This new number is nearly double the previous $585 million price tag. With finance costs, the project would reach $3 billion - rivaling I-15 reconstruction in 2005-'06. If built, however, the pipeline would not receive federal subsidies as the freeway project did.
After hearing a one-sided version of the pipeline story in 2006, Utah's Legislature promised to issue bonds for the whole (then $585 million) project. The Legislature optimistically believed that the residents of Kane, Washington and Iron counties could repay the loan.
But last week's news casts a gloomy shadow over project financing. Fewer homes are selling in Washington County and the new price tag will cause all county residential and commercial water impact fees to double. For example, county water impact fees on quarter-acre lots will soon exceed $9,500. These higher prices will likely cause even fewer homes to sell and even more developers to go bankrupt.
The pipeline's new price tag - combined with a lack of federal funds and less-than-expected impact fee revenues - could drown Utah's bonding capacity even if the three counties could miraculously cover bond payments.
Every Utahn benefiting from Utah's AAA bond rating is on the hook and should be alarmed. This includes Gov. Jon Huntsman and trickles down to legislative leaders Sens. Curtis Bramble, R-Provo, and Mike Dmitrich, D-Price; Reps. David Clark, R-Santa Clara, and Brad King, D-Price; their legislative colleagues and every business leader and taxpayer interested in protecting Utah's "Best Managed" status.
Unlike transportation projects that can be repaired after a storm, the entire pipeline could fail. A water shortage would leave Lake Powell too low. A legal shortage caused by a Colorado River Compact "call" would limit Lake Powell's supply during sustained drought. Where would local residents or legislators find $3 billion (or more) then?
The pipeline is only one of many multibillion-dollar projects on Utah business and legislative leaders' radar screens. The Salt Lake Chamber of Commerce says the Wasatch Front faces a transportation funding gap of nearly $6.8 billion by 2015. Northern Utah's transportation priorities include reconstructing I-15 in Utah County, completing the Mountain View Corridor highway and adding four new TRAX light rail lines.
In 2015, southern Utah's pipeline promoters hope to begin building the 174-mile-long water conduit - potentially adding billions more to the funding gap.
Since the pipeline price tag has doubled in three years, what can Utahns expect in the next 12 years before construction supposedly ends? At this rate, should legislators prepare for costs, including interest, to exceed $6 billion? Does anyone honestly think southwest Utah's small population can pay $3 billion to $6 billion - an unprecedented sum for local taxpayers even in a strong economy?
What would our pioneer ancestors think of Washington County's current 330 gallons per-person per-day average water use? They would gasp at how far we've strayed from living within our means.
Modern Washington County pioneers, by returning to the historic value of conservation, are proving that 200 gallons per-person per-day is more than enough.
Since the Lake Powell pipeline is an all-or-nothing proposition, which is more important to Utah: essential transportation or expensive, unreliable and unnecessary water development?
It's time for level heads in the Legislature to get the rest of the story during the pipeline's Federal Energy Regulatory Commission licensing process.
Abundant untapped local water options in southwest Utah can support future growth without the pipeline through expanded development of local water supplies, moderate water conservation, improved efficiencies and wastewater reuse. Legislative leaders should ask state water officials to seriously study all viable pipeline alternatives with FERC.
Let's earn our "Best Managed" status in 2008 and study all affordable, reliable and relevant water options for southwest Utah - then choose one that makes fiscal sense for all Utahns.
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* PAUL VAN DAM is a former Utah attorney general and current executive director of Citizens for Dixie's Future (www.citizensfordixie.org). He lives in Ivins.
