Firm Yield Not Best Measure of Cost for SDS

Some critics of the Southern Delivery System (SDS) are using incorrect assumptions to suggest the most expensive of the seven alternatives being considered is the best option for SDS. Here are the facts:

1. Measuring the Wrong Thing: They believe the most expensive option, the Downstream Intake Alternative, is “cheaper” because they assert the unit cost of water is lower. They base their claim on a calculation of the unit cost of water as measured by the “firm yield” listed for each of the seven alternatives in the Bureau of Reclamation’s Draft Environmental Impact Statement for the project.

Firm yield is not an accurate measure of how much water will actually be used. Firm yield is used to compute whether a potential option will provide enough water to meet our future water needs during inevitable dry years.

An analogy: You wouldn’t say a car with a big engine and lots of horsepower is “cheaper” than a less expensive car with less horsepower because the unit cost of horsepower would be lower for the car with the big engine.

What you want to know with your car is that there’s enough horsepower to do the job when you need it. Firm yield just tells us we’ll have enough “horsepower” – enough water in dry years – to meet our needs. You wouldn’t use your car’s horsepower to compute a unit cost for the miles you’ll drive over the time you use it. We don’t use firm yield to calculate a unit cost for the water supplied by SDS, either.

2. Firm Yield Doesn’t Measure Use: To achieve the unit cost calculated by the SDS critics, we would have to use every drop of firm yield available every single year.

Under the logic used to support using unit cost of firm yield, you would measure the unit cost of horsepower consumed over the life of your car on the assumption you would use all the horsepower available to you all the time. Available horsepower is not how you would determine the best value of a vehicle. Available firm yield is not how you would determine the best value of a water project, either.

3. The Participants’ Proposed Action is Less Expensive than the Downstream Intake Alternative: The estimated costs listed in the Draft Environmental Impact Statement for each of the seven alternatives considered is based on the cost of delivering the water we actually expect to use through 2046 – not the firm yield available for use.

As listed in the Draft Environmental Impact Statement, the Downstream Intake Alternative (Alternative 6) proposed by the critics would cost $732 million – 41 percent – more to build and operate than the Proposed Action. It would cost $558 million – 30 percent – more to build and operate than our second choice, the Highway 115 Alternative (Alternative 7) through Fremont that we propose to build if we can’t get approval for a pipeline from Pueblo Dam.

The operating costs for the Downstream Intake Alternative would be higher if we used all the firm yield available every year. These extra operating costs aren’t included in the calculations that were used to come up with the unit costs of water available as firm yield.

There are many more reasons why the Proposed Action is a better choice than the Downstream Intake Alternative. In addition to being cost effective, the Proposed Action is an environmentally responsible way to deliver water to Colorado Springs, Pueblo West, Security and Fountain.