Economists Question Lake Powell Pipeline Costs | KUER 90.1

Economists Question Lake Powell Pipeline Costs

Oct 29, 2015

Economists from three Utah universities say repayment costs for the proposed Lake Powell Pipeline would be way out of reach for water users in Washington County.

In a letter to Gov. Gary Herbert and legislative leaders this week, 22 economists question whether Washington County can really afford to repay more than $1 billion dollars in loans to build the massive water project.

“The answer’s ‘yes’,” says University of Utah economist Gabriel Lozada, one of those who signed the letter. “The costs could be paid back. But the implications for water rates and for impact fees would be quite dramatic.”

The letter summarizes an analysis that found every Washington County resident would owe up to $781 dollars annually over 50 years to repay the state loan. And impact fees could top $14,000

U of U economist Gail Blattenberger says supporters aren’t properly counting the costs to state taxpayers either.

“There’s a lot of camouflage about what things are going to cost,” she says, “and I think if we’re making big financial decisions like this, we should make them honestly.”

Meanwhile, project proponents say the economists are making faulty assumptions. Jeremy Aguero, financial consultant for the pipeline project, says supporters have looked in-depth at water rates, impact fees and property taxes.

“None of those analyses got even close to the level of magnitude that is set forth in that report,” he says, adding that the broader question about the project’s value to Utah isn’t getting appropriate attention.

The Utah Division of Water Resources plans to deliver the pipeline license application to the Federal Energy Regulatory Commission by December 1.