[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]




 
  COLORADO: OPTIONS TO INCREASE WATER SUPPLY AND IMPROVE EFFICIENCIES

=======================================================================

                        OVERSIGHT FIELD HEARING

                               before the

                    SUBCOMMITTEE ON WATER AND POWER

                                 of the

                         COMMITTEE ON RESOURCES
                     U.S. HOUSE OF REPRESENTATIVES

                      ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION

                               __________

             Friday, December 12, 2003, in Denver, Colorado

                               __________

                           Serial No. 108-81

                               __________

           Printed for the use of the Committee on Resources



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                         COMMITTEE ON RESOURCES

                 RICHARD W. POMBO, California, Chairman
       NICK J. RAHALL II, West Virginia, Ranking Democrat Member

Don Young, Alaska                    Dale E. Kildee, Michigan
W.J. ``Billy'' Tauzin, Louisiana     Eni F.H. Faleomavaega, American 
Jim Saxton, New Jersey                   Samoa
Elton Gallegly, California           Neil Abercrombie, Hawaii
John J. Duncan, Jr., Tennessee       Solomon P. Ortiz, Texas
Wayne T. Gilchrest, Maryland         Frank Pallone, Jr., New Jersey
Ken Calvert, California              Calvin M. Dooley, California
Scott McInnis, Colorado              Donna M. Christensen, Virgin 
Barbara Cubin, Wyoming                   Islands
George Radanovich, California        Ron Kind, Wisconsin
Walter B. Jones, Jr., North          Jay Inslee, Washington
    Carolina                         Grace F. Napolitano, California
Chris Cannon, Utah                   Tom Udall, New Mexico
John E. Peterson, Pennsylvania       Mark Udall, Colorado
Jim Gibbons, Nevada,                 Anibal Acevedo-Vila, Puerto Rico
  Vice Chairman                      Brad Carson, Oklahoma
Mark E. Souder, Indiana              Raul M. Grijalva, Arizona
Greg Walden, Oregon                  Dennis A. Cardoza, California
Thomas G. Tancredo, Colorado         Madeleine Z. Bordallo, Guam
J.D. Hayworth, Arizona               George Miller, California
Tom Osborne, Nebraska                Edward J. Markey, Massachusetts
Jeff Flake, Arizona                  Ruben Hinojosa, Texas
Dennis R. Rehberg, Montana           Ciro D. Rodriguez, Texas
Rick Renzi, Arizona                  Joe Baca, California
Tom Cole, Oklahoma                   Betty McCollum, Minnesota
Stevan Pearce, New Mexico
Rob Bishop, Utah
Devin Nunes, California
Randy Neugebauer, Texas

                     Steven J. Ding, Chief of Staff
                      Lisa Pittman, Chief Counsel
                 James H. Zoia, Democrat Staff Director
               Jeffrey P. Petrich, Democrat Chief Counsel
                                 ------                                

                    SUBCOMMITTEE ON WATER AND POWER

                   KEN CALVERT, California, Chairman
        GRACE F. NAPOLITANO, California, Ranking Democrat Member

George Radanovich, California        Calvin M. Dooley, California
Greg Walden, Oregon                  Jay Inslee, Washington
Thomas G. Tancredo, Colorado         Raul M. Grijalva, Arizona
J.D. Hayworth, Arizona               Dennis A. Cardoza, California
Tom Osborne, Nebraska                George Miller, California
Rick Renzi, Arizona                  Ciro D. Rodriguez, Texas
Stevan Pearce, New Mexico            Joe Baca, California
Devin Nunes, California              Nick J. Rahall II, West Virginia, 
Richard W. Pombo, California, ex         ex officio
    officio


                                 ------                                
                            C O N T E N T S

                              ----------                              
                                                                   Page

Hearing held on Friday, December 12, 2003........................     1

Statement of Members:
    Beauprez, Hon. Bob, a Representative in Congress from the 
      State of Colorado..........................................     7
        Prepared statement of....................................     9
    Calvert, Hon. Ken, a Representative in Congress from the 
      State of California........................................     2
        Prepared statement of....................................     3
    Tancredo, Hon. Thomas G., a Representative in Congress from 
      the State of Colorado......................................     4
        Prepared statement of....................................     5
    Udall, Hon. Mark, a Representative in Congress from the State 
      of Colorado................................................     6

Statement of Witnesses:
    Binney, Peter D., P.E., Director of Utilities, City of 
      Aurora, Colorado...........................................    22
        Prepared statement of....................................    24
    Foutz, Alan, President, Colorado Farm Bureau.................    57
        Prepared statement of....................................    58
    Kassen, Melinda R., Esq., Director, Colorado Water Project, 
      Trout Unlimited............................................    39
        Prepared statement of....................................    40
    Kuhn, Richard Eric, General Manager, Colorado River Water 
      Conservation District, and Member, CLUB 20 Water 
      Subcommittee...............................................    47
        Prepared statement of....................................    49
    Rivera, Hon. Lionel, Mayor, City of Colorado Springs, 
      Colorado...................................................    11
        Prepared statement of....................................    13
    Rosenstein, Joel, Vice President, Coloradans for Water 
      Conservation and Development...............................    52
        Prepared statement of....................................    54
    Thurston, Hon. Randy, Vice President, City Council, Pueblo, 
      Colorado...................................................    15
        Prepared statement of....................................    16
    Walcher, Greg, Executive Director, Colorado Department of 
      Natural Resources..........................................    18
        Prepared statement of....................................    20
    Wells, Patricia L., General Counsel, Denver Board of Water 
      Commissioners, Denver, Colorado............................    60
        Prepared statement of....................................    62
        Additional statement submitted for the record............    69

Additional materials supplied:
    Leak, Alan J., P.E., Centennial, Colorado, Letter submitted 
      for the record.............................................    86
    Miller, Dave, Independent Water Planner, Letter and newspaper 
      articles submitted for the record..........................    78
    Western Resource Advocates, Statement submitted for the 
      record.....................................................    82


OVERSIGHT FIELD HEARING ON ``COLORADO: OPTIONS TO INCREASE WATER SUPPLY 
                       AND IMPROVE EFFICIENCIES''

                              ----------                              


                       Friday, December 12, 2003

                     U.S. House of Representatives

                    Subcommittee on Water and Power

                         Committee on Resources

                            Denver, Colorado

                              ----------                              

    The Subcommittee met, pursuant to call, at 10:00 a.m., in 
the Old Supreme Court Chambers of the Colorado State Chambers, 
200 East Colfax Avenue, Denver, Colorado, Hon. Ken Calvert 
[Chairman of the Subcommittee] presiding.
    Present: Representatives Calvert and Tancredo.
    Also Present: Representatives Udall of Colorado and 
Beauprez.
    Mr. Calvert. The oversight hearing by the Subcommittee on 
Water and Power will come to order. The Subcommittee is meeting 
to hear testimony on options to increase water supply and 
improve efficiencies here in Colorado.
    I ask unanimous consent that Mr. Beauprez, the 
Representative from the Seventh District of Colorado has 
permission to sit on the dais and participate in this hearing. 
So ordered.
    Before we proceed with opening statements and testimony, I 
will yield to Mr. Beauprez for some announcements, including 
Presentation of the Colors and Pledge of Allegiance.
    [Presentation of the Colors.]
    Colonel Lucas will lead us in the Pledge of Allegiance. 
Colonel Lucas is a fighter pilot Veteran of the Second World 
War, served in the Pacific, a Veteran of the Korean War and a 
Squadron Commander of the Vietnam War.
    Colonel Lucas.
    [Pledge of Allegiance.]
    Mr. Calvert. Thank you.
    Mr. Beauprez?
    Mr. Beauprez. Thank you, Mr. Chairman, I'd like to 
acknowledge the members of the Adams City Junior Officer 
Training Corps, the Reserve Officer Training Corps, excuse me, 
that were kind enough to present and post our colors this 
morning.
    Would everyone please join me in showing your appreciation.
    [Applause.]
    Mr. Chairman, I'll have more official or more formal 
comments in a moment, but let me begin by thanking especially 
you and Congressman Tancredo for convening this hearing on a 
subject that is extremely important and timely to the State of 
Colorado, one which we have grappled with most of my life and 
I'm sure we'll continue to grapple with for some time coming, 
but especially as Subcommittee Chairman, I thank you for coming 
to Colorado. Obviously, it is a subject that is of interest to 
a great many people, judging from the crowd we've got today. I 
look forward to the testimony and yield back.

STATEMENT OF THE HON. KEN CALVERT, A REPRESENTATIVE IN CONGRESS 
                  FROM THE STATE OF CALIFORNIA

    Mr. Calvert. I thank the gentleman and certainly it's great 
to start this morning with young Marines. I represent Camp 
Pendleton in California, so it's always great to see Marines 
wherever I go and this is certainly a magnificent room to have 
this hearing and this is a subject, of course, of great 
interest to this Committee and to me personally. And throughout 
this year, this Subcommittee has witnessed the drought's severe 
impact on the West.
    Every day we hear more stories about how Western community 
leaders are faced with increasingly tough decisions on how to 
provide adequate and reliable water supplies to their citizens, 
while safeguarding the environment.
    My home region of Southern California has been especially 
hit by the drought--as has all the West. Our water supply has 
decreased because of decreasing supplies. Although Colorado 
probably doesn't like to be compared to California, your State 
is also experiencing some of the same demand for water as 
demand for water continues to grow.
    Similarly to California, Colorado has one area, the Western 
Slope with most of the water, and another area, the Front 
Range, as I understand, with most of the population. Colorado's 
population has grown by almost 1 million every decade for the 
last 30 years, yet no new major storage for water has been 
built to accommodate the projected and current demand for a 
number of reasons. This, too, is an echo of my own experience 
in my own State. As we all know, capturing and transporting 
this water and paying for the associated infrastructure are not 
easy tasks due to budget constraints and certainly differences 
of opinion.
    There is a tremendous lack of consensus on how to resolve 
Colorado's water supply situation. The defeat recently of 
Referendum A is a clear message that Colorado's water leaders 
are divided and need to constructively discuss the best way to 
move forward. Too often solutions are not found because there's 
a lack of communication between key stakeholders.
    The ones who end up paying the ultimate price for this lack 
of construction discussion are the water consumers we are 
trying to help. As a matter of fact, I have an old saying that 
I know the Committee gets tired of me saying it is that from 
that old movie, ``Field of Dreams,'' ``Build it and they will 
come.'' Of course, we have a saying anywhere in the West, 
``Don't build it and they come anyway.'' And so we need to 
communicate because your constituents are the ones that pay the 
price.
    For these reasons my distinguished colleague, Bob Beauprez, 
asked for this field hearing. As someone who knows firsthand 
how intractable water issues can be, I certainly commend him 
for his positive and proactive leadership and look forward to 
working with him and the rest of the Colorado delegation on 
these important issues.
    Mr. Tancredo has been very actively involved in this on the 
Committee and I would like to say--I know Scott McInnis is not 
here today, but I came in the House with Scott a number of 
years ago. We served in the last six terms together and he's 
retiring this term and I wanted to say publicly my friendship 
and affection for Scott. We will miss him in the House, but I 
know that he's not going to disappear and he will be of service 
to Colorado in many years to come.
    I certainly hope that today's hearing will help foster 
communication and bring about collaborative and commonsense 
solutions for all of Colorado. Otherwise, if you don't come to 
an agreement, then you'll just have to send all that unused 
water down the river and we may find use for it.
    With that, we're going to recognize our first panel. The 
Honorable Lionel Rivera, Mayor, City of Colorado Springs, 
Colorado, welcome. The Honorable Randy Thurston, Vice 
President, Pueblo City Council, Pueblo, Colorado, welcome. Mr. 
Greg Walcher, Executive Director, the Colorado Department of 
Natural Resources, and Mr. Peter Binney, Utilities Director, 
Aurora, Colorado, welcome.
    And before we get into that, we're going to have opening 
statements. Excuse me, I ought to look at my script more 
carefully.
    And with that, I would recognize Mr. Tancredo for his 
opening statement.
    [The prepared statement of Mr. Calvert follows:]

           Statement of The Honorable Ken Calvert, Chairman, 
                    Subcommittee on Water and Power

    Throughout this year, this Subcommittee has witnessed the drought's 
severe impact on the West. Every day, we hear more stories about how 
western community leaders are faced with increasingly tough decisions 
on how to provide adequate and reliable water supplies to their 
citizens while safeguarding the environment.
    My home region of ever-growing Southern California has been 
especially hit hard by the drought and the regulations that decrease 
our water supplies. Although Colorado certainly does not like to be 
compared to California, your state is also experiencing the same 
pressures.
    Very much like California, Colorado has one area with most of the 
water and another area with most of the population. Colorado's 
population has grown by almost 1 million every decade for the last 30 
years, yet no new major storage has been built during the same time due 
to a number of reasons. This, too, is an echo of California's water 
problems. As we all know, capturing and transporting this water--and 
paying for the associated infrastructure--are not easy tasks with 
limited budgets and differences of opinion.
    There is a tremendous lack of consensus on how to resolve 
Colorado's water supply situation. The defeat of Referendum A is a 
clear symbol that Colorado's water leaders are divided and need to 
constructively discuss the best way to move forward.
    Too often, solutions are not found because there is a lack of 
communication between key stakeholders. The ones who end up paying the 
ultimate price for this lack of constructive discussion are the water 
consumers we are trying to help.
    For these reasons, my distinguished colleague, Bob Beauprez, asked 
for this field hearing. As one who knows firsthand how intractable 
water issues can be, I commend him for his positive and pro-active 
leadership and look forward to working with him and the rest of the 
delegation on these important issues.
    I sincerely hope that today's hearing will help foster 
communication and bring about collaborative, commonsense solutions for 
all of Colorado. Otherwise, you can keep on sending your unused 
Colorado River apportionment down to California!
                                 ______
                                 

 STATEMENT OF THE HON. THOMAS G. TANCREDO, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF COLORADO

    Mr. Tancredo. Thank you, Mr. Chairman, and let me say 
certainly, first of all, welcome, and to tell you that it is a 
courageous act for anyone to come to Colorado from California 
to talk about water. So I am very pleased that you are here and 
I commend you for that act of courage. And I do thank you very 
much for having this hearing.
    Mark Twain once said, ``In the west, whiskey is for 
drinking, water is for fighting.'' And as most of us have seen 
that old adage is as true now as it was then. Since Teddy 
Roosevelt first envisioned the Bureau of Reclamation that would 
make the ``Western deserts bloom'', the history of water in the 
West has been one of struggle, triumph, conflict and it 
continues even today.
    Over the last several decades Colorado has become an 
increasingly urbanized State with a more diversified economy. 
We have seen our population double over the last two decades. 
It is likely that we will see it double again in another 20 
years. In fact, there are more people living along the front 
range of Colorado today than were people in Colorado in the 
entire state just 30 years ago.
    While the face of Colorado has changed significantly, urban 
water consumption continues to amount to just 5 percent of 
overall consumption. And the same shortages that plagued 
Colorado's cities 50 years ago, continue to do so today. In 
fact, talk about irony. Today's Denver Post reports that on 
this day in 1953, this was the comment in the Denver Post, 
``Denver's progress in spurring residential development 
depended on getting more water, officials said.'' This was 
1953. The water storage projects that former Western Colorado 
Congressman and Interior Committee Chairman Wayne Aspinall 
built, like Glen Canyon Dam and Fryingpan-Arkansas, have served 
the interior West well in coping with their water and power 
needs. Unfortunately, our storage infrastructure is inadequate 
to meet the demands of the future or to cope with the droughts 
of today.
    Most people agree that we need to build additional storage, 
but the goal of enlarging existing reservoirs and building new 
ones remains an elusive one. Such efforts have been stalled by 
interstate water conflicts and the rhetoric of extreme 
environmentalists. Federal environmental laws like the 
Endangered Species Act have also played a role in inhibiting 
new water storage and development of projects.
    In the long run, Democrats and Republicans, Front Range 
suburbanites, farmers and Western Slopers will have to work 
cooperatively if we are to find a solution that benefits our 
entire State. It also means that people who live in places like 
Highlands Ranch, in my District, and in Aurora, will probably 
continue to pay higher rates for their water and that 
additional water will be transferred from agricultural uses to 
municipal under leases or sales.
    In short, it means Colorado water users will need to do 
what we all learned to do in kindergarten, and that is, share. 
Stretching current supplies whether by utilizing excess storage 
capacity in existing reservoirs, improving conservation, using 
more efficient irrigation and landscaping techniques, 
eliminating invasive plants like tamarisk, improving Federal 
laws, enlarging existing storage facilities and exploring the 
concept to build new storage and delivery systems are all 
avenues that need to be explored.
    While it is clear that addressing these challenges to the 
satisfaction of all parties will not happen overnight, it's 
also clear that continued regional in-fighting and perpetual 
inaction are recipes for a disaster and one that will affect 
not just the thirsty, and often the scape-goated Front Range 
cities, but the economy of the entire State.
    So I hope this hearing will serve as a useful tool in 
continuing the dialog and I really do look forward to hearing 
from the participants today.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Tancredo follows:]

  Statement of The Honorable Thomas G. Tancredo, a Representative in 
                  Congress from the State of Colorado

    I would like to thank my colleague Chairman Calvert and Chairman 
Pombo for holding this hearing.
    Mark Twain once said, ``In the west, whiskey is for drinking, and 
water is for fighting,'' and, as most of us have seen, that old adage 
is as true now as it was then. Since Teddy Roosevelt first envisioned a 
Bureau of Reclamation that would make the ``western deserts bloom,'' 
the history of water in the west has been one of struggle, triumph, and 
conflict that continues today.
    Over the last several decades, Colorado has become an increasingly 
urbanized state with a more diversified economy. We have seen our 
population double over the last two decades, and it is likely that we 
will see it double again in another twenty years. In fact, there are 
more people living along the Front Range of Colorado today than there 
were in people in the entire State just thirty years ago.
    While the face of Colorado has changed significantly, urban water 
consumption continues to amount to just five percent of overall 
consumption, and the same shortages that plagued Colorado cities fifty 
years ago, continue to do so today. In fact, today's Denver Post 
reports that. on this day in 1953, ``Denver's progress in spurring 
residential development depended on getting more water, officials 
said.''.
    The water storage projects that former western Colorado Congressman 
and Interior Committee Chairman Wayne Aspinall built--like Glen Canyon 
Dam and Fryingpan-Arkansas--have served the interior west well in 
coping with their water and power needs. Unfortunately, our storage 
infrastructure is inadequate to meet the demands of the future, or to 
cope with the droughts of today.
    Most people agree that we need to build additional storage, but the 
goal of enlarging existing reservoirs and building new ones remains an 
elusive one. Such efforts have been stalled by intra-state water 
conflicts, and the rhetoric of extreme environmentalists. Federal 
environmental laws, like the endangered species act, have also played a 
role in inhibiting new water storage and development projects.
    In the long run, Democrats and Republicans, Front Range 
suburbanites, farmers, and western slopers will all have to work 
cooperatively if we are to find a solution that benefits our entire 
state.
    It also means that people who live in places like Highlands Ranch 
and Aurora will probably continue to pay higher rates for their water, 
and that additional water will be transferred from agricultural uses to 
municipal under leases or sales. In short, it means Colorado water 
users will need to do what we all learned to do in kindergarten: SHARE.
    Stretching current supplies further by utilizing excess storage 
capacity in existing reservoirs, improving conservation, using more 
efficient irrigation and landscaping techniques, eliminating invasive 
plants like Tamarisk, improving federal laws, enlarging existing 
storage facilities, and exploring the concept of building new storage 
and delivery systems, are all avenues that need to be explored.
    While it is clear that addressing these challenges to the 
satisfaction of all parties will not happen overnight, it is also clear 
that continued regional infighting and perpetual inaction are recipes 
for a disaster--and one that will affect not just the thirsty, and 
often scapegoated Front Range cities, but the economy of the entire 
state. I hope this hearing will serve as a useful tool in continuing 
the dialogue, and I look forward to hearing from our panelists today.
    Thank you Mr. Chairman.
                                 ______
                                 
    Mr. Calvert. I thank the gentleman.
    Mr. Udall?

STATEMENT OF THE HON. MARK UDALL, A REPRESENTATIVE IN CONGRESS 
                   FROM THE STATE OF COLORADO

    Mr. Udall. Thank you, Mr. Chairman. I, too, want to join in 
my current colleague's welcome directed toward you and I want 
to thank you for holding the hearing today here on this 
important matter. I also want to thank Congressman Beauprez for 
seeking the hearing and it's always great to spend time with my 
twin, Congressman Tancredo, and to be here with him.
    We also want to thank the witnesses who are going to help 
edify us so that we can learn more about what we can do, 
particularly when you take into account the Federal role which 
we will discuss here today as well as the state role in 
providing for present and future water needs.
    Water, as Congressman Tancredo just pointed out, has been 
an important issue in Colorado since humans first settled here. 
And Mr. Chairman, it's my understanding that there are more 
water attorneys in Colorado per capita than any other state in 
the country including your home State of California. So it's no 
surprise that not only is water the life blood of our 
communities, it's also provided full employment for lawyers.
    In all seriousness though, the prolonged drought that 
Colorado has been experiencing has indeed raised the stakes in 
our efforts to supply an already scarce resource to the many 
demands placed on it. Since water issues have been so 
contentious, it is essential that we work together to develop 
collaborative solutions that are environmentally sound, 
fiscally responsible and do not pit one community against 
another. Because Referendum A, the proposed $2 billion water 
project bonding initiative that failed this past November, did 
not live up to those requirements, I opposed it. But now that 
it has been defeated, it's even more important to renew and 
reemphasize these essential principles in our continuing 
efforts to address water supply needs, as well as consumption 
policies and behaviors. Clearly, that discussion has already 
begun and this hearing is another opportunity to continue it.
    The focus for us now should be to identify and explore 
options and opportunities to help develop our existing 
resources and find ways to stretch the resources we already 
have.
    A number of proposals have been made before and after the 
defeat of Referendum A. One of those is a potential new 
reservoir near Wolcott in Eagle County. I'm encouraged by that 
effort, as it is an example of the right way to approach such a 
project: develop a process at the front end by bringing all the 
interests together, East and West Slope, to sort through the 
issues and then reach some consensus.
    If and when that consensus is reached, then I believe the 
financing is likely to follow; and without beating up on 
Referendum A too much, I think that's why the referendum was a 
particular flop because it put the last piece, the financing, 
ahead of the identification and development of projects.
    I do want to be clear too that I think our solution to our 
water woes does not solely rest with new storage projects. 
Clearly, new dams should be on the table, but there's much more 
we can do with our existing infrastructure to capture more 
water.
    These ideas include expanding existing dams and reservoirs, 
preparing many small dams so that they hold water to their 
capacity, developing conjunctive use of surplus surface flows 
with groundwater aquifers and, of course, greater conservation 
measures.
    We should also not overlook the needs of safety and 
security of existing supply facilities, especially in these 
times of terrorist threats. All of these things we can do right 
now. The State has financing authority to help with this and 
entities like the Denver Water Department have shown that 
conservation efforts can and do work.
    I hope to continue to work with all interests to explore 
these and other options and ideas and suggestions that may be 
offered here today at this hearing. I look forward to the 
conversation and the exploration that will follow today's 
hearing.
    Again, Mr. Chairman, welcome to Colorado. It's great to 
have you here.
    Mr. Calvert. Thank you.
    Mr. Beauprez?

    STATEMENT OF THE HON. BOB BEAUPREZ, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF COLORADO

    Mr. Beauprez. Thank you, Mr. Chairman, again thank you for 
your willingness to hold and host this timely hearing today and 
thanks to my good friends, Congressman Udall and Congressman 
Tancredo, both members of your Subcommittee for participating 
today and not only today, but for what they have done, what you 
have done, to further the issue of water and the subject that 
we're about today, improving not only our ability to store and 
use it, but efficiencies of the same. And especially thanks to 
all of the witnesses that are going to testify because you're 
the real experts and we're here to learn and hear from you.
    There's also a number of key Colorado leaders that, 
although they're not present with us today, have strongly 
committed themselves to advancing the water solutions here in 
the Colorado in recent years. I want to acknowledge especially 
the foresight and leadership of our Governor, Bill Owens; our 
Attorney General, Ken Salazar, as well as you mentioned, Mr. 
Chairman, Congressman Scott McInnis, and also Joel Hefley, who 
have contributed substantially to this issue for many years in 
our State.
    All of the support, sustainable, expanding, job-creating 
economy, to facilitate that objective we must be willing to 
provide the three basic infrastructure elements to that end: 
transportation, energy and water, all in dependable, 
predictable, affordable supply. In Colorado, we have to do some 
work on all three of those, Mr. Chairman. Today, we'll focus on 
water. And maybe it's the most critical of all three of those 
for us.
    In the past, we have typically adopted a very parochial 
view regarding infrastructure, water infrastructure, kind of 
any every man for himself view. I hope, however, that we 
finally realize that if one part of the State suffers, then we 
all are hurting.
    If Douglas County has a problem, as they do, then we all 
have a problem. If we dry up our farms, the whole State 
suffers. Although Referendum A did not pass at the ballot box 
on November 4th, it did succeed in terms of generating public 
debate all across the State of Colorado about water policies, 
so that part is good. Colorado citizens still expect its 
leaders to do something about planning, developing and 
utilizing water resources for our beautiful State.
    I requested this field hearing by the Water Subcommittee 
because it is imperative that we keep the momentum going in 
Colorado's movement for solving our water issues.
    Mr. Chairman, Colorado has experienced a lot of growth as 
had already been recognized in recent years, largely because of 
our beauty, climate and expanding economy, not unlike the 
reasons many flock to your State of California. Between Mr. 
Udall and Mr. Tancredo and myself, we represent a majority of 
the regions of this State that are most heavily impacted by 
growth.
    Mr. Chairman, it was during the 1960s with leadership from 
Congressman Wayne Aspinall, who I think you already cited, that 
Colorado last undertook serious aggressive steps to address our 
water needs about 40 years ago. Our population was less than 2 
million then. Today, our population stands around 4.3 million 
and according to our state demographer, by the Year 2025, we 
might exceed 6.5 million.
    While the population and demand for water swells, we still 
have the same 3.4 million acres of farmland to irrigate and 
agriculture remains a bedrock industry in this State. It 
contributes 16 billion--with a B--to our state economy 
annually. My constituents and all Coloradans know all too well 
that today, not tomorrow, is when we need to reach consensus 
about water storage, transfer and conservation for future 
generations.
    The need is obvious, but the solution continues to elude 
us. Obvious to all is that we are a 100 percent source state, 
no water flows into Colorado, only out. Further, each spring, 
millions of acre feet of water beyond our compact agreements, 
flows past our borders because we lack means to store and 
distribute. During my lifetime in this State and I am a native, 
the first 40 years I spent farming and the last 15 in an urban 
environment, it seemed that three things you don't discuss 
among friends were religion, politics and water. All three of 
those were sure to start a fight and likely not to lead to a 
resolution. We have to get beyond that.
    Without utilizing wisely the water we have sourced here, we 
endlessly pit urban interests against agriculture, east against 
west, issues or District against that, but the only clear 
result being Courts perpetually stuffed with water litigation, 
ever escalating value on a limited supply of water rights that 
we do have and bitter divisions of Coloradans against one 
another as this inevitable winners and losers gets determined. 
And really, we're all losers in the end.
    This past time, we must find a solution for the good of the 
State that involves winners and I believe it is very much 
possible, not easy, but possible. Not to oversimplify a very 
complex situation, but I believe our solution to the good of 
all of Colorado must include the following four key principles: 
first, conservation. We can always use water more efficiently 
and more wisely.
    Augmentation of existing storage is the second. There are 
numerous examples of storage lakes that need dredging to remove 
silt, dams that can be raised to increase capacity, and 
aquifers that can be used as water banks.
    Third, build new storage. Reservoirs are not inherently all 
bad. I see the Mayor of Golden out here somewhere, there's 
Chuck. Quinella Reservoir is being completed right now with 
assistance from Congressmen Udall, Tancredo and myself and will 
solve much of the City of Golden's challenge. We have to be 
willing to look at solving storage needs, rather than simply 
dismissing the possibility out of hand.
    And last, transbasin transfers. Transbasin transfers. We 
must be willing to do the hard work of moving water from where 
it's generated to where it is needed while providing both 
compensation and environmental protection for the basin of 
origin.
    Mr. Chairman, allow me to add that I requested this hearing 
with some reluctance because I strongly believe that Colorado's 
water solutions should be driven locally. I don't want any 
misconception from this requested hearing that I suggest the 
Federal government should drive this critical issue. Having 
said that, however, I recognize that vast amounts of Federal 
land are in our State, especially our mountains where most of 
our water is generated and stored, so it's rather obvious that 
the Federal government will have a role to play in Colorado's 
water solution.
    Mr. Chairman, I'm ready to work together with you, my 
colleagues in the Colorado delegation, and other members of the 
Water Subcommittee and state and local leaders, to deal with 
the difficult issues that are before us, issues related to 
water resources, project alternatives, funding methods, 
planning and the environment.
    Time has come for us in Colorado to focus on finding 
solutions to our collective water needs, not just raising 
objections to the challenges that we face. I welcome today's 
testimony on the critically important issues regarding options 
for increase in our water supply and improving our 
efficiencies. I look very much forward to our panel of 
witnesses. Thank you, again, Mr. Chairman and I yield back.
    [The prepared statement of Mr. Beauprez follows:]

 Statement of The Honorable Bob Beauprez, a Representative in Congress 
                       from the State of Colorado

    Thank you, Mr. Chairman.
    I want to thank you for holding this timely hearing on Colorado's 
options for increasing its water supply and improving water-use 
efficiencies. Thanks also to my friends, Ranking Subcommittee Member 
Udall, Congresswoman DeGette, and Committee Member Tancredo for their 
valued participation--both today and previously--in this issue so 
critical to Colorado. Most importantly, I want to thank all of the 
witnesses who will be testifying today. All of you are deeply 
entrenched in water issues on a daily basis, and I know all of us look 
forward to hearing your insights and opinions.
    There are a number of key Colorado leaders that, although they are 
not present with us, have strongly committed themselves to advancing 
water solutions in recent years. I want to acknowledge the foresight 
and leadership of Governor Bill Owens, Attorney General Ken Salazar, as 
well as Congressmen Scott McInnis and Joel Hefley, who have contributed 
substantially to this issue for years.
    All of us support a sustainable, expanding, job-creating economy. 
But to facilitate that objective we must be willing to provide the 
three basic infrastructure elements--transportation, energy, and 
water--all in dependable, predictable, and affordable supply. In 
Colorado, we have work to do on all three fronts, but today we'll 
concentrate on water.
    In the past, we have typically adopted a very parochial view 
regarding infrastructure--a kind of every-man-for-himself attitude. I 
hope, however, that we finally realize that if one part of the state 
suffers, we all hurt. If Douglas County has a problem, we all do. If we 
dry up our farms, the whole state suffers.
    Although Referendum A did not pass at the ballot box on November 
4th, it did succeed in terms of generating public debate all across the 
great State of Colorado about water policies. Colorado's citizens still 
expect its leaders to do something about planning, developing, and 
utilizing water resources for our beautiful state. I requested this 
field hearing by the Water Subcommittee because it is imperative that 
we keep the momentum going in Colorado's movement toward solving our 
water issues.
    Mr. Chairman, Colorado has experienced a lot of growth in recent 
years, largely because of our beauty, climate, and expanding economy--
not unlike the reasons many flocked to your State of California. 
Between Mr. Udall, Mr. Tancredo, and myself, we represent a majority of 
the regions of Colorado most heavily impacted by increased growth, with 
Congresswoman DeGette's district, Denver, the nexus of it all.
    Mr. Chairman, it was during the 1960's with leadership from 
Congressman Wayne Aspinall that Colorado last undertook serious, 
aggressive steps to address our water needs. Our population was less 
than 2 million. Today, the population of Colorado stands at around 4.3 
million. According to the state demographer's office, by 2025 the 
state's population may exceed 6.5 million. While the population and the 
demand for water swells, we still have the same 3.4 million acres of 
farm land to irrigate. Agriculture remains a bedrock industry in our 
state contributing $16 billion to our economy annually. My constituents 
and all Coloradoans know all too well that today--not tomorrow--is when 
we need to reach consensus about water storage, transfer, and 
conservation for future generations.
    The need is obvious, but the solution continues to elude us. 
Obvious to all is that we are a 100% source state; no water flows into 
Colorado, only out. Further, each spring, millions of acre feet of 
water beyond our compact agreements flows past our borders because we 
lack the means to store and distribute it.
    During my lifetime in this state--the first 40 years spent farming 
and the last 15 in an urban environment--it seemed the three things you 
didn't discuss among friends was religion, politics, and water. Any of 
the three were sure to start a fight, but likely not lead to a 
resolution. We have to get beyond that.
    Without utilizing wisely the water we have sourced here, we 
endlessly pit urban interests against agriculture, east against west, 
this user district against that, with the only clear result being 
courts perpetually stuffed with water litigation, ever escalating value 
on the limited supply of water rights, and bitter divisions of 
Coloradoans against one another as the inevitable winners and losers 
are determined. And, really we all are losers in the end.
    It is past time when we must find a solution for the good of the 
state that involves winners and winners. And, I believe it is very much 
possible.
    Not to oversimplify a very complex situation, but I believe our 
solution for the good of all of Colorado must include the following 
four key principles:
      Conservation: we can always use water more efficiently 
and more wisely;
      Augmentation of existing storage: there are numerous 
examples of storage lakes that need dredging to remove silt, dams than 
can be raised to increase capacity, and aquifers than can be used as 
water banks;
      Build new storage: reservoirs are not inherently all bad. 
Golden is completing the Guenella Reservoir with assistance from 
Congressmen Tancredo, Udall, and myself. We have to be willing to look 
at solving storage needs, rather than dismissing any possibility; and
      Lastly, Transbasin Transfers: We must be willing to do 
the hard work of moving water from where it is generated to where it is 
needed, while providing both compensation and environmental protection 
for the basin of origin.
    Mr. Chairman, allow me to add that I requested this hearing with 
some reluctance because I strongly believe that Colorado's water 
solutions must be driven locally. I do not want any misconception from 
this requested hearing that I suggest the federal government should 
drive this critical issue. However, recognizing the vast amounts of 
federal land in our state, especially our mountains where most of our 
water is generated and stored, I do feel there is an obvious role for 
us to play in an eventual solution.
    Mr. Chairman, I am ready to work together with you, my colleagues 
in the Colorado delegation, other Members of the Water Subcommittee, 
and state and local leaders to deal with difficult issues before us--
issues related to water resources, project alternatives, funding 
methods, planning, and the environment. Time has come for us in 
Colorado to focus on finding solutions to our collective water needs, 
not just raising objections to the challenges we face.
    I welcome today's testimony on the critically important issues 
regarding options for increasing water supply and improving water-use 
efficiencies. I am looking forward to hearing from the distinguished 
panel of witnesses, and I am confident that this will be a very 
informative hearing.
    Thank you again, Mr. Chairman.
                                 ______
                                 
    Mr. Calvert. I thank the gentleman for his testimony and 
for his leadership on this issue.
    And first, our witness is the Honorable Lionel Rivera, the 
Mayor, City of Colorado Springs.
    Welcome, sir, and you're recognized for 5 minutes. We have 
a 5-minute rule and you may have been told about that. We try 
to keep the testimony to 5 minutes so it will give us plenty of 
time for questions.

