So how are we going to build these western water markets? — John Fleck

October 20, 2014

From InkStain (John Fleck):

Peter Culp, Robert Glennon and Gary Libecap have published an excellent new analysis of the potential for water markets to help us dig out of the western United States’ water mess:

Water trading can facilitate the reallocation of water to meet the demands of changing economies and growing populations. It can play a vital role in encouraging conservation and stewardship of water supplies in a way that can address cultural, social, and environmental priorities. It can facilitate building a structure for managing the ever-increasing risks of greater variability in water, including through methods such as insurance contracts, hedging tools, water banking, and other mechanisms. Deploying market tools in the allocation of water can help us to overcome the growing fragility and vulnerability of the water management institutions and infrastructure in the American West.

I agree, and their new work offers a great menu of policy options to move down this path. In brief (again quoting Culp et. al):

  • Reform legal rules that discourage water trading to enable short-term water transfers.
  • Create basic market institutions to facilitate trading of water.
  • Use market-driven risk mitigation strategies to enhance system reliability.
  • [B]etter regulate the use of groundwater by monitoring and limiting use to ensure sustainability, and by bringing groundwater under the umbrella of water trading opportunities.
  • To make water markets work at scale, strong federal leadership will be necessary to promote interstate and interagency cooperation in water management
  • This is great stuff. But how do we actually do any of them?

    Each of their first four bullet points is a staggeringly difficult task that will require enormous institutional capacity within the states to carry out. Consider California’s efforts to move on number four, for example. In the midst of the drought of record, with overwhelming problems caused by groundwater pumping, all California could manage was some feeble legislation aimed at just the first part – monitoring and limiting use to ensure sustainability at some future point in time sorta maybe. This is not for lack of smart scientists and policy people pointing out that the problem is deeper and requires stronger action. This rather reflects a shortcoming of the political system that has left us at with a sub-optimal equilibrium because of the ability of individual players, acting in their own short term interest, to block progress toward a more socially optimal solution…

    Having spent years watching the New Mexico legislature’s lack of institutional capacity to make even simple water rule changes, and watching California thrash about this year in the midst of genuine crisis, I think Culp and his colleagues are a tad optimistic to suggest this could be done “immediately”, but whatever. I’m all for optimism. And I’d file this under the critical category of “baby steps,” smaller and relatively easier things that can be done that provide shorter term benefits and the learning experience to help amass the necessary social capital to take on the harder challenges to come…

    Minute 319, the U.S.-Mexico agreement that, among other things, allowed last spring’s Colorado River Delta environmental pulse flow (and which Culp helped design) is a great “baby steps” example. It includes some of the elements Culp, Glennon and Libecap are asking for (albeit dressed up quite differently), but it was as much about learning how to do stuff as it was about actually doing stuff. It also demonstrates the importance of the role of the U.S. federal government.

    The important thing we need recognize here, I think, is that the investment in the social capital needed to do these things, an investment in what I’ve sometimes called the “institutional plumbing”, is every bit as real and important as the investment in pumps and canals and dams that make up the physical plumbing of water in the West.

    More water law coverage here.

    Argument analysis: State’s veto power brings Republican River modeling dispute to the Supreme Court

    October 17, 2014
    Republican River Basin by District

    Republican River Basin by District

    From the SCOTUSblog (Ryke Longest):

    On Tuesday, the Court heard arguments in an original jurisdiction dispute between Kansas, Colorado, and Nebraska over flows of a common river: the Republican River. After the states disputed the terms of their 1943 compact, they enacted a 2003 settlement stipulation. When the parties confronted a breach by Nebraska and a dispute over the water supply models they used to calculate Nebraska’s share, they reached an impasse. Kansas exercised its veto power, sending the dispute first to arbitration, then the Special Master and to the Supreme Court.

    At oral argument, Kansas disputed the special master’s proposal to alter the settlement stipulation’s water accounting procedures based on a claim of mistake. Kansas spent most of its argument focused on the accounting procedures changes suggested by the special master. Kansas argued that the special master exceeded the charge and upset a carefully negotiated compromise by siding with one party. Nebraska similarly focused on the accounting issue, but characterized the carefully negotiated bargain as the principle that imported water should not be counted, with the formula representing a tool for implementation as opposed to a term. Justices pushed back on both sides.

