RWR Concept
THE RWR CONCEPT IS NOT A PRACTICAL ALTERNATIVE FOR PARKER WATER. This information is provided as an explanation of an option that has been pedaled to South Metro water providers and Douglas County.
RWR [Renewable Water Resources] is a group of speculators who acquired "agricultural" water rights in the San Luis Valley about 20 years ago for about $10 to $20 million and have been attempting to sell those rights to metro water districts since that time. Most recently an attempt to sell an obligation ($430 million) for Douglas County to acquire those rights, secured by a $20 million down payment failed after the county commissioned the DiNatali (PDF below) study of the costs and constraints of the concept. Note that the total capital cost of the concept would actually have been $1.6 billion had they exercised and built the project.
The most important point is that is a contingent obligation rather than an option.
"The County will pay to RWR a nonrefundable initial payment of $20 million (“Initial Payment”). The remainder of the purchase price based upon the discounted, fixed price per acre foot of water will be
paid by the Parties within 180 days of the final, non-appealable decree for the Water Rights......
In consideration for the Initial Payment, the Purchase Price for the water rights will be fixed at $18,500.00
per annual acre foot."
These rights were acquired as agricultural water rights, remain agricultural water rights and must go through water court at considerable cost and time to convert them to municipal water rights to be useful to a water provider. These rights purchased for an estimated $10 to $20 million would have been sold to Douglas County for $18,500 an acre foot or $425 million once RWR had then paid all costs to adjudicate the water for municipal use! In order to get through water court there must be a real justified (beneficial use rule) rather than a hypothetical demand.
Additionally, water court only conveys/defines the rights to such water as may exist on a property. Water court re-designation of water from Agricultural to Municipal use does not ensure that any physical water exists.
In Summary the deal would have been:
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Purchaser pays RWR $20 million for down payment on the water rights purchase.
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RWR pays unknown cost to get through water court to convert from Agriculture to Municipal use.
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Purchaser then pays RWR $425 million for water rights. *
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RWR has no further responsibility or risk that the water can't be permitted or removed from the valley.
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Purchaser then pays to battle the 16 show stoppers like getting a permit from Feds to drain water from under great sand dunes. DiNatale says "water court and permitting are potential fatal flaws." Buyer is at risk of $425 million water rights purchase and cost of navigating these 16 issues identified by DiNatale.
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RWR walks away with $445 (less cost of municipal water adjudication) million payday for $10 million investment!
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Purchaser would then expect to pay $1.2 billion more to complete the project.
* If water court decree is more than 12,000 acre feet but less than 22,000 acre feet purchaser is obligated to purchase decreed amount based on $18,500 per acre foot. However, cost to complete project and move that water to Douglas County would like still remain $1.2 billion. So, the cost per delivered acre foot would increase substantially.,
The analysis summary, page 26 and 27 of the DiNatali study, included sixteen points that establish the concept is not viable. Additionally, after release of this report, six counties that surround the San Luis Valley enacted 1041 actions to prevent San Luis Valley water from crossing their counties. If Parker Water were to opt for the RWR San Luis Valley concept and it actually could be built, based on Capital and Operations costs in the Douglas County analysis and our current SFEs served of 24,118, we would have to increase the monthly water bills by at least $500!
By Tunnels option:
By 285 right of way option:
Click on the PDF box below to see the entire DiNatale analysis/presentation of the RWR, San Luis valley purchase agreement presented to the Douglas County Commissioners. Pay particular attention to pages 26 and 27 as these pages detail sixteen major challenges, anyone of which would kill the project making the purchase of water rights worthless. Subsequent to the report, six counties surrounding the valley passed 1041 resolutions prohibiting San Luis Valley water from being transported through their counties.
Also Note pages 22 and 24 that point out capital cost of $1.6 billion and annual O & M of $45.2 million. Applied to Parker Water's current Single Family equivalent of 24,000 this would require an average increase to monthly bills of at least $500, making this an untenable solution for Parker Water or any other combination of sfe in Douglas County.
Combined these factors make the project DOA and any initial investment and sunk costs to mitigate the 16 potentially fatal issues worthless. Click on the PDF below for the entire DiNatali presentation.
To add a little perspective:
In the early 2000's, former Governor Bill Owens and organizer of RWR, became a board member of "Credit Bank of Moscow". In 2013 he became Chairman of the bank. In February of 2022, Russia invaded Ukraine, Bill Owens resigned from the Credit Bank or Moscow and Biden issued executive order forbidding loans from the bank. There is no way to know if RWR San Luis Valley water right investments were directly or indirectly financed by Credit Bank of Moscow or related Oligarchs. However, since February of 2022, RWR's Principals and their families have become very aggressive in attempting to unload the San Luis valley water rights--- aggressive enough to invest $32,000 in an attempt buy two Parker Water Board seats and contributed more than $60,000 to two 2024 Douglas County Commissioner campaigns. Unfortunately, puchase of elected board seats with the expectation that those candidates will spend your money to buy the speculator's water deal is not considered fraud in Colorado.
Click here for San Luis Valley Eco System analysis
San Luis Valley Eco System Video