       STATEMENT OF THE HONORABLE LIONEL RIVERA, MAYOR, 
               CITY OF COLORADO SPRINGS, COLORADO

    Mr. Rivera. Before I get started, Mr. Chairman, I want to 
first thank you for coming to Colorado and hosting this very 
important hearing on very important issues for our State and I 
also would like to thank members of our delegation also for 
being here today.
    Over the years, and one more comment, I will be submitting 
my comments, written comments for the record.
    Mr. Calvert. Without objection, all the comments, any 
additional comments will be accepted into the record.
    Mr. Rivera. Over the years, the cities and towns in this 
State, as well as the agricultural community have developed a 
wide and innovative series of projects to allow us to utilize 
the water which we are entitled to consume under our compact 
with neighboring states. The very nature of our water supply 
requires us to continue to improve and increase the amount of 
storage we have in order to carry the snow melt runoff from the 
wet years to the dry years and from the runoff months to the 
months with low stream flows.
    Colorado Springs has appropriated and beneficially uses a 
portion of Colorado's compact of apportioned water on the 
Colorado River. Colorado Springs has developed and utilizes 
local water supplies originating in the snow fields on Pikes 
Peak and Colorado Springs has acquired water supplies on the 
Arkansas mainstream.
    In 1990, we began a water planning process to determine our 
needs through the Year 2040. We found that although our 
existing water supply decreased and may be adequate, there was 
need for additional storage and delivery infrastructure. In 
1996, the city adopted a plan of action which identified a 
number of approaches for meeting our future water demands. As 
part of this plan, Colorado Springs approached the Southeastern 
Colorado Water Conservancy District and indicated our need for 
additional storage. The Southeastern District then conducted a 
water and storage needs assessment on behalf of all district 
members including Colorado Springs.
    That study confirmed the need for additional storage 
capacity in order to provide firm yield to municipal entities 
and it analyzed a wide range of alternatives to meet that 
demand, including storage of nonproject water and project space 
and possible reservoir enlargements. Both storage of nonproject 
water and possible enlargement of Pueblo Reservoir and 
Turquoise Reservoir, rank very favorably in terms of cost, 
operational effectiveness, and environmental socio-economic 
factors.
    Colorado Springs has committed to pay for and receive 
approximately 50 percent of the additional storage capacity 
available through storage of nonproject water and enlargements, 
totally about 58,000 acre feet of storage, a critical component 
in meeting our future water supply requirements. The 
enlargement study is also a critical first step in future water 
planning and development in the Arkansas River Valley.
    Colorado Springs, the Southeast District, and the Pueblo 
Board of Water Works, along with over 40 entities, participated 
in this storage study process. We strongly supported and 
encouraged this regional and cooperative approach to water 
development.
    Throughout the years, Colorado Springs has worked in close 
cooperation with its neighbors in developing water supplies. 
That cooperation has been evident with the City of Pueblo's 
Board of Water Works and by that cooperation both cities have 
been able to develop very reliable supplies for their citizens.
    We hope to see a continuation of that cooperation and 
Colorado Springs is willing to accommodate concerns that the 
City of Pueblo has about flows for recreation through their 
city, as well as efforts to protect a viable agricultural 
economy in the Arkansas Valley east of Pueblo.
    We in Colorado are focusing on the improvement and 
expansion of existing storage facilities and the development of 
the means to better utilize water already capable of being 
stored. Colorado Springs believes that all the interest in 
Colorado support the principle of safely enlarging existing 
facilities, developing the means to better utilize the water 
that is already stored.
    We hope that when Congress returns from the holiday recess, 
Congressman Hefley, joined by Congressman Beauprez and 
Congressman Tancredo, will introduce legislation to permit the 
improved use of the storage facilities of the Fryingpan-
Arkansas Project, including Pueblo Reservoir and Turquoise 
Reservoir. Colorado Springs supports that legislation which 
will allow a preferred storage option plan to be developed. 
That plan will make additional storage space available to the 
cities and towns in the Arkansas Valley, as well as to the 
agricultural community through more efficient use of existing 
storage space.
    In addition, we hope that Congress will authorize the 
investigation of enlarging one or both of these facilities to 
take advantage of additional supplies that can be developed. 
This effort is consistent with the Bureau of Reclamation Water 
2025 effort to remove institutional barriers to allow storage 
of nonproject water and project space.
    We appreciate the Bureau of Reclamation's commitment to 
this effort, but we need Congress to act by codifying the 
Bureau's contracting authority on this project and to authorize 
the enlargement study. For Colorado Springs to utilize the 
waters that it has developed already, it is necessary to 
construct a pipeline from Pueblo Reservoir to the city.
    Colorado Springs with the communities of Fountain and 
Security are pursuing a new pipeline, a southern delivery 
system from Pueblo Reservoir to the Pikes Beak Region. Colorado 
Springs is working with its neighbors and the Pueblo community 
to secure the construction of that pipeline and we are 
confident that with the long history of cooperation and good 
will between the communities, that the development of the 
Colorado Springs southern delivery system will be a reality.
    We trust that Congress will be supportive in our efforts to 
ensure that the Colorado Springs community has a stable and 
adequate water supply, now and in the future.
    If we are capable of managing the water supplies that are 
apportioned to us by our various compacts, we will be able to 
meet the challenges of additional population and future 
droughts. However, that cannot occur without improved 
management of existing storage and the development of 
additional storage.
    The most efficient way to ensure that additional storage 
can be developed, is to enlarge existing facilities, rather 
than confront the challenges of creating extensive new storage.
    We would respectfully request that the Committee give 
favorable consideration to any legislation proposed by Colorado 
to permit the more efficient utilization of existing storage or 
the enlargement of existing storage facilities. And those 
conclude my comments and thank you very much, Mr. Chairman.
    [The prepared statement of Mr. Rivera follows:]

           Statement of The Honorable Lionel Rivera, Mayor, 
                   City of Colorado Springs. Colorado

    On behalf of the City of Colorado Springs, we would like to express 
our appreciation to the Subcommittee and you, Mr. Chairman, for taking 
the time to visit Colorado to discuss the very pressing water resource 
problems this State faces. As you know, Colorado sits at the top of all 
of its rivers and must share their flow with all of its neighbors. In 
addition, well over 70% of the total amount of water flowing in our 
rivers occurs in just three short months and comes from the melting 
snow in our mountains.
    Colorado Springs is the second largest metropolitan area in the 
State of Colorado and the home to a number of our military 
installations, including the Air Force Academy, Fort Carson, NORAD, 
Peterson Air Force Base, Schriever Air Force Base and the newly created 
Northern Command. All of these entities are served by Colorado Springs 
Utilities, an enterprise of the City of Colorado Springs.
    Colorado Springs has a history of providing reliable, cost-
effective utility services to our customers, including domestic, 
commercial and industrial water supplies, despite our location in a 
very arid part of the country.
    We possess a very diverse water supply and delivery system, with 
over 75% of its water coming from the Colorado River Basin through 
transbasin diversion projects. The remainder is obtained from the Pikes 
Peak watershed or from the Arkansas River itself via the Fountain 
Valley Pipeline. The latter delivers our federal Fryingpan-Arkansas 
Project water.
    However, the recent drought has stressed our water supply and 
delivery system. As we can all attest, it has forced all of us to 
reevaluate our water supplies and delivery infrastructure. Colorado 
Springs for several years has had an aggressive water conservation and 
demand side management program. During the drought our residents were 
able to reduce their consumption by 12% in 2002 and almost 20% this 
year.
    I also want to highlight our reuse system. We have one of the 
largest wastewater reuse systems in the state and it has been in use 
since the 1960's. We have a direct reuse/non-potable water system at 
our Las Vegas Street Waste Water Treatment Plant that currently has a 
capacity of up to 6 mgd, and we reuse about 3,000 acre feet (af) of 
water per year on that system for irrigation. In addition, the water 
that is delivered to the Air Force Academy and some of the water to 
Fort Carson is also reused. We continually make improvements in those 
systems recognizing it is a valuable component of our current and 
future water supply. We are evaluating expanding our non-potable reuse 
delivery system.
    Over the years, the cities and towns in this State, as well as the 
agricultural community, have developed a wide and innovative series of 
projects to allow us to utilize the water, which we are entitled to 
consume under our compacts with our neighboring states. But the very 
nature of our water supply requires us to continue to improve and 
increase the amount of storage we have in order to carry the snowmelt 
runoff over from wet years to dry years and from the runoff months to 
the months with low streamflows.
    Colorado Springs has been a leader in developing innovative water 
supplies relying upon a variety of sources to meet the needs of its 
rapidly growing population. Colorado Springs has appropriated, and 
beneficially uses, a portion of Colorado's Compact apportioned water on 
the Colorado River; Colorado Springs has developed, and utilizes, local 
water supplies originating in the snowfields on Pikes Peak, and 
Colorado Springs has acquired water supplies on the Arkansas mainsteam.
    In 1990, we began a water planning process to determine our needs 
through the year 2040, based upon realistic growth projections. We 
found that, though our existing water supply decrees may be adequate, 
there was a need for additional storage and delivery infrastructure. In 
1996, the City adopted a plan of action which identified a number of 
approaches for meeting our future water demands, including water 
conservation, existing system improvements, and a new Southern Delivery 
System from Pueblo Reservoir, which is part of the Fryingpan-Arkansas 
Project.
    As part of this action plan, Colorado Springs Utilities approached 
the Southeastern Colorado Water Conservancy District and indicated our 
need for additional storage. The Southeastern Colorado Water 
Conservancy District then conducted a water and storage needs 
assessment on behalf of all District members, including Colorado 
Springs. Colorado Springs Utilities fully supported this district-wide 
effort. That study confirmed the need for additional storage capacity 
in order to provide firm yield to municipal entities and it analyzed a 
wide range of alternatives to meet that demand, including storage of 
non-project water in project space and possible reservoir enlargements.
    Both storage of non-project water and possible enlargement of 
Pueblo Reservoir and Turquoise Reservoir ranked very favorably in terms 
of cost, operational effectiveness and environmental/socioeconomic 
factors. Colorado Springs has committed to pay for and receive 
approximately 50% of the additional storage capacity available through 
storage of non-project water and enlargements, totaling approximately 
58,000 acre-feet of storage, a critical component in meeting our future 
water supply requirements. The enlargement study is also a critical 
first step in future water planning and development in the Arkansas 
River Valley.
    Colorado Springs and the Southeast District were not alone in 
undertaking these planning efforts. Over 40 entities participated in 
the storage study process, including the Upper Arkansas Water 
Conservancy District, the City of Canon City, Arkansas River Outfitters 
Association, Colorado Division of Wildlife, City of Florence and the 
Pueblo Board of Water Works, the body responsible for providing water 
service to the City of Pueblo, our neighbor to the immediate south. We 
strongly supported and encouraged this regional and cooperative 
approach to water development.
    Throughout the years Colorado Springs has worked in close 
cooperation with its neighbors in developing these water supplies. In 
particular, that cooperation has been most evident with the City of 
Pueblo's Board of Water Works and, by that cooperation, both Cities 
have been able to develop very reliable supplies for their citizens. We 
hope to see a continuation of the cooperation that has occurred for so 
many years, and Colorado Springs is willing to accommodate concerns 
that the City of Pueblo has about flows for recreation through the 
City, as well as efforts to protect a viable agricultural economy in 
the Arkansas Valley east of Pueblo.
    I know the Committee is painfully aware that the opportunity to 
build new storage on the rivers and streams in Colorado has been 
significantly reduced by the competing pressures to protect the 
environment and insure that Native species and riparian conditions are 
not damaged or destroyed. As a result, we in Colorado are focusing on 
the improvement and expansion of existing storage facilities and the 
development of the means to better utilize the water already capable of 
being stored. Colorado Springs hopes and believes that all of the 
interests in Colorado support the principal of enlarging existing 
facilities and developing the means to better utilize the waters 
already stored.
    We hope that when Congress returns from the holiday recess, 
Congressman Hefley joined by Congressman Beauprez and Congressman 
Tancredo will introduce legislation to permit the improved use of the 
storage facilities of the Fryingpan-Arkansas Project including Pueblo 
Reservoir and Turquoise Reservoir. Colorado Springs supports that 
legislation, which will allow a preferred storage option plan to be 
developed. That plan will make additional storage space available to 
the cities and towns in the Arkansas Valley, as well as to the 
agricultural community through more efficient use of existing storage 
space. In addition, we hope that Congress will authorize the 
investigation of enlarging one or both of those facilities to take 
advantage of additional supplies that can be developed.
    This effort is consistent with the Bureau of Reclamation's Water 
2025 effort to remove institutional barriers to allow storage of non-
project water in project space. Optimizing the use of existing water 
supply infrastructure makes both business sense and environmental 
sense. We appreciate the Bureau of Reclamation's commitment to this 
effort, but we need Congress to act by codifying the Bureau's 
contracting authority on this project and to authorize the enlargement 
study.
    For Colorado Springs to utilize the water supplies that it has 
developed already it is necessary to construct a pipeline from Pueblo 
Reservoir to the City. Although there are already pipelines from the 
Arkansas River near Buena Vista and from Pueblo Reservoir to the City, 
those pipelines no longer meet the needs of the City of Colorado 
Springs, and an additional infrastructure must be constructed. Colorado 
Springs, along with the communities of Fountain and Security, are 
pursuing a new pipeline, the Southern Delivery System from Pueblo 
Reservoir to the Pikes Peak region. Colorado Springs is negotiating in 
good faith with its neighbors and the Pueblo community to secure the 
construction of that pipeline, and we are confident that with the long 
history of cooperation and good will between the communities that the 
development of the Colorado Springs Southern Delivery System will be a 
reality. We trust that Congress will be supportive of our efforts to 
insure that the Colorado Springs community has a stable and adequate 
water supply both now and in the future.
    To sum up, the State of Colorado has adequate water for its present 
and future needs. If we are capable of managing the water supplies that 
are apportioned to us by our various Compacts, we will be able to meet 
the challenges of additional population and future droughts. However, 
that cannot occur without improved management of existing storage and 
the development of additional storage. The most efficient way to insure 
that additional storage can be developed is to enlarge existing 
facilities rather than confront the challenges of creating extensive 
new storage. We would respectfully request that the Committee give 
favorable consideration to any legislation proposed by Colorado to 
permit the more efficient utilization of existing storage or the 
enlargement of existing storage.
    Again, we sincerely appreciate the Committee's willingness to take 
time from your incredibly busy schedule to hold a field hearing here in 
Colorado to hear from Colorado Springs and our friends and neighbors in 
this fine State concerning our desperate need for more storage to meet 
the challenges of the future.
    Thank you very much.
                                 ______
                                 
    Mr. Calvert. I thank the gentleman for his testimony. Next, 
the Honorable Randy Thurston, Vice President of Pueblo City 
Council.

  STATEMENT OF THE HONORABLE RANDY THURSTON, VICE PRESIDENT, 
             PUEBLO CITY COUNCIL, PUEBLO, COLORADO

    Mr. Thurston. Mr. Chairman, thank you and welcome to 
Colorado.
    As a representative from Pueblo, I am honored and pleased 
to address the distinguished members of this Committee. We 
welcome the opportunity to update the Committee on the advances 
Pueblo has made in developing and utilizing water resources in 
the region and to discuss the shared water concerns of our 
constituents.
    We, in southeastern Colorado, including the community of 
Pueblo, recently reached a crossroads decision. Our choice was 
either to continue to fight in Court, further depleting 
resources, opportunities and expanding taxpayers' dollars in 
Court battles, as well as understanding that there is no growth 
during the periods of fighting and battles, or to unite and 
reach consensus that benefits the needs of our citizens that 
trust us to represent their interests.
    Those benefits could include expanded water capacity in the 
Pueblo Reservoir with a new concept of soft inflows. As long as 
the enlargement is not there exclusively for future out of 
transfers basin then we truly have a problem in southeastern 
Colorado.
    The guaranteed continuing flows in the Arkansas through the 
region of the City of Pueblo, and the removal of the tamarack 
trees along the Arkansas River, the simple fact that one of 
those trees consumes 300 gallons a day of water is a major 
issue that can solve a lot of the problems just in addressing 
that.
    The vehicle used by the Arkansas Basin stakeholders was the 
creation of goals and principles signed in September of this 
year. At least 90 percent of the population of the Basin is 
represented by these stakeholders and we were very proud of 
this document and what it means both now and in the future for 
keeping the water basin, making water quality a priority, 
instead of shoving it under the carpet for future generations 
to clean up. As a foundation for continued communications and 
solutions, the goals and principles have set direction for the 
entire Arkansas Basin for its future.
    We ask that state and Federal legislators support our 
efforts and goals and principles during this time of 
transition. I hope that as a parent that all the stakeholders 
involved in developing these goals and principles have done 
such by putting the larger interest of the region above their 
own interest and have worked together to simply do what is 
right to keep the Arkansas Basin in southeastern Colorado alive 
and prosperous.
    We want to cooperate with this Committee as a partner and 
stakeholder in developing water solutions for this Basin, as 
well as the entire State. It's in the same spirit of 
cooperation we ask this Committee to respect and acknowledge 
the issues and concerns of the citizens of southeastern 
Colorado. These concerns include keeping the Arkansas Basin 
alive, the Arkansas River alive, maintaining water quality and 
ensuring the Arkansas Basin is not destroyed as a result of 
ill-formed or insensitive decisions and should be based on 
feedback from the most familiar and affected by the final 
choices that will be made in the near future.
    Pueblo and southeastern Colorado are pleased to participate 
on the on-going discussions regarding the future of water 
supplies in our State. The Pueblo City Council is optimistic 
that these efforts will ultimately be a success and a win-win 
result can soon be achieved.
    As the governing municipality of the Pueblo Reservoir that 
is dedicated to protecting and preserving the Arkansas River 
Basin, we are a strong advocate of water storage, maintaining 
water flows, improving water quality and maintaining a high 
quality of life for our city's citizens. We come to the table 
as partners to discuss and address the needs of the region, 
determined to develop the solutions necessary to preserve 
Colorado's heritage and future.
    Thank you.
    [The prepared statement of Mr. Thurston follows:]

             Statement of Randy Thurston, Vice President, 
                     City Council, Pueblo, Colorado

    The severe drought conditions that struck Colorado and other 
regions of the arid West in 2002 have made it clear that additional 
water storage in the state, in combination with sensible growth 
management, and increased water conservation and use efficiency, is 
necessary to provide a reliable future water supply for the State's 
increasing population and to meet competing demands for water. Regional 
cooperation to identify and develop appropriate projects is required. 
Reasonable mitigation of detrimental impacts will be necessary. In 
southeastern Colorado, new efforts are being made on a regional basis, 
to implement cooperative approaches to the complex issues and competing 
interests implicated by new water storage projects. While it is too 
early to determine whether these efforts will be successful, Pueblo 
remains hopeful that through these and similar efforts, appropriate 
balances can be struck to match the benefits of proposed water projects 
with acceptable levels of local, environmental and other impacts.

I. PUEBLO/SOUTHEASTERN COLORADO
    Pueblo is a community of approximately 105,000 people located on 
the semi-arid plain in southeastern Colorado. Pueblo serves as the 
medical, financial, retail and cultural center for 350,000 people from 
the Continental Divide east to Kansas, and from the City of Fountain 
south to the New Mexico border. Located at the confluence of the 
Arkansas River and Fountain Creek, Pueblo has been an important trading 
and population center for over 300 years. The Arkansas River has always 
been an important part of the City, due to its prominent role in 
commerce and industry, as a source of water for the community, and as 
the peaceful riparian habitat enhancing the urban core of the City 
adjacent to our City parks, river trails and nature center.
    Water in Colorado is obviously a scarce and precious resource. In a 
state where over 80% of the population is located on the eastern slope 
of the Continental Divide and over 80% of the moisture is located on 
the western slope of the Divide--getting the water to the people is 
often a complicated and controversial task. Most of the moisture in 
Colorado falls in the form of snow during the winter months. During the 
warming days of spring, rivers and creeks quickly fill to capacity. 
Storage of the peak spring runoff is crucial to the reliability of 
water supplies in Colorado. Water storage can benefit municipal, 
agricultural, and recreational interests, alike.
    Pueblo and southeastern Colorado have been fortunate to benefit 
from several Bureau of Reclamation storage and diversion projects. 
These projects have brought water to thirsty Front Range communities 
and farms, as well as providing needed water storage to the western 
slope of Colorado. Before these projects, farmers working the fertile 
soils in the region had water for the initial part of the growing 
season, but not all of the growing season. The Fryingpan-Arkansas 
Project, part of which is Pueblo Reservoir located less than 10 miles 
upstream from Pueblo, was completed in 1975. Project facilities are 
used for storage of both project and non-project water. In general, the 
project brings surplus water from the western slope of Colorado to 
southeastern Colorado. The project also includes western slope storage 
facilities, such as Ruedi Reservoir.

11. ENLARGEMENT OF PUEBLO RESERVOIR
    The recently proposed enlargement of Pueblo Reservoir well 
illustrates the complexities and difficulties associated with new water 
storage projects in Colorado. Even before the 2002 drought, Pueblo 
Reservoir was the focus of efforts to increase water storage on the 
Arkansas River. These efforts were, and continue to be, directed by the 
Southeastern Colorado Water Conservancy District, and supported by the 
Cities of Colorado Springs, Aurora, and other primarily municipal 
interests. The Pueblo Board of Water Works also is a strong supporter 
of the project. The Southeastern District anticipates that the Bureau 
of Reclamation will also be a partner in this expansion effort.
    While recognizing the value and need for additional water storage, 
the Pueblo City Council has consistently voiced concerns with any 
increase in the storage capacity of Pueblo Reservoir that results in 
significant diminishment of the flow of the Arkansas River through the 
City, located only a few miles below the dam. As a result, Pueblo 
opposed (including in hearings held before this Subcommittee in March 
2002) proposed federal legislation contemplating enlargement of water 
storage space in Pueblo Reservoir, because the legislation did not 
include enforceable mechanisms to protect reasonable minimum flows 
through the City. Pueblo's concerns focused on the fact that, while the 
lion's share of the benefits of the increased storage would accrue to 
distantly located municipalities, the project's detrimental impacts 
would most heavily burden Pueblo. These impacts include reductions in 
flows that diminish the value of the River as an important and 
irreplaceable amenity for the City and its residents, and impacts to 
the City's on-going efforts in partnership with the Army Corps of 
Engineers to restore riparian habitat and enhance river-related 
recreation through Pueblo.
    As a general matter, Pueblo agrees that increased utilization and 
expansion of existing storage projects is preferable to the 
construction of new projects. From a water supplier standpoint, 
expansions can be accomplished more quickly, with less time and 
resources expended on permitting efforts and at a lower cost per acre 
foot of water storage than new projects.
    Since Pueblo's testimony in 2002, several positive developments 
have occurred. As an initial step, Pueblo, Colorado Springs, the 
Southeastern District, and both the Lower and Upper Arkansas Valley 
Water Conservancy Districts reached agreement on a set of common water-
related goals and principles that are intended to provide the general 
framework for cooperative decisionmaking regarding Arkansas River 
Valley water matters. These ``Arkansas River Water Preservation Goals 
and Principles'' were finalized in September 2003. The City Councils of 
Pueblo and Colorado Springs are working more closely together than ever 
before on water issues, as a result, and Pueblo commends and recognizes 
the new leadership in Colorado Springs that has facilitated this. While 
Pueblo's on-going concerns with the proposed legislation relating to 
Pueblo Reservoir have not yet been resolved, the Cities are working 
hard to reach specific agreement on these and related issues that would 
permit the legislation to go forward. The Pueblo City Council is 
optimistic that these efforts will ultimately be successful and that a 
``win-win'' result can soon be achieved.
    Pueblo remains committed to pursuing an appropriate, cooperative 
resolution of the issues that will allow for increased water storage 
opportunities in Pueblo Reservoir to improve water supply reliability, 
while protecting the interest of Pueblo and its residents in preserving 
appropriate minimum flow levels in the Arkansas River through Pueblo. 
Additional time is necessary, however, to allow the affected state 
interests to develop an appropriate solution, and federal legislation 
mandating specific actions in the advance of local agreement could 
chill the new cooperation.

III. CONCLUSION
    The proposed expansion of the Fryingpan-Arkansas project provides 
an example of the complexities and difficulties associated with new 
water storage projects in Colorado. Recognition of the competing uses 
and values of water in an evolving Colorado and cooperation at the 
regional and local levels is necessary for such projects to become a 
reality. Federal action that would discourage such cooperation, or 
which fails to recognize the necessity for a reasonable balance of the 
various competing interests, will serve only to shift the focus of 
discussion from problem-solving at the negotiating table, to the types 
of legal and permitting wrangle that historically plagued projects like 
Two Forks and Animas-La Plata.
                                 ______
                                 
    Mr. Calvert. Thank you.
    Mr. Walcher, Executive Director of Colorado Department of 
Natural Resources is recognized for 5 minutes.

        STATEMENT OF GREG WALCHER, EXECUTIVE DIRECTOR, 
            COLORADO DEPARTMENT OF NATURAL RESOURCES

    Mr. Walcher. Thank you, Mr. Chairman, and thank you for 
being in Colorado and holding this hearing and for all of your 
leadership on resource issues that matter so much in the United 
States of the West. We appreciate you being here. And I'd 
appreciate you starting out with pointing out some of the 
similarities between our states and water and particularly in 
the reality of the natural water being in one part of the State 
and the population in another. That essentially ends the 
similarities between our states and water as you probably know. 
California has an unfortunate tendency to take our water and 
send us its people and we wish it would stop both.
    We have a serious issue in Colorado that the other 
witnesses have already talked about and Congressmen Beauprez, 
Tancredo and Udall mentioned as well. In Colorado, the issue is 
always going to be about storage and conservation because in 
this State, 80 percent of the water that we have comes in the 
form of snow and so that means that in the natural situation 
that in a span of about 2 months, it melts and leaves.
    So in this State, we have to be able to either store that 
water during the wet periods and use it during the dry periods 
or we can't sustain life here. It also means that there will 
always be discussion about the responsible use of that water to 
make sure we're using it in the most efficient and effective 
possible manner, so that all of the things that we can do to 
create a really sincere movement toward better water 
conservation in this State, we ought to be doing and we are 
doing.
    In terms of storage, it's a new era and new kind of debate 
in our State than has been before because storage doesn't just 
mean new reservoirs as others have already said. There are many 
ways to store additional water. In Colorado, that means an on-
going effort to enlarge some existing reservoirs, either by 
dredging out the bottom or enlarging the dams or both, 
particularly in places where the politics were fought out years 
ago and the reservoir is already there, that can be done.
    It also means repair existing dams where the water level is 
restricted and we have upwards of 100,000 acre feed of water 
storage already built that we cannot take advantage of because 
of restrictions on unsafe dams. We've made progress. We've 
repaired more than 100,000 acre feed of dams already, so it's 
an on-going effort, but it's a part of the storage that we need 
as well.
    We also are beginning to examine the prospects for 
underground storage in Colorado which California has already 
done to a large extent, and which we need to do as well. And 
then finally, it means new storage in this State as well.
    We're involved in the statewide water supply initiative 
which is a year-and-a-half long process to do essentially what 
Congressman Udall outlined, which is at the local level from 
the ground up to identify with all of the different players at 
the table the future water demands and needs for each basin and 
to try and figure out solutions to supplying that. That's going 
to result in an effort on the part of our State to build, I 
suspect, dozens of small water storage facilities of one kind 
or another, generally off the main stem of rivers and streams 
where they can enhance the environment as well.
    It's also enormously important to us, as part of our 
responsibility to future generations that we do everything we 
can to protect the sanctity of the interstate compacts that we 
are a party to and we are especially grateful, in fact, for the 
long-term positive working relationships we have developed with 
many of the water leaders in California, leading toward the 
publication of California's 4.4 Plan and the final signatures 
on the quantification settlement agreement. We know that you 
played a key role also in that, Mr. Chairman, and we appreciate 
your leadership there.
    And finally, I want to mention one thing that gets in the 
way in the discussion of water in Colorado very commonly and 
that is the Endangered Species Act. I want to mention it 
because I know from conversations we've had with Chairman Pombo 
and others on the Full Committee that something that the 
Resources Committee is struggling with. And it's a serious 
issue because it complicates so many of the water discussions 
in our State.
    Public support for recovery and protection of endangered 
species is overwhelming on its 30th anniversary, as you know. 
But the debate so often has veered off of actually recovering 
endangered species and into sort of sidebar issues about 
controlling human activity.
    Colorado has taken, as you probably know, a very different 
approach to recovering species by actually recovering them in 
the wild. We built the first state-owned native species 
hatchery in America dedicated entirely to the production of 
endangered fish and we have stocked back in the Colorado River 
system hundreds of thousands of razorback suckers and bony-
tailed chubs and humpbacked chubs and Colorado pike minnow. 
We're making huge progress in the recovery of the greenback cut 
throat trout and boreal toads and other aquatic species so that 
we can, in the end, get back to arguing about water for water's 
sake which is recreation to us here in Colorado.
    But there is something the Federal government could do to 
help that process along and that is to do everything that you 
can to insist that recovery goals be published on all of the 
endangered species so we know where we're headed and we can 
figure out where the light is at the end of the tunnel.
    The Endangered Species Act does not require massive 
rewrite. It doesn't require huge changes in thousand-page 
bills, that if we had actual recovery goals for all of the 
species like we now have on the Colorado River recovery 
program, it would enable us to do a better job of recovering 
species and dealing with water on the basis of the merits of 
the water issues.
    Thank you very much.
    [The prepared statement of Mr. Walcher follows:]

            Statement of Greg Walcher, Executive Director, 
                Colorado Department of Natural Resources

    I am Greg Walcher, Executive Director of the Colorado Department of 
Natural Resources.
    Mr. Chairman. It is a pleasure to join you today to share with you 
the State of Colorado's view on our water supplies and the efficient 
use of this most precious resource. I thank you and your colleagues for 
taking the time to visit our great State and to learn how we are 
addressing issues related to water management.
    With Colorado firmly in the grasp of an on-going drought, your 
visit could not have been more timely. While late spring storms eased 
the dramatic situation, the summer and fall brought continued harsh 
conditions for water managers and policymakers. We still sit at the 
heels of the worst drought on record.
    Because Colorado is uniquely situated at the apex of eight major 
water drainages, it has built its water conservation and supply 
programs around these features. Our state is highly reliant on spring 
runoff to fill our reservoirs, irrigate our fields, and bring water to 
our thirsty metropolitan areas.
    In order to meet the State's water needs, we must look to locally 
driven solutions to this statewide issue. Clearly, we cannot assume 
that West Slope water users will shoulder the entire burden created by 
growth in other parts of the state. However, we must be willing to look 
at novel answers to use and reuse of water currently in the system.
    The State of Colorado, through the Colorado Water Conservation 
Board, has started the process of working with local communities to 
identify and develop their water needs. This program, called the 
Statewide Water Supply Initiative, is the first comprehensive analysis 
of locally based solutions to our statewide water issues. Unlike other 
plans that have been offered, SWSI is built on the premise that a 
coordinated effort, built upon local expertise, offers the best 
opportunity to find new and different answers to the age-old question 
of water use.
    The project started in June of this year and is scheduled for 
completion in November of 2004. During this time, my staff will have 
held public meetings in each river basin, contacted hundreds of local 
water authorities and reviewed thousands of documents in order to 
provide a forum aimed at developing a common understanding of existing 
water supplies, future water supply needs and demands throughout 
Colorado and possible means of meeting those needs.
    Because Colorado is so diverse in its water needs, it is clear that 
the only way to address this statewide issue is to begin from the 
bottom up. As a sidebar, I would like to thank Rick Brown of the 
Colorado Water Conservation Board for his efforts guiding the SWSI 
process.
    Being a ``West-Sloper'' myself, I am sensitive to the needs of 
Western Slope towns, farms and ranches. There is no question that the 
time has come for a more comprehensive approach like the one being 
offered by the Colorado Water Conservation Board.
    While there is no question that Colorado must advance water storage 
and delivery across the state, it is important to note that the federal 
government holds a very important key to efficiently managing our 
State's water resources.
    The Endangered Species Act passed with the best of intentions three 
decades ago. However, in the intervening years, the Act has been used 
more and more as a tool to control and inhibit human activities as 
opposed to securing the future of the species it was intended to 
protect.
    Colorado has taken a bold step in advancing species conservation on 
the state level. We built and operate the first facility dedicated to 
the conservation of threatened and endangered aquatic animals. This 
facility, located in Alamosa, Colorado, is a testament to Colorado's 
desire to move beyond the political squabbles that have historically 
put a stranglehold on species conservation and to focus on recovering 
threatened and endangered species.
    In order to take the next step in our forward-looking program, the 
federal government, through the United States Fish and Wildlife 
Service, must be willing to publish static and responsible recovery 
goals. The Colorado River Program is an example of the State's ability 
to step in on behalf of wildlife, here there are four endangered fish, 
and make significant headway through the use of leadership and 
cooperation. However, we cannot efficiently utilize our water resources 
without a level of certainty on how threatened and endangered species 
will be treated. Reasonable recovery goals responsive to the resource 
will allow us to do that.
    Mr. Chairman, all of this work will be for nothing if Colorado is 
not able to protect its share of Colorado River water. Over the past 
five years, I and my staff have worked with the Department of the 
Interior and other Colorado River states to develop a framework under 
which Colorado's share of the Colorado River would be better-protected. 
With the signing of the QSA in October, the Colorado River basin states 
appear to be on track to live within the Colorado River Compact 
requirements. I am pleased that this peace has been secured and would 
like to thank Secretary Norton and her staff for their hard work.
    Earlier this month, the Colorado Water Conservation Board finished 
a feasibility study aimed at determining whether Colorado can use its 
share of the Colorado River in a way that is economically practical. 
The feasibility study concluded that such a project is possible with 
the right mix of users and the financial will to see it through. This 
novel analysis is just the type of solution that allows us to put the 
necessary tools on the table.
    Colorado's water issues are not unique, but are shared across the 
western United States. For the better part of four years, most of the 
region has seen below normal precipitation. While we cannot dwell on 
the impacts of the current drought, it is important to recognize that 
we can plan better for the next time Mother Nature throws us a 
curveball. For Colorado that means increased storage, in the form of 
expanding existing reservoirs and building new ones, increased 
efficient use of ground water sources and a sincere movement toward 
water conservation. Certainly no single program can address the 
management issues present in our state, but by protecting the water to 
which we are entitled, and by using that resource wisely, Colorado can 
protect our valued way of life and continue the State's economic 
prosperity.
    Mr. Chairman, this concludes my testimony. I thank you and your 
colleagues for the opportunity to address you today and will answer 
questions the committee might have.
                                 ______
                                 
    Mr. Calvert. I thank the gentleman.
    Next is Mr. Peter Binney, the Utilities Director, Aurora, 
Colorado. You are recognized for 5 minutes.

