A plan has been hatched to buy the remaining uncontracted water from Ruedi Reservoir to keep it on the Western Slope and pay off $34 million in debt remaining on the construction of the dam and reservoir.
The Colorado River District is coordinating a purchase agreement that involves 18 entities. They range from an oil and gas company to the city of Aspen.
They will purchase 19,585 acre-feet of water annually. That is about 19 percent of the capacity of the reservoir when full.
"The river district action to deal with the debt rids the West Slope of the uncertainty of what would happen to uncontracted water and puts a stop to the ever-increasing price of the water based on the escalating debt," the river district said in a recent newsletter.
Ruedi Dam and Reservoir were constructed between 1964 and 1968. The debt was initially $9.3 million but has ballooned to $34 million over the decades because fluctuating and compounding, unpaid interest and operational expenses were added to the principal, according to the river district.
The U.S. Bureau of Reclamation anticipated that demand for water for the oil-shale boom and energy development would produce buyers for the water - "a prediction that did not come true," the river district newsletter said.
Meanwhile, the clock was ticking. The debt is supposed to be paid off by 2019.
As the debt ballooned, the price of the water soared. The entities proposing the purchase want to be locked in at the 2012 rate, which is $1,300 per acre-foot, or 1 acre of 1-foot-deep water.
The Reclamation Bureau is obligated to study the proposal to enter into contracts to sell the water, but the agency is eager to complete a deal, spokeswoman Kara Lamb said.
She said the agency didn't contemplate what would happen if the water wasn't sold.
"We were confident we would get the remaining available water" under contract, she said.
The river district coordinated the purchase among a diverse group of entities. The parties and the amount of water they are contracting to purchase each year are: the Colorado River District, 2,666 acre-feet; the Ute Water Conservancy District, 8,885 acre-feet; the Wildcat Ranch Homeowners' Association, 50 acre-feet; the Mid-Valley Metro District, 100 acre-feet ; the Crown Mountain Park and Recreation District, 62 acre-feet; the Owl Creek Ranch Homeowners' Association, 15 acre-feet; the town of Palisade, 200 acre-feet; Encana Oil, 3,998 acre-feet; Snowmass Water and Sanitation, 500 acre-feet; the town of DeBeque, 100 acre-feet; the Basalt Water Conservancy District, 300 acre-feet; Garfield County, 889 acre-feet; the town of Carbondale, 250 acre-feet; Elk Meadows Properties LLC, 70 acre-feet; the city of Aspen, 400 acre-feet; the Battlement Mesa Metro District, 500 acre-feet; Petroleum Development Corp., 500 acre-feet; and the W/J Metro District, 100 acre-feet.
The river district hopes the purchase agreement is in place by 2013.