Ambitious Colo. plan focuses on conservation, costs billions

By Jennifer Yachnin | 11/20/2015 01:21 PM EST

DENVER — Colorado officials adopted the state’s first-ever comprehensive water plan yesterday following a decade of negotiations — winning widespread praise for a focus on conservation rather than on new diversion projects — but state officials and local utilities must now tackle the complicated task of funding the plan’s $20 billion price tag.

DENVER — Colorado officials adopted the state’s first-ever comprehensive water plan yesterday following a decade of negotiations — winning widespread praise for a focus on conservation rather than on new diversion projects — but state officials and local utilities must now tackle the complicated task of funding the plan’s $20 billion price tag.

Colorado Gov. John Hickenlooper (D) unveiled Colorado’s Water Plan here following the Colorado Water Conservation Board’s adoption of the nearly 500-page document and praised collaboration among the state’s eight major river basins, as well as state agencies, organizations from environmental groups to the agriculture industry, and a total of 30,000 public comments.

"Clearly, Colorado is a state that can do things like this differently than just about anywhere else in the country. We now have a plan with measurable objectives, concrete goals and detailed critical actions all driven by our statewide water values, our system of how we think about water," Hickenlooper said.


Hickenlooper first ordered the CWCB to create the state’s first water plan in 2013 in an effort to address water supplies for a population that is predicted to double its current 5.3 million residents by 2050.

The plan’s ambitions — which must be implemented via a mix of legislative and state agency actions — include a statewide conservation goal of 400,000 acre-feet of municipal and industrial water by 2050, as well as reducing a projected demand shortfall for municipal and industrial water use from 560,000 acre-feet in 2050 to zero in 2030.

"We have to recognize that time is of the essence, that we have to get right to work," Hickenlooper said. One acre-foot of water is equal to nearly 326,000 gallons of water. An average family of four in the United States uses about 400 gallons of water per day, according to U.S. EPA.

Other key proposals in the Colorado plan include the construction of 400,000 acre-feet of additional water storage through a variety of plans that include expanding existing reservoirs as well as aquifer storage, in which potable water is injected into the ground for later use.

The plan also encourages stream management — including annual funding for river assessment and restoration — as well as protection for critical watersheds for a majority of the state by 2030. Those management plans will address not only water quality and flood mitigation, but also riparian and aquatic habitat improvements, fire mitigation, and land use.

The plan also considers but does not encourage a new transmountain diversion, in which water is pumped from the state’s mountainous Western Slope to the Front Range, where most of the state’s population is located.

"There ought to be ways that we can get to those [goals] to make sure that we have sufficient water to satisfy the growth along the Front Range without diverting water across the mountains," said Hickenlooper, who noted that Colorado currently utilizes 25 diversions, both tunnels and ditches, to transport water across the state. "In most cases, if we’re successful in going through this water plan, it will not be necessary."

Much of the input for the plan was generated by the regional roundtables, which were first established under a 2005 state law.

"Our goal from the very beginning was to try and make sure that where the water is, the water stays," Hickenlooper said.

Funding ‘critical’

But the state must also address the cost of its water plan, which a draft report estimated would cost $20 billion to implement over its lifetime.

State officials expect that the bulk of those costs will be paid for by regional water utilities but acknowledge that Colorado must still come up with between $3 billion and $6 billion by 2050.

"We have to find some sustainable ways of funding water supply projects," Colorado Water Conservation Board Director James Eklund told Greenwire. "That’s a critical action going forward."

Eklund said there are a variety of options for the state to consider as it aims to raise about $100 million in additional revenue annually, either through a tax increase — the report suggests a possible mill levy or sales tax increase — or a bond program.

Other options outlined in Colorado’s Water Plan include federal loan guarantees or other federal funding via a state-federal program like the Central Arizona Project, which oversees distribution of the Colorado River in Arizona.

The state could also look to increase its severance taxes, the fees charged for the removal of minerals.

A portion of those monies already goes to the Water Project Loan Program (WPLP), which makes between $50 million and $60 million available annually for various water projects.

One proposal would lift the current $50 million annual cap on the Severance Tax Trust Fund — which funds the WPLP along with the Construction Fund, which receives a portion of its monies from federal mining lease revenues — and allow funds to be used to kick-start bonds for environmental or recreational projects.

