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• Board Meeting Date: 7/22/2009
• Description: WSP Section - Upper Colorado River ESA Recovery Program - 10825 - Tuedi Reservoir Update
• Board Meetings - Doc Type: Memo

Agenda Item 21
Julv 21-22, 2009 Board Meeting
Page 3 of 6
be made possible by the dry-up of a portion of the land currently irrigated by the Redtop Valley
Ditch. Also, excess storage capacity in Green Mountain Reservoir inay be utilized to re-tiine the
scheduled releases froin Granby Reservoir as necessary and to optiinize benefits in the 15 Mile
Reach. The selected Granby / Ruedi alternative would be cooperatively and jointly developed by
the coalition of East Slope and West Slope water users.
The Granby / Ruedi alternative is selected for the following priinary reasons:
q Water deliveries to the 15 Mile Reach will utilize existing facilities to effectively and
efficiently deliver the water.
q Of the alternatives evaluated, this alternative will provide the most benefit to headwater
streams in the Colorado River Basin (particularly in Grand County) while simultaneously
ineeting 10825 Water obligations. Increased streain flow of the Colorado River below
Granby Reservoir will enhance aquatic life, recreational opportunities and water quality.
q Recovery Program releases of v~ater froin Ruedi Reservoir will decline by 5,412.5 AF' after the
year 2012. Thus, high suininer streain flow conditions in the Fryingpan River that inay interfere
with recreational use can largely be avoided.
Discussion
Financial Impact of Water for Endangered Fish: The 5,000 AF' of Round II water for
endangered fish is reimbursable, i.e., the capital and OM&R costs associated with this water are
carried forward as part of the west slope's repayment obligation. These costs are spread over
future contracts for Round II water. Fish and wildlife benefits at other Reclamation projects are
considered non-reimbursable costs.
Of the 21,650 AF' called for in the 1995 biological opinion, 10,825 AF' is now provided by water
users, and the reinaining 10,825 is provided by Reclaination froin Ruedi for endangered fish
flows. The water provided by Reclamation is considered to be `under contract' until 2012. In
2013 this water is again available for inarketing.
Reclaination annually accounts for the 10,825 AF' of water for endangered fish flows under
contract through 2012 and receives recognition by the Recovery Program for the annual capital
payinent based on the 2003 rate of $67.89, which is equivalent to $734,909.25 annually. The
total capital cost return on the contract (2003-2012) is $7,349,092.50, which reduces the debt on
Ruedi Reservoir.
Ruedi Round II Debt: The original Round II capital cost of $7.893 million is subject to a fixed
interest rate of 3.046% per the Fryingpan-Arkansas Project Act. This interest rate is applied to
the unpaid original debt. Pursuant to the Water Supply Act of 1958, the interest on the unpaid
debt (costs associated with non-contracted water) coinpounds, i.e., there is interest on interest, at
the rate established under the Water Supply Act of 1958. Between 1980 and 2009, the annual
interest rate has varied froin 7.095 % to11.07%.
Interest also coinpounds on the OM&R costs associated with unsold, inarketable water. The five
year (2004-2008) average annual OM&R costs were $227,000. Revenue from contracted water
was $117,000, leaving $110,000 unpaid. These costs accuinulate and are charged coinpound
interest at rates determined by the Water Supply Act of 1958.