        STATEMENT OF PETER BINNEY, UTILITIES DIRECTOR, 
                        AURORA, COLORADO

    Mr. Binney. Thank you, Mr. Chairman. Aurora is a growing 
municipality of nearly 300,000 people in the eastern Denver 
metropolitan area. We operate the third largest municipal water 
system in the State. Aurora is strategically located to be home 
to more than 500,000 people in the next 25 years and 
contributes significantly to the vitality and economic well-
being of the State of Colorado.
    Aurora represents an important case study in how the State 
of Colorado could potentially respond to the forecasted growth 
of the Front Range population by 3,500,000 people over the next 
60 years. The recently completed Big Straw Study has projected 
that the Front Range corridor between Pueblo and Fort Collins, 
including the Denver metropolitan area, will have to develop an 
additional 784,000 acre feed to meet its municipal water needs 
and as a water manager, a rule of thumb would suggest that that 
will require 1.5 to 2 million acre feed of additional storage 
beyond what we have at the moment.
    Aurora is an important subset of those demands and will 
develop new sources of water totaling approximately 85,000 acre 
feed by the Year 2060. This represents a doubling of our 
current water supply system. Many of these projects will have 
to be completed in the next 10 to 25 years to provide an 
adequate safe and reliable water supply to these growing 
communities. Time is of the essence. These new water sources 
must be developed in a cooperative, timely and systematic 
manner while respecting the social, environmental and 
institutional values that are embraced by all the citizens in 
the State of Colorado.
    The conundrum that we face lies in this forecasted growth 
in population and resulting water demands along the Front 
Range. Our existing infrastructure of reservoirs, pipes, pumps 
and treatment plants are capable of meeting our near-term 
needs. They are not, however, adequate for meeting these 
forecasted demands and must be expanded significantly.
    The State of Colorado does not have a ``Panacea Project'' 
that can miraculously be turned on to meet the needs we expect 
to have in the Year 2060, let alone in the Year 2010. We do not 
have untapped pots of water that provide an effective or easy 
solution to our forecasted demands. We must therefore face the 
hard decisions of changing the way we use water in the State 
and recognize that we have to move beyond the ``Man over 
Nature'' phase of the early 20th century. We are now in a 
tradeoff phase of water management in the State of Colorado and 
we have to reallocate our uses at this time. We will have to 
bring water from remote geographic areas into the Front Range. 
We must trade some of our established and appropriated uses of 
water for those that will meet our needs in the future. And 
these needs will not only be for the communities of Beulah, 
Julesburg and Mr. Aurora. They also must include the 
environmental and ecosystem protection that we embrace: 
recreational, agricultural and other non-consumptive uses as 
well.
    The State of Colorado must accept that new water supplies 
will move from the West Slope across the Continental Divide as 
well as other river basins into the front range and that farms 
and cities will work more cooperatively than they have in the 
past, either through permanent transfers of agricultural water 
or as we're doing in the Arkansas Basin on an interruptable 
supply basis. The cities must accept that these projects will 
be built in a cooperative and participative way and that 
multiple benefits include mitigation and enhancement projects 
will be a part of future water supply programs. These are 
expected to significantly increase the cost to urban water 
users. The economic vitality of the Front Range communities 
should not be seen as a threat to other parts of the State or 
to traditional water users, but rather as the opportunity to 
effectively guide the State's decisions on water management and 
policy.
    The recent defeat of Referendum A illustrated the concern 
that Coloradans have over the methods used by water providers 
and private interests, as well as the state and Federal 
agencies, in meeting these changing needs for water across the 
State.
    Unfortunately, the Referendum A debate again polarized 
opinions and positions reminiscent of past water wars. I 
believe that what did emerge though was a better understanding 
that pragmatic and effective solutions need to be identified. 
No ``blank checks'' will be written. Only then can the public 
appreciate and make informed decisions on what the future 
plumbing systems will look like, how they can be enlarged, how 
they can be rehabilitated, and how they can be operated to 
benefit other communities while also protecting our 
environment. And all of this must happen in an economic and 
timely manner.
    I would suggest to you that engineers, hydrologists and 
managers of the water systems across the State have a sound 
appreciation of the technical solutions that could be 
implemented in the next 60 years. In my written testimony, I 
have identified many of the strategies that will be employed by 
the City of Aurora to meet these growing needs.
    I would also suggest to you that systems like Aurora's are 
capable of financing the more than $1 billion in capital 
improvements we have forecasted that we would need in the next 
10 to 12 years. What exacerbates the implementation of this 
program are governance, political, regulatory and institutional 
issues. I'd also draw your attention to the de facto conflict 
resolution process that water agencies must navigate to make 
something happen.
    While the cities and urban water needs cannot be satisfied 
by riding roughshod over the needs of others, we collectively 
do not benefit from guerilla warfare tactics, obstructionism 
and an inability to make commitments to meet our future water 
needs.
    Our long-term solutions are in storing water in enlarged 
and new reservoirs, in pumping water from geographically remote 
areas or in changing the ways we use water currently in the 
Arkansas and South Flat River Basins. Those changes and ways we 
use water could come from transfers or leases of agricultural 
water, reclamation of potable water from treated effluent, 
conservation and demand management, conjunctive uses of surface 
and ground waters or water system integration.
    We, as a State, cannot accept the ``do nothing'' 
alternative and we must successfully enlarge our water supply 
infrastructure needed for the future and do that in a manner 
that is respectful of the needs of all responsible 
stakeholders. To do otherwise is disingenuous. It wastes time 
in chasing ``paper water'' or illusory solutions and sets the 
State toward a position where it will deal with this need in a 
time of crisis rather than solving it in a programmatic and 
participative approach that can benefit the State as a whole.
    Thank you.
    [The prepared statement of Mr. Binney follows:]

      Statement of Peter D. Binney, P.E., Director of Utilities, 
                        City of Aurora, Colorado

INTRODUCTION
    My name is Peter D. Binney. I am the Director of Utilities for the 
City of Aurora, Colorado. Aurora is a growing municipality of nearly 
300,000 people in the eastern Denver metropolitan area and operates the 
third largest municipal water system in the State. Aurora is 
strategically located to be home to more than 500,000 people in the 
next 25 years and to contribute significantly to the vitality and 
economic well-being of the State of Colorado.
    Aurora represents an important case study in how the State of 
Colorado could potentially respond to the forecasted growth of the 
Front Range population by 3,500,000 people in the next 60 years. The 
recently completed Colorado River Return Reconnaissance Study, 2003 has 
projected that the Front Range Corridor between Pueblo and Fort 
Collins, including the Aurora, Denver and Colorado Springs metropolitan 
areas, must develop an additional 784,000 acre-feet of water in the 
next six decades. Aurora is an important subset of those demands and 
will develop new sources of water totaling approximately 85,000 acre-
feet by the year 2060. Many of these projects must be completed in the 
next 10--25 years to provide an adequate, safe and reliable water 
supply to these growing communities. These new water sources must be 
developed in a cooperative, timely and systematic manner while 
respecting the social, environmental and institutional values that are 
embraced by all the citizens of Colorado.
    The conundrum the State of Colorado is facing lies in this 
forecasted growth in population and resulting water demands along the 
Front Range. Our existing infrastructure of reservoirs, pipes, pumps 
and treatment plants are capable of meeting our current, or near-term, 
needs for water. They are not, however, adequate for meeting these 
forecasted needs and must be expanded significantly.
    The State of Colorado does not have a ``Panacea Project'' that can 
miraculously be turned on to meet the needs we expect to have in the 
Year 2060, let alone in the Year 2010. We do not have untapped pots of 
water that provide an effective or easy solution to our forecasted 
demands. We must therefore make the hard decisions of changing the way 
we use water in the state and recognize we have moved beyond the ``Man 
over Nature'' phase of the early 20th century and we are now in a phase 
of reallocating or trading off the finite bucket of water we can use to 
meet the State's water needs. We must bring water from remote 
geographic areas, or we must trade some of our established and 
appropriated uses of water for those that will meet our needs in the 
future. These needs are not only municipal water uses across the State 
from Beulah to Julesburg to Aurora. They also include needs for 
environmental and ecosystem protection, recreational, agricultural and 
other non-consumptive uses that our citizens may embrace.
    The State of Colorado must accept that new water supplies will move 
from the West Slope across the Continental Divide as well as other 
river basins and either permanently, or on an interruptible basis, from 
agricultural uses. The cities must accept that these projects will be 
built in a cooperative and participative way and that multiple benefits 
including mitigation and enhancement projects will be included. These 
are expected to significantly increase the costs to urban water users. 
The economic vitality of the Front Range communities should be seen not 
as a threat to other parts of the State or to traditional water users 
but rather as the opportunity to effectively guide the State's 
decisions on water management and policy.
    The recent defeat of Referendum A illustrated the concern that 
Coloradoans have over the methods used by water providers and private 
interests, as well as state and federal agencies, in meeting the 
changing needs for water across the State. The Referendum A debate 
again polarized opinions and positions reminiscent of past water wars. 
I believe what did emerge though, was a better understanding that 
pragmatic and effective solutions need to be identified. No ``blank 
checks'' will be written. Only then can the public appreciate and make 
informed decisions on what the future plumbing system will look like, 
how it can be enlarged, and how it can be operated to benefit other 
communities while also protecting our environment. And all of this has 
to happen in an economic and timely manner.
    I would suggest to you that the engineers, hydrologists and 
managers of the water systems across the State have a sound 
appreciation of the range of technical solutions that could be 
implemented. In my written testimony, I have identified many of the 
strategies that will be employed by the City of Aurora to meet its 
identified needs. I would also suggest to you that systems like 
Aurora's are capable of financing the more than one billion dollars in 
capital improvements we have identified that need to be built in the 
next 10--12 years. What exacerbates the implementation of this program 
are governance, political, regulatory and institutional issues and the 
de facto conflict resolution process that local water agencies must 
navigate to make something happen.
    While the cities and urban water needs cannot be satisfied by 
riding roughshod over the needs of others, we collectively do not 
benefit from guerilla warfare tactics, obstructionism and an inability 
to make commitments to meet our future needs.
    Our long-term solutions are in storing water in enlarged and new 
reservoirs, in pumping water from geographically remote areas or in 
changing the ways we use water currently in the Arkansas and South 
Platte River basins. Those changes in ways we use water could come from 
transfers or leases of agricultural water, reclamation of potable water 
from treated effluent, conservation and demand management, conjunctive 
uses of surface and ground waters or water system integration.
    We, as a State, cannot accept the ``Do Nothing'' alternative and 
must successfully enlarge the water supply infrastructure needed for 
the future and do that in a manner that is respectful of the needs of 
all responsible stakeholders. To do otherwise is disingenuous, it 
wastes time in chasing ``paper water'' or illusory solutions and sets 
the State towards a position where it will deal with this need in a 
time of crisis rather than solving it in a programmatic and 
participative approach that can benefit the State as a whole.
(Submitted written background material)

CURRENTLY AVAILABLE WATER SUPPLIES
    As with many of the growing cities in the West, Aurora has been 
developing its water supply systems since the early 1950's and must 
develop its water supplies from the relatively junior water rights and 
sources left after more than 100 years of water development by 
agriculture and the older cities and industries. These available water 
sources are typically less reliable during dry years (and therefore 
require proportionately larger reservoirs to provide reliable sources 
of water), are geographically remote from the cities, and require major 
investments to develop. In fact, water rights in the South Platte River 
basin with priority dates of later than 1876 are typically considered 
unreliable for meeting municipal water demands without major reservoirs 
being available to buffer hydrologic uncertainty.
    In developing its water rights portfolio, the City of Aurora has 
used many of the practices that will be representative of future water 
programs. Key components of the City's Water System include:
      75% of the City's water has been developed by 
transferring senior agricultural water rights for municipal use;
      approximately 50% of the City's water has been developed 
by transferring water from the Arkansas and Colorado River basins into 
the South Platte River basin;
      approximately 80% of the City's water supplies result 
from snowmelt between May 1 and July 31 and must be stored in 
reservoirs for delivery to the City in other months or for carryover to 
drier years;
      the City currently uses close to 80% of its reusable 
return flows through water trades, augmentation, irrigation of parks 
and open spaces, exchanges and leases;
      Aurora has developed and implemented an industry-leading 
Water Conservation Program that has reduced municipal water demands by 
more than 30% from Year 2000 levels, but that has come at a cost of 
higher water rates and impacts on the environment in the City;
      Aurora has entered into numerous Intergovernmental 
Agreements or contracts with the federal government, counties, water 
providers and water conservation districts to develop water by 
efficiently using existing infrastructure and to mitigate the impacts 
of Aurora's water developments;
      Aurora has signed agreements with Arkansas Valley 
interests that preclude future permanent transfers of agricultural 
water for a 40-year period, significantly subsidize the cost to local 
water users for reimbursement to the federal government for Fryingpan-
Arkansas Project, provide a reliable mechanism for dry-year leasing of 
agricultural water without disrupting the agricultural economy and 
makes substantial payments to the local water district to address in-
basin water needs;
      Aurora is developing an Integrated Resource Plan for the 
development of an additional 85,000 acre-feet per year of water. This 
Plan to double the size of the Water System will emphasize the 
development of water sources through cooperative programs with farms 
and other parts of the State and will incrementally add onto the core 
physical infrastructure built over the last 50 years; and
      Aurora has identified close to one billion dollars in 
infrastructure and water supply development needs in the next decade 
and has instituted rate and tap fee increases to generate the necessary 
funds from its current and future customers. New customers on the 
Aurora Water System now pay 56% more for a tap than they did two years 
ago and water rates have increased at 15% per year. These increases do 
not include additional drought surcharges or burdensome tiered pricing 
structures of nearly 400% for higher water users. No subsidies are 
requested from the state or federal government and Aurora is prepared 
to pay for its own programs, if needed.
    Aurora is now planning the next phases of its long-term water 
acquisition program.

IMPACTS OF ONGOING DROUGHT
    The effects of the ongoing drought are still pronounced and 
continue its adverse effects on cities, farmers and the environment. 
Regional drought conditions are not ameliorating across the Western 
United States and unless there is a substantial change in forecasted 
weather patterns, the city will face its third year of highly 
restrictive water uses in 2004. The City of Aurora's storage levels in 
its reservoirs was reduced to 26% of capacity in the spring of 2003 but 
will have recovered to 40% of capacity in the spring of 2004. A 
seasonal minimum reservoir capacity of 60% is considered acceptable for 
Aurora's municipal water system. This recovery in reservoir levels was 
not a result of higher water flows in the streams but the product of 
exceedingly high levels of water conservation, the purchase of water 
rights, and very successful development of interruptible supplies 
through short-term leases of agricultural and industrial water.
    In 2003, Aurorans conserved aggressively and used 30% less water 
than they did in Year 2000. A comprehensive Water Conservation and 
Water Management Plan has guided our customers in all aspects of their 
water use from toilet flushing practices to water glasses in 
restaurants to limiting the sizes of lawns. Aurora's water customers 
did also pay a marginal rate of $2,885 per acre-foot per year for 
watering larger lawns in the City. This economic disparity between 
water used for some agricultural uses at a rate of less than $100 per 
acre-foot per year is one of the major paradoxes that Colorado's water 
managers and policymakers will have to address.
    Aurora also developed other water sources to increase the 
robustness of its current water supply system and to aid in drought 
recovery. The Cities of Thornton and Aurora negotiated the sale of 
Thornton's Upper South Platte water rights to Aurora. This yields 7,146 
acre-feet per year to Aurora while return flow obligations from Aurora 
replace that water for Thornton's needs. Aurora paid more than 
$51,000,000 through the sale of revenue bonds issued through the City's 
Water Enterprise Fund. Additionally, Aurora, the Southeast Colorado 
Water Conservancy District and Upper Arkansas Water Conservancy 
District entered into long-term Intergovernmental Agreements that 
should settle twenty years of often acrimonious and unproductive 
dispute. Details of these agreements are described later but of 
significance include the potential for periodic dry year leasing of 
agricultural water rights that assist in drought recovery but do not 
require permanent transfers from agricultural water uses.
    This ongoing drought has rudely reminded all water users (including 
recreationists and environmentalists) that we live in a semi-arid 
climate and in a region that is periodically exposed to severe and 
sustained drought conditions. The last century was one of the most 
benign climatic periods we have seen in the last 2,000 years, so many 
of our policies and presumptions about water and its reliability have 
been formed in a time of surplus. It is not prudent, nor is it 
responsible, to only construct new projects or adapt our emerging water 
policies every few decades, as we have been prone to do. Inevitably, 
our needs change or available capacity in existing infrastructure is 
absorbed and we place ourselves behind the proverbial ``eight ball.'' 
The game of billiards is not often won if we have to rely on trick 
shots too often.

WATER SUPPLY DEVELOPMENT STRATEGIES
    The State has seen numerous proposals in recent decades to 
structurally develop major new water projects. It has been estimated 
that more than $100 million in engineering and legal fees has been 
spent in the last decade alone on various proposals, but not one gallon 
of water has been developed from most of these efforts. Something 
critical has been missing from this approach to water supply planning. 
The packaging or public/ institutional acceptability of the proposals 
has been flawed in some fatal way.
    The challenge as we reformat our approach for the future is to find 
the balance between past and future water uses and different geographic 
areas of the state that are either supply-rich or demand-rich. 
Unfortunately, these attributes are often mutually exclusive and so 
tradeoffs of current uses or physical delivery of new water supplies to 
those areas with additional water needs will have to occur. Or, we will 
have to implement elegant cooperative programs, whether the farms, 
cities and environment, to establish a new, balanced and sustainable 
equilibrium.
    The bottom line for water managers and policymakers is that no one 
strategy is likely to meet their future water needs so an integrated 
approach that embraces demand management, new source development and 
basin of origin mitigation and environmental protection will be 
required. We do not believe these requirements should be codified but 
rather result from negotiation between the parties with State 
Government providing an arbitration (through Water Courts and 
otherwise) or facilitation role. If those negotiations are 
unsuccessful, no water project will proceed.
    A component of future water sources will be met through more 
efficient use of existing water rights or infrastructure as described 
in the following section. Those efficiency strategies will be 
supplemented by new source strategies that could include the following 
approaches.

Unappropriated and Developable Junior Surface Water Rights
    Hydrologists recognize that some water is available for development 
at or near the points where our major rivers leave the State. It was 
this recognition that led to the recently completed studies of the Big 
Straw concept. Certainly, a technologist can plan massive pump back 
systems from the Colorado River at the Utah State line, from the lower 
Arkansas River downstream from La Junta and from the lower South Platte 
River downstream from Julesburg. But the Big Straw report did start 
quantifying the multi-billion dollar costs and major environmental 
hurdles that are associated with these projects. The report does, 
however, stimulate us to consider other more reasonable alternatives 
including mid-basin reservoirs and re-operation or reallocation of 
water supplies that are currently bypassing the emerging demand centers 
on their way to downstream decreed water users. Rather than the heroic 
home run hits of Stateline pump back systems it is certainly reasonable 
to incorporate more modest proposals, such as Aurora's Camp Hale pump 
back project or Colorado Springs' Southern Delivery System. It is also 
reasonable to further evaluate the Green Mountain Pump back, Blue Mesa 
Pump back and Reudi Pump back alternatives in long-range planning.

New Reservoir Storage
    A fundamental component of all future water supply programs will be 
the addition of new reservoir storage. The strategic location of new 
reservoirs and operational interconnection with existing delivery 
systems can capture wet year or high spring runoff flows, be used to 
substitute water releases from existing reservoirs for downstream water 
needs while allowing higher utility of those upper basin reservoirs for 
future uses, enhance return flows for Interstate Compact and 
environmental uses, and stage water deliveries so current delivery 
systems can be used more efficiently.

Agricultural Water Rights
    Aurora is currently participating in, and has plans to expand, 
cooperative farm-city programs with willing agricultural water users as 
a part of its long-term water management programs. When a willing 
buyer-seller or lessor-lessee partnership can be developed, Aurora 
invites discussion on identifying whether it is feasible to enter into 
a relationship that would benefit both parties. We are willing to 
discuss opportunities with the Colorado Farm Bureau, as well as ditch 
companies or senior water rights holders, and to identify appropriate 
terms of mitigation projects that would allow a water project to 
proceed.
    Agricultural water uses represent the largest consumer of water in 
the State with over 14 million acre-feet of irrigation annually. Of the 
State's overall water uses, 5.5 million acre-feet or 93% of the State's 
total water consumption is used by agriculture. Under the hypothetical 
assumption that all the Front Range's future consumptive water needs 
(55% of 784,000 acre-feet or 430,000 acre-feet) were to be met by 
transfers from agriculture, then the State would still have 5.1 million 
acre-feet or 86% of the States' water available for irrigation. 
Colorado will still predominantly be an agricultural water-using state. 
It is possible that the effects of agricultural transfers will be 
concentrated closer to the emerging demand centers so localized effects 
of transfers will have to be carefully evaluated. It is unlikely that 
the southwestern or northwestern areas of the State will be involved in 
any future programs to meet the emerging water needs of the Front 
Range.

Denver Basin Aquifers
    These large non-tributary and non-renewable aquifers underlying 
much of the Front Range are an important water resource that must be 
managed and developed in an integrated and sustainable manner. Prior 
overestimates of the aquifers' capacity have resulted in over pumping 
and declines of water tables exceeding thirty feet per year. While more 
than 99% of the theoretically recoverable water is still in the 
aquifers, the cost of extracting that nonrenewable resource is 
escalating and will require groundwater dependent users to develop 
alternative sources or conjunctive use water systems. The costs of this 
infrastructure will exceed one billion dollars and a reliable and 
sustainable surface water source must still be identified and secured.

PROMOTING MORE EFFICIENT USE OF EXISTING INFRASTRUCTURE AND WATER 
        RIGHTS
    Past water development projects have essentially used all the 
reliable yields in streams that flow to the Front Range. Any new water 
development programs bringing water from other river basins will likely 
have to be integrated into the infrastructure and operations of current 
users including the Colorado Big Thompson Project, Denver Water, 
Aurora, Colorado Springs and the Fryingpan-Arkansas Project. New water 
projects could most likely deliver new water for interconnection to 
these existing systems and then redistribute water along the Front 
Range to individual customers. The physical reality of the State's 
topography and past water development practices along the Continental 
Divide must be considered by those who are responsible for planning and 
implementing future solutions.
    It is envisaged that an integrated water management plan meeting 
the needs of the growing cities will include at least the following.

Water Conservation
    A benefit of the ongoing severe drought conditions is the 
development and broad implementation of highly restrictive water use 
programs not seen in the Front Range since the 1950's drought. This 
reminder that we live in a semi-arid climate has reinforced an ethic of 
responsible water stewardship in Front Range cities that, while widely 
practiced in the past, had not been codified to the extent now in 
practice. It is expected that these benchmarks of water use will be a 
part of water utility operations in the future. Certainly, the 
literature describing effective water conservation programs will be 
updated to reflect the beneficial performance of these programs in arid 
climate areas.
    This ethic of wise water stewardship in the cities results in 
higher utility of the existing investments in water development and 
also reduces the rate of increase in which new water supplies must be 
developed.

Water Reclamation
    The treatment of municipal sewage so it can be used for outdoor 
irrigation or, with enhanced tertiary treatment, for indirect potable 
use are expected to be important components for future water supply 
plans for Front Range communities. There are many examples where non-
potable reclamation is occurring in Colorado Springs, Aurora, Denver 
and the South Metro area. While the development of these programs are 
an advantage to a particular community, they do reduce the return flows 
to streams and so the environmental impacts and effects on downstream 
water users who have relied on these discharges must be assessed 
against the impacts on new source water development.

More Effective Use of Federal Projects
    The City of Aurora has developed its water rights in the Arkansas 
River basin in part through creative and beneficial operating 
strategies that use the federal Fryingpan-Arkansas Project. While 
Aurora is not a Project Participant and is not represented on the 
governing body of that Project, annual payments made to the U.S. Bureau 
of Reclamation and to local agencies will represent nearly 50% of the 
local cost reimbursement share when the federal debt is repaid. 
Aurora's participation effectively halves the cost of local farmers, 
the City of Colorado Springs and Pueblo and others for the benefits of 
using this federal project.
    Transferred agricultural water rights are exchanged upstream to an 
existing point of diversion on the Arkansas River to the South Platte 
River basin for delivery to the City. These exchanges are made only 
when there is no adverse impact to Project participants and indeed a 
10% premium in delivered water is made to other in-basin users for 
every acre-foot of water delivered to Aurora. Additionally, Aurora will 
pay $21 million to the local water district to allow local solutions to 
local water problems.

Conjunctive Use and Groundwater Development
    Many newer water utilities and districts have relied on the 
groundwater resources underlying much of the Front Range in the Denver 
Basin aquifers. The recently completed South Metro investigations have 
identified the finite nature of those aquifers and estimated the cost 
of developing sustainable water sources to supplement the use of 
groundwater in a conjunctive use approach. The combination of surface 
water and groundwater resources in a conjunctive use program will allow 
efficient use of available local water supplies although one resource 
will not be effective without the other.

Rehabilitated Storage Reservoirs
    The State of Colorado has cataloged those reservoirs where storage 
capacity is limited because of dam safety issues. Selective repairs to 
these dams can be an important water supply component with typically 
limited environmental impacts.

Water System Integration and Consolidation of Water Development
    An economy-of-scale must be achieved before a significant water 
development project becomes feasible. Many of Colorado's current water 
systems are tied to local jurisdictions and individual cities or 
districts still fiercely voice their independence and need for 
autonomous control of their water systems. There will be little 
progress made in solving the major water needs of these growing cities 
until a new regional governance model is initiated. Denver Water 
followed this model when they became the contract provider of water for 
more than 50 suburban contracts. It was also the realization of this 
factor that allowed other metropolitan areas, such as Tampa and Las 
Vegas, to move beyond their previously balkanized, divisive and 
ineffectual approaches to meeting growing urban water needs. It has 
been proposed as a solution for the needs of the South Metro Denver 
area as they respond to the major capital requirements of developing a 
reliable and renewable water supply system to supplement their use of 
diminishing groundwater supplies. It is also seen as a possible role 
for Aurora as they develop their future water sources.

Appropriation Doctrine Identifies Standards of Developing New Water 
        Sources
    The State of Colorado's Appropriation Doctrine codifies and 
protects the property right nature of a water right and allows for the 
transfer of existing water uses to the extent that no other senior 
water rights holders are injured by that action. The State's Water 
Courts and legal system are diligent in assuring that the 
redistribution of water through this process does not cause injury and 
protects other values including in-stream flows. Additional tests 
applied by the Water Courts include the required demonstration that a 
water right can and will be developed--this requires that the applicant 
can secure all local, state and federal permits.
    The numerous overlapping regulatory checks and balances as well as 
the rigor of the financial markets minimizes, if not prevents, the 
speculative or damaging impacts of future water projects. Indeed, there 
are many who would suggest that this multi-layered oversight has 
crippled the ability of sound and needed projects from proceeding and 
not just preventing the infeasible or poorly considered projects from 
happening.

