Northern Water is increasing rates to stop the drain on cash reserves

August 3, 2014
Colorado-Big Thompson Project Map via Northern Water

Colorado-Big Thompson Project Map via Northern Water

From the North Forty News (Jeff Thomas):

Northern Colorado Water Conservancy District moved to triple the yearly assessment for agricultural users by 2018, beginning with a 9 percent increase this year, though North Poudre Irrigation Co. users will be largely unaffected.

“It’s a fairly significant increase for agricultural users,” said Northern spokesman Brian Werner. “But we’ve been dipping into our reserves the last couple of years, and the board felt that we had to take a more fiscally responsible path.”

The Northern board in June set the 2015 assessment for a per acre-foot unit of Colorado Big-Thompson water at $30.50 for municipal and industrial users, up from $28, and $10.90 for agricultural users, up from $10. The board also approved a plan in which the rates will rise in 2018 to $53.10 for municipal and industrial and $30.20 for farmers.

The increase does not affect subject-to-change contracts or fixed-rate contracts, established between the creation of the water district in 1937 and 1959, when the district went to open rates. Today only one third of the district’s shares have a fixed-rate contract, which pay only a $1.50 a year assessment, but that includes all 40,000 C-BT shares owned by North Poudre Irrigation Company.

“We’ve really wrestled with these fixed-rate contracts,” Werner said, noting that while attorneys have been asked to take a long look at whether they could be changed, some fixed-rate contract holders have already threatened suit if the board takes such action.

At any rate, the hit on agriculture changes a long-held emphasis at Northern Water of trying not to price farmers and ranchers out of the market.

“We’ve always been focused on ability to pay, but now we are moving to more cost-of-service,” Werner said, noting the board attempted to come somewhere in between. “More than two thirds of our shares are now owned by municipal and industrial users, and they are yelling about why they are taking the brunt of the costs.”

Taking into consideration only the assessment cost, Werner said, the water is fairly inexpensive for agriculture, moving from about 6 cents per 1,000 gallons to about 16 cents through 2018. But after next year, the steep incline begins for farmers and ranchers, as in 2016 the rate will increase 61 percent, followed by a 61 percent raise in 2017.

And that may be just the tip of the iceberg, as the district’s future plans reveal a rate change through 2023 in which municipal and industrial users could be assessed more than $100 per acre foot and agriculture, $80…

For Colorado agriculture, however, the fastest growing cost is most probably water. A share of C-BT, with an average yield of 0.7 acre feet, is now selling for between $20,000 and $25,000, compared to $9,500 in January 2013, Werner said.

More Northern Colorado Water Conservancy District coverage here.


Northern Water: The first C-BT Project water was released from Horsetooth Reservoir into the Poudre River on this day 63 yrs ago #ColoradoRiver

July 21, 2014

From the Fort Collins Coloradoan (Ryan Maye Handy):

Horsetooth Reservoir gets its water from a network of Western Slope reservoirs fed by mountain snowmelt. Water is usually pumped up from Lake Granby to Shadow Mountain Reservoir, where gravity eventually pulls it down through the 13-mile Adams Tunnel and into a couple of more reservoirs before it reaches Horsetooth.

Back in 1951, hundreds of people came to the reservoir to mark the event — it was a long-awaited milestone for farmers and cities along the Front Range, who had survived decades of drought.

The shuttling of Western Slope water into Horsetooth and the Poudre River is a system that Northern Colorado has been reliant on for decades. In Northern Colorado, the plea for more water started in the Great Depression, when a devastating drought plagued the western and central United States.

The federal government agreed to come to the aid of Colorado’s farmers and in the late 1930s began building the Colorado-Big Thompson project. Today, the C-BT project supplies Fort Collins with 65 percent of its water.

I was 4 months and 16 days old at time. I don’t remember the event. More Colorado-Big Thompson Project coverage here.


Northern Water opts for gradual rate increase — Fort Collins Coloradoan

July 18, 2014
Colorado-Big Thompson Project Map via Northern Water

Colorado-Big Thompson Project Map via Northern Water

From the Fort Collins Coloradoan (Ryan Maye Handy):

The Northern Colorado Water Conservancy District will increase the cost of its water step-by-step over 2016 and 2017, which will mean 28 percent cost increase per year for cities like Fort Collins.

The district’s board came to a decision about the rate increases on July 11, after months of considering the best way to hike prices to balance out the district’s budget. The board initially considered a more than 40 percent increase in 2016, but decided to compromise with cities and other water users concerned that such drastic increases would harm their finances.