    Kansas argues Against the Five-Run Solution

    Kansas Solicitor General Stephen McAllister came out forcefully arguing that the settlement stipulation itself was a carefully crafted compromise. McAllister stated that all parties were aware that the accounting procedure was subject to uncertainty. Kansas’s primary objection to the special master’s report involves the special master’s recommendation to amend the accounting procedure to implement Nebraska’s proposed “five-run solution.”

    Justice Stephen Breyer pushed back on the argument against reformation, noting pointedly that, due to a mistake in the model, Nebraska’s use of “imported water” from sources outside the Republican River basin is counted against it under the settlement stipulation’s accounting procedures. Justice Breyer continued: “And nobody wanted that. That would be totally unfair. … So what do you suggest we do about the mistake? Nothing?”

    McAllister responded that they should send the case back and do nothing about the mistake, since it is not a mutual mistake. He emphasized that the intersection between the “five-run solution” and other issues were highly complicated and that Nebraska had gotten concessions in other areas of the settlement which kept the accounting mistake from being unfair. McAllister pointed out the effect of groundwater recharge credits as an example: “We gave Nebraska a high credit for groundwater recharge at a percentage much higher than Colorado and Kansas get and Nebraska crowed about that as a concession they got from Kansas that was worth 15 to $20 million annually, that’s Exhibit K, 133, in the record.”

    Justice Antonin Scalia asked McAllister about the role of deference in the case. McAllister said that there was no deference owed the special master and argued that the special master ignored trade-offs. McAllister asserted that the parties needed to renegotiate the entire set of trade-offs in order to be fair, rather than allowing the special master to set aside one set of trade-offs to the benefit of Nebraska and Colorado.

    Chief Justice John Roberts asked what Kansas thought of its chances if the matter were sent back to the Republican River Compact Administration, for resolution. (All disputes under the compact are run first though this body, consisting of one representative of each of the three states.) McAllister responded, “Twenty-some years ago, Kansas introduced a resolution in the RRCA that said, how about we all resolve that we will comply with the compact. Kansas voted yes, Colorado voted yes, and Nebraska voted no. So this goes back a long ways.” McAllister went on to explain that its proposed disgorgement remedies against Nebraska were necessary.

    The United States argues for the special master’s disgorgement remedy

    Assistant to the Solicitor General Ann O’Connell argued on behalf of the United States in support of the special master’s Report. O’Connell defended disgorgement by pointing out that disgorgement must be sufficient to discourage opportunistic breach, citing to the Restatement of Restitution and Unjust Enrichment. Justice Scalia asked whether the United States was overstating case law by citing the Restatement, telling her that “I don’t think the Restatement can change our law by just saying something by consensus of law professors.” O’Connell cited back to the classic case of Texas v. New Mexico to support her position. In response to questioning about the amount of disgorgement, O’Connell avoided taking any position at odds with the special master. Justice Kagan asserted that the $1.8 million figure recommended was less than what Nebraska had gained by its breach, arguing against an equitable balancing approach.

    Nebraska argues that Kansas’s veto requires the Court to break the impasse

    David Cookson, Nebraska’s chief deputy attorney general, argued that the bargain Nebraska struck with Kansas was that water imported from the Platte River Basin would not be counted towards Nebraska’s allocation of the Republican River. Justice Scalia questioned whether the deal was actually that broad, suggesting instead that Nebraska had agreed to a formula, not a broader principle.

    Scalia explained: “The parties knew that this formula would not be entirely accurate and they agreed to a fair price, that is, none of this water should be counted. But they said the way to figure out whether this water is coming in or not is this formula. Why shouldn’t they be held to that formula?”

    Cookson responded that the settlement specifically provided the parties with the ability to modify the accounting formulas. Nebraska asked the Republican River Compact Administration to modify the accounting procedures, to which Kansas objected exercising its veto powers. The issue was then sent to arbitration and finally to the special master who recommended the change to the formula, the “five-run solution.”

    Chief Justice Roberts asked Cookson if he agreed that the special master would have been powerless to change the formula if it had been part of the original compact as opposed to a later settlement. Cookson readily agreed that amending the compact would be beyond the power of the special master, citing Alabama v. North Carolina for support.

