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COLORADO RIVER BASIN MANAGEMENT STUDY: F'INAL REPORT ISSUES OF ALLOCATIONS: RECONCILlNG~ SUPPLY WITH DEMAND RODNEY SMITH STRATE;CON CLAREMONT, CA Nurturing Development of Market Institutions. A growing general consensus in state and federal water policy is that markets have an important role in providing economic incentives for water conservation and water allocation. The long delay in the issuance of Reclamation's draft regu- lations for the Lower Colorado River Basin and the recent misfiring of the so-called Three State Process indicate that the rules of the road governing water transactions remain to be definitively established. Especially given the special role of the Interior Secretary as watermaster in the Lower Basin, the development of market institutions needs clear criteria, guidelines, and policies that would be followed by Interior when it approves proposed transactions. The list of issues is long, but generally understood (even though some of the specific provisions need funher refinement, 1 find Reclamation's draft regulations a good checklist of the issues). The specifics of how each issue is clarified will ultimately determine the respective role of market and non-market decision-making in the conserva- tion and allocation of Colorado River water. ROBERT SCHEMPP METROPOLITAN WATER DISTRICT OF SOUTHERN CA Los ANGELES, CA Metropolitan supports water conservation and efficient water use practices as described in the Regional Water Supply Solution section of the cover letter. Metropolitan and the Central Arizona Water Conservation District have executed an agreement implementing a demonstration project on interstate underground storage of Colorado River water in Arizona. The Southern Nevada Water Authority also participated in the storage of water under this program. That section of the letter discusses our sup- port of, and the essential need for interstate water trans- fers for a period of time as a component of a regional solution, The simplified process achieved with the President's approving Public Law 104-20 provides flexibil- ity to Reclamation in implementing additional measures to control salinity. The Imperial Irrigation District (Imperial) and Metropolitan have executed an agreement to construct a concrete lined canal parallel to the All American Canal. We are now awaiting commencement of negotiations for a construction funding agreement with Reclamation, and are attempting to reach consensus regarding a mitigation agreement among Metropolitan, Imperial, Reclamation, the U.S, Fish and Wildlife Service, Bureau of Land Management, and the California Department of Fish and Game. The Mitigation agreement formalizes the commit- ments made in the Final Environmental Impact StatementlReport (FEISIR) prepared by Reclamation. Potential project effects of lining the canal on Mexico's water are described in the FEISIR. It is the position of the United States Section of the International Boundary and Water Commission that the water seeping from the All American Canal is United States water and it is therefore appropriate to conserve this water and put it to beneficial use in the United States. REGI~NAL STAKEHOLDER MEETING FARMINGTON, NM We rriust deal with the facl that most of the demand for Color~do River water is outside the basin rather than within, When you move water from one basin to the other it destroys economic base that built up around the water, Water banking, what are we in the upper basin going to get out ~f this? Political power is south of us. Pres~nt mentality of established water rights precludes som~one from coming along later with a better Use. We get development where we don't need it. The traditional water development strategy is where can we get more? Do we have a need for additional water? Wat~r marketing brings problems with it, but there is good wit~ it also. It can establish a system to allocate water to areaiwith highest use. There is a problem with terminology of water regulation disql_cts, they donlt conserve water, they manage it,. Conservation is not always possible, Today use is 10 gal per 'capita per day on reservation. Welte not going to see con~ervation there, probably an increase in use. There is a lack of economic incentives/disincentives for cor$ervation of water. Its ~mportant to look at historic ways welve used water, thete may be things we've done right over time. We must learn from it and not "chuck" it because it doesn't fulfill all our wants. If lIoU put water to people who can pay the most, you're goirg to do some damage to the present system. , Hi~hest use to me means keep as much water in the river as possible, i Old farms that have been subdivided and now have houses on! them, They are no longer agricultural, but these proper- tyowners are still receiving irrIgation. And they are less eff~cient with the water than the original farmer. There needs to be a simpler process of transferring water rights. , . AlJove all else, new projects should do no harm, i RfGIONAL STAKEHOLDER MEETING RPCK SPRINGS, WY T1>e upper basin can't be expected to provide water to the 10)>ler basin until the lower basin resolves its own needs. This living beyond your means certain mentality needs to be adjusted, California and Las Vegas have warped the view of how water should be used. , t1AL SIMPSON diVISION OF WA'TER RESOURCES dENVER, CO Reducing non-beneficial consumptive uses.