Click here to read the newsletter. Here’s an excerpt:
Demand Management – a Hot Topic!!
There was an in-depth conversation around the Demand Management topic!
Celene Hawkins stated that the Demand Management workgroups are just at the beginning stages of work and there are still many questions. There is a greater need for coordination and keeping a steady pace of the work, while not moving too quickly so as to not miss things, as these are very complicated issues and need to take that time that is needed to do the work. There will be a joint IBCC and Demand Management work-group meetings that will take place March 4-5 where discussion could take place about that better coordination and how the CWCB can support the work-groups moving forward.
Russell George stated that the IBCC is not a work-group in Demand Management, they intentionally stand aside because they wanted to be ready as the IBCC to pick any particularly thorny question with the statewide implication that needed their help. The IBCC believes that at this point in time, and because of what’s going on with the river as a whole and the water levels of the big reservoirs, Demand Management becomes probably one of the most important issues for discussion on Colorado water issues that there is today. George explained that we owe it to the other Upper Basin states who are going through this drill, to work together to find an approach that works in all four states or to learn together that Demand Management can’t be done. Whatever conclusion is reached, it needs to be based on open and careful consideration of Demand Management as a tool that is being evaluated, as called for in the Drought Contingency Plans and Legislation.
Conservation Colorado, which has offices across the state to help organize citizen activism and engagement, will be hosting “Securing Our Water Future,” from 6 – 8 p.m., Thurs., Jan. 23, at 4Corners Riversports. The goal of the event is to discuss what local residents and businesses can do to help curb water usage, build drought resilience and support the goals of the [Colorado Water Plan]. The meeting will be held in partnership with local members of the Colorado Outdoor Business Alliance, which has 40 members in Southwest Colorado. In addition to free food and drinks, the evening will include an expert panel: Celene Hawkins, of the Nature Conservancy and Colorado Water Conservation Board; Marcie Bidwell, from the Mountain Studies Institute; and a representative from the Ute Mountain Ute Tribe.
“The point is not to shame people for their water use,” Goodman said. “Instead, we will present more efficient irrigation strategies and programs.” Goodman said the biggest hurdle to implementing the state’s water plan right now is money. It’s estimated that putting the plan into action will require $100 million a year – which might seem like a lot but is a mere drop in the bucket compared to the state’s other budget items, he said. State legislators are currently looking at adding $10 million to next year’s budget toward the plan, and the recently passed Proposition DD, which legalized sports betting, will add about another $10 million a year (that number will be significantly less in its first year of implementation).
Goodman said he hopes next week’s meeting, in addition to providing a dialogue, will spur local citizens to get active and encourage their representatives to fund the water plan.
“This is a good starting point, our legislators need to know this matters to us and to make it a reality,” he said. “As great as the water plan is, if we don’t have money behind it, we won’t see results.”
Here’s a guest column from Andy Mueller that’s running in The Grand Junction Daily Sentinel:
At the Colorado River District, we are working to ensure that whatever the future holds, there’s water on the West Slope to support our way of life.
Whether you grow food, rely on clean water from your kitchen tap, or recreate on our rivers, the River District is working to develop every tool possible to ensure that West Slope water users are represented and protected.
In fact, the District recently received a $315,000 “WaterSMART” grant, which we will use to analyze many of the risks that we face on the West Slope in an uncertain water future.
Despite the optimism from recent snowfall, Colorado is still amid a prolonged decline of flows in the Colorado River — and facing more variable weather conditions and snowpack with each passing year. When you combine that with growing population in the Colorado River basin, both in Colorado and downstream, we’re looking at an uncertain water supply.
Under the Colorado River Compact, Colorado and other states in the Upper Colorado River Basin are required to keep a certain amount of water flowing to states in the Lower Basin. But declining flows have signaled a risk to that obligation. And continued drought could mean water users in the Centennial State might have to reduce water use in the future without compensation in order to meet this compact commitment.
As part of a multi-state plan to avoid that, Colorado is exploring the feasibility of a program called demand management, which would pay farmers, industry and cities to voluntarily and temporarily reduce water use in order to bank it in reservoirs for use in preventing an uncompensated call. At the Colorado River District, we have concerns about whether such a program is advisable or necessary, but even as we seek answers to those concerns, others are looking at how such a program will be structured.
