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sions, integrating conservation, efficiency, reuse, nonstructural approaches into water resources planning, rehabilitating existing facilities before building new ones, and probably bottom line, adopting water supply solutions that minimize harm to or create benefits for the environment, the economy, and the local communities.

As the panel knows, there are currently a number of water development proposals on the books or on the table that would involve Fry-Ark Project facilities, and TU's position on those projects depends on the degree to which they are developed in a smart manner. And it seems to us there are two things that the Federal government can help to assure that water development in the Fry-Ark area is smart. One would be to study the feasibility of a variety of means of meeting water supply, and the other is to study the impacts of water supply arrangements.

On the first point, both Representative Salazar's H.R. 1833 and Representative Lamborn's H.R. 2277 would authorize the Department of Interior to conduct a study of the most feasible method of meeting water supply demands in the Fry-Ark Project service area. TU is supportive of having the Bureau conduct such a study, but to ensure that the study is fully informed and actually results in smart water supply choices, we think it's important that the study look at a variety of options or combinations of options for meeting demand.

Looking at storage only we think is too narrow and is inadequate. What we have in mind is looking at these nonstructural approaches, like efficiency, water-sharing arrangements, conservation, either nonstructural approaches which can be less environmentally damaging and less expensive to build.

In addition to addressing a variety of needs of meeting demands, the other way the Federal government can help to assure smart water supply in the Fry-Ark area is to conduct a study of the impacts of various supply arrangements. Assessing the impacts of water development is the cornerstone of smart water supply. Therefore, Trout Unlimited is supportive of the provision of Representative Salazar's bill that directs the State of Colorado to conduct an impact evaluation.

One of the sets of impacts of the Fry-Ark Project results from the diversion of water from the Colorado Basin to the Arkansas Basin that are felt in the Colorado Basin. And as it's currently written in H.R. 1833, it is a little bit unclear as to whether those impacts would be addressed in the evaluation. We think that it's important they be addressed and we suggest that the legislation make that point clear, that you're going to be addressing the impacts felt in the Colorado Basin of diversions to the Arkansas Basin.

H.R. 1833 also must provide the impact study, which again would be conducted by the State of Colorado. The impact study is not a replacement for need for compliance. Before the Department of Interior and the Bureau of Reclamation takes action on any proposals related to the Fry-Ark Project, it must comply with NEPA, and in fact, given all of the changes to the Fry-Ark Project since it was authorized in 1962 and given all of the proposals for future changes to the Fry-Ark Project, we think that now might be an appropriate time for the Bureau of Reclamation to perform a programmatic environmental impact statement on Fry-Ark in general. This would be something in addition to the state analysis called for in H.R. 1833.

With that, thank you again for the invitation. I appreciate the chance to be here, and Trout Unlimited is anxious to participate in future conversations regarding H.R. 1833 and any other similar legislation. Mr. LAMBORN. Thank you, Mr. Peternell.

[The prepared statement of Mr. Peternell follows:]
May 29, 2007
United States House of Representatives
Committee on Natural Resources
Subcommittee on Water and Power
1324 Longworth House Office Building
Washington, D.C. 20515
Re: Fryingpan-Arkansas Project Field Hearing
Dear Representatives:

Please accept this letter as my written testimony in connection with the June 1, 2007 House Natural Resources Committee, Subcommittee on Water and Power field hearing regarding the Bureau of Reclamation's (“Reclamation's”) FryingpanArkansas (“Fry-Ark”) Project.

Trout Unlimited (“TU”) is a national, non-profit fisheries conservation organization with approximately 160,000 members nationwide and approximately 10,000 in Colorado. TU's mission is to conserve, protect and restore coldwater fisheries and their habitats. TU's Colorado Water Project works to maintain and restore stream flows for healthy coldwater fisheries and to increase meaningful public participation in decisions regarding water allocation. The Colorado Water Project and TU's Colorado membership are interested in the conservation and protection of the rivers and streams affected by the Fry-Ark Project.