CONCLUSIONS
    The State of Colorado is forecasting a doubling of its population 
in the next fifty years with much of that growth occurring in Front 
Range cities between Pueblo and Fort Collins and not just the Aurora-
Denver metropolitan area. This population growth will require the 
development of major new water infrastructure and require very 
effective uses of water in the cities as water is delivered from other 
river basins or transferred, temporarily or permanently, from current 
water uses. This development and reallocation of the State's water must 
occur in a respectful and collaborative manner that recognizes the 
needs of all responsible stakeholders. But the result of this process 
should be the structured and systematic development of the 
infrastructure that will deliver water to the cities while ensuring 
adequate water for other users across the state and for ecosystems and 
the environment.
    An integrated program should come from local water agencies as they 
identify the infrastructure and operational needs of their water 
systems. State and federal governments should work cooperatively with 
the water agencies to facilitate the decisionmaking process and 
represent the interests of all responsible stakeholders who may also 
have an interest or concern about proposed projects.
                                 ______
                                 
    Mr. Calvert. Thank you. It's my privilege in chairing this 
Committee, I go around the country and we discuss with many 
different folks and regions about difficulties that we're 
having with water, not just the Colorado River, obviously, 
which is certainly very significant here in the West, but the 
Rio Grande in the South and the Colombia in the Pacific 
Northwest.
    There's problems with water throughout the country, 
especially in the West, but not just in the West. And one of 
those issues, of course, is the Arkansas River and the 
difficulties that Colorado and Kansas have had well over a 100 
years in litigation and the rest that has been going on.
    As a matter of fact, we've had some hearings in Washington 
that Mr. Hefley and Mr. Moran have both attended--and Mr. Moran 
from Kansas and Mr. Hefley, a great member of Congress from 
your State of Colorado, are concerned about this issue of 
enlarging Pueblo Reservoir. And I'm going to ask this question 
for Mayor Rivera and Councilman Thurston, are you 
communicating, as you move forward on the concept of enlarging 
the reservoir and using, I'm sure, good science and engineering 
and so forth to resolve these outstanding issues, are you 
staying in contact with our friends from Kansas that apparently 
are worried and share their worries with us, that the 
enlargement may affect the Arkansas compact, and what's your 
feeling?
    Is it--will the enlargement of that reservoir in any way 
affect the compact or the agreements that have been litigated 
over the years? And I'll start with you, Mayor, and Councilman 
Thurston.
    Mr. Rivera. Well, Mr. Chairman, we've been in regular 
contact with the Representatives from Kansas and no, we don't 
believe that the enlargement of Pueblo Reservoir will impact 
the compact agreements already settled to at all.
    And in addition to our big dialog with Kansas, we have a 
good dialog with our neighbors to the south. The reservoir is 
in their city or close by. Water stored behind the dam is water 
that was acquired by Colorado Springs that's good to go and 
we're working with them cooperatively so we can have solution 
that benefits both our communities.
    Mr. Calvert. Councilman?
    Mr. Thurston. I will echo Mayor Rivera's comments as far as 
the situation with Kansas and feeling that it won't have a 
negative impact and the fact that we're very pleased in Pueblo.
    Our Council has been working with the Colorado Springs 
Council. This is the first time probably in 40 years or beyond 
that the two Councils have really sat down in earnest and 
really said let's look at the region as a whole instead of what 
our interests are and what their interests are. And taking the 
responsible role of let's just do what's right.
    Let's really look at southeastern Colorado where we're both 
located as our responsibility as big brothers to find solutions 
and have that cooperative working.
    So again, I want to commend my friends in Colorado Springs 
and their efforts to cooperate in that dialog with us.
    Mr. Calvert. Great.
    Mr. Walcher, you mentioned that Colorado is undertaking a 
state water supply initiative. Will this water initiative 
include movement of Western Slope water to Front Range?
    Mr. Walcher. The statewide water supply initiative, Mr. 
Chairman, is an analysis of all who have thought about water 
storage proposals over the last few generations, which there 
are literally hundreds of on the books, actually very few of 
those involve any trans-mountain diversion, but there are 
hundreds and hundreds of places, sites where from a geologic 
point of view, have been identified as potential water storage 
areas.
    This project is an attempt to figure out, I guess, which of 
those are more feasible in the modern world--which is to say 
where there is an actual water right available, an actual 
proponent and beneficiary of the water and, perhaps most 
importantly, where there is public support for it. So at the 
grass roots level, it's a series of dozens and dozens of 
meetings in every single basin of the State with all of the 
different players from both sides of the issues at the table 
trying to figure out what the future demands are in that basin 
and what the future potential storage sites are that they might 
support and that are feasible. Once they get there, they will 
have narrowed a list of 707 potential storage sites down to 
some reasonable number that we can go to work on and it 
involves new storage in every single basin of the State.
    Mr. Calvert. Maybe I can ask this for the entire panel here 
today because apparently I understand the emotion of moving 
water from one region of the State to the next. I run into that 
quite often. How do you propose to resolve Western Slope Front 
Range trans-basin water issues? I mean I know this State has 
been discussing it for some time, but I'd like Mr. Binney to 
add to this discussion.
    How would you propose that?
    Mr. Binney. First off, I'd like to say that if the West 
Slope is not a part of the Front Range solution, then we'll 
have to meet our needs in either the Arkansas or the South 
Platte Basin. I hope that we're thinking a little more broadly 
than that and that we'll be able to look at all of the State's 
resources.
    Let me give you, as an example, a project that we're 
involved in with Colorado Springs and with Western Slope 
interests. This is a project where we're looking to develop 
conditional water rights that we have in the Eagle Valley.
    We reached an agreement with West Slope interests about 10 
years ago that would leave a third of that project's water 
supply for West Slope water needs rather than asserting our 
legal rights that were available to Colorado Springs and to 
Aurora.
    We came to an agreement where a third was going to be an 
accommodation where we would leave water in the West Slope to 
meet recreational, municipal, in-stream needs while we were 
moving ahead with trans-Basin diversions.
    I think that's representative of the types of mitigation 
projects that Front Range cities are prepared to undertake to 
address some of these emotional and political needs that you're 
suggesting.
    Mr. Calvert. Thank you.
    Mr. Udall?
    Mr. Udall. Thank you, Mr. Calvert. If I might, I'd like to 
follow-up on the Pueblo-Colorado Springs discussion we're 
having and hopefully leave a little bit of time to talk with 
Mr. Binney about what I felt was very interesting in hearing 
your testimony about the money you're prepared to bring to the 
table over the long term.
    You mentioned, both of you, in the end of your testimony 
that you hope that the Congress will, number one, not get in 
the way of what you're trying to accomplish, and number two, 
that we would help you.
    Could you elaborate just a little bit more, each of you, as 
to what that would involve?
    Mr. Rivera. Well, in Colorado and in Colorado Springs we 
are very concerned about the doctrine of prior appropriation. 
We think it's important to realize that there are state water 
rights issues that really are dealt with on a local level and 
while we want Federal legislation to at least study the 
expansion of Pueblo Reservoir and Turquoise Reservoir, it comes 
to the point where that legislation passes and there is an 
expansion.
    We really don't think there should be anything written in 
the legislation that overrides state water rights and we think 
that's critical. We need your help, but we don't want you 
stepping on what we do here locally. That's very critical to 
us.
    Mr. Calvert. We've never heard that before.
    [Laughter.]
    Mr. Calvert. Vice President Thurston, do you have----
    Mr. Thurston. We work very diligently on these goals and 
principles and I would like to leave each one of you a copy of 
that, so that you can see where we're going. And we're just 
really saying that the Federal legislation be sensitive to 
those goals and principles and it really is through the voice 
of the people that these principles were generated and also in 
understanding that the Arkansas Basin is over-appropriated.
    Again, when we're looking at solutions, the solution is not 
going to an over-appropriated basin, but again when we're 
looking at the under-appropriation of the Colorado, we will put 
all of our resources and energies behind how can the State fill 
that situation without again taxing on to an over-appropriated 
river basin which again if it's done inappropriately will make 
a very dark hole for southeastern Colorado. So these goals and 
principles are something I would like to share with all of you.
    Mr. Calvert. Mayor and Vice President, it sounds to me like 
there's perhaps some application to what you've been able to 
accomplish in other arenas. As you move ahead, I think the 
State is going to keep an eye on what you're doing and we may 
be drawing on your expertise, assuming that this reaches a 
positive conclusion, so I want to thank you for that.
    You mention in here, Mayor, that you're hoping that 
Congressmen Hefley and Tancredo and Beauprez will introduce 
legislation as we return. Is Congressman McInnis a part of this 
process as well and have you included him in these discussions?
    Mr. Rivera. Well, we work very closely with our own 
Congressman, Congressman Hefley, and we know that he is dealing 
with Scott McInnis on a regular basis in trying to get him 
involved in the process, but Congressman McInnis, of course, is 
very interested in ensuring that Pueblo and Colorado Springs 
come to an agreement on their own in terms of our southern 
delivery system and thus ensuring that Pueblo has the water 
that they need that flows through their city for recreation 
uses and we're doing that. And so that the conversation is on-
going and I think we're getting very, very close to an 
agreement where the entire congressional delegation can support 
us.
    Mr. Udall. Great. I look forward to being included in those 
discussions as well. Both Congressman McInnis and I straddle 
different basins, so we try and do all we can to balance those 
competing needs and oftentimes have to look across both sides 
of the divide, whether it's the Platte and the Colorado or the 
Colorado and the Arkansas or the Rio Grande, so I think that's 
important he's involved in those discussions.
    Mr. Thurston. And Sue Smith from Scott McInnis' office is 
here in the audience today as well, so we've been working very 
closely with them.
    Mr. Udall. If I might turn to Mr. Binney. Thank you again 
for your testimony and the outline you provide us of what we 
face, both opportunities and challenges. I was fascinated when 
you pointed out that you think you can bring a billion in 
capital to all these various needs. Are you approaching this 
with the mindset that you don't need Federal support when it 
comes to the dollars that might be necessary to do all the 
various things that are being proposed?
    Mr. Binney. No, certainly we would look to work with the 
Federal delegation in many ways that you can help us out.
    [Laughter.]
    What we have done in the City of Aurora, we operate as an 
enterprise fund. All of our funding comes from tap fees and 
user fees and when we looked at the challenge that was ahead of 
us, one way that you can obviously presume to move ahead is 
through self-sufficiency. I talked to my Council last year 
about this 10-year capital program. I outlined the alternatives 
for them. They strongly suggested to me that I ought to look 
inwards before I look outwards. We increased our tap fees by 56 
percent last year and increased programmatically our user fees 
by 15 percent and that's without any draft surcharges.
    So we have put in place a financing program that would 
allow us to meet our needs. Certainly, we will be in touch with 
you to see if there are other ways that you can help, but we 
have recently just done the first of a series of revenue bonds, 
working with Wall Street. We have already spent 100 million 
dollars of that and that has been funded through revenue bonds 
that are pledged against revenues coming from the utility 
itself.
    Mr. Udall. Thank you. Thank you, Mr. Chairman. This has 
been helpful to me.
    Mr. Calvert. I thank the gentleman. Mr. Tancredo?
    Mr. Tancredo. Thank you, Mr. Chairman. Mr. Udall indicated 
that we've heard some of these things before, especially about 
not wanting the Federal government to override any decisions of 
the local level. We certainly have. But I'll tell you something 
else we've heard before, gentlemen, and that is we're close to 
an agreement. We're working closely together. It's almost 
there. We've been dancing this dance for a long, long time. And 
frankly, I would like to get us a little closer to the 
discussion of when we're going to end this dance and what it's 
going to take to get us to the point where we have some 
agreements down there. And I know, Mr. Binney, for instance, 
Aurora has recently signed an agreement with the Southern 
Colorado Water Conservancy District which should end--I know 
that the purpose is to try to end this 20 years of acrimony and 
the wars in the Arkansas Valley. And I also understand, as part 
of this agreement that you will be paying, as you say, a great 
deal of the cost, but will have actually no governmental 
representation on how the decisions are made in the Basin.
    So what else is necessary? What else do we have to do to 
get this thing done, Mr. Binney?
    Mr. Binney. We have been working very closely with the U.S. 
Bureau of Reclamation to give us some more security in how we 
operate our water rights in the Arkansas Valley. Previously, 
everything was done on an annual if-and-when basis. We can only 
use the Fryingpan-Arkansas Project when there is excess storage 
capacity available.
    We have been working diligently with the Bureau of 
Reclamation to see if we can't have in place a long-term 
contract, a 40-year contract where we will have some of that 
security that you're suggesting is important to our community. 
We are a part of the Arkansas Valley fabric. Some people are 
continuing to fight us there, but I think some of the security 
that we have and one of the things that I think led to our 
being able to negotiate disagreement with the Southeastern 
District was recognizing that we're only going to be there, 
under sufferance, but we're going to be there in a respectful 
way. So I think we're a long way--I would like to see Aurora 
become part of the discussions between Pueblo, the Pueblo City 
Council and Colorado Springs though as we move forward and I 
think once we've done that, they will see us not as the monster 
as perhaps we are portrayed in the newspapers, but rather as a 
constructive part of their community.
    Mr. Tancredo. Well, let's talk about the way it's perceived 
in the newspapers, Aurora, in particular and you're continually 
identified as the primary cause of drying up the farmland in 
rural areas like the Arkansas Valley and what kind of 
mitigation does Aurora provide for these transfers, the 
transfers of water from the basins and is there--are there 
mitigation requirements in the law?
    Mr. Binney. Yes. Within the decrees that we have with the 
State of Colorado, when we move the consumptive use portion of 
water off the lands, we have to leave water there for 
revegetation and weed control. When people characterize what 
we're doing as the decertification of southern Colorado that is 
not correct. We have to put a stable grassland down on to that 
land.
    So part of it is preserving the environment when we move 
water to the city. Part of it is that we are paying large 
amounts of money, one to the Otero County. We have paid far 
beyond what is required by law. With the agreement that we 
entered into with the Southeast District, we not only are 
paying a very large amount of the local cost reimbursement 
share for the Fryingpan-Arkansas Project, basically we're 
subsidizing Colorado Springs and Southeastern District as 
they're paying off the Federal government for that project.
    We also allocated in excess of $20 million that could be 
used by the Southeast District to start addressing some of 
these local water supply needs that are in the valley and that 
are being affected by changes in the agricultural community.
    Mr. Tancredo. Just how much water has been taken out of the 
valley by Aurora as compared to let's say Colorado Springs or 
Pueblo?
    Mr. Binney. In the decade of the 1990s, we moved 4,000 acre 
feeds out of the basin.
    Mr. Tancredo. Four thousand acre feeds during the decade?
    Mr. Binney. That was per year. We have water rights, 
decreed water rights for 22,000 acre feeds and just for that in 
context, the average annual flow coming out of Pueblo Reservoir 
is in excess of 500,000 acre feeds. So once we have fully 
developed the decrees that we have, we'll be affecting perhaps 
4 percent of the flow coming out of Pueblo Reservoir.
    Mr. Tancredo. I really do hope that his helps your--the 
testimony here today, I hope this helps put Aurora in 
perspective, Aurora's usage of that water and helps us move 
toward some sort of collaborative arrangement.
    Mr. Chairman, I have a number of questions here for which I 
will not have time, but I'd like to be able to offer them----
    Mr. Calvert. Without objection. Questions will be entered 
into the record and we would ask the Panel to answer those 
questions and make it part of the permanent record.
    Mr. Tancredo. Thank you, Mr. Chairman. Just this one now 
for Mr. Walcher and that is what's the Administration doing to 
act as an honest broker in this whole thing? And is there an 
initiative of any kind here in the State through your office, 
through the government?
    Mr. Walcher. Thanks for asking. Our primary function and it 
is the statewide water supply initiative that we talked about 
because we don't frankly believe that the State ought to 
dictate to all the local basins in Colorado what their water 
future is. That isn't the tradition of Colorado water law. The 
tradition is that local people come up with local solutions to 
local problems and so our role is to help enable and facilitate 
that which is what that project is all about.
    But I will say and this sort of goes to your previous 
question too about the vigorous sort of argument that goes on 
so long and how we're going to get to fixing it. We have an 
advantage in this generation that hasn't existed in Colorado 
for a very long time, that people ought to be focusing on. The 
sad thing about Referendum A, of course, was how contentious it 
became and because of that became kind of a distraction. But 
the advantage we have now is the tremendous working 
relationships that have developed among water leaders 
throughout the State that have not existed in my lifetime.
    And I can remember well, as you can too, no doubt, when the 
Denver Water Board had to disguise people pretending to be 
farmers when they went to buyout water rights because they were 
so unpopular no farmer would talk to them.
    We have evolved a long ways past that from a situation 
where California and Colorado water leaders didn't talk to each 
for three generations hardly. We've now got situations where 
Aurora is making available water that it doesn't have to make 
available during a time when we had 80,000 wells shut off in 
the South Platte Basin.
    We've got projects with the Colorado River District and the 
Denver Water Board and Parker Water and Sanitation working 
together to try and make something happen.
    We've got relationships that I think haven't existed for a 
long time in Colorado. Whether that comes naturally to us or 
not isn't clear, but out of necessity, we have had to learn to 
work together. I think that there's a very good chance that 
we're going to see whether it's a project in Wolcott or where, 
I'm not sure. But I think there's a very good chance that we're 
going to see people come together and work on solutions that 
will work for everyone and I think the State has a role to play 
in facilitating that, not in dictating the outcome.
    Mr. Tancredo. Thank you. Thank you, Mr. Chairman.
    Mr. Calvert. Thank you. I would, for the record, correct 
that Colorado water leaders and California water leaders did 
talk to each other the last 30 years, we just couldn't put that 
into the record.
    [Laughter.]
    Mr. Beauprez, you're recognized.
    Mr. Beauprez. Thank you, Mr. Chairman. First of all, just--
I won't belabor the point any more than to recognize Mayor 
Rivera and Vice President Thurston, I commend both of your 
cities for working toward a reasonable commonsense solution to 
what I think is a rather obvious challenge. And I think I'll 
direct my questions during my time primarily to Mr. Binney and 
perhaps Mr. Walcher.
    Mr. Binney, you put forward what to me are some fairly 
staggering numbers, based on the study you cite and I commend 
you, frankly, for looking beyond 10 or 20 years, but 60 years I 
think is your time frame. Seven hundred eighty-four thousand 
acre feed of additional usage, which I think you said would 
require a million-and-a-half to two million of additional 
storage. Is that correct?
    Mr. Binney. That's correct.
    Mr. Beauprez. And to put it in context, am I correct, I'm 
just pulling numbers out of my memory here, but is not Blue 
Mesa something like 1.1 million acre feed of storage capacity, 
is that----
    Mr. Binney. I'm not sure of that, but Two Forks would have 
been 1 million acre feeds.
    Mr. Beauprez. I'd be glad to be corrected if I'm wrong, but 
you're talking about a lot of storage?
    Mr. Binney. That's correct. We'll need storage in different 
basins as well as along the Front Range.
    Mr. Beauprez. I would commend you at least first of all for 
recognizing the magnitude of the challenge, of focusing on what 
I alluded to in my opening comments of winners and winners, the 
mitigation at least offers and considerations that you're 
talking about, whether or not they end up being acceptable. I 
think we've got to talk about that.
    Where I would like to go with you and Mr. Walcher, Mr. 
Walcher, you just mentioned a minute ago about the State's 
role. My concern, Congressman Udall mentioned it in his opening 
comments, and I think we all did in some way, shape or form, 
how do we manage to bring all of the various interests 
together, including agriculture and I would ask you, Mr. 
Binney, would it be a fair statement that if we had adequate 
storage in Colorado, we might not need to be looking at 
agricultural water rights as aggressively as municipalities 
have somewhat been forced to look at them?
    Mr. Binney. I would be a strong advocate of a more balanced 
approach of one versus the other. I think that to deliver this 
784,000 acre feed that was identified by the State in using 
Junior Unappropriated Waters, they're really--what you're doing 
is you're looking at yourself to pump back projects like the 
Big Straw Project or Blue Mesa Pump or has been proposed 
pipelines from the lower part of the Arkansas Valley.
    I think the State would be better served by a balance of 
some of those projects, perhaps not as heroic as the one that 
we just received a report on, but also considering setting up 
farm-city relationships where I think Mr. Walcher recognized 
that Aurora was delivering treated effluent for the benefit of 
people who operate wells for agricultural purposes in the lower 
part of the basin. And to me that should be a part of what 
we're looking at as we move into the future.
    Mr. Beauprez. Let me ask a real direct question and maybe 
Mr. Walcher, you can respond first, if you like.
    I am concerned governance and how we pull all these various 
groups together to develop some sort of a statewide, not only a 
plan, but how in the world does it function? How do we identify 
the projects, how do we satisfy all the players, how do we keep 
winners and winners at the table and still satisfy the long-
term water needs of the State of Colorado without a statewide 
umbrella somehow?
    Mr. Walcher. I don't think a statewide umbrella is 
necessary to do that to tell you the truth.
    Mr. Beauprez. Let me be even more direct because I'm 
concerned that what we have done in the past with very local 
control and I am a local control advocate, but without some 
consideration of municipality to municipality, basin to basin, 
user group to user group and getting all of those somehow to 
collaborate, are we not perhaps continually setting ourselves 
up for these endless wars?
    Mr. Walcher. I don't think so. I think in the absence of 
some sort of metro-wide water district or some kind of a 
governance structure like that it means the table has to be 
bigger and lots more people need to be there, but I don't think 
it's necessarily impossible to do.
    We have the ability under our current system for all the 
local entities involved to get together and make solutions that 
work for multiple entities and we have a lot of those in play 
already as Peter has mentioned and as we've talked earlier. 
There are lots of collaborative projects that people are 
talking about now, even in the absence of some sort of 
governance change that you're talking about.
    It may be that the people in the suburbs might get together 
and decide that a unified water district is a good way to go 
and it might simplify things a bit if they do, but frankly, I 
don't think it changes the type of issues that have to be 
worked through to get to the solution whether the table has 
four people at it or 40 people present. The issues aren't 
really that different.
    I think one of the biggest myths in Colorado water is the 
concept of over-appropriated rivers. And I know that there are 
more than 100 potential storage projects in the South Platte 
Basin and the South Platte is an over-appropriated river by 
that standard, meaning that every single drop in it is owned by 
somebody. But we still have peak flows in wet years when all 
the reservoirs are full and we still have lost hundreds of 
thousands of acre feed of South Platte water to Nebraska 
because we didn't have the room to store it.
    So the need to get the storage there is what we ought to be 
focused on and however many people need to be at that table to 
get there. I think the State's role is to try and help identify 
what the feasibility of it is and then the local folks, I 
guess, can decide if they want to create some sort of different 
governing structure, but if they don't, I still believe we can 
get there.
    Mr. Beauprez. Mr. Binney, can you respond quickly? I know 
I'm probably running short on time.
    Mr. Binney. I've been looking for that Holy Grail as well 
and I think I found it in Las Vegas of all places. I asked Pat 
Mulroy who has gone through something similar to what we've 
gone through where the Las Vegas Valley was basically ready to 
shut down development because of water supply issues. They came 
together and they fought the Southern Nevada Water Authority 
and they brought a certain level of harmony to the six major 
water users in that valley.
    Her homily was that they were able to solve their problem 
when the availability of water was no longer a political issue. 
I think there's some truth in that and I think as we search 
through with the governance issues what they were able to do is 
to turn it into a purely commercial transaction. If you wanted 
the water in which they were bringing from Lake Mead and they 
spent close to $3 billion for their solution, you ponied up and 
you bought your part of that project.
    So I think that there are some things that we should look 
to our friends not only in California, but in Nevada, to find 
some potential solutions for along the Front Range. We're a 
victim of economies of scale and I don't think we're going to 
solve our problems by doing a continuing series of very small 
suboptimal projects.
    I truly believe that we're going to build some very large 
public works projects where there will be multiple 
beneficiaries on both the basins of origin and on the Front 
Range. And it's only when we realize that we've got to get to 
that level of project that we're going to solve our needs.
    Mr. Beauprez. Thank you, Mr. Chairman.
    Mr. Calvert. I thank the gentleman. I thank this panel for 
your valuable testimony. Members of the Subcommittee may have 
additional questions that we will submit to you in writing and 
we would ask for your responses for the permanent record.
    With that, thank you very much and you're excused.
    I will now recognize the second panel of witnesses: Ms. 
Melinda Kassen, Director, Colorado Water Project for Trout 
Unlimited; Mr. Richard Kuhn, Club 20; Mr. Joel Rosenstein, Vice 
President, Coloradans for Water Conservation and Development; 
Mr. Alan Foutz, President, Colorado Farm Bureau; and Ms. 
Patricia Wells, General Counsel, Denver Water, Denver Colorado.
    Will you please come forward? For the panel again I'll 
explain our 5 minute rule. We have a little light up here, and 
hopefully you can see it. It's got a little green light, a 
little yellow light which means hurry up, red light which means 
stop. So we try to stay within the 5 minute rule so we can have 
some questions and I can catch my plane.
    [Laughter.]
    So with that we'll first recognize Ms. Melinda Kassen. 
You're recognized for 5 minutes.

            STATEMENT OF MELINDA KASSEN, DIRECTOR, 
            COLORADO WATER PROJECT, TROUT UNLIMITED

    Ms. Kassen. Thank you, Mr. Chairman, and Members from 
Colorado, good morning. I appreciate the opportunity to 
testify. I've submitted written testimony for the record with a 
host of suggestions regarding water supply strategies. I'll 
focus this morning on just a few.
    First, I want to agree with Congressman Beauprez' statement 
on the facts version of this hearing agenda that Colorado's on-
going water problems only get worse if we fail to address them 
in a meaningful way. I think the question that we all grapple 
with is what is meaningful? Colorado must choose water supply 
strategies for the future that are equitable and that are cost 
effective.
    The era of mega projects with devastating environmental 
impacts and the era of massive Federal subsidies are both over. 
The big straw is and will remain a pipe dream and I don't think 
that Union Park is significantly better----
    Mr. Calvert. No pun intended, right?
    Ms. Kassen. Sorry?
    Mr. Calvert. No pun intended, pipe dream?
    Ms. Kassen. No pun intended. Fifteen billion dollars, and 
the list goes on. But the same coalition of Coloradans who have 
worked together for the past several decades to stop 
destructive, risky and costly water projects and financing 
schemes will continue to block big, new diversions from the 
West Slope, the Rio Grande, and the Arkansas River to supply 
areas of the Front Range that have failed to provide 
sustainable water for their own futures.
    The high quality of life that Colorado enjoys depends also 
on maintaining and in some cases restoring recreational, 
environmental and the aesthetic values of our rivers and 
streams. That's one of the reasons that we all live here.
    Our water future, thus, must rely on smart storage and 
supply strategies that protect these values. The solutions and 
most of them have already been discussed today, they're not 
unknown. We have a road map.
    On the supply front, we need to do at least three things: 
conserve water and maximize all water users, efficiency of use 
and re-use. Colorado has not tapped fully into conservation 
programs. Most cities still don't have significant tiered block 
rate structures. There are few incentives for leak detection 
and repair and many places don't have rebates for changes in 
landscaping and efficient appliances. I mean there are lots of 
things that we can mine in terms of conservation.
    Second, reclaiming and integrating existing infrastructure 
and using temporary transfer programs like water leasing, 
interruptable supplies and water banks to allow existing water 
users the full use of water that's already developed, but 
currently isn't captured by providers.
    And finally, expanding storage incrementally, but only 
after involving all of the parties to craft mitigation for 
adverse ecological, social and economic impacts. At the same 
time, we need to be mindful of stream protection and for that 
there are also a couple of things that we need to do. We need 
to lower barriers for existing water users who want to convert 
their rights for in-stream protection.
    We need to identify the funds to enable those sorts of 
conversions. We need to make water management actions deliver 
environmental benefit and I believe that that's possible in 
terms of reoperation of projects and such. And we need to allow 
Federal agencies to use their existing authorities and rights 
to protect rivers.
    Finally, there is some more research. We know a lot about 
water, but there are also things we don't know. On the 
environmental side, there isn't enough information about what 
ecologically sustainable flows really means, what's necessary 
to keep in the river and on the supply side, there could be 
more information available about the capacity of and how to 
recharge our groundwater resources.
    With Federal and state--while the Federal and state 
government can help, the lion's share of this work will happen 
at the local level. The most important state role, I believe, 
is to provide leadership to help the disparate interests agree 
on smart solutions. For Congress, I would suggest that the most 
important activities are to ensure that the Federal scientists 
provide timely focused research and that Federal projects are 
operated as models in terms of smart supplies, smart storage, 
both on the conservation side and on the supply side as well as 
demonstrating that you can operate in a way that is not 
completely environmentally destructive.
    The Federal role is not to weaken the Clean Water Act, as I 
think you're going to hear later or the Endangered Species Act.
    Thank you again for your time. I'd be happy to answer 
questions.
    [The prepared statement of Ms. Kassen follows:]

            Statement of Melinda R Kassen, Esq., Director, 
                Colorado Water Project, Trout Unlimited

    Mr. Chairman, members of the Committee, and members from Colorado, 
good morning and thank you for the opportunity to offer testimony today 
on the important topic of Colorado water supplies and water-use 
efficiency.

Trout Unlimited
    Trout Unlimited (TU) is a national, non-profit organization with 
130,000 members, of whom over 8,000 belong to our Colorado Council. 
Trout Unlimited's mission is to conserve, protect and restore coldwater 
fisheries and their watersheds. In 1998, TU established the Western 
Water Project, which now has offices in five states in the inter-
mountain west. We participate, primarily at the state level, in 
decisions affecting water quality and water allocation to ensure 
healthy coldwater stream flows and foster meaningful public input into 
these decisions.

My Background
    I opened the Colorado Water Project office in 1998. My previous 
experience in water matters dates back 20 years to the Office of the 
Colorado Attorney General, where I represented the Water Quality 
Control Division and Commission, the State Engineer and the Colorado 
Water Conservation Board. I then worked at the Environmental Defense 
Fund where I spent half of my time on water matters, including the 
fight against Two Forks Dam and Reservoir. Prior to starting at TU, I 
represented Kaiser-Hill, the contractor responsible for cleaning up the 
former nuclear weapons facilities at Rocky Flats; in that capacity I 
was involved in the renewal of the site's Clean Water Act discharge 
permit. I have also taught Environmental and Administrative Law at the 
University of Denver College of Law, and worked as counsel to the House 
of Representatives Armed Services Committee. I last testified before 
this Subcommittee in March 2002 regarding H.R. 3881, a bill involving 
the proposed expansion of the Bureau of Reclamation's Fryingpan-
Arkansas project.

A Sustainable Strategy to Meet Colorado's Water Needs
    In 2002, Colorado endured one of the worst droughts in its history. 
A year later, many reservoirs have yet to refill. Colorado's population 
growth is placing significant additional demands on our water 
resources. Water policies at all levels of government need to encourage 
sustainable supplies of good quality water for all Colorado residents 
without excessive costs or environmental damage.
    In January 2003, the conservation community released a report, What 
the Drought Means for the Future of Water Management in Colorado. I 
have attached copies of the Executive Summary to this testimony. 
Written by water policy experts, the Report examines the hydrology of 
the drought, its economic impact, and the responses of water suppliers. 
The Drought Report suggests smart supply and smart storage principles 
to guide future water management. I would like to focus on these 
commonsense solutions to our common problems.
    Smart supply alternatives can substantially increase the amount of 
available water by using existing water supplies fully and efficiently. 
For example:
      Strengthen conservation and efficiency programs. While 
this is primarily the province of local providers, state and federal 
government agencies may be able to provide financial and technical 
assistance. Just a few of the programs that have been demonstrated to 
reduce urban water use are programmed to detect and fix system leaks, 
rebates for re-landscaping and efficient appliances, and tiered block 
rate structures.
      Reclaim unusable space in existing reservoirs. Colorado's 
State Engineer estimates that, due to safety restrictions on 
reservoirs, as much as 250,000 acre feet of storage that currently 
exists in the state is unusable. Fixing the problems would allow the 
State Engineer to lift these restrictions, thereby recovering this 
space for active storage. In addition, many of the state's older 
reservoirs would be able to increase active storage capacity were they 
dredged.
      Expand the ability of water users to share supplies 
through leasing, water banks and other arrangements. While Colorado has 
an active water market, our court-based system has made it difficult to 
move water around quickly and on a short-term basis. The State 
Legislature enacted several bills in 2003 that begin to remedy this 
situation, but more work is necessary before water users will truly be 
able to share water easily in response to drought, or for other market-
driven reasons.
      Integrate existing infrastructure in a way that allows 
all water users within a geographic area to maximize their rights. The 
Drought Report describes several examples where the ability to 
integrate infrastructure would result in a direct increase in Front 
Range water supplies. Later in this testimony, I give several examples 
of how Front Range providers could use existing federal facilities to 
supply water rather than build new diversions and storage.
    Smart storage principles optimize already claimed water supplies to 
increase useable supply. For example:
      Use existing water supplies and usable return flows fully 
and efficiently. Efficiency programs in Colorado's urban areas are 
spotty, and Front Range water providers have been reluctant to reuse 
water due to consumer sensitivities, despite water court decrees 
directing this reuse, although Colorado Springs does reuse treated 
effluent on city turf.
      Expand existing diversion and storage capacities 
incrementally to enhance providers' flexibility to respond to increased 
needs as they appear. This is the strategy that Denver has successfully 
pursued since EPA vetoed its enormous, proposed Two Forks Dam and 
Reservoir project over a decade ago.
      Involve all of the affected interests, not just the water 
users, in crafting mitigation to eliminate or lessen environmental and 
socioeconomic impacts. For example, because the market is now driving 
water transfers from agriculture to municipal uses, participants should 
structure such transfers, where possible, to maintain agriculture, and 
under any circumstances to mitigate the adverse impacts to rural 
communities. A successful example of where this has happened is in the 
Upper Arkansas River Basin where the local water conservancy district 
led a negotiation effort with the City of Aurora, basin water rights 
holders and other basin interests, including rafting businesses and 
Trout Unlimited's local chapter regarding Aurora's plan to take water 
out of that basin.
      Emphasize the most efficient utilization of existing 
supplies to avoid the problems and inequities of new transbasin 
projects. The most recent example is the Big Straw. Last month, the 
Colorado Water Conservation Board released a reconnaissance-level study 
that predicted the costs of this project could reach $15 billion. New 
transbasin diversions, i.e. from the Colorado River to the growing 
cities along the Front Range east of the Continental Divide, 
particularly under junior priorities, are the most expensive option for 
supplying Colorado's water needs. They are also the most 
environmentally damaging. Why choose this approach when there are 
faster, smarter and cheaper alternatives?
    One of the lessons of the failed state bond referendum is that all 
affected entities must be at the table in developing new water 
supplies. Whether the project involves drying up agricultural land, 
taking unappropriated water from areas that are themselves growing, or 
depleting flows in rivers that support a recreation economy, the 
politics of transbasin diversions demand that those who benefit from 
such diversions minimize the adverse effects, mitigate those effects to 
the extent possible and compensate for the remaining losses, even if 
those loses are lost future opportunities for the exporting basin.
    The Bureau of Reclamation can also play a role. The Bureau has 
developed major water projects across Colorado, many of which serve 
agricultural users. As is true elsewhere in the west, agriculture 
consumes close to 90% of the water used in Colorado. Virtually all of 
Colorado's growing water demand is municipal. Given that the state has 
a mature water supply infrastructure, which stores and delivers 7.5 MAF 
of water annually, this existing infrastructure must help satisfy 
increased urban demands, as well as recreational and environmental 
needs. The Bureau must pursue reoperation of its projects, or the 
reallocation of water within these projects, to provide additional 
urban supplies, while maintaining riparian and instream resources and 
rural economies. In addition, Congress should take action, or encourage 
the Bureau to act, to:
      Streamline the processes required to allow cooperative 
use of federal water infrastructure for water development and delivery. 
Cooperative utilization of federally and locally owned water supply and 
distribution infrastructure would greatly expand our ability to move 
water up and down the Front Range and to water short areas on the west 
slope. Without this cooperation, water users may be required to build 
expensive and environmentally damaging new projects that would 
otherwise be unnecessary. For example, if Denver could expand its north 
end system at least in part via the Bureau's Colorado-Big Thompson 
project and Windy Gap, wheeling the water through this system to the 
northern suburbs Denver supplies, this would save additional pressure 
on the already over-depleted Fraser and Williams Fork Rivers in the 
Colorado Basin. Similar opportunities exist on the Arkansas River, with 
the Bureau's Fryingpan-Arkansas Project, and other Bureau reservoirs in 
that basin.
      Pursue opportunities to increase conservation for Bureau 
projects and activities. For example, the Bureau can modify existing 
water supply and delivery infrastructure to reduce physical losses of 
water within a system to create additional supplies. (Such supplies can 
then increase out-of-stream deliveries and/or supplement environmental 
flows.) The Bureau can also define what constitutes beneficial use for 
water used from its projects, as well as what constitutes waste.
      When evaluating existing infrastructure for modernization 
or rehabilitation, consider the outright removal and replacement of 
existing infrastructure with alternative means of supply, including 
conservation.
    Finally, everyone recognizes that environmental values are an 
integral part of Colorado's quality of life and increasingly 
recreation-based economy. We should recognize and develop state policy 
that ensures that water projects do not have significant adverse 
environmental effects. Where possible, we should restore the rivers and 
streams that past water policies have left high and dry.

