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Utilities has it both ways

City Sage


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"What we want," Colorado Springs Utilities CFO Bill Cherrier told this reporter several months ago, "is lots of snow in the mountains, full reservoirs and a hot, dry summer in the city."

The amiable Cherrier got half of his wish. The city's reservoirs are overflowing thanks to nature's generosity, and Utilities managers can sleep easy.

But there's a new problem. For many residents, utility bills are the surest marker of the season. From November to April, home heating costs soar. May to September is water time, as thirsty lawns and gardens demand water. The halcyon days of April and October usually provide a little respite, but otherwise we're all CSU's bitches.

We're hooked on natural gas, hooked on water for landscaping — and let's not forget wastewater and electric! But thanks to nature's unexpected bounty, Utilities' revenue faucet has been turned off. I haven't hooked up my garden hose, much less turned on the sprinkler system. So disastrous has the spring been for the water sellers that they're contemplating a rate hike.

It's déjà vu all over again. A couple of years ago, the CSU Board (i.e., City Council) responded to a deepening regional drought by adopting punitively tiered water rates upon all users. Like many residents, I didn't fully learn my lesson until the bill arrived.

That lesson was simple: Conserve! My water-use behavior has changed — as it has for tens of thousands of other customers. In CSU-speak, that's the "drought shadow," implying most customers would happily go back to their pre-drought behavior if no longer forced to conserve.

I'm not so sure. After a five-year regional recession, many of us are wedded to the ethic of conservation. It's a lot easier to save money on water bills than to retrofit your energy-inefficient house to save on heating bills. New windows, new insulation and a new furnace will cost you thousands — but turning off the sprinklers is free.

In most markets, surpluses create lower prices as suppliers compete for customers. But CSU, as a monopoly supplier, has to realize enough revenue to pay operating costs and service debt. The organization has long-term debt of more than $2 billion, much related to the ongoing construction of the Southern Delivery System.

Yet it seems unfair, doesn't it? Not enough water? Pay more! Too much water? Pay more!

It's a strange dilemma, a consequence of building a metro area of 650,000 souls in a high plains desert.

Colorado Springs has no substantial native water source except Pikes Peak's snowmelt. By the early 1950s, the city's growth required new supplies, so City Council looked to the west. A series of diversions brought water from the Western Slope and upper Arkansas River to Colorado Springs through a complex network of pipelines, pump stations and reservoirs. SDS is the latest iteration of a water development process that began when Gen. William Palmer and Dr. William Bell founded the city in 1871.

Creating new supply is an arduous, lengthy business. First you acquire the water rights, then establish diversion points, then plan, permit and build the storage and delivery system. After the city's efforts to build a new transmountain delivery system were thwarted by Eagle County's commissioners in the late 1980s, planning for SDS began.

A generation later, SDS is nearly finished. For a business, it's an inconceivable time horizon — as if General Motors' 2016 models had been designed in 1990.

For the moment, SDS is an albatross. We don't need the water now, but we have to pay for it anyway. We may grumble about high rates, we may rejoice in free water from the sky, and we may not care about CSU's declining sales and high debt levels, but one day we'll need the water.

This summer is an anomaly. The West's water future is almost certainly one of drought and scarcity. Almost alone among Western cities, Colorado Springs' water supply is adequate, diversified and sustainable. The rain may delight, but future residents should be grateful to retiring CSU Water Services boss Gary Bostrom, who spent most of his 36-year career bringing SDS from conception to realization.

Great job, Gary — but we still love these afternoon rains!


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