The Fry-Ark Project is a Reclamation project that diverts water from the Fryingpan

River and Hunter Creek in the Colorado River basin for delivery to the Arkansas River basin. The project consists of a series of dams, reservoirs, diversion structures, pumps, pipelines and other infrastructure. Water is delivered initially to Turquoise Lake, near the top of the Arkansas River basin, and the terminal reservoir in the Fry-Ark system is Pueblo Reservoir, near the City of Pueblo. The project came on-line in 1975 and since that time has delivered an average of 55,000 acre-feet of water annually from the Colorado River basin to the Arkansas River basin for agricultural and municipal use.

TU is not opposed to water resources development. We recognize that water development is necessary to sustain Colorado's agricultural heritage and growing population. As outlined, however, in our 2005 report, Facing our Future: A Balanced Water Solution for Colorado, our support for new water development projects is contingent on the project being “smart.” Principles that undergird smart water supply include: making full, efficient use of existing supplies before increasing transbasin diversions; integrating conservation, reuse, water sharing arrangements and demand management into water supply planning; rehabilitating or enhancing existing infrastructure before building new projects; and adopting water supply solutions that minimize harm to, or create benefits for, the environment, the economy and local communities.

Water providers on Colorado's Front Range and eastern slope currently are planning for or recently have undertaken four new water development projects that rely on Reclamation's Fry-Ark Project facilities. The four projects are: • Reclamation recently issued a record of decision approving a 40-year contract

with the City of Aurora for exchange and storage of non-project water using Fry-Ark facilities. This contract facilitates the delivery of Aurora's Arkansas River water rights to Aurora's service area in the South Platte River basin. Many of Aurora's Arkansas River water rights were obtained through retire

ment of irrigated lands in the lower Arkansas Valley. • Colorado Springs is pursuing a project, known as the Southern Delivery System

(“SDS”), that would transport water through a pipeline from Pueblo Reservoir to Colorado Springs. The project could enable additional diversions of water from the Colorado basin to the Arkansas basin and could deplete the Arkansas River between the outlet of Pueblo Reservoir and the confluence with Fountain Creek—a reach the City of Pueblo and the U.S. Army Corps of Engineers recently spent millions of dollars to restore. Colorado Springs would exchange

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SDS wastewater effluent down Fountain Creek, potentially exacerbating the water quality and flooding problems on the Fountain which already are the sub

ject of a lawsuit between Pueblo and Colorado Springs. • Working with the Southeastern Colorado Water conservancy District

(“SCWCD”), communities in the_lower Arkansas Valley are pursuing the Arkansas Valley Conduit project. The conduit would deliver water from Pueblo Reservoir through a pipeline to cities and towns downstream in the Arkansas

Valley. The SCWCD is promoting a plan, known as the Preferred Storage Options Plan (“PSOP”), to enlarge Pueblo and Turquoise Reservoirs for the benefit of a number of eastern Colorado water providers. Depending on the operational details, PSOP could dramatically alter the environment in both the Colorado and Arkansas River basins.

TU's position on these and other water supply projects depends on the degree to which they are developed in a manner that is smart.

As a precursor to expanding Fry-Ark facilities as contemplated in PSOP, two separate bills pending before the House Committee on Natural Resources—Representative Salazar's H.R. 1833 and Representative Lamborn's H.R. 2277would authorize the Secretary of Interior to conduct a study of “the most feasible method of meeting the present and future water supply and related storage requirements within the area served by the Fryingpan-Arkansas Project...” An analysis such as this is a first-step towards planning for smart water supply. To ensure that the analysis results in smart water supply choices, however, the legislation should require that the study consider a variety of methods or combinations of methods of addressing water demand, specifically including water conservation, efficiency improvements, water sharing agreements and other non-structural approaches to supplying water and lessening water demand. The implementation of non-structural approaches could reduce or eliminate the need for new or renovated water diversion or storage facilities, which often are expensive, environmentally-damaging and culturally-disruptive. Any legislation authorizing a study of the feasibility of methods of meeting demands also should direct that the analysis account for demands for stream flows for environmental and recreational purposes and should require that Reclamation perform the study according to a process that allows for public involvement.