Protecting Rivers Given Drought & Growth
    We value our rivers for their ecological, recreational and 
aesthetic benefits. Already, too many of Colorado's rivers and streams 
are dry at some times of the year. This is true even though water 
drives Colorado's increasingly recreation-based tourism economy. At the 
same time, there is increasing pressure to withdraw more water to 
supply Colorado's growing population.
    Not only has Colorado's water allocation system failed to protect 
many rivers and streams for these ecological, recreational and 
aesthetic benefits, but some of Colorado's water conflicts now exist 
because the water allocation system that has served for 150 years to 
deliver water to agriculture and cities, failed to provide adequate 
protection for endangered and threatened species who rely on Colorado's 
native water supplies. These species, like all aquatic life as well as 
those other species who depend on aquatic life or habitat, need some 
portion of the natural flow regime (i.e., high spring flows, trailing 
off over the rest of the year) to survive. Yet, there is not enough 
information available regarding how much of the natural hydrograph must 
be preserved to sustain native and wild aquatic species as well as 
riparian functions. Federal agencies could advance the science 
regarding environmental flows.
    We need to protect the environment that makes Colorado the special 
place it is, even in the face of drought and growth. Trout Unlimited 
hopes that Colorado can demonstrate to the rest of the West that growth 
and conservation can proceed hand in hand. Here are a few ways we can 
do so under existing laws:
      Enforce against the wasteful use of water. Our courts and 
Constitution impose on every water user a duty to use water in a wise 
and efficient manner. Unfortunately, the prior appropriation system's 
``use it or lose it'' imperative conflicts with Colorado's 
constitutional ban against wasting water. Both the state and the Bureau 
could do a better job of defining waste and limiting diversions to what 
is necessary for beneficial use;
      Allow federal agencies to help protect the state's 
rivers. Federal agencies have some authority to protect Colorado 
streams. Unfortunately, most Colorado water users object to the 
agencies exercising their authority, even when the agencies are trying 
to prevent streams crossing national parks, monuments and forests from 
dry up or serious impairment;
      Convert diversionary water rights to instream flow 
protection. In some cases, the only way to restore dry streams is by 
purchasing or leasing senior water rights and then putting that water 
back into the stream. The Colorado Water Conservation Board currently 
has the authority both to buy and seek donations of rights for 
conversion. The Board should pursue these aggressively. There may also 
be federal funds available for these purposes, for example, from the 
Land and Water Conservation Fund or through some of the Farm Bill 
accounts;
      Continue to add to the Board's portfolio of instream flow 
rights on streams that would benefit from this protection;
      Enforce existing instream flow water rights to the 
maximum extent under the law. The Board has no field personnel to 
determine whether its rights are being satisfied;
      Encourage both agricultural and municipal conservation to 
stretch existing water supplies and thereby reduce the need for new 
dams and diversions; and
      Invest in better stream monitoring to enhance enforcement 
of instream flow rights and provide data on stream health. This is 
another place where the federal government could assist. Research to 
quantify the flows that will sustain aquatic species has been quite 
limited. Only within the last decade have articles appeared regarding 
the importance of maintaining natural hydrographs both to maintain 
instream and riparian systems and values. More is needed.
    To protect the environment, Colorado must also develop new 
strategies. Other western states have tried and proved effective all of 
the following:
      Add conservation requirements to decrees for new or 
changed water right;
      Create incentives for agricultural water salvage as 
Oregon and Montana have done;
      Condition new or changed water rights to minimize or 
mitigate the adverse effects on water quality, fisheries and the 
environment, as the laws of South Dakota, Oregon and Utah provide; and
      Allow existing water rights holders to convert their 
rights to instream protection, either temporarily or permanently, as is 
allowed in California, Arizona, Nevada, Alaska, Montana and Oregon.
    Finally, in addition to the scientific research mentioned above, 
there are things federal agencies with land and water management duties 
in Colorado can do to restore or sustain environmental flows:
      Explicitly integrate environmental restoration into all 
water management actions by approving future water development, 
management changes, water supply contracts or transfers only if they 
are designed and operated to provide a net environmental restoration 
benefit; and
      Evaluate the possibility of developing leasing 
arrangements to provide environmental flows with only occasional 
interruptions in times of extreme drought, such as the state program 
instream flow donation agreement between the City of Boulder and the 
Colorado Water Conservation Board.

Avoiding the Crises
    In Water 2025, the Secretary of Interior identified the Front Range 
as one of the West's ``red zones,'' at or near a water crisis. 
Certainly, most of the region's large water suppliers are currently 
undertaking projects to deliver more supplies to this fast-growing 
region. The Cities of Denver, Aurora and Colorado Springs, along with 
the Northern Colorado Water Conservancy District, which supplies both 
agricultural and municipal users in the Ft. Collins-Greeley-Loveland 
area, each have projects for which the NEPA scoping process just closed 
public comment. There are additional projects that these suppliers are 
discussing, including another small reservoir on the Eagle River, a 
Colorado River tributary, which could benefit both the Front Range and 
West Slope interests. Together, these projects may deliver close to 
300,000 new acre feet of water, some of which will come from the 
Colorado River Basin.
    In recognition of the need to work more collaboratively on water 
projects, many of these same Front Range water suppliers have engaged 
with some of the west slope counties that would be the most affected as 
a result of increased transbasin diversions to identify not only the 
impacts of their projects, but also the water short areas within these 
exporting counties. The Upper Colorado River Study (UPCO), five years 
in the making, is a landmark effort to examine ways in which the water 
transfers everyone knows are coming can be done in a manner that is the 
least disruptive to local interests.
    Unfortunately, not all of Colorado's water suppliers have engaged 
in such far-sighted planning. In addition, some of Colorado's fastest-
growing counties have been relying on non-renewable ground water that 
is proving not to be as long-lived as had been envisioned 20 years ago. 
Thus, these localities, many of which are at the southern end of 
Denver's metropolitan area, need help. One new study suggests that 
``conjunctive use'' of water, i.e., using surface water directly and to 
replenish ground water in wet years while pumping ground water to repay 
surface water rights owners during dry years, may work to alleviate the 
problems in the south metro area. Certainly, TU hopes that the on-going 
negotiations regarding this approach succeed, given that the 
alternatives, including new transbasin diversions, are likely to be 
significantly more expensive and environmentally damaging.
    To solve the problems facing the south metro Denver area, as well 
as other areas around the west, additional federal research and 
information programs monitoring both surface and ground water resources 
would be helpful. While ground water development and management is 
within state authority, federal research could help states and 
localities better understand this resource, as well as how to 
accomplish recharge and how to utilize water stored in federal projects 
to do so. Given the apparent over-reliance on ground water in Denver's 
southern metropolitan area, such additional research could provide 
necessary information to water planners that might help them make 
intelligent choices regarding supply options.
    Lastly, another research arena for federal scientists is the likely 
effects (if any) of climate change on Colorado's water supply. Federal 
research on the impacts of climate change could help water managers 
better understand how to plan for, and accommodate, changes in runoff 
associated with predicted changes in climate. For example, most climate 
change models predict a loss of runoff in Colorado that far exceeds the 
state's unused increment of its compact entitlements and equitable 
apportionment decrees. Validating these model estimates, as well as 
explaining the system dynamics that might cause this result, would 
provide important information to local water providers in Colorado and 
around the West trying to plan for the future. Certainly, no one wants 
new crises to arise due to failure to plan for an adequate water supply 
in light of changes to expected supplies resulting from global warming.
    Thank you for this opportunity to present my views. I would be 
happy to answer questions.
                                 ______
                                 
    [An attachment to Ms. Kassen's statement follows:]
 WHAT THE CURRENT DROUGHT MEANS FOR THE FUTURE OF WATER MANAGEMENT IN 
                                COLORADO

                            Daniel F. Luecke

                              John Morris

          Lee Rozaklis, Hydrosphere Resource Consultants, Inc.

         Robert Weaver, Hydrosphere Resource Consultants, Inc.

                              January 2003

EXECUTIVE SUMMARY
    For at least the last three years, Colorado has been in the grip of 
a serious drought. In the public debate that has emerged from this 
natural phenomenon, some elected officials and others have called for 
more large dams. We believe that a review of the hydrology of the 
state's rivers, the existing water supply infrastructure, and the 
economic, financial, and environmental consequences of building large 
new structures suggests that there are more effective and efficient 
options. In this report, after describing the state of the Colorado 
water economy and the value of water in various uses, we: 1) identify 
the principles for assessing future management strategies and projects; 
2) review the hydrologic and economic impacts of the drought; 3) 
appraise the drought response of water managers; and 4) outline the 
structural and non-structural options for meeting future demands.
Principles for Assessing Water Management Strategies and Projects
    Colorado has a surprising abundance of water for a great variety of 
purposes, despite relatively low and unevenly distributed precipitation 
and a perception of water scarcity. This abundance is often obscured, 
however, by the inefficient way in which water is managed and used. 
Many, if not most, water management utilities are making significant 
strides toward improving both their efficiency and system reliability. 
Nonetheless, while individual users may be efficient from their point 
of view, at higher levels, like watersheds, the potential for improved 
efficiencies still exists.
    Colorado's water economy has passed from its ``expansionary phase'' 
into what might be called its ``mature phase,'' in which: 1) water 
users are linked by elaborate physical systems and are increasingly 
interdependent economically; 2) new supply options are limited; 3) 
costs of new supply are rapidly escalating; and 4) federal subsidies 
have evaporated. Moreover, people now value free flowing streams for 
their recreational and environmental worth. Applying a widely accepted 
rule based on the principle that an efficient and fair public policy 
decision is one that makes no entity worse off for the betterment of 
another, present day water supply expansion decisions based on large 
storage projects are almost always wasteful, inefficient, and unfair. 
Thus, we recommend that, before considering new storage options, we 
should:
      Invest in conservation;
      Foster cooperation between the two largest user groups--
cities and farmers;
      1Restore and enlarge existing storage facilities; and
      Use system linkages to distribute existing supplies more 
efficiently.
    We further recommend that future water supply management and 
development efforts should adhere to five basic principles of what we 
would characterize as ``smart storage'':
      Make full and efficient use of existing water supplies 
and usable return flows;
      Expand water supplies incrementally to utilize existing 
diversion and storage capacities better;
      Recognizing that market forces now drive water 
reallocation from agricultural to municipal uses, structure such 
transfers, where possible, to maintain agriculture, but in all cases, 
mitigate the adverse impacts to rural communities from these transfers;
      Involve affected publics and fully address the inevitable 
environmental and socioeconomic impacts of increasing water supplies; 
and
      Recognize the fundamental political and economic 
inequities and the adverse environmental consequences of new transbasin 
diversions and emphasize the most efficient utilization of existing 
supplies to avoid new transbasin projects.

Hydrological Impacts of the Drought
    The current drought, which began in 2000 and has continued to the 
present, has been the most severe on record by several measures. Stream 
flows in Colorado in 2002 have generally been the lowest in over 100 
years and the tree ring data suggest that flows are probably the lowest 
in 300 to 500 years. In terms of multiple year stream flow deficits, 
the current drought is worse than the historic droughts of the 1950s 
and 1970s. While this drought has not lasted as long as the drought of 
the 1930s, it is not yet over and it has been more severe than any 
three-year period of the 1930s.

Economic Impacts of the Drought
    The total economic impact of the drought of 2002 is probably in 
excess of $1 billion, or roughly 0.7% of the state's income, although 
no one can yet know the precise losses. Losses occurred in several 
economic sectors, but mostly in agriculture, and water-dependent 
recreation and tourism. Federal programs and insurance mitigated some 
losses. Municipal use, including landscaping, is the only sector where 
more water supply development and/or measures to increase efficiency 
could have prevented a large fraction of the losses incurred. As a 
result, the preventable economic losses were about $250 million 
overall, or 17% of the total loss. Given that even these ``avoidable'' 
losses will recur only with another major drought, probably not more 
than once every half-century, programs to prevent these losses should 
not cost more than $250 million and probably not even half that.

Managers' Responses to the Drought
    Water managers' responses, though late in many cases, did have an 
effect on customer behavior and did achieve some reduction in customer 
demand. Initial efforts consisted of educational programs to encourage 
efficiency and voluntary conservation programs, followed by mandatory 
restrictions on outdoor water usage. Very few water providers adopted 
pricing surcharges or placed any restrictions on the issuance of new 
taps. Many providers invoked restrictions as a precautionary response 
in recognition that the current drought might not be over.
    Water savings achieved by municipal providers' drought response 
measures varied; but, preliminary results suggest that, on average, 
municipal water users will have reduced their normal demand by about 
10% between May 1, 2002, and April 30, 2003. In most communities the 
public response to efforts to reduce water use was positive.
    Some providers also implemented measures to increase their supplies 
and reduce their draw on storage reservoirs. These measures included 
cooperative arrangements with farmers, invoking special drought clauses 
to relax minimum bypass flows, drilling supplemental wells, trading 
supplies between users, building facilities to allow better use of 
existing water rights, and sharing the burden of shortages where the 
State Engineer was willing to relax administration of the priority 
system.
    Agricultural water users employed a wide variety of strategies to 
cope with the drought and irrigators were generally more adept than 
cities at anticipating its onset. Responses included reductions in the 
amount of acreage planted, changes in cropping mix from full season 
crops (e.g. feed corn) to partial season crops (e.g. 1- or 2-cut hay 
and corn for silage). Some farmers decided not to farm this year 
(2002), and to lease their water supplies to cities instead and many 
livestock owners sold off significant percentages of their herds in 
expectation of high-priced and reduced feed supply.
Mechanisms to Meet Existing & Future Water Demands
    Looking to the future and the assessment of storage augmentation in 
managing Colorado's water needs, not all basins are created equal. Some 
can be eliminated from consideration given current conditions either of 
hydrology, adequacy of existing storage capacity, economics, project 
proposals that are already well along (e.g., Animas/La Plata), 
downstream delivery requirements (e.g., Rio Grande Compact), or some 
combination of the above. The Rio Grande, the San Juan/Dolores, the 
Yampa/White, and the North Platte fall into this category. In all of 
these basins at least two of these factors are relevant. For these 
reasons, the report concentrates on the question of storage in the 
Colorado/Gunnison, the Arkansas, and the South Platte.
    Reservoirs have been part of Colorado's water development strategy 
since the late 1800s, in response to its highly variable stream flows. 
Today, Colorado has more than 7.5 million acre-feet of reservoir 
storage. About 25% of this capacity directly supports municipal water 
uses and this fraction is steadily growing, mostly as cities acquire 
agricultural water rights with their associated storage. In addition, 
there is the natural storage provided by Colorado's principal 
underground aquifers. The Denver Basin aquifers contain approximately 
150 million acre-feet of recoverable groundwater and aquifers elsewhere 
within the South Platte, Arkansas and Rio Grande basins contain over 15 
million acre-feet.
    The traditional purpose for building reservoirs has been to capture 
excess runoff, which usually occurs relatively infrequently and in 
large volumes. Consequently, traditional reservoirs are fairly large 
and located directly in a stream channel. Apart from their well-
documented environmental impacts, such large on-stream reservoirs have 
other major limitations. First, they are relatively costly to build and 
cannot be built incrementally in response to gradually growing demands. 
Rather, they must be fully paid for and constructed ``up front,'' which 
increases their financial risk and diminishes their economic viability. 
Second, as a basin becomes over-appropriated, additional runoff-capture 
storage produces ever-diminishing returns in terms of water supply 
yield, because unappropriated runoff occurs less frequently and storage 
carry-over periods become longer. Third, evaporation losses compound 
the diminishing yield problem, becoming a major limiting factor in 
reservoirs' ability to provide relief both over extended drought 
conditions and for severe droughts that occur every few decades or less 
often. Finally, given the diminishing returns for new storage projects 
that would be fully integrated into existing systems, storage-yield 
ratios for projects designed to store wet-year water for drought 
protection are approaching, if not exceeding, 5-to-1. This means that 
for 100,000 acre-feet of additional firm annual supply, the reservoir 
would have to store over 500,000 acre-feet and would cost well over one 
billion dollars.
    If reservoirs are built solely for drought protection, providing a 
full measure of protection requires keeping these reservoirs almost 
full until severe droughts are obviously underway. They cannot be used 
to provide water to existing demands during non-drought periods or to 
meet the demands of new growth. To do so compromises their drought 
protection capacity.
    Another consideration is that building reservoirs for drought 
protection does not eliminate the need for municipal water 
restrictions. Virtually all water providers that enacted watering 
restrictions in 2002 had sufficient storage supplies to meet their 
normal demands throughout the year. They enacted watering restrictions 
as a precautionary measure, recognizing that there is no way of knowing 
how long the current drought may last.
    With these limitations in mind, we find that water providers are 
increasingly developing ``smart storage''--smaller reservoirs designed 
to optimize already-developed supplies rather than capture 
unappropriated peak season runoff. Smart storage is now commonly 
developed as a means for capturing and re-regulating reusable return 
flows, increasing the yields of exchange rights and augmentation plans, 
re-regulating the yields of changed irrigation rights to meet municipal 
demand patterns, and increasing yields from existing water rights and 
transbasin diversions. In some cases, existing traditional storage 
capacity has been rededicated to smart storage purposes with resulting 
increases in yields.
    While recognizing the progress water providers are making in 
developing smaller, off-channel projects, enlargements of existing 
projects and underground aquifer storage, we think that three basic 
elements constitute Colorado's water future: 1) conservation and demand 
management; 2) municipal-agricultural cooperation; and 3) supply 
integration, management, and development. In the three major basins we 
have looked at carefully--the South Platte, the Arkansas, and the 
Colorado--we believe that this combination of measures can meet growing 
long-term urban demands.
                                 ______
                                 
    Mr. Calvert. Thank the gentle lady.
    And next, Mr. Richard Kuhn, Club 20.

STATEMENT OF RICHARD ERIC KUHN, GENERAL MANAGER, COLORADO RIVER 
          WATER CONSERVATION DISTRICT, MEMBER, CLUB 20

    Mr. Kuhn. Thank you, Chairman Calvert and Members of this 
Committee from Colorado. For the record, my name is Richard 
Eric Kuhn. I represent both Club 20 and the Colorado River 
Water Conservation District. Both of those organizations 
represent the Western Colorado or the Colorado River Watershed 
within Colorado.
    I want to call your attention or address three important 
issues. First, I want to call your attention to what is called 
the Colorado 64 Water Principles. Second, I want to emphasize 
and perhaps second what Peter Binney and Greg Walcher said, 
that although Colorado certainly faces tough challenges with 
our water future, we're very busy as well. I don't want to 
leave you with the impression that nothing is going on because 
in my 23 years in this business, we've never been busier, more 
innovative or looked at more cooperative projects than we are 
doing today.
    And then finally, just a real quick discussion of some new 
challenges we face in the evolving Federal role.
    Concerning the Colorado 64 Water Principles, this was 
developed by Club 20, other organizations or regional 
organizations such as Action 22, Progressive 15 and government 
and business leaders within Colorado's urban Front Range. These 
principles were overwhelmingly endorsed by the Colorado General 
Assembly. And I think I want to point out as often the case 
with many large civil works, the political and institutional 
challenges are often much more challenging than the actual 
engineering or the technical or even the financial issues. I 
think that's true of dams, that's true of freeways. That's true 
of a lot of things.
    We see these Colorado 64 Principles as essentially a set of 
behaviors that if you follow them, it's more likely to lead to 
success, especially at the local level. The organization, the 
River District that I represent voted against Referendum A by 
87 or 88 to 12. There's a message there and that message is you 
need to involve the locals. You have to address the local 
concerns if you're going to use rural or western Colorado water 
to help solve the Front Range water problems.
    Current projects, there are a lot of them under 
development. Many of them have been mentioned. Enlargement of 
Elk Head Reservoir off the Colorado River Basin Project, the 
Eagle River work including Wolcott, Colorado Springs 
Substitution Agreement, the Douglas County Water Resources 
Authority Study that's looking at conjunctive use, the Arkansas 
River Basin Projects that we discussed. Some smaller ones that 
we're involved with that are not just Front Range, enlargement 
of existing Stagecoach, Animas-La Plata, Wolford Mountain 
enlargement, Reuter-Hess, Gerry Creek, Statewide Water Supply 
Study. So there are many of them.
    New challenges. I want to address three things here. First, 
within Colorado and I think this is very similar to the 
experience in California, Idaho, Utah, Arizona, the ``easy to 
build'' projects were built a long time ago. We're not talking 
about those that are very simple any more.
    If one were to walk along the Continental Divide from 
Monarch Pass which is east of Gunnison, north 200 miles to near 
Steamboat Springs and you were to look to the w`est, you would 
find that the water in the watersheds is already spoken for and 
in most cases it was spoken for 25 to 50 years ago. So if 
you're going to use more additional Colorado River water, 
you're going to go farther to the west, farther to the north, 
farther to the south. And the Big Straw Project may seem like a 
joke, but the reality is beginning in 2001, all of 2002 and in 
most of 2003, you had to go all the way to Grand Junction to 
find any free water. And by free water, I mean water that's not 
appropriated and used by others in the Colorado River system. 
Those were dry years. It's not true of wet years. There are 
strategies that can make better use of the wet year water.
    Second thing I want to mention real quickly is that I think 
there's increasing concern among the water community that 
there's a basic water supply paradigm out there that the last 
50 years or so of hydrology can represent the future. And 
there's increasing concern that that's no longer the case.
    At a recent NWRA convention, Reclamation Commissioner Keys 
made it clear that he believes there's something very 
significant happening out there, but we're not smart enough to 
know what it is and exactly how it's going to impact us, but as 
a water community and the simplest water projects take 15 to 20 
years to develop, we need to be very aware of what's going on 
out there. And I see that science as very much a Federal role. 
That affects California, New Mexico, Arizona, Colorado, 
everyone.
    When I talk about the Colorado River, I often point out you 
don't have to look to global warming scenarios to be concerned. 
In fact, I don't look to global warming. I look to the recent 
history. Instead of going back 100 years where we have gauges, 
go back 500 years when we can reconstruct with good confidence 
those gauges and the flow of the Colorado is maybe 10 percent 
less than what we think it is. And with that I will end my 
testimony, only indicating that the Federal agencies can play a 
very productive role, especially in science in cooperation with 
local entities.
    [The prepared statement of Mr. Kuhn follows:]

           Statement of Richard Eric Kuhn, General Manager, 
      Colorado River Water Conservation District, Member, CLUB 20

    I want to thank Subcommittee Chairman Calvert, Congressman Beauprez 
and the other members of the House Resources' Subcommittee for this 
opportunity to share the views of the Colorado River Water Conservation 
District and CLUB 20 on the important water issues facing the State of 
Colorado.
    For the record, my name is Richard Eric Kuhn. I am here 
representing the Colorado River Water Conservation District (River 
District) and the CLUB 20 Water Committee. I am employed by the River 
District as the General Manager. I have been an employee of the River 
District since 1981 and General Manager since 1996.
    The Colorado River Water Conservation District is the principal 
policy body for the Colorado River within Colorado. We are a political 
subdivision of the State of Colorado, responsible for the conservation, 
use, and development of the water resources of the Colorado River Basin 
to which the State of Colorado is entitled under the 1922 and 1948 
Colorado River compacts. The River District includes all or part of 15 
counties in west-central and northwest Colorado.
    CLUB 20 was founded in 1953. For over five decades, this 
organization of businesses, local governments and individuals has been 
the voice for western Colorado. A board of directors makes CLUB 20 
policy, which includes voting membership for each of the 22 counties 
and the Ute Nations in Colorado West.
    For the benefit of the Committee, I would like to briefly address 
three important water matters. First, I want to call your attention to 
the Colorado 64 Water Principles. Second, I want to emphasize that the 
Colorado water community is very busy. While Colorado certainly faces 
tough challenges with meeting its future water needs, individual water 
agencies within Colorado have probably never been as busy, innovative 
or cooperative with their efforts to meet Colorado's future water 
needs. Finally, I want to address some of the new challenges we face 
and the evolving role of the Federal government on water issues.
``Colorado 64'' Water Principles
    I want to call your attention to a set of principles developed 
through a consensus process by CLUB 20, similar regional organizations, 
such as Action 22 and Progressive 15, and government and business 
leaders from Colorado's urban Front Range. The ten principles were 
overwhelmingly endorsed by the Colorado General Assembly through its 
adoption of House Joint Resolution 1019 this year.
    As is often the case with development and construction of large 
civil works, the political and institutional challenges associated with 
water projects are often much more difficult to solve than the 
technical challenges. In our view, these ten principles represent a 
consensus list of ``behaviors'' that, if followed, will increase the 
likelihood that new or expanded water projects can attain the necessary 
public support, especially at the local level.
    While these principles on their face appear straightforward and 
simple, the devil, of course, is in the details of implementation. 
Western Colorado and other rural Colorado residents are obviously very 
concerned that the growing demand for water along the urban Front Range 
corridor will take away our existing economic base, be it recreation or 
agriculture, our quality of life and our future. The fact that many 
Colorado counties outside the Front Range, be they in Western Colorado, 
the San Luis Valley, or in the Arkansas River Valley, voted against the 
recent Referendum A by margins of eight or nine to one is compelling 
evidence that water solutions designed to meet the needs of the Front 
Range at the expense of Colorado's rural areas are, in all likelihood, 
a road map for failure. The ten principles presented in ``Colorado 64'' 
are, in our view, the road map toward success.

Current Projects Under Development
    From an outsider's view, based on press reports addressing such 
issues as the continuing drought in Colorado and the Western United 
States, the problems with over reliance on groundwater use in the 
Southern Metropolitan Denver Area and the recent controversy over 
Referendum A, it may appear that not much is being done to address 
Colorado's water needs. I believe that the reality is that nothing 
could be further from the actual truth. Throughout Colorado, water 
agencies are very busy with the development of new and innovative 
projects designed to meet Colorado's future water needs. Further, in my 
23 years of experience, I've never seen more cooperative projects or 
cooperative efforts that are designed to develop cooperative or joint 
projects.
    The following is a list of some of the projects currently under 
development that the West Slope is involved with:

1. The Enlargement of Elkhead Reservoir.
    The River District, State of Colorado and the Upper Colorado River 
Basin Endangered Species Recovery Program are working on a joint 
project to enlarge the existing Elkhead Reservoir by about 12,000 acre 
feet. Elkhead Reservoir is located on Elkhead Creek, a tributary to the 
Yampa River near Craig. The remarkable aspect of this project is the 
fact that the needs of endangered fish are being met through a 
cooperative project where the Federal agencies are stepping up to the 
plate and, through the Recovery Program, participating in a project 
with broad local support.

2. Upper Colorado River Basin Project.
    The River District, Denver Water, Northern Colorado Water 
Conservancy District, Grand County, Summit County, the Northwest 
Colorado Council of Governments, Middle Park Water Conservancy District 
and other local entities are working on a joint effort to examine local 
water issues in the headwaters of the Colorado River in Grand and 
Summit Counties (the UPCO Project).
    This study has two general areas of focus, the Upper Blue River in 
Summit County and the Fraser River Basin in Grand County. Denver Water 
is currently in the process of seeking federal permits to ``firm up'' 
and enhance the yield of its North End or Moffat Tunnel Collection 
System. Northern Colorado Water Conservancy District's Municipal 
Subdistrict is seeking federal permits to ``firm up'' the yield of the 
Windy Gap Project. Both of these projects will further impact the 
Colorado River Basin in Grand County, a region already heavily impacted 
by existing transmountain diversions.
    The goal of UPCO is to identify and address the local Grand County 
water supply and environmental needs and develop projects or project 
operational criteria to meet these needs as components of one or both 
of the firming projects.
    Within Summit County, the UPCO efforts are focused on meeting the 
recreation and water supply needs of the communities surrounding Dillon 
Reservoir, which includes four major Colorado ski areas.

3. The Eagle River Memorandum of Understanding.
    Within the Eagle River watershed, the River District, Eagle County, 
local water districts, Vail Resorts, Colorado Springs, Denver and 
Aurora are working together to identify and implement joint projects. 
Projects that can be supported by both the in-basin users and the out-
of-basin users. This effort is the direct result of the past failure of 
Colorado Springs and Aurora to obtain local permits for the original 
Homestake II Project.

4. Colorado Springs Substitution Agreement.
    The River District, Colorado Springs, Denver Water, Summit County, 
Breckenridge and others recently completed a small, but complicated, 
agreement that firms up the yield of Colorado Springs' Upper Blue River 
water rights in very dry years. In return, Colorado Springs provides a 
small (250 acre feet) amount of water for uses on the Blue River above 
Dillon Reservoir.

5. Douglas County Water Resources Authority Study.
    The River District, Denver Water and the Douglas County Water 
Resources Authority are jointly studying options to address the water 
needs of the Southern Metropolitan Denver Area which is an area 
currently relying on deep groundwater use. Options include the 
development of a conjunctive-use project. This project would supplement 
groundwater use with water available from the Platte and Blue Rivers in 
wetter years.

6. Arkansas River Basin Projects.
    While not a party to the Preferred Storage Option Project (PSOP) 
sponsored by the Southeastern Colorado Water Conservancy District, the 
River District is currently negotiating Memorandums of Agreement (MOAs) 
with Colorado Springs and the Twin Lakes Reservoir & Canal Company so 
that the River District Board of Directors can support, in concept, the 
reoperation of Pueblo Reservoir and a feasibility study to enlarge 
Pueblo Reservoir. The goal of the MOAs is to preserve the historic 
compromises associated with the Congressional approval of the 
Fryingpan-Arkansas Project.
    In addition to the above list, the following is a list of some of 
the other Colorado projects under development:
        1)  Enlargement of the existing Stagecoach Reservoir (Upper 
        Yampa Water Conservancy District);
        2)  Animas-La Plata Project (U.S. Bureau of Reclamation);
        3)  Wolford Mountain Reservoir Enlargement (River District);
        4)  Colorado Springs Southern Delivery System (SDS);
        5)  Rueter-Hess Reservoir (Parker Water & Sanitation District);
        6)  Enlargement of Gerry Creek Reservoir (Ute Water Conservancy 
        District); and
        7)  Statewide Water Supply Initiative Study (Colorado Water 
        Conservation Board).

New Challenges
    Finally, I want to take a few moments to comment on some of the new 
challenges we face and make a few suggestions on the Federal role to 
help local agencies address Colorado's water future.
    First; within Colorado, the ``easy to build'' projects were built a 
long time ago. If one were to walk along the Continental Divide from 
Monarch Pass east of Gunnison to Muddy Pass, near Steamboat Springs, 
(several hundred miles), all of the available water on the West Slope, 
from the Divide, west for 25 to 50 miles has been appropriated and 
developed, most, but not all, for transmountain uses. To develop 
Colorado's unused Colorado River water, we either need to devise 
projects that better manage existing supplies and use more wet year 
water or go farther west. The recently completed ``Big Straw'' study by 
the Colorado Water Conservation Board may seem like an extreme example 
of this concept. The project proposes to pump water from the Colorado 
River below Grand Junction to the Continental Divide. However, the 
reality is that in all of 2001, all of 2002, and most of 2003, one 
would have had to go all the way to Grand Junction to find any water 
that was available for use for a new appropriator.
    Second; there is increasing concern among the water community that 
the basic water supply paradigm that the hydrology records of our 
streams from the past 50 years or so can be used to ``predict'' 
hydrology into the future may be WRONG. In a business where even the 
development of simple projects normally takes 15 to 20 years, climate 
variability could add major new uncertainties and conflicts over water 
supplies. At the recent NWRA convention, Reclamation Commissioner John 
Keys made it clear that he believes something very significant may be 
happening to our weather patterns, but we're not yet smart enough to 
know exactly what or why. As a state that obtains most of its surface 
supply from snowmelt, Colorado may be especially at risk to climate 
change.
    I often point out that one need not look to future global warming 
scenarios to be concerned. My personal opinion is that there is 
overwhelming evidence that the long-term average (500 year) flow of the 
Colorado River system is as much as 10% less than the recent 90 year 
gauge records and, unfortunately, if this is true, the recent dry years 
which have drained Lake Powell to below 50% of capacity may be more the 
``rule'' than the ``exception.''
    Finally, I would urge the Water & Power Subcommittee members to 
continue their role of examining and questioning the Federal government 
role in addressing Western water issues. Clearly, the role of the 
Federal agencies in water development has changed. In 1937, when the 
River District was formed, Coloradans viewed the Federal government, 
especially the Bureau of Reclamation, as essential to the development 
and settlement of the West. Federal assistance was needed to fund and 
build water projects that would provide reliable water supplies for 
economies based on irrigated agriculture. The lynchpin of a reliable 
water supply was then, and still is, upstream storage. However, the 
reality of today is that in the initial press releases outlining the 
Department of the Interior's Water 2025 initiative, the words ``new 
water storage'' were not to be found.
    Even though the days when Congressional appropriations were the 
primary source of water projects are long gone, federal agencies still 
have an important role. Almost every project needs Federal permits, 
right-of-ways or contracts. I would hope that, in the spirit of the 
2025 initiative, Federal agencies will become active partners in 
working with local agencies to develop consensus-based solutions to 
Colorado's water needs. The River District's Wolford Mountain Project 
and Elkhead enlargement are good examples of a generally positive 
partnership between Federal agencies and local water agencies.
    [NOTE: Attachments to Mr. Kuhn's statement have been retained in 
the Committee's official files.]
                                 ______
                                 
    Mr. Calvert. Thank you.
    Mr. Joel Rosenstein, Vice President of Coloradans for Water 
Conservation and Development.

