FERC Additional Information Request

Summary

1. FERC issued an Additional Information Request (AIR) in August 2017 related to the license
application for the Lake Powell Pipeline, which was submitted in the spring of 2016. The
information requested on cultural resources was filed on October 11th. Supplemental
information on the projects financial feasibility and cost was filed on October 19th to allow the
project team to collaborate on the analysis with interested parties.
a. AIRs are a routine part of the FERC-managed environmental process.
b. FERC will require the state to file documentation associated with project financing at
least 90 days before the start of construction.
c. Additional information on project financing will be available when NEPA is complete and
factors such as the final alignment, mitigation requirements, timing of construction, and
final design are determined.
2. There are three primary mechanisms that can be used for project funding by the state:
a. Set-aside funds
b. Cash investments from project participants
c. Bonded debt
3. The project beneficiaries (the water conservancy districts in Washington and Kane counties) are
required to repay the state, with interest.
4. The state cannot expend any money on construction until project beneficiaries have contracted
for at least 70 percent of the water.
5. The Governors office is currently engaged in a detailed analysis of project funding, through:
a. Collaboration with the Executive Water Finance Board
b. Collaboration with the legislature via SB 251
6. The State of Utah is financially sound.
a. The State of Utah has a AAA rating from all three major credit agencies.
b. Utah was recently ranked #4 in the George Mason University Mercatus Centers Ranking
the States by Fiscal Condition report.
c. In its most recent credit opinion, Moodys Investor Service gave Utah a Aaa rating and
assigned the state a stable outlook, citing conservative fiscal management, improved
reserves post-recession, a closely managed debt portfolio, a diversified and growing
economy and a well-funded retirement system.
d. Earlier this year, Fitch ratings similarly affirmed the states AAA rating and stable
outlook, commending the states conservative fiscal and debt policies, noting the
expectation of continued economic growth, and similarly finding that Utahs long-term
liabilities are below average for a U.S. state.
e. The State of Utah carefully assesses all large infrastructure projects to be responsible
stewards of taxpayer dollars.
7. Washington and Kane County Water Conservancy Districts have several revenue options to
repay the project. The projected growth in Washington County, 350,000 new residents by 2065,
spreads and minimizes impacts on current citizens. Revenue sources that can be used to repay
the project include:
 a. User Rates
i. An increase of $1 per 1,000 gallons in Washington County, with an incremental
increase of 10 cents per year for 10 years, would result in $1.57 billion in
revenue by 2065.
b. Impact Fees
i. In 2018, Washington Countys impact fees are scheduled to increase $1,000
annually through 2026 to assist with the costs of facilities needed to serve
growth, including the Lake Powell Pipeline. Every $1,000 increase in fees yields
approximately $145 million in revenue through 2065.
c. Property Taxes
i. WCWCD is authorized to levy a tax rate of up to 0.1 percent; its current rate is
0.072 percent, leaving capacity of 0.028 percent.
ii. Aggregate assessed value is anticipated to increase from the $13.4 billion in
2017 to more than $168 billion by 2065; the resulting revenue potential through
2065 is just shy of $900 million.
8. Washington and Kane County Water Conservancy Districts are confident they can meet their
obligation to repay the state for any financing provided for the LPP.
9. The State of Utah and project beneficiaries are dedicated to collaboration, continued analysis
and ensuring that Southern Utahs communities, families and economies have the water needed
to thrive well into the future.