    Justice Kagan picked back up the thread of Justice Scalia’s question and extended it further. She asked Cookson what would happen if the parties had negotiated over three distinct formulas and had chosen one. Under that situation, she wanted to know, would it be right to continue to use the formula chosen going forward? Cookson pushed back that changing the accounting procedures is basic process under the agreement, and that prior to the current dispute, fourteen such formula changes have been approved by the three states. Cookson continued that this time is different, because Kansas has objected. He reasoned that the exercise of a veto can kick the dispute to the Supreme Court to break the impasse created by the veto process in the compact itself, likening the problem to the one faced in the Pecos River Compact, brought before the Court in Texas v. New Mexico.

    Chief Justice Roberts countered that the formula, as specific language in the contract, should control the general statement that imported water not be counted. Cookson argued that the imported water stipulation was the specific term and the formula was just the tool designed to deliver that deal.

    Cookson defended Nebraska’s response as not showing an intentional violation of either the compact or the stipulation. He argued that Nebraska could not have foreseen dust-bowl-like conditions. He argued that there is no need for an injunction or for disgorgement, tangling with Justice Scalia again on how those remedies interact.

    Kansas rebuts Nebraska’s argument that the formula was just a toolkit

    In rebuttal, McAllister returned to Justice Kagan’s line of questioning the choice of formulas for accounting made by the parties in the settlement stipulation. McAllister pointed out that the formula that Nebraska is seeking to have reformed was actually selected by Nebraska as its first choice during settlement negotiations. Citing the result in the boundary dispute of New Hampshire v. Maine, McAllister told the Court that it had given “New Hampshire the answer we think you should give Nebraska today, which is: ‘Sorry; you made the deal, and just because you now think you have a better way of doing it doesn’t mean we should rewrite the contract.’”

    In closing, Justice Sonia Sotomayor asked McAllister how much money is represented by the difference between the accounting preferred by Nebraska and that preferred by Kansas. McAllister answered with the amount of water in dispute – between 8,000 and 10,000 acre-feet. (An acre-foot is the amount of water needed to cover an acre of land to a depth of one foot, approximately 325,851 gallons.) When Sotomayor pressed for a dollar figure, McAllister told her that the special master had valued the water to Nebraska at $362 per acre-foot. On that note, the Court adjourned.

    Ryke Longest is the Director of the Environmental Law and Policy Clinic and a Clinical Professor of Law at the Duke University School of Law.

    More Republican River Basin coverage here.

    Supreme Court hears arguments on dispute in Republican Basin — The Imperial Republican

    October 16, 2014
    Republican River Basin by District

    Republican River Basin by District

    From The Imperial Republican (Russ Pankonin):

    The nine justices of the U.S. Supreme Court heard oral arguments from Kansas and Nebraska Tuesday on the 2013 findings of Special Master William Kayatta, Jr.

    Kayatta issued the ruling last year in an ongoing dispute dating to 2010 between the two states over Nebraska’s overuse of water in 2006.

    Kayatta recommended Nebraska pay Kansas $5.5 million—$3.7 million as the actual damages Kansas suffered by Nebraska’s overuse; and $1.8 million to Kansas for the gain Nebraska received by pumping extra water in 2006.

    He also said the accounting methods used to calculate water supplies in the Republican River Basin should be revised.

    Two primary issues
    The oral arguments by the states and questioning by the justices Tuesday centered on two main subjects:

  • Whether Kansas was entitled to a significant disgorgement or damage payment for Nebraska’s compact violation; and
  • Whether new accounting procedures for measuring imported water supplies into the basin, sought by Nebraska and recommended by Kayatta, should be allowed.
  • Kansas Solicitor General Stephen McCallister was the first to present arguments before the high court and set out by addressing the changes in the compact accounting. He said Kansas does not agree with Nebraska and the special master that the method for calculating imported water supply should be rewritten.

    “That agreement itself (2002 settlement) was a complex set of concessions and compromises,” he told the justices.

    The water model is an estimation at best of what’s going in the basin, he said. Parties were aware of the imported water phenomenon when the agreement was reached, he added. He said it wasn’t fair the water master focused solely on what Nebraska wanted changed while Kansas had issues that weren’t addressed. Justice Sonia Sotomayor said Kansas was invited to provide a better solution to the accounting issues but did not. McAllister said they were working on one but didn’t have time to develop it.

