Federal Court Ruling on a Reservoir Expansion Could Have Big Implications for the Colorado River

A federal district court judge ruled last week that the U.S. Army Corps of Engineers violated the National Environmental Protection Act and the Clean Water Act when it approved expanding a Colorado reservoir. But a footnote to that decision is even more significant, experts and environmentalists say, with potentially far-reaching impacts on water management in the West and current negotiations to cut back use of the declining Colorado River. 

Since 2002, Denver Water, which supplies 1.5 million people in the Denver metropolitan area, has been seeking to expand the Gross Reservoir. Construction that began in 2022 and is expected to be completed in 2027 will add 131 feet to the reservoir’s 340-foot dam, allowing it to triple its water storage capacity and hold an additional 72,000 acre-feet of water diverted from the declining Colorado River—enough water for roughly 150,000 homes. 

The diversion of more water from the already over-appropriated Colorado River would threaten the wildlife that depend on the waterway and put the state at risk of violating the guidelines that regulate the river’s water supply, environmentalists have argued. Senior federal judge Christine Arguello agreed, noting that diverting more water from the Colorado River could result in forced reductions for the state. Any proposed new diversion must keep that risk, as well as reduced flows in the river due to climate change, in mind when pursuing new projects that would take more water out of the river, she wrote in her decision. 

“The cracked foundation of the Colorado River’s management system all but demands skepticism over any proposal that will affect the hydrology of the Colorado River basin,” Arguello wrote in the footnote of her decision. She added that the Army Corps did not adequately consider the possibility that the collection of states dependent on the river’s water could make a “compact call” that could cut the amount of water to projects like Gross Reservoir. “It is perplexing to this Court that the Corps dismissed the possibility of a compact call in its analysis of a proposed water management project,” she wrote.

The Colorado River Basin is regulatorily split in two, with the Upper Basin consisting of Colorado, Wyoming, Utah and New Mexico, and the Lower Basin composed of Arizona, California and Nevada. Under the 1922 Colorado River Compact, which divided up the river’s resources and is the bedrock document of how it is governed, the Upper Basin is required to allow the Lower Basin states’ allocation of water to flow downstream and then gets what is left over for its own use. Every 10 years, the Upper Basin is required to deliver 75 million acre feet of water (an acre foot is 325,851 gallons) to the Lower Basin—7.5 million every year. If it fails to send what’s required, the Upper Basin’s allocation could be cut in a compact call to ensure the Lower Basin, which has more senior water rights, gets what it is owed.

But the original compact measured the river’s flow during a series of wet years and overestimated what would actually be available in the river in the future. Today, years of overuse, combined with climate change, has left the Colorado River in dire straits, making the unthinkable—like a compact call—a possibility. The river that enabled the Southwest’s rapid growth and vital agricultural production is now declining in a megadrought, with its flows diminishing roughly 20 percent over the past two decades. The federal Bureau of Reclamation has reduced water allocations in recent years, paying users to conserve water, and the seven basin states, tribes and the federal government are in negotiations to cut even more. Meanwhile, cities and states are scrambling to find new water supplies. 

“What the footnote calls out is that the people planning projects need to be realistic about the fact that there may not be water to put in them,” said John Fleck, a water policy expert at the University of New Mexico School of Law’s Utton Center whose work on the Colorado River is cited in Arguello’s ruling. 

In the Upper Basin, some water users are racing to build or expand dams, reservoirs and pipelines to use more Colorado River water while they can. Unlike the Lower Basin, the Upper Basin does not yet use all of the water it is technically entitled to, as the region doesn’t have reservoirs as large as Lake Mead or Powell to store water, Colorado officials have told Inside Climate News previously. The states of the Upper Basin legally could use another 3 million acre feet, but experts and environmentalists say those are nothing more than paper water rights—meaning the water does not actually exist, given that the river is already over appropriated. Denver Water’s right to the water comes from a 1945 agreement, but the water has not yet been put to use. In Colorado, water providers can receive a conditional water right from the state’s water court, which allows them to potentially develop that supply in the future. 

“For 15 years, we’ve been telling the exact same story about how it’s insane to be further draining the river at the top in the Upper Basin, and then paying people in the Lower Basin— farmers, principally—to use less water,” said Gary Wockner, founder of Save the Colorado, the environmental group that’s led the push against the Gross Reservoir expansion as well as other diversion attempts along the river. “It’s a shell game and here we finally have a judge pointing out that taking more water out on the top of the basin could eventually trigger a compact call.”