Smart water resources planning depends not only on evaluating the feasibility of a variety of methods of satisfying demands, but also on assessing the impacts of various water supply arrangements. Individually, PSOP and the other water supply projects being pursued could impact fishery and ecological resources. Collectively, the raft of projects could have broad impacts on the environment, especially when considered in light of other alterations to natural flow regimes in the Colorado and Arkansas River basins, including on-going Fry-Ark operations. Projects that transfer water from one location or use to another also can have significant economic, social and cultural impacts. Assessing these impacts and implementing measures to avoid them is a cornerstone of smart water supply. Together with the feasibility study called for in Representative Salazar's and Representative Lamborn's legislation, an analysis of the impacts of Fry-Ark operations would serve as the basis for smart water resources planning in the Arkansas basin.

Pursuant to NEPA, Reclamation prepared an environmental assessment to address the impacts of the excess capacity contract with Aurora. Reclamation also is in the process of preparing a NEPA environmental impact statement on Colorado Springs Southern Delivery System. But, neither Reclamation nor anyone else has prepared an in-depth analysis of the cumulative environmental, recreational, economic, social and cultural impacts of current and future Fry-Ark Project operations. Before agreeing to any of the pending water supply proposals that would rely on Fry-Ark Project facilities, and before committing federal dollars to expanding FryArk facilities, it is important that the cumulative impacts of Fry-Ark operations be evaluated. Section 3 of Representative Salazar's bill calls for the State of Colorado to conduct such an impact evaluation. Because Representative Lamborn's bill does not include a similar provision, TU supports H.R. 1833 over H.R. 2277.

One set of impacts of the Fry-Ark Project results from the diversion of water from the Colorado basin to the Arkansas basin. As currently written, H.R. 1833 creates some confusion as to whether the analysis contemplated in Section 3 would address these impacts. Section 3(a) of H.R. 1833 provides that the impact study is to evaluate the effects of water transfers from the Arkansas and Colorado basins to communities outside of those two basins. Section 3(b) is broader than Section 3(a), calling for evaluation of certain activities, such as exchanges and expansion of Fry-Ark facilities, that do not necessarily involve the transfer of water to areas outside the Colorado and Arkansas basins. The language of Section 3(a) should be expanded to be more consistent with Section 3(b) and to specify that the study is to address impacts in the Colorado basin of diversions to the Arkansas basin.

H.R. 1833 should also require that the State of Colorado conduct the Section 3 impacts study using a public participation process modeled after NEPA. In particular, TU is concerned that the public process include an opportunity to comment on the scope of the impacts study and on draft and final versions of the study document. Further, while the legislation should require that the state conduct the impacts analysis with the benefit of public involvement, H.R. 1833 should provide that the Section 3 impacts study is not intended to satisfy the requirements of NEPA as applied to any individual federal action related to the Fry-Ark Project. In fact, depending on the timing of the various proposed federal actions relative to the timing of the Section 3 impacts analysis, and depending on the scope of the Section 3 analysis, it may be necessary for the Bureau of Reclamation to supplement the H.R. 1833 impacts analysis with a NEPA programmatic environmental impact statement addressing Fry-Ark Project effects on the Colorado and Arkansas River basins. Thank

you for the invitation to provide this testimony. I look forward to the dialogue at the field hearing on June 1. Trout Unlimited also is anxious to participate in more detailed discussions regarding PSOP, H.R. 1833 or any other similar legislation. Sincerely, Drew Peternell Director and Counsel Colorado Water Project Trout Unlimited

Mr. LAMBORN. Mr. Treese.

