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CHAPTER IV UTILIZATION OF AGRICULTURAL WATER RIGHTS I Cost Summary The comparable sales approach method was used to estimate upstream water right acquisition costs for this study. In his of the referenced study on the Water Transfer Process concerning the transaction costs for water rights in Colorado, Dr. MacDonnell states: "Analysis of nine out of 21 randomly selected cases (those for which we were able to obtain cost data) indicates a wide range of transaction costs. Transaction costs per acre foot ranged from $0.37 to $1,702. Statistical analysis of this small data set indicates several relationships: unit costs appear to go down as the quantities of water increases; and opposition raises costs."' Summary Assuming willing sellers could be identified, the option of purchasing water rights appears technically feasible to enhance the flow regime in the Reach. The above consumptive use rates, the transfers experienced by the city of Grand Junction and Ute Water, and the volume of the CU within Division 5 all indicate the feasibility of this option. The need for an additional 47,000 AF to ensure adequate flows 4 out of 5 years or 94,000 for all years, would require 10 percent or 21 percent of the total consumptive use in Division 5. Assuming the cost of purchasing water is between $1,500 and $3,000/AF of yield, the equivalent annual cost ranges between $130 and $260/AF. Purchasing 47,000 AF would cost $70,500,000 to 141,000,000 or an equivalent annual cost of $6,000,000 to $12,000,000. Irrigation Rights in the Grand Valley The six irrigation organizations in the Grand Valley have three or four different legal structures. There is one association (GVWUA), three irrigation districts (PID, MCID, OMID), one mutual ditch company (GVIC), and the Redlands Water and Power Company. Water is "tied to the land" in the association and districts, meaning owners cannot sell the land without selling the water or vice versa. However, in the mutual ditch company, the water is divided into shares. These 48,000 GVIC shares can be sold anywhere within the GVIC service area without any ties to the land. Upon purchase of a share of water, the owner informs the GVIC which headgate to deliver the water to within GVIC's irrigation system. ' WATER TRANSFER PROCESS AS A WATER MANAGEMENT OPTION FOR MEETING CHANGING WATER DEMANDS, report prepared for the U.S. Geological Survey by Dr. Lawrence J. MacDonnell, April 1990, Vol. I, p. 26. 30