Pipeline project cost increased

By Jack King: Freedom Newspapers

The board of directors of the Eastern New Mexico Rural Water Authority voted Wednesday to raise the official cost of the Ute Pipeline Project by $52 million.

A peer review of the conceptual design of the project estimated that its total capital cost should be estimated at $296 million, instead of the $244 million the conceptual design originally estimated.

On a motion by Roosevelt County representative David Sanders, the board voted to raise the amount of money it is asking Congress to authorize for the project to the higher figure.

“We can’t afford to ignore the difference in these figures,” Sanders said.

The authority is planning to ask the federal government to pay for 80 percent of the project and will go to Congress for authorization in January or February, officials have said.

Robert Jarnis, of Jarnis Environmental Consulting, head of the team of engineers who performed the peer review, told board members his team believes they should increase estimated costs of construction and operation and maintenance and should spend money not yet budgeted on extended start up costs, rechlorination, energy recovery and a new substation in the Logan area.

But Jarnis told the board the Ute Pipeline Project design is basically sound and the project will do what it is intended to do. He also said his team did not include cost-saving methods in their report. However, the project should be able to save money through such measures as transferring to suppliers electric energy generated by project water and not using a softening process on project water, he added.

The conceptual design includes water softening in its budget, but water now used by most communities in the project is “hard water;” that is, water with a high-mineral content.

Not softening the Ute Lake water could save $15 million from the project’s capital costs and between $4 and $5 million in operating and maintenance costs, he said.
Program Manager Scott Verhines said he has not yet completed arrangements for a water rate study of communities in the project.

A water rate study will be part of helping communities decide about their ability and willingness to pay for the project. Congressional representatives have said resolutions from communities attesting to their ability and willingness to pay are an important part of the authorization process.

U.S. Bureau of Reclamation representative Miguel Rocha said, even before the new project cost was figured, many communities faced steep price tags.

“Grady’s share of the project’s cost is estimated to be $49,000 a year, while its ability to pay is estimated at $20,000 a year. In an extreme example, Elida’s share is estimated to be $295,000, while the ability to pay study says they can only afford $40,000 a year,” he said.

“What I hope the water rate study does is bring communities’ costs closer to their ability to pay,” he said.

Portales Mayor Orlando Ortega said the board is in the process of working with each community on a rate structure.
“All this stuff from the Bureau of Rec about ability and willingness to pay is one thing,” said Clovis Mayor David Lansford. “But you have to compare that to the cost to the region of doing nothing.”

In other business:

• Ortega, director of operations for Portales public television station KENW TV, announced the station will broadcast a panel discussion on water issues in eastern New Mexico, titled “Just Add Water,” at 8 p.m. Jan. 15. The board is asking Lansford, State Engineer John D’Antonio, Eastern New Mexico Council of Government director Lee Tillman and a Congressional delegate to serve as panelists, he said.

• Verhines said the state Water Trust Board has selected the Ute Pipeline Project as one of 16 water projects it will submit to the Legislature for funding in the next year. The board is requesting $1.5 million for the project. Also, $2 million the state has reserved for the project will be held by the New Mexico Finance Authority and the project can request it early next year, he said.