CBT/WG Water Sharing Report

• Project Type: Ag/Muni Grant
• Applicant: Northern Colorado Water Conservancy District
• Project Name: Ag Options
• Title: Interruptible Supply Contracts for Water-Sharing Between the Colorado Big Thompson and Windy Gap Projects
• Date: 1/1/1996
• County: Larimer
• Water Conservation - Doc Type: Final Report

provisions that are necessary to protect operations of the C-BT and Windy Gap Projects
and ensure that no injury to C-BT allottees results from the interruptible arrangements.
Beyond these provisions, willing buyers and sellers can be left free to negotiate contracts
that meet their individual needs, with the District providing support but not mandating
terms. All proposed contracts would be contingent on submission to and approval by the
District's board of directors.

The District need not avoid all involvement in the negotiating process. The
board's guidelines for these contracts should emphasize that the District wishes to be
aware of contracting activity and to support potential contracting parties in their efforts
to structure agreements that will be acceptable to the District as well as to the parties.
The board should consider the following roles that may be played by the District in this
regard.

While the District will not be directly involved in contract negotiations as a matter
of course, the guidelines should encourage parties who are interested in entering into
interruptible supply agreements to notify the District of that interest and to keep District
staff apprised of the progress of negotiations. This will enable the District to offer
appropriate support to the parties and to intervene at an early stage if it appears that the
agreement will not comply with District requirements.

The District's participation in this regard could entail a variety of activities, such as
reviewing correspondence and written materials submitted by the parties, clarifying
District guidelines and their application to the agreement contemplated by the parties,
and ensuring that provisions necessary to comply with the guidelines are included in the
contract. If the parties so request, District staff members could participate in actual
negotiating sessions, either as observers or actual participants in the discussions. In the
latter case, care would have to be taken to ensure that District representatives were not
influencing contract provisions -- beyond the minimum requirements set forth in District
guidelines -- in such a way as to result in differential treatment of different contracting
parties.

In deciding the appropriate role for the District to play in regard to interruptible
contracts, these agreements should be viewed in the context of the current market
situation involving C-BT water. There are long-standing and active markets in both
permanent transfers and annual rentals of C-BT units. These transactions proceed with
minimal involvement by the District. It is appropriate for the District to take a similar
approach to the negotiation of interruptible supply contracts, leaving the parties to arrive
at contracts that meet their own mutual needs while ensuring that the C-BT and Windy
Gap Projects are protected.

Support for potential contracting parties

The District may consider ways, beyond participation in negotiations, in which it
can assist in the process of concluding interruptible supply agreements or provide support
for potential contracting parties. For example, the District might maintain lists of

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