Choppy waters 

You know how soap operas go. As soon as one drama is resolved, another arises.

So goes the Southern Delivery System.

But while soaps are fictional, Colorado Springs Utilities' water pipeline project is a hard reality. Even with recent good news regarding interest rates, SDS is going to cost ratepayers about $1.6 billion, including interest. Complications, of course, could drive the cost higher. And quite a few have been popping up lately.

A contrary court ruling. A competing reservoir plan. Skirmishes over access to engineer the 60-mile line from Pueblo Reservoir. Unresolved deals for real estate and trenching.

Utilities thought it was home-free last year after negotiating a long-term storage deal in Pueblo Reservoir with the federal government. It's already installed 20 miles of pipe and acquired 63 percent of the roughly 300 parcels it needs. So what could go wrong?

Plenty, apparently.

"It just speaks to how increasingly difficult it is to get a project like this put on line," Utilities spokeswoman Janet Rummel says. "At this time, we believe we can continue to manage these risks within the approved budget."

But there are no guarantees.

Competing reservoirs

SDS, which will deliver water by 2016 from Pueblo Reservoir to Colorado Springs and Pueblo West, Security and Fountain, includes plans for a reservoir on Upper Williams Creek, southeast of the city on about 2,000 acres of land. About 1,140 acres are owned by the State Land Board, and 791 acres by the Norris family: Bob (the former "Marlboro Man"), his son Steve and grandson, Steven.

That reservoir site has been included in the project since 2008, but Utilities didn't contact the Norris family about it until March 9 of this year. By then the Norrises, who own swaths of land in El Paso and Pueblo counties, had already applied with El Paso County to form the Marlborough Metropolitan District, with a reservoir in mind for the same land.

Explains Robert Duncan, the Norrises' attorney: "The Norris family came to me in 2011 and said, 'Do we just have to sit here and wait? Do we have to keep our property frozen until the SDS project gets ready to buy it?'"

Instead, the family hired a water engineering firm, which Duncan says has found possible customers for water storage, including Cherokee Metropolitan District, Duncan says. The Norrises envision a $102 million reservoir holding enough water to serve about 60,000 to 90,000 families.

They certainly face obstacles. Any water project begins with owning water rights; Utilities has them and the Norrises don't, says SDS deputy program director Keith Riley. County commissioners approved Utilities' reservoir location in 2010, and Utilities contends they can't approve the same spot for someone else. Also, there's the question of how to deliver water to and from the reservoir.

"The challenges may be insurmountable," Duncan acknowledges. "On the other hand, if we form the metro district and get good cooperation from regional water providers, we could move forward in a positive direction.

"I can't predict what the city of Colorado Springs is going to do. The Norris family has plans to build a reservoir. Colorado Springs might be interested in working with us or us with them."

One meeting with Utilities seemed "productive," he adds, in that "nobody threw anything or threatened any lawsuits." But when the city gave written comments to the county on the Norris plan, they included terms like "unsupportable" and "speculative at best."

Million questions

At the very least, the Norris family could drive a hard bargain: Steve Norris says the land has been valued at $50,000 per acre. But for now, he's "not interested" in selling.

"The more we get into [reservoir planning]," he says, "the more excited we are that we can actually do this."

Another part of the mix is a project being floated by Fort Collins entrepreneur Aaron Million, a friend of the Norris family. He's planning a $3 billion, 500-mile pipeline from Wyoming's Green River to Front Range cities and farms, and says he could store water in the Norrises' reservoir.

"We believe it's in the interest of the state to help alleviate the pressure on the Arkansas [River], to add more water supplies to the region overall," Million says. "Plus, the hydropower piece. We're having initial discussions with the military. It's a huge opportunity for them to secure power."

Fort Carson spokeswoman Dee McNutt says the post is interested in "any viable sustainable energy projects that would help us meet our net zero goals," but adds that any project "would need to be coordinated through Colorado Springs Utilities."

"They may see us as a competitor, which is unfortunate," Million says of Utilities, "because they're going to infringe on a family that has a major legacy in the region. They're going to infringe on the military for secure power, and they're going to infringe on the continued erosion of the agricultural base on the Arkansas."

Another problem for Utilities is Pueblo District Judge Victor Reyes' decision to overturn SDS's "401 certification" by the Colorado Water Quality Control Division. Reyes ruled the state failed to adequately assess the impact of SDS on Fountain Creek. Utilities has appealed.

Lastly, the city faces minor approvals related to construction. One is burrowing the pipeline under Union Pacific Railroad tracks in a way that meets the rail company's demands, and satisfies federal and state regulators. Utilities officials are confident they can resolve that.

But don't bet against more headlines. As Rummel says, "There's never a dull moment in our world."



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