Southwest Pipeline officials tell appropriations committee funding gap remains for major expansion and pipe replacement

Southwest Pipeline Project managers told the House Appropriations — Education and Environment Division on the hearing for House Bill 1020 that the regional system faces major capital needs, a backlog of unserved customers and accelerating costs for large pipeline and treatment projects.

The Southwest Pipeline Project currently serves about 58,000 people, including roughly 7,750 rural customers, officials said. Jen Murray, manager for the Southwest Pipeline Project, said the system includes more than 5,000 miles of pipe, 35 booster pump stations, 32 storage tanks and reservoirs, and three water treatment plants.

Why it matters: committee members pressed officials on a multiyear plan and specific dollar amounts as construction and replacement work carries into the next biennium. Justin Prosseth, the project manager with the Department of Water Resources, told lawmakers a major Southwest expansion now estimates a total project cost of $106 million; the 2023 session committed about $90 million (including a $50 million letter of credit and $40 million in appropriations), leaving roughly $16 million still needed to complete that contract package.

Officials outlined four near-term focuses: maintaining transmission reliability, strategic hydraulic improvements (parallel pipelines and booster stations), rural service-area expansion to serve unconnected customers, and replacement of critical metallic raw-water and potable pipelines showing microbiologically induced corrosion.

“We serve a population of about 58,000 people,” Jen Murray said, summarizing the system’s scale, and described the funding model: the State Water Commission has been the principal funder and construction administrator, and local customers repay a local share through a capital-repayment component of water rates. Murray said contract customers pay $1.51 per 1,000 gallons as a capital repayment component and that the base minimum for many rural customers in 2025 is $46.16 per month.

Committee members asked how many potential customers remain unserved. Murray said the system’s waiting list included 675 people and that an underserved rural area under active consideration had 825 financially committed customers; combined, she said, there were “more than 1,500 customers that we know of right now that are still needing water in our service area.” Prosseth said the authority typically connects about 200 people per year but that new commitments continually add to the waiting list.

On replacement needs, Murray and Prosseth described microbiologically induced corrosion affecting portions of the raw-water metallic pipeline between Lake Sakakawea and Dickinson. Prosseth said patterns point to low-elevation pipe runs in saturated soils with higher sulfates, and that replacements are costly: he estimated a current construction cost for a 30-inch pipeline could run “upwards of $500 per foot” depending on site conditions. The department has begun replacing lineal feet and plans to bring funding-and-process guidelines to the State Water Commission at an upcoming meeting.

Officials also described projects already in design and procurement: Buffalo Gap storage reservoir (to relieve West Zone constraints and bid in the coming months), hydraulic upgrades for the North New England service area (expected to benefit about 90 wait-list users), and a phased approach for serving the larger Hebron/Burton area. Prosseth said West Zone preliminary design would likely require multiple contracts and that construction bids and escalation in materials and labor explain the higher project totals.

No formal committee votes were recorded during the hearing segment; presentations were part of the House Bill 1020 hearing. Lawmakers requested more granular project-cost breakdowns by subproject and pressed staff on carryover and committed balances for prior appropriations; Cindy (Sindhuja S.) Palai Granoz, Water Development Division director, told the committee that about $80 million had been provided in the last biennium for Southwest projects and that much of that is committed to contracts in the pipeline.

Looking ahead, Murray and Prosseth said funding decisions and prioritization matrices—used to target projects that provide the greatest number of new service connections per dollar—will determine which underserved areas move forward. They recommended continued state appropriations and clarified that some replacement or capital-asset work may need to be funded from different capital buckets (e.g., REM vs. capital assets funding).