Fort Collins Utilities, which now gets the bulk of its water from the district, says that in the short term customers’ utility rates will not be affected…

For 2015, allotment prices for cities were set at $30.50 per acre foot, up from $28. While that cost will only increase for cities over the next few years, irrigators will face a 61 percent increase in allotment costs in 2016 and 2017.

Fort Collins Utilities directly owns 18,855 units in addition to about 14,000 units it leases from the North Poudre Irrigation Co. But, in terms of actual use for 2014, the city has used 14,900 acre feet of water since Nov. 1, when the water year begins.

After the High Park Fire, Utilities became even more reliant on C-BT water since the Poudre River, the city’s other water source, was filled with fire and flood debris. This year, the city gets about 65 percent of its water from Northern Water, and 35 percent from the Poudre.

From the Loveland Reporter-Herald (Jessica Maher):

Costs are expected to increase every year until 2018, when municipal and industrial C-BT users will be charged $53.10 per unit and agricultural users will be charged $30.20 per unit. That represents a nearly 90 percent increase for municipalities and 202 percent increase for agricultural users.

The city of Loveland owns 12,118 units of C-BT water, 5,112 of which are fixed at a rate of $1.50 per unit that will not change.

The increase for Loveland’s remaining 7,006 open-rate units will cost the city about $176,000 more by 2018. Loveland Water and Power staff will budget for the increase in the coming years, senior water resources engineer Larry Howard said.

“It’s real money, but it’s not something that’s devastating to the utility or something,” Howard said.

Next year, rates are set to increase by 9 percent. That’s a manageable increase that will not require rate increases for Loveland Water and Power customers, Howard said.

Whether customers will see an impact from the increase in future years is not known.

“When we do our cost of service study next year, the cost increase will be taken into account, along with any other changes in our costs,” Utility Accounting Manager Jim Lees said.

The city of Loveland’s primary two sources of water are the Green Ridge Glade Reservoir and water diverted directly from the Big Thompson River at the Big Dam.

“We generally rely on those each year and then start filling in with C-BT and Windy Gap water,” Howard said. “It depends on the year and how much we need.”

Depending on conditions year to year, the city rents C-BT water to farmers, so Howard said that could help to absorb the cost of the rate increases over the next few years.

Brian Werner, Northern Water’s public information officer, said that the increases are the result of a comprehensive study that started last year.

“The cost of doing business is going up,” Werner said. “Our management has charged us with looking at where we can control costs.”

More Colorado-Big Thompson Project coverage here.


Water Lines: Colorado needs a better water plan — Jim Pokrandt #ColoradoRiver #COWaterPlan

July 16, 2014


From the Glenwood Springs Post Independent (Jim Pokrandt):

It’s almost time for football training camps, so here’s a gridiron analogy for Colorado River water policy watchers: Western Colorado is defending two end zones. One is the Colorado River. The other is agriculture. The West Slope team has to make a big defensive play. If water planning errs on the side of overdeveloping the Colorado River, the river loses, the West Slope economy loses and West Slope agriculture could be on the way out.

This is how the Colorado River Basin Roundtable is viewing its contribution to the Colorado Water Plan ordered up by Gov. John Hickenlooper. A draft plan will be submitted this December and a final plan in December 2015. The Roundtable is assessing local water supply needs and environmental concerns for inclusion into the plan and there is plenty of work to consider in the region. But the big play may very well be the keeping of powerful forces from scoring on our two goal lines.

Here’s why: Colorado’s population is slated to double by 2050. Most of it will be on the Front Range, but our region is growing too. Mother Nature is not making any new water. We still depend on the same hydrological cycle that goes back to Day 1. So where is the “new” water going to come from? Right now, there seems to be two top targets, the Colorado River and agriculture (where 85 percent of state water use lies in irrigated fields). Colorado needs a better plan.

The Colorado Basin Roundtable represents Mesa, Garfield, Summit, Eagle, Grand and Pitkin counties. This region already sends between 450,000 and 600,000 acre feet of water annually across the Continental Divide through transmountain diversions (TMDs) to support the Front Range and the Arkansas River Basin.

That water is 100 percent gone. There are no return flows, such as there are with West Slope water users. On top of that, this region could see another 140,000 acre feet go east. A number of Roundtable constituents have long-standing or prospective agreements with Front Range interests wrapped around smaller TMDs. Existing infrastructure can still take some more water. That’s the scorecard right now. We assert another big TMD threatens streamflows and thus the recreational and agricultural economies that define Western Colorado, not to mention the environment.

