A federal judge has ruled that Denver Water may resume construction on its $531 million Gross Reservoir dam expansion in Boulder County, but emphasized that key federal environmental permits must be rewritten before the dam can be filled.

The decision, issued late Thursday by Senior U.S. District Judge Christine Arguello, handed a partial victory to the utility while maintaining significant restrictions intended to address environmental concerns. The ruling represents a complex compromise in a long-standing legal battle over the expansion’s impact on Colorado’s waterways and ecosystems.

“There is no evidence that there would be additional environmental injury resulting from completion of the dam construction. In fact, the opposite is true,” Arguello wrote. “There is a risk of environmental injury and loss of human life if dam construction is halted for another two years while Denver Water redesigns the structure of the dam and gets that re-design approved by” the Federal Energy Regulatory Commission.

The FERC’s involvement stems from the hydroelectric facility at the base of the dam.

Jessica Brody, Denver Water’s general counsel, said in a Friday statement that the utility welcomed the judge’s acknowledgment of safety risks and service concerns. “We’re relieved that the judge understood and appreciated the safety issues. We are relieved as well that she understood the impact to Denver Water’s customers,” Brody said.

While construction will proceed and is expected to wrap up later this year, Denver Water must now pursue a ruling from a federal appeals court regarding the requirement to revise its environmental permits. Arguello’s decision leaves open the possibility that the Army Corps of Engineers may reduce the volume of water Denver Water can divert from the Fraser River — a key tributary of the Colorado River — to fill the newly enlarged reservoir.

The legal case has reignited broader concerns over how Colorado balances increasing water demands on the populous Front Range with ecological preservation on the Western Slope. Save The Colorado, one of the plaintiffs, pledged to continue opposing efforts to divert more water from the Fraser River.

“Importantly,” said Save The Colorado’s Gary Wockner, “her original 86-page ruling still stands … so they can’t cut trees and they can’t put water in it until it is all resolved.”

The legal saga stems from an April 3 ruling in which Judge Arguello halted the project, finding that the U.S. Army Corps of Engineers and Denver Water had violated the Clean Water Act and National Environmental Policy Act when they issued permits in 2017. That ruling issued a permanent injunction against enlarging the reservoir, including associated activities like tree removal and water diversion.

In her April order, Arguello also criticized Denver Water for acting "recklessly" by pushing forward with construction in 2022 despite ongoing legal challenges brought by Save The Colorado, the Sierra Club, and other groups. She noted that federal regulators failed to sufficiently consider whether long-term drought and climate change might limit water availability for the expansion’s intended use.

The Gross Reservoir expansion project, which includes raising the dam by 131 feet and tripling its capacity, has faced fierce opposition for years. Boulder County residents and environmental groups have argued that the project would significantly harm local ecosystems and the broader Colorado River system, which is already under stress from overuse and climate-driven drought.

Denver Water first proposed the expansion more than two decades ago, citing the need to boost water security for its 1.5 million customers across metro Denver. The utility maintains that expanding Gross Reservoir is essential for withstanding future droughts and meeting demand in a changing climate.

After extensive environmental reviews and permitting, the Army Corps issued its approval, and construction began in earnest in 2022. However, legal victories by opponents brought the project to a halt this spring.

Now, with the latest ruling, construction can continue — but significant hurdles remain.

The long-term future of the reservoir’s operations will depend on how the Army Corps revises its permits and whether courts uphold the need for a scaled-back water diversion plan. Arguello’s ruling has reaffirmed that even with concrete being poured, the law demands serious reconsideration of the environmental trade-offs involved.

Originally reported by Jerd Smith in Coloradosun.