 STATEMENT OF JOEL ROSENSTEIN, VICE PRESIDENT, COLORADANS FOR 
               WATER CONSERVATION AND DEVELOPMENT

    Mr. Rosenstein. Mr. Chairman and Members of the House 
Committee on Resources, thank you very much for the opportunity 
to address your group. For the record, my name is Joel 
Rosenstein. I am here on behalf of the Coloradans for Water 
Conservation and Development (CWCD). I represent the Denver 
Metro Chamber of Commerce. I'm on the CWCD's Board of 
Directors. The Chamber represents about 3,000 businesses in the 
Metro Denver area.
    The CWCD is a recently formed nonprofit corporation that 
promotes responsible conservation and the development of water 
resources in the State of Colorado. The CWCD represents a broad 
coalition of business and agricultural interests, many of which 
are statewide organizations. Our members include the Chamber, 
Colorado Concern, the Colorado Farm Bureau, National 
Association of Industrial and Office Properties, Colorado 
Apartment Association, the Colorado Association of Home 
Builders, as well as a number of individuals supportive of our 
primary objectives.
    The severity of the recent drought on Colorado business and 
agriculture and the need for a unified voice for water 
development among business and agriculture interests prompted 
these organizations to form a coalition that, in a very short 
time, is shaping policy concerning conservation and the 
development of the State's water resources.
    Since 2002, I have chaired the Denver Metro Chamber of 
Commerce's Water Task Force. This year our task force issued a 
white paper entitled ``Water: What it Means to Business'' and I 
brought with me copies and I'd be happy to share that with you. 
In publishing the white paper, the Chamber sought to inform and 
educate its membership and other interested parties about the 
critical role of water in our State's economy.
    The drought impacted nearly every industry and every region 
of Colorado. Sixty-three of the 64 counties in Colorado 
received a Federal Drought Disaster designation and for the 
first time since its creation in 1981, the Colorado Drought 
Mitigation Response Plan was fully activated.
    The Colorado Department of Natural Resources estimates the 
economic loss to agriculture, tourism, and recreation at $1.1 
million. Agriculture producers, especially dry land crop and 
livestock producers suffered damages totaling more than $450 
million. The green industries, which includes landscaping and 
nurseries, estimate that the 2002 drought resulted in a loss of 
15,000 jobs and $75 million in sales. The severe drought caused 
many municipal water providers in the metro Denver area to 
impose severe water restrictions which cause lawns, gardens, 
fields and parks to brown and effected the ways children 
practice and get involved with organized sports. Wildlife 
habitat and riparian areas also suffered tremendously. For 
residents of smaller towns such as Rocky Ford, Beulah, Victor, 
Cripple Creek and Penrose, the water shortage forced entire 
towns to have drinking water delivered by truck from other 
locations.
    If Colorado's economy is to remain strong and vibrant, we 
must take immediate action to maximize our current water 
resources and develop water resources on both sides of the 
Continental Divide. Currently, Colorado Water Conservation 
Board is conducting the Statewide Water Supply Initiative as we 
talked about that some this morning. And it goes by the acronym 
of SWSI and SWSI is identifying conservation projects and also 
existing facilities in need of repair and expansion. And we're 
going to be looking forward to working with the CWCB and other 
groups involved with SWSI to make sure that it succeeds.
    Each proposed water project will face the unique set of 
challenges before its completion. All water projects face a 
very daunting challenge in satisfying the multi-faceted 
requirements of the various state and Federal agencies having 
jurisdiction. In our view, the greatest obstacle for any water 
storage project is securing the necessary Federal permits. An 
applicant's efforts to secure such permits require significant 
time and resources. It is important to note that new water 
storage projects and the repair, rehabilitation and expansion 
of existing water storage facilities are subject to the onerous 
permitting process. Even continued operation of existing 
facilities can become entangled in permitting disputes when 
existing permits must be renewed.
    There is no question that environmental impacts must be 
assessed when a project is being considered. Environmental 
Impact Statements required under NEPA are, in theory, an 
excellent opportunity for project proponents and opponents to 
assess the positive and negative impacts of a proposed project. 
It is our understanding that NEPA was intended as a tool for 
regulators, stakeholders and lawmakers to identify the 
environmental issues that may arise from a water project.
    The Environmental Impact Statement process, however, has 
evolved in a way that too often does not meet the needs of our 
citizenry, especially those relating to water development. The 
process, too often, halts water development projects that are 
both feasible and have sufficient financial backing.
    We respectfully urge Congress to take immediate action to 
streamline the Federal permitting process. We look to recent 
actions by Congress where the permitting process has been 
significantly simplified, if not altogether eliminated, for 
actions deemed to be critical for the health and safety of our 
citizens.
    And for the sake of time, my testimony goes on and talks 
about some actions that were recently taken by Congress and 
some that weren't, including the recent energy bill and the 
Healthy Forests Restoration Act as areas and ways to streamline 
overly burdensome Federal permitting requirements. Improved 
coordination among Federal agencies, stronger state roles in 
the process and limits on appeals are constructive proposals 
that could help streamline the process.
    In addition, limiting the number of alternatives an agency 
must consider, and expanding categorical exclusions from NEPA 
to include repermitting, repairing or enlarging existing 
facilities may merit further consideration.
    Thank you very much for the time and the opportunity to 
testify.
    [The prepared statement of Mr. Rosenstein follows:]

  Statement of Joel Rosenstein, Vice President, Coloradans for Water 
 Conservation and Development, Representative, Denver Metro Chamber of 
                                Commerce

Introduction and Background
    Mr. Chairman and members of the House Committee on Resources, my 
name is Joel Rosenstein. I am here on behalf of Coloradans for Water 
Conservation and Development (CWCD). I represent the Denver Metro 
Chamber of Commerce on CWCD's board of directors. I was recently 
elected vice president of CWCD.
    The CWCD is a recently formed non-profit corporation that promotes 
responsible conservation and the development of water resources in the 
State of Colorado. The CWCD represents a broad coalition of business 
and agricultural interests, many of which are statewide organizations. 
Our charter members include the Denver Metro Chamber of Commerce, 
Colorado Concern, the Colorado Farm Bureau, National Association of 
Industrial and Office Properties, Colorado Apartment Association, the 
Colorado Association of Home Builders, as well as a number of 
individuals supportive of our primary objectives.
    The severity of the recent drought on Colorado business and 
agriculture and the need for a unified voice for water development 
among business and agriculture interests prompted these organizations 
to form a coalition that, in a very short time, is shaping policy 
concerning conservation and the development of the state's water 
resources. In fact, we are beginning to work with public and private 
entities to support the development of additional water projects.
    In addition to my involvement with the CWCD, I am a real estate 
attorney with the Denver law firm of Fisher, Sweetbaum & Levin. I 
practice real estate, general corporate and some special district law. 
Since 2002, I have chaired the Denver Metro Chamber of Commerce's Water 
Task Force. This year, our task force issued a white paper entitled, 
``Water: What it Means to Business.'' In researching and drafting the 
white paper, I was involved in extensive interviews with stakeholders 
representing an array of business and agricultural interests from 
around the state. In publishing the white paper, the Denver Metro 
Chamber of Commerce sought to inform and educate its membership and 
other interested parties about the critical role of water in our 
state's economy.
    In researching and preparing this white paper, our committee found 
that, notwithstanding water's centrality to a healthy, vibrant economy 
in Colorado, the business community has typically been involved only on 
the periphery of Colorado water policy discussions and debates. The 
historic drought of 2002 (and, for some areas of the state, 2003) has 
caused many Colorado business leaders and businesses to focus on the 
management and development of Colorado's precious water resources.
2002 Drought Impacts
    The drought impacted nearly every industry in every region in 
Colorado. Sixty-three of the 64 counties in Colorado received a federal 
drought disaster designation and, for the first time since its creation 
in 1981, Colorado's Drought Mitigation and Response Plan was fully 
activated. The Conservation and Drought Planning Division of the 
Colorado Department of Natural Resources estimated the economic loss to 
agriculture, tourism and recreation--three of Colorado's largest 
industries--at $1.1 billion. Agricultural producers, especially dry 
land crop and livestock producers, suffered damages totaling more than 
$450 million. The green industries (landscaping and nursery industries) 
estimate that the 2002 drought resulted in a loss of 15,000 jobs and 
$75 million in sales.
    The severe drought caused many municipal water providers in the 
metropolitan Denver area to impose severe water use restrictions. These 
restrictions caused lawns, gardens, fields and parks to brown. This, in 
turn, forced many school-aged children to find other locations to 
practice and engage in organized sports. For those unable to find a 
suitable alternative, they had to do without. Wildlife habitat and 
riparian areas also suffered tremendously. For residents of smaller 
towns, such as Rocky Ford, Beulah, Victor, Cripple Creek and Penrose, 
the water shortage forced entire towns to have drinking water 
delivered, by truck, from other locations.

Water development and conservation: key elements in securing Colorado's 
        future
    If Colorado's economy is to remain strong and vibrant, we must take 
immediate action to maximize our current water resources and develop 
water resources on both sides of the Continental Divide. Water 
conservation measures must be tailored to preserve and sustain return 
flows for downstream users and to facilitate the recharging of 
underground aquifers. While conservation is a necessary component of 
sound water management, conservation, alone, will not meet the growing 
demands of our state. We must do more to store excess water during 
times of peak run-off as permitted by our interstate compacts. The 
storage of such water will benefit instream flows and recreational uses 
as much as it does municipal, industrial and agricultural users.
    Efforts are now underway at the state and local levels to identify 
projects that are feasible and locally supported. One of the most 
expedient ways to increase Colorado's capacity is to repair, 
rehabilitate and restore our existing facilities. According to the 
Colorado Department of Natural Resources, we are unable to use more 
than 100,000 acre feet of reservoir storage. Such facilities require 
capital repairs before they can safely fill to full capacity. Just like 
conservation, the rehabilitation of existing facilities is an important 
part of managing our state's water resources. And, like conservation, 
rehabilitation of existing facilities, alone, is not enough to meet our 
future needs.
    Currently, the Colorado Water Conservation Board (CWCB) is 
conducting the Statewide Water Supply Initiative (SWSI). The CWCB will 
issue a report in December 2004. SWSI will identify new local and 
regional water storage projects with attendant local and regional 
support. In addition, SWSI will also identify conservation projects and 
initiatives and existing facilities in need of repair and/or expansion. 
We look forward to working with the CWCB, local water conservation and 
conservancy districts and municipalities in moving these projects 
forward--projects that will meet our future water needs and temper the 
severity of future droughts.

Federal permitting: A major obstacle to water development
    Each proposed water project will face a unique set of challenges 
before its completion. All water projects, however, face a very 
daunting challenge in satisfying the multifaceted requirements of the 
various state and federal agencies having jurisdiction. In our view, 
the greatest obstacle for any water storage project is securing the 
necessary federal permits. An applicant's efforts to secure such 
permits require significant time and resources. It is important to note 
that new water storage projects and the repair, rehabilitation and 
expansion of existing water storage facilities are subject to the 
onerous permitting process. Even continued operation of existing 
facilities can become entangled in permitting disputes when existing 
permits must be renewed.
    There is no question that environmental impacts must be assessed 
when a project is being considered. Environmental Impact Statements 
(EIS) required under National Environmental Policy Act (NEPA) are, in 
theory, an excellent opportunity for project proponents and opponents 
to assess the positive and negative impacts of a proposed project. It 
is our understanding that the NEPA process was intended as a tool for 
regulators, stake holders and lawmakers to identify the environmental 
issues that may arise from a water project. It is our further 
understanding that the environmental analyses to be conducted pursuant 
to NEPA should result in a balancing act between the environment and 
the diverse needs of our citizenry. This EIS process, however, has 
evolved in a way that, too often, does not meet the needs of our 
citizenry, especially those relating to water development. The process, 
too often, halts water development projects that are both feasible and 
have sufficient financial backing.
    When Secretary of the Interior Gale Norton, then acting as Attorney 
General of the State of Colorado, testified before the full House 
Resources Committee during a 1998 Oversight Hearing on NEPA, she drew a 
grim picture of the burdensome nature of EIS process. Of the final EISs 
filed in 1996, Norton stated, the longest had 1,638 pages of text, 
while the average was 572 pages, including 204 pages of NEPA analysis. 
In preparation of an EIS, a project proponent must expend significant 
time and resources. Such are spent with no reasonable assurance that 
the proposed water project will ultimately prevail or prevail on a 
timetable that meets the growing demands of its proposed users. For 
instance, the Parker Water and Sanitation District has spent 
approximately 18 years and millions of dollars trying to permit its 
off-channel reservoir, Reuter-Hess. Permitting and red tape can mire 
down even the most environmentally benign water projects. Rancher John 
Miller from Montezuma County spent $20,000 out of his own pocket on 
permitting to clean out an irrigation ditch that predated the San Juan 
National Forest.
    We respectfully urge Congress to take immediate action to 
streamline the federal permitting process. We look to recent actions by 
Congress where the permitting process has been significantly 
simplified, if not altogether eliminated, for actions deemed to be 
critical for the health and safety of our citizens.

Models for future permitting reforms
    Congress had considered permitting reforms before. The most recent 
energy bill, the Chairman's CALFED bill, and the Healthy Forests 
Restoration Act of 2003 addressed ways to streamline overly burdensome 
federal permitting requirements. Improved coordination among federal 
agencies, stronger state roles in the process and limits on appeals are 
constructive proposals that will help streamline the process. In 
addition, limiting the number of alternatives an agency must consider, 
and expanding categorical exclusions from NEPA to include repermitting, 
repairing or enlarging existing facilities may merit consideration.
    The Healthy Forests Restoration Act of 2003 (Act) provides one 
model of federal permitting reform. The Act limits the number of 
alternatives that must be considered when assessing environmental 
impacts. Perhaps, just as important as examining the alternatives of 
moving forward with a particular project or initiative, the Act 
requires that the federal government consider the impact of not moving 
forward. With respect to public land management, the cost of not moving 
forward with forest management may be the increased risk of 
catastrophic wildfires that ravage lands and habitat and endanger human 
lives and homes. In the case of water development, the cost of not 
moving forward is no less catastrophic: loss of critical riparian and 
wildlife areas, impacts to drinking water supplies, soil erosion and 
dust storms (which Colorado experienced in the 2002 drought), the 
strain on existing water capacity, and the loss of the quality of life 
that makes Colorado a very desirable place to live, work and raise a 
family.
    The Act also set forth a tiered approach to deal with federal 
permitting. In the Act, there are specific federal activities, such as 
those involving federal agency involvement in developing a community 
wildfire protection plan, that are deemed not to constitute a federal 
agency action under NEPA (42 U.S.C. 4321 et seq.).
    We acknowledge that it may not always be appropriate to exempt 
completely a federal agency action from NEPA. In these instances, it 
may be helpful to limit the scope and duration of the NEPA process. The 
Act provides that certain federal activities, such as those involving 
wildland-urban interface, do not require the Secretary of Interior ``to 
study, develop or describe more than the proposed agency action and one 
action alternative in the environmental impact statement prepared 
pursuant to section 102(2) of the National Environmental Policy Act of 
1969.''
    We believe that similar actions must be taken with respect to 
federal laws, such as NEPA, that relate to the permitting of water 
projects in Colorado. Earlier in my testimony, I referred to the 
ongoing efforts of SWSI to identify existing storage facilities in need 
of repair and rehabilitation and new water projects. We propose that 
with respect to those projects in need of repair and rehabilitation, as 
identified by SWSI, such should not be categorically subjected to a 
NEPA or similar review process. And, in connection with new water 
projects identified by SWSI, they should be subject to a less 
burdensome federal permitting process whereby the proponent must only 
submit one alternative in preparing the EIS.
    Thank you, Mr. Chairman, members of the Committee, CWCD would be 
happy to work with you on these, or other ideas, to help ensure future 
generations have adequate water supplies.
                                 ______
                                 
    Mr. Calvert. I thank the gentleman.
    Next, Mr. Alan Foutz, President, Colorado Farm Bureau is 
recognized for 5 minutes.

              STATEMENT OF ALAN FOUTZ, PRESIDENT, 
                      COLORADO FARM BUREAU

    Mr. Foutz. Mr. Chairman and members of the Subcommittee, 
good morning. My name is Alan Foutz. I am President of Colorado 
Farm Bureau. I currently farm about 1200 acres of wheat and 
sunflowers and millet in the Akron area. I would ask that as 
the winter gets worse that you feed your birds. That certainly 
helps me out.
    I appreciate the opportunity this morning to provide 
comments to the Subcommittee on Water and Power, specially 
regarding the status of Colorado's water supply and possible 
ways to increase such supplies. I think it's interesting and 
important to note that the Colorado Farm Bureau is the State's 
largest farm organization and we do represent a majority of our 
State's farmers and ranchers.
    It's important, I think, to understand for the Subcommittee 
the reason that agriculture finds it so important to be a part 
of this Subcommittee hearing today. Of the approximately 6 
million acre feed that are stored in the State, Colorado 
agriculture has the rights to use 85 to 90 percent of that 6 
million acre feed, and so in fact, we are probably the largest 
stakeholder in terms of use of the water that is currently 
stored in the State of Colorado.
    Because of that and because of the increasing urban 
population which is being accompanied by industrial growth, 
that simply produces significant impacts for those of us in the 
agricultural community.
    Federal mandates for endangered species habitat, improved 
water quality, those also simply increase demand on the water 
that we currently store and while we understand that the 
endangered species must be taken into account, we believe that 
listing of species based on speculation rather than on sound 
science often prohibits much of our needed water development.
    We feel the same, sometimes of water quality and although 
water quality is important to all of us, we need to understand 
that as we begin to look at those mandates, there needs to be 
some consideration about the use and where that goes and the 
impacts that those Federal regulations do have on us.
    Because of the huge impact that water has in the State of 
Colorado, and on the agricultural industry, 2 years ago I put 
together a Colorado Farm Bureau Task Force and the goal of that 
task force was to provide an opportunity and a forum for all of 
the water using entities to come together so that we could try 
to begin to bring partnerships and form partnerships within the 
water community so that we could come to some understanding and 
some reasonable assurance that there was going to be water 
available for agriculture.
    Gentlemen, the losers in this discussion of water is 
agriculture. The municipalities aren't going to lose. They have 
the money to buy the water. Industrial use has the money to buy 
the water. The only ones who have most of the water in this 
state is agriculture and without increasing our supplies, the 
loser in this argument is going to be the agricultural industry 
in the State of Colorado. As you've heard, it is a huge 
industry.
    Mr. Chairman, Colorado Farm Bureau's member-driven policy 
states that we recommend that our number one priority for 
Colorado be the maximum beneficial utilization of Colorado 
water under the present system for the State and that a 
concerted program be initiated to build storage and water 
facilities and improve existing structures.
    Our policy also states that we recommend that the State of 
Colorado take aggressive action in funding and development of 
multiple water projects within the State with the objective of 
retaining all of the Colorado water that's owned and that can 
be used in any one of our numerous basins. That was the reason 
why we supported very vigorously Referendum A.
    Colorado Farm Bureau also believes that Colorado should, 
and this is extremely important, protect the prior 
appropriations system that's been the basis of our water 
structure for a 150 years. We need to maintain that. It works 
and we need to maintain that.
    We need to make sure that we maintain our Colorado 
interstate water compacts. We need to make sure that we 
maintain our existing water rights systems so that we when 
those people who own those water rights can utilize them on a 
free market system, and I think some of these solutions to the 
problem is really free market in some cases. There's going to 
be some that might argue that, but I think that may be the 
case.
    We also need to be concerned about when we get to talking 
about inter-basin transfer, that there is, in fact, some way to 
help mitigate the movement of that water whether it's an 
economic mitigation or whether it may be an environmental 
mitigation, whatever that mitigation needs to be locally, 
that's obviously something we need to do.
    In order for the State of Colorado to meet the current and 
future water demands, policymakers, users and managers should 
strongly consider a mix of the several potential water 
development opportunities that we have. I think the first thing 
that we need to look at is the development of the 
unappropriated waters that do leave the State and those numbers 
have existed. We know there's somewhere between 450,000 acre 
feed and a million and a half acre feed.
    Second, we need to develop cooperative water resource 
planning processes for local, regional and state agencies.
    Third, we need to develop alternatives for further funding 
of projects, whatever that might be, both private and public.
    Fourth, we need to encourage conservation and carry our 
programs to educate the public about conservation and the 
impacts, both negative and positive that conservation has. And 
fifth, we need to develop additional water supplies by 
supporting large and small scale projects.
    Mr. Chairman, the Colorado Farm Bureau is dedicated to 
helping further the water programs in Colorado and in 
furthering partnership so that we can move forward on this 
issue in the State.
    Thank you.
    [The prepared statement of Mr. Foutz follows:]

      Statement of Dr. Alan Foutz, President, Colorado Farm Bureau

    Good morning. My name is Alan Foutz. I am President of the Colorado 
Farm Bureau and currently farm 1,200 acres of wheat, sunflowers and 
millet in Akron. I appreciate the opportunity to provide comments to 
the Subcommittee on Water and Power regarding the status of Colorado's 
water supply and possible ways to increase such supplies. Colorado Farm 
Bureau is the state's largest agriculture organization with over 28,000 
members.
    Today's widespread delivery facilities provide such easy access to 
water that most people take it for granted, even in Colorado, a state 
where water is considered the most precious natural resource. Like 
other western states, Colorado's settlement and subsequent economic 
progress was possible only by developing water resources from surface 
waters and underground aquifers.
    Colorado is one of only two states in the nation that depends 
solely on precipitation for our water supply. Our state also supplies 
water to many of our eastern and western neighbors. Drainage throughout 
the state occurs through three separate systems, with all rivers 
originating in the Colorado mountains. All drainage west of the 
Continental Divide flows into the Colorado River, through Nevada and 
Arizona, and eventually out to the Gulf of California. The major rivers 
east of the Continental Divide are the North and South Platte, 
Arkansas, and the Rio Grande. Drainage east of the Continental Divide 
flows into the Gulf of Mexico by the South Platte and the Arkansas 
rivers which are part of the Mississippi system. Water from the eastern 
slope of the San Juan Mountains drains into the Gulf of Mexico by the 
Rio Grande River.
    Agriculture is the third largest industry in the state of Colorado, 
with revenues reaching $16 billion. Agriculture uses 85% to 90% of 
Colorado's water to produce food and fiber. Producing a typical lunch--
hamburger, french fries, and a soft drink--requires 1,500 gallons of 
water. This includes the water needed to raise the potatoes, the grain 
for the bun, the grain needed to feed the cattle, and the production of 
the soda.
    Water that is not consumed by crops returns to the river system 
where it is picked up and used again and again before it leaves the 
state. We estimate it is diverted, applied to beneficial use and a 
portion returns to the stream for subsequent diversion seven times from 
the headwaters of a major river in Colorado to the state line where it 
fulfills our interstate compact obligation.
    Surface water supplies, developed from natural streams, represent 
the largest source of fresh water supplies. The eastern plains and 
western plateau regions are semiarid, while the central mountains 
collect abundant precipitation during the winter and snowmelt in early 
spring. This water feeds four of the West's major river systems: the 
South Platte, Arkansas, Rio Grande, and Colorado. Mining and 
agricultural interests were the first to tap water resources from these 
stream systems.
    The increase in population accompanying industrial growth has 
produced significant increases in the water demand by municipalities, 
particularly those on the eastern front range. Continued population 
growth, federal mandates for endangered species habitat and improved 
water quality will increase future demands for water supplies. While we 
understand that endangered species must be taken into account, we 
believe that listing a species based on speculation rather than sound 
science often prohibits much-needed water development.
    Colorado is currently experiencing one of the worst droughts in our 
state's history. Most people believe that we are in the third 
consecutive year of a drought cycle in Colorado and that the state is 
in the fifth year of below-average snow pack. Based on the available 
information we have now, we are in the worst drought since 1977, with 
some river basins below 10 percent of their normal water capacity. Some 
estimates say that this is the worse drought in the last 350 years.
    Typically runoff in Colorado equals 16 million acre feet. During 
this drought, however, runoff is approximately 6.4 million acre feet. 
Today, our reservoir capacity is less than 6.5 million acre feet. To 
put this in perspective, one acre foot is equal to 325,851 gallons of 
water or enough to fill a football field one foot deep.
    Colorado farmers and ranchers depend on a reliable water supply to 
produce the highest quality of food for U.S. consumers. According to 
the Colorado Department of Agriculture, total water diversions in 
Colorado were 21.9 million acre-feet, with irrigation withdrawals 
accounting for 11.5 million acre-feet or 53% of all water diverted. The 
value of crops produced in Colorado is around $1.3 billion with three-
fourths of this total value depending on irrigation. These crops form 
the basis for Colorado's livestock industry, which produces $3.2 
billion in sales.
    Right now, this high standard and our way of life are in jeopardy 
due to our lack of water and our inability to store the water we are 
entitled to under our interstate compact agreements. Water conservation 
practices are a way of life for farmers and ranchers in Colorado. We 
inspect water systems before water begins to flow, clear ditches of 
debris and make sure ditch banks are sturdy, check nozzles for leaks on 
sprinkler systems, rotate grazing for adequate rest and regrowth, 
maintain riparian buffers, filter strips and grassed waterways as 
conservation buffers near streams, use conservation tillage to increase 
soil moisture and reduce evaporation, and plant crops that withstand 
dryness.
    Water conservation practices, while important, will not satisfy 
future water supply needs alone. We must store the water that is 
rightfully ours instead of watching it flow freely from our state. 
Colorado is entitled to more than 16 million acre feet per year but we 
only store 6 million. Storage options range from constructing new 
reservoirs to enhancing wastewater reclamation opportunities.
    Colorado Farm Bureau's member-driven policy states that we 
recommend that the number one priority for Colorado be the maximum 
beneficial utilization of Colorado water under the present system for 
the state, and a concerted program be initiated to build storage and 
water facilities. Our policy also states that we recommend the State of 
Colorado take aggressive action in funding and development of multiple 
water projects within the state with the objective of retaining all the 
Colorado-owned water that can be used by any basin within the state.
    Colorado Farm Bureau also believes Colorado should protect the 
prior appropriations system, Colorado interstate water compact 
entitlements, existing water rights when interbasin water transfers 
occur, and allow the free market system to work in the pricing of 
water. In order for the State of Colorado to meet current and future 
water demands, policymakers, users, and managers should strongly 
consider a mix of several potential water development opportunities.
    First, we must develop unappropriated supplies. At least 450,000-
1.5 million acre-feet have been identified as new developable surface 
water supplies. Second, we must develop a cooperative water resource 
planning process for local, regional, and state agencies. Third, we 
need to develop alternatives for further funding, both private and 
public, for water project development. Fourth, we must encourage 
conservation and carry out programs to educate the public and water 
user entities about the importance of water efficiency as well as the 
importance of water resource development to our state's economy. Fifth, 
we must develop additional water supplies by supporting large- and 
small-scale water projects, wastewater reuse, and groundwater recharge 
programs. Finally, we must enhance and expand statewide computer 
databases and decision support systems to improve development and 
management of existing supplies.
    Water is fundamental to all life forms, affecting all ecosystems 
and the various uses to which it is put. Often, these uses compete 
quantitatively and qualitatively with one another. At the same time, 
agriculture, industry, and rapidly expanding populations are increasing 
the demand for this limited resource. As a state, our challenge is to 
come together and build new water projects that will benefit every 
corner of our state and protect the water we do have.
    Colorado Farm Bureau looks forward to working with the Committee on 
western water issues and developing a strategy to meet our demanding 
water needs. Thank you.
                                 ______
                                 
    Mr. Calvert. I thank the gentleman.
    Next, Ms. Patricia Wells, General Counsel, Denver Water, 
Denver, Colorado.

         STATEMENT OF PATRICIA WELLS, GENERAL COUNSEL, 
                 DENVER WATER, DENVER, COLORADO

    Ms. Wells. Thank you, Mr. Chairman, and Members of the 
Colorado Congressional Committee. Denver Water is the largest 
municipal water supply in Colorado serving more than 1.2 
million people. While we're drinking bottled water up here 
today, I assure you that the water from the tap will be just as 
good.
    Mr. Calvert. I hope so because we're drinking the water 
from the tap.
    Ms. Wells. Even better.
    Mr. Calvert. And for the record I would point out that the 
water you're drinking is Arrowhead Water which is imported from 
California.
    [Laughter.]
    Ms. Wells. Denver's water gets its supply from both the 
South Platte and the Colorado River. I've described in my 
written testimony the 1996 integrated resource plan what Denver 
Water did to determine how we will meet our build out need of 
475,000 acre feed and it's basically a tripartite approach, if 
you want to call it that. First, conservation. Our plan calls 
for 16,000 acre feed to be gained through conservation before 
the Year 2030.
    In addition, the recycling of water is a very important way 
to increase supply. We have a $60 million recycling water 
treatment plant that will go on-line this spring to supply 
15,000 acre feed of water into our customers for nonpotable 
uses and the third prong is new supply. We looked first at 
refinements of our system. It's been around for a long time. We 
have some ditch rights, for example, that we can convert to 
municipal use.
    We're looking at joint projects with our suburban neighbors 
and also with our West Slope partners and we're also looking at 
some new projects, for example, enlarging existing reservoirs, 
perhaps building a new small reservoir to solve a problem that 
we currently have on the north side of our system.
    For the rest, the topic of this hearing was to be options 
for increasing supply or improving water use efficiencies, so I 
thought I would make some suggestions as to how, in fact, 
Congress could help with both of those. For enhancing supply, 
one thing that Congress could do is that right now the Drinking 
Water State Revolving Fund created by Congress that funds a lot 
of local water supply projects is by regulation prohibited from 
being used for reservoirs, reservoir rehabilitation or the 
acquisition of water rights.
    In Colorado, that's how we tend to enhance supply and those 
projects are not available. This is only a regulatory 
prohibition, not a statutory prohibition and Congress could 
probably maybe fix that.
    Second, water transfers are currently not subject to 
regulation by discharge permits, NPDES discharge permits. 
However, two Federal circuit courts have determined that they 
would be. In Colorado, and all the western states, how we 
create water supplies is by moving water. We do it through 
ditches, tunnels, canals, millions and millions of facilities 
that have never been subject to discharge permits.
    Two cases have held that they must be. One of those cases 
is currently going to be heard by the U.S. Supreme Court in 
January. It's called the Miccosukee Tribe of Indians versus the 
South Florida Water Management District. That case has great 
import for all of us in the West. If we have to have a 
discharge permit to move water through the Roberts Tunnel then 
we have a problem. EPA could say you can't move--the issue is 
the water in the Blue River is different than the water in the 
Platte River and we move water from the Blue to the Platte. 
It's different. And the Courts have determined that that is, 
that difference is addition of pollutant, even though we're not 
adding anything to the water by moving it.
    So the issue in the case is as often is the case 
congressional intent. So if Congress did not intend to regulate 
all these ditches, dams, canals under the NPDES discharge 
permits, you can probably maybe fix that as well. Third, the 
Endangered Species Act is, in fact, a problem for existing 
supplies as well as for new supplies. I do not think that the 
Endangered Species Act should be weakened. I don't think the 
public would stand for it. But I do think there are a couple of 
things that you could do to adjust it.
    First, which isn't an adjustment at all and that is to 
provide money for recovery programs. So long as there are 
recovery programs in place for the species, then projects can 
go forward. That's happened on the Colorado with the four 
endangered fish. We're still in the balance and whether that's 
going to be true on the Platte for the birds in Nebraska, our 
recycling plant could be in danger, if there is no recovery 
program for the birds in Nebraska.
    In addition to money, the minor adjustment would be for 
Congress to change the timing of critical habitat designation 
from within a few months after listing to the recovery program. 
What happens now is critical habitat is supposed to be 
designated concurrently or within a year after listing. At that 
time, the Federal government, the Fish and Wildlife Service 
doesn't know anything about the species or what they need. That 
can only be done really in the context of recovery program 
where you know what you're doing, you have goals and you set 
about to do it.
    A second item under the Endangered Species Act, which is 
the subject of supplemental testimony I have provided at the 
desk, is a decision yesterday that came down that has put into 
question the ``No Surprises Policy'' currently available to 
people who do habitat conservation plans. It's very important. 
Three hundred seventy-nine habitat conservation plans covering 
30 million acres are currently enjoying the ``No Surprises 
Policy'' assurance and the Court has held that that was not 
adopted properly.
    My time is up and I can't get to what Congress could do to 
help for re-use and conservation, but it is in my written 
testimony.
    Thank you.
    [The prepared statement of Ms. Wells follows:]

           Statement of Patricia L. Wells, General Counsel, 
                  Denver Board of Water Commissioners

INTRODUCTION
    Denver Water is an agency of the City and County of Denver, the 
largest municipal public utility in Colorado, serving water to over 1 
million people, about one-quarter of the state's population. Because 
Denver was one of the earliest communities in Colorado, and thanks to a 
number of visionary leaders in the early 20th century, Denver Water 
enjoys relatively senior water rights, and storage and transmission 
facilities, that are the envy of water suppliers nationwide.

