Colorado homeowners and businesses are already planning for a brutally dry summer. They should also be planning for an expensive one, as Denver and other cities prepare to impose drought fees to encourage conservation and to buffer their budgets against millions of dollars in lost water sales as customers cut back.
This Fresh Water News story is a collaboration between The Colorado Sun and Water Education Colorado. It also appears at wateredco.org.
Denver, which announced Stage 1 drought restrictions last week, said its preliminary estimates suggest $30 million to $70 million in lost revenue as a result of restrictions. It has annual revenue of $488.5 million. Denver is Colorado’s largest water utility, serving more than 1.5 million people in the city of Denver and across the southern and western suburbs.
The agency said its surcharges will be designed to penalize high-volume outdoor water use, while keeping the price for drinking, cooking and bathing water unchanged.
Its surcharge prices, if approved by the board this month, will vary depending on how homeowners and businesses use water indoors and outside. A low surcharge for a conservation-minded homeowner who doesn’t do much, if any, outdoor watering might be just $7 per bill, according to the agency, but the drought fee could rise to $76 a month on a residential bill where outdoor water use is high.
Denver Water spokesperson Todd Hartman said via email that the agency will use a portion of its cash reserves to offset the lower water sales and other costs associated with the drought. It has also taken steps to reduce other costs, such as leaving job vacancies open longer.
Colorado experienced record-low mountain snows this year and a scorching hot spring, which has the thin snowpack melting sooner than normal. Reservoir storage is stable for this year, at roughly 80% of average across the state. But heavy water use could drain those reservoirs too quickly, potentially causing major shortages next year if this winter is as dry as last winter’s was, officials have said.
To protect reservoir storage, cities want customers to reduce water use by 10% to 20%.
They’re hoping the surcharges will help them reach those goals.
A “drought shadow” sometimes persists
Chris Goemans, a professor in the agricultural and resource economics department at Colorado State University, said the drought fees are an important tool in water conservation, and can have a lasting impact on water use if they go on for a long period of time.
For several years after the deep drought Colorado experienced in 2002, for instance, water providers saw a lingering “drought shadow” where users continued to tighten their spigots, even after the drought fees were removed, according to research by Goemans, and others.
“They can promote lasting change,” he said.
Not every city will use the fees. Colorado Springs has permanent three-day-per-week watering rules and does not plan to impose a surcharge, at least not this year, spokesperson Jennifer Jordan said. She said the city’s drought plan allows surcharges only when reservoir storage is below 1.5 years on April 1. Right now, the system has three years of water stored.
And Aurora has only used them once before, in 2023, but took them off almost immediately when big rains came, according to Aurora Water spokesperson Shonnie Cline.
Cline said the severity of this drought is forcing the city to gear up for unprecedented times.
“We always thought that 2002 was the worst possible year, but we are expecting something worse this year,” she said.
Castle Rock will impose surcharges, if its council approves them in the coming weeks, but it is taking a different approach because its customers live with a water system based on what are known as water budgets, according to Mark Marlowe, director of Castle Rock Water.
Its customers already are limited every year in how much water they can use during the lawn-watering season, an amount that is based on home and lot size. A small home with a small yard is allocated less water each year and typically has a smaller bill, than a large home with a large yard, which is given more water and pays a larger bill.
This year, Castle Rock will reduce everyone’s water budget. If homeowners exceed those lower budgets, they will be hit with a higher fee than normal.
To help offset that and keep its conservation message top of mind, Castle Rock envisions drought surcharges of $6.91 per thousand gallons initially and rising to $10.31 if the drought deepens, Marlowe said.
Is there any good news here? Maybe. City officials said if customers cut back as much as they are being asked to, say 10% to 20%, their bills might not change at all.
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