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SWSI II Technical Roundtables
Title
SWSI Phase 2 Report - Alternative Agricultural Water Transfer Methods to Traditional Purchase and Transfer
Date
11/7/2007
Author
CWCB
SWSI II - Doc Type
Final Report
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Section 3 <br />Alternative Agricultural Water Transfer Methods to Traditional Purchase and Transfer <br />reinforced when the agricultural water right is <br />relatively senior in priority. <br />~ A better or more stable income to agricultural <br />users can be assured, since during a drought <br />water supplies may not be adequate to <br />satisfactorily produce a crop. Presumably, if the <br />option were exercised, the net income from an <br />ISA could match or exceed the revenue that <br />would be realized from farming in that same year. <br />Moreover, smaller "take-or-pay" payments or <br />reservation changes may be included to bolster <br />net income in the years the ISA is not exercised. <br />~ The assessed value of the land can be maintained <br />at an irrigated agricultural valuation for most, if <br />not all years. <br />There are several potential issues and conflicts with <br />ISAs that may impede or hinder the usefulness of <br />this alternative as a tool for meeting future water <br />needs: <br />~ ISAs may be of limited benefit in meeting long- <br />range M~eI water supply or other uses without <br />some arrangement for permanency to the end <br />user. If the agricultural user is free to sell the <br />water to a different entity, the end user must then <br />find other sources of water if there is an ongoing <br />or permanent need for water supplies. Given the <br />competition for limited water resources, it is <br />likely that M~eI users that have committed to <br />perpetually serve its customers will seek <br />permanent water supplies, such as outright <br />acquisition of agricultural rights over ISAs. This <br />issue can potentially be addressed if there is an <br />arrangement where the M~eI user can purchase <br />the water that is part of the ISA if and when the <br />owner sells them. <br />~ One important and somewhat unusual feature of <br />an ISA is that the owner of the water right is <br />committing themselves and their successors to <br />performance of the contract, so that any later uses <br />of the underlying water right would be subject to <br />the contract. This might most easily be <br />accomplished by keeping the water in its <br />agricultural use, but the commitment of the water <br />right is not a commitment of the water right <br />owner to tie up other resources or continue the <br />~ ISAs must be evaluated on acase-by-case basis, as <br />not all agricultural rights can easily be transferred <br />to M~eI or other water uses. For example, in the <br />Denver Metro and South Metro subbasins of the <br />South Platte there is very little agricultural water <br />use in the area or upstream that can be <br />interrupted on an annual basis and easily <br />transferred to existing M~eI intakes. Increasing <br />supplies to these areas with ISAs would require <br />significant infrastructure investments in <br />pipelines, pump stations, and advanced treatment <br />facilities in order to convey agricultural water <br />from remote locations. An ISA may not provide <br />the permanence/security to warrant large capital <br />investments. <br />~ It is usually desirable for the agricultural rights <br />involved in the ISA to have dry-year yields. If the <br />underlying water right or portfolio of water rights <br />is not sufficiently senior in priority, agricultural <br />water would not be available to transfer when it <br />is most needed for other uses. Water rights to be <br />used to refill reservoirs drawn down during a <br />drought might be considerably less senior and <br />still serve the purpose of recovering from the <br />impacts of a drought than water rights to be used <br />during droughts, which would need to be <br />relatively senior in order to provide for drought <br />yield. It is important to recognize that these <br />arrangements will be case and place specific to <br />the parties' interests. <br />~ The determination of the transferable amount can <br />be complicated; as in a water transfer by sale the <br />rights of other vested water users must be <br />protected. There must be a mechanism to ensure <br />that the transfer does not result in an increase of <br />3-12 FINAL DRAFT <br />
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