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001272 1. Offstream surface or underground storage of Colorado River water in water banks in the Lower Division states created and operated under applicable state law. 2. Distribution, via contract, of credits for Colorado River water stored in state water banks on an interstate basis within the Lower Division states. The criteria for offstream storage allows for a Lower Division state to establish a state water bank to store Colorado River water for itself and for the other two Lower Division states. Colorado River water to be stored in a state water bank may consist of the Storing state's basic or surplus apportionment or the basic or surplus apportionment of another Lower Division state. Credits for Colorado River water stored in a state water bank could be redeemed on an interstate basis between state authorized entities acting as willing buyers and sellers in accordance with the Law of the River and the terms and conditions of written agreements among the affected Lower Division states and the united states. Interstate redemption of credits would be coordinated through applicable state water agencies. Future Demand for Colorado River Water For the first time ever, in 1996, demand for Colorado River water in the Lower Division states exceeded the basic apportionment of 7.5 million acre-feet (maf). Although surplus water supplies were made available to accommodate all needs, surplus water will not always be available in the future. Under this rule, Colorado River water that is apportioned to the states of Arizona, California, and Nevada can be made available by one of these states to water users in the other Lower Division states. The proposed rule would provide greater flexibility to the Lower Division states in managing, using, and storing their limited supplies of Colorado River water. Risk Associated with On stream Storaqe The proposed regulations would facilitate Colorado River water users to reduce the risk of losing on stream stored Colorado River water in flood control releases. Water that is banked on stream is regarded as "top water" or water that is the first to spill when flood control releases or anticipatory flood control releases are made. Water banked on stream must be the first to spill to avoid third party impacts2. Currently, with high Lake 2 An example of the risk that currently exists when entities try to bank Colorado River water on stream is given by the following. From 1992-1994, the Metropolitan Water District of Southern California (Metropolitan or MWD) purchased and, 3 " "