Bureaucracy retains Feds’ $140m for Colorado River drought relief.

Federal Funding for Western Slope Water Projects Hangs in the Balance

About $140 million in federal funding that was earmarked for Western Slope water works in Colorado is stuck in a bureaucratic holdup, despite pleas from the state’s congressional delegation. The funds were allocated to 17 projects under the Inflation Reduction Act’s drought mitigation grant opportunity for the Upper Colorado River Basin during the final days of President Joe Biden’s administration, almost 16 months ago.

Discrepancy over Fund Disbursement

The allocation included $40 million to the Colorado River District for the acquisition of the Shoshone water rights, the most significant and oldest non-consumptive right linked to the hydropower plant in Glenwood Canyon on the Colorado River. However, three days post the announcement of these grants, President Donald Trump ordered all federal agencies to “immediately pause the disbursement of funds appropriated through the Inflation Reduction Act” as part of his Day 1 order: “Unleashing American Energy”. Most of the funds remain frozen since then, with only two projects in the Orchard Mesa Irrigation District in Palisade receiving their released funds in June by the U.S. Bureau of Reclamation.

Representative Jeff Hurd, who represents Colorado’s third district encapsulating the Western Slope, expressed his concern over the delayed release of funds. He stressed the urgency of the situation due to the current conditions facing Colorado in general, and western Colorado in particular. “I am continuing to press hard for clarity on timing and next steps because those projects were awarded for a reason and the need has not gone away,” he stated.

Congressional Appeal for Fund Release

Hurd, along with all members of Colorado’s congressional delegation, appealed for the release of the remaining funds by writing to the top officials at the U.S. Department of the Interior and Bureau of Reclamation in August. Hurd has been engaging at multiple levels to address the issue and said, “I’ve raised it directly with the president. I’ve raised it directly with the acting commissioner of the Bureau of Reclamation, the Secretary of the Interior, the undersecretary at the Department of Interior.” He emphasized the urgent need for these projects and warned against further delays in their implementation.

Faced with roadblocks due to bureaucratic reasons and political maneuvering, Hurd remained determined, comparing his efforts to that of a river. “When water meets an obstacle, it either goes around it or wears it down,” he said.

Colorado’s Drought Mitigation Needs

The Inflation Reduction Act provisioned $4 billion for drought mitigation, from which the Bureau of Reclamation’s Upper Colorado River Basin System Conservation and Efficiency program, or the Bucket 2E funding, was also supposed to benefit. In January, under Biden’s administration, the Bureau allocated a total of $388.3 million to 42 projects on tribal land and in Upper Basin states, including $152 million for 17 projects in Colorado.

The Colorado River District, which serves 15 Western Slope counties, was promised the largest award of $40 million. This amount forms a significant portion of the $98.5 million required by the River District to acquire the Shoshone water rights from Excel Energy. Alongside the frozen federal dollars, the River District has raised $57.2 million from the state Legislature, its board, and various Western Slope municipalities and utilities it serves.

Impact of Withheld Funding

With the funds in limbo, the Colorado River District is continuing to take necessary steps to acquire the water rights. It entered into an instream flow agreement with the Colorado Water Conservation Board in November, ensuring that flows tied to the water rights will remain in the Colorado River regardless of the hydroelectric plant’s future. The River District and Xcel Energy have also jointly filed an application in water court, with the final determination resting on the court’s rulings.

The severe drought affecting the entire state has further escalated the urgency of the funds. The Colorado River, the lifeline of the state, is expected to receive only about one-fifth of its normal water from the basin. In response to the worsening conditions, Colorado Governor Jared Polis activated the state’s drought task force in March. As a result, various local water providers and municipalities have started implementing restrictions to conserve the limited water resources.