District officials look at selling reservoir water to help offset limited tax revenue

Brent Gardner-Smith
Aspen Journalism
A canoe traveling near the dam that forms Ruedi Reservoir on the Fryingpan River, with evidence of falling water levels in the reservoir. The Colorado River District sees a potential market for selling some of the water it owns and controls in Ruedi for environmental purposes, by releasing the water to boost in stream flows in the Fryingpan and Colorado rivers.
Brent Gardner-Smith/Aspen Journalism

More water sales to cities and the energy sector from water in Ruedi Reservoir and three other Western Slope reservoirs are stagnant or declining, but the idea to sell water to increase flows in rivers for environmental purposes continues to hold promise.

Earlier this month, the Colorado River Water Conservation District during an industry workshop in Glenwood Springs gave an update on its financial outlook, which is challenged by the effects of two Colorado laws that put limits on property-tax revenue. District officials told their board of directors about the potential to increase revenue from additional water sales to offset the tax revenue.

Today, the district’s enterprise fund brings in $1.2 million a year from the sale of roughly a third of the 24,400 acre-feet of water it has available in Ruedi, Wolford, Elkhead and Eagle Park reservoirs.

But there does not appear to be much future demand for the district’s unsold water.

A recent exception to the trend at Ruedi Rerservoir near Basalt is a lease for water that the district signed in July with a state agency, the Colorado Water Conservation Board, for $229,000. In exchange, the district will ask the Bureau of Reclamation, which manages Ruedi, to release this year as much as 3,500 acre-feet of water from the reservoir.

Releases will be timed to boost instream flows in the Fryingpan River during the winter to prevent icing and to increase flows in the Colorado River later in the year to help preserve habitat for endangered fish in a 15-mile reach below Palisade. The Fryingpan flows into the Roaring Fork River in Basalt, and the Fork flows into the Colorado River in Glenwood Springs.

“There is a growing trend and acceptance for paying market rates for in-channel water,” district general manager Andy Mueller said. “Evidence is the 3,500 AF lease to the CWCB, as well as prices (that were) paid for various non-diversion agreements in recent years.”

The district owns 11,413 acre-feet of marketable water in Ruedi Reservoir, which holds about 102,000 acre-feet of water behind a dam on the Fryingpan River above Basalt. It has contracts to deliver to customers 5,263 acre-feet of water from Ruedi, leaving 6,150 acre-feet available to sell.

“Municipal entities that could benefit from either Ruedi or Wolford (reservoirs) water are already well-situated for the foreseeable future through existing Ruedi and Wolford contracts,” Mueller noted in a memo to the board of directors. “Energy demands are expected to remain modest or potentially decline as the principal use for our marketing pool by industry has been for frac water and ancillary uses. Again, absent some large-scale, industrial demand (historically, oil shale development), demands are expected to be flat.”

In Wolford Reservoir, the district has 8,100 acre-feet of water set aside for sales. Wolford is owned and operated by the river district and located on Muddy Creek, a tributary of the Colorado River above Kremmling.

The district has sales contracts for 3,038 acre-feet of water from Wolford, leaving 5,062 acre-feet available to sell.

In Elkhead Reservoir, on Elkhead Creek, a tributary of the Yampa River near Craig, the district has 4,457 acre-feet of water available for sale but has contracts for only 100 acre-feet of the water.

The district owns 432 acre-feet of water in Eagle Park Reservoir, which is on the upper Eagle River. Of that, 254 acre-feet is under contract, leaving 178 acre-feet to sell.

But according to Mueller, Wolford contracts have decreased since 2009 and Ruedi contracts have been flat or decreased since 2013.

Pointing to the Ruedi release, Mueller said the recommendation is the enterprise fund pursue ways to monetize its in-channel beneficial uses while preserving the ability to meet municipal and industrial demands as they arise.

Tom Gray, who represents Moffat County on the river district board, was bullish on the idea of using water stored in reservoirs to bolster flows in the state’s rivers as an alternative to drying up agricultural fields to do so.

“I think in all the basins there is going to be money for that,” Gray said. “I think there is opportunity there.”

Editor’s note: Aspen Journalism covers rivers and water in collaboration with The Aspen Times and other Swift Communications newspapers. More at