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<br />Section 4
<br />Legal Framework for Water Use
<br />IJIII
<br />
<br />drop following the snow melt each year.26 Over the
<br />years, there have been numerous water storage projects
<br />undertaken by Colorado irrigation districts, water
<br />conservation districts, M&I water providers, and the
<br />federal government. 27
<br />
<br />4.2.2 Conditional Water Rights
<br />
<br />A conditional water right is defined in the 1969 Act as "a
<br />right to perfect a water right with a certain priority upon
<br />the completion with reasonable diligence of the
<br />appropriation upon which such water right is based."28 A
<br />conditional water right allows an appropriator to secure a
<br />place in the priority line before any water is actually
<br />applied to beneficial use. To obtain a conditional water
<br />right, the applicant must show that the "first step" towards
<br />the appropriation has been taken. The "first step"
<br />includes the intent to appropriate, plus a demonstration
<br />of that intent through "physical acts sufficient to
<br />constitute notice to third parties."29 Once the appropriator
<br />actually places the water to beneficial use, an absolute
<br />decree may be issued with a priority date relating back to
<br />the date the appropriation was initiated through the "first
<br />step."
<br />
<br />As explained by the Colorado Supreme Court in Public
<br />Service Co. vs. Blue River Irrig. CO.,30 a conditional
<br />water right "encourage[s] development of water
<br />resources by allowing the applicant to complete
<br />financing, engineering, and construction with the
<br />certainty that if its development plan succeeds, it will be
<br />able to obtain an absolute water right." Conditional water
<br />rights are crucial to large-scale development projects,
<br />including most transmountain diversions and storage
<br />projects, because they allow an appropriator to secure a
<br />priority and protect its investment when water cannot
<br />immediately be placed to beneficial use.31 Thus,
<br />cond itional water rig hts are a tool that may be used to
<br />complete major water projects, including storage
<br />reservoirs, transmountain diversion projects, or pipelines
<br />to meet water needs.
<br />
<br />26 See Hobbs, I U. Deny. Water L. Rev. 1 at 13, supra
<br />27 See id. (for discussion of 1902 Reclamation Act and reclamation
<br />storage projects in Colorado).
<br />28 C.R.5.S 37-92-103(6)
<br />29 City of Aspen v. Colorado River Water Conservation Dist., 696 P.2d
<br />758, 761 (Cob. 1985).
<br />30 753 P.2d 737, 739 (Cob. 1988).
<br />31 See Vranesh, supra at 99.
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<br />4.2.3 Changes of Water Rights
<br />
<br />A change of water rig hts is another tool that allows water
<br />users flexibility to maximize the potential use of water. As
<br />described in the 1969 Act, a change of water rights
<br />includes "a change in the type, place, or time of use, a
<br />change in the point of diversion," and changes in the
<br />manner or place of storage. A change of water right will
<br />not be allowed unless it is approved by the water court, 32
<br />upon a finding that the change "will not injuriously affect
<br />the owner of, or persons entitled to use, water under a
<br />vested water right or a decreed conditional water right."33
<br />
<br />In a change case, the measure of the water right is the
<br />amount that was historically consumed (not the amount
<br />diverted) under the water right. Thus, only the amount of
<br />water that historically has not returned to the stream
<br />system under the original decreed use may be changed
<br />to a new place or type of use. This limitation ensures that
<br />the change will not enlarge the historical impact of the
<br />water right on the stream system, avoiding injury to other
<br />water users. In addition, in a change of water right
<br />proceeding, the applicant must take appropriate steps to
<br />ensure that historical return flows from the use of the
<br />water in amount, timing, and location are maintained.
<br />This is required because other water users rely, and are
<br />legally entitled to rely, on those return flows to support
<br />their appropriation and uses of water.
<br />
<br />Changes of water rig hts allow for the reallocation of
<br />water resources to meet changing demands. For
<br />example, in Colorado, the largest water demand is for
<br />irrigated agriculture. With increasing urbanization,
<br />however, ever larger amounts of water are needed for
<br />municipal uses. To meet this demand, municipal entities
<br />can purchase senior agricultural water rights and change
<br />them to municipal uses. Likewise, the CWCB can also
<br />purchase agricultural water rights and change them to
<br />instream flow uses. All of these activities, however, must
<br />satisfy the "no injury" requirements in terms of
<br />maintaining historical return flows and preventing an
<br />expansion of historical consumptive use (CU).
<br />
<br />Increasing the efficiency of use of a water right may not
<br />require a change of water right proceeding in all
<br />instances. For example, an agricultural user may change
<br />his method of irrigation (e.g., from flood to drip or
<br />
<br />32 See Northern Colo. Water v. Three Peaks Water, 859 P.2d 836
<br />(Cob. 1993).
<br />33 CR5. S 37-92-305(3).
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