In the bigger picture, the Colorado River Compact of 1922 requires Colorado to bypass about 70 percent of the river system to the state line to comply with legal limits on depletions so six other states can have their legal share of the water. Failure to do so, by overdeveloping the river, threatens compact curtailments and chaos nobody wants to see. For one thing, that kind of bad water planning could result in a rush to buy or condemn West Slope agricultural water rights.

The Roundtable has heard these concerns loudly and clearly from its own members across the six counties as well as from citizens who have given voice to our section of the water plan, known as the Basin Implementation Plan (BIP). A draft of the BIP can be viewed and comments offered by going online to http://coloradobip.sgm‐inc.com/. It is under the “Resources” tab.

Jim Pokrandt is Colorado Basin Roundtable Chair.

More Colorado Water Plan coverage here.


Northern Water board approves rate increase #ColoradoRiver

July 15, 2014
Colorado-Big Thompson Project east slope facilities

Colorado-Big Thompson Project east slope facilities

From The Greeley Tribune (Eric Brown):

A number of share holders in the Colorado-Big Thompson Project — the largest water-supply project in northern Colorado — will see assessment costs sharply increase during the next few years, the Northern Colorado Water Conservancy District board recently decided.

Although the numbers aren’t set in stone and are subject to change, the board on Friday approved a general outline that over time increases open-assessment fees for municipal and industrial water users from $28 this year to $53.10 by 2018, and increases those fees for agricultural users from $10 this year to $30.20 per unit by 2018.

The increases won’t apply to those who own fixed-assessment C-BT shares. Those who bought shares before 1959 and still own those shares still pay a fixed assessment of $1.50 per unit. The majority of the city of Greeley’s C-BT shares, for example, are fixed-assessment shares, and won’t be impacted by the changes, according to Brian Werner, public information officer with Northern Water.

The recently approved uptick for open assessments was made to keep up with the always-increasing expenses at Northern Water, Werner said, noting that the uptick in wildfire-mitigation efforts, water-quality measures and overall regulation, among other expenses, are making it more and more pricey to deliver water from the C-BT’s high-mountain reservoirs to its users across northern Colorado.

“It’s just another example of how water is getting more and more expensive. There’s no getting around it,” Werner said, noting that, despite Northern Water continuing its efforts to reduce operating costs, the increase in open assessments was needed.

Increases in water costs are nothing new for users in the state, particularly in northern Colorado, where rapid population growth along the Front Range, large ag use and increased oil-and-gas production have sharply increased demand for water.

And as supplies have tightened, prices have skyrocketed.

In January 2013, the price of a water unit in the C-BT Project was about $9,500. Now it’s well over $20,000 per unit.

But while costs are increasing, Northern water officials stress that, in the global picture, C-BT users are still getting a good deal on good water.

Werner noted that 1,000 gallons of water is still being delivered to C-BT share holders “for pennies.”

The C-BT Project collects and delivers on average more than 200,000 acre feet of water each year (about 65 billion gallons). Most of this water is the result of melting snow in the upper Colorado River basin west of the Continental Divide. The project transports the water to the East Slope via a 13.1-mile tunnel beneath Rocky Mountain National Park.

C-BT water flows to more than 640,000 acres of irrigated farm and ranch land and 860,000 people in portions of eight counties within Northern Water boundaries, according to Northern Water data.

More Northern Colorado Water Conservancy District coverage here.


Where our water comes from — Fort Collins Coloradoan

July 14, 2014

Ash and silt pollute the Cache la Poudre River after the High Park Fire September 2012

Ash and silt pollute the Cache la Poudre River after the High Park Fire September 2012


From the Fort Collins Coloradoan (Ryan Maye Handy):

With Colorado’s water year at its mid-July end and many Northern Colorado reservoirs still flush with the bounty of a plentiful water year, water woes of years past have turned into discussions of how the state will store water in the future.

In the coming months, the Army Corps of Engineers will release an updated study on the Northern Water Conservancy District’s proposal to expand its water storage capacity near Fort Collins. The Northern Integrated Supply Project would build Glade Reservoir northwest of the city, bringing a new reservoir larger than Horsetooth Reservoir to the area.

