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Wildfires and drought hit water resources in northeastern Colorado
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Wildfires and drought hit water resources in northeastern Colorado

Water market tighten from the High Park fire

The Poudre River continues to collect ash and sediment from last year's High Park fire.
Courtesy, USDA
The Poudre River continues to collect ash and sediment from last year's High Park fire. Courtesy, USDA
Drought and water-quality issues from forest fires are already drying up water availability up and down the Front Range, as anxious eyes continue to watch the hills and the relatively non-existent snowpack.

Fort Collins has already announced that it will in all likelihood have water restrictions next summer and the city will not be leasing any of its water from the Colorado-Big Thompson (C-BT) project next year. The decision was mainly a consequence of continuing ash and sediment in the Poudre River from the High Park fire area, which last year meant the city was unable to use water from the river for three months, said the city’s Water Resources Manager Donnie Dustin.

“We just feel we might need to hold on to that, because we have to take half of what we normally rely on out of the picture,” said Dustin, noting the city’s in-stream rights on the Poudre normally account for half of Fort Collin’s total water resource. “Every time it rained that water turned black.”

Fort Collins’ decision has already left a number of farmers high and dry, most notably in the 111-year-old, Wellington-based Northern Poudre Irrigation Company.  The city will pull at least 25 percent of the base flow out of the ditch, but in the end most farmers here will probably be able to plant less than half of their normal acres.

Greeley has similar problems with it in-stream rights on the Poudre and that has put a good deal of pressure C-BT water, which is the most easily exchanged and used water in the state.  The system’s combination of storage is extensive, but right now the biggest East-Slope reservoir are below 50 percent of capacity and the biggest Western-Slope reservoir, Granby, is also well below historic norms.

Prices for the acre-foot shares of C-BT have climbed to about $11,000 already, compared to a low of about $7,000 in 2007, said
Sherri Rasmussen, an allotment contract specialist at the Northern Colorado Water Conservancy District in Loveland. “There has not been a lot of CBT for sale – period – and that’s been the issue this entire year,” she said.
District spokesman Brian Werner said the water quality issues and the drought have “absolutely” had an affect on the availability and price of C-BT water throughout the district, which serves cities as far south as Broomfield.

“It’s one of the purest commodity markets in water, because you don’t have to go through water court to convert its use,” Werner said. Although two thirds of the water’s use in normal years if for agricultural uses, municipalities and industry (most municipalities) actually own two thirds of the shares and normally lease water to agricultural users.

But unless there’s an exceptionally good water year coming up, those leases probably won’t be made next summer.
Most of the cities with C-BT rights, including Boulder, Longmont and Broomfield, have already begun looking at the situation with an eye at not making any water available for lease, said Dennis Miller, operations manager for Northern.
Miller said that yearly rental prices for CBT shares are normally around $30, but last year it was closer to $50, with a high of $175. He said this year’s market looks to be even more expensive.

“This upcoming year, the cities are going to be more apt to hold onto their water,” he said. “A lot of the utilities are already saying they need to keep that water in reserve.”

Miller said that the Northern district is still in good shape, because 2011 was such a good water year (actually a record water year). In 2011 the district set a quota of 100 percent, meaning that shareholders got one acre foot of water delivered for each share. This year he predicted the district will probably set a quota of 70 percent, or 0.7 acre feet per share.

The system is still in much better shape than in 2003, when several years of drought had the C-BT system so far depleted that a 30 percent quota was set.

“That put the cities into a lot of confusion and worry, and they called back all their rental water,” he said. “Some of the cities actually went out and paid some farmers not to farm.”

“This year, we’re in better shape,” he said. “We’re just going to have to be a lot more conservative, than last year.”
Denver Water’s reservoir storage was about 68 percent full on Dec. 11, compared to a historic median of 84 percent for this time a year, and the utility declared a Stage 1 drought this past spring, asking customers to reduce outdoor water use.

“If it remains dry, we’ll probably need to ask our customers to further reduce water use next summer,” said Denver Water Spokesman Travis Thompson.
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