Fort Collins-Loveland Water District, intended to be the largest water buyer by far for a long-troubled $2 billion northern Colorado dam and pipeline complex, is dropping out of the project, officials confirmed Friday.
Northern Water, which is building the Northern Integrated Supply Project, or NISP, on behalf of 15 cities and water districts to supply decades of future need in fast-growing suburban areas, said it will continue business as usual and has not heard a direct cancellation from Fort Collins-Loveland.
Northern Water completed a $100 million environmental mitigation settlement with longtime opponents of the dam complex in February. Fort Collins-Loveland officials said at the time they were happy with the settlement and appeared committed to the project that spans the Cache la Poudre and South Platte River basins.
Fort Collins-Loveland had 20% of NISP, or 8,100 acre-feet, and was on the hook for at least $400 million — and growing — for its share of construction bonds and the environmental settlement. An acre-foot supplies the water needs of two or more average households in a year.
An official statement from Fort Collins-Loveland said officials are “currently evaluating whether to continue participating” ahead of important finance meetings in October. Fort Collins-Loveland district chief Chris Pletcher said in an interview Friday afternoon, “It’s not a final decision today, but if it were today, that would be our decision to not move forward” with NISP.
The district has been part of the plans for 21 years, at a cost of $34 million to date, but in the last few months, Pletcher said, the true cost and risk of the project has “reached a point of clarity.”
In recent meetings discussing financial guarantees needed to move forward, Pletcher said, the major spenders like Fort Collins-Loveland are being asked to risk unlimited costs with no promise of delivered water amounts.
“That’s not a deal any normal person would enter into. The risk is all put on the participants with no guarantee of any yield,” said Pletcher, whose district supplies about 60,000 people in Loveland and Fort Collins, Timnath, Windsor and Larimer County.
“The result of that was that the project was beyond our ability to not only carry financially, but the net unit cost of the water resulting from it was 50% larger than what our market can carry for buying new taps. Once we purchased it, we couldn’t sell it. That’s what changed over the past six months that was not apparent two years ago,” he said.
Northern Water says it will continue moving forward
Northern Water spokesman Jeff Stahla said the consortium will move ahead with plans for the initial phases of the sprawling project, which involves first relocating U.S. 287 out of a valley northwest of Fort Collins. That valley will be dammed to make the new Glade Reservoir, with water to fill it pumped in from the Cache la Poudre. NISP is fully permitted after years of trying, and construction of the dam and reservoir at Glade could begin in 2027 or 2028, Stahla said.
The project also includes a new reservoir east of Fort Collins for South Platte River water, called Galeton, and pipelines to exchange water rights and supply farmers and cities along the way.
“One thing I can tell you is that over the course of this project, there have been times when we’ve had communities stop participation,” Stahla said, while not addressing Fort Collins-Loveland actions. “Berthoud was one, they were initially part of the project and then chose several years into the project to drop out. So that has occurred.”
Fort Collins-Loveland said it may be willing to reconsider supporting NISP if Northern Water is willing to negotiate cost and water delivery guarantees, as well as water quality issues. But so far, Pletcher said, Northern Water has not asked for talks since he told the agency of his plans at a regular meeting.
“If there is a possibility of adjusting the project to something that has a different level of risk and certainty,” Pletcher said, they would be willing to listen. “We don’t see how we can move forward with it as it’s currently put together.”
The $2 billion price tag, of which Fort Collins-Loveland would pay 20%, is “without updated financing cost and construction change orders,” Pletcher said. “It would go up from there, potentially significantly. That’s what we’re wrestling with.”
Opponents of the project over the years have attacked the plans for taking more water out of the Poudre River through Fort Collins and opening the participating cities up to potentially huge costs as construction prices and financing fees rise. The nonprofit Save the Poudre fought NISP in court and through local government forums for years, before agreeing to the $100 million mitigation settlement this year.
“We are watching the situation closely and continue to have our eye on the best outcome for the river,” said Save the Poudre founder Gary Wockner.
Though Pletcher emphasized the decisions were separate, he said Fort Collins-Loveland has continued to expand other potential water supplies through a recent agreement with the private developer Front Range H2O. That company is developing an underground aquifer in northern Colorado that could hold excess surface water in wet years that Fort Collins-Loveland holds the rights to from the Michigan, Laramie and Colorado rivers.
“It’s comforting to know we are now under contract with Front Range H2O,” Pletcher said. “But we evaluated NISP on its own merits.”
There was at least one other “walkaway” issue with NISP, Pletcher said, involving water quality. In earlier agreements, Northern Water had promised to pipe clean Cache la Poudre water around the city of Fort Collins’ Mulberry wastewater treatment plant outflow. Though Mulberry treats sewage and runoff water, it is impossible for treatment plants to get rid of all the PFAS, microplastics and other contaminants from the waste.
If Northern Water didn’t divert its new supply until after Mulberry, Pletcher said, Fort Collins-Loveland would be taking on low-quality water.
“We feel like that’s a very significant issue for us, because we’ve made a commitment to our customers to maintain very high-quality water in our system,” he said.
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