Colorado Springs Utilities Have Too Much Water

by | June 11, 2015

By Ryan Maye Handy

Colorado Springs Utilities is facing a water paradox this spring: While water levels in the company's system are at the highest they have been in years, the abundance of spring moisture could cost Utilities millions of dollars in lost revenue.

Record-breaking spring rains in Colorado Springs lessened city water usage and has cost Utilities about $17 million in revenue since the start of the year, said Steve Berry, a Utilities spokesman. That number could change -- for better or worse -- during the summer, but it could also mean internal cuts for the company or possible rate hikes for customers.

In addition to depleting Utilities revenue, the rains took a toll on the company's infrastructure, which officials estimate sustained $4.4 million in damage.

The losses are far from catastrophic for Utilities, but the problem could be significant enough to warrant action when the company's budget cycle comes up in early fall.

"If there's that kind of gap in revenue . I would say that it certainly impacts," Berry said.

Wet and unpredictable weather may be a boon for a drought-stricken region in constant need of water, but weather can also wreak havoc on Utilities' budget, which must account for losses in revenue when the Pikes Peak region has a good water year.

When that happens, Utilities tries to keep a tenuous balance by resorting to internal cuts to insulate customers from rake hikes, but the company needs money to maintain its vast infrastructure, which stretches from canals and reservoirs on the eastern plains to reservoirs and pump stations near the Continental Divide.

"We want customers to conserve, but we have the same need to generate revenue for our services," Berry said. "It's a very delicate balance, and the (recent) weather pattern has impacted our revenue."

While the company's financial side must grapple with the consequences of excess water, Utilities' water supply department may well be rejoicing. The wet and cool spring in southern Colorado has put excess water in many reservoirs and canals, and for the first time since 2011, Utilities is selling surplus water to farmers in the drought-stricken Lower Arkansas Valley.

Utilities sold 4,850 acre feet of water to irrigators along the Colorado Canal in Crowley County, 6,000 acre feet to Colorado Parks and Wildlife for use in lakes and parks and 7,000 acre feet to groups that buy excess water for the Arkansas Valley, said Abby Ortega, a planning supervisor for Utilities' water supply department. One acre foot is enough to cover one football field in 1 foot of water.

The spring moisture has helped drive the price of water down -- the going rate of $70 an acre foot in May dropped to $30 an acre foot in June. All told, Utilities has sold around $650,000 worth of water this spring, money that will go back into the company's general water services fund. The money will only slightly help offset some of Utilities' lost revenue, Ortega said.

Meanwhile, the rest of Utilities' system is reaping the rewards of late-season snows, heavy spring rains and later-than-usual snowmelt. May rains helped fill the lower elevation reservoirs around Pikes Peak, and snowmelt has begun to fill the mountain reservoirs near Buena Vista. While recent moisture was the trigger to start selling excess water, all signs pointed to a surplus of water in early spring, Ortega said. "So in May with all of the rain, we started to see a surplus," Ortega said. "But by April, we knew that we'd need to move some water out of storage."

In many areas across Utilities' network, water levels are at their highest in at least five years. Reservoir capacity is at 85 percent before spring runoff has really hit the mountain reservoirs, Ortega said. "We have 2.7 years of demand in storage," and that's "well above average," she said.

On Mother's Day weekend, Utilities stopped pumping water into Rampart Range Reservoir, a main storage reservoir north of Pikes Peak. While pumping typically keeps the reservoir near capacity in a regular year, rainwater has kept the reservoir close to full this year -- which hasn't happened since 2010. Utilities expects most of its reservoirs this year will be at "operating capacity" -- as high as reservoirs can be kept without overflowing -- yet another rare occurrence for the system.

Due to cool spring temperatures, runoff in Colorado's mountains started later than usual, but in the past two weeks, the mountains have lost snowmelt to the state's water system.

"Runoff kind of started in earnest last week in the mountains, and we expect it to be fairly fast," Ortega said.

The runoff is a boon and a potential bane for a region already prone to flooding.

For the immediate future, more water has begun to pose some flooding problems for El Paso County, problems that could only increase as runoff picks up.

"Without our reservoirs being able to take that water, you are going to see that result in the creeks down below," Ortega said. "And you haven't seen that condition for several years."

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