Critics slam Lake Powell Pipeline funding

Published: Tuesday, Oct. 16 2012 4:33 p.m. MDT

SALT LAKE CITY — Critics of the proposed Lake Powell Pipeline that would ferry water to Kane and Washington counties are marshaling their opposition to the proposal in advance of a legislative meeting where its funding will be discussed.

Members of the Utah Legislature's Revenue and Taxation Interim Committee are slated to meet at 9 a.m. Wednesday to discuss a variety of issues — including a proposal to allocate 15 percent of future growth in sales tax revenue to pay for water projects throughout the state.

Groups such as the Utah Rivers Council and the Western Resource Advocates assert the project is unnecessary due to failed water conservation policies in Washington County and a slowdown in population growth. On top of that, they argue the pipeline would be a financial boondoggle that would dog residents for decades to come.

New families moving into the area could be hit with outrageously high impact fees on water hookups, the groups say, or be subjected to water rates so high they will be difficult to swallow.

"The Lake Powell Pipeline is just a billion-dollar water slide," said Amelia Nuding, water and energy analyst for Western Resource Advocates. "Southwest Utah already has enough water for decades to come. They just need smarter planning."

The group not only questions the $1 billion price tag for the 139-mile pipeline — saying it could ultimately be twice that amount — but contends the revised population growth projected by the Governor's Office of Planning and Budget for that area demonstrates water needs could easily be met through 2060 or longer without the pipeline.

"In fact, (Washington County) could double its water demand and actually serve a nearly four-fold increase in population," Nuding said.

But water purveyors and other supporters say the time to plan for long-term needs is now, and Washington County's chief water supply, the Virgin River, is nearly tapped out.

The "new" source of water for the pipeline would come from a portion of Utah's allocated but unused share of the Colorado River, water that slips by now and flows downstream to the benefit of Nevada and California residents.

The proposal's sponsor, Rep. Patrick Painter, R-Nephi, said it is foolish to let Utah water flow by undeveloped, especially when growth projections can be fickle.

Money for the Lake Powell Pipeline and an array of other water infrastructure needs would be generated by the earmark of 15 percent of the future growth in sales tax revenue collected by the state. It would be repaid over time, with interest, to the state. 

But in a letter directed Tuesday to Utah's legislative leadership and the co-chairmen of the revenue and taxation committee, an economic analysis of the pipeline's financing urges lawmakers to "carefully study" if Washington County has the capacity to repay the loan.

The letter, released by the Utah Rivers Council, points out that water district income is eclipsed by the annual repayment demands on the loan, plus debt service that would be significantly higher than commercial lending standards.

Ron Thompson, manger of the Washington County Water Conservancy District, said the pipeline would be repaid through water rates and impact fees, and said any increases would be reasonable.

"They don't have to go that high," Thompson said.

Of the 1,400 water contract projects issued since 1947 under a similar repayment scenario as the proposed pipeline, only two of those loans went into arrears, Painter added.

"I think we are 100 percent safe on getting it paid back," he said.

E-mail: amyjoi@desnews.com Twitter: amyjoi16

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