The South Platte River viewed from Grant-Frontier Park on Thursday, Sept. 30, 2021 in South Denver. The river originates west of Denver and flows northeast, entering Nebraska near Julesburg.(Olivia Sun, The Colorado Sun)

By Grant Schulte, The Associated Press

LINCOLN, Neb. — Nebraska took another step Wednesday toward building a canal that would divert water out of neighboring Colorado under a 99-year-old compact, a project based in fears about the Denver area’s growing use of the South Platte River that runs through both states.

State lawmakers gave initial approval to a bill that would allow Nebraska’s Department of Natural Resources to lay the groundwork for the estimated $500 million canal.

The measure advanced, 36-3, through the first of three required votes in the Legislature despite skepticism from some lawmakers about whether the canal is necessary.

“This vote today is going to signal to the state of Colorado how serious Nebraska is about its water resources,” said Sen. Mike Flood, of Norfolk, who cast the project as crucial for Nebraska’s long-term strength.

Republican Gov. Pete Ricketts announced the plan in January to invoke Nebraska’s right to build the canal under the South Platte River Compact, a legally binding water-sharing agreement approved by both states and Congress in 1923.

Building the canal would give Nebraska the right to claim some of the water in late fall, winter and early spring and store it for use in drier times. Colorado has always fulfilled its obligation to provide at least 120 cubic feet per second of water during the summer irrigation season, but it has no such duty during the non-irrigation season. The compact lets Nebraska claim 500 cubic feet from rural, northeastern Colorado during that time, but only through a canal.

Ricketts, Nebraska Attorney General Doug Peterson and the state’s water regulators have said they’re convinced that Colorado intends to scale up its water usage to meet the needs of a fast-growing Denver-area population. They pointed to a Colorado report that identified 282 new water projects in the South Platte River Basin, at a total cost of $9.87 billion.

Colorado officials have said many of those projects are only tentative proposals and wouldn’t consume water. After Ricketts announced the Nebraska project, however, a Colorado lawmaker introduced a bill that would require his state to prioritize South Platte River storage projects.

Sen. Dan Hughes, a southwestern Nebraska farmer, said the canal would help shield Nebraska from future restrictions that would hurt the state economy. He pointed to the Republican River Basin in southern Nebraska, where farmers now face limits on how much groundwater they can use to water their crops because of a similar compact with Kansas.

Officials in Lincoln, Nebraska’s second-largest city, told a legislative committee last month that about 7% of their water supply originates in the South Platte River, and having it is more even important during droughts.

“Compact rights are a powerful tool and must be used to their fullest extent to preserve and protect Nebraska’s water,” Hughes said.

But Sen. John Cavanaugh, an Omaha lawyer, said it’s not clear whether Nebraska would actually get all of the water it can claim under the compact. The Nebraska-Colorado compact includes several provisions that lets Colorado set aside water for its own use before it arrives at the canal.

Sen. Carol Blood, of Bellevue, questioned why Nebraska officials haven’t talked more with their Colorado counterparts to try to reach a deal.

“When did we start infringing on other states without conversations first?” said Blood, a Democrat who is running for governor.

Nebraska officials have said they didn’t want to tip their hand out of concern that Colorado would start trying to hoard more water.

The legislative vote didn’t include funding for the project, and it’s unlikely that lawmakers will approve the full $500 million this year.

Despite an influx of federal pandemic money, surging tax revenue and public pressure from Ricketts, lawmakers on the budget-writing Appropriations Committee have only approved $53.5 million for design work, permitting and purchase options to potentially buy land later. Speaker of the Legislature Mike Hilgers acknowledged Wednesday that a future Legislature will probably have to decide whether to go all-in.

Sen. John Stinner, the Appropriations Committee chairman, said he opposed committing all $500 million at one time in a shaky economy, while some lawmakers are also pushing to cut taxes and build a new $270 million prison.

“That’s fiscally irresponsible,” he said.