An artist’s depiction of the Alkali Reservoir. (BLM)

The estimated cost of a proposed reservoir above Hyattville in Big Horn County increased 69% to $59 million after studies revealed complex underlying geology and poor embankment material, among other factors. 

As a result, lawmakers are asking for more money in the 2020 omnibus water construction bill now before the Legislature. 

Engineers originally estimated the Alkali Creek Reservoir would cost $35 million, but that changed last year after geotechnical investigations revealed more detailed information. Now the project is expected to cost $59 million, an increase of $24 million over the original 2015 calculation.

The Select Water Committee’s 2020 construction bill seeks to increase a proposed funding grant by 73%. If passed as drafted, the bill would ask for a $56.9 million grant for the project, up from $32.9 million approved by the Legislature in 2017.

Thirty-three irrigation shareholders would be on the hook for $2.1 million or 3.6% of actual development costs, whichever is less. Their maximum $2.1 million commitment to the 8,000 acre-foot impoundment remains unchanged with the price increase, according to the bill.

The Nowood Watershed Improvement District would own the dam and reservoir once they are built. They would hold water exclusively for use by Wyoming. The reservoir would serve 13,500 acres using flows from Paint Rock and Medicine Lodge creeks diverted to and impounded in the Alkali Creek drainage.

“I’m a little alarmed by the 70% increase in costs,” Rep. John Eklund (R-Cheyenne) said at a legislative meeting in November. “We’re using our savings account and at an alarming rate. The money we use to increase this then takes away from other projects.”

Lawmakers support increase

Eklund supported construction of the dam, however, calling it “a great project … from the get-go.” 

The bill would not change a previously approved $2.1 million loan to the watershed district or the loan’s 4% interest rate. The proposed 73% grant increase would reduce the watershed improvement district’s share of the project cost from 6% to 3.6%.

Lands that would be served by the Alkali Reservoir (deep blue) are shaded light green. Those shaded brown would benefit through water rights exchanges. (BLM)

Irrigators would pay $24 an acre foot for their subscribed allocations annually, regardless of whether the reservoir fills or they use their water allowance. The price is based on what irrigators said they can afford to pay, according to discussion at the November meeting.

The dam would be 100 feet high, 2,600 feet long and inundate 294 acres of BLM and private property. Two additional embankments would help impound the reservoir. The landowning Martin Mercer family has indicated a willingness to trade or sell its property.

The BLM authorized the plan after completing an environmental study. The agency rejected an alternative that would have reduced the project’s footprint by constructing a smaller inflow ditch and reducing the length of an auxiliary spillway.

“Greater sage-grouse use of the project area may be reduced,” the BLM said in approving the project. The reservoir would flood more than 2 miles of Alkali Creek, considered an intermittent stream. As such, the reservoir is considered an off-channel impoundment that doesn’t inundate either Paint Rock or Medicine Lodge creeks and their riparian environments.

The 2015 cost estimate was “pretty coarse” Jason Mead, Water Development Office deputy director for dams and reservoirs told the committee in November. During final geotechnical studies, engineers discovered the geologic structure under and around the proposed dam “was much more complex” than originally believed, he said.

Seepage was to be cut off with a bentonite/clay blanket, he told the committee. “Now we’ve realized we’re going to have to do some grouting,” a process in which cement is injected into subterranean fissures.

Further, the earth with which the dam is to be built turned out to be “significantly weaker than what we thought,” he said. Consequently, more earth will be needed to make a dam with gentler slopes than originally conceived.

The dam’s shell will be gravel, not clay, and haul distances for materials will be longer.

Nevertheless, the project would be an economic benefit, based on a 50-year lifespan, Mead said. The facility could operate for 75 years, he said.

He pegged benefits at $133,728 million, a 2.27 benefit/cost ratio. Public benefit — derived from a 2,000-acre foot reserve pool that would hold fish, plus public access to a boat ramp — amount to about $92 million, he said.

Uncounted benefits accrue to downstream wetlands, riparian areas, fisheries and from “keeping families in business over time,” Mead said. While only 33 shareholders have signed up, they represent others. “A ranch has many folks they employ,” he said.

Geology affects another project

The project is important for the area around Hyattville, John Joyce, chairman of the Nowood Watershed Improvement District told the committee. “We’re putting Wyoming water to beneficial use — it’s not going to Montana any more,” he said.

The reservoir is designed to provide late-season irrigation to farmers and ranchers who otherwise rely mainly on snowmelt for their water supply. Joyce expects the project to receive a U.S. Army Corps of Engineer’s permit next summer, he said.

