Administrative Record 1-11

• Year: 2009
• Instream Flow Rules - Doc Type: Rulemaking Hearings

• The legislation will allow a ~;pater right that is adjudicated for a particular identified use(s) to
no«~ effectively be used twice; i.e.; to meet the instream flog;~ needs through a given reach
(non-consumptive) and then to be diverted to a traditional (consumptive) use.
• A third party «~ithout independent financial resources could potentially finance the
acquisition of the water right for instream flo~~~ purposes by utilizing the revenue from the
sale of the consumptive use at the do«~nstream terminus of the instream flo~.~~ reach. This
may facilitate the transfer of more senior rights to instream floe- use than has occurred in the
past.
• Instream floe- decrees can significantly impede the ability to move water by ne«.- exchanges;
as the flows in the instream flo«~ reach cannot be diminished beyond the decreed instream
flow amount. They are similar in this regard to recreation in-channel diversion decrees.
• Ltilizing the water for consumptive use below the downstream terminus of the instream flow
reach will require that the end users be physically located do«-nstream; or that potentially
expensive infrastructure; e.g. pipelines, etc. be installed.
• A v~~ater right owner who no longer has a beneficial use for the «~ater or does not want to
exercise the existing right could choose to "park'' his «~ater rights «-ith the CWCB for an
extended period of time ~:~hile they appreciate in value. At the end of the leasehold period.
he could then sell the appreciated asset. In some respects; this conflicts with Colorado's
policy against speculating in ~~rater rights.
• Once the lease terminates and the water rights are "on the market.'' if the CWCB desires to
continue to protect the natural environment to a reasonable degree; and the continuation of
the flov~~s is necessary to do so. either the CWCB «-ill have to find the monies necessary to
purchase the water, or it must locate an alternative substitute supply (through purchase or
other~~~ise). In the alternative, it must accept the consequences associated with the loss of the
flo«:~.
• It is reasonable to expect that persons ~vho lease their water rights for instream flow use and
after the term of the lease seek to sell the water right, will demand a higher price for the
water right than the market value at the beginning of the lease. Thus, given CWCB budget
constraints. the leasing of water rights for instream flo«- purposes; as opposed to purchasing
them; may have the unintended consequence of reducing the water available for instream
flows in the future. Thus; a preference should be established for (1) the purchase or donation
of «.-ater rights for this purpose; and (2) short term leases as opposed to long term leases.
Each of the above observations should be kept in mind in reviewing the following criteria
comments.
B. Public ~-otice: It is important that those «:~ho maybe impacted (currently or in the future) by
such an instream flow use be notified of the proposed transaction and afforded an opportunity to
comment. There is a number of ways of achieving this objecti~Te. Suggestions include:
• Place notice of the proposed transaction in the ~~rater court resume at least 60 days prior to a
Board hearing thereon.
• Place the matter on the CWCB agenda for ``informal consideration" prior to contract
finalization. •
• Afford a second opportunity for comment on the CWCB agenda at the time of final approval.
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