Right now, there are a lot of questions. As Colorado decides if and how demand management would be implemented, we want to advocate for rules that are the best possible for West Slope water users. We are studying the hypotheticals and talking to a broad set of water users to understand what might work in western Colorado.
The Colorado River District received its $315,000 WaterSMART grant from the U.S. Bureau of Reclamation as part of a federal water planning program. We will be working with the Southwestern Water Conservation District, Tri-State Generation and Transmission Association, The Nature Conservancy, Basin Roundtables, the state of Colorado and others to study risks to our water supply. Leveraging these federal funds and partnerships allows us to do more to protect West Slope water users.
Agricultural producers play a critical role in our local economies, whether it’s equipment repairs at a local mechanic or a ranch hand buying a burger at the local diner. Our main street businesses could see changes if farmers, even temporarily, aren’t farming.
To understand how our local economies might be affected by demand management, the River District is sponsoring a study of the potential secondary economic impacts that such a program could have on the businesses and communities that West Slope agriculture supports.
The grant will also fund the next phase of a multi-year study to understand the risk to Colorado’s water users if a call under the Colorado River Compact requires that we use less water. This study is designed to give us all an idea of what water rights might be curtailed by a compact call, giving water users across the West Slope a better idea of what could happen to their water.
Finally, the WaterSMART grant will help us bring West Slope water users together to understand how to create a program that makes sense for them. While we can’t get the thousands of water users in the Colorado River District in a room to decide what demand management should look like, we’ll be working with a broad cross-section of water users from different industries and communities in the district to do just that. We want to be sure that if demand management is implemented, it works for ranchers, towns, and rivers in western Colorado.
All these studies and conversations will give West Slope water users the information and tools they need to decide if they should take part in demand management. They will also better allow the Colorado River District to advocate for those users and protect water on the West Slope in an uncertain future.
Water managers from throughout the Colorado River Basin took the stage at the Colorado River Water Users Association conference earlier this month to talk about conserving water in the face of the twin threats to the river: increasing demand and climate change.
The state of Colorado is currently exploring a water-use-reduction program that is largely designed to pay farmers and ranchers on the Western Slope to voluntarily conserve water. While there’s still debate whether such a program should be implemented, the first question many ask is how to pay for such a program. In recent months, some water managers have come up with innovative ways to fund the controversial water-use-reduction plan — known as demand management — that wouldn’t rely entirely on taxpayers.
The drought contingency plan, which water leaders inked at last year’s annual CRWUA meeting, set up a reserve account of 500,000 acre-feet of water that the Upper Basin — Colorado, Wyoming, Utah and New Mexico — could use to store water in Lake Powell as an insurance policy against dwindling reservoir levels.
In November, Colorado voters passed Proposition DD, which is projected to funnel roughly $16 million a year to the Colorado Water Conservation Board, or CWCB, by taxing sports betting. Demand management is one of the two things money from Proposition DD could fund (the other is Water Plan grants).
However, it’s widely accepted that $16 million is not enough to fund either of those things in their entirety. Demand management needs other sources of money.
Although the Glenwood Springs-based Colorado River Water Conservation District still isn’t convinced that a demand-management program is the right approach for the Western Slope, general manager Andy Mueller told the Las Vegas crowd that the Upper Basin has to reduce its water consumption — and explore creative solutions to accomplish that.
“I often talk about the Lower Basin overuse and how that’s driving the problem, and I will say they in the Lower Basin need to fix that problem,” Mueller said. “I will also say we in the Upper Basin … need to reduce our use. The science is pretty clear. Water we all thought was there even 15 years ago is not going be there. You can’t have water for the environment and the people if we are not reducing consumptive use throughout the basin.”
Who should pay?
So, if nearly all water users on the Colorado River, including those in the Lower Basin — California, Nevada and Arizona — would stand to benefit from a demand-management program, who should pay for it?
Not Colorado taxpayers, Mueller said, at least not entirely.
“Eighty million (dollars) a year would need to be out there in payments to get the appropriate amount of water in Lake Powell,” he said. “That cost to taxpayers is too high. So you turn to: Who else benefits from us creating a storage account in Lake Powell?”
