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<br />MWSI Project <br />Interruptible Supply Framework Report - DRAFT <br /> <br />August 21,1995 <br /> <br />3.2 Quasi-Interruptible Supply Arrangements and Studies <br /> <br />MWD / Areias Dairy Farm: A IS-year agreement between MWD and the <br />Areias Dairy Farm involves the transfer of water from the dairy farm to MWD in any <br />seven of the 15 years, at MWD's discretion, When water is transferred, the dairy farm <br />is expected to fallow its land, MWD will pay $175 / AF to the dairy farm and $25/AF <br />to an environmental restoration fund, as mandated by the CVPIA (Central Valley <br />Project Improvement Act), As of 1994, this agreement was in the public review stage, <br />This arrangement is not a true interruptible supply arrangement since the number of <br />times the transfer will occur is known at the onset of the agreement. <br /> <br />3,3 Purchase / leaseback Arrangements <br /> <br />Although the focus of this study is on the potential for interruptible supply <br />agreements in the study area, it is beneficial to understand purchase / lease back <br />agreements that have taken place, Two such arrangements have been developed in the <br />Denver metro area. <br /> <br />. <br />Denver Water: In 1963, Denver entered into forty-year contracts with two <br />ranchers, by which it acquired rights to water from the Williams Fork River. One of <br />the rights was for 110 cfs and the other for 3 cfs. The sellers used the water to grow <br />feed for their livestock, so when the city exercised its option, payments were intended <br />to compensate the ranchers for the purchase of alternative feed, The ranchers paid a <br />specified amount for rent over the forty-year period and the city paid the ranchers a <br />certain amount during years in which it exercised its option to use the water. The <br />amount depended on if all or a portion of the water was optioned, Denver had to give <br />notice no later than March 10 if all water for the upcoming irrigation season would be <br />taken, and by June IS if all or a portion of the water would be taken starting July I <br />(pinnes. 1994), <br /> <br />City of Boulder: In 1994, the City of Boulder purchased shares of the Lower <br />Boulder Ditch and entered into a lease back arrangement with the seller. The seller has <br />a perpetual right to delivery of the irrigation water, subject to the City's right to take <br />the water in time of shortage, Boulder has agreed to take the water only in times of <br />shortage, but the City has the discretion to determine the existence of this type of <br />situation, The City anticipates exercising its option once every 20 to 30 years and is <br />required to give at least two weeks' notice of the proposed interruption, The farmer <br />does not pay rent to the City and the amount the City must pay to the farmer in the <br />event of water being taken depends on when notice was given, If notice is given before <br />May I, the City must pay ditch company assessments for that year, If after May I, <br />Boulder must reimburse the farm for losses resulting from the interruption (pinnes, <br />1994), Thus far, the City has not exercised its option. <br /> <br />HVdrosphere Resource Consultants <br /> <br />11 <br />