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July 15, 2005 The Water Report
<br />Water
<br />Banking
<br />Demo Project
<br />US Interior
<br />Regulation
<br />Arizona v.
<br />California
<br />Decree
<br />Storage Credits
<br />"ICUA"
<br />Underground
<br />Storage
<br />INTERSTATE WATER BANKING ,,,,,,ti
<br />EVOLVING COLORADO RIVER SYSTEM AGREEMENT
<br />by James H. Davenport, Chief, Water Division, of the Colorado River Commission of Nevada
<br />& Special Deputy Attorney General of the State of Nevada
<br />Introduction
<br />In late 2004, two milestone agreements involving water agencies in Arizona, Nevada and California
<br />constituted a second chapter in the development of interstate water banking transactions for the Colorado
<br />River system. The agreements have established a larger experience base from which to contemplate the
<br />elements of future interstate water transactions.
<br />This article reviews salient features in the evolution of this multi -state water banking system from
<br />initial enabling efforts in the 1990s through to the present.
<br />Chapter One: Offstream Banking
<br />Water banking on the Colorado River system involves the concept of forbearance of diversions from
<br />the Colorado River in favor of allowing the same volumes of water to accumulate elsewhere, either in the
<br />Colorado River's reservoirs or off the river in underground storage. This approach was contemplated by
<br />the State of Arizona's 1996 amendments to Title 45 of Arizona Revised Statutes. Arizona Laws of 1996,
<br />ch. 308, section 16 (see LaBianca, Margaret Bushman, "The Arizona Water Bank and the Law of the
<br />River" 40 Arizona Law Review 659, 663 (1998)). In 1992, water purveyors in California and Nevada
<br />executed an early agreement authorizing a "demonstration project" for offstream banking (Agreement
<br />Behveen the Central Arizona Water Conservation District and the Metropolitan Water District of
<br />Southern California for a Demonstration Project on Underground Storage of Colorado River Water,
<br />October 15, 1992, as amended December 1, 1994).
<br />On November 1, 1999, the Secretary of the Interior (Secretary) published " Offstream Storage
<br />Regulations" defining the procedure for lower division states of the Colorado River system to engage in
<br />interstate offstream storage agreements. (See Offstream Storage of Colorado River Water and
<br />Development of and Release of Intentionally Created Unused Apportionment in the Lower Division
<br />States: 43 C.F.R. Part 414.) The regulations are premised on the authority of the Secretary pursuant to 5
<br />U.S.C. § 553, 43 U.S.C. § 391, 485, and 617, 373 U.S. 546, and Article II (13)(6) of the Decree in Arizona
<br />v. California, 376 U.S. 340 (1964).
<br />ARTICLE II(B)(6) OF THE DECREE PROVIDES:
<br />(6) If, in any one year, water apportioned for consumptive use in a State will not be consumed in that
<br />State, whether for the reason that delivery contracts for the full amount of the State's apportionment are
<br />not in effect or that users cannot apply all of such water to beneficial uses, or for any other reason,
<br />nothing in this decree shall be construed as prohibiting the Secretary of the Interior from releasing such
<br />apportioned but unused water during such year for consumptive use in the other States. No rights to
<br />the recurrent use of such water shall accrue by reason of the use thereof.
<br />On July 3, 2001, pursuant to the regulations established earlier by the Secretary, the Southern
<br />Nevada Water Authority (SNWA), the Colorado River Commission of Nevada (CRCN), and the Arizona
<br />Water Banking Authority (AWBA) entered into an Agreement for Interstate Water Banking. In that
<br />agreement, AWBA committed to use its best efforts to create "long -term storage credits" in an initial
<br />amount of 1,200,000 acre -feet for SNWA, to be held in an SNWA interstate account established with the
<br />Arizona Department of Water Resources and, on request of SNWA, to recover those credits and cause the
<br />development of "intentionally created unused apportionment" (ICUA) of Colorado River water for
<br />SNWA. SNWA agreed to reimburse AWBA for its costs on an annual basis. Colorado River water
<br />would be moved through the aqueduct of the Central Arizona Project and stored underground in central
<br />and southern Arizona. The water stored underground in existing aquifers would later be used directly by
<br />irrigation districts instead of ground water, thereby creating ICUA. (See Arizona Revised Statutes
<br />Annotated, 45 -2423; also, Agreement for Creation of Intentionally Created Unused Apportionment
<br />between the Arizona Water Banking Authority and the Central Arizona Water Conservation District,
<br />December 28, 2002.)
<br />On December 18, 2002, the United States, acting through the Secretary of the Interior, AWBA,
<br />SNWA, and CRCN entered into a Storage and Interstate Release Agreement (SIRA), again pursuant to
<br />the Secretary's Offstream Storage Regulations. In the SIRA, the Secretary committed to release ICUA
<br />developed by AWBA in accordance with the request of SNWA, the terms of the SIRA, and certain
<br />specified determinations of the Secretary.
<br />Copyright© 2005 Envirotech Publications; Reproduction without permission strictly prohibited. 11
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