Eklund also mentioned the possibility of public-private partnerships to fund water infrastructure, similar to arrangements in which the state leases state highways to private contractors that recoup costs by operating paid express lanes.

"If we do this right, we’ll have a lot of efficiencies put in ahead of time," Eklund said.

But several of those options have already faced skepticism from state lawmakers and in the recent past even from the state’s voters.

In 2003, voters rejected by a 2-to-1 margin a state ballot initiative that would have allowed the CWCB to finance up to $2 billion for public and private water projects via a bond initiative.

Eklund pointed to recent ballot initiatives in both Texas and California, where voters approved a $7.5 billion bond measure for water projects last year, to argue that voters across the West have shifted on such issues.

During an October hearing by the state Legislature’s bicameral Water Resources Review Committee, which is evenly divided between Democrats and Republicans, some members raised concerns about potential public-private partnerships for water projects, suggesting any legislation promoting those arrangements could also face an uncertain future.

"We have some experience in Colorado with public-private deals. … They’re deals; they’re not partnerships. To me, that’s spin," state Sen. Matt Jones (D), whose district includes Longmont, Lafayette, Louisville and Erie, Colo., said at that hearing.

The panel also deadlocked along party lines over two measures aimed at streamlining the permitting process for new water projects. Those measures, which drew criticism from some state environmentalists, would consolidate the permitting process within the state engineer’s office rather than share duties with the state Department of Public Health and Environment.

Political will needed to make it work

While Colorado’s Water Plan looks to state lawmakers to take action on some of its goals — including designating $1 million or more in continued funding for stream management and watershed plans — stakeholders in the plan generally expressed low expectations for the Legislature in an election year.

"This isn’t the end; this is only the beginning. … We all share the responsibility of implementation," Hickenlooper said, and later added: "If you’re a legislator, now is the time to prepare bipartisan and collaborative legislation that’s going to allow us to make progress on achieving the plan’s measurable objectives and to make that legislation in this upcoming session."

But aside from urging the Legislature to address funding issues, Hickenlooper demurred when asked what specific legislation he would like to see before his term ends in 2018, stating that he did not want to offer "specific requests" until he had met with state legislative leaders. Colorado’s Legislature is divided, with its House controlled by Democrats and its Senate controlled by Republicans.

Conservation Colorado Water Advocate Theresa Conley said it is not yet clear what measures state lawmakers will pursue but suggested that the Legislature might opt to address efficiency requirements for lawn and garden irrigation equipment sold in the state. Colorado adopted a similar measure mandating the sale of high-efficiency indoor fixtures last year.

"We haven’t seen any bills yet," said Conley, who said that only one or two bills are likely.

But she added: "This really did need a lot of political will to get this plan up and running, and so [Hickenlooper] will carry that momentum through in the Legislature."

It remains to be seen whether the Legislature will address the plan’s call to protect agricultural lands from pursuing "buy and dry" agreements, under which water rights are sold for municipalities.

"It is in the self-interest of everyone in the state to make sure we don’t dry up our agricultural counties," Hickenlooper said.

State lawmakers approved a law in early 2014 to examine the problem — the water plan predicts the state could lose up to 20 percent of its irrigated agricultural lands, or about 700,000 acres, by 2030 under current laws — but did not mandate specific changes.

Eklund said proposed changes would allow farmers and ranchers to make "temporary swaps" rather than sell their water rights outright. Alternatives could include rotational fallowing and water conservation programs, according to the report.

"I’m not saying we should get rid of water court," Eklund said, referring to the state’s specialized system of courts that deal with water rights and administration.

‘An ethic of conservation’

Still, even as Colorado officials aim to make over the state as a bastion of conservation efforts, Eklund was careful to frame the plan as a largely voluntary effort. The state water board does not have regulatory authority.

"We have really an ethic of conservation that we’re trying to pursue here; this isn’t a mandate," Eklund said. "Every person in the state can do their part."

Denver Water CEO Jim Lochhead emphasized that the utility has reduced usage by its customers 20 percent in the past 10 years — from 200 gallons per capita per day on average to 165 gallons — without a noticeable difference for most customers.

"We can go a lot lower without sacrificing quality of life," Lochhead said.