    If contract principles were applied to the disagreement, the remedy would be to rescind the compact settlement.

    “And I don’t think you want that,” Sotomayor said. McAllister agreed that none of the states would want that.

    So if rescinding the agreement isn’t possible, she said, then it falls back to reforming or revising the contract.

    She asked McCallister, “If Kansas couldn’t come up with an alternative, why shouldn’t the court just accept the special master’s recommendation?”

    McCallister said Nebraska’s change in accounting procedures came late in the process, as a counterclaim during arbitration.

    Justice Ruth Bader Ginsburg asked about the process when the states can’t agree.

    McAllister said there’s the option of non-binding arbitration, “which we all love and almost always works out our disputes.”

    If that doesn’t work, and the states feel strongly about it, they can request a special master, he said. “But again, I don’t think we’ll get there because the parties can and have negotiated successfully.”

    Sotomayor was skeptical of this. “But I thought you had gone through the alternatives,” with no resolution, she said.

    He said they brought this case to the high court because Kansas believed there was a compact violation by Nebraska that needed a remedy.

    Disgorgement remedy

    That remedy would be for the justices to grant Kansas a significant disgorgement payment from Nebraska to get their attention, McAllister said.

    Disgorgement is defined as the forced giving up of profits obtained by illegal or unethical acts.
    Of the $80 million Kansas sought in damages, they designated $60 million as profits or unjust enrichment Nebraska received by their overuse of water.

    Justice Antonin Scalia said disgorgement payments aren’t a normal contract remedy and require an intentional violation.

    McAllister said if Nebraska only has to pay Kansas $3.7 million, there’s little incentive for compliance, especially if a dispute can drag out eight years before any possibility of recovery.
    Justice Samuel Alito, Jr. said Kayatta found Nebraska didn’t intentionally violate the compact agreement.

    McAllister said the master did find that Nebraska “knowingly exposed Kansas to a risk of violation.”

    While they didn’t purposefully violate, they did violate it, McCallister said. “I think you have to say it’s more than negligent.”

    McCallister continued, “Nothing less than a substantial disgorgement award seems to really get their attention. And here it has gotten their attention and it has also gotten Colorado’s attention.”

    Justice Dept. sides with Kansas on disgorgement

    Ann O’Connell, Assistant to the Solicitor General, U.S. Department of Justice, said disgorgement should be an available remedy when a state violates an interstate water compact.

    She said the monetary remedy would “help to stabilize compacts and ensure the states are working vigorously to meet their compact obligations.”

    Justice Scalia reiterated the need for intentional violation in contract law and asked O’Connell for cases where the high court imposed disgorgement, even in the case of intentional violation. She could not cite any.

    She did cite a case between Texas and New Mexico where disgorgement could be a possible remedy. She continued, “It certainly left that door open.”

    “For an intentional violation?” Scalia questioned. “Yes,” she replied.

    “But we’ve never done it, have we?” Scalia asked. “No. And this is a novel . . .” she said before Scalia cut her off.

    At the end of her argument, O’Connell did go on record that the Justice Department does support the special master’s recommendation to revisit the compact accounting methods.
    Nebraska wants accounting change, not high damages

    Nebraska’s Chief Deputy Attorney General, David Cookson, was the final lawyer to present arguments. He stated the compact settlement specifically says the accounting will not count imported Republican River water and requested the court approve Kayatta’s recommendation for the accounting change.
    Scalia challenged him, saying the settlement included how such a water supply be determined—by a formula—and that was agreed to.

    Cookson countered, saying the deal Nebraska agreed to was not the formula.

    “The deal we made was not to count imported water,” he said.

    He said the final settlement made it clear that accounting procedures could be modified at any time through the appropriate process.

    Cookson said Nebraska followed that process, by going to the three-state compact administration. After Kansas objected, non-binding arbitration was sought.

    “The master agreed the mistake occurred, sent it back to the RRCA (Republican River Compact Administration) to develop a solution. This was all presented to Kansas in 2007,” Cookson told the justices.

    He said the accounting procedures are a technical appendix to the settlement and were not part of the settlement agreement.

