In July, Berg Hill Greenleaf Ruscitti attorneys helped the Lower Arkansas Valley Super Ditch Company (“Super Ditch”) begin successful operations of the first “interruptible water supply agreement” in Colorado. This project marks a significant step in the quest to implement alternatives to so-called “but and dry” of irrigated agricultural land to meet the State’s increasing municipal water supply and demand gap, as set forth by Colorado’s Water Plan.
As Colorado’s population continues to grow so does the demand for water. Municipalities have been looking to agricultural irrigation water rights to satisfy some of this need, to the detriment of Colorado’s rural agricultural communities and the loss of hundreds of thousands of acres of irrigated land. This process is commonly referred to as “buy and dry.” In response, the Lower Arkansas Valley Water Conservancy District, with assistance of Berg Hill Greenleaf Ruscitti attorneys, facilitated the formation of the Lower Arkansas Valley Super Ditch Company (“Super Ditch”) in 2008 to, in part, develop and implement a fallowing-leasing program. Through this program, Super Ditch negotiates on behalf of farmers to temporarily fallow parcels of cropland and lease the associated water to cities.
In Colorado, Super Ditch’s fallowing-leasing program is difficult to implement because, generally, changes of water rights require a lengthy and expensive water court process. However, the State has at least recognized these challenges, and as part of Colorado’s Water Plan, has directed water users to help address buy and dry by moving at least 50,000 acre-feet of water using alternative transfer methods. See Colorado’s Water Plan at 6-115 https://www.colorado.gov/pacific/cowaterplan/plan. The legislature has provided some avenues for temporary approval of changes of water rights, such as fallowing-leasing pilot projects and interruptible water supply agreements. Under C.R.S. § 37-60-115(8), the Colorado Water Conservation Board can administratively approve fallowing-leasing pilot projects without a water court process. Super Ditch has been successfully operating a pilot project under this program since 2015 to supply water to the City of Fountain and Security Water District. Interruptible water supply agreements, which are approved by the State Engineer’s Office, provide another avenue. C.R.S. § 37-92-309.
On behalf of Super Ditch, Berg Hill Greenleaf Ruscitti attorneys negotiated a long-term water leasing contract with the City of Fountain to help provide water to the city without permanently drying up irrigated land. Super Ditch applied for approval of an Interruptible Water Supply Agreement (the “IWSA”) in April of 2019. The State Engineer approved the IWSA on June 28, 2019, and it began operating this July. The IWSA is a temporary change of water rights that allows participating farmers under the Catlin Canal to fallow parcels of land and lease the associated water to the City of Fountain through Super Ditch. The IWSA approval is for a period of ten years, or from July 1, 2019 through December 31, 2028. The participating land may only be fallowed for three years during the ten-year approval period. Even if Super Ditch only exercises the IWSA for a subset of the water rights, all of the water rights will be deemed to have been used that year (the shares cannot be “split”). C.R.S. 37-92-308(3)(c); Approval at 11. Super Ditch will deliver historical consumptive use credits associated with 192 shares in the Catlin Canal Company that have historically been used to irrigate 236 acres of land. The water is diverted through two Catlin Canal augmentation stations to the Arkansas River, and the historical consumptive use credits are then exchanged upstream to Pueblo Reservoir for use by Fountain via pipeline. Super Ditch will maintain return flows during the operation of the IWSA by using the augmentation stations and delivering water to three recharge ponds.
Four farms are participating in the IWSA, and Super Ditch’s consulting engineers, Martin and Wood Water Consultants, analyzed the historical consumptive use and return flow obligations for each of the four farms using the State’s Lease Fallow Tool. The State Engineer and Division Engineer for Water Division No. 2 issued an approval letter with 39 terms and conditions to protect other water rights from injury. These terms and conditions include, among other things, maximum consumptive use limits by farm, return flow factors by farm, and notification and reporting requirements. Additionally, the Approval requires Super Ditch to either move the water via exchange pursuant to Case No. 10CWC4, Water Division No. 2, or an administrative exchange approved in advance by the Division Engineer.
Super Ditch’s IWSA represents another route to help supply water to thirsty cities while maintaining the viability of irrigated agriculture and rural communities. The IWSA will also allow Super Ditch and other water users and suppliers to analyze and compare the pilot project and interruptible water supply agreement processes, which will help other entities make program decisions in the future.