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Infrastructure Investment for Rural America

Keeping Water on the Land

Location: Cucharas Reservoir No. 5, Colorado

 

 

Our Mission

WaterVault America’s mission is to own and re-develop water-related infrastructure in disadvantaged rural communities in Colorado to benefit our communities by creating jobs through restoration and preservation of irrigated agricultural land and renewable energy. 

We believe that public good is served by making impact investments that simultaneously achieve our commercial objectives and are socially responsible.

 

Our Infrastructure Assets

Huerfano-Cucharas Irrigation Company (HCIC) is the operating affiliate of WaterVault America, Inc. that owns our dams, reservoirs, canals, and water rights. The Company was registered with the Colorado Secretary of State as a mutual company on March 17, 1888.

It has served Huerfano County for over a century.

HCIC has grandfathered water assets that includes decreed, conditional and storage capacity water rights.

Decreed Water Rights (ac-ft)

Conditional Water Rights (ac-ft)

Storage Capacity (ac-ft)

Sustainable Investment Strategy

We maintain, rebuild, acquire, and construct water infrastructure to both capture and move surface water only. We do not invest in groundwater. We review aquifer depletion as an environmentally unsustainable form of the resource “strip mining.”

Water Storage

 Our storage assets are valuable and water infrastructure is in increasing demand. In order to realize on these assets we are required to rebuild the 1913 dam, which was damaged and razed in 2019. Subject to construction of the modernized replacement dam, we have legally decreed rights to store approximately 66,000 acre feet (acr-ft) of water. 

 

Water Transportation

We also own a distribution network of thirty-two miles of irrigation canals used to distribute water for agricultural consumption. This transportation represents an established low cost means of distributing water for localized use. We have identified additional opportunities to extend our transportation network by constructing more ditches and are evaluating pipeline opportunities.

 

Recurring Revenue Model

We are a pure-play infrastructure asset owner that derives our sources of revenue principally from lease payments from unaffiliated tenant users. We supply the infrastructure needed to get water to Southern Colorado farms that require access to water resources. We do not operate any agricultural properties we service with water.

Maps of Cucharas Reservoir No. 5

Our Approach to Sustainable Water

WaterVault’s water infrastructure approach aligns with critical needs identified by a lengthy public process.

Within the next few decades, even assuming aggressive conservation and the completion of dozens of water projects currently being considered, Colorado will face a shortfall that could exceed 500,000 acre feet.

The Colorado Water Conservation Board (CWCB) delivered Colorado’s Water Plan in November 2015 as a result of Governor Hickenlooper’s May 2013 executive order. The Plan is a comprehensive set of programs and projects that will help conserve and protect the state’s rivers and streams while beginning to address the gap between the demand for water and the water that is available.

Colorado’s Water Plan sets a measurable objective to achieve 400,000 acre-feet of municipal and industrial water conservation by 2050. 

The CWP report also identified that there is an acute risk to farmland. The state concluded that twenty percent (20%) of the farmland in the state is at risk of becoming fallow principally as a result of water depletion. Accordingly, the state has made storage and agriculture preservation priorities for its sustainable water plan.

Huerfano-Cucharas Irrigation Company

Huerfano-Cucharas Irrigation Company is the operating affiliate of WaterVault America, Inc. that owns our dams, reservoirs, canals, and water rights. The Company was registered with the Colorado Secretary of State as a mutual company on March 17, 1888. It has served Huerfano County for over a century.

 

In the 132 years since our subsidiary was formed as a mutual company Colorado has grown to be a prosperous state with strategic geography. It is not overstated that Colorado River water built the American Southwest and continues as a vital economic resource to United States prosperity.

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“To further understand water’s economic importance and its interconnected nature, it is helpful to focus on three areas of water use that form the core of the nation’s economy: energy production; water supply; and food production. These activities and their interactions form a major economic hub – an energy-water-food nexus – that accounts for more than 94 percent of off-stream water use nationwide.”

-EPA, United States Environmental Protection Agency

Colorado’s Water and Irrigated Farmland is at Risk

“Colorado’s Water Plan sets a measurable objective of attaining 400,000 acre-feet of water storage in order to manage and share conserved water and the yield of IPPS by 2050. This objective equates to an 80% success rate for these planned projects.”

– Colorado Water Conservation Board, Department of Natural Resources

Climate Change

Our infrastructure is critical to water management in an increasingly highly volatile environment where climate change has stressed reliable water provisions. Wet and dry years are more extreme than ever. We believe storage infrastructure is critical to smoothing the supply curve of available water resources during times of increasing uncertainty. Through smoother water supply management, we believe there is a substantial opportunity to preserve endangered agricultural land.

Irrigated Agricultural at Risk

Agriculture is both the largest consumer of water in Colorado and vital to the state’s economy and local communities. Due to the large volume of water used by this sector, large scale water conservation and efficiency efforts, and innovative water-sharing approaches must be goal to share at least 50,000 ac-ft of agricultural water for other uses, through voluntary agreements, know as alternative transfer methods by 2030. Without these efforts, it is projected Colorado could lose up to 20% (700,000 more acres)  of its irrigated agricultural land by 2050.

Storage

Colorado’s Water Plan sets a measurable objective of attaining 400,000 ac-ft of water storage in order to manage and share conserved water and the yield of IPPs by 2050. This objective equates to 80 percent success rate for these planned projects. 

