Workshop on Future Water Supplies in Arizona June 21, 2006 1

WATER ALLOCATION WATER ALLOCATION

Allocation of the Right to Make Allocation of the Right to Make Beneficial Use of Public WaterBeneficial Use of Public Water

ByByMarvin S. CohenMarvin S. Cohen

..

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FIRST-COME-FIRST-SERVEDFIRST-COME-FIRST-SERVED(Use It or Lose It)(Use It or Lose It)

• The West—prior appropriation The West—prior appropriation doctrine— beneficial use of scarce doctrine— beneficial use of scarce water resources. water resources. – Arizona, doctrine applies only to surface Arizona, doctrine applies only to surface

waters.waters.• Property right in the beneficial use of Property right in the beneficial use of

the water.the water.– The right can be lost by non-use.The right can be lost by non-use.

• Water right can be severed and Water right can be severed and transferred from appurtenant land.transferred from appurtenant land.– Must have approval of Director of Must have approval of Director of

ADWR.ADWR.

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INTERSTATE ALLOCATIONINTERSTATE ALLOCATION• Interstate stream allocation among states:Interstate stream allocation among states:

– Compact, Compact, – Congress or Congress or – U.S. Supreme Court—equitable apportionment. U.S. Supreme Court—equitable apportionment.

• Prior Appropriation Doctrine need not apply. Prior Appropriation Doctrine need not apply. • Early 1900’s Colorado River States worried that Early 1900’s Colorado River States worried that

California would appropriate all of that River’s California would appropriate all of that River’s water.water.– Compact permanently divided the River’s water by Compact permanently divided the River’s water by

agreement between the Upper Basin and Lower Basin.agreement between the Upper Basin and Lower Basin.

• Lower Basin water then permanently apportioned Lower Basin water then permanently apportioned among the Lower Basin States by Congress among the Lower Basin States by Congress without regard to who first put the water to without regard to who first put the water to beneficial use. beneficial use.

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GROUNDWATERGROUNDWATERThe Regulated Riparian The Regulated Riparian

Approach Approach • Landowner can make reasonable use of Landowner can make reasonable use of

the groundwater extracted from his land.the groundwater extracted from his land.– But State can regulate the withdrawal and use But State can regulate the withdrawal and use

of that water. of that water.

• In AMAs, groundwater withdrawals and In AMAs, groundwater withdrawals and use tightly regulated (except for exempt use tightly regulated (except for exempt wells.)wells.)– For AWS, first-come-first-served. For AWS, first-come-first-served.

• In non-AMA’s loose regulation.In non-AMA’s loose regulation.

• Interbasin transfers highly restricted. Interbasin transfers highly restricted.

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COMMAND & CONTROL COMMAND & CONTROL • Allocation of Colorado River water.Allocation of Colorado River water.• Secretary of the Interior can decide who Secretary of the Interior can decide who

will receive Colorado River water and how will receive Colorado River water and how much water each will receive. much water each will receive.

• CAP water—The Director of ADWR CAP water—The Director of ADWR recommends—the Secretary allocates.recommends—the Secretary allocates.– Transfers of CAP allocations must be Transfers of CAP allocations must be

approved by U.S. and CAWCD. approved by U.S. and CAWCD. – CAWCD consults with ADWR on the water CAWCD consults with ADWR on the water

policy implications of each requested policy implications of each requested transfer.transfer.

– CAP allocations not lost for non-use. CAP allocations not lost for non-use.

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CAGRD—MODIFIED FIRST- CAGRD—MODIFIED FIRST- COME-FIRST-SERVEDCOME-FIRST-SERVED

• CAGRD membership—open to developers & water CAGRD membership—open to developers & water providers in CAWCD’s three counties that can show a 100-providers in CAWCD’s three counties that can show a 100-year physical supply of groundwater.year physical supply of groundwater.– Groundwater physical supply “locked up” on a first-come-first-Groundwater physical supply “locked up” on a first-come-first-

served basisserved basis• A plan of operation every ten years .A plan of operation every ten years .

– If plan of operation not approved, no new member lands or If plan of operation not approved, no new member lands or member service areasmember service areas..

– If this happens, those who got in first get access to the If this happens, those who got in first get access to the replenishment waterreplenishment water

• CAGRD is responsible for finding the replenishment water. CAGRD is responsible for finding the replenishment water.

•

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MARKET ALLOCATIONMARKET ALLOCATION• Water farms:Water farms:

– Tucson—Avra Valley 1970s.Tucson—Avra Valley 1970s.– Phoenix—McMullen Valley.Phoenix—McMullen Valley.– Scottsdale—Planet Ranch.Scottsdale—Planet Ranch.– Mesa—Pinal County farmland.Mesa—Pinal County farmland.

• Indian CAP water leases.Indian CAP water leases.

• CAGRD potential acquisition of additional CAGRD potential acquisition of additional water under new plan of operation.water under new plan of operation.

• Storage credits, extinguishment credits.Storage credits, extinguishment credits.

• Type 2 rights. Type 2 rights.

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FUTURE ALLOCATIONSFUTURE ALLOCATIONS

• Excess CAP aqueduct capacity—command or market?Excess CAP aqueduct capacity—command or market?• 90,00090,000± af of NIA CAP to be allocated by command—± af of NIA CAP to be allocated by command—

Director of ADWR.Director of ADWR. • Water transfers—regulated market?Water transfers—regulated market?

– Colorado River water.Colorado River water.• Present Perfected Rights.Present Perfected Rights.• On River Indian water.On River Indian water.• On River agricultural contracts. On River agricultural contracts. • Indian CAP leases.Indian CAP leases.• CAP non-Indian allocations transferable but not marketable. CAP non-Indian allocations transferable but not marketable.

– Other surface water.Other surface water.– Groundwater.Groundwater.– Effluent.Effluent.

• If new rural water districts are formed as result of If new rural water districts are formed as result of SWAG:SWAG:– How will the districts acquire water?How will the districts acquire water?– How will a district’s water supplies be allocated among members? How will a district’s water supplies be allocated among members?

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HOW WOULD I DO IT?HOW WOULD I DO IT?

• Markets are generally the most efficient Markets are generally the most efficient way to allocate scarce resources. way to allocate scarce resources.

• In the U.S we have built successful market In the U.S we have built successful market economy by:economy by:– regulating for health, safety and public policy regulating for health, safety and public policy

and and – allowing the market to function within those allowing the market to function within those

constraints. constraints.

• We need such a market system for water We need such a market system for water use allocation.use allocation.