Understanding Colorado’s Water System

With unprecedentedly low snowpack and high temperatures over the last year creating severe drought conditions,[1] potential water shortages and water restrictions are on everyone’s mind in Colorado right now. Colorado’s water system and the laws that govern it are unique and are often in the spotlight when resources are scarce. This article introduces readers to Colorado’s water sources, the state’s water use by sector, and the prior appropriation system.

Colorado’s Water Supply

Approximately 83% of Colorado’s water is supplied by surface water, with the remaining 17% supplied by groundwater.[2] Colorado is known as a “headwaters” state because most of its rivers begin in the Rocky Mountains and flow through the state and across state lines.[3] About 80% of Colorado’s water flows west of the Continental Divide, but 90% of the state’s population lives east of the Continental Divide. As a result, water diversion, storage, and return flows are an integral part of the state’s complicated water supply system.[4]

Colorado has nine major river basins, which are: the Arkansas, Colorado, Gunnison, North Platte, Republican, Rio Grande, South Platte, Dolores/San Juan/San Miguel, and the Yampa/White/Green. “Each basin relies on a mixture of rain, snow, and groundwater to fill its rivers and creeks. Likewise, each basin hosts a distinct range of water uses that help shape Colorado’s overall identity.”[5] Nearly six million Coloradans depend on water from Colorado’s river basins, but that supply is at risk due to population growth, long-term warming and drying trends known as “aridification,” wildfires, and multi-year droughts.[6] 

Water Use by Sector

The Colorado Water Conservation Board (CWCB) breaks down consumptive water use by sector as follows: 90% Agriculture, 7% Municipal, 3% Large Industry.[7] Agricultural water is primarily used for livestock and to irrigate crops. Municipal water is used in homes, yards, businesses, firefighting, and industry. Large industry water, also referred to as self-supplied industrial (SSI) water, is used for things like energy development, snowmaking, thermoelectric power generation, and food and beverage processing.[8]

Prior Appropriation and Water Rights

Under the Colorado Constitution, water is a public resource subject to a prior appropriation system (“Prior Appropriation System”) in which private property rights govern the beneficial use of water.[9] The Prior Appropriation System controls the allocation of water and dictates who may use water, where the water is taken from, how much water may be used, and what the water may be used for. As explained by the Colorado Division of Water Resources:

A simplified way to explain this system is often referred to as ‘first in time, first in right.’ An appropriation is made when an individual physically takes water from a stream (or underground aquifer) and places that water to some type of beneficial use. The first person to appropriate water and apply that water to use has the first right to use that water within a particular stream system. This person (after receiving a court decree verifying their priority status) then becomes the senior water right holder on the stream, and that water right must be satisfied before any other water rights can be fulfilled.[10]

There are seven water courts in Colorado that adjudicate and decree “water rights” (i.e., a specific appropriation of water). The State Engineer’s Office is tasked with distributing water based on the Prior Appropriation System. Under the system, water is distributed to older or “senior” water right holders first and then, to the extent water is still available, to newer or “junior” water right holders. Although, there are certain circumstances in which a junior appropriator may take water from the system out of order, in times of water scarcity, tensions exist between senior and junior water right holders and those with senior rights may place a “call” on the river or stream, demanding that those with junior decreed water rights reduce or stop diverting water from the river until the senior rights are satisfied.

Water rights are a type of property right and, as such, may be bought, sold, and transferred, and water right owners may change the type or place of use of existing water rights through a formal adjudication process in water court.

For example, use of water for agricultural irrigation may be changed to municipal use. “Depending on the river basin and the type of water right or change requested, it may take years and significant financial resources to successfully adjudicate a change of use of a water right.”[11] As a result, farmers and municipalities are increasingly using alternative transfer mechanisms (ATMs) to address municipal water supply gaps as Colorado’s population grows.[12]

Our Team

BHGR’s Water and Conservation Group represents commercial and industrial businesses, energy companies, private landowners, ranchers, farmers, developers, non-profit organizations, and a variety of public entities seeking to acquire, develop, protect, and sell water rights throughout Colorado. Our attorneys advise clients on water rights due diligence and purchases, water supply evaluation and planning, well permitting, applications for new water rights, changes of water rights, complex plans for augmentation, and leasing, farming, and other water sharing agreements.

Sources

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