Why It Matters
The release of $40 million in federal funding marks a pivotal step toward securing the Shoshone Power Plant’s historic water rights for the Colorado River system, offering greater water certainty for farmers, municipalities, and ecosystems across western Colorado and beyond.
The funding fulfills a major financial requirement in the purchase agreement and nearly closes the remaining gap in what has become one of the most significant water rights acquisitions in the state’s history.
What Happened
The Trump administration has released $40 million in federal grant funding directed toward the acquisition of the Shoshone Power Plant’s water rights on the Colorado River. The Colorado River Water Conservation District, which covers 15 counties across western Colorado, has been leading efforts since 2023 to purchase those rights from an Xcel Energy subsidiary for a total price of $99 million.
The federal funds were originally approved in the final hours of the Biden administration but were quickly frozen by the incoming Trump administration pending a review of whether the grant aligned with the new president’s policy priorities. After more than a year of uncertainty, the administration cleared the funds for release.
Andy Mueller, general manager of the Colorado River District, credited the state’s congressional delegation and local coalition partners with helping advance the project. “By advocating for the Shoshone Water Rights Project in Colorado and Washington, they helped deliver a durable and permanent solution for the entire Colorado River system,” Mueller said in a public statement.
By the Numbers
- $99 million — Total agreed purchase price for the Shoshone water rights from Xcel Energy
- $40 million — Federal funding now released by the Trump administration
- $37.3 million — Pledged contributions from local irrigation districts, cities, universities, utilities, and the river district itself
- $20 million — State funds approved by the Colorado Water Conservation Board in early 2024
- 60+ — Cities, irrigation districts, and other entities that submitted opposition filings in the ongoing water court proceedings
The Stakes for Western Colorado
The Shoshone Power Plant, situated along Interstate 70 in Glenwood Canyon, holds some of the oldest and most senior water rights on the Colorado River in the state. Under Colorado water law, that seniority means the plant is entitled to its full water allocation even during drought conditions — a legal position that has shaped river flows for more than a century. The plant also returns all the water it uses back to the river, providing downstream benefits for municipalities, agricultural users, and endangered fish habitat.
Western Slope communities have long worried that if the aging facility were shuttered or its rights sold to another party, those flows could be redirected or reduced — disrupting water supplies for farmers, ranchers, recreation operators, and downstream cities that depend on predictable river conditions. The acquisition is designed to preserve the historic function of those rights under public stewardship. Recent spring precipitation has provided some relief to drought conditions across Colorado, but long-term water security remains a central concern for the region.
Legal and Regulatory Hurdles Remain
The funding release does not complete the deal. Under the terms of the purchase agreement, the Colorado River District will own the rights and lease them back to Xcel Energy, allowing the hydroelectric facility to continue operating. The district also intends to keep Shoshone’s water flowing in the river whenever the plant is not generating power — a change that required approval from the Colorado Water Conservation Board, which was granted in late 2025.
The district, Xcel, and the conservation board have since filed in water court to formally change the rights, a proceeding that is expected to take additional years. Major Front Range water utilities, including Denver Water and Aurora Water, have engaged in the court process to contest aspects of the arrangement, particularly how the volume of water tied to the rights should be calculated and managed going forward.
Separately, Xcel Energy must still obtain approval from the state’s utility commission before the transaction can be finalized.
What’s Next
With the federal funding now released, the Colorado River District and its partners have assembled resources that nearly cover the full $99 million purchase price. The water court process will continue with opposition filings from dozens of stakeholders, and Xcel’s utility commission approval remains outstanding. Officials have indicated the full acquisition process could take several more years to complete.