Gross Reservoir Community Impact Fund

After the Federal Energy Regulatory Commission (FERC) issued a permit approving Denver Water’s plan to expand Gross Dam, Denver Water filed a lawsuit against Boulder County. Denver Water claimed that, because FERC, a federal agency, approved the expansion project, Boulder County could not use its local permitting authority to stop the project. The legal precedent related to the issue, including U.S. Supreme Court cases, supported Denver Water’s position. Rather than litigating a case in which the long-term outcome was likely to result in nothing for Boulder County’s environment or its residents, Boulder County negotiated a settlement that provides substantial mitigation measures. While no mitigation measures can fully offset the significant impact the expansion project will have on Boulder County and its residents, the settlement agreement was Boulder County’s best option given its legal inability to stop the project.

Denver Water had a strong legal case and the Boulder County stated that it was not going to be able to use its local permitting authority to stop the expansion project. This raises the question of why Denver Water would settle with Boulder County rather than simply waiting for a judgment from the court. In pursuing the expansion project, Denver Water reached agreements with other cities and counties, citing its preference to work with communities rather than have an adversarial relationship. For example, numerous western slope counties, cities, irrigation districts, water authorities, and conservation organizations decided to support the expansion project because of the Colorado River Cooperative Agreement (“CRCA”). Similarly, the City of Boulder and the City of Lafayette agreed to support the expansion project after Denver Water committed to establishing an environmental pool to enhance stream flow in South Boulder Creek during low flow periods. In addition to its preference for working with other Colorado communities, Denver Water was concerned about financial impact that potential delays caused by protracted litigation would have on the expansion project. The settlement removed the uncertainly related to the timeframe of the litigation.

Denver Water made numerous commitments related to the expansion project in the settlement agreement, including a $5 million resident mitigation fund, $50,000 per year for park rangers and other measures during recreation closure, easements for recreational trails, $5.1 million for use in acquiring new County open space, a transfer of 70 acres of Denver Water property to Boulder County for open space, $1 million for a habitation restoration project, $250,000 for a program aimed at minimizing the carbon impact of forest waste, and $1.25 million for a climate innovation/impact fund. The full settlement agreement is here.

All of Denver Water’s commitments are contingent upon Denver Water’s awarding a construction contract and the project proceeding to construction. Denver Water is required to fulfill most of its monetary commitments when Denver Water begins construction on the dam raise portion of the project (anticipated 2024). Boulder County has received the funding for the $5 million-dollar resident mitigation fund and will be working with Pinyon Environmental and the Gross Reservoir community to determine how best to distribute those funds directly to the impacted community.

The $5 million dollar mitigation fund its intended for use of households near the expansion project who will experience noise, light, and air impacts. The County will hire a third-party contractor with expertise in this area to work with the community to determine impacts, mitigation strategies, and make recommendations regarding fair distributions of the funds. The Commissioners have committed to a transparent process which will include community input into the distribution process.

Once the County has been able to assess all impacts and the County’s contractor has completed its evaluation of impacted households, the Commissioners will determine the process for the distribution of funds. A public meeting has been scheduled for June 29, 2023, for the Boulder County Commissioners to consider recommendations for Phase 1* funding from Section 2. of the Denver Water vs. Boulder County Settlement Agreement.

* Because Denver Water’s operational plan for tree removal around Gross Reservoir will not be available until 2024, the Boulder County Commissioners decided that tree removal impacts will not be considered in the first phase of funding (i.e., money from the full $5 million mitigation fund will be held back for a future round of funding once the tree removal impacts are better known.).

As a result, there will be two phases of funding. Phase 1 will distribute funding based on ongoing impacts from the full 7-year Gross Dam Expansion Project. Phase 2 will distribute funding based on impacts from the 2-year tree removal operations, specifically. The Working Group focused on developing recommendations on the methodology to distribute Phase 1 funding. They also developed recommendations on how much funding to retain for Phase 2 of funding distributions.