Big Front Range water players are questioning a $99 million deal to purchase a historic Colorado River water right on the Western Slope, according to letters obtained through a public records request by The Colorado Sun.
The Colorado River Water Conservation District, which is based in Glenwood Springs and safeguards water resources in western Colorado, is working with a collection of more than 20 partners to raise money to buy Shoshone Power Plant’s water rights from Xcel Energy. The rights are some of the oldest on the mainstem Colorado River in Colorado, and have supported communities and boosted the river’s flows for over a century.
Northern Colorado Water Conservancy District says it’s not necessary to spend millions in taxpayer dollars on the deal, nor is it necessary for the River District to play such a central role. Whether it opposes the deal will depend on a highly anticipated analysis of past water use that will guide how the rights can be used in the future, spokespeople said.
Both entities question the legality of the other’s proposal, offering an early glimpse into disagreements that could weigh down the deal.
“If we start messing with what we’ve all gotten used to … who knows if you pull on that string what unravels,” Kyle Whitaker, water rights manager for Northern Water, said in an interview. “That’s why we are so adamant. We have to see the historic use analysis, and we need to mimic that going forward.”
The River District maintains that its goal is not, and never has been, to change the way the water right has been used for over 100 years.
“Our whole point here isn’t to enlarge the right. We’ve said that very clearly, and I’m going to say that right now, we are not trying to enlarge the Shoshone water right beyond what its historic use has been,” said Andy Mueller, general manager for the Colorado River District.
Shoshone Power Plant is tucked into Glenwood Canyon by Interstate 70, a few miles upriver from Glenwood Springs. It pulls water out of the Colorado River to generate electricity, then sends the water back into the river — legally deemed a nonconsumptive use.
The water rights attached to Shoshone have been coveted for years. Under Colorado water law, older rights get water first, and younger rights can be shut off early when there’s not enough water to go around.
The older, 1905 water right allows Shoshone operators to divert 1,250 cubic feet per second, making it one of the largest, most senior, nonconsumptive rights on the mainstem Colorado River in Colorado. Shoshone’s junior right, which dates back to 1940, is for 158 cubic feet per second of water.
These rights mean that Shoshone has legal priority over some of the biggest water providers in the state. That includes Northern Water, which sends Colorado River water east through the mountains to croplands and 1 million people in northeastern Colorado, and Denver Water, which serves over 1.5 million Front Range residents.
Both providers have diverse water supplies capable of adapting to fluctuations in Shoshone’s operations.
Western water users have long feared the rights would be sold to someone who would send the water elsewhere in Colorado. Over a century, the steady flows provided by Shoshone have become integral to local economies, communities, reservoir operations, statewide water agreements and endangered fish recovery programs.
In December, the Colorado River District announced a historic deal to buy the water rights from Xcel Energy. The goal was to protect the status quo — permanently preserving the historic westward flow of water through the Colorado River even if the plant is closed or sold.
The River District plans to lease the water back to Xcel to generate electricity. If the power plant is not in production, the water associated with the rights would revert to instream flows and remain in the river to benefit the environment.
“We are trying to actually mimic the historic use of the Shoshone water right, and the historic calls on the river, to preserve the natural state of the Colorado River as we’ve known it for the last 120 years,” Mueller said.
But … is $100 million really necessary?
Northern Water has questions. So do other big water players on the Front Range.
Under the River District’s plan, Xcel Energy will be paid millions of dollars and then be able to continue producing power at Shoshone in perpetuity, Northern Water said.
“We don’t quite understand where the value is there of providing them $100 million,” Whitaker said.
Xcel could conceivably maintain ownership of the Shoshone water rights and work directly with the state to establish an environmental flow right, Northern said.
This approach would not require compensating Xcel, according to a document from Northern Water. It would also mean the River District would not need to take on such a central role — owning the new, environmental flow water right — in the first place.
If Xcel Energy did not want to help establish an environmental flow right, Northern suggested an alternative plan during an Aug. 5 meeting, according to the letters: Water users across the state could negotiate an agreement to establish an instream flow right and backdate it to the early 1900s to match the power plant’s existing rights.
