The Biden administration announced on Thursday that it set aside another $100 million for the Arkansas Valley Conduit, putting the total investment by the federal government at about halfway of the estimated $600 million project.

But some of the local water providers along the 130-mile pipeline are nervous about their share of the cost. 

The $100 million — the largest one-time federal allocation to date — comes from the bipartisan infrastructure law, the second tranche of funding for the conduit from that act, following a 2022 appropriation of $60 million.

The project’s first funding of $28 million in 2020, plus just over $20 million in funds from the 2022 and 2023 federal omnibus spending bills, added more than $48 million to the conduit’s funding. That brings the federal government’s investment to more than $208 million out of its total estimated share of around $400 million.

The state has so far contributed $100 million — $90 million in loans to the Southeastern Water Conservancy District, which manages the project on the state side, and another $10 million in grants. That covers about half of the district’s total share of around $200 million, part of which will be passed on to local water providers in the valley.

The Biden administration said Thursday that, through the Bipartisan Infrastructure Law, the U.S. Bureau of Reclamation is investing a total of $8.3 billion over five years for water infrastructure projects, including water purification and reuse, water storage and conveyance, desalination and dam safety. The Inflation Reduction Act is allocating an additional $4.6 billion to address the historic drought.

“In the wake of severe drought across the West, the Department is putting funding from President Biden’s Investing in America agenda to work to provide clean, reliable drinking water to families, farmers and Tribes throughout the West,” said Department of the Interior Secretary Deb Haaland. “Through the investments we’re announcing today, we will expedite essential water storage projects and provide increased water security to Western communities.”

Bureau of Reclamation Commissioner Camille Calimlim Touton said water is “essential to every community — for feeding families, growing crops, powering agricultural businesses and sustaining wildlife.”

Touton added: “Our investment in these projects will increase water storage capacity and lay conveyance pipeline to deliver reliable and safe drinking water and build resiliency for communities most impacted by drought.”

The pipeline that begins at Pueblo Reservoir and goes all the way to Lamar could serve as many as 40 communities and 50,000 people east of Pueblo. The conduit will supplement existing water supplies, which face state compliance issues because of salinity or radionuclide contamination. Most of the participants rely on groundwater and need a reliable supply of fresh water. 

The project was first approved by President John Kennedy as part of the 1962 Fryingpan-Arkansas Project but has taken decades to get off the ground due to funding issues. It broke ground last April.

Colorado’s two U.S. senators issued a joint statement lauding the latest round of funding. 

“Since my earliest days in the Senate, I’ve fought to ensure the federal government keeps its word and finishes this vital infrastructure project for southeast Colorado,” said U.S. Sen. Michael Bennet, D-Denver. “Today’s announcement marks the single largest investment in the Conduit’s history. I’m grateful to have helped deliver this new funding to provide safe, clean water to nearly 40 communities and 50,000 Coloradans along the Arkansas River.”

“Southern Coloradans have been waiting decades for clean drinking water. Now, thanks to our Bipartisan Infrastructure Law, it’s in our reach!” said U.S. Sen. John Hickenlooper, D-Denver.

Water providers worry about costs

But the cost to connect the pipeline through “spurs” to the local water providers is causing a little heartburn.

It’s not a small cost, either, even for the smallest providers, particularly the private ones. 

Norman Noe, head of South Swink Water Company in Otero County, which serves 620 residents, said the cost for South Swink to connect to the pipeline is based on population and is estimated at 1.21% of the amount borne by the Southeastern Water Conservancy District.

Noe said his company will have a seven-mile spur line just to get from the pipeline to the water company. 

The May Valley Water Association, a private water provider based in Wiley, northwest of Lamar, is the largest among the water providers in the valley where radium exceeds federal limits.

The May association has its own reverse osmosis water treatment station, one of the ways local families can get clean water in one, two, three and five-gallon increments — but as a stop-gap measure. The association has nine treatment plants, three booster stations and a storage capacity of 820,000 gallons to serve its 1,800 residents over 100 square miles. 

There’s been no “sign on the bottom line” paperwork sent out yet, said Rick Jones, superintendent of May.

His board is also concerned about those costs. Jones pointed out that most of what they pump is for agriculture, industrial use or feedlots, not human consumption. If May has to raise the rates — they charge $3.50 per thousand gallons and the conduit could add $4 to $7 per thousand — that becomes awfully expensive, Jones said. 

“How can our customers afford this?” Jones said.

As a private water provider, the company can’t access the governmental funding or grants from the state that could help pay for its share of the conduit, Jones said. 

The solution for those water providers, according to Jones, is to convert to a public water authority, which is being considered by his company, as well as others in the valley, which would give the association the ability to at least apply for some of those dollars.