Skip to contents
Environment

Controversial Chimney Hollow Dam project near Loveland moving forward after $15 million settlement

Northern Water will begin construction of the 25-story Chimney Hollow dam this summer.

View of a creek bed and the Flatiron Penstocks from the Chimney Hollow Reservoir area. When completed around 2026, the Chimney Hollow Open Space Public Recreation Area will be the largest reservoir in the state for non-motorized boating. (Valerie Mosley/Special to the Colorado Sun)
  • Credibility:

A complex Front Range dam-building project that includes transferring water from the Colorado River will move forward this summer after Northern Water agreed to a settlement putting $15 million in trust for waterway improvements in Grand County. 

Environmental opponents begrudgingly accepted the mediated settlement of their lawsuit against Northern Water’s Windy Gap Firming Project, which involves a menu of waterworks construction including Chimney Hollow dam near Loveland and rerouting the Colorado River around Windy Gap Dam near Granby. 

The settlement resolves litigation in the federal 10th Circuit Court of Appeals, and Northern Water said it now can begin construction of the 25-story Chimney Hollow dam this summer. The dam will plug the northern end of a dry valley northwest of Carter Lake. It will eventually be filled using Colorado River rights purchased by municipalities that are members of Northern Water. The Northern Water rights can be tapped only when Grand County is wet enough to supply other, higher priorities first.

Northern Water hailed the settlement and said it is eager to move forward on years of construction. It is still pursuing final approvals for a separate major project, using Cache La Poudre River water and water exchanges to fill two proposed Front Range reservoirs, called Glade and Galeton.

“This settlement shows there is an alternative to costly litigation that can provide benefits both to the environment in Grand County and the Colorado River, as well as acknowledging the need for water storage,” Northern Water General Manager Brad Wind said in a written statement.

An alliance of environmental groups opposing the project wants to stop any more transfers of Western Slope water, which would ordinarily flow west in the Colorado River, to Front Range reservoirs that supply growing Colorado cities and suburbs. 

In the case of Chimney Hollow and Windy Gap, the environmentalists say damage has already been done to the Colorado River in Grand County, and the settlement can help them reverse some of the hurt. 

“While we’re disappointed with the district court’s ruling, we’re pleased to have extracted this $15 million settlement from Northern Water, which will allow the Grand County community to mitigate some of the impacts of this reckless dam project,” said Daniel E. Estrin, general counsel and advocacy director for Waterkeeper Alliance. “Climate change and severe drought should serve as a stark wake-up call to the 40 million people in seven states and two countries who depend on the Colorado River for their water supply. The basin’s communities and ecosystems can ill afford these unsustainable water grabs. We stand with our fellow conservation groups in continuing to oppose new diversions from the Colorado River basin.”

Windy Gap Reservoir is key to a complex series of waterway projects that will now move forward after a settlement between Northern Water and environmental groups. Northern Water wants to rebuild the damaged Colorado River channel around the dam and reservoir here. (John Fielder, Special to the Colorado Sun)

Gary Wockner, of Save the Colorado and Save the Poudre, said the $15 million settlement holds no “miracles” compared to the $2.5 billion value he places on the water being transferred to the Front Range, but it may fund some valuable projects on the river. “This is not a win or a victory, but rather a minimally cushioned severe loss for the future of the Colorado River and rivers in the West,” he said. 

The $15 million will go into a foundation and is new money, not credit for previous work done to improve the Colorado River corridor. It can be used only for waterway projects in Grand County, Wockner said. 

The settlement projects themselves are likely to be controversial. Northern Water says it will reroute the Colorado River channel around Windy Gap Reservoir to restore food supplies and migrating paths for trout, but some environmentalists have warned about creating another sterile, human-made channel. 

The Northern Water Municipal Subdistrict Board voted 10-1 Wednesday to participate in the settlement. A federal district court had rejected the environmental groups’ challenge of permits for the Windy Gap and Chimney Hollow projects issued by Army Corps of Engineers, and mediation was required as part of the appeal. 

Chimney Hollow water will be used by 12 of Northern Water’s members: Central Weld County Water District, Little Thompson Water District and the Platte River Power Authority, and the cities of Broomfield, Erie, Fort Lupton, Greeley, Lafayette, Longmont, Louisville, Loveland and Superior. The members say they need more water storage to accommodate future growth in homes, industry and agriculture.

The Colorado Sun has no paywall, meaning readers do not have to pay to access stories. We believe vital information needs to be seen by the people impacted, whether it’s a public health crisis, investigative reporting or keeping lawmakers accountable.

This reporting depends on support from readers like you. For just $5/month, you can invest in an informed community.