BERTHOUD — For the casual observer, it comes down to the math. How much is too much cost.
To proponents of the Northern Integrated Supply Project, it’s still about the water that will be made available to thirsty, growing communities of Northern Colorado.
A project first envisioned in 2003 and projected to cost $350 million will now begin construction in 2026, but its price tag has escalated 671% to $2.7 billion.
NISP includes two new reservoirs: Glade Reservoir northwest of Fort Collins that will require the relocation of U.S. 287, and Galeton Reservoir northeast of Greeley. It also includes pipelines and pumping stations to move water from the Poudre River into the reservoirs, and then back out to end users in its 15 partner entities.
The project will make available up to 40,000 acre feet of water per year and is divided into 40,000 shares. An acre foot equals 326,000 gallons or enough water for two typical families for a year. Fifteen partners — now down to 12 — share in the cost of the project and will pay $67,500 per share to cover the total project cost. The number of shares attributable to each partner varies from 8,100 for the Fort Collins-Loveland Water District to 500 shares each for Severance and Eaton.
As costs have escalated, some partners have begun to think again about the costs. The largest shareholder and the smallest have signalled their intent to pull out of the deal. Evans, at 1,200 shares, also intends to drop out. Together, the three utilities that plan to leave have 9,800 shares.
“… Escalating project costs have grown beyond what is sustainable for our community,” Evans Mayor Mark Clark wrote when he communicated the town’s decision to Northern Water. “The financial trajectory of NISP no longer aligns with the fiscal responsibilities we owe to our residents and customers.”
Since each share accounts for $67,500 of the total cost, the departing entities represent $661,500,000 of the $2.7 billion total. Somehow, that sum needs to be made up, either by increasing costs to the remaining shareholders, by reducing the project cost or by recruiting new partners.
The NISP map shows reservoir and pipeline locations. (Courtesy Northern Water)No panic yet
Jeff Stahla, public information officer for project builder Northern Colorado Water Conservancy District, also known as Northern Water, said the cost calculation isn’t as easy as completing a division problem. First, the district plans to wait to see if there are others who want to pull out. “We’ve extended this year’s contract to April 30, 2026, so the partners can gauge their interest,” he told BizWest in an interview. Each participant needs to re-evaluate interest based upon where future water sources might be found and at what cost.
Northern Water has assessed partner entities since the start of the project an annual amount based on costs incurred to that point and their share of the spending. Since 2004, Stahla said, $180 million has been paid by the 15 partners to cover engineering, legal and other costs. That amount is part of the overall $2.7 billion total project cost.
Departing entities may be able to recover what they’ve paid, if other interested parties join the project and agreements are reached, he said.
“The most optimal option is if shares can be sold to other interested parties,” Stahla said, and he was aware of two or three potential new participants. All participants are public entities, not private companies, to this point and he anticipates that would be the case with any new entrants.
Stahla said that the district “does not have a formal process to match up those who want to sell with those who want to buy.” He anticipates the district will have guidance on that by the end of 2025.
Scaling the project
Brad Wind, general manager of Northern Water, said the departing partners will not derail the project.
“Our board feels strongly that if we’re shy of the 40,000 shares being subscribed, it’s still important to build the project as envisioned,” Wind told participants at a BizWest CEO Roundtable discussion in October. “How we do that, time will tell. You just don’t downsize these kinds of projects and save that much money. If you build a dam, you’ve got to build the dam. Shaving five feet off the top doesn’t really reduce the cost of the project.”
Stahla said that the district is looking at points of scalability. “Glade doesn’t scale down. There’s little cost savings in making it smaller because we still have to move the highway.”
The cost of moving the highway is among the factors that have caused the project price tag to escalate, he said. The district has to compete with the open market for contractors, and growth in the region has made finding contractors more expensive.
Northern Water will still build Glade to its planned 170,000 acre-foot size, he said.
A smaller reservoir built between the Poudre and Glade, called a forebay reservoir, can be reduced in size. A forebay reservoir is a holding facility. Glade will be higher than the river, so water will flow into the forebay until it makes economic sense to pump the water up to Glade. Typically, electrical rates are cheaper at night, making it cost effective to hold water during the day and pump it at night.
Sometimes reservoirs are both forebay and afterbay; Lake Estes, for example, is an afterbay for the power plant there and a forebay for power plants downstream.
Stahla said that the size of Galeton Reservoir, originally planned at 45,600 acre feet, can be made smaller at the start and expanded later if needed.
While planned to be 40,000 acre feet of deliverable water per year, the project might be scaled back to 35,000 or 37,000 acre feet. Permits issued call for a 40,000 acre-foot project. Making it bigger would require new permits but making it smaller can be accomplished without reopening permits.
