WSP09405

• File Number: 8149.100
• Description: Miscellaneous Small Projects and Project Studies - NRCS-Ft Lyon Canal Co Limestone Graveyard Creeks
• State: CO
• Basin: Arkansas
• Water Division: 2
• Date: 6/2/1993
• Author: Gronning Engineering
• Title: Ft Lyon Canal Company Water Transfer Alternatives Study Appendix of Phase 1 Report
• Water Supply Pro - Doc Type: Report/Study

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"'PENDIX 6.2 W.., "',ki" .\~~ ~"'"

rackets indicate additions] qz:- r' ~ p

~ Colorado t of 1976-77 inflicted hardships on small rural towns and agricultural water users ~'
in Coiorado (Howe, Alexander and Moses 1982). Small towns experienced the greatest difficulties rJ
because of inadequate supply systems, exhaustion of groundwater, or inadequacies of water rights. :.1<' ""\
In a number of cases, emergency supplies had to be provided by tank truck. The main lessons learned .-/'2iO
include: (1) that there are great variation in the conditions facing adjacent drainage basins, some 5' ~ .
having nearly normal supplies and others facing record low flows; and (2) that redistribution of
available supplies among agricultural users and between water suppliers (e.g. mutual ditch companies)
occurred frequently and served greatly to reduce drought damages. These findings point to the
desirability of decentralization of decision-making regarding reallocation of water to take advantage
of information on local conditions. Practices observed in Colorado in 1976-1978 which mitigated the
efforts of drought included those listed below [not included]. Most of these actions were locallv
initiated." [emphasis added]

2808

/

"Water banks require some physical factors to be in place: sufficient storage space such as reservoirs
or natural lakes and a reasonably extensive network of canals or stteams in order to facilitate transfers
among a large number of potential buyers and sellers over a sizeable area."

"Most recently, the California State Legislature has turned to the water bank as a way to mitigate
drought conditions. The enabling legislation allowed the governor to make emergency appropriations
for these types of requests [drought emergency responses]. In addition, no district is permitted to
purchase water if it is shown to be using resources inefficiently, or can not show a shortage of supplies
given current demand levels. The motivation for permanent improvements in water conservation thus
is absent. If farmers knew they could regularly get a good price for their water, they would be likely
to give up production of lower-valued crops and to undertake investments to increase water use
efficiency."

Howe (1992) developed several conclusions about water banking. Each of the water banks studied
had both positive aspects and some shortcomings. In the case of the 1977 California water bank, the
participants were limited to Federal and State agencies, thus excluding many potential buyers and
sellers, especially many farmers. On the other hand, prices were set according to buyers' and sellers'
marginal valuations of water, thus ensuring efficient transactions between those who did participate
in the water bank.

In the Snake River water bank, those who can participate include all contractors [buyers, under long-
term contract] of reservoir water in the region. The problem here is that water prices are not allowed
to vary to reflect market conditions in the region. In the California Water Bank of 1991, while the set
of permitted participants was much greater than under the 1976-77 bank, the fixed price is likely to
be inefficient. Refer to Table A6.2 for summarized data on water banks from Howe (1992).

As long as water banks are constrained in their operation from find g a
sellers are limited in their participation, water banks will not function
to Howe.

A6-5