Roman aqueduct redux

The North Valleys along Highway 395 may look like wide-open spaces to developers.

The problem? "Presently there are no water rights available," says Paul Orphan, engineering manager for Washoe County.

While existing demand in the Reno-Stead corridor stands at 4,000 acre-feet of water per year, he estimates future demand at 10,000 acre-feet per year.

Already, shortages mean developers can't move forward, he says. Residential, commercial and industrial they all stand by, waiting for someone to turn on the tap.

Vidler Water Co. wants to be the one. The Fish Springs project, formerly known as the Honey Lake project, aims to deliver 8,000 acre feet of water annually to the North Valleys later this year.

The $100 million project includes $80 million in construction costs for a 35-mile pipeline. Up to another $10 million went to litigation costs, with the remainder going to permits and studies.

But water rights in the North Valleys have sold in the range of $27,000 to $40,000 an acre-foot, so Vidler's water could be worth $215 million to $320 million.

A 4-million-gallon tank will store the water on Matterhorn Drive northeast of Stead on part of old Red Rock Ranch estate. The site was chosen for its elevation, allowing water to flow downhill toward development.

The Regional Water Planning Committee in 2002 endorsed the view that groundwater from Fish Springs would be the most economical source of supply.

But environmental challenges dogged the project for years.

"There have been delays," acknowledges Steven Hartman, corporate counsel, executive vice president, corporate development for Vidler.

Dorothy Timian-Palmer, Vidler's chief operating officer, says the delays have added to the price tag to be paid for the water.

Still in court is a challenge by the Pyramid Tribe that claims the pipeline water, once used and treated, will flow back into the Truckee River and end up in Pyramid Lake, ultimately degrading the overall quality of the lake.

Vidler says that's not an issue because Washoe County aims to reclaim all the water and use it to irrigate parks and golf courses.

"There are 9,000 pages of record," says Hartman. "Tribal members were here every step of the way." But Palmer predicts the lawsuit ultimately will make it to the Ninth District of the U.S. Court of Appeals.

While the litigation continued, the company watched steel prices climb 2 percent per month.

"Vidler took on $12 million worth of costs with no right-of-way, which was still tied up in litigation," Palmer says. "When Katrina devastated the Southeast, Sierra Pacific Power told Vidler it had better order all its generators now."

The company did, and sat on that equipment.

Another nagging cost was keeping the 9,800-acre Fish Springs Ranch viable. (Water rights must be kept in use.) Vidler bought the property with its water rights in 1999 from private ranchers. The ranch has pumped 5,000 acre feet each year over the past 20 years, says Palmer.

The ranching operation, Vidler found, was a money-loser.

"It was in a remote location which required running the ranch on diesel," Hartman says. "Mormon crickets come and eat it up. Lightning strikes the haystacks and burns up the feed."

Now that the water is no longer available to irrigate alfalfa, the company has planted in native grass and plans to run 700 head of cattle on the ranch.

Vidler finally started work on the pipeline in September to lay 35 miles of pipe welded steel coated in concrete and buried three to seven feet underground. A construction crew of 200 is employed on the project. Cultural observers from the Pyramid Tribe are also on payroll. To date, 15 miles of pipe have been laid.

The water will be sold to Washoe County, from whom developers buy water rights credits.

Palmer's background positioned her to jump the project through numerous hoops. She previously worked for the Natural Resources Conservation Service (formerly the U.S. Soil Conservation Service) and was director at Carson City utilities.

Hartman, meanwhile, had made a career of representing Western farmers and ranchers in their quest to win water rights.