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Regional News
August 22, 2017
Feds Ask State to Prove It Can Pay for Proposed Lake Powell Pipeline
The Salt Lake Tribune
By Emma Penrod
Feds ask state to prove it can pay for proposed Lake Powell Pipeline Federal Energy Regulatory Commission gives state officials 60 days to produce a financial study, along with more data on water use and cultural riches along proposed pipeline route.
Feds ask state to prove it can pay for proposed Lake Powell Pipeline Officials from the Federal Energy Regulatory Commission (FERC) have given the state of Utah 60 days to provide a financial feasibility study on how the state would pay for the billion-dollar-plus Lake Powell pipeline.
State officials and other proponents of the Lake Powell pipeline may have just two months to convince federal regulators that their project is backed by a robust plan to pay off more than $1 billion in costs.
The Federal Energy Regulatory Commission has indicated it cannot review the state’s yet-to-be-completed application for permission to build the pipeline in southern Utah because it lacks an adequate financial analysis.
In an Aug. 11 letter to the state’s Board of Water Resources, federal regulators have given Utah 60 days to submit the financial feasibility study, including estimated costs to new and existing water users in Washington and Kane counties. FERC has also asked for additional water use data and for more details about cultural resources along the proposed route of the pipeline, which would carry Colorado River water from Glen Canyon Dam 140 miles to St. George.
A spokeswoman for the federal agency, Celeste Miller, said Tuesday that state officials had indicated the requested information would be part of Utah’s final application. But the study still has not been submitted.
Josh Palmer, a spokesman for the Utah Division of Water Resources, said the division’s staff is reviewing FERC’s request and plans to submit at least some additional information within 60 days.
Whether or not Utahns can actually afford to build the pipeline — last estimated to cost in the range of $1.4 billion— has been a central issue in a long-running debate over the proposed project. Zach Frankel, executive director of the Utah Rivers Council and an outspoken opponent of the pipeline, said he was pleasantly surprised to see FERC wading into the issue.
“We’re pleased to see they’re at least asking the right questions,” he said.
According to current state law, the state Division of Water Resources would pay for the construction of the Lake Powell pipeline, with taxpayer money. But the recipients of the water — currently Kane and Washington county water conservancy districts — would be required to repay the state through the purchase of pipeline water over the course of 50 years. How much that water will cost remains a matter of dispute.
Frankel pointed to an analysis by economists at theUniversity of Utah, which concluded that water rates in Washington County would have to rise by more than 500 percent to pay for the water the Washington district would be obligated to buy.
The water district, on the other hand, has contended it has a plan that would enable it to pay for the pipeline by increasing customers’ water bills just a few dollars each month. But, when pressed for documentation of its plan, the water district released a series of slides and spreadsheets it said were used in interactive focus groups in 2013 and 2014. The documents did not represent an actual repayment plan, according to the water district.
The state’s Lake Powell pipeline license application, which was initially submitted in March 2016, did not detail the cost of water to end users. The application remains incomplete in other ways as well; shortly after filing it, regulators at the Division of Water Resources indicated that the 6,000-page document contained numerous errors and would require revision.
The state has intermittently filed supplementary material correcting and expanding its application since it was first submitted.
Frankel said he believes the state is stalling in order to avoid having to admit it does not know how to pay for the pipeline.
“I think Utah taxpayers are going to pay $6 of every $7, or $8 of every $10, for the Lake Powell Pipeline and the proponents of the project know it,” Frankel said. “They‘re stalling and they’re hiding, and they’re pretending like they have a viable repayment plan, but they know it can’t be done.”
Utah’s congressional delegation, as well as Gov. Gary Herbert, have asked FERC to complete its review of the as-yet-unfinished application by 2018.
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