One answer: power providers in both the Upper and Lower Basin states, who all need Lake Powell to remain above 3,525 feet, the minimum level required to continue generating hydropower. Some Upper Basin power cooperatives such as Western Area Power Administration, which sell power to local communities, including Aspen and Glenwood Springs, purchase hydropower generated at Lake Powell. Adding a small demand-management surcharge to customers’ bills is something that should be explored, Mueller said.
“Power customers should share in the costs of us storing for demand management,” Mueller said.
Another potential source of funds could be nonprofit environmental groups, since sending more water downstream to Lake Powell would also benefit stream health. The federal government, whose Bureau of Reclamation operates Lake Powell and Lake Mead, also has a role to play, Mueller said.
But no matter where the money comes from, Mueller said it must be channeled through the CWCB in a heavily regulated market to prevent speculation by private buyers.
“We have been very clear it needs to be a guided market if it’s going to happen, with lots of thoughtful, proactive rules to prevent lots of serious consequences,” he said.
The CWCB currently has a workgroup devoted to exploring how to fund demand management. The group has met twice so far, but CWCB facilitator Anna Mauss said the two biggest questions the group is grappling with are these: how much water is needed and what would the cost be. The workgroup, she said, will dive deeper into funding strategies at the next meeting, scheduled for the end of January.
“We are baby-stepping into this, trying to be diligent,” Mauss said. “It’s really just looking at scenarios at this point.”
The state is also encouraging innovative ideas from the private sector. The CWCB recently awarded $72,000 to 10.10.10, a Colorado Nonprofit Development Center project that aims to tackle “wicked problems” in water and climate. Under the program, 10 entrepreneurs will, over 10 days, attempt to tackle 10 systemic issues that are not adequately addressed by government, organizations or institutions.
“Yes, we are looking at demand management, and it could be one of the wicked problems we address,” said Jeffrey Nathanson, president of 10.10.10.
Platform for payment?
While some people work on finding sources of funding, others are already creating a platform to pay irrigators once the money is in place. Southwest Colorado water managers Steven Ruddell and David Stiller think a reverse auction to compensate water users for using less is the best way to go.
A reverse auction, which features many sellers (farmers and ranchers) and one buyer (the state of Colorado through the CWCB), would allow water-rights holders to set the lowest price they are willing to accept to voluntarily send their water downstream. According to Ruddell and Stiller’s paper on the subject, a reverse auction would remove paying for demand management from a political process and move it into a market-based process that lets water-rights holders bid the fair-market value of their water. It would also keep costs down for the CWCB.
Ruddell and Stiller presented their reverse-auction idea at the Upper Colorado River Basin Forum at Colorado Mesa University last month.
“We’ve tried to bite off a small piece of demand management by suggesting we use an auction that people are familiar with,” Ruddell said. “It’s used to determine the value of something, especially in the ag world.”
There are still many questions surrounding how a demand-management program might be paid for.
“There are all sorts of options,” Mueller said. “We shouldn’t just focus on raising taxes in our state.”
Aspen Journalism collaborates with The Aspen Times and other Swift Communications newspapers on coverage of water and rivers. This story appeared in the Dec. 30 edition of The Aspen Times.
Click here to view the Twitter hashtag #CRWUA2019 from the conference.
Saving water on the Colorado River system, funding the state water plan, and preserving more water for streams are expected to top lawmakers’ water agenda when the Colorado General Assembly begins its work Jan. 8
Saving Water on the Colorado River
Last May the seven Colorado River Basin states signed a drought contingency plan that requires the three lower basin states, Arizona, Nevada and California, to cut water use. It also gives the four upper basin states — Colorado, New Mexico, Utah and Wyoming — the option to create a large-scale water conservation program that would add more water to storage in Lake Powell. That water would be credited to the Upper Basin states and protect them from cutbacks if levels in Powell start to fall below those needed to generate power and to meet water delivery obligations to the Lower Basin. Colorado and other Upper Basin states are exploring whether such a conservation program, known as demand management, is feasible. Any water users who contributed to the new Powell storage account would do so voluntarily and would be paid for their participation.
