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<br />What fallowing leasing must do: <br />--maximize the short and long term value of irrigation water to Lower Valley <br />--for cities: provide a reliable, cost- competitive alternative source of water <br />-- for irrigators, recognize the differences in values and reliability of various water <br />rights <br /> <br />Potential water volumes with 65% participation <br />--assumed participation rate at 65% <br />--assumed fallowing rate at 25% <br />--assuming no additional storage and 65% participation <br />--Can make an additiona128,000 ac.ft available on average <br /> <br />Muni water supply consideration <br />--increasing resistance to large new water projects and trans basin projects; <br />rotational fallowing thus a flavored alternative <br /> <br />--Risk Management Strategy: <br />--with a 40 year lease, know what the water will cost <br />--super ditch company ( broker between irrigators and munis) can provide <br />efficiencies not possible to each group acting alone <br />(additional costs and operational economics of scale) <br />--hedge against potential future calls on CO River <br />--hedge against ESA or T &E species; and other environmental concerns and <br />compliance; if you lease it, don't have to store it <br /> <br />What is leased water wOlih? <br />--Avoided costs <br />--maximizes market potential <br />--explicitly recognizes different ditch yields <br />--three different markets depending on dry, average or wet year <br /> <br />Factors: pipeline alternatives, water quality diminishes downstream; cost for <br />water treatment; regional economic impacts (changes in spending by participating <br />irrigators when fallowing; impacts related to how and where water lease proceeds <br />are spent) <br /> <br />Legal issues: alternative legal structures of Super Ditch Co; County 1041 permits; <br />water court change case <br /> <br />Super Ditch Company is mechanism to lease water from irrigators who are <br />willing to fallow land (all voluntary: collective negotiation levels playing field); <br />created, controlled and owned by participating irrigators; responsible for leasing <br />water, obtaining water court approval and 1041 permits; determine which lands <br />will be fallowed each year based on supply, lease demand, and hydrology <br /> <br />10 <br />