Lake Powell Pipeline gets financing reality check

Published: Friday, Nov. 29 2013 1:34 p.m. MST

These canals are located in the Sugar House area. The Utah Rivers Council said the state should more aggressively pursue agricultural water contained in canals like these instead of going after big dollar projects like the Lake Powell Pipeline or the Bear River Development project to augment water supplies.

Zach Frankel, Utah Rivers Council

SALT LAKE CITY — Hotly contested and highly complex, the planned Lake Powell Pipeline project continues to wend its way through federal reviews, a process that involves close to two dozen studies spanning everything from air quality impacts to effects on endangered species.

The $1 billion, 139-mile pipeline would divert 80,000 acre-feet of water to Kane and Washington counties from Lake Powell — water that is Utah's share of unallocated Colorado River Basin water that isn't being used. Because a component of the pipeline is the hydropower it would generate, the Federal Energy Regulatory Commission is the entity overseeing the licensing and approval process, which is still a couple of years away.

A 29-member citizen advisory committee recently finished up a year's worth of work reviewing various details about the project, culminating in a meeting earlier this month in which several funding scenarios were presented by a consultant.

The Community Integrated Resource Planning Advisory Committee, or CIRPAC, was polled for responses on several issues associated with the pipeline, such as their views on how much population will grow in the coming decades in Washington County and how much water can be saved through conservation.

Jeremy Aguero, the principal analyst for Applied Analysis, said the basic idea is to take the demand for water and marry that with the available supply in Washington County.

"It was an exercise we went through that put context around the conversation of water developement," he said.

The variables in the survey — including who should pay for what portion of the pipeline — were plugged into a model that generated any number of financing scenarios for the pipeline such as what water rates may look like in the future and how impact fees would be affected.

Some of the committee's opinions showed that:

69 percent said Washington County can count on less water in the future because of drought and climate change, with most settling on a decline of 10 percent

94 percent said they do not believe Washington County has sufficient water to meet the needs of population growth, or its build out population

88 percent said "new growth" should bear the majority of the construction cost for the pipeline

69 percent said the sale of land by the Washington County Water Conservancy District should be used to offset the project's costs

Aguero, the consultant, said the model includes the built-in flexibility to reflect the reality of how the pipeline would be funded, tapping a combination of revenue streams like water rate increases, impact fees, the sale of property and ultimately the pipeline's hydropower component.

"We want to reset the tone of the dialogue from being alarmist to something reasonable. The conversation has not ended, but only just started."

Foes of the pipeline contend it is nothing more than a financial boondoggle that will saddle residents with exorbitant increases for water the county doesn't need. Groups such as the Utah Rivers Council and Citizens for Dixie's Future have argued against the pipeline, urging conservation of water and other reforms as a way to shore up Washington County's water needs.

But Aguero said even conservative population growth shows Washington County running of out of water by about 2025 and claims of monumental rate increases and skyrocketing impact fees are just that – assertions that fail to consider the pipeline is paid for in chunks, according to the amount of water that is taken over time.

"You pay for it when you need it. These may seem like small details, but they are remarkably important when it comes to costs."

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