Where would that water come from? Since irrigated agriculture is the largest user, most of it is likely to come from farmers and ranchers. That troubles Colorado Rep. Marc Catlin, R-Montrose, former manager of the Uncompahgre Valley Water Users Association in southwest Colorado. “We’re still looking at agriculture as a living reservoir that we don’t have to build,” he says.
But Catlin sees “some shifting in the conversation” about sharing water cuts with East Slope communities, where there’s a growing recognition that “if it hurts western Colorado, it hurts the whole state.” That’s because East Slope urban water providers rely on transmountain diversions for much of their water supply. Denver Water, for example, counts on Colorado River imports for half its water. And since most of those rights are junior — acquired after the 1922 Colorado River Compact was signed — the metro area, along with irrigators in the South Platte and Arkansas River valleys that receive water via transmountain diversions, would also be affected by any cutbacks in Colorado River water deliveries. It is anticipated that those entities and regions would participate in conservation alongside West Slope irrigators.
While the Colorado Water Conservation Board (CWCB) is now examining whether to create such a program, lawmakers this year will consider a bill that would require CWCB to involve the public and the state’s nine river basin roundtables in developing a demand management program. Although CWCB would have final say, it would have to submit any draft program to the Water Resources Review Committee and consider its feedback.
Funding Colorado’s Water Plan
Implementing Colorado’s Water Plan is projected to cost $3 billion over the next 30 years, or $100 million annually. The CWCB and the General Assembly have provided some funding for the water plan, but those amounts cover only a fraction of the water plan’s estimated costs.
Enter Proposition DD, approved by voters in November. It legalizes sports betting and assesses a 10 percent tax on casinos’ net proceeds. The state can collect up to $29 million per year, with more than 90 percent of that going into a newly created Water Plan Implementation Cash Fund run by CWCB. Experience with sports betting in other states suggests that no more than $16 million in tax revenue will be generated annually, and during the first year just $7 million is expected.
Lawmakers are expected to discuss options giving them some say in how CWCB allocates that revenue, but those talks may not result in legislation this year.
Sen. Bob Rankin, R-Carbondale, a member of the Joint Budget Committee (JBC) and prime sponsor of the general fund water appropriations last year, does not expect Proposition DD to affect JBC’s water plan funding recommendations this year. Last year, for the first time, lawmakers approved $10 million in general fund money for the water plan. But Rankin cautions that appropriating another $10 million in general funds to support water plan implementation and demand management development will depend on how revenue forecasts shake out.
Rep. Dylan Roberts, D-Avon, said he plans to introduce a bill that would expand the existing instream flow loan program. Under current law, a water right holder can loan water to the CWCB to further preserve water for rivers on stream segments where the board already holds an instream flow water right. The loan may be exercised for no more than three years in a single 10-year period. Roberts’ bill would increase the number of years the loan could be exercised from three to five, and allow for two additional 10-year periods.
The proposed bill is similar to one that passed the House of Representatives but was defeated in Senate committee last year. Opposition to that bill centered on the potential impact on historical irrigation return flows from leaving water in the stream rather than applying it on the land, the effects on soils fallowed for long periods, and the tight comment period allotted after a loan application is filed in which opponents can make their case. Those issues were discussed during the interim session, but the Water Resources Review Committee took no action.
Roberts says that recommendations developed by a Colorado Water Congress working group to provide water right holders with more opportunities to comment and protect downstream users will be incorporated into the new bill. With those changes, he’s optimistic that “we have arrived at a place where more of the water community feels comfortable with the program’s expansion.”
The Water Resources Review Committee recommended three other bills for consideration this session. One would address water speculation, with concerns raised that agricultural water rights are being sold to entities with no real interest in farming that are holding those rights for future, profitable transactions. The bill would create a working group to explore ways to strengthen anti-speculation laws and report its findings and recommendations to the committee next year.
Another bill would task the University of Colorado and Colorado State University’s Colorado Water Center with studying new technologies to improve monitoring, management, conservation, and trading of water rights and report back to the committee in 2021.
The final bill would increase the number of state water well inspectors and require rulemaking to help the state engineer identify high-risk wells for inspection.
