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diminishing returns for large, new storage projects, storage -yield ratios are approaching, if not exceeding, 5 -to -1, which means that for 100,000 acre -feet of additional supply during drought conditions even less severe than those of 2002, a water utility would have to build 500,000 acre - feet of storage at a cost well over one billion dollars. Alternatively, reservoirs can be constructed exclusively for drought protection. If this were done, a much smaller reservoir would be needed than in the example above. One major problem associated with building reservoirs solely for this purpose is that, in order to provide a full measure of protection, such reservoirs must be kept full until severe droughts are obviously underway. They cannot be used to provide water to existing demands during non - drought periods or to meet the demands of new growth; otherwise they would be significantly drawn down before a major drought occurs. Dillon Reservoir was built in response to the severe drought of the 1950s, but because Denver uses it to meet day -to -day demands, it entered the spring of 2002 less than 75% full. Another problem is that building reservoirs for drought protection does not eliminate the need for water restrictions. Virtually all water providers that enacted watering restrictions in 2002 had sufficient storage supplies to meet their normal demands throughout the year. They enacted watering restrictions as a precautionary measure, recognizing that there is no way of knowing how long the current drought may last. Tree ring evidence suggests that there have been several droughts in Colorado over the past 400 years that have persisted for more than 10 years. Because of these limitations, water providers are increasingly developing "smart storage" — reservoirs designed to optimize already - developed supplies rather than capture unappropriated peak season runoff. Providers now commonly develop smart storage as a means for capturing and re- regulating reusable return flows, increasing the yields of exchange rights and augmentation plans, re- regulating the yields of changed irrigation rights to meet municipal demand patterns, and increasing yields from existing water rights and transbasin diversions. Smart storage tends to take the form of smaller, off - channel projects, enlargements of existing projects and underground aquifer storage. In some cases, existing traditional storage capacity has been rededicated to smart storage purposes with resulting increases in yields. C. Overview of Current Water Development Projects In assessing the role of storage augmentation in managing Colorado's future water needs, not all basins are created equal. Some can be eliminated from consideration given current conditions either of hydrology, adequacy of existing storage capacity, economics, project proposals that are already well along (e.g., Animas /La Plata), downstream delivery requirements (e.g., Rio Grande Compact), or some combination of the above. The Rio Grande, the San Juan/Dolores, the Yampa /White, and the North Platte fall into this category. In each of these basins at least two of these factors are relevant. Furthermore, in each of these basins the primary use of water is for irrigated agriculture. In none does municipal or domestic use exceed 3.5% of the total and only in the San Juan/Dolores is it expected to reach 6% over the next 30 years. There are no economic conditions conceivable under which agricultural interests in these basins could pay for new storage. In any farm budget, water rarely has a value of more than $100 /acre -foot and the cost of new storage, on an annual basis, is at least an order of magnitude greater. For these 34