DENVER WATER'S APPROACH TO WATER SUPPLY
    Denver Water completed an Integrated Resource Plan (IRP) in 1996 
that identified an overall requirement of 100,000 more acre-feet of 
firm yield in order to serve our combined service area to geographic 
build-out. A more detailed description of the IRP and Denver Water's 
resulting activities appears later in this testimony. Upon completion 
of the IRP, the Denver Water Board determined to produce the increased 
supply needed until 2030 through three basic approaches:
    1.  Conservation--Elements of conservation include the ``natural 
replacement'' that occurs when older water fixtures are replaced with 
newer, more efficient fixtures; incentive programs funded by Denver 
Water; and regulatory programs implemented by both Denver Water and 
general purpose governments. The IRP concluded that 16,000 acre-feet of 
``supply'' could be created through conservation. (An average single 
family residence in Denver Water's service area uses about .6 acre-foot 
of water per year.)
    2.  Reuse or recycling--The IRP proposed that approximately 15,000 
acre-feet of new supply be created by treating effluent from a 
wastewater treatment plant to non-potable standards to be used for 
irrigation and industrial purposes. For every acre-foot of recycled 
water used, one less acre-foot of potable water needs to be stored, 
treated and distributed. As a result of the IRP analysis, Denver 
Water's recycled water plant was put on a fast track. The $60 million 
treatment plant is nearly completed and will begin delivering water 
next spring.
    3.  New supply--While new supply might be viewed as the traditional 
solution to water needs, the IRP emphasized alternatives to Denver 
Water's time-honored approach of unilateral construction of new 
reservoirs. The IRP recommended system refinements, which could include 
changing ditch irrigation rights to municipal use, conversion of park 
irrigation from potable to non-potable water, and improvements in 
distribution facilities, and joint-use cooperative projects developed 
with partners. In addition, the plan contemplated new supply projects 
that could include enlargement of existing reservoirs or construction 
of relatively small new reservoirs.
    With regard to Denver Water's water supply, or any other water 
supply in Colorado, the truth discerned through the three-year IRP 
process is that there is no silver bullet. No single approach, much 
less a single project, can resolve the need for water supply. 
Conservation is very important and can provide the least-cost supply, 
but it is not a panacea. Certainly, any entity contemplating new supply 
must first ensure that it has placed the maximum reasonable reliance on 
conservation in order to minimize the costs of new supply and maximize 
the acceptability of the project. Reuse of effluent is also important. 
If the appropriate water rights exist, the supply of effluent is 
dependable and relatively drought-proof. However, reuse of effluent 
requires expensive treatment capacity and also results in lower flows 
in streams to which the effluent is presently being discharged. New 
supply in the form of reservoirs is also beneficial, but presents the 
well-known tension between the environmental benefit of water left in 
streams and the human benefit of water used for domestic purposes. All 
three approaches should be included in efforts to enhance water supply.

OPTIONS TO INCREASE WATER SUPPLY
    As discussed above, new supply projects are not the sole or even 
the primary solution to water needs. However, when new supply is an 
appropriate solution, there are several ways in which Congress could 
improve the likelihood that viable projects will, in fact, be 
implemented.
    1.  Remove regulatory limitations on the use of federal loan funds. 
The Safe Drinking Water Act Amendments of 1996, P. L. 104-182, created 
the Drinking Water State Revolving Fund (DWSRF) to provide financial 
assistance to public water systems. Although the statute does not 
require such a result, see 42 U.S.C. Sec. 300j-12 (a)(2), EPA 
regulations do not permit the funds to be used to enhance water supply, 
at least in the ways that supply is normally enhanced in the West. 
While eligible projects are allowed to ``rehabilitate or develop water 
sources,'' EPA specifically prohibits use of the funds for reservoirs, 
dams, dam rehabilitation or water rights 40 C.F.R. Sec. 35.3520(e). 
This regulatory limitation has caused problems for water projects in 
Colorado; Congress could easily rectify this situation by means of 
instructions to EPA.
    2.  Clarify that water transfers do not require NPDES discharge 
permits. The judiciary has recently increased dramatically the scope of 
the Clean Water Act's requirement that any addition of pollutants to 
the nation's waters be subject to an NPDES permit issued by EPA. 
Despite 30 years of contrary experience under the Clean Water Act, two 
federal circuit courts have held that transfers and diversions of 
natural, untreated water as part of water supply or water quality 
systems are subject to regulation by means of NPDES permits. Catskill 
Mountains Chapter of Trout Unlimited, Inc. v. City of New York, 273 
F.3d 481 (2nd Cir. 2001); Miccosukee Tribe of Indians v. South Florida 
Water Management Dist., 280 F.3d 1364 (11th Cir. 2002). It is almost 
impossible to overstate the danger these cases pose to the operation of 
water supply systems, both current systems and certainly any new supply 
project. More than two million dams and countless other diversion 
structures throughout the United States would become subject to permit 
requirements that might well be impossible to satisfy. Fortunately, the 
U.S. Supreme Court will hear one of the cases in January. South Florida 
Water Management District v. Miccosukee Tribe of Indians, et al., No. 
02-626. However, a decision would probably not be forthcoming for 
several months, and judicial interpretation is not always predictable. 
Since the issue in the litigation is whether Congress intended to 
regulate water transfers diversions as point sources rather than non-
point sources, compare 33 U.S.C. Sec. 1362(12) with 33 U.S.C. 
Sec. 1314(f)(2)(F), Congress has the ability to clarify its intent and 
provide definitive protection for the water supply systems on which the 
nation depends.
    3.  Ensure that the Endangered Species Act does not prohibit water 
supply projects. In the semi-arid West, the competition for water is 
fierce, and the competitor with the trump card is the Endangered 
Species Act. If the U.S. Fish and Wildlife Service determines that 
flows are needed by a threatened or endangered species, then water is 
not available to be developed or stored for human needs. See Rio Grande 
Silvery Minnow v. Keys, 333 F.3d 1109 (10th Cir. 2003)(holding that the 
Bureau of Reclamation must reduce deliveries required by contracts that 
pre-date the ESA to protect the minnow). The fundamental protections of 
the ESA should remain in place. The ESA works to protect important 
habitat and ecosystems, and the public supports its purpose. What would 
be most useful to water suppliers is the development and implementation 
of recovery programs for all species that have been listed. Where 
recovery programs are in place, water development can occur. For 
example, the Recovery Implementation Program for Endangered Fish 
Species in the Upper Colorado River Basin, developed over many years, 
has allowed existing and new depletions to the Colorado River to occur 
without jeopardy opinions. Congress should provide significantly 
increased funding for recovery programs under the ESA. To make the 
development of recovery plans more workable and rational, Congress 
should also amend the statute to move the designation of critical 
habitat to a more sensible place in the process, the development of the 
recovery plan. At present, the statute requires designation of critical 
habitat ``concurrently'' with the listing of the species, or at least 
within one year 16 U.S.C. Sec. 1533(a)(3)(A) and (b)(6)(C). This 
requirement forces Fish and Wildlife either to make completely 
uninformed decisions about habitat and, in the interest of caution, 
designate much more area than necessary, or to violate the statute. 
Fish and Wildlife has been placed in the untenable position of 
routinely losing lawsuits for failure to designate critical habitat 
within the statutory deadline, e.g., Forest Guardians v. Babbitt, 174 
F.3d 1178 (10th Cir. 1999), and then losing another lawsuit because its 
hasty compliance resulted in an inadequate designation. E.g., Middle 
Rio Grande Conservancy District v. Babbitt, 206 F.Supp.2d 1156 (D.N.M 
2000). Congress can rectify this counterproductive dilemma by including 
critical habitat designation as part of development of recovery plans, 
and providing sufficient funding that recovery plans can actually be 
implemented.
    4.  Clarify the meaning of ``waters of the United States'' under 
the Clean Water Act. In the years since the passage of the Clean Water 
Act in 1974, the extent of its jurisdiction has been subject to 
``regulatory creep.'' The Act regulates under the NPDES program 
discharges into ``navigable waters,'' 33 U.S.C. Sec. 1344(a), which are 
defined in the statute as ``waters of the United States.'' 33 U.S.C. 
Sec. 1362(7). The U.S. Supreme Court recently held that the Corps of 
Engineers had exceeded its authority when it interpreted the Act to 
cover an isolated, intrastate gravel pit Solid Waste Agency of Northern 
Cook County v. United States Army Corps of Engineers, 121 S. Ct. 675 
(2001). However, a new threat to water suppliers arises from a Fourth 
Circuit case, United States v. Deaton, 332 F.3d 698 (4th Cir. 2003), 
which upholds the Corps' assertion of jurisdiction over a roadside 
drainage ditch. The Corps' theory is that the drainage ditch eventually 
empties into a navigable water. Of course, that is what drainage 
ditches are intended to do, transport storm water and other surface 
water off roads and developed land into streams and rivers. These 
drainage ditches are considered sources of pollutants at the point 
where they discharge into streams and rivers, and are regulated under 
storm water management programs. It is difficult to see how they can 
also be ``waters of the United States.'' The problem for water 
suppliers is that water systems frequently include ditches of many 
types, and any eventual connection with a stream could subject them to 
control by the Corps of Engineers and EPA under the Clean Water Act. 
Congress could clarify the definition of ``waters of the United 
States'' to exclude ditches and other man-made structures.

OPTIONS TO IMPROVE WATER USE EFFICIENCY
    As discussed above, conservation and reuse can be important sources 
of water supply. Congress has an important role to play in enhancing 
the productivity of these potential sources.
    1.  Create water efficiency standards for appliances. The federally 
mandated production of low-volume toilets has been very effective in 
helping to reduce indoor water consumption. Congress could further 
increase indoor water conservation by creating water efficiency 
standards for other water-using appliances, such as dishwashers and 
clothes washers. These standards could either be mandated, as was the 
case for toilets, or could form the basis for water efficiency product 
labeling. Denver Water offered a rebate for horizontal axis clothes 
washers during the recent drought, and the response from our customers 
was overwhelmingly positive.
    2.  Enhance the effectiveness of irrigation systems. Automated 
irrigation systems are becoming the norm in residential developments in 
the West. Since irrigation constitutes more than 40% of Denver Water's 
water use, any savings in irrigation enhances overall supply. Congress 
could facilitate the manufacture of more efficient irrigation systems 
in two respects. First, water efficiency labeling could be initiated, 
so the customer could determine in advance which system would produce 
greater efficiency. Second, Congress could mandate that new controllers 
include a rain sensor, which prevents operation of the irrigation 
system during precipitation events. Since rain sensors avoid wasting 
water, their inclusion in new irrigation controllers would benefit both 
consumers and water providers.
    3.  Prohibit restrictive covenants that restrict water-wise 
landscaping. Although restrictive covenants are contractual, when they 
violate important public policy, they are unenforceable. Several local 
governments have prohibited new covenants that require a certain amount 
of turf, or restrict the use of Xeriscape or other drought-tolerant 
landscaping. E.g., Denver Rev. Municipal Code Sec. 57-100;Colo. Rev. 
Stat. Sec. 37-60-126(g)(11). Congress could greatly enhance the use of 
water-wise landscaping, resulting in significant water savings, if it 
declared such restrictive covenants to be contrary to public policy.
    4.  Increase funding for recycling of water. Recycled water 
projects are eligible for loans under the Water Pollution Control State 
Revolving Loan Fund established under the Clean Water Act. However, 
such funding has in the past been quite limited. As the technology for 
recycling water has improved and public acceptance has grown, this 
would be an opportune time to increase funding for recycling projects.

DENVER WATER'S INTEGRATED RESOURCE PLAN
    Denver Water's approach to water supplies has undergone profound 
change during the past several years. In part, this change has resulted 
from a new and complex political and regulatory environment that 
culminated in the federal government's 1991 veto of the Two Forks 
project. Two Forks was designed to capture and store an additional 1.1 
million acre-feet of water and was intended to provide for the needs of 
much of the metropolitan Denver area well into the 21st century.
    With the project's veto, Denver Water moved to redefine the 
boundaries of its service area and reassess its traditional assumptions 
for providing the water supply needed to meet customer demand within 
that area. This reassessment was accomplished through Integrated 
Resource Planning (IRP). Such planning includes techniques to factor in 
changing public and regulatory sentiment and new technologies, as well 
as traditional engineering and financial aspects of water utility 
planning.
    A principal policy decision made in the context of the IRP process 
was that Denver Water would not attempt to expand its service area. 
Denver Water defined a ``Combined Service Area'' comprised of the City 
and County of Denver and 78 suburban Contract Distributors. See 
Attachment A. Denver Water committed to serve the build-out needs of 
this area, but also agreed to provide fixed amounts of water to certain 
entities outside the Combined Service Area. This approach allows Denver 
Water to estimate with more certainty future water needs, as growth 
within the Combined Service Area proceeds to build-out. The Denver 
Water Board decided to look outside its Combined Service Area for 
potential efforts, only when such efforts would provide a substantial 
benefit to the Combined Service Area.
    In the 1996 IRP, the Board indicated that no single option or 
project would be sufficient to close the 100,000 acre-foot shortfall 
between its available supply and demand at build-out. As a central 
feature of its resource strategy, the Board emphasized the need for a 
strong water conservation ethic and additional cost-effective water 
conservation measures. The Board also committed itself to development 
of a non-potable recycled water project and small-scale system 
refinements, such as conversion of park land from potable to non-
potable irrigation. The Board indicated that new surface water storage 
would likely be needed toward the end of the near-term time frame to 
supplement conservation, reuse and small-scale refinements. To 
implement its near-term and long-term strategies, the Board set forth 
certain guidelines:
      When meeting future needs, including development of 
cooperative projects with others, the Board will pursue resource 
development in an environmentally responsible manner;
      The Board recognized that ``cooperative actions'' with 
other metropolitan entities outside its service area can enhance its 
near-term and long-term strategies, and directed staff to explore such 
cooperative actions with entities grouped by quadrants of the 
metropolitan area;
      The Board cautioned that, as a result of maximizing use 
of its existing supply, flows in the Platte would be reduced downstream 
north of Denver, and fluctuation of its reservoirs, such as Dillon 
Reservoir, would be increased; and
      The Board emphasized that it would not undertake future 
structural projects on the Western Slope unless such project is 
developed cooperatively with Western Slope entities for the benefit of 
all parties concerned.
    Supply and Demand. As part of its 2002 update of the IRP, Denver 
Water revisited various water supply and demand management options. The 
results of that update show that the Denver Water Board currently has a 
supply of 375,000 acre-feet of firm annual yield. Much of that increase 
can be attributed to projects under construction and processes 
presently underway. For example, 17,000 acre-feet results from Denver 
Water's non-potable recycling project, which is under construction and 
will be fully used over the next decade. Similarly, 5,000 acre-feet are 
attributable to gravel pit storage, even though these storage 
reservoirs will not be fully operational for several years.
    Current demand on the Denver Water system is now 285,000 acre-feet. 
Denver Water projects its requirement for build-out of the system in 
the middle of the 21st century at approximately 450,000 acre-feet.
        Conservation. In 1996, the Board set a goal of saving 29,000 
        acre-feet through additional conservation efforts by the year 
        2045. The IRP identified two planning horizons: the near-term 
        from 1996 through 2030 and the long-term from 2030 through 
        build-out of the Combined Service Area. The near-term 
        conservation goal established in the IRP was 16,000 acre-feet. 
        Based on this near-term goal, the conservation measures are 
        considered to have saved approximately 2,300 acre-feet.

        Staff is currently researching new incentive measures, 
        effective mandates and reasonable rates that meet other Board 
        goals, as well as the conservation goal. This approach will 
        include the education and information measures already in 
        place, and even more cooperation with neighboring utilities, 
        non-profit organizations and trade associations to maximize 
        results.
        Non-Potable Reuse. Denver Water is currently constructing a 
        non-potable water recycling project. The recycling project will 
        take secondary treated wastewater from the Denver Metro 
        Reclamation District plant and treat it to a tertiary level. 
        The basic treatment processes include coagulation, 
        sedimentation, filtration and disinfection with chlorine. 
        Colorado recently implemented control regulations for non-
        potable reuse water for urban irrigation areas. Denver Water's 
        recycled water will meet or exceed both adopted and proposed 
        state regulations.

        In Colorado, 15 recycling projects are on-line, including 
        Colorado Springs, Aurora and Westminster. Broomfield is 
        planning a new project, and expansions of existing systems are 
        also planned. When constructed, Denver Water's project will be 
        the largest in the state. When it is fully operational in 2013, 
        it in combination with exchanges operated pursuant to state 
        water rights will, in effect, exhaust the yield that can be 
        generated from reusable water until additional reusable water 
        becomes available due to additional growth.
        System Refinements or Modifications. The IRP process in 1996 
        identified numerous small-scale projects to improve water 
        system efficiency, resulting in 10,000 acre-feet of additional 
        firm yield. Today, the yield estimate is 13,000 acre-feet. As a 
        result of the long lead time and uncertainties of many of these 
        projects, Denver Water is implementing the largest projects to 
        determine their capabilities. Estimated yields and completion 
        dates are shown below.
        [GRAPHIC] [TIFF OMITTED] T0927.001
        

        Denver Water and South Adams County Water and Sanitation 
        District have jointly acquired six gravel mining sites to 
        develop 8,000 acre-feet of storage needed for river exchanges 
        and 4,000 acre-feet of storage for augmenting the recycling 
        project.

        Nearing completion is a Future Management Study investigating 
        the effects of reducing deliveries in the lower third of the 
        High Line Canal and conveyance of that section to a recreation 
        management entity. Aurora has expressed interest in operating 
        most of the lower canal and helping provide canal flow to 
        maintain the vegetation.

        The Lawn Irrigation Return Flow study began in 2000 and is 
        expected to be complete in 2004. Denver Water will enhance its 
        supply by claiming its reusable LIRF's through a water court 
        proceeding. Denver Water has constructed a pump station near 
        the South Platte, which will allow it to recover bypass flows 
        that must be released from Strontia Springs Reservoir as a 
        regulatory condition. Denver Water customers on or near the 
        City Ditch are being converted to the recycling plant.
    Cooperative Actions. Denver Water believes it can find the 
additional water to build out its Combined Service Area from its own 
resources. That is, the Board is not dependent on resources--water 
rights, facilities, or dollars--from those outside its Combined Service 
Area to find additional water supply or demand reduction needed to meet 
its future obligations within the Combined Service Area. The 
combination of Denver Water's infrastructure and extensive conditional 
water rights puts it in an enviable position in terms of preparation 
for its future.
    However, the Board also realizes that there may be economies and 
efficiencies to be gained by pooling its efforts and resources with 
those outside its Combined Service Area, and is willing to engage in 
mutually beneficial cooperative actions with those outside its Combined 
Service Area. The Board is not willing to permanently dedicate its 
infrastructure or water rights capacity to those outside its Combined 
Service Area without receiving yield, infrastructure or other 
commensurate benefit beyond payment of the costs involved.
    Denver Water has been exploring cooperative actions with water 
suppliers outside the Combined Service Area. The following cooperative 
actions have been discussed or implemented within the four metro 
regions:
    Aurora. Aurora and Denver Water are discussing potential steps for 
rebuilding Denver Water's Antero Dam to allow storage of the full 
decreed amount in the reservoir. Cooperation on the enlargement of 
Denver Water's Eleven Mile Reservoir also is part of the discussion. 
The Antero project would provide an additional 65,000 acre-feet of 
storage, while the Eleven Mile project could provide an added 18,000 
acre-feet of storage. Preliminary steps include an engineering 
feasibility study, on-site environmental evaluation, an outreach 
program in Park County to identify crucial issues, and an assessment of 
probable regulatory hurdles.
    Northeast. The northeast regional group includes Aurora, Brighton, 
Farmers Reservoir and Irrigation Company, South Adams County Water and 
Sanitation District (South Adams), Thornton, the Rocky Mountain 
Arsenal, and the State of Colorado. Early meetings of this group also 
included Public Service Company of Colorado (now Xcel Energy) and Metro 
Wastewater Reclamation District. Denver Water has implemented one 
cooperative action in this region--a three-way agreement among Denver, 
South Adams and the Rocky Mountain Arsenal. South Adams and Denver 
Water are cooperatively building 8,000 acre-feet of gravel pit storage 
for Denver Water's use, which will produce 5,000 acre-feet of new 
yield. South Adams will receive 4,000 acre-feet of this new yield, and 
Denver Water will acquire the remaining 1,000 acre-feet. The Rocky 
Mountain Arsenal will receive 1,200 acre-feet of recycled water for the 
wildlife refuge. A further outcome of northeast regional efforts is an 
agreement between Denver Water, Farmers Reservoir and Irrigation 
Company, and two other irrigation companies that settled long-standing 
disputes surrounding the acceptability of Denver Water's reusable 
effluent as a replacement supply in exchanges and Denver Water's 
ability to use pumps at Metro Wastewater to operate exchanges.
    Northwest. The northwest regional group includes Arvada, 
Broomfield, Consolidated Mutual and Westminster. Denver Water's first 
priority in this region is to solve its Moffat System problem. Denver 
Water and Consolidated Mutual have entered into an arrangement that 
provides Denver Water with 440 acre-feet of yield in exchange for 
Denver Water paying $3 million toward the construction of a small 
reservoir (Walter S. Welton Reservoir) built by Consolidated Mutual. In 
1999, the Board entered into an agreement with the City of Arvada to 
purchase land and preserve the option to build Leyden Gulch Reservoir 
as a possible answer to Denver Water's Moffat reliability problem.
    South Metro. The south metro group includes Douglas County, the 
Town of Castle Rock, Centennial Water & Sanitation District, Parker 
Water & Sanitation District, East Cherry Creek Valley Water & 
Sanitation District, Castle Pines North Metropolitan District, 
Cottonwood Metropolitan District, Inverness Water & Sanitation 
District, Stonegate Village Metropolitan District, Meridian 
Metropolitan District, Pinery Water & Wastewater District, Roxborough 
Park Metropolitan District, and Arapahoe County Water & Wastewater 
Authority. Denver Water, the Colorado River Water Conservation 
District, and the south metro entities listed above have agreed to 
study collaboratively possible water supply options. The expected 
completion date for the study is December 2003. When the study is 
completed, the Douglas County water users expect to prepare a 
cooperative action proposal for Board consideration.
        Upper Colorado River Basin Study. While not a part of the metro 
        Denver regional efforts, the Board has extended its outreach to 
        the Western Slope as well as to the Northern Colorado Water 
        Conservancy District (Northern). On the Western Slope, Denver 
        Water has been engaged in a four-year effort known as the Upper 
        Colorado River Basin Study. The study includes, as 
        participants, the Colorado River Water Conservation District 
        (Colorado River District), Summit County, Grand County, the 
        Northwest Colorado Council of Governments' ``QQ Committee,'' 
        the Northern Colorado Water Conservancy District, and Colorado 
        Springs. Other interested entities, including the environmental 
        community, have participated from time to time. The study is 
        intended to identify current and future impacts of growth and 
        increasing water demand on the Upper Colorado River Basin, 
        whether from the headwater counties themselves or the Eastern 
        Slope. That study is now moving toward the ``negotiation'' 
        stage to see if mutually beneficial solutions can be found for 
        the problems and issues identified in the study's data-
        gathering efforts.

        Eagle River Basin. The Board has numerous water rights in Eagle 
        County and is currently participating in a study to develop 
        information regarding the feasibility of storing Eagle River 
        water supplies near Wolcott, Colorado. The importance of this 
        effort is that the east and west slopes are working together to 
        understand how a joint use project may improve their respective 
        water supplies. The participants in this work are the River 
        District, Vail Consortium, Aurora and Denver Water.
    The Moffat Project. Denver Water is facing an increased likelihood 
that it will not be able to meet its customers' water demands reliably 
on the north end of its system during dry periods. The reason is a 
water availability problem at the Moffat Water Treatment Plant. Denver 
Water currently has adequate water in its supply system, but not enough 
of that water is available for treatment at the Moffat plant.
    Denver Water is examining several potential solutions for providing 
more water to the Moffat plant during dry years, such as enlarging 
Gross Reservoir; building a new off-channel reservoir; or recycling 
water for drinking purposes. The NEPA process for this project being 
conducted by the Corps of Engineers has just begun, with the scoping 
completed only a few days ago. Phase II, which involves the initial 
screening of potential alternatives, will begin shortly.

[GRAPHIC] [TIFF OMITTED] T0927.002

                                 ______
                                 

  Additional statement submitted for the record by Patricia L. Wells, 
          General Counsel, Denver Board of Water Commissioners

    In my pre-submitted testimony, I mentioned several means by which 
Congress could increase water supply, or protect existing water supply. 
A federal court opinion issued on December 11, 2003, has unfortunately 
created another opportunity for Congress to act in response to judicial 
interpretations damaging to water suppliers. Therefore, I submit this 
supplemental testimony to make an additional recommendation for 
Congressional assistance to increase water supply.
    5. Adopt the ``No Surprises Policy'' as part of Section 10 of the 
ESA. In 1994, the Departments of the Interior and Commerce first 
announced the ``No Surprises Policy,'' which provides crucial 
protection to landowners and water suppliers who are willing to devote 
resources to protection of threatened and endangered species by means 
of a Habitat Conservation Plan (HCP) created pursuant to Section 10 of 
the Endangered Species Act. 16 U.S.C. Sec. 1539(a). The ``No Surprises 
Policy,'' codified into regulation in 1998, provides regulatory 
certainty to property owners in exchange for conservation commitments. 
The regulation prevents the federal government from imposing additional 
requirement that would increase costs or further restrict the use of 
natural resources beyond the original HCP. See 50 C.F.R. 
Sec. Sec. 17.22, 17.32, 222.2.
    The ``No Surprises Policy'' has been extremely successful in 
encouraging property owners to enter into HCP's. From 1982 to 1992, 
only 14 plans were approved. In the following ten years, 379 HCP's with 
``No Surprises'' assurances have been approved, covering approximately 
30 million acres and affecting more than 200 species. The policy is 
also important to Denver Water, which has an HCP for the Preble's 
Meadow Jumping Mouse covering thousands of acres of operating property 
along the foothills west of Denver. Without the ``No Surprises 
Policy,'' Denver Water would not be willing to enter into an HCP and 
dedicate certain land as a refuge for the mouse. Without an HCP, Denver 
Water's operations could be severely compromised.
    The ``No Surprises'' regulation has been remanded by a federal 
district court on procedural grounds. Spirit of the Sage Council, et 
al. v. Norton, et el., Civ. Action No. 98-1873(EGS)(D.D.C. Dec. 11, 
2003). The court's order of remand was sufficiently critical of the 
intent and purpose of the ``No Surprises Policy'' that its survival in 
the next round of judicial review is doubtful. Congress could resolve 
this problem simply by adopting the ``No Surprises'' regulation into 
Section 10 of the ESA.
                                 ______
                                 
