Some of the oldest water rights on the Colorado River may finally belong to water users on the Western Slope if the Trump administration doesn’t stall the funding first.
The U.S. Bureau of Reclamation awarded up to $40 million on Friday to the Colorado River District, which advocates on behalf of Western Slope water users, to put towards purchasing two water rights from Xcel Energy. The state’s largest utility uses that water to generate electricity at its aging Shoshone facility, nestled in Glenwood Canyon on the Colorado River.
“Securing the Shoshone water rights has been a priority of West Slope water entities and local governments for over 80 years,” said Kathy Chandler-Henry, the board president of the Colorado River District, in a statement.
Water cascading through the plant continues downstream, where it’s used for recreation, agriculture, municipal supplies and a federal fish restoration project. But dramatic equipment failures and rockfalls have shuttered the Shoshone plant for months, limiting how much water flows westward.
Western Slope advocates fear that the economy and the environmental health of the river will suffer if the power plant shuts down for good, or if the rights are auctioned off to someone else.
“This funding award is a huge step forward in what is a continuing effort, and we are thankful for the leadership shown by the Bureau of Reclamation in bringing these critical funds to West Slope communities,” Chandler-Henry said.
The announcement means Reclamation officials will begin negotiating a funding agreement with the district. It could still take years for the money to actually be transferred to the district to complete the deal.
In December 2023, the river district inked an agreement to buy from and then lease back the rights to Xcel Energy for $99 million, to use for as long as the plant is operating. But they also had to secure the funding to make the deal go through.
If it happens, the river district and state regulators would add permanent environmental protection to the Shoshone water rights — known as an “instream flow right" — so that a certain amount of water flows into the Colorado River permanently.
The $40 million award comes from a funding pool in the Inflation Reduction Act — President Biden’s landmark climate law — meant to mitigate the effects of drought in the upper reaches of the Colorado River basin. The river district has also secured at least $56 million in commitments from the state, local governments and other water users to purchase the rights.
But one consequential change occurred since Friday’s announcement: President Trump’s inauguration.
Executive Order pauses climate funding and introduces uncertainty
On Monday, President Trump issued an executive order directing agencies to pause distributing funding from the Inflation Reduction Act and the bipartisan infrastructure law, which also funded climate-friendly projects. The order is a first step in fulfilling a campaign promise to claw back climate funding from those laws.
On Tuesday, the federal government issued a memo that suggests the pause applies to policies or programs that discourage the use of fossil fuels in cars or for the nation’s energy needs. But the order still injects enormous uncertainty for career staff responsible for distributing federal funds.
“The memo indicates there’s a lot of confusion in the administration about where spending should continue, and where it should stop,” said Martin Lockman, a fellow at the Sabin Center for Climate Change Law.
The Inflation Reduction Act mandates that agencies, like the Bureau of Reclamation, spend the money appropriated to them under the law, usually by 2031. But the president has significant discretion in directing how or when that money is spent, according to Lockman.
“Frankly, we’re worried that the Trump administration has a lot of ability to stall spending, even if they can’t redirect it or cancel it entirely,” Lockman said.
Recipients of federal climate dollars, with signed contracts in hand, have the most secure funding, even though the Trump administration can delay or obstruct those contracts.
“People who have contracts in place have legal rights that are independently defensible,” Lockman said. “The federal government is required to fulfill its contractual obligations under those agreements. And there’s little that the Trump administration can do about that.”
Funding for projects that are still negotiating their contracts, like the Shoshone deal, is much more vulnerable to being blocked or delayed.
“That doesn’t mean there are no defensible rights here,” Lockman said. “Until the agreement is actually finalized, there is a lot more flexibility for an administration to negotiate around it in different ways, or even potentially block negotiations entirely.”
Still, the Shoshone project has strong bipartisan support from state and congressional lawmakers, and it may be politically infeasible to cancel funding that’s already been announced. In November, the river district said it had backup plans if their federal funding is cut, but would not say what they were.
The district did not comment on the executive order. The Bureau of Reclamation did not return a request for comment about whether it is continuing to negotiate its funding agreement.
On Friday, 15 other projects throughout Colorado were awarded funding for drought mitigation under the climate law.
“They’ll preserve historical Colorado River flows, help manage drought impacts on Upper Basin ecosystems, and improve water supply resiliency on the Upper Rio Grande,” said U.S. Senator John Hickenlooper in a statement.
Pausing funding injects uncertainty into projects that have begun, while it could violate agreements depending on their specific terms, according to Lockman. That might require recipients to eventually go to court
“Just because President Trump has signed this executive order directing agencies to do something, that doesn’t require agencies to violate their legal obligations under agreements,” Lockman said.
“But the law only exists when you enforce it. The process of figuring out where those boundaries are might take quite a lot of struggle and quite a lot of litigation.”
