Back in 2011… around the time that the San Juan Water Conservancy District (SJWCD) and Pagosa Area Water and Sanitation District (PAWSD) were sitting at the negotiating table with Trout Unlimited discussing an agreement for the Dry Gulch Reservoir water rights… a doctoral candidate at the University of Colorado Law School named Derek Turner was writing a 39-page essay about an important 2009 Colorado Supreme Court Decision. Mr. Turner’s essay was titled, Pagosa Area Water & Sanitation District v. Trout Unlimited, and an Anti-Speculation Doctrine for a New Era of Water Supply Planning.
From Mr. Turner’s essay (which you can download here):
In the modern, high-stakes competition for water supplies needed to serve future population growth, Colorado municipalities and quasi-governmental water agencies have long escaped scrutiny for appropriations to serve undefined future populations. Under the “great and growing cities” doctrine, Colorado courts essentially rubber-stamped applications for water rights for future populations.
Until now.
The term “now” refers to two Supreme Court rulings — one in 2007 and one in 2009 — that sent PAWSD and SJWCD back to district water court, requiring them to thoroughly justify a claim for 64,000 acre-feet of storage rights (in the 2007 ruling, also known as ‘Pagosa I’) or alternately 25,300 acre-feet of storage rights (in the 2009 ruling, also known as ‘Pagosa II’) in the proposed Dry Gulch Reservoir.
Mr. Turner continues:
In 2009’s Pagosa Area Water & Sanitation District v. Trout Unlimited, the Colorado Supreme Court restated the standard of proof that municipal water providers must satisfy to conditionally appropriate publicly owned water for future populations. Public water agencies now must prove their future water needs with substantiated evidence and must accurately account for future water savings through water conservation efforts. This case represents the latest evolution of Colorado’s anti-speculation doctrine, signaling a new era of water supply planning — an era that will involve greater water supply planning collaboration and a heightened focus on conserving our most valuable resource.
Tomorrow, I’d like to address the question of resources, and which ones might be the most valuable. But for today’s installment, we’ll stick to water.
Based on my admittedly limited understanding of Colorado water law and Colorado’s water resources, I very much agree with Mr. Turner’s characterization of the historical “rubber-stamping” of municipal water rights applications — a process which may have come to an end with the Supreme Court rulings in Pagosa I and Pagosa II.
These were certainly not the first two cases to be heard by the Supreme Court concerning the legal question of speculative water rights applications, but Pagosa I and Pagosa II were especially noteworthy because they defined more clearly the arguments that a municipal water district must support — convincingly — with factual data, when applying for future water rights. In the opinion of the Supreme Court.
Disclosure: I currently serve on the San Juan Water Conservancy District board, but this essay does not necessarily reflect the opinions of the SJWCD board as a whole or of any other SJWCD board members.
In a noble attempt to keep Colorado water from becoming a private resource that could be bought and sold, for profit, the authors of the Colorado Constitution had written, in 1876:
“The water of every natural stream, not heretofore appropriated, within the state of Colorado, is hereby declared to be the property of the public, and the same is dedicated to the use of the people of the state, subject to appropriation as hereinafter provided.” (Colorado Constitution, Article XVI Section 5)
Colorado water rights are thus property rights to the use of water under conditions specified by the state, not rights to the possession of the water molecules themselves. Many western states included similar language in their respective constitutions.
One essential idea, crucial to preventing water from becoming a commodity suitable for trading in a for-profit marketplace was Colorado’s appropriation process, which grants a water right of a certain particular amount, for a certain particular use, in a certain particular location — with the appropriation date determining the ‘priority’ of the water, whenever a shortage arises.
A certain use. A certain location. A certain amount. A certain date.
Nevertheless, it seems that — in spite of those seemingly strict legal qualifications — water has become, for some water rights holders, a profit center. With the help of the Colorado legal profession (and its uncanny ability to make words mean something different from what we all thought they meant), Colorado water courts have been allowing water rights holders to “lease” or “sell” their water allocations to third parties, to be used for purposes other that the originally decreed uses, and at locations other than the original decreed locations.
But the appropriation date remains the same?
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How, exactly, this apparent perversion of Western water law came about, I cannot say, but it appears to be a commonplace practice for a holder of an ancient water right (that is, pre-1922) to accept money from this or that industry, government, or environmental organization, and send water off in a direction it was never originally intended to go… in exchange for monetary compensation.
Not everyone views this development of a ‘water market’ as a perversion. Some argue will that, so long as the water is put to a ‘beneficial use’ there’s nothing wrong with a water district or a farmer or a rancher making a few bucks “leasing” water to a needy neighbor.
Except that the water district or farmer or rancher pays nothing for their annual use of a constitutionally-protected public resource, yet are being allowed — by Colorado water courts — to charge the next person down the line whatever per-acre-foot price they can negotiate.