    Mr. Calvert. I thank the gentle lady for her testimony.
    Ms. Kassen, I certainly appreciated the remarks about 
maximizing existing water supplies, but I'm aware your group is 
well known for litigating to prevent farmers, ranchers and 
others from using their existing supplies. Does that mean 
you're no longer going to challenge the right to use existing 
water rights?
    Ms. Kassen. I'm not sure what litigation you're talking 
about.
    Mr. Calvert. Does that mean--as I understand, there's a 
case, a lawsuit that affects the rights of Northern Colorado 
farmer water supply and storage to use existing water rights, 
is that the case--is your operation involved in that case?
    Ms. Kassen. Is this the bypass water case from 1994?
    Mr. Calvert. Yes.
    Ms. Kassen. We're awaiting a decision from the Judge. I 
don't think there are any other pieces of litigation on the 
table, but with regard to bypass flows, Congressman, I think 
that in the renewal of permits that were given long before any 
environmental laws had come on to the books, it is appropriate 
for the Federal agency who is the land manager to determine 
whether the renewal of the permit is consistent with existing 
law and that's when you have the bypass flow controversy arise.
    Trout Unlimited remains committed to existing law which we 
believe requires Federal agencies to manage land as wise 
managers and to manage land consistent with existing laws and 
FLMPA, which your Committee was probably involved with when it 
was passed in 1976, does require, we believe, the Forest 
Service to impose bypass flows, if necessary, to meet its 
obligation under that act.
    Mr. Calvert. Certainly we have a different understanding of 
the intent of the law as it was passed, but to all of the 
witnesses, Mr. Rosenstein, you talk about coordinating 
permitting requirements, in the bill that I have that is 
involved with Western Water and certainly involved with 
Colorado. We have a portion of that bill that would streamline 
the permitting process. This was, quite frankly, taking from 
the City of San Francisco on their Hut Hutchie Reservoir 
rebuilt and pipeline and Ms. Pelosi introduced the streamline 
language. I took that language and put it in this legislation 
and I guess I won't ask the whole panel, but I'll start with 
you, is this the type of thing that you think is necessary to 
help streamline and build these projects?
    Mr. Rosenstein. Yes sir, I do. I think it's important 
before you're going in to do a project when you're doing your 
initial due diligence you've got to be able to identify what 
all the obstacles are and not be, I guess, surprised.
    Mr. Calvert. Ms. Wells, do you have any comment on that?
    Ms. Wells. I'm not sure what the exact provisions of the 
bill are. NEPA is long and difficult and expensive. If you have 
enough money and enough time, you can get through it. And I 
think that streamlining can be helpful. Redundancies are not 
necessary. Where various Federal agencies don't cooperate with 
one another, that would be very helpful.
    Mr. Calvert. That's the intent of this and the fact that we 
would, in effect, together through a large project like this, 
streamline this process and move it not bypassing any existing 
Federal law, but moving this in a more comprehensive way and 
get it done and move on.
    Ms. Wells. I can give you an example. We are in our North 
Side supply. The Corps of Engineers is the lead agency and one 
of the potential solutions, Gross Reservoir, which has a FERC 
license and we had to pretty much pull teeth to get FERC to 
agree to be a cooperating agency and they are and so that 
helps, but actually it would be useful if they were required to 
be.
    Mr. Calvert. Mr. Kuhn, any comment?
    Mr. Kuhn. No, I think it's just a good idea. We've been 
through four or five major permitting processes and generally, 
if you get out ahead, it's good. The one concern that I have at 
a local--as a local issue is many of these projects, we've had 
project failures in Colorado because where proponents have 
received Federal permits but have not been able to obtain the 
necessary local permits, so you've got to bring them together, 
both the local and the Federal issues. There are several major 
ones, of those, in fact.
    Mr. Calvert. Any other comments? Mr. Udall, you're 
recognized.
    Mr. Udall. Thank you, Mr. Chairman. I want to just begin by 
thanking the panel, in general, and Counselor Wells, it's 
always great to see you and thanks for the very concrete ideas 
that we can pursue at the Federal level to help meet the 
challenge here in Colorado.
    I look forward to reading your testimony because I think 
there's a lot of great detail in there that the panel and the 
Committee ought to consider.
    If I might, I want to turn to Ms. Kassen for a minute and 
talk a little bit about this concept of recreation flows you 
had mentioned in your commentary and I wanted--Dr. Foutz also 
had talked about agriculture is the third largest industry in 
the state. Tourism is the second largest industry and we need 
them both. I think we have some opportunities here to work in 
concert, but this question of recreational flows is continuing 
to raise its head and be debated and if you would comment on 
that, I'd appreciate if the Panel would as well.
    Ms. Kassen. Well, speaking just for a moment as a 
representative----
    Mr. Udall. You might take that mike and bend it in your 
direction
    Ms. Kassen. Speaking just for a moment as a representative 
of Colorado, of Trout Unlimited, the fishing industry brings 
about $1.5 billion a year to the State of Colorado and that's 
part of the whole complex of recreation activities. I think the 
drought report which the environmental community commissioned 
at last fall after the 2002 year showed that agriculture was 
the top loser and that recreation was the second biggest loser 
as a result of the drought, mostly as a result of the reduced 
flows associated with rafting. And you put a lot of rafting and 
guide kind of businesses, if not out of business, at least at 
risk as a result of that last year. So there are a number of 
ways that reservoirs can be reoperated to enhance recreation. 
There are also, as I think you know, a number of innovations in 
Colorado water law to allow water, to allow kayak forces to get 
water rights which puts them in the prior appropriation system 
and enables them to protect those rights for recreation and 
certainly we think that's important and we think that any new 
projects going forward in this state will have to take account 
of impacts to the recreation community. In other words, if 
you're taking water--large amounts of water--out of a basin 
that has a recreation economy, as is true in much of your 
District on the West Slope, that would be an important part of 
any mitigation that happens with those kinds of projects.
    Mr. Udall. Thank you. And I think I may have demoted my 
good friend, Mr. Foutz, by calling him Dr. Foutz, but I had it 
in my head somewhere he had a doctorate, you do, don't you? 
Yes, I think--so did you want to comment at all from an 
agricultural point of view on that question?
    Mr. Foutz. Thank you, Congressman Udall. You know, Colorado 
Farm Bureau has historically proposed, I mean opposed 
recreational industry in flows and I guess we do that for 
several reasons. Number one, it's kind of a parochial issue 
because we think that the beneficial use for the water really 
in the State is agriculture and municipal use. We've always--
we've been there and that's probably where we're going to be.
    Certainly I think one of the big issues that we face is how 
those in stream flows today are being delineated and simply 
going through Court action and delineating in stream flow 
without participation in some way financially and obtaining the 
water right or something else other than simply having it 
decreed by a court, creates problems. It does create problems 
because it defines then that a certain amount of water has to 
pass a point in the stream and any activities which would 
remove or delineate, decrease that amount of water past that 
point, is certainly going to add an impact upstream from that, 
from that particular point in the river. So the amount on how 
it's handled is, I think, extremely important.
    The State has water rights. If you want a water right, buy 
one just like the municipalities and we do.
    Mr. Udall. I highlight this because I think you're a 
fisherman and I'm a fisherman, I'm a boater and I think 
everybody sitting here in some way or another recreates with 
our water resources and it reminds me of the 64 Principles that 
this is an issue we ought to continue and try and to discuss 
and solve together. I think the ground work has been done and 
the common elements shown, so let's keep working on it.
    Mr. Foutz. Again, I go back to the task force that Colorado 
Farm Bureau has put together and we are bringing all of these 
stakeholders to our table and sitting down and trying to 
discuss that with the water owners and water users to see if 
there isn't some way that we can reasonably try to address 
those issues.
    Mr. Udall. I want to thank the panel and if I might, Mr. 
Chairman, I would like to extend a question to be answered 
later to Mr. Kuhn about some of the projects he outlines and my 
sense is that there hasn't been a lot of problems when it's 
come to the permitting, once you all did that work on the front 
end.
    Mr. Kuhn. Yes, once you basically have local consensus and 
a broad public support, the permits are there. If you look at 
when projects have problems with permitting it's almost, 
there's almost a complete coalition with whether there's local 
support for a project. There are a few exceptions, but for the 
most part, if you've got local and state support, Federal 
agency permits, they can be onerous at times, but ultimately, 
they're there.
    Mr. Udall. Thank you, Mr. Chairman.
    Mr. Calvert. Mr. Tancredo?
    Mr. Tancredo. Thank you, Mr. Chairman. Just three quick 
questions other than those that I'll submit for the written 
response.
    First of all, Mr. Rosenstein, I want to congratulate you, 
first of all, I want to congratulate the organization and the 
formation of this organization, it seems to me, is something 
that was desperately needed here in the State. I want to see an 
organization that will lobby for both development and 
conservation efforts and so I wish you all the best of luck in 
the world in that organization.
    What's your impression of the reasons, the primary reason, 
I guess that amendment, Referendum A failed. Do you think it 
was, in fact, a rejection on the part of the stakeholders of 
any idea of storage and expansion of present resources?
    Mr. Rosenstein. First, thanks very much for your support of 
our organization. And too, I wish I had a crystal ball that 
could tell me why that measure failed and why the other ones in 
the ballot failed as well. In terms of talking to folks, I 
think people recognize the importance of having water storage 
projects that will help sustain Colorado's economy. I think 
that's the bottom line and the defeat of Referendum A, I don't 
think, affects that bottom line. We need available water supply 
to support our economy and also to support our future as well.
    Mr. Tancredo. Alan, first of all, let me tell you that I'll 
be happy to feed the birds that are around my house during the 
winter if you promise me you'll feed the pheasants that might 
be around your place.
    Mr. Rosenstein. I'd be glad to do that.
    Mr. Tancredo. It's a deal. Alan, you heard reference 
earlier here to a mapping project. I don't know if Mr. Kuhn 
spoke specifically of a mapping project, but the importance of 
getting some new information about the geology out here in the 
West and there is legislation that's been proposed, I think 
it's a Senate bill. It's High Plains Aquifer Mapping and 
Monitoring Act.
    Are you familiar with it at all? Do you know how, for 
instance, the agricultural community responds to these kinds of 
requests for new information about the geology and hydrology in 
the area?
    Mr. Foutz. From the standpoint of collecting information, I 
think you'll notice in my written comments that that's one of 
the things that we do recommend is that we do gather as much 
scientific data as we can on both closed basins and on 
tributary waters and try to understand more fully what is 
exactly going on in the interconnection. It may be between all 
of those and how this system works.
    We have a lot of information in the State. We have a lot of 
people in CSU and CU that have studied Colorado waters for a 
long time and we know a lot about, but there's still a lot that 
we don't know and I think this last two or 3 years when we've 
had the drought, we've really begun to understand what we don't 
know.
    If we were to go to the Rio Grande Valley or the San Luis 
Valley, for example, on the Rio Grande, and if we were to look 
at the underground aquifer and the stream flows there, I think 
they're finding out that they don't understand that completely. 
We don't understand the Ogalalla Aquifer completely and how 
that is recharged. So those studies are important, yes. They're 
all important.
    Mr. Tancredo. They're important, Alan, but if you look at a 
picture of those aquifers or what we believe they are today and 
where they are today, you can see, it's not a Colorado issue. 
This is an issue for all the states in the region and it will 
require some sort of Federal initiative and Federal support. So 
I'm hoping that what you're saying is that you would look 
carefully at that particular piece of legislation. We did have 
it come before the Committee, I know, and I think somebody from 
maybe the Corn Growers Association came in and testified 
against it. I really hope that we get some reference from the 
Farm Bureau here that we can use----
    Mr. Foutz. And I think if what we're looking at is a study, 
I've not specifically looked at that particular piece, but I 
don't see a problem with it. If it involves more than that we'd 
have to sit down and take a look at it, but I think we have to 
know what's going on underground and above ground in terms of 
water in this State and in the surrounding states so that we 
begin to understand the system. It is a system.
    Mr. Tancredo. That's right and I think we would be in for 
some big surprises if we took a very hard look at exactly how 
that system is put together and what we're doing to it. So----
    Mr. Foutz. But we do need to understand that, good or bad.
    Mr. Tancredo. Undeniably. And last, Ms. Kassen, in your 
testimony and in your responses to the question I think put to 
you by Representative Udall, you indicated that you could see, 
of course, that there was damage that had been done during the 
drought to the recreation industry and specifically to trout. 
Now doesn't that mean, can I interpret that to mean that you 
would support projects that would store water for those times? 
I mean, after all, it's not just an issue of storing water for 
the potential use of urban projects or urban part of the State, 
but storing water that can be used during drought to replenish 
stream flows, so why shouldn't we--well, I guess I shouldn't 
jump to a conclusion about what you're going to say. What do 
you think about storing water? Increasing our storage capacity 
so as to mitigate against the problems that you identify as 
there with recreational industry?
    Ms. Kassen. Congressman Tancredo, Trout Unlimited has never 
been against storage, let's just start there.
    Mr. Tancredo. And new projects, new development, new 
storage capabilities, expanding the ones we have. How do you 
feel about that?
    Ms. Kassen. I think I said in my testimony that we believe 
that expanding reservoirs is going to be part of the solution 
and I'm certainly involved in terms of writing comments on a 
number of these projects that are coming down the road. There 
are attached to my testimony is the executive summary of 
something called what I call the Drought Report and there's a 
whole list of things there which include new storage.
    Mr. Tancredo. Is there any project you can think of, that 
you can tell us, anything that's on the drawing board right now 
that you can say we support this idea or is it just a general, 
that meets certain criteria and we'll be happy to think about 
it?
    Ms. Kassen. I think that Eagle Park Reservoir is one 
example and when Patty Laws talked about the Denver North End 
expansion 15 years ago, Trout Unlimited suggested that an 
expansion of Gross Reservoir was part of the alternative 
solution to Two Forks. We don't know exactly what that project 
is going to look like right now. We're involved in the project. 
We're hoping to be able to support that. Those are two.
    We hope to be able to support the expansion of Pueblo 
Reservoir as well. Our concern there, and this goes back to a 
discussion you all were having a few minutes ago about getting 
agencies to--the Federal agencies to be on the same page, is 
that Pueblo Reservoir expansion could dry up a section of the 
Arkansas River that the Corps and some local agencies have just 
spent $6 million trying to restore. And we don't think that 
makes a lot of sense. But assuming that Pueblo Reservoir can be 
expanded in a way that preserves the Arkansas River below 
Pueblo Reservoir, we would expect to be able to support that. 
So those are three.
    Mr. Tancredo. Thank you. Maybe you should think about 
joining Coloradans For Water Conservation and Development. You 
seem to be more positive today than I noticed in the past, so I 
just offer that to you for your consideration.
    Thank you, Mr. Chairman.
    Mr. Calvert. I thank the gentleman.
    Mr. Beauprez?
    Mr. Beauprez. Thank you, Mr. Chairman, and again thank you 
so much for conducting this hearing today. I think it's been 
exceptionally good. I know you have a plane to catch and I'll 
try to be very brief. I'd like to pursue, if I had an unlimited 
amount of time with Mr. Foutz, the statement you made about 
agriculture being the real loser and I fear the same.
    I'd like to pursue that issue with you about agriculture 
because I could not agree more. And I very much fear because of 
the nature of agriculture, small farms, and independent farmers 
are few in numbers even if you aggregate all of them that 
sometimes they're victimized and I'm very concerned about this 
stream flow issue that has come up.
    And I am very sensitive. I want to make that very clear. I 
am sensitive to that, too. I don't know if anybody wants to dry 
up our streams unnecessarily, but it certainly elevates the 
issue of water rights and private property rights and whose 
water is it and I think the point, I think you made, Ms. 
Kassen, about needing more research is a legitimate one, 
because I hope that this doesn't end up forever and ever and 
ever in Courts.
    Ms. Wells, I thank you very much for some very proactive 
and commonsense suggestions as to what Congress might address. 
Thanks for that.
    And to Mr. Kuhn, if I might, I'll address my question and 
stop right there. I want to commend you for the Colorado 64 
Principles. I like that a lot. And I looked through those and I 
noticed with great interest that number one in those says that 
all Colorado water users must share in solving Colorado's water 
resource problems. I couldn't agree more.
    I assume you really mean it when you said ``all Colorado 
users.'' And then last, not to skip over all the rest of them, 
but you say ``future water supply solutions must benefit both 
the area of origin and the area of use.'' There are some of us 
that live on the east side of the mountains, where I've lived 
all my life, and I'm not necessarily one of them, but there are 
some that think that those on the West Slope think, when you 
say water over here from over there it's a no how, no way.
    My sense in scanning your position statement is that you're 
much more open to discussion and I'd like you to directly 
address that, if you would.
    Mr. Kuhn. Thank you, Congressman Beauprez. I think the 
reality of this is that it's always been a positioning between 
West Slope interests and East Slope interests to establish a 
neutral playing field, more or less, one where if you build a 
transmountain diversion, the basin of origin doesn't unduly 
suffer from that and our history is going back to the 1930s and 
the development of the Colorado Big Thompson Project that 
carried with it mitigation measures on the West Slope that are 
very important today, to the most recent efforts that Peter 
Binney mentioned and the Eagle River is one of where there is 
that neutral playing field, then we have productive projects.
    When one side says no, never or the other side says it's 
our manifest destiny to take whatever we want, then we end at a 
stalemate.
    Mr. Beauprez. Well, I thank the gentleman for his proactive 
action on that and I really think it is an absolute necessity 
for the sake of Colorado and our--I mean I don't see another 
solution to water other than we all work together and recognize 
it is our collective challenge to address and focus not only 
limitations, but upon solutions to rather obvious endpoints.
    Mr. Chairman, again, I thank you very much for convening 
this. I think it's been most productive and I yield back.
    Mr. Calvert. Thank you, Mr. Beauprez, and thank you for 
your leadership and inviting me here to Denver and your 
community's hospitality. My friend, Mr. Tancredo, it's always 
great for Californians to come up to Colorado and see what our 
water looks like when it's white.
    [Laughter.]
    But seriously, as you know, I go around the country and we 
discuss water issues and they're always emotional and 
difficult, but we need that extra water to sustain all those 
attorneys that are in the audience. And seriously, as one of my 
best friends who is a water attorney continues to tell me 
consensus is highly overrated.
    [Laughter.]
    Which leads to nothing happening and Mr. Binney, you said 
in your statement ``doing nothing is not an alternative.'' And 
that's absolutely correct. We can learn to share without having 
one part of the State to the benefit of the other. We need to 
do that. We can help the whole. And that's a hard thing to do. 
I experience it all over the country. We can agree on a lot of 
things. Everybody agrees that conservation is a good thing. I 
don't think anybody in this room would say conservation is bad 
and we can all agree to do that. And we can do a better job of 
it. Removal of non-native evasive species, they're all over the 
West and we need to get rid of them and it's expensive, but 
it's a positive step and we need to do that. We can all agree 
to work together to get that done.
    Most of us agree that reclamation is a good idea and we 
ought to get into it. Water transfers, I mean, obviously 
there's fights within communities and between the rural 
communities and the urban communities, but water transfers can 
be done if properly done and water rights are protected and 
people are paid. They can be done properly.
    Ground water management is something that we need to work 
on all throughout the West and certainly through the whole 
country. When we get into controversies, we get into surface 
storage, either off-stream storage or on-stream storage, but 
all of it, really is part of the solution and we need to work 
together to make sure that we get this done because especially 
in this State, if you don't, the water, as Mr. Foutz pointed 
out, the unappropriated water is going downstream and you're 
not using it. And if you don't use it, I know who will.
    [Laughter.]
    So let's be realistic about this and work together to solve 
this problem and we shall. I'd like to include statements for 
the record from Mr. Dave Miller, the Independent Water Planner 
for Palmer Lake, Colorado; Mr. Bart Miller, Water Program 
Director, Western Resource Advocates; and Alan J. Leak, 
Centennial, Colorado. I'd also again say for the record we will 
keep the hearing open for 10 business days for any additional 
statements from witnesses or anyone else interested in 
contributing to the record. If there's no further business 
before the Subcommittee, I again thank the Members of the 
Subcommittee and all our witnesses and happy holidays.
    We stand adjourned.
    [Whereupon, at 12:12 p.m., the hearing was concluded.]

    [Additional information submitted for the record follows:]

    [Information submitted for the record by Dave Miller 
follows:]

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[GRAPHIC] [TIFF OMITTED] T0927.007


    [A statement submitted for the record by Western Resource 
Advocates follows:]

   Statement submitted for the record by Bart Miller, Water Program 
                  Director, Western Resource Advocates

    Members of the Subcommittee:
    Western Resource Advocates takes this opportunity to provide public 
comment on the December 12, 2003, Field Hearing: ``Colorado: Options to 
Increase Water Supply and Improve Efficiencies.'' Western Resource 
Advocates, formerly called Land and Water Fund of the Rockies, is a 
regional law and policy center that uses law, economics, and policy 
analysis to protect land and water resources and assure energy demands 
are met in environmentally sound and sustainable ways.
The Issue
    At the heart of today's hearing is how best to deal with Colorado's 
water future, shaping a solution that meets human needs and, at the 
same time, protects the natural environment that is a significant part 
of why Colorado is such a wonderful place to live, work, and visit.
    Although water currently is being put to use in the state for many 
purposes, the growth in demand in the foreseeable future is for urban/
suburban uses. The population of the Denver metropolitan area, as well 
as other communities on Colorado's Front Range, may double within the 
next 35-40 years, potentially doubling urban water demand.
    If we rely solely upon water supply solutions from the recent 
past--diverting and storing water with large infrastructure projects--
we will endanger one of the state's most precious resources, our 
natural river systems. This should not be the path we follow blindly 
forward in the future and should not be the target of any federal 
funding or other assistance.
    Federal funding or involvement, to the extent any is needed, would 
be best spent assisting the state, local water providers, and citizens 
to maximize the efficient use of our existing supplies. We can stretch 
already-developed water supplies to meet a higher portion of our needs 
through indoor and outdoor conservation as well as through creative 
supply-side options that are less likely to require large new projects 
that are, on the whole, slow to construct, highly contentious, 
extremely costly, and environmentally damaging.
    Efficiency alternatives can postpone or alleviate entirely the need 
to divert and store the last water left in our rivers. Water that is 
crucial to continued enjoyment by anglers, rafters, local communities, 
and the preservation of the plants, fish, and other wildlife that 
rivers support.
    Thus far, western water policy has not encouraged efficiency 
alternatives, both because of legal impediments and a lack of sustained 
public pressure to invest in efficiency. Some water utilities have made 
efforts, but progress has been isolated and sporadic. Although 
agricultural efficiency also must be addressed, urban water use is an 
area where demand for water is growing most quickly, where there is a 
receptive audience to an efficiency message, and the financial 
resources to implement efficiency alternatives.
    Lack of comparative data on water use and efficiency options has 
been a significant hurdle to maximizing urban water use efficiency. 
Many cities simply are in the dark as to how they compare to others in 
the region. Nor are they necessarily aware of cutting-edge approaches 
being explored elsewhere. Isolation has hampered innovation. 
Comparative information could inspire the state, water providers, and 
citizens to transform to a world of greater efficiency.
The Solution
    Earlier this week, Western Resource Advocates released a report 
that fills this gap in knowledge. ``Smart Water: A Comparative Study of 
Water Use Efficiency Across the Southwest'' provides, for the first 
time, a snapshot of current water use in major cities in six 
Southwestern states (including 4 cities in Colorado), along with how 
cities compare with conservation and efficiency programs, leaks, water 
rate structures, and unmet potential for improvement. Smart Water also 
includes a roadmap for the future, explained in detail in the pages 
that follow. A digital copy of the report is available on Western 
Resource Advocates' website at www.westernresourceadvocates.org. 
Hardcopies or CDs can be obtained by calling Don Wojcik at 303-444-1188 
ext. 247, or e-mailing him at [email protected].
    To the extent that federal assistance or funding results from this 
field hearing, we propose that ``in consultation with the state, local 
water providers, and interested members of the public'' the following 
recommendations from Smart Water be implemented to improve water use 
efficiency in Colorado and throughout the Southwest.
(A) Outdoor Water Use Efficiency
    On the demand-side of the water use equation, among urban uses, 
outdoor use has the greatest potential for water savings in the 
Southwest. Outdoor water use (primarily landscape irrigation) not only 
accounts for the majority of residential urban water use but, for the 
most part, is ``elective'' or discretionary. Current levels of outdoor 
use in many urban areas in the Southwest expose the divergence between 
the high-water-use landscape vegetation many have chosen and the arid/
semi-arid place in which we live. In addition, our Smart Water analysis 
indicates that little or no correlation exists between municipal water 
consumption and climate conditions. An appropriate or acceptable 
``developed urban landscape'' is defined differently in many 
southwestern cities. In addition to landscape design issues, low-
density urban sprawl compounds the problem of high outdoor water use as 
it usually brings with it substantial landscaped area (i.e., irrigated 
area), typically covered with non-native vegetation.
    Recommendations for action for water policymakers:
      Offer landscape/Xeriscape rebate programs and irrigation 
controller rebate programs;
      Limit water use on medians, sidewalk parkways, slopes, 
and other areas close to impermeable surfaces;
      Enact and/or amend landscaping ordinances (via municipal 
zoning ordinance or development codes) that: (1) require some degree of 
Xeriscape landscape; (2) regulate the amount/percentage of high water-
use vegetation; and (3) require water-efficient soil preparation best 
management practices and landscape designs;
      Enact watering regulations that restrict landscape 
irrigation to early morning and evening times to avoid daytime 
evaporation losses;
      Provide landscape irrigation audits to identify waste by 
customers in all sectors and educate the public on Xeriscape, efficient 
irrigation techniques, design, etc.; or
      Incorporate smart development principles into municipal 
zoning ordinances, development standards, and comprehensive plans 
(e.g., emphasize higher-density mixed-use developments, Xeriscape 
requirements, infill development, and the use of reclaimed water for 
landscape irrigation, etc.).
(B) Water Rate Structures and the Price of Water
    Strategic water pricing is a key component of demand-side water-use 
efficiency that can induce water conservation by customers. Currently, 
water sold in the region to urban customers for discretionary use is 
priced much lower than its actual long-term cost. Many water providers 
in the arid Southwest simply do not use water rate structures that send 
an effective ``conservation message'' to their customers. With a finite 
water supply, this practice results in unsustainable consumption. Many 
water providers have begun to apply increasing block rate structures in 
an attempt to send this conservation message via their water pricing 
structures. However, in many cases, the block price increases are not 
steep enough to get the attention of water users. As explained in 
detail in Smart Water, rate structures that yield inclining marginal 
price curves and average price curves tend to be most effective in 
promoting water-use efficiency. Increasing block rate structures also 
tend to be fair, if they are designed to charge high-volume users for 
the provider's avoidable costs of serving discretionary, outdoor use 
and reward low-volume users.
    Recommendations for action for water policymakers:
      Reassess and modify water provider rate structures in a 
way that sends a clear, consistent conservation message via water 
pricing. This is most effectively done through an increasing block rate 
structure;
      More effectively incorporate long-term infrastructure 
costs, new supply attainment costs, and environmental costs into 
municipal water price-setting;
      Set fixed service charges and variable consumption prices 
in a way that sends a consistent conservation price signal while 
maintaining revenue stability; and
      Utilize aggressive increasing block rate structures in 
all years (i.e., not just as an emergency drought response tool).
(C) Indoor Water Use Efficiency
    Although the savings potential for indoor water efficiency may be 
secondary to the gains from outdoor efficiency, they are still 
significant. By converting a ``typical'' American home to a 
``conserving'' American home, we can go from an average of 69 gallons/
capita/day (gpcd) to approximately 45 gpcd (via low-flow fixtures and 
appliances that are readily available at home improvement stores).
    Recommendations for action for water policymakers:
      Offer indoor appliance/fixture rebate programs;
      Enact municipal ordinances that require water-efficient 
indoor appliances/fixtures in all new residential and commercial 
development (coinciding with 1992 EPAct) as well as all building 
upgrades (executed and inspected via building permit process);
      Require appliance upgrades contemporaneous with property 
sales, or perhaps require landlords to install them to qualify for a 
rental license;
      Enact municipal ordinances (building/plumbing codes) that 
require appliances/fixtures not captured by the EPAct and that exceed 
standards established therein;
      Provide indoor water use audit services to all customers 
in all sectors (including leak detection and repair assistance); and
      Educate the public on water-efficient appliances, 
fixtures, and personal water use behavior.
(D) Supply-Side Water Use Efficiency
    Supply-side water use efficiency holds some of the greatest 
potential for minimizing or even avoiding the need for developing new 
supply sources. In order to send a consistent ``conservation message'' 
to their customers, water providers must demonstrate an equal effort in 
increasing the efficiency of their collection/storage facilities, 
delivery systems, and treatment facilities, as well as reap the 
benefits of using innovative supply strategies and technologies.
    Water loss reduction is a critical piece in the water efficiency 
puzzle. Rates of Unaccounted for Water (UFW) vary substantially between 
water providers in the region. Smart Water reveals that collectively in 
our region, hundreds of thousands of acre-feet are unaccounted for in 
our water collection and distribution systems each year. Halting 
preventable losses (e.g., leaks) will save a great deal of water and 
better metering will provide more accurate data on actual use and 
losses in distribution systems.
    Many other innovative supply-side measures are being developed 
across the Southwest. These measures include: water reuse and recycling 
systems; aquifer storage and recovery projects; system integration and 
coordination; and market-based water transfers. Such supply-side 
strategies are already being used by many water providers, although 
they are not yet commonplace in the region.
    Recommendations for action for water policymakers:
      Implement aggressive system-wide water loss reduction 
programs (e.g., leak detection and repair, dam repair, etc.) to 
minimize UFW;
      Seek efficiency savings via cooperative, integrated water 
supply efforts with other local or regional water providers
      Pursue market-based water transfers, such as water 
salvage projects with agricultural users, temporary dry-year leases 
with agricultural users, and water banking transfers with other water 
providers or regional/state water banking authorities;
      Explore the feasibility and legality of using water reuse 
and recycling systems. When feasible, use non-potable reclaimed water 
for urban landscape irrigation and industrial uses; and
      Investigate the feasibility of using aquifer storage and 
recovery (ASR) systems (e.g., conjunctive use), if at least a portion 
of a water provider's supply is derived from groundwater sources.
(E) Program Implementation, System Monitoring, and Staying ``Up to 
        Speed''
    Through the Smart Water analysis, we have discovered a very large 
potential for improving urban water efficiency throughout the 
Southwest. Based on comparisons of per capita Single-Family Residential 
consumption, outdoor and discretionary consumption, UFW and other end-
use variables in service areas throughout the region, it appears urban 
water providers have just begun to improve water-use efficiency.
    There is a least one ``target'' water provider in almost every 
category, setting the benchmark toward which others can strive. Model 
water providers hint at a vast potential for water savings. Smart Water 
also found a significant variation in conservation programs throughout 
the region, from very comprehensive programs to much more limited ones.
    The analysis reveals that several water providers' water 
consumption accounting and program monitoring were lacking, incomplete, 
and/or inconsistent, leaving these providers with only a fuzzy picture 
of actual water use. In addition, many water providers have not 
thoroughly assessed the cost-effectiveness of their conservation 
programs. Although detailed benefit/cost analyses are often conducted 
to justify traditional structural water supply improvements, this level 
of analysis for water use efficiency measures is extremely limited, 
even nonexistent for some providers.
    Recommendations for action for water policymakers:
      Enact and implement multi-faceted conservation programs 
that concurrently use rebate programs, education programs, 
conservation-aimed water rate structures, and regulations/policies to 
reach customers with unique response ``triggers'' or ``motivators.''
      Keep ``up to speed'' with the continuously evolving 
state-of-the-art programs and policies used in other water providers. 
The significant variation in conservation programs and policies in the 
Southwest indicates that much more information sharing and modeling can 
take place;
      Improve or upgrade water system accounting practices to 
reduce water waste and increase revenues;
      Streamline water conservation program monitoring and 
analysis efforts, including cost-effectiveness and/or benefit-cost 
analyses. In addition to facilitating the promotion and fine-tuning of 
conservation programs, this information also can provide excellent 
``model'' material to be shared with other water providers; and
      Take charge in promoting water use efficiency in dry and 
wet years.
(F) Education and Awareness
    Although many municipal water providers offer water conservation 
education programs, many consumers do not have a basic knowledge of 
water sources/issues within their area:
      Where does our water supply originate?
      What's at stake if we don't conserve? and
      Where will the ``next drop'' of supply water come from?
    Many water customers are not sufficiently aware of programs/
opportunities offered by their water providers, or aware of how they 
can improve their water-use efficiency. Furthermore, many residents of 
the American West, often transplants from other, less arid, parts of 
the nation or globe, have only a fledgling awareness of place. 
Collectively, Southwestern residents need to adjust their water use and 
mindset to be more consistent with the arid climate in which we live, 
and make clear distinctions between our water ``needs'' and water 
``wants.''
    Recommendations for action for water policymakers:
      Improve the promotion and advertisement of water 
conservation programs (e.g., for rebate programs, audit programs, the 
rationale for increasing block rates, etc.);
      Use all available media outlets to spread the message of 
adapting to our surroundings/climate and the importance of water 
conservation during wet and dry periods (i.e., not only during drought 
conditions);
      Educate people on the ``collision course'' of population 
growth and water supply in the Southwest (i.e., that we can prevent a 
``crisis'' by acting now); and
      Promote comprehensive water-use audit programs to all 
municipal water customers to provide personalized education and 
direction on how to become water efficient.
                                 ______
                                 
    [The statement submitted for the record by Alan Leak 
follows:]

December 12, 2003

Honorable Richard W. Pombo, Chairman
1522 Longworth House Office Building
U.S. House of Representatives
Washington, DC 20515-6204

Dear Honorable Pombo, and Members of the Subcommittee on Water and 
Power:

    As a native Coloradan, a resident of the City of Centennial, and a 
water resources engineer with over 23 years of water resources planning 
experience whom is extremely concerned about Colorado's water future, I 
appreciate you taking time today to hear testimony on how the United 
States can help Colorado further develop its water supplies.
    I am writing you today to request the United States take whatever 
actions are necessary which would allow, facilitate, and promote the 
diversion of up to 240,000 A.F./year of waters of the Gunnison River 
and tributaries at or above Blue Mesa Reservoir for the benefit of the 
residents of the State of Colorado upon payment for power interference 
charges at the Aspinall Unit.
    Proposed diversions of water from or above Blue Mesa Reservoir 
above 60,000 A.F. per year have been opposed by United States officials 
in the past based primarily upon the transparent need to protect 
hydropower and other claimed uses at the Aspinall unit. This was never 
the intent of the Colorado River Storage Project Act (Act) under which 
the Aspinall Unit was constructed. The following describes the current 
state of renewable water resources within the State of Colorado and why 
and how such a request should be approved.
    Colorado is uniquely situated at the headwaters of seven major 
river systems which discharge an average of 10,726,000 A.F. of water 
per year to our neighboring states as follows (see Exhibit A):

[GRAPHIC] [TIFF OMITTED] T0927.008


    Ninety-three percent (93%) of this water (9,670,000 AF/YR) 
originates on the west slope of the Colorado Rockies. In comparison, 
over 81% of Colorado's total population resides on the east slope of 
the Colorado Rockies. To meet the current water demands of this large 
(3.6 million) east slope population base, Colorado water providers have 
diverted water from the west slope (transmountain diversion), dried-up 
agricultural lands, depleted non-renewable groundwater, and instituted 
water conservation measures. However, to meet the State's current and 
future east slope populations, additional water supplies from the west 
slope of Colorado will be, and are currently, necessary. Repeated 
attempts to divert water from the Gunnison River Basin have been met 
with opposition, with the water rights assigned to, and owned by, the 
United States for the Aspinall Unit being wrongly used to prevent 
transmountain diversions out of the Gunnison River basin at or above 
Blue Mesa Reservoir.
    Compact requirements and the Endangered Species Act have severely 
restricted Colorado's ability to use water leaving the state from the 
South Platte River and the Arkansas River. In addition, existing 
transmountain diversions (see Exhibit B) out of the upper tributaries 
of the Colorado River (i.e. Blue River, Eagle River, Roaring Fork 
River, Fryingpan River, Fraiser River, etc.), coupled with the 
Endangered Species Act, limit the amount of additional water (if any) 
which could be diverted from these rivers for use on the eastern slope 
of Colorado. In contrast, the largest untapped and economically 
feasible renewable water source for the east slope population is to 
divert water out of the Gunnison River Basin, which currently 
discharges almost 1,900,000 AF annually to the Colorado River. This 
represents 40% of the total flow of the Colorado River leaving the 
State of Colorado.
    The Colorado River Compact apportioned to the State of Colorado a 
share of the flows in the Colorado River. It has been estimated that up 
to 1,000,000 AF annually of Colorado's compact entitled water has been 
flowing out of Colorado for the lack of diversion and storage 
facilities.
    In 1956, the Colorado River Storage project Act (Act) was enacted 
to assist the State of Colorado and other upper basin states in 
developing its compact entitled water. The Act provided for the 
construction of holdover storage reservoirs which, in times of drought, 
could be drained to meet Colorado's (and other upper basin states') 
compact requirements while still allowing Colorado to divert its 
compact entitled water. Hydropower facilities were constructed at these 
reservoirs in order to generate funds to pay for the project 
construction until such time as water upstream of the reservoirs was 
diverted by the upper basin states for compact entitled purposes. There 
was no intent to use hydropower purposes to prevent the upper basin 
states from using their compact entitlements. Rather the reservoirs 
were meant to assist in this utilization.
    However, efforts by those opposed to transmountain diversions, in 
conjunction with United States officials have used the cloud of water 
rights adjudicated for hydropower purposes in state water court and 
donated to the United States as a tool to prevent transmountain 
diversion of water from and above Blue Mesa Reservoir.
    There is no doubt that the Aspinall Unit reservoirs generate a 
significant amount of power revenues and provide recreational benefits 
to the citizens of Colorado. However, in the current state of water 
needs in Colorado, the need for renewable water to Colorado's most 
populated east slope must outweigh the need for the incremental power 
production, which would be lost by an upstream transmountain diversion 
project, especially if the value of such power would be paid by those 
who are diverting the water (power interference costs). Studies of such 
proposed diversion of water from the Gunnison River Basin have been 
previously prepared (i.e. the USBR's original Gunnison-Arkansas 
Project), which proved that such diversions of water are viable.
    The current missing component which would allow the State of 
Colorado to utilize water from the Gunnison River at or upstream of 
Blue Mesa Reservoir would be to direct the United States Bureau of 
Reclamation to facilitate and promote the diversion of water at, or 
above, Blue Mesa Reservoir. Specifically, the USBR should use the water 
rights assigned to the Aspinall Unit to place a call on the river 
system ``only'' when needed to refill the Aspinall Unit ``after'' a 
compact call for releases from storage.
    An additional 240,000 AF per year of water diverted into the 
eastern slope river basins (Arkansas River and South Platte River) 
would put a significant dent into east slope water deficits. The 
reduction of 240,000 AF/year of runoff into Blue Mesa Reservoir 
represents only one-fourth of the average annual inflow to the 
reservoir, and would be diverted only in the average and high (wet) 
runoff years, thus protecting natural habitats and the stream corridor 
from damaging droughts and floods. Peaking flows could still be 
released for aesthetic and habitat protection in the Black Canyon of 
the Gunnison National Park.
    This simple directive would protect the Upper Colorado River Basin 
area (above Green Mountain Reservoir) from further depletions, as well 
as lessen the threat to eastern and western Colorado agriculture from 
further dry-ups to meet Colorado's existing and growing population.
    Because of page limits, I have not included information (reports, 
studies, etc.) to backup the statements included herein. I would be 
honored to provide whatever additional information is requested to 
allow the Commission to establish a basis of findings to support this 
request. I sincerely appreciate the opportunity to provide input to the 
Commission on this important topic.

Respectfully submitted,

Alan J. Leak, P.E.
6909 South Clermont Street
Centennial, CO 80122
                                 ______
                                 

    [Exhibits A and B follow:]

    [GRAPHIC] [TIFF OMITTED] T0927.009
    
    [GRAPHIC] [TIFF OMITTED] T0927.010
    
                                 
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