    Scalia asked if the final settlement could be amended by mutual agreement.

    Cookson said no, because the three states, in the final settlement, put in a non-severability clause that they couldn’t change it. Cookson made the distinction that the accounting procedures could be changed and cited case law where the court allowed appendixes to state settlements to be changed. In addition, he said the accounting procedures appendix was not included as part of the compact settlement when it was approved by Congress.

    Chief Justice John G. Roberts, Jr., said the settlement is an agreement between two sovereign states.

    “The idea of a special master or this court changing the nature of that agreement is a pretty radical one,” he said.

    Cookson responded, “But we’re not changing that agreement. The agreement in the final settlement stipulation is do not count imported Platte River water.”

    When negotiating the settlement, Cookson asserted the parties knew the accounting procedures would change as things moved forward. He cited roughly 14 changes that have already been made and approved by the compact administrators. He said Kayatta’s recommendation doesn’t reform the compact settlement, just the technical appendix
    on accounting procedures.

    Disgorgement not justified

    On the issue of disgorgement, Cookson said Nebraska took exception to the award because the state did not deliberately violate the compact.

    Justice Elena Kagan said the special master and Justice Department Solicitor General characterized Nebraska as “a conscious wrong-doer, that you failed to act, refused to act in the face of known risk.”

    Cookson took exception, noting that Nebraska took control of consumptive use in 2002, while the settlement was still being negotiated. In addition, through 2006, the state reduced its pumping by 500,000 acre-feet, a 35 percent reduction. He said it was not possible for Nebraska to foresee its allocations would fall even below the record lows that occurred during the Dust Bowl of the 1930s. He urged justices to understand that allocations in the settlement were based on a 10-year period of the Dust Bowl. He said it was reasonable for Nebraska to believe allocations would never go below those of the Dust Bowl.

    “And yet in ‘05 and ‘06, our allocations significantly fell below the Dust Bowl,” he told the justices.

    He said Nebraska conceded it fell short of compliance in 2006 and offered to pay Kansas its actual damages.

    Since then, Cookson said Nebraska has remained in compliance “even in the driest condition now of record in the basin.”

    For these reasons, he said Kansas’ claim of unjust enrichment “as a means of disgorging gain to Nebraska” is not appropriate.

    In rebuttal to Cookson’s arguments, McAllister said the court should give Nebraska this answer on changing the accounting method: “Sorry; you made the deal, and just because you now think you have a better way of doing it, doesn’t mean we should rewrite the contract.”

    Nebraska delegation attends

    A Nebraska delegation including representatives from the Department of Natural Resources, the Attorney General’s office and attorneys and natural resource district officials closely associated with the case attended the oral arguments. Those attending from the Upper Republican NRD included Manager Jasper Fanning, Assistant Manager Nate Jenkins and Board Member Jason Kunkel.

    The justices will now review the case and render a decision which could occur sometime before the end of the year but no later than the end of June 2015.

    More Republican River Basin coverage here.

    Colorado Water Congress: Join us Nov. 19 for a day of fact-filled workshops

    October 15, 2014

    Republican River Basin: “You want more than damages” — Antonin Scalia

    October 15, 2014
    Republican River Basin by District

    Republican River Basin by District

    From Omaha World-Herald (Joseph Morton):

    The court heard oral arguments Tuesday in the latest twist of the 1943 Republican River Compact signed by Kansas, Nebraska and Colorado. The case pits Nebraska against Kansas — not only over the amount of money Nebraska owes, but also to set the ground rules for what are sure to be future battles over the use of a critical but stressed resource.

    Justices had sharp questions for both sides. They expressed skepticism about Kansas’ claim for higher damages as well as Nebraska’s desire to rewrite the formula used to calculate water usage.

    As is typical in such interstate disputes, a special master earlier had reviewed the case for the court. He found that Nebraska owes $5.5 million — $3.7 million in basic damages with an additional $1.8 million attributed to the gains made by Nebraska farmers as a result of the violations. Nebraska is challenging the extra $1.8 million penalty.

