Final Draft ALP Marketing Supply and Demand Study

Section 5
A -LP Water Marketing Programs
to Increase Sales of State A -LP
Water
5.1 Alternative for Leasing if State Water Reverts to Tribes
If Reclamation makes a final cost allocation of construction costs for the A -LP Project without the State
entering into a repayment contract for its allocation, the State's water allocation automatically reverts to
the two Ute Tribes. As noted in Tables 1 -1 and 1 -2, the Tribes have a significant amount of water
available for future use. It may be beneficial for all parties to cooperate in future water development.
The two Ute Tribes and the State of Colorado are discussing the possibility of a cooperative process over
the next several months to explore options for increasing the utilization of A -LP Project water allocated to
the Ute Tribes and other water interests in Colorado. The Tribes want this process to be developed in
time to announce it at the CWCB meeting in November. The Tribes and the State, as well as local water
users, have a deep interest in seeing that A -LP Project water allocated for use in Colorado is used to the
fullest extent possible and are looking for creative ways to accomplish this objective. The process
envisioned by the State and the Tribes will extend beyond the time frame allowed for completion of this
study. However, Brown and Caldwell agrees that a cooperative investigation between the State and
Tribes is an efficient way to proceed in order to maximize the use of A -LP Project water.
The first task in such an investigation will be the development of options or alternatives to be
investigated. Should the State's water revert to the Tribes, either automatically or by agreement, the
options that follow are possibilities that the State and two Ute Tribes may wish to consider further in their
discussions. These alternatives have not been fully discussed with the Tribes and further refinements
and negotiations may occur as they are further investigated. It is also acknowledged that these
proposed alternatives may require modifications to the IGA in order to implement them.
The options identified to date are as follows:
1. Have the State Water that reverts to the Tribes held in a separate account for future sale to water
users in Colorado for M &I purposes. The reason for this is to allow future users to purchase water at
market rates rather than enter into a long term lease. M &I water supplies need to be permanent
water supplies for any water provider and water providers are placed in an unfavorable long range
financial planning situation when long term water leases become their only viable water supply
option. The M &I water providers need to be as certain as possible of both the supply and cost.
2. Have State Water that reverts held in a separate account for compact compliance purposes. The
Tribes would agree to lease water to the State or water providers in Colorado in the event it becomes
necessary to curtail uses of Colorado River water in the Upper Division States. The lease could be
structured in at least a couple of ways.
a. The State or any of its water users could enter into a lease agreement in which the leasing
parties would agree to pay the tribes a "fee" each year. The fee could be kept by the Tribe, used
5 -1
FINAL ALP Report_l 13_11_1- L. Dorx