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PRPA to sell additional Windy Gap units as it pays for its share of reservoir construction costs

FORT COLLINS — In a few weeks, Platte River Power Authority hopes to have sold another five units of what it owns in the Windy Gap water project. The sale will provide cash to help PRPA pay its share of the construction costs of the Chimney Hollow Reservoir west of Berthoud, will help determine the current value of unfirmed Windy Gap units and place the electrical utility’s water portfolio on a footing that it expects to need once it eliminates coal-fired generation by 2029.

PRPA, a wholesale electric utility owned by the cities of Fort Collins, Loveland, Longmont and Estes Park, uses water in its power generation — for cooling and other needs at the Rawhide power plant north of Fort Collins and at Craig Station near Craig, Colorado.

PRPA owned 160 of the total 480 shares of Windy Gap, shares that it bought from Loveland (40), Fort Collins (80), and Estes Park (40). Longmont retained its 80 shares.

Heather Banks, fuels and water resources manager for PRPA, told BizWest in an interview that the utility prizes the Windy Gap water but doesn’t need all that it owns. In 2017, the Platte River board instructed staff to sell off 60 of its 160 shares in order to provide cash to pay reservoir construction costs and because once the reservoir is built it will have a solid, predictable source for water, unlike the Windy Gap project without storage now.

“That water is important to us because it’s a reusable water supply. We’re a zero discharge facility (at Rawhide). We had to have something that was fully consumable,” she said.

Water from Windy Gap “can be used to extinction,” water managers know. Water from the Colorado-Big Thompson project is not; initial users are expected to let used and treated wastewater flow downstream for secondary users.

In the case of Rawhide water usage, Platte River has a water usage agreement with Fort Collins, which sold its Windy Gap shares to PRPA. Fort Collins uses that water first, then sends the treated effluent to Rawhide for use in generating electricity.

The issue for Platte River has been reliability of Windy Gap shares, something that the reservoir is meant to remedy. 

“Windy Gap participants knew we would need to have some sort of storage. In normal years, Windy Gap worked well, but those are few and far between,” she said, noting that in wet years there isn’t room to store Windy Gap water in Lake Granby, and in dry years there isn’t water available to be pumped into Granby storage.

“When we were determining how much storage we needed, we determined we could go down to 100 Windy Gap units with the storage (in Chimney Hollow) and have the same yield as the 160. That’s the approach we took,” she said.

On June 21, PRPA published a legal notice seeking proposals to buy up to five unfirmed Windy Gap units. Proposals are due no later than Aug. 22, at which time the utility will review the offers and determine whether to sell to one or more potential buyers.

It set a minimum reserve bid of $3.8 million per unit, which means the five units will bring at least $19 million. Number of acre feet in an unfirmed unit of Windy Gap is variable. This year, because there’s no room to store that water, there would be zero acre feet in a unit. 

“We end up with more wet water available for use” once all 60 of its 160 units are sold and the reservoir comes on line, she said. Five are to be sold this year and five will be sold in the next three to five years, bringing the utility’s shares down to 100.

Platte River will need water to operate Rawhide through at least 2029 when coal-fired operations will be phased out in favor of renewable sources such as solar and wind. Beyond that, the utility is uncertain what it will need.

When asked to share scenarios that Platte River may consider for future power generation and water use, Banks said she was not prepared to answer.

“As we’re modeling the scenarios, they each have different water needs. With our current strategy, we’ll have enough water for whatever is needed,” she said.

PRPA also has water rights on the Yampa River in northwest Colorado that it uses for power generation at the Craig Station. Those rights are held in concert with other utilities that co-own the power plants there and those utilities are in discussions about the future use of that water.

As for water needs for power generation this year, when the C-BT reservoirs are full and unable to capture Windy Gap water, Platte River has been renting water shares from other entities in order to keep generating power.

It recently rented 150 acre feet of C-BT water from Fort Lupton, which had it available. 

“That’s a perfect example of not having storage. We pumped (Windy Gap) water last year and used it over the winter. We ran out this spring. In a perfect world, we would have pumped again this spring but Granby was full of C-BT water. So then we go out to rent water,” she said.

And in the complicated world of water law in Colorado, because Rawhide will fully consume what it rents from Fort Lupton, when that water is committed to secondary users downstream, Platte River will need to replace that water with Windy Gap water when it is available to pump again.

Source: BizWest