Supply-Demand Gap

Colorado’s Water Plan sets a measurable objective of reducing the projected 2050 municipal and industrial gap from as much as 560,000 ac-ft to zero ac-ft by 2030. 

Colorado's Water Plan

The Colorado Water Conservation Board (CWCB) delivered Colorado’s Water Plan in November 2015 as a result of Governor Hickenlooper’s May 2013 executive order. The 567-page plan represents the collective effort and vision of thousands of stakeholders. This included dozens of state agencies, providers from each of Colorado’s eight major river basins, input from the nine basin roundtables, thousands of meetings, and over 30,000 public comments.

Visit Colorado State’s Office Site to learn more. 

 

Water Drives Land Values

In our dry high plains environment of Colorado, man-made irrigation systems and agriculture are symbiotic – they require one another. Land without water has nominal economic potential.  Our central investment thesis in water infrastructure is directly extendable to the acquisition of “dry” – or unirrigated – land and improving it.

We intend to improve land through bringing into it production by reintroduction of water resources through irrigation infrastructure.

"$743 billion in water infrastructure investment is needed in the United States."

 

– Enviornmental Protection Agency (EPA)

“Through these resources, USDA is committed to helping veterans in agricultural areas so we can strengthen the American economy and provide assistance for those who have served. Veterans and agriculture are just a great fit.”

 

– Sonny Perdue, United States Secretary of Agriculture

“…farmland has become an increasingly attractive investment for institutional investors. Real assets are attractive additions to investment portfolio because they are negatively correlated with equities and bonds, are a natural hedge against inflation, provide a source of current income, and have intrinsic value”

 

Yale University

Strategic Locale of Our Basin

“[v]eterans are over-represented in rural America…and can provide valuable and needed skills…[a] huge opportunity exists for rural communities to reach these key populations [of vets]…[t]he federal government must do a better job to…reach and serve veterans.”

– Sonny Perdue, US Department of Agriculture

Photo Credit: Wikipedia

Agriculture Dependence

Our river basin is approximately 1,600 square miles. We are overwhelmingly dependent on agriculture. The government’s Arkansas Basin Roundtable Implementation Plan refers to a finding of the Water Institute at Colorado State University that “agriculture contributed $1.5 billion [annually] to the economy of the Arkansas Basin.”

However, our basin is located in the high plains at the feet of the Sangre de Cristo Mountains. Atmospheric water is lost to the mountains leaving the basin relatively dry and sunny. We rely on snowpack melt waters to feed our rivers, which makes our storage assets that much more valuable for agriculture irrigation. Without storage there is not enough natural precipitation to grow crops. Our basin consumes much more than 100% of annual precipitation, and up to 500% of annual precipitation.

Strategic Resources

Because of our specific geography we possess two local resources that are valuable to our plan of operations: stored mountain water and retired service members. Our plan is to make full use of both to revitalize our community that has shrunk by over twenty-five percent (source: 2000 and 2010 US Census). The entire county of Huerfano is down to 7,000 residents with 3,154 residents left in our county seat of Walsenburg, Colorado. Our investments in infrastructure will lead to jobs that are needed in our community.

Investment Supercycle

Our business mandate is to participate in what we believe is the next super-cycle of water infrastructure investment in the US. Our opportunity is to intermediate the deployment of long-term capital into focused projects in Colorado. Fundamentals are favorable including the historical and projected trend in water prices due to scarcity and insecurity. Our opportunity is to benefit from these macro conditions for our good and the social good for our rural communities.

Presidential Executive Order 13790

We are in a super-cycle of capital investment in infrastructure from the public sector, including investment in rural America where we operate. The USDA recently issued a report the Office of the President from its Task Force on Agriculture and Rural Prosperity highlighting plans for inducing investment into rural communities. The USDA also announced a $4 billion commitment for 2019 to investment in water projects. Our plan is to utilize these financing sources to lower our cost of capital and to match the long-life duration of our infrastructure and revenues therefrom.

Public-Sector Support

WaterVault America is co-founded and majority owned by a purple heart decorated combat veteran – Iraq and Afghanistan. Our commitment to Colorado’s veteran community is in our DNA. We are fortunate to also be recognized under federal law and by Presidential Executive Order as a Service-Disabled Veteran Owned Small Business, or SDVOSB, that enables federal agencies to provide preferred financial assistance to aid us in executing our mission.

WaterVault has a compelling opportunity as an SDVOSB to engage with government to bring together Colorado’s veteran community with important infrastructure and agricultural progress for rural American communities.

Federal Support

The Trump Administration has substantially increased commitments to water infrastructure through federal contributions to the State Revolving Funds (SRFs). According to the EPA, in 2018 the federal government transferred $9.6 billion to SRFs for water infrastructure. The EPA states that since the 1987 creation of the SRFs over $170 billion has been invested in over 39,900 water projects.

Learn More about WaterVault America

Download our WaterVault America company brochure to learn more about the dynamics of our company and timely events and circumstances that shape our purpose and future.

  • Rural Economic Development Through Water
  • Our Approach to Sustainable Water
  • Our Infrastructure Assets
  • Strategic Locale of Our Basin
  • Water Drives Land Values