TELLURIDE – Few were present in the Telluride Town Council’s meeting chambers last Tuesday, Nov. 20, for perhaps the most momentous agenda item of the entire year – the unveiling of a pending comprehensive settlement agreement regarding the Bridal Veil water system between the Idarado Mining Company and the Town of Telluride.
If council approves the settlement agreement, which it anticipates doing at its next meeting on Tuesday, Dec. 11, it will put an end to a decades-long legal battle between the town and Idarado (Idarado’s parent company is the Newmont Mining Corporation) over the town’s water supply, and streamline the path toward constructing the new Pandora Water Treatment Plant, ensuring Telluride a plentiful municipal water supply well into the future.
Councilor Chris Myers waxed eloquent on the significance of the agreement.
“When we turn that faucet and clear, clean water comes out of the tap, it comes at a price,” he said. “‘Whiskey’s for drinkin’ and water’s for fightin’. Hopefully in a couple of weeks, some of those fights will be put to rest for a while.”
Telluride Town Attorney Kevin Geiger described the process of reaching the settlement agreement as “one of the more intensive engineering and legal efforts the town has ever undertaken.
“There were times when it was difficult, but to everyone’s credit we kept at it for resolution,” Geiger said. “We knew we had more in common and there were ways we could both receive benefit if we worked cooperatively instead of going our separate ways.”
The agreement addresses ways in which the Bridal Veil Water System can be improved and enhanced so that yield can be increased for the benefit of the Town of Telluride and Idarado.
One of the key issues it resolves is the timing of how the town can operate its projected Pandora Water Treatment Plant to meet the its demands and still be sensitive to environmental concerns Idarado continues to address with the State of Colorado, including keeping zinc levels in the San Miguel River at acceptable levels.
Basically, the town has agreed to take less water (.8 cubic feet per second, or about a half-million gallons per day) from Bridal Veil Basin in the winter months. This amount of water can be supplemented with water from its current municipal water treatment plant at Mill Creek, which has a maximum capacity of 1.5 cfs.
If the town’s demand is still not met, it retains the right to go back to Bridal Veil Basin to satisfy the rest of its demand. In the winter months, peak demand in Telluride currently spikes at about 1.1 cfs so the town would still be drawing 70 to 80 percent of its water out of Bridal Veil Basin.
“We felt that was a reasonable compromise,” Geiger said.
Idarado, meanwhile, has given the town greater flexibility to draw basically as much water as it needs out of Bridal Veil Basin to meet its summer demand which currently peaks at 1.9 cfs.
One of the benefits Idarado is offering the town in exchange for the timing restrictions is a million dollars’ worth of infrastructure improvements to maximize the efficiency of the historic Bridal Veil Water System, some components of which date back to the 1880s. Idarado has also agreed to assume full responsibility for maintenance of upper reaches of the system above the Bridal Veil Powerhouse.
Idarado is also allowing the town to incorporate a hydroelectric element into its new Pandora Water Treatment Project. Previously, the company did not consent to the proposed hydro design. Now, under the terms of the settlement agreement, Idarado has given a thumbs-up to hydro as a permitted use, and has also given authorization to combine its own water with the town’s, to double the amount of water going through the system and generate more electricity at no cost to the town.
The term of the agreement is 20 years, but after year 10, there are mechanisms in the settlement agreement to increase the town’s draw on water if it experiences a spike in demand. These mechanisms are not tied to Idarado’s zinc compliance issues.
“That’s an important point for the town,” Geiger said. “We are happy to talk about ways to time our flows for Idarado’s zinc issues, but we are not the body responsible for clean water, and it is not our regulatory obligation.
“We think we negotiated a very strong agreement for the town,” Geiger said. “We think it will enable the town to fully utilize our water rights into the future, for a hundred years if not more.”
The crown jewel of the Bridal Veil Water System is Blue Lake, a pristine mountain lake that is 330 feet deep and holds 6,000 acre feet of water. The water flows into the Bridal Veil Hydroelectric Plant via a network of historic pipelines, diversion and conveyance structures associated with the senior water rights that Idarado and the town now share at a ratio of about 60/40.
Telluride obtained extensive water rights in Bridal Veil Basin from the Idarado Mining Co. in the 1992 settlement of a lawsuit arising out of the contamination of wells in Town Park. Over the course of a decade of legal wrangling, the town won the approval to convert these historic industrial water rights to municipal use. These senior water rights, which include a portion of the tremendous water storage capacity of Blue Lake, enabled Telluride to eventually develop the Pandora Water Treatment System now under construction which is capable of delivering pristine mountain water to its citizenry.
In 2005, Telluride voters authorized the financing needed to pay for the Pandora Water Treatment System, by means of a $10 million bond, but the project has been held up by legal disputes between the town and Idarado ever since.
With the settlement agreement finally in place, the town plans to start building its new Pandora plant in 2013. Until the new system is operational, the town will continue to rely on its primary water source at Mill Creek near the Valley Floor.
“That plant was built in the 80s and has served us well, but it’s a direct flow diversion – all we are doing is taking water out of a stream,” Geiger told The Watch. “There is no lake, no storage system; you are at the mercy of how much water is in the creek system.”
Last June, during a severe drought system, the town was perilously close to maxing out this meager supply to meet its demand.
“If we had had a big fire during Bluegrass, it could have been a very dangerous situation,” Geiger said. “That’s the advantage of Blue Lake; it is a large vessel of water that is there if we need to call on it at a certain time.”
Nobody on the town council or staff seemed to know on Tuesday just how much the town has spent on the legal dispute with Idarado over the years. Mayor Stu Fraser said he “had heard a number given years ago, that over $1 million had been spent,” but added that he has “absolutely no idea of the cost.”
Councilor Thom Carnevale said he would like an accounting, which Geiger said he could provide at the next meeting.