The Associated Press August 24, 2011, 11:14AM ET

Vegas water pipeline could cost $15B, study shows

A proposed pipeline to bring groundwater about 300 miles from Utah and eastern Nevada to Las Vegas may cost as much as five times more than current estimates under a worst-case scenario provided to officials reviewing the plan.

Pipeline opponents claim the estimated $15 billion price tag is another "black mark" against an already controversial project.

Nevada water authority officials, however, argue the study -- which they were required to do as part of their application -- proves the project is feasible and that the biggest potential rate increase for water users is about $30 per month.

The study by Las Vegas-based Hobbs, Ong and Associates projects the pipeline could cost more than $7 billion to build. There would be an additional $8 billion in interest payments if the pipeline was funded with 60-year bonds.

Southern Nevada Water Authority spokesman J.C. Davis said the study was required to prove that the project could be completed under even the worst financial circumstances. That meant the numbers assume the authority will not generate any additional revenue from new users or earn interest income on reserve accounts.

"It's a planning exercise," Davis said.

The construction cost is more than double numbers commonly used by the water authority. Davis said the discrepancy is because the authority is estimating the cost using current construction prices while the study used prices as they're projected over the course of the next two decades.

Launce Rake, an environmental consultant working with opponents of the pipeline, said the increased price tag should cause significant concern.

"These projects tend to go massively over their budget," Rake said. "If the water authority is saying this is the worst-case, I would expect it to be even higher than these estimates."

The water authority has consistently underreported the actual costs, Rake said, so the study is really the first trustworthy overview.

"I'm very suspect of the numbers put out by the water authority," Rake said. "I have a lot more confidence in a study by an independent firm."

The project is currently being reviewed by the Bureau of Land Management, which is accepting public comment through early October. As proposed, the water would be brought to Las Vegas through allow the network of pipes and wells in basins in Nevada's Clark, Lincoln and White Pine counties, as well as in western Utah's Snake Valley.

The federal agency in June released a document detailing the environmental effects of the project, which would pump enough water to supply about 440,000 Las Vegas households each year.

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Josh Loftin can be reached at http://twitter.com/joshloftin


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