Colorado River District sees soft demand for its stored water

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Photo: Courtesy of Bureau of Reclamation

The crest of the dam across the Fryingpan River that forms Ruedi Reservoir, which can hold 102,373 acre-feet of water.

GLENWOOD SPRINGS – Officials at the Colorado River Water Conservation District say the market for additional water sales to cities and the energy sector from water it owns in four Western Slope reservoirs, including Ruedi Reservoir, is flat or declining.

However, the potential to sell water from the reservoirs to increase flows in rivers for environmental purposes holds promise.

As part of a Feb. 15 workshop on the river district’s financial outlook, which is challenged by the effects of two Colorado laws that put limits on property-tax revenue, district officials briefed the district’s board of directors on the potential to increase revenue to the district from additional water sales.

Today, the district’s enterprise fund brings in about $1.2 million a year from the sale of about a third of the 24,400 acre-feet of water it has available for sale in Ruedi, Wolford, Elkhead and Eagle Park reservoirs.

But there does not appear to be much future demand for the district’s unsold water.

“Municipal entities that could benefit from either Ruedi or Wolford water are already well situated for the foreseeable future through existing Ruedi and Wolford contracts,” district general manager Andy Mueller said in a Feb. 11 memo to the board of directors. “Energy demands are expected to remain modest or potentially decline as the principal use for our marketing pool by industry has been for frac water and ancillary uses. Again, absent some large-scale, industrial demand (historically, oil shale development) demands are expected to be flat.”

The district owns 11,413 acre-feet of marketable water in Ruedi Reservoir, which holds about 102,000 acre-feet of water behind a dam on the Fryingpan River above Basalt.

Today, the district has existing sales contracts to deliver to various customers 5,263 acre-feet of water from Ruedi, leaving 6,150 acre-feet of water available to sell.

In Wolford Reservoir, the district has 8,100 acre-feet of water set aside for sales. Wolford is owned and operated by the river district and located on Muddy Creek, a tributary of the Colorado River above Kremmling. The district now has sales contracts for 3,038 acre-feet of water from Wolford, leaving 5,062 acre-feet available to sell.

In Elkhead Reservoir, on Elkhead Creek, a tributary of the Yampa River near Craig, the district has 4,457 acre-feet of water available for sale but has contracts for only 100 acre-feet of the water.

And the district owns 432 acre-feet of water in Eagle Park Reservoir, which is on the upper Eagle River. Of that, 254 acre-feet is under contract, leaving 178 acre-feet to sell.

But according to Mueller, Wolford contracts have decreased since 2009 and Ruedi contracts have been flat or decreased since 2013.

A recent exception to the trend at Ruedi is a lease for water that the district signed in July with a state agency, the Colorado Water Conservation Board, for $229,000.

In exchange for the money, the district will ask the Bureau of Reclamation, which manages Ruedi, to release this year up to 3,500 acre-feet of water from the reservoir.

Releases of the water will be timed to boost instream flows in the Fryingpan River during the winter to prevent icing and to increase flows in the Colorado River later in the year to help preserve habitat for endangered fish in the “15-mile reach” below Palisade. (The Fryingpan flows into the Roaring Fork River in Basalt, and the Fork flows into the Colorado River in Glenwood Springs).

“There is a growing trend and acceptance for paying market rates for in-channel water,” Mueller said in his memo. “Evidence is the 3,500 AF lease to the CWCB, as well as prices paid for various non-diversion agreements in recent years. Staff recommends that the enterprise (fund) pursue creative ways to monetize our marketable yield for in-channel beneficial uses while preserving our ability to meet municipal and industrial demands when they arise.”

Tom Gray, who represents Moffat County on the river district board, was bullish on the idea of using water stored in reservoirs to bolster flows in the state’s rivers as an alternative to drying up agricultural fields to do so.

“I think in all the basins there is going to be money for that,” Gray said. “I think there is opportunity there.”

Editor’s note: Aspen Journalism covers rivers and water in collaboration with The Aspen Times and other Swift Communications newspapers. The Times published a version of this story on Sunday, Feb. 24, 2019, as did the Glenwood Springs Post Independent and the Summit Daily News.

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