Fast-growing northern Colorado communities will pay $100 million into a Cache La Poudre River improvement trust to settle a lawsuit from environmentalists and clear the way for construction of a complex $2 billion, two-reservoir delivery system after disputes stretching across five decades.
Save the Poudre sued in January 2024 to block the $2 billion Northern Integrated Supply Project, a two-reservoir development designed to serve tens of thousands of people in northern Colorado. The lawsuit targeted the federal permit issued and alleged that the Army Corps of Engineers had not adequately weighed the environmental impacts and considered less harmful ecological alternatives to the project.
The Northern Water Board of Directors signed the agreement late Friday.
“This is a milestone day for the communities participating in the project,” said Northern Water General Manager Brad Wind in a news release Friday. “The settlement agreement will close the permitting process for the project, open the door to constructing a project that will deliver much-needed water supplies to vibrant communities, and allow for dozens of large-scale riverine investments in and along the Poudre River.”
The settlement ends decades of opposition to the expansive water supply project, including concerns that the new reservoir northwest of Fort Collins would drain water from the Cache la Poudre River to satiate the water needs of growing towns in Weld, Larimer and Boulder counties. The project calls for a second reservoir, near Greeley, where water from the South Platte River will be stored and used directly or traded with Poudre River users.
As a key win for environmental group Save the Poudre, the agreement outlines the creation of a new, long-term funding source to help a reach of the Poudre River, which extends from the mouth of Poudre Canyon to the river’s confluence with the South Platte River near Greeley.
Over the next two decades, project participants will contribute $100 million to create the fund, housed at the Community Foundation of Northern Colorado, or NoCo Foundation. The money will be made available for initiatives that improve the river’s ecosystems, wildlife habitat, recreational uses, water quality and more.
The 15 project participants include Fort Collins-Loveland Water District, Erie, Fort Morgan, Left Hand Water District, Central Weld County Water District, Windsor, Frederick, Lafayette, Morgan County Quality Water District, Firestone, Dacono, Evans, Fort Lupton, Severance and Eaton.
The participants’ share of the settlement will be assessed based on their share of the project, with the largest, Fort Collins-Loveland Water District, picking up about 20% of the cost, Northern Water spokesperson Jeff Stahla said Friday evening.
The agreement also allows some of the fund to be used to buy water rights, which could help restore flows to severely depleted portions of the river near Fort Collins, as well as create recreational pools and flows for kayaking, fishing and more, according to Save the Poudre.
The $100 million is separate from, and in addition to, the money already committed by the Northern Integrated Supply Project, called NISP, in its 2017 Mitigation and Enhancement Plan.
“For 20 years, we have brought attention to the plight of the Poudre River and the impacts on the river that would be caused by NISP,” Gary Wockner, Save the Poudre director, said in a news release Friday. “We are pleased to have reached this agreement and we look forward to putting the improvement fund to work for the health of the river and all of the people who love and enjoy the river in northern Colorado.”
In return for the fund — and a win for the water providers — Save the Poudre will end its legal challenge to the federal Clean Water Act permit issued by the Army Corps of Engineers in 2023.
Northern Water received the permit after two decades of work showing the need for the project, the Northern Colorado Water Conservancy District said. The mitigation requirements in the permit will remain, and the settlement funding will add projects beyond those outlined in the various permits issued.
“This added investment to the river will complement the mitigation and enhancements identified by the involved permitting agencies,” said Carl Brouwer, NISP’s program manager.
The dismissal triggers the first $5 million payment to the fund. Another $5 million will be paid when construction begins in 2026 and $7.5 million when the project is complete, likely in 2029 or 2030, Stahla said. Then payments of $7.5 million will be made annually for 12 years.
The payout schedule is similar to a $15 million settlement Northern Water reached in 2021 concerning legal challenges to its Windy Gap Firming project in Grand County. Northern partners have so far paid $10 million toward the Windy Gap deal. Another $5 million is due when that project is complete.
“It will take hard work to keep the Poudre alive”
When complete the multibillion-dollar water supply project will produce about 40,000 acre-feet of new water supplies to the 15 Front Range water providers. One acre-foot roughly equals the annual water use of two to three homes.
The extensive project will include several new pump plants, 50 miles of buried pipelines, and two reservoirs, Galeton Reservoir near Greeley and Glade Reservoir near Fort Collins. The project will also improve water diversion infrastructure, like headgates, on the Poudre River to help fish passage. These improvements will fulfill a requirement to send 30% of the project’s water downstream to help the Poudre River. A section of U.S. 287 will also be rerouted around Glade Reservoir.
Some of the construction work has already been done, like fish passage improvements at Watson Lake. Work on the remaining pipeline segments, the highway relocation and Glade Reservoir dam will begin in 2026. Galeton Reservoir construction will occur after Glade Reservoir is complete.
“The Poudre River is smack in the middle of one of the fastest growing areas of the U.S., and it will take hard work, creativity, and a lot of money to keep the Poudre alive,” Wockner said. “This $100 million is a strong step in the right direction.”
While the agreement sweeps away one of the largest remaining hurdles to the northern communities’ pursuit of NISP, some details remain to be settled.
Pipelines moving water through the system were initially planned to go under parts of Fort Collins, but city politicians rejected the plan and said they needed to pause decisions while they created a process for analyzing big infrastructure projects.
“We are evaluating alternatives that would allow us to avoid or minimize easements on Fort Collins open space, but those alternatives are not finalized,” Stahla said.
The district expects to begin installing some pipeline segments in Johnstown soon, he said, “before growth overtakes the route.”
Save the Poudre, which is allied with Save the Colorado and other environmental groups seeking to protect or restore river flows in the state, will continue fighting other big construction projects in legal actions that have delayed or significantly altered water rights development elsewhere.
A federal judge in 2024 agreed with parts of Save the Colorado’s opposition to Denver Water’s $531 million expansion of Gross Dam and Gross Reservoir in western Boulder County. The judge had ordered the parties to negotiate a potential settlement for mitigating more of the environmental damage from the construction project, which is massive and ongoing.
But the parties did not reach an agreement by the judge’s early December deadline, and they filed their separate proposed solutions.
Save the Colorado and an environmental coalition, who have tried for years to halt Denver Water’s expansion, want senior U.S. District Court Judge Christine Arguello to issue an injunction to stop the half-finished work while she further considers a solution.
Denver Water, meanwhile, wants the permit to stay in effect even though the judge ruled in October that the U.S. Army Corps of Engineers had erred in issuing it. Halting construction would threaten safety of the new dam and violate Denver Water’s agreements with the Federal Energy Regulatory Commission, which has oversight on the hydroelectric generating portions of the expanded dam, Denver said in its brief.
Briefs arguing for and against an injunction potentially halting further construction are on the judge’s desk and awaiting action, Wockner said.
Sun journalists Michael Booth and Dana Coffield contributed reporting to this story.
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