The end result would be the same: An environmental water right that serves to maintain the flow of water past Shoshone when the power plant is not operational, Northern Water claims.
Under the current plan, Coloradans and potentially the federal government would be putting money down on a deal that isn’t finalized, which would come with legal and political complications, according to the letters.
There is still an approval process with the Colorado Water Conservation Board and a water court case, both of which could determine how the water right works, like the timing, location and amount of flows, Whitaker said.
Historic use: The “giant unknown”
Northern Water’s final position on the deal is going to depend on the outcome of the historic use analysis. That’s the “giant unknown,” Whitaker said.
The power plant has not always used its water rights to their maximum capacity, which is 1,408 cubic feet per second year-round. That would roughly equal about 1 million acre-feet per year, Northern said.
One acre-foot is about the annual water use of two to three homes.
The analysis should take a couple of weeks to produce, and they have been asking to see it since early this year, Whitaker said.
If the River District’s historic use analysis matches how the power plant actually operated, Northern Water would generally be supportive of the purchase deal, he said.
If the River District wants the power plant’s water rights to operate at their maximum capacity, then Northern believes that would be an expansion of how the water right has historically been used. Pulling the maximum amount of water west could adversely impact upstream water rights for the Western Slope and Front Range, Northern said.
In that case, “I guess we’ll find out what the court ultimately decides was a historic exercise of those rights,” Whitaker said.
There are more than 10,000 water users who draw water from the Colorado River upstream of Shoshone and whose water rights are more junior than the power plant’s rights, according to the Colorado Division of Water Resources.
That includes federal projects, like Green Mountain Reservoir, which is part of Northern Water’s system.
“There are protocols in place right now that will be in place for the next 30 years,” said Northern Water spokesman Jeff Stahla. “We shouldn’t be tempted to rush into something that still has some unknowns.”
“It is legally impossible to do that”
The River District disagrees with Northern Water’s stance — strongly. They said Northern Water is purposefully placing obstacles in the way, not negotiating in good faith, and suggesting options that have no precedent in water law.
The purchase price accurately reflects the value of the power plant’s water rights, and the rights clearly have public value because they are so integral to communities, economies and environmental needs on the Western Slope, district staff said. There is significant public interest in making this purchase, as demonstrated by over 20 irrigation districts, water agencies and governments committing more than $16 million toward the purchase.
The River District and the State of Colorado have each put down $20 million, bringing the total in committed dollars to over $55 million. The River District plans to apply for federal funds this fall.
The River District and Western Slope water users are very fiscally conservative and don’t like spending taxpayer dollars when it’s not necessary, Mueller said in response to Northern Water’s assertions.
“I think they somehow think that West Slope spending West Slope tax dollars and federal tax dollars is somehow not appropriate in this instance,” he said. “It’s interesting that tax dollars being spent for their benefit are appropriate, whereas their perspective is that tax dollars spent to protect the Colorado River are not appropriate.”
The River District’s central role is outlined in the purchase agreement with Xcel and in years spent searching for a way to permanently maintain Shoshone’s water rights. Many legal cases show that there is precedent for the River District to own the instream flow right, under the condition that the state is the only entity that can use it, Mueller said.
Not only that, but Northern’s alternative proposal does not work under Colorado water law, he said. Water users cannot file a new water right in 2024 and postdate it. Doing so would undermine the state’s legal system of prior appropriation, which is the foundation of how water is shared in Colorado.
“It is legally impossible to do that. I got to say, they have very skilled, highly experienced legal counsel who knows better than that, to give us an offer like that,” Mueller said. “That’s not a legitimate offer on the table.”
That proposal would negatively impact upstream water users, Mueller said, not the River District’s plan. Everyone, including the River District’s contingency of funders, rely on the continued historic flows past Shoshone Power Plant, he said.
The district did not have a timeline for when its analysis of those historic flows will be completed. Its staff is busy sifting through over 100 years of data including hundreds of 3-foot-long, handwritten spreadsheets from the Bureau of Reclamation, Mueller said.
“We actually are thinking about how this water right has run historically and how to preserve it, and how to make sure the Front Range has water during dry times,” he said. “It’s not our goal to dewater the urban Front Range. It is truly our desire to be coo
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