Vegas Water Pipeline Cost-Effectiveness

A state water engineer decision cutting the amount of water Las Vegas would be able to draw from rural Nevada raised concerns from a regional analyst about the financial viability of a massive pipeline that would be built for the project.

"At some point, there's a threshold where you're not moving enough water to offset the capital cost," said Jeremy Aguero, a principal with the economic consulting firm Applied Analysis in Las Vegas.

State Engineer Tracy Taylor's decision on Monday allows the Southern Nevada Water Authority to pump 40,000 acre-feet of water per year for 10 years from Spring Valley, in White Pine County near the Utah border. The authority had sought 91,000 acre-feet per year.

The Spring Valley plan is a main element of a $2 billion plan to build a 250-mile pipeline to draw rural groundwater mainly from the Spring and Snake valleys and sent it to Clark County - home to almost 1.9 million of the state's 2.6 million residents and the economic engine of the state's gambling and tourism economy.

Water authority spokesman Scott Huntley said Monday that the pipeline project would move forward. He called Taylor's ruling "conservative but very reasonable" and said no appeal was planned.

But a critic of the pumping request, Susan Land of the Great Basin Water Network, said she thought the decision threatened the cost-effectiveness of the water authority's pipeline project.

Aguero told the Las Vegas Review-Journal for a Tuesday report that he did not know how many acre-feet of water the pipeline would need to carry for the project to make fiscal sense.

Aguero was appearing Tuesday before the state Legislature in Carson City and did not immediately respond to a request by The Associated Press for comment.

But "if (the water allotment) doesn't meet critical mass to develop the in-state water project, it's absolutely bad for southern Nevada and, frankly, for Nevada," Aguero told the Review-Journal.

The water authority hired Aguero's firm to analyze how an interruption in growth would affect the state economy. The company found that Nevada's businesses and residents could suffer if fiscal considerations prevent development of the water system.

Monica Caruso, a spokeswoman for the Southern Nevada Home Builders Association, said the trade group submitted letters of support to the state for the water authority's initial water request.

"It's our position that we live in the desert, and we do need to find new sources of water, not just for future growth, but for the people who are already living here - for the future generations of children and grandchildren," Caruso said.

Taylor's decision apparently won't affect Las Vegas-area hotel-casinos and high-rise condominiums under development.

MGM Mirage's $7 billion Project CityCenter, Las Vegas' Sands Corp.'s $1.8 billion Palazzo, Wynn Resorts Ltd.'s $1.74 billion Encore, and the $600 million Trump International Hotel and Tower, received water rights as part of their predevelopment approval processes, officials said.

(Copyright 2007 by The Associated Press. All Rights Reserved.)