11d

• Board Meeting Date: 1/22/2008
• Description: CF Section – Construction Fund and Severance Tax Trust Fund Perpetual Base Account – New Loans - Republican River Water Conservation District - Republican River Compact Compliance Pipeline Project
• Board Meetings - Doc Type: Memo

n my opinion, the SP Resource proposal is not a cost-effective or realistic alternative to
the RRWCD Compact Compliance Pipeline project. The SP Resources proposal would be 3 to
4 times more expensive on an acre-foot basis and would cost at least $0.5 million/year more to
operate n addition, a realistic timeline for delivery of water to the Colorado-Nebraska state line

n theory, the SP Resources proposal could be modified to deliver approximately 15,000
ac-ftlyr to have the same yield as the RRWCD Compact Compliance Pipeline project. The SP
Resources pipeline construction cost would increase some and it is reasonable to estimate that
the additional water would probably cost $6,OOO/ac-ft. The operating cost would increase by
50% due to additional pumping cost. This would increase the total cost of the SP Resource
proposal to at least $210 million and would lower the unit cost to about $14,000 per ac-ft. This
would still be almost 3 times more expensive than the RRWCD Compact Compliance Pipeline
project. The RRWCD projects a fee increase of $9 per acre to cover the cost of the RRWCD
Compact Compliance Pipeline. An increase of at least $27/acre would be required to cover the
cost of a comparable SP Resource proposal

As shown in Table 1, the SP Resources proposal is approximately 3.7 times more
expensive per ac-ft than the RRWCD Compact Compliance Pipeline project. Colorado is
currently about 11,000 ac-ftlyr out of compact compliance. This compact compliance shortfall is
projected to grow to approximately 14,000 or 15,000 ac-ftlyear in the next 25 to 30 years. The
SP Resources proposal does not have sufficient water to meet Colorado's current obligation
and no reserve to meet projected future compact obligations

Description
Yield of Project (ac-ftlyr)
Cost of Water
Unit Cost of Water per ac-ft
Length of Pipeline to state line
Cost of Pipeline
Annual Operating Cost
Total Cost of Project
Unit Cost of Project per ac-ft
Prolected DeliveJY Date

South Platte
Resources
Proposal
10,000
$60 million
$6,000
80 miles
$120 million
$1 million/year
$180 million
$18,000
1.5 to 4 'y'ears

RRWCD
Compact
Compliance
Pipeline
15,000
$50 million
$3,400
13 miles
$21 million
$0.5 million/year
$71 million
$4,800
1.5 'y'ears

Difference
-5,000
+10 million
+$2,600
+67 miles
$99 million
+$0.5 million/year
+ 1 09 million
+$13,200
+2.5 years

Table 1
Comparison of SP Resources Proposal and the RRWCD Compact Compliance

P~eiine Prolect

The following table is a comparison of
noted that the pipeline cost shown in Table 1
cost per mile of pipeline developed by GEl. Consultants.

the major features of each project. It should be
for the SP Resources proposal is based on the

Summary and Recommendations

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