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I I I I I I I I I I I I I I I I I I I As a fallowing agreement does not involve the purchase of land or the purchase of a water right, it may be undertaken without reducing the long-term apportionments of the Basin States. As part of negotiations to purchase replacement water for Cliff Dam of the CAP, the cities in the Phoenix area offered to purchase agricultural water at $600 per af (an annualized value of $50 per acre-foot). There have been few, if any, offers at this price. However, a 2-year fallowing agreement is being worked out between The Metropolitan Water District of Southern California (Metropolitan) and the Palo Verde Irrigation District that would provide 100,000 af of water each year for a price of $130 per acre-foot. Under the arrangement, the water made available through fallowing would be banked in Lake Mead and used to cover potential overages. Allowing for longer-term contracting and increased volume, one might suppose that the bid-offer market is $50 to $150 per af. The costs assume $150 per acre-foot. Under the 1974 Act, the Secretary was entitled to use water conserved from lining the Coachella Canal in California to assist in replacing the additional water released from storage to meet the delivery obligation to Mexico. Similarly, the United States would use the fallowing or leasing arrangement as a measure to assist in replacing the additional water released from storage. Such leasing or fallowing could be acquired from any Basin State agricultural area. Bypass and loss of irrigation drainage would be allowed to continue. PROS: Cost The primary advantage of this alternative is the reduced cost while preserving the Desalting Plant should future operation be required. Operation and maintenance costs would be $12.5 million for the first year, $7 to $9 million for the second year, and $3 million per year thereafter. Following the interim period, leasing or fallowing would cost $11.8 million per year. Total annual cost would be $14.8 million per year after the interim period. Some Impact on Santa Clara Slough Bypass drainage of 97,000 af per year would continue, and impacts to the Slough would need to be evaluated preserved. Uncertain Risks to States Water Supply While it is clear that water belonging to the Basin States is being allowed to be bypassed and lost, it is not clear that this loss will cause harm or that conserving this loss will significantly increase Colorado River water supplies. As the Upper Basin has yet to fully develop, overall water supply demands continue to be less than the long- term supply. With the large carryover storage of the Colorado River reservoirs, the probability that shortage will occur in the foreseeable future is relatively low, and..there is a good probability that the reservoir system will fill and flood control releases will be required. 34