And although no legislation has yet been drafted, Sen. Kerry Donovan, D-Wolcott, said she anticipates discussion of how to better dovetail water planning with land use development to ensure large new communities have sustainable water supplies.
Larry Morandi was formerly director of State Policy Research with the National Conference of State Legislatures in Denver, and is a frequent contributor to Fresh Water News. He can be reached at email@example.com.
Fresh Water News is an independent, non-partisan news initiative of Water Education Colorado. WEco is funded by multiple donors. Our editorial policy and donor list can be viewed at http://www.wateredco.org.
Click here to read the newsletter. Here’s an excerpt:
Here are a few of the reasons 2019 was a year to
CELEBRATE in the Gunnison River Basin
Year of plenty with full reservoirs & ditches!
The Gunnison Basin Roundtable had another successful year in their continued support of water users, water education and through management of grants for important projects from headwaters to mouth.
Completion of significant water use efficiency improvements within the Lower Gunnison Basin Project.
Blue Mesa played a huge role in meeting flow targets in the critical reaches while providing full supply to irrigators; Taylor Park, Paonia, Crawford & Ridgway Reservoirs met both human & environmental needs. as well.
Major agreements were signed benefiting not only our basin but all of the much larger Colorado River Basin as evidenced by the Drought Contingency Plan, approved by all seven basin states & Congress helping to ensure that we keep our eye on the prize – healthy Lake Powell & Lake Mead levels to maintain vital hydropower generation & compact compliance for all.
And one more of the many reasons to celebrate, one of our own,- John McClow was named Aspinall Water Leader of the Year.
When Colorado voters OK’d Proposition DD last month, they were told sports betting would deliver millions in tax revenue toward solving the state’s water problems.
But a new analysis from the Polis administration shows that likely won’t happen in the first full year of wagering.
The Division of Gaming expects sports betting, which starts in Colorado in May, to generate between $1.5 million and $1.7 million in tax revenue in the 2020-21 fiscal year, which begins on July 1. That amount isn’t enough to reach the threshold under which funds would be transferred to water projects.
The projection is wildly different from what state lawmakers anticipated when they put the measure on the November ballot. In fact, it’s about the same amount the Colorado General Assembly’s fiscal analysts projected would be generated in the first two months of sports betting.
The annual revenue expectation also is far less than the $16 million in tax revenue that legislative analysts forecast would be collected each year for the first five years of sports betting in Colorado. The state is authorized to collect up to $29 million in sports betting tax revenue annually under the Taxpayer’s Bill of Rights…
The Division of Gaming’s estimates were presented Thursday to the Joint Budget Committee as it prepared to draft the $30 billion-plus spending plan for the coming fiscal year. And members of the panel expressed concern…
It’s likely that enough tax revenue will be generated in future years to go toward the water plan, but how much water managers can expect appears lower overall given the latest projections by the gaming division. Proponents of sports betting are bullish that tax revenue figures will rise once the industry matures in Colorado, though they admit initial estimates were likely too high.
A spokeswoman for the Department of Revenue, which oversees the Division of Gaming, noted “that all of these numbers are still projections.” She added that the department has been consistently conservative in its assumptions about sports betting revenue when speaking with lawmakers and legislative analysts…
One reason revenue projections are lower: The gaming division doesn’t believe the state’s casinos, which will operate sports betting, will be willing to pay the $125,000 per license — which would have to be renewed every two years — to offer wagering as originally projected. Instead, gaming officials think that the most they could reasonably charge for a license fee would be $40,000 and possibly much less, according to a memo presented to the JBC on Thursday.
Because the cost to implement sports betting is expected to exceed the tax revenue generated in the first months, it could actually end up costing taxpayers money.
If that deficit were to happen, the Joint Budget Committee would likely ask the Department of Revenue to dig into its pockets to cover the difference. The funds could, however, ultimately have to come out of the legislature’s discretionary fund, which goes toward paying for things like transportation and education…
The division’s revenue estimates came after the agency gathered 75 people representing gambling companies and operators from around the world to help create its rules around sports betting. The agency also visited other states where sports betting has been legalized, like New Jersey, to better understand how to implement the wagering in Colorado and what to expect.