Funding's Available To Cover Lake Powell Pipeline Costs, Proponents Say
Proponents of the Lake Powell Pipeline say they’re confident they can raise enough money from southwestern Utah water users to repay any loans from state taxpayers.
Water-rate increases, impact fees and property taxes can generate $6.12 billion between now and 2065 to cover construction costs and interest — money that would be owed to state taxpayers who began chipping into a statewide water-development project fund three years ago. Constructing the pipeline is estimated to cost between $1.1 billion and $1.8 billion.
The proposed water pipeline would span half the width of Utah, drawing water from Lake Powell to serve fast-growing Kane and Washington counties.
The Washington County Water Conservancy District and the Utah Division of Water Resources shared the latest revenue projections last month with the Federal Energy Regulatory Commission (FERC), which is reviewing hundreds of comments that poured in last fall on the pipeline application.
John Fredell, program director for the Lake Powell Pipeline project, said the entire $6 billion won’t be needed. It’s just that regulators — and state taxpayers — should know that there is more than enough money available to cover the projected costs.
The revenue sources include $1.75 billion from incremental water rate increases that have already begun, according to a fact sheet on Washington County’s repayment options. Another $1.41 billion will come from increased property taxes as the county’s assessed value continues to grow. And impact fees, which currently amount to 2.4 percent of median home prices in the county, would gradually rise and generate about $2.96 billion through 2060.
“When you look at the total, incrementally, it’s not money that’s already being used for, say, operations and maintenance of the water system,” said Fredell. “It’s additional money to that.”
The St. George area is growing faster than any other county in the nation, according to U.S. Census Bureau data. By 2065, Washington County is projected to have 509,000 residents, more than double the current population. Meanwhile, data recently sent to FERC showed that demand for water is also expected to double by 2060.
Fredell says it’s too soon to detail financial plans for the Lake Powell Pipeline, because FERC is just starting its formal environmental review and the pipeline’s route hasn’t been chosen yet.
Critics say strong conservation would provide enough water to serve the region – without the billions of dollars in costs. Jane Whalen, who serves on the board of the conservation group Conserve Southwest Utah, says the revenue estimates are unsubstantiated.
“It just doesn’t add up,” she said of the $6 billion revenue projection. “We have a concern that it’s not correct, and it’s going to lead us down the wrong path.”