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Utilities works out the first water-sharing deal in the state with agricultural interests

Ebb and flow

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The city spent $1.75 million for water storage in this former gravel pit near Lamar. - COURTESY COLORADO SPRINGS UTILITIES
  • Courtesy Colorado Springs Utilities
  • The city spent $1.75 million for water storage in this former gravel pit near Lamar.
Colorado Springs Utilities is trumpeting a water-sharing deal involving several parties in the Lower Arkansas River Valley. The agreement is the first of its kind in the state, aligns with the Colorado Water Plan’s edict to share water among users and helps the city secure a water supply for decades to come.

But several people in the valley are skeptical, saying the agreement could transfer irrigation water for crops, much like the so-called “buy and dry” deals of the 1970s and 1980s that exported Crowley County farmers’ water rights held in mountain lakes to municipalities along the Front Range, thereby decimating agriculture.

“Any time water leaves the lower valley it’s a great concern,” says former Bent County Commissioner Bill Long, who’s advising current commissioners on the matter.

But Springs Utilities officials say it’s another step toward assuring adequate water supplies for the city’s population, which is expected to swell to 740,000 people by 2070. Despite the 2016 activation of the controversial Southern Delivery System water pipeline from Pueblo Reservoir, the city needs more water, they say.

“We are exploring developing additional supplies from the Arkansas River basin to diversify our portfolio,” Pat Wells, Springs Utilities’ general manager of water resources and demand management, says. “We are acquiring these water rights as a first step to plan for the future.”

Essentially, the complicated deal gives Utilities access to 2,000 acre feet of water — more than enough for 4,000 households per year — for five out of 10 years from water rights held by the Lower Arkansas Water Management Association. LAWMA, which is entitled to use the water for the other five years, is a member-owned nonprofit that replaces water to the Arkansas River for its members’ depletions caused by irrigation pumping.

The city bought 2,500 LAWMA shares owned by Arkansas River Farms at $3,500 per share, or $8.75 million. The city also paid LAWMA $1.75 million for 500 acre feet of water storage in a former gravel pit in the Lamar area, giving LAWMA flexibility to manage its water rights.

Utilities can place a call on the water any February for that year, and LAWMA is allowed to say “no” for one year in 10. Utilities would take the water through a series of exchanges that involve Pueblo Reservoir.

As Utilities senior project manager Scott Lorenz says, “LAWMA is betting that by doing the deal with CSU they will not only immediately benefit from the 2,000 acre feet in five out of 10 years, but they will also have set in place a replicable model that will allow them to further increase their water portfolio.”

Don Higbee, LAWMA general manager, described it this way in a news release: “We will gain a more reliable water supply that will increase crop yields for the average shareholder in both wet and dry years. If we are collaborating with municipalities for water, we are not competing with them for water. The alternative is we risk buy and dry, which permanently removes water from the valley. This agreement keeps water in the valley.”

History attests to what happens when water leaves the valley. Some 40 years ago, farmers began selling more than 80,000 acre feet of water, which wound up in the hands of municipalities such as Pueblo, Colorado Springs, Pueblo West and Aurora. “First the weeds came, then the drought destroyed whatever topsoil remained. Now the dirt is blowing everywhere, piling up across the fields,” wrote Robert Sanchez in a 5280 magazine article about Crowley County’s fate.

That experience has instilled a sense of caution in valley residents.

“Trying to see the future is one of our biggest concerns,” says Dale Mauch, who farms land north of Lamar and serves as a director of the Fort Lyon Canal Company, which transports water. “Once you go down that road [selling water rights], we don’t go back.”

The canal board’s approval isn’t required, but Utilities wants it to sign off to solidify relationships with the board and its shareholders, Lorenz says.

Exporting water, even periodically, makes Mauch nervous, because the 113-mile-long canal serves 94,000 irrigated acres between La Junta and Lamar. Those acres are owned by roughly 200 farmers. “It remains to be seen how it works out for the Fort Lyon Canal, Bent County and the neighbors,” he says.

That’s because there are ancillary promises tied to the deal. Arkansas River Farms, which sold water rights as part of the Utilities plan, has vowed to revegetate acreage left without water in the years Utilities uses it, Long says. The farming operation also has said it would build a $40 million dairy and a commercial tomato greenhouse, erect irrigation sprinklers to more efficiently water their acreage in dry years and plant native grasses, as well as provide Bent County a $1.7 million letter of credit and some cash to cover lost property taxes. Property taxes are lower on dryland acreage than irrigated.

“If they [Arkansas River Farms] fulfill their commitments, then it will have success for both parties,” Long says. “If they do not complete revegetations and they do not do the economic mitigation they propose, then we’ll be sorely disappointed and definitely on the short end of the stick.

“The commissioners understand things change,” Long adds, “and we need to use water more efficiently down here, and what Arkansas River Farms has proposed will provide that. If they don’t deliver, I think it would be difficult to do another one like this one.”

And that’s important, because Lorenz says valley water-rights owners and Utilities hope the LAWMA agreement is just the beginning.

Many water users want to explore such agreements, Lorenz says, as they try to secure supplies amid climate change, which adds uncertainty to how much water is available in any given year.

“The partnership allows them [LAWMA] to start to meet that gap both through the additional water and storage,” he says. “If this project is successful CSU will have a path forward to acquire part of the water it needs in the future, as will LAWMA. When it comes to developing future water supply, the status quo isn’t working.”

The Colorado Water Plan specifically calls for water sharing, dubbed “alternative water transfers,” which will benefit agriculture and municipal users. The goal, it says, is to seek contributions from the farming industry while “maximizing options for alternatives to permanent agricultural dry-up.”

In other words, Lorenz notes, “The state of Colorado says, ‘Work things out, so we don’t have to impose things on you.’ This is the first shot at that.”

Utilities gets most of its water from the Western Slope through trans-mountain transfers, but one of those sources, the Colorado River Basin, isn’t producing water to adequately supply the appropriations already committed to.

“There is increased competition for limited water supplies, and our existing system has not yielded as much as we thought back in 1996,” when the SDS project was first conceived, Wells says.

Noting that Utilities used to consult the historical record and assume the past would repeat in the future, Wells says, “What we’ve come to understand with climate change is that hydrology is expected to take a turn for the worst, so we’re mitigating our risk for our customers.”

The deal with LAWMA now goes to water court for approval, although Utilities can use the water pending that approval. That’s good, Lorenz notes, because drought conditions might require Utilities to call on the water as early as next year.

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