    Kansas Solicitor General Stephen McAllister, however, urged the justices to go significantly higher in penalizing Nebraska, contending that Nebraska’s actual gains were much larger than $3.7 million, or even $5.5 million. If Nebraska winds up with more in benefits than it is penalized for the excess water, he said, it will have no incentive to work hard at compliance in a future drought.
    Justice Antonin Scalia focused on the extra penalty that Kansas is seeking.

    “You want more than damages,” Scalia told McAllister. “You want to say, ‘I not only want to receive what it cost me, what your violation cost me, but I want in addition to receive any benefits that you got from the violation.’ … That’s not a normal contract remedy.”

    Justice Samuel Alito pointed out that Nebraska’s violations of the compact had been ruled unintentional. But McAllister said Nebraska knew it was exposing Kansas to risk and described it as “more than negligent” on Nebraska’s part.

    “These were massive violations on Nebraska’s part, knowing they were in trouble and just really not taking any kind of adequate steps,” McAllister said.

    Nebraska Chief Deputy Attorney General David Cookson defended Nebraska’s efforts to stay in compliance
    with the compact and to mitigate the situation once the problems were revealed. Still, he faced questions from Justices Elena Kagan and Ruth Bader Ginsburg, both of whom cited the special master’s findings that while Nebraska’s violations were not an intentional breach, the state should have seen what was coming.

    “The special master also said essentially … that you were a conscious wrongdoer, that you failed to act, refused to act in the face of a known risk,” Kagan said to Cookson. She said the special master found that “unless there was some very lucky fortuitous thing that happened, the quite foreseeable effect of your actions was going to be that Kansas didn’t have enough water.”

    Cookson said Nebraska does not agree with the findings about what Nebraska should have known or the idea that it took no action.

    “Nebraska seized control of its consumptive use in 2002 while it was still negotiating the compact, and through 2006 reduced its pumping (by 35 percent),” Cookson said. “At the same time, however, Nebraska could not reasonably foresee that its allocations were going to fall even below the historical low period of record in this basin, which was the Dust Bowl.”

    Nebraska also has asked the court to go along with the special master’s finding that the formula for calculating water usage should be reworked because it is unfair. Chief Justice John Roberts expressed skepticism about taking such a step, however.

    “The idea of a special master or this court changing the nature of that agreement is a pretty radical one,” Roberts said.

    The court is expected to rule before the end of the year.

    After the arguments, Cookson told The World-Herald that it’s impossible to gather from the court’s questions which way the justices are leaning. They often play devil’s advocate and push harder on the side they ultimately agree with in order to sharpen the arguments in their favor.

    “The court was very engaged,” Cookson said. “They asked questions that pushed the boundaries of both sides’ arguments.”

    More Republican River Basin coverage here.

    Twin Lakes Reservoir and Canal Co, Aspen and the #ColoradoRiver District reach deal

    October 15, 2014

    From the Aspen Daily News (Brent Gardner-Smith):

    The city of Aspen and Front Range water interests have reached a compromise 20 years in the making that allows more water to be sent east when the spring runoff is plentiful, in exchange for bolstering flows when the Roaring Fork River is running low in the fall. The deal is between the Twin Lakes Reservoir and Canal Co., which operates transbasin diversion tunnels underneath Independence Pass, and the city of Aspen and the Colorado River District, which works to protect water rights on the Western Slope.

    The deal, which has its roots in a 1994 water court application from Twin Lakes that sought to increase diversions during the runoff in high-snowpack years. It will leave 40 acre-feet of water in Grizzly Reservoir when Twin Lakes exercises its rights under the 1994 proposal. That water will be stored in the 500-acre-foot reservoir and released into the Roaring Fork for about three weeks in late summer, when seasonal flows are at their lowest. The water must be called for and released in the same year it was stored.

    Grizzly Reservoir, located about 8 miles up Lincoln Creek Road near the Continental Divide, is a component of the transbasin-diversion system. A tunnel underneath the reservoir channels water underneath the mountain to the south fork of Lake Creek in the Arkansas River basin, on the other side of the pass.

    Additionally, under the deal, the River District will have the right to store 200 acre-feet of water in Grizzly Reservoir and can call for up to 150 acre feet of that water in a year. Importantly, that 200 acre-feet can be stored long-term in the reservoir until it is called for by the River District, which manages water rights across the Western Slope.