Jason Mead in 2015 describes to irrigators and others the plans for expanding the Upper Leavitt Reservoir in Big Horn County. (Angus M. Thuermer, Jr./WyoFile)

Eklund asked whether the increase is something lawmakers could expect on other projects: “Are they all going to be that way?”

Mead said no.

The geologic discoveries, however, will also hike the cost of another nearby reservoir project, increasing the estimated cost of the Leavitt Reservoir expansion by $5 million. Instead of $41 million, it is now estimated to cost $46 million.

A grant to fund that project would increase 12% from the previously approved $39.3 million to $44.3 million. A loan to irrigators would remain unchanged at $1.7 million.

Eklund said the state was spending “more on regulations and garbage than construction,” at the Alkali project. But Mead said the environmental compliance studies account for about half the $4 million permitting and design costs.

The Legislature set up a fund of severance tax revenue automatically diverted toward water development that in 2005 began accruing approximately $775,000 annually. Lawmakers have supplemented the account with additional funds.

There’s about $63 million in the construction account today — enough to complete the Alkali Reservoir, Mead told lawmakers. The Legislature, nevertheless, must approve the construction bill that includes the proposed changes.

All told, the 2020 omnibus water construction bill would appropriate $87 million in new money to the Wyoming Water Development Office for additional Alkali Reservoir and Leavitt Reservoir funds, plus other projects.

Water rights in the Alkali Reservoir would be owned by the improvement district, Mead said. Wyoming has more water to appropriate in the Bighorn Basin, Joyce said, water that could be diverted from the region’s rivers and streams for irrigation or other uses.

The Alkali project started in the fall of 2007 and design will be finished in 2021, Mead told the group. The impoundment should begin filling in 2023 and 2024, he said.

Angus M. Thuermer Jr. is the natural resources reporter for WyoFile. He is a veteran Wyoming reporter and editor with more than 35 years experience in Wyoming. Contact him at or (307)...

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  1. It would be really nice to see a breakdown of the benefit/cost analysis. I have a hard time believing this development pays out without some fuzzy math and fringe accounting going on. The supposed $133 million dollar benefit sure is a lot of hay and cows.

    As mentioned above, the ranchers sure are getting a sweet deal. The fact that ranching accounts for less than 3% of Wyoming’s GDP should hold some water when we are allocating tax dollars. If we’re going to move forward as a State and diversify our economy, we need to stop kowtowing to ranchers.

  2. Don’t build dams where they won’t hold. The amount of water and limited number of users make this a BAD use of taxpayer dollars.

  3. To some , this is considered to be a sweet deal for the 33 plus families impacted by this project. Let us not forget the economic contribution these families, for generations, have contributed to our great state . I pray this project goes forward with what has been learned from failures of others . Which would help the economic stability of these great families , they’re community and our great state of Wyoming .

  4. We should never stop searching for ways to improve our AG base or our recreational value of the great state of Wyoming . I applaud any and all efforts being made .

  5. Those 33 private sector irrigator/shareholders the dam would provide water to are getting a real sweetheart deal here. They would own the project, built with state money , but only having to contribute about 5 percent out of their own local pockets… $ 19 in somebody else’s money for every $ 1 of their own.

    The Roach Gulch dam northeast of Meeteetse was a $ 40 million project by the private Greybull Valley Irrigation District paid for largely with public funds. The Legislature appropriated the money. The dam is on BLM land. Only $ 10 million will be repaid by GVID for Roach Dam… a fifty year note at 4 percent interest.

    Roach Dam has a huge seep on each side. The reservoir cannot hold even half the water it was intended to. Hmmm…. They say all earthfill dams leak a little, but this is more than that . A lot more.

    Then there is the infamous Anchor Dam west of Thermopolis on Owl Creek . It is a classic concrete arch ” plug” dam like Hoover Dam or COdy’s Buffalo Bill Dam. The Bureau of Reclamation built Anchor Dam as a means to keep money flowing to BuRec in the 1950’s , not out of any real big need for its stored water. The Bureau was in danger of being dissolved and needed projects. Just one thing… Anchor Dam cannot hold water. As the reservoir filled, a geologic rupture occurred and drained the lake. They were forewarned about this. These days you can visit Anchor Reservoir in the autumn and see cattle grazzing on the mudflats of the bottom of the lake there. Ancho Dam cost over $ 50 million in 1950’s dollars, which would be more like $ 250 million today. And it likely would not be built to serve so few users.

    Those who do not learn from Wyoming Dam Development History are doomed to repeat it… just sayin’