Final Draft ALP Marketing Supply and Demand Study

Section 6
Conclusions
The investigations completed in the present study, as well as in the February 2010 report, conclude that
A -LP is an important source of water in meeting future M &I demands.
• The LPAWD has indicated interest in purchasing up to 1,560 AF of A -LP Project water.
• With assistance in constructing necessary infrastructure, several other entities have indicated
interest in purchasing A -LP water, including Lake Durango Water Authority and La Plata West Water
Authority.
• Meet future water demands and protect against droughts and shortages due to variability due to
climate change. Although limited, there are some exchange opportunities to serve M &I demands and
reduce priority calls on junior reservoirs.
• Provide assistance in meeting Colorado River Compact Compliance obligations.
• Assist with the San Juan River Basin Recovery Implementation Program.
Colorado River Compact Compliance is significant because Article XIV of the Upper Colorado River
Compact assures that Colorado will deliver sufficient water from the San Juan River and its tributaries to
New Mexico. Because New Mexico is allowed to make full use of the water apportioned to New Mexico
by the Upper Colorado River Compact and because the presently unknown terms for Compact
curtailment have not yet been developed, it is important for Colorado to maintain water supplies to which
it has rights in order to meet these compact compliance obligations without injuring Colorado water
users. This need has been previously identified by the State and will be further evaluated in the water
banking concept study being developed by the Colorado River Water Conservation District, Southwestern
Water Conservation District, and other Colorado water users. This use of A -LP water should be fully
explored within that study.
In utilizing A -LP Project water„ consideration needs to be given to legal and water right issues discussed
in Section 4.0.
Project Costs
Costs for A -LP Project water as of October 2010, are estimated to be about $3,475 per AF for capital
costs. This is composed of capital costs of $27,914,902 and estimated IDC costs of $8,437,263 for a
total cost of $36,352,165. IDC will continue to increase until a contract is negotiated with Reclamation,
but the State of Colorado intends to negotiate IDC charges and other costs, potentially bringing an
overall decrease to the capital charges.
Fixed OM &R costs for the entire A -LP Project range from $610,000 per year to $680,000 per year as
determined by Reclamation in March 2009. Colorado's portion for State Water would range from
$64,050 to $71,400 assuming a purchase of the entire allocation. Variable OM &R costs are related
solely to pumping into Lake Nighthorse. Pumping may not be required every year. Variable OM &R costs
will be paid first from the Variable OM &R Fund. Variable OM &R costs are estimated to range from $12
to $29 per AF depending on the season, time of day, number of pumps used and various other factors.
The OM &R costs are also estimates and will change once the Association begins operating the project.
6 -1
FINAL ALP Repo rt_1_13_11_LL.Dorx