    Another 600 acre-feet will be provided to the River District for seasonal storage in Twin Lakes Reservoir, also on the east side of Independence Pass. The district will then trade and exchange that water with various entities, which could lead to more water staying on the Western Slope that would otherwise be diverted through other transbasin tunnels.

    Twin Lakes diverts an average of 46,000 acre-feet a year from the headwaters of the Roaring Fork and sends it to Colorado Springs and other Front Range cities. The city of Colorado Springs owns 55 percent of the shares in the Twin Lakes Reservoir and Canal Co., entities in Pueblo own 23 percent, entities in Pueblo West own 12 percent, and Aurora owns 5 percent.

    Aspen and the River District intend to cooperatively use the stored water in Grizzly Reservoir to boost late-summer flows in the Roaring Fork as it winds through Aspen proper.

    Water already flowing
    The stretch of the Roaring Fork River below the Salvation Ditch on Stillwater Drive typically runs below environmentally sound flows each year for about eight weeks, according to city officials. And given that this spring saw a high run-off, the three parties to the agreement managed some water this year as if the deal was already signed.

    “At the close of the current water year (which ended the last day of September), Twin Lakes started making releases of some of the water stored for the River District, followed by release of the 40 acre-feet, as directed by Aspen and the River District,” Phil Overeynder, a special projects engineer for the city, wrote in an Oct. 3 memo to city council. “These releases had the effect of increasing flows in the Roaring Fork through the Aspen reach by approximately 20 percent and will last for approximately a three-week period at the end of the lowest flow conditions of the year.”

    Overeynder added that “both Aspen and the River District believe that this agreement, while not perfect, is of real and meaningful benefit to the Roaring Fork.”

    Aspen City Council approved the agreement on its consent calendar during a regular council meeting on Monday. The agreement is on the River District’s Tuesday meeting agenda, and Twin Lakes approved it last month.

    The deal still needs to be accepted by Pitkin County and the Salvation Ditch Co. in order to satisfy all of the details of the water court’s 2001 approval of the 1994 water rights application.

    Junior and senior rights
    In addition to its junior 1994 water right, Twin Lakes also holds a senior 1936 water right that allows it to divert up to 68,000 acre-feet in a single year and up to 570,000 acre-feet in a 10-year period.

    Originally, the water diverted by Twin Lakes was used to grow sugar beets to make sugar, but it is now primarily used to meet the needs of people living on the Front Range.

    The 1936 water right still has some lingering restrictions in high-water years, according to Kevin Lusk, an engineer with Colorado Springs Utilities who serves as the president of the board of the private Twin Lakes Reservoir and Canal Co. Under its 1936 right, when there is plenty of water in the Arkansas River and the Twin Lakes Reservoir is full, Twin Lakes is not allowed to divert water, even though it is physically there to divert, Lusk explained. So in 1994 it filed in water court for a new water right without the same restrictions so it could divert more water to the east. It was dubbed the “Twin Junior,” water right.

    The city of Aspen and the River District objected in court to the “Twin Junior” and the agreement approved Monday is a long-delayed outcome of the case.

    Aspen claimed that if Twin Lakes diverted more water in big-water years, the Roaring Fork wouldn’t enjoy the benefits of the high water, including flooding the Stillwater section and replenishing groundwater supplies. That process, the city argued, helps the river in dry times.

    “We don’t necessarily agree with the theory behind it,” Lusk said of the city’s claim, but added that Twin Lakes agreed to the deal as part of settlement negotiations.

    And since 2014 turned out to be a high-water year, Twin Lakes exercised its right to divert water under its 1994 Twin Junior right, and worked cooperatively with Aspen and the River District to release 40-acre feet of “mitigation water” as described in the pending deal.

    The new agreement between the city, Twin Lakes and the River District is in addition to another working arrangement between Twin Lakes and Aspen related to the Fryingpan-Arkansas diversion project, which diverts water from the headwaters of the Fryingpan River.

    That agreement provides 3,000 acre-feet of water each year to be released by Twin Lakes into the main stem of the Roaring Fork beneath a dam near Lost Man Campground, normally at a rate of 3 to 4 cubic feet per second.

    More Twin Lakes coverage here.

    Water Values Podcast: What’s an augmentation plan?

    October 14, 2014


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