Northern Colorado Water Conservancy District moved to triple the yearly assessment for agricultural users by 2018, beginning with a 9 percent increase this year, though North Poudre Irrigation Co. users will be largely unaffected.
“It’s a fairly significant increase for agricultural users,” said Northern spokesman Brian Werner. “But we’ve been dipping into our reserves the last couple of years, and the board felt that we had to take a more fiscally responsible path.”
The Northern board in June set the 2015 assessment for a per acre-foot unit of Colorado Big-Thompson water at $30.50 for municipal and industrial users, up from $28, and $10.90 for agricultural users, up from $10. The board also approved a plan in which the rates will rise in 2018 to $53.10 for municipal and industrial and $30.20 for farmers.
The increase does not affect subject-to-change contracts or fixed-rate contracts, established between the creation of the water district in 1937 and 1959, when the district went to open rates. Today only one third of the district’s shares have a fixed-rate contract, which pay only a $1.50 a year assessment, but that includes all 40,000 C-BT shares owned by North Poudre Irrigation Company.
“We’ve really wrestled with these fixed-rate contracts,” Werner said, noting that while attorneys have been asked to take a long look at whether they could be changed, some fixed-rate contract holders have already threatened suit if the board takes such action.
At any rate, the hit on agriculture changes a long-held emphasis at Northern Water of trying not to price farmers and ranchers out of the market.
“We’ve always been focused on ability to pay, but now we are moving to more cost-of-service,” Werner said, noting the board attempted to come somewhere in between. “More than two thirds of our shares are now owned by municipal and industrial users, and they are yelling about why they are taking the brunt of the costs.”
Taking into consideration only the assessment cost, Werner said, the water is fairly inexpensive for agriculture, moving from about 6 cents per 1,000 gallons to about 16 cents through 2018. But after next year, the steep incline begins for farmers and ranchers, as in 2016 the rate will increase 61 percent, followed by a 61 percent raise in 2017.
And that may be just the tip of the iceberg, as the district’s future plans reveal a rate change through 2023 in which municipal and industrial users could be assessed more than $100 per acre foot and agriculture, $80.
Werner said the district has not been on an official hiring freeze, but has not replaced a number of positions during the last year. He said that increased environmental regulatory costs — including water quality and endangered-species work, as well as forest mitigation for watershed protection — appear to be the fastest rising costs at Northern.
For Colorado agriculture, however, the fastest growing cost is most probably water. A share of C-BT, with an average yield of 0.7 acre feet, is now selling for between $20,000 and $25,000, compared to $9,500 in January 2013, Werner said.