Friday, March 25, 2011

Let's drink to the pipeline, Chamber says

Posted By on Fri, Mar 25, 2011 at 6:40 AM

From the "rah rah" section comes a report saying the city's Southern Delivery System water pipeline is an essential component of our future, starting in 2016 when water will first come gushing up a 1,500-foot hill from Pueblo Reservoir to our kitchen taps.


"Economic Impacts of the Southern Delivery System on the Regional Economy of Pueblo, Colorado Springs and Surrounding Areas" was produced by consulting firm Summit Economics LLC. The firm was hired by the Center for Regional Advancement, which is connected to the Greater Colorado Springs Chamber of Commerce.

The Chamber's Stephannie Finley told the Pueblo Chieftain the study was released now, because several candidates for mayor and City Council have said they wanted to halt or at least pause progress on SDS.

“We discussed it and our board became concerned there was information too important to hold until after the election,” she said.

Here's one justification for the project: SDS Diversifies the El Paso County Water Portfolio

Perhaps more important than bringing new water to the community to reliably meet demand
growth, SDS provides needed flexibility to the overall CSU water system.

—By providing a second pipeline into Pueblo Reservoir, in addition to the Fountain Valley
Authority pipeline, SDS provides back‐up to the water supply for Colorado Springs and
potentially much of El Paso County’s population. The back‐up is needed as a number of factors
potentially threaten the region’s water supply.

—Two of the three existing pipelines to Colorado Springs, Homestake and the Blue River,
are over 40 years old. Like any infrastructure, the need for repairs, maintenance and
replacement increases with age.

—Many El Paso County subdivisions and municipalities currently rely on nonrenewal
underground aquifers. SDS potentially provides an alternative if the communities
relying on groundwater can acquire their own water rights and permits. This could be
critical as evidenced by Cherokee Water District receiving national media coverage
when mandatory water restrictions were imposed due to chronic water shortages.

—Political, regulatory, and legal risks are mounting from a variety of sources as water
becomes scarcer. the States of Arizona, Nevada, Utah, New Mexico, and California;
Western Colorado; federal agencies, environmental groups, Native Americans, oil shale
companies; and grass roots constituencies all have claims to Colorado River basin water.
Approximately 70% of all Front Range renewable water, including Colorado Springs’,
originates in the Colorado basin. If any of the Colorado River basin entities successfully
assert their claims, current supplies to Colorado Springs could be reduced.

—Drought in the lower Colorado River basin and forecasted long‐term climatic changes
provide growing uncertainty.

Hopefully, the emerging risk factors will not manifest into actual threats. However, the risks are
real in an increasingly complex world. SDS reduces that risk by creating more flexibility to the
overall CSU water system. For instance, outages on the Homestake pipeline could be worked
around with water flowing into Pueblo Reservoir and pumped to Colorado Springs via SDS.

Calls on the Colorado River basin that reduce Western Slope water might be replaced with
water leases or additional exchanges with owners of water in the Arkansas basin. SDS might be
able to assist El Paso County water districts to transport water in the early decades, before the
full capacity is needed by Colorado Springs, as some of the districts grapple with groundwater
issues. A number of those districts are actively purchasing water rights in the Arkansas River
basin and will have to transport that water to El Paso County.

The study sets the cost at $880 million for phase one, to be completed by 2016, and up to $740 million for subsequent phases. Those costs don't include financing charges, which drive the cost of the first phase up to more than $2 billion.

But researchers emphasize the great deal we're getting by noting that bonds issued per capita for the Homestake transmountain project during the 1960s cost more than $4,000, compared to $1,600 for SDS. Homestake drove water bills up by 141 percent in eight years, while water bills will double for SDS within six years (by 2016). However, the study notes that only 75 percent of that increase is due to SDS, with the balance paying for upkeep and upgrades to the existing system.

Pueblo Reservoir: The source of happy tomorrows.
  • Pueblo Reservoir: The source of happy tomorrows.

The bottom line is we can't all get as rich as we are hoping without SDS, the study says.

"Without additional water capacity, economic friction surfaces; thereby limiting growth and opportunity by creating economic drag," the study notes, and then says without SDS, we'd see 35 percent less population growth by 2050, leading to less personal income — $866 million by 2020 and increasing to $6.7 billion by 2050.

That reduction, in turn, will reduce sales tax collections by $102.7 million annually, the study predicts.

All that means life as we know it will end, the study says. Fewer jobs, military retiree numbers will sink, manufacturing will dry up, and home-building will blow away.

If, on the other hand, SDS is built, gold will fall from the skies as Utilities spends millions of dollars building the pipeline. The project means 500 jobs with $19.3 million in wages in 2011, and an average of 786 workers with $30.3 million in earnings from 2011 to 2015.

In closing, researchers wrote:

The findings of this report indicate new water supply capacity is critical to support future economic development. Even more important is the diversification SDS provides for the region’s water supply.... Hesitating to move forward with SDS would have serious economic consequences to Colorado Springs and El Paso County with impacts felt among all of its regional neighbors.

The Center, Springs Utilities and Pueblo Board of Water Works shared the cost of the $15,000 study.

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