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<br />I' <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br /> <br />OOIH 77 <br /> <br />Nevada CO!Jlments on <br />Proposed Off stream Storage Rule <br />April 3, 1998 <br /> <br />the Department, it seems likely that one of the early, if not the first, interstate off stream storage <br />transactions will involve Arizona and Nevada entities. <br /> <br />Given Nevada's interest in Arizona's groundwater storage program, we have <br />recommended to Reclamation for more than a year many concepts that, from our vantage as a <br />prospective participant, are important for the successful implementation of interstate off stream <br />banking. In its comments, Nevada has stressed that any such transaction will entail significant <br />investment by the Authority, and the Authority will rely on its rights in the transaction for part of <br />Southern Nevada's water supply beginning as early as the next decade. Moreover, any such <br />transaction will be very complex. <br /> <br />In Nevada's view, any rules adopted by the Interior Department, to be successful, should <br />accommodate all these considerations. They should provide for certainty and enforceability and <br />accommodate the complexities inherent in an interstate storage transaction. <br /> <br />B. The final rule should provide for a contractual commitment by the Secretary <br />to release to an authorized entity in the Consuming State intentionally <br />created unused apportionment that exists as a consequence of <br />. implementation of the interstate storage agreement. <br /> <br />The Commission and the Authority are greatly concerned over the absence of any <br />provision requiring the Secretary to make a contractual commitment to an "authorized entity" <br />(e.g., the Authority) in the Consuming State (e.g., Nevada) that he will release the intentionally <br />created unused apportionment water when the terms of the Interstate Storage Agreement have <br />been met. While the proposed rule does state that intentionally created unused apportionment <br />"will be made available to the authorized entity of the Consuming State" (section 414.3(d)), there <br />is a fundamental difference between such a regulatory statement and an enduring contractual <br />commitment by the Secretary. The reality of rulemaking is that a future Secretary may unilaterally <br />change a regulation at any time, but modification of a contract requires the assent of all affected <br />parties. <br /> <br />Southern Nevada is the fastest growing region in the country and is expected to fully <br />consume Nevada's 300,000 AFY Colorado River apportionment by 2006. The Southern Nevada <br />Water Authority's objective is to store about 1.2 million acre feet of Colorado River water <br />off stream in central Arizona. Southern Nevada will rely on access to this water (through creation <br />of unused apportionment) as a vital supplemental water supply. Moreover, the Authority's up- <br />front investment just to place 1.2 million acre feet into storage may be in the range of $1 SO million <br />to $200 million. <br /> <br />2 <br /> <br />'210155.4 <br />