Wockner said his group plans to cite the decision in other cases where users are attempting to divert more Colorado River water, and in public comments concerning current negotiations on the Colorado River. The system’s current operating guidelines expire at the end of 2026, and stakeholders are currently negotiating how to further cut back use, with the Upper and Lower basins each submitting their own separate plans for how to do that earlier this year. 

Major Decision, But Won’t Stop Reservoir Expansion

The court’s decision does not force Denver Water to stop construction, but orders the utility to meet with plaintiffs to agree on remedies for the project’s environmental impacts and notes that the groups have a right to relief from any damage caused by the construction. 

The court’s decision found the U.S. Army Corps of Engineers had failed to analyze the full impact climate change could have on the project and water supplies in the region, or consider a range of alternatives for the project that might be more environmentally friendly or better account for future needs. 

“Despite acknowledging that future climate conditions might neuter the Gross Dam’s value as a water storage solution, the Corps expressly declined to attempt to quantify the impacts of climate change—or even provide an educated guess, for purposes of discussion,” Arguello wrote. 

The project as permitted, she wrote, is reliant upon rain and snowmelt remaining “viable solutions” for filling the reservoir despite “the likely event that aridity worsens for extended periods of time,” which would affect rain and snowmelt in the region. “There can be no better example of arbitrary reasoning than this,” Arguello wrote. “The Corps’ refusal to provide even an estimate on future hydrology is indefensible, an abject violation of NEPA.”

Denver Water plans to continue pursuing the project.

“Denver Water looks forward to working through the legal process to address any potential remedies and move this critical project toward completion,” the utility said in a statement, adding that the project is “critical” to the region “ in an era of climate change.” 

Mark Squillace, a law professor at the University of Colorado Boulder specializing in natural resources, said the decision came too late and he’s skeptical negotiations between Denver Water and the environmental groups will find much common ground, given the solution to the project’s environmental impacts is keeping the water in the river. If the decision had come two years prior, he said, maybe it would have been enough to stop it. 

Denver Water, Squillace and environmentalists point out, has reduced water consumption over the years despite the increasing number of customers it serves, and there’s more water to be saved through conservation efforts. The idea of expansion and taking more water out of the river in an era of drought and cutbacks on the Colorado River, he said, is “crazy.”

“Why would you spend half a billion dollars on a new project to take more water out of the Colorado River when you know you’re going to have to give up some of that water?” he asked.

Broader Implications for Colorado River

Squillace doubts a compact call will ever happen, as the political risks are too high, and the compact itself is a “dead letter” based on an overestimation of the amount of water in the river that could be argued in court as making the agreement null and void. But the decision does call attention to the broader issue surrounding new proposals for water diversions in the Upper Basin, he said. In recent years Colorado, in particular, has argued it is owed its full allocation of the river and has the right to put it to use. 

“It’s kind of crazy to think that Colorado is somehow going to be able to get its full allocation of Colorado River water,” Squillace said. “The water’s just not there and they need to start being more realistic about what they can hold on to. We’re heading into a really bad situation if the states are all claiming that they’re entitled to more water.”

Even if a compact call won’t happen, that doesn’t mean the reservoir will be filled, as most models show that climate change will continue to diminish flows in the Colorado River over the next century. 

Fleck said the rhetoric in the Upper Basin claiming a compact call or other legal actions won’t happen puts the region’s water users at risk and leaves them vulnerable to insufficient planning and preparation for the impacts of climate change on the region’s water resources.

“The water’s just not there and they need to start being more realistic about what they can hold on to.”

— Mark Squillace, University of Colorado Boulder law professor

He’s hopeful the decision might influence the Bureau of Reclamation, the federal agency overseeing Colorado River operations, to model in the negotiations and decisions about post 2026 river management what a compact call’s cutbacks would look like. Meanwhile, Wockner, with Save the Colorado, said his group will submit new comments referencing the decision, especially concerning the need for more alternatives from parties other than the states themselves. 

“We’re not even allowed to be in the process to talk about what alternatives should be considered until after the water agencies themselves tell us what alternatives are reasonable,” Wockner said.