BOARD01272

• Board Meeting Date: 7/23/2002
• Description: WSP Section - Colorado River Basin Issues - Update on Navajo- Gallup Project in New Mexico
• Board Meetings - Doc Type: Memo

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Agenda Item 15
July 23-24, 2002 Board Meeting
Page 5 of 10

to the State of Arizona by Article III (a) of the Upper Colorado River Basin Compact (63 Stat.
31).

Since this was accomplished with the consent of all seven basin states and the project
subsequently authorized by Congress, we have .crafted the proposed resolution along the
same lines. If this resolution is adopted by all seven states and Congress subsequently
authorizes Navajo-Gallup this would remove this controversy and allow the project to
move forward. Similarly, other projects such as the Lake George Pipeline in Utah could
move forward following a similar process in the future. The key is the consent of all seven
basin states.

2. Can Arizona divert water from the San Juan River Basin in New Mexico for delivery and use in
either the Upper or Lower Basin portions of Arizona? If so, are the depletions from such
diversions charged to Arizona's Upper or Lower Basin apportionment?

The analysis provided in Item I above would cover any Arizona attempt to take its Upper Basin
apportionment for use in a portion of Arizona within the Lower Basin. If Arizona attempts to
take its Lower Basin apportionment for use in the Lower Basin, but through a diversion in the
Upper Basin, different questions arise. The latter approach received consideration, as some
believed the issue was resolvable via accounting solutions. However, this approach must take
into consideration Article XIV of the Upper Colorado River Basin Compact that would make
such use in Arizona a lesser priority. Such use in Arizona would also need to take into
consideration the San Juan River flow recommendations for endangered fish recovery and what
would happen to deliveries to Arizona if the flow recommendations were not being met. Also,
given that the one million acre-feet allowed for tributary uses under the Colorado River Compact
has been fully utilized, such use may be curtailed in the event of shortages under the compact or
to the Mexican Treaty delivery.

Finally, in response to general marketing proposals, Colorado has taken the position that such
diversions might be possible if proper accounting methods can be determined. How such
deliveries, if made, would affect compliance with; (I) 602(a) of the Basin Project Act, (2) the
Operating Criteria for the Colorado River Reservoirs, and (3) the decree in Arizona v. California
must be considered.

3. Can either Arizona or New Mexico permit water diversions which would cause the state to
exceed its compact apportionment under Reclamation's current hydrologic detennination?

Articles III (b)(3) and IV of the Upper Colorado River Basin Compact expressly state that Upper
Basin states may use more than their apportionments if that use does not deprive another state of
the use of its apportionment. Article III (b)(3)(iii), however, disclaims any intent to
"countenance average uses by any signatory state in excess of its apportionment."

The answer to this question thus turns on the amount of Upper Basin supply the states wish to
assume for purposes of calculating apportionment, and how we wish to defme the "average use"
provision. It is worth noting that Reclamation's current hydrologic determination is based in part
on an interpretation of the Mexican Treaty delivery obligation with which Colorado has never
agreed. In any case, it appears that Reclamation would need to revise and increase its current
hydrologic determination in order to issue contracts that would result in consumptive uses that