Before the release of the study reignites the battle over the potential environmental impacts of expanding Northern Colorado’s water storage capacity, we look at where Fort Collins gets the water that provides the basis for everything from the natural resources residents enjoy to the craft beer they drink…

Before the High Park Fire, which burned more than 87,000 acres of the Poudre watershed, Fort Collins Utilities split its water sources between the project and the river. But the Poudre’s water has since become filled with fire and flood debris, which prompted a total shutdown of river water for Fort Collins customers.

Time and the September 2013 floods have cleaned out the river, but the city is still mostly reliant on the C-BT project for more than 60 percent of its water each year.

Fundamentally, snowmelt fills the many reservoirs in the C-BT project. The Northern Colorado Water Conservancy District, which helps manage the project, delivers a certain amount of water to cities like Fort Collins as well as farmers and irrigators — all of whom own hundreds or thousands of acre-feet of the project’s water…

Here’s a look at where our water comes from.

THE WESTERN SLOPE

The water that feeds Colorado — and a vast swath of the nation — begins its downward flow from the Continental Divide high in the Rocky Mountains. In order to harness water that otherwise would flow to the Pacific Ocean, water managers created a vast network of reservoirs, tunnels and canals to reroute Western Slope water to Colorado’s more populous Front Range.

LAKE GRANBY

For Fort Collins, and much of the northern Front Range, this is where it all begins. Snowmelt fills this Western Slope reservoir, and the water from it is pumped to Shadow Mountain Reservoir. From there, it’s literally all downhill — gravity pushes water through five reservoirs until it gets to Horsetooth Reservoir, southwest of Fort Collins. This year, due to above-average snowpack, Lake Granby soon will spill over its banks. It can hold up to 540,000 acre-feet of water.

HORSETOOTH RESERVOIR

Horsetooth was built along with the Colorado-Big Thompson Project and is a fraction of the size of Lake Granby — it holds about 156,000 acre-feet of water. This is where Fort Collins will get most of its C-BT water, which has traveled through the 13-mile Adams Tunnel, under U.S. Highway 34, and through several reservoirs. Fort Collins Utilities has its only operational water treatment plant at Horsetooth. In 2014, Fort Collins gets about 65 percent of its water from the C-BT project.

THE CACHE LA POUDRE RIVER

The Poudre River typically provides Fort Collins with 50 percent of its water. But after the High Park Fire polluted the river, Fort Collins has been forced to shut down its Poudre River sources, sometimes for months. The upper part of the river is considered “wild and scenic” — a federal designation. It is also one of the few remaining dam-free rivers in Colorado. In 2014, Fort Collins gets about 35 percent of its water from the Poudre.

CARTER LAKE

Carter Lake is one of many reservoirs that make up the Colorado-Big Thompson Project. Some of Fort Collins’ water can come from this reservoir, but not frequently. Other reservoirs in the system include Grand Lake, Mary’s Lake, Lake Estes and Flatiron Reservoir, to name just a few.

FORT COLLINS

Treated water coming into Fort Collins comes from a plant near Horsetooth Reservoir. Since Nov. 1, the city has used about 9,700 acre-feet of water from the Colorado-Big Thompson Project, and about 5,200 acre-feet from the Poudre River. Before the High Park Fire, the city typically split its water use between the two sources but has since had to use more C-BT water.

More infrastructure coverage here.


Say hello to @Northern_Water #ColoradoRiver

July 12, 2014

Meanwhile, Northern is looking at big rate increases to coverage operations. Here’s a report from Steve Lynn writing for the Northern Colorado Business Report. Here’s an excerpt:

Under current projections, rates for Colorado-Big Thompson Project water could rise from $28 to more than $100 per unit for municipal users and from $10 to $80 per unit for agricultural users by 2023, according to documents from the Northern Colorado Water Conservancy District…

The extra money is needed because Northern Water’s expenses have outpaced its revenue in three of the last four years. Property taxes, which have remained flat since the recession, make up more than half of Northern Water’s revenue, while water-rate revenue accounts for about 20 percent of its funding.

The agency has coped, up until now, by drawing from cash reserves to fund its operations. Reserve funds are partly intended to help stabilize revenue but are not a sustainable funding approach in the long term, according to Northern Water.

The agency’s board is expected to decide on short-term rate hikes through 2018 this month. These potential hikes to $52.70 for municipal users and $32.20 for irrigation users would represent the largest dollar increase in Northern Water’s history, although the district has seen similar, double-digit percentage increases in the past.

