Water Supply and Demand Study 1/13/11

Animas -La Plata Water Marketing Supply and Demand Study Section 2
that this estimate may change depending on how successful the State is in negotiations with
Reclamation to reduce the cost of water to the State.
2.3 Updated OM &R Costs
The Animas La Plata Operations and Maintenance Association (Association) was established through an
Intergovernmental Agreement (IGA) among six of the seven Project Sponsors, including Colorado Water
Resources and Power Development Authority (on behalf of the ALPWCD), the Ute Tribes, the Navajo
Nation, the San Juan Water Commission, and the La Plata Conservancy District, the exception being the
State of Colorado. The Association was established to assume the Operations, Maintenance and
Replacement (OM &R) responsibilities and associated costs for the A -LP Project from Reclamation.
Pursuant to the "Operation, Maintenance and Replacement Contract" (OM &R Contract) between
Reclamation and the Association, the defined "Transferred Works" include the following:
Ridges Basin Dam and Lake Nighthorse and their appurtenant facilities:
• Downstream channel improvements on Basin Creek;
• Durango Pumping Plant and appurtenant facilities;
• Ridges Basin Inlet Conduit and appurtenant facilities; and
• 0 &M Facilities necessary to support the OM &R of the Project, including certain moveable
property and equipment as determined by Reclamation after consultation with the Association
(OM &R Contract, Section 4).
The transfer process will begin upon notification of "substantial completion" of the Project by
Reclamation to the Project sponsors. At that time, Reclamation will prepare a "Transfer Inspection
Report" which will contain a detailed list of all Project facilities, moveable property and equipment to be
transferred. At this time, a declaration of substantial completion and transfer report are anticipated to
be prepared in the 2nd or 3rd Quarter of 2012.
The Association will not be responsible for the Navajo Nation municipal pipeline; any recreation facilities
that may be constructed at Lake Nighthorse; the Project mitigation area and related lands in the La Plata
River Basin; County Road 210 and 211; gas lines; power lines or other facilities; unless specified in
writing between Reclamation and the Association.
Association Membership
The State of Colorado is a Project sponsor, recognized in the Congressional Authorized legislation as a
Project beneficiary, but is not a member of the Association at present. Pursuant to Section 2.3.1 of the
IGA (Appendix C) the State of Colorado or the entity or entities to which it assigns its interests may
become a member of the Association upon assumption of the State's repayment responsibilities to
Reclamation for at least 780 acre -feet (AF) of annual depletion (1,560 AF of water supply) no later than
the date of the Final Cost Allocation for the Project, which is the last step of the project construction
phase and will occur following the declaration of "substantial completion" and the submission of the
transfer report to the Association. The State of Colorado, through the CWCB and the Colorado Attorney
General's Office, participated in the negotiation of the IGA to assure, to the extent possible, that the
State could join the Association without modification of the IGA and that the State's interests could be
assigned. It should be noted that the State of Colorado's membership in the Association is subject to
the Association's acceptance of the repayment contract between the State and Reclamation and /or
provisions in an assignment contract to another water provider in the State. Secondly, while Reclamation
is not part of the Association it will pay the Fixed OM &R costs of the Ute Tribes until the Tribes put their
A -LP Project water to use. Therefore, Reclamation will necessarily be an active participant in A -LP Project
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FINAL ALP Report_1_13_11_LL.Docx