The district has rights to the water up to 40,000 acre feet, “and that comes into priority when there’s more than normal water in the river,” Stahla said. “We won’t get that much water every year, but when we do, we’ll be able to store it. If Glade isn’t built, there are people behind us in line who would get that water.”
Stahla said another cost consideration will be timing the sale of bonds for the project. “As bond prices go up and down, it affects the overall cost. Chimney Hollow (west of Berthoud as part of the Windy Gap Firming Project) was timed perfectly for the bond market,” he said.
Big year in 2026
While work to date has largely been in engineering, design and legal offices, in 2026 dirt will begin to move.
“We’re going into final design, and we want to take the project to the construction market next year,” Stahla said.
In 2026, the district will issue a Request for Qualifications and break the project in multiple bids, The Glade dam — to be a clay-core dam and not a bituminous core dam like the Chimney Hollow dam — will be one bid project. Pipelines will be another bid. An irrigation canal that now runs within the footprint of the Glade Reservoir will be converted to a pipeline and stay on the bottom of the new reservoir. Other pipelines will deliver water from the project to each of its participants.
The district has already contracted with Sema Construction Inc., a heavy civil contractor, to relocate U.S. 287. Sema is designing the new highway now.
“We have to move a power line to where the highway will go,” Stahla said, “so that will be the first (visible) construction in early 2026. In late 2026, construction on the actual highway will begin.”
Construction of Glade will begin in 2027 and take four years to complete. In 2031, the project will begin to “capture water.”
The NISP construction timeline. (Courtesy Northern Water)Litigation
Some have blamed litigation against the project for its escalating cost, and a $100 million settlement with the Save the Poudre environmental group has certainly contributed. Yet litigation was less of a factor than some might think, Stahla said. The settlement amounts to 3.7% of the project’s overall cost.
“We weren’t at final design yet,” he said, meaning that design was happening in parallel with lawsuits and therefore not a significant delay factor that would cause inflation to further escalate costs.
“Because we were able to settle and not go to court, it created certainty for us and for Save the Poudre. We were confident in our case, but settlement meant that the litigation was over.”
Under the agreement, Save the Poudre ended its 20-year opposition to the project and withdrew the lawsuit against the U.S. Army Corps of Engineers that it filed in January 2024 over the Corps’ issuance of a permit to NISP. The water district has committed to contribute $100 million over the next two decades to create a “Poudre River Improvement Fund” to benefit the river from the mouth of Poudre Canyon to its confluence with the South Platte River near Greeley.
The fund is likely to be held in trust at the NoCo Foundation — formerly the Community Foundation of Northern Colorado — and the NISP Water Activity Enterprise will pay into it, with the first payment of $5 million already made. An additional $5 million will be paid when construction starts, $7.5 million when the dam is complete and $7.5 million each year until 2042.
“It isn’t all paid out at once, so it becomes an annual operations cost,” Stahla said.
The money will be available for projects and initiatives designed to improve the river for recreational uses, wildlife, water quality and more. A committee composed of three people appointed by Northern Water and three appointed by Save the Poudre will determine where the money will be spent.
Other pending items
While the project awaits its final design, several other items are pending, among them permits from Fort Collins, which has objected to the placement of certain project components within the city. Stahla said the district is working with the city to reach agreements and has options to accomplish what it needs to make the water delivery work.
The district also is working with Larimer County on recreational aspects of Glade, where the situation is different than what happened with Chimney Hollow.
With Chimney Hollow, the district and county jointly bought the property for the reservoir and the land around it. The district has control of the reservoir and the county has control of the recreation around it, which will include only daytime use, not camping. Motor boating is not permitted on Chimney Hollow.
With Glade, the decisions yet to be made could include recreation similar to what exists around Horsetooth Reservoir west of Fort Collins. There, camping along the shore and boating on the reservoir are permitted. With Glade, Northern Water will control the land around Glade and may contract with an entity to operate it. The county will have a say in surface activity on the reservoir. Glade and its surrounding land totals 770 acres.
Stahla said the district doesn’t expect any surprises as construction gets underway. He said the Glade footprint does include evidence of native people — teepee rings, for example, but not villages or town sites. The Overland Trail ran through the site. All that is being documented.
But what about Haystack?
Haystack is the large rock along the west side of the current path of U.S. 287. Over decades, it has been painted by fans of Colorado State University and the University of Wyoming — fierce competitors on the gridiron and basketball court. The rock is within the footprint of Glade.
There are no plans for the rock, Stahla said. “Speaking for Jeff Stahla, and not the district, I hope we can do something with it.”
“Something” could include sealing it and leaving it in place for scuba divers to find. Or, perhaps the estimated 200-ton rock (who knows how much of it is underground) could be moved to a visitor center.
“We’ll need to talk to the contractor when we get started,” he said.
This article was first published by BizWest, an independent news organization, and is published under a license agreement. © 2025 BizWest Media LLC.
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