STATEMENT OF CHRIS TREESE, MANAGER, EXTERNAL

AFFAIRS, COLORADO RIVER WATER CONSERVATION DISTRICT, GLENWOOD SPRINGS, COLORADO Mr. TREESE. Thank you, Mr. Chairman. My special thanks to the Chairwoman for not only this hearing, but your commitment to personal travels throughout the West to visit firsthand and hear from water users and water interests on the challenges of sustainability. Appreciate it very much.

I am the only Western Slope representative before you today, and I appreciate Mr. Udall's recognition that western Colorado is in fact a part of the Fryingpan-Arkansas Project, with corrections to President Kennedy, that is not just the source of water for the Fryingpan-Arkansas Project. And that was made clear in the authorizing legislation, western Colorado is part of the project.

In fact, western Colorado, from the headwaters of the Roaring Fork River above Aspen, including the Fryingpan tributary, all the way down to the Colorado River at Grand Junction, is specifically listed as part of the service area to the project. We do supply water. We also receive water and benefits from the project.

As a result of Colorado water law and Congressional leadership back in the 1950 and '60s, Ruedi Reservoir was constructed in western Colorado for the express purpose of addressing project impacts and ensuring that project benefits would accrue to western Colorado. Additionally through the Congressional authorization process, specific operating principles were adopted and incorporated by reference into Federal statute. I'd like to read into the record and for everyone's understanding the opening paragraph of these principles.

It says that, quote, the project contemplates, A, the maximum conservation and use of water; B, the protection of western Colorado water uses, both existing and potential, in accordance with the declared policy of the State of Colorado; and C, the preservation of recreational values. The Colorado River District calls for nothing more than a rededication to these original and guiding principles of the Fryingpan-Arkansas Project.

A couple other elements of those operating principles which I would like to call note to, one is the protection of stream flows on the Roaring Fork River above Aspen. Authorized in the original project was a second west slope reservoir; however, none was found feasible and none was ever constructed. The impacts to stream flows, however, continue to occur without any mitigation from such a reservoir.

To further protect the upper Roaring Fork River, minimum stream flows were included in the principles. These are not being met consistently with attendant impacts on stream health and local recreational opportunities, and they deserve attention.

Finally, I'd like to raise a looming issue of concern regarding repayment of Ruedi Reservoir. Ruedi Reservoir is a separately allocated feature of the Fryingpan-Arkansas Project for repayment purposes. There is no sponsoring entity like the Southeastern District for Ruedi Reservoir. At the time of authorization, Ruedi repayment was anticipated to come principally from a burgeoning oil shale industry and water service contracts to that industry.

That industry has not materialized, in fact, has not materialized after two booms and busts in the energy cycles. There are numerous critical water contracts from Ruedi presently; however, they are much smaller contracts, bringing in less than the annual revenues required for repayment to the Federal government. The result is a negative amortization on the project. And the combination of an increasing repayment cost, in fact, the original cost of the repayment cost of the project was about 17 million, is now well over $30 million, and we have less time in which to repay it. Repayment is due no later than 2019. The result is the cost of water, annual service cost of water, is increasing geometrically and will soon become cost-prohibitive well in advance of 2019.

I anticipate discussing this issue with the committee, Secretary of Interior and others who can help address this issue. It should also be noted that Ruedi, in addition to providing critical waters to west slope farms, cities and municipalities, is also a critical water source for water for the recovery of four endangered fish species listed under the endangered species act residing in the Colorado River.

The Colorado River District, my district, looks forward to working with this committee, the Congress, and all project interests to ensure sustainable water in the future. We need to honor first and then fulfill the past commitments, and then we can move forward toward the admirable and necessary goal of a sustainable water future.

Mr. LAMBORN. OK. Thank you, Mr. Treese.
[The prepared statement of Mr. Treese follows:)

Statement of Christopher J. Treese, Manager, External Affairs, Colorado River Water Conservation District, Glenwood Springs, Colorado

I want to thank Chairwoman Napolitano for this opportunity to share the Colorado River Water Conservation District's concerns and recommendations re

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