Santa Fe may buy billions of gallons of bad water

By John T. Huddy, Journal Staff Writer

    City officials announced Thursday a proposal to buy several billion gallons of brackish water annually from the Estancia Basin south of Moriarty.
    The massive project with a price tag of $127 million— not including annual operating costs— would provide a huge boost to Santa Fe's water supply.
    City staffers insisted the brackish water can be treated to city standards through reverse osmosis.
    "We are sure the water is treatable and can be pumped into our system," city water director Galen Buller said.
    City officials said the project would produce about 5.6 million gallons of treated water a day— nearly enough to cover the 6 million gallons Santa Feans use on a typical winter day and about half what's needed to supply Santa Fe on dry, hot, high-usage summer days.
    The proposed system would also produce 800 gallons a day of brine waste, according to Thursday's announcement by Mayor Larry Delgado and top city staffers.
    The proposal is expected to go to the City Council next month.

Fulfilling promises
    "When each of us ran for council, we promised we would work to get new water supplies," Delgado said. "... If we don't get this water, I'm certain somebody else will."
    Proposals to supply Santa Fe or Albuquerque with water from the Estancia Valley— extending from near Stanley south into Lincoln County— have been kicking around for years. Concerns have been expressed about the impact such plans would have on area farmers who fear depletion of the water table. The cost of treating saline water has been an issue.
    In 2002, former state engineer Tom Turney rejected a businessman's application to pump water from the basin to Santa Fe, saying more information was needed on the geology of the basin and the effect of pumping large amounts of water from it. Another group submitted a similar application in 2003.
    City Councilor Karen Heldmeyer said the council has been discussing the plan in closed sessions.
    "I think what the council wants to do is throw this possibility open to the public," she said. "... It's a complicated deal and needs to be aired in the public and discussed.
    "On the plus side, it's a potential source of a lot of water. On the negative, it's very expensive and it's not clear what the environmental impacts would be."
    Delgado acknowledged the project would be expensive.
    "There's no way I can tell the residents of Santa Fe they won't be affected (financially) by this," he said, "that we won't increase water rates."
    Delgado supports the project. "How can we talk about annexation and development when we don't have the water?" the mayor asked, referring to the city's plan to annex more than 14,000 acres of county land.
    Last year, Santa Fe used 11,500 acre-feet of water from its wells and reservoirs. An acre-foot is equal to 325,851 gallons. In the Estancia Valley project, sellers are offering access to 7,200 acre-feet of new water rights.

Letting wells rest
    City officials emphasized Thursday that the new water would allow the resting of Santa Fe's current wells, which have been heavily pumped during the recent years of drought.
    The city would make the deal with Sierra Waterworks LLC of Moriarty, owners of an 8,702-acre farm near Estancia. Efforts to reach representatives of the company weren't successful Thursday.
    Sierra Waterworks "approached us about making a deal. Why they want to sell, we don't know," Delgado said.
    State Corporation Commission records show that a Sierra Waterworks Co. of Moriarty was incorporated in June 2003 to construct or maintain reservoirs, canals and pipelines, with John Cyle Sharp as president.
    Here are terms of the proposed deal as presented Thursday by Delgado and city staffers:
    The city would pay $27 million for 51 percent ownership of the 8,702-acre farm now used for alfalfa and grain cultivation. With the purchase, the city would also take ownership of 51 percent of the 7,200 acre-feet of water rights.
    Sierra Waterworks would retain a 49 percent ownership of the ranch and the remainder of the water. The company would annually sell, based on a fair market price per acre-foot, the 49 percent of its water rights to Santa Fe.
    City water engineer Rick Carpenter said the city "would have to figure out" what a fair market rate would be.
    The city would pay $6 million, to be applied to the total $27 million purchase price, to secure an option on the water and land. The option would be paid out over a three-year period at $2 million a year. If after three years the city decided not to go forward with the project, it could forfeit all or part of the option costs.
    The city would shell out an estimated $100 million for project infrastructure— a 65-mile pipeline stretching from the ranch north along N.M. 41 into Santa Fe, a water treatment facility to desalinate the brackish water pumped from the ranch's wells and required rights of way. Infrastructure costs would most likely be paid out with a bond over a 30- to 40-year schedule.
    The city would have an "undivided" interest in the water rights, meaning "the ranch owners with the other 49 percent couldn't just pick up that water and say, 'We're going somewhere else with it,' '' said assistant city attorney Kyle Harwood.
    Buller said that "there are risks" in getting permits for the project from the State Engineer Office. Officials there could not be reached for comment Thursday.
    Another major obstacle is the cost. The city is already working on a $120 million project to divert its share of San Juan-Chama water— water piped from the Colorado River basin for storage in Heron Lake— from the Rio Grande. The city plans to spend about $60 million for that project, splitting the bill with Santa Fe County and Las Campanas subdivision.
    The diversion project is scheduled to be on-line the first part of 2008. The Estancia Valley project would come on-line by 2010 or 2012. City officials said Thursday they will seek state and federal money to help pay for the Estancia Valley project.

Major concerns
    Heldmeyer said "the big issue" in the proposal is whether there is a sustainable water supply at the Estancia Valley farm. "That's what we need to talk about— how long it can produce and at what levels," she said.
    Other big questions, Heldmeyer said, are "what do you do with the leftover"— the waste brine resulting from the desalination process— and the issue of whether the state will allow pumping water from one basin to the other.
    Heldmeyer said the owners of the ranch have apparently not submitted any formal applications to the state engineer but have "run it (the project) by various people in the State Engineer's Office."
    Heldmeyer said there could be options for Santa Fe to sell water or buy water from other supplies along the route of the pipeline between Estancia and Santa Fe. "There are a lot of unknowns," she said.
    Harwood said the Estancia water would increase Santa Fe's ground-water right allocations— which now total about 13,500 acre-feet— "by at least 50 percent." Santa Fe has about 22,000 acre-feet of total water rights.

 Copyright 2004 Albuquerque Journal