“In the early 1980s, there were several years with double-digit increases, similar to what we are looking at now,” Northern Water spokesman Brian Werner said.

The rate hikes are essential to maintain infrastructure, according to Northern Water, and experts believe they will lead to additional water conservation. But the higher prices will put pressure on farmers…

Northern’s customers receive water under two types of contracts: fixed and open rate. The new rate hikes apply to those customers who buy open-rate water. In June, Northern Water board members raised the open-rate assessment 9 percent for next year. The 2015 rate for cities will increase to $30.50 per unit while the agricultural rate will rise to $10.90 per unit. Fixed-rate assessments based on decades-old contracts will remain $1.50 per acre foot.

Roughly two-thirds of Northern’s water is delivered via open-rate contracts, while one-third is governed by fixed-rate agreements…

Northern Water isn’t the only water district that has had to raise water rates. The Greeley-based Central Colorado Water Conservancy District, which supplies water to areas of Weld, Adams and Morgan counties, also has passed rate-assessment increases in recent years and plans to meet this month to consider additional rate hikes.

“Our organization is looking at future (operations and maintenance costs) and how do we keep our finances up,” Central Water Executive Director Randy Ray said. “You’ve got regular operations costs like labor, electricity and gasoline for vehicles. Then you also have deferred maintenance.”

The rate increases come as the nation faces challenges from deteriorating water infrastructure, which will cost more than $1 trillion over the next 25 years to fix in order to maintain current water service levels, according to a report from the American Society of Civil Engineers. Customers will pick up the tab mostly through higher water bills.

Similarly, users of Colorado-Big Thompson Project water will pay higher water bills as a result of the increased rate assessments. Increased revenue from the assessments will help fund Northern Water’s operations and maintenance budget, which accounts for almost half of the water district’s expenses. Northern Water says it needs to make major upgrades to water delivery infrastructure, much of which was built more than 60 years ago.

Tom Cech, director of One World One Water Center at Metropolitan State University of Denver, said higher expenses and a rising population have pressured water supplies, leading to elevated costs. He noted, however, that investments in water infrastructure are critical to maintaining water delivery systems.

“Look at all the investments that water providers did 100 years ago in our water system: new reservoirs, delivery systems and so forth,” he said. “That’s just the process of keeping up with the costs and population growth.”

The Northern Board did pass an increase. Here’s a report from Steve Lynn writing for the Norther Colorado Business Report. Here’s an excerpt:

The board of directors for Colorado’s largest water wholesaler Friday passed a historic water-rate hike in terms of dollars, representing a 202 percent increase for agricultural users and 90 percent for municipal users from 2014 through 2018.

Customers of the Northern Colorado Water Conservancy District receive water units under two types of contracts: open rate and fixed. By 2018, the open-rate assessment for a unit of water from the Colorado-Big Thompson Project will cost $30.20 for agricultural users, up from $10 this year, and $53.10, up from $28, for municipal users.

Fixed-rate assessments based on decades-old contracts will remain $1.50 per acre foot.

Board members unanimously approved a steep rate hike for the open-rate assessments, though Colorado-Big Thompson Project water users had requested a smoother transition of increases over time. The rate hike through 2018 represented the largest dollar increase in the public water district’s 77-year history, though the water district’s board members has passed similar percentage increases in the past.

The steeper rate hikes will help Northern Water more quickly achieve a balanced budget, said Jerry Gibbens, project manager and water resources engineer for Northern Water. The water district’s expenses have outpaced its revenue in three of the last four years, but Northern Water expects to reach a balanced budget by fiscal 2017 through the rate hikes.

Based on decades-old contracts, the fixed-rate assessments remained the same, a point of contention among some water users who pay the higher open-rate assessments and contend that Northern Water should raise the fixed-rate assessments.

Northern Water’s board agreed to look into how it could adjust the fixed rates in the future, but the agency has indicated that it may not be able to do so because they are set “contractually in-perpetuity.”

In June, the board decided to raise 2015 open-rate assessments to $30.50 per unit while the agricultural rate will rise to $10.90 per unit.

Under current projections, rates for Colorado-Big Thompson Project water could increase to more than $100 per unit for municipal users and to $80 per unit for agricultural users by 2023, according to Northern Water documents.

Board members did not decide on increases after 2018, but they plan to set rates annually as well as make projections of rate adjustments two fiscal years in advance.

More Northern Colorado Water Conservancy District coverage here.


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