Water Banks in the United States by bsx20897

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									  Water Banks in the
   United States
          Draft Report
      Prepared Jointly by:
      WestWater Research
Washington Department of Ecology
Public Sector Participants
Private Sector Market Participants



             WaterBankSM
                Trust
                           Acquisition Types by Region
                  160

                  140

                  120

                  100
No. Acquistions




                                                                  Donation
                                                                  Purchase
                   80                                             Lease

                   60

                   40

                   20

                    0
                        Pacific Northwest   Southwest   Rockies



Source: Landry 1998
Environmental Water Acquisitions
  Leases, Purchases and Donations




   No. Acquisitions         Total Quantity Acquired
                   46
                             P. Northwest   1,234,57 af
                             California      536,323 af
                             Southwest       306,658 af
                             Rockies         286,482 af
       No. Lease
       No. Purchases
       No. Donations


                            Source: Landry 1998
      Environmental Water Acquisition
                     Expenditures and Quantity 1990-1997

$12,000,000                                                                         700,000

                                                                                    600,000
$10,000,000

                                                                                    500,000
 $8,000,000
                                                                                    400,000




                                                                                              Acre-feet
 $6,000,000
                                                                                    300,000
 $4,000,000
                                                                                    200,000

 $2,000,000                                                                         100,000

        $0                                                                          0
              1990    1991   1992      1993        1994        1995   1996   1997

                                    Expenditures          Quantity
                                                                             Source: Landry 1998
      Environmental Water Leasing Programs




                                                                                                                                N


                                                                                                                         W             E

                                                                                                                                S


                                                                                                               Snake River Leases
                                                                                                               USBR Lemhi River Leases
                                                                                                               Yakima Drought Bank
                                                                                                               USBR Klamath Leasing Program
                                                                                                               Salmon Creek Leasing Bank
                                                                                                               Oregon Water Trust Walla Walla
                                                                                                               Leasing Program
                                                                                                               Montana Leasing Programs
Note: Map depicts representative location of water right place of use and groundwater restricted area.         Environmental Water Account
Exact location and acreage may differ. This map is intended for illustrative purposes only and should not be   Dugeness Water Leasing Program
Used for any other purpose.                                                                                    Deschutes Water Exchange
                Initial
State        Bank Activity
Arizona          1996
California   1991 & 2001
Colorado         2002
Idaho        1932 & 1979     Water Banks in
Montana
Nevada
                   -
             2000 & 2002
                               the West
New Mexico       2002
Oregon           2003
Texas        1993 & 2001
Utah               -
Washington       2001
Wyoming            -
               Water Bank Definition
Institutional mechanism that facilitates the legal transfer
   and market exchange of various types of surface,
   groundwater, and storage entitlements.

     Water Supply Clients                                                    Water Demand Clients
                                                                            Multiple clients purchase/lease water
     Multiple clients sell/lease water to
                  the bank                  Regulatory Body                             from the bank


                                                      Regulates bank operations
        1                                             Certifies water quantity                          A

        2                                                                                               B
                                                    Water Bank
                                               Forms contracts with suppliers
                                              Forms contracts with demanders
        3                                     Acts as intermediary with clients                         C
                                                        and regulator
                                                          Set Price
                                                      Manage the bank
                                             Market-maker/clearinghouse/broker
       Water Bank Formats
• Water Banks are designed around specific
  sources or water entitlements
• Common Bank Formats
  – Institutional Banking
  – Surface Storage Banking
  – Ground Water Banking
  – Conjunctive Use Banking
     Purpose of Water Banking
• Creating reliability in water supply during dry years
• Creating seasonal water reliability
• Ensuring water supply for farmers
• Promoting water conservation by encouraging right
  holders to conserve and deposit rights into the bank
• Acting as market mechanism
• Resolving issues of inequity between groundwater and
  surface-water users
• Ensuring compliance with intrastate agreements of
  instream flow
    Bank Administrative Functions
• Registry of water rights or entitlements
• Price setting and regulation
• Policies administration and daily operations
• Water right verification
• Quantifying the bankable water
• Specifying who can purchase or rent from the
  bank
• Administering transfer or contract terms
• Provide regulatory reporting or oversite
• Resolving disputes
 Market Structure of Water Banks
• Clearing House
  – Online Bulletin Boards
  – Office Posting Boards
• Standing or Fixed Price
• Option or Contingent Markets
• Auctions
                           California
              Drought Emergency Bank Profile
•   Location:              Statewide
•   River Basin:           Statewide, Primarily SWP and CVP service areas
•   Established:           1991
•   Year Active:           1991, 1992, 1994
•   Bank Format:           One-year leasing program
•   Market Structure:      Clearinghouse
•   Participation:         Supply – Northern California users;
                           Demand – SWP and CVP contractors south of Delta
•   Activity:              High
•   Pricing:               Administrative
•   Price Range ($/AF/YR):           $68-$175
•   Regulatory Oversight: Streamlined transfer process
•   Administrator:         California Department of Water Resources (DWA)
•   Environmental Objective: Ensure minimum stream flows through the Delta
                                California
                     Drought Emergency Bank Activity
                                1991              1992              1994
        Supply/Use         AF          $/AF    AF        $/AF    AF        $/AF
Water Source                           $125               $50               $50
Fallowing                 410,000                   0                 0
Groundwater               246,000             152,000           187,000
Stored Water              164,000              38,000            33,000
Total                     820,000             190,000           220,000
Delta Requirements        -160,000            -30,000            50,000
Net Available             660,000             160,000           170,000
Allocations                            $175               $72               $68
Urban Uses                297,000              40,000            25,000
Agricultural Uses          99,000              96,000           145,000
Environmental Uses               0             24,000                 0
Carryover Storage         264,000                   0                 0
Total Allocated           660,000             160,000           170,000
                   Idaho
         Statewide and Rental Pools
           Statewide Bank                               Rental Pools
•   Location:       Statewide            •   Six Established Banks
•   River Basin:    Statewide            •   Year Active:       1932 – Snake River
•   Year Established:         1979       •   Bank Format: Leasing stored water
•   Year Active:    1995                 •   Market Structure: Clearinghouse
•   Bank Format: Institutional water     •   Participation:     Supply – Stored water;
    bank                                                        Demand – Open
•   Market Structure: Clearinghouse      •   Activity:          Low to High
•   Participation:  Supply – Open;       •   Pricing:           Administrative
                    Demand – Open        •   Price:             $3.00 for in- basin
•   Activity:       Moderate                                    $10.50 out-of-basin
•   Pricing:        Market Based         •   Regulatory Oversight: State
•   Price:          $11/AF/YR            •   Administrator: Water District #1
•   Regulatory Oversight: Idaho          •   Environmental Objective: None -
    Department of Water Resources            Instream transactions encumbered by
•   Administrator: Idaho Department of       “last fill” policy
    Water Resources
•   Environmental Objective: None
                                       Water Banking
                               Upper Snake River Rental Pool
                                The Problem of Fixed Pricing
            1,000,000
             900,000
             800,000
                                                             Dry Years
             700,000
             600,000
Acre-Feet




             500,000
             400,000
             300,000
             200,000
             100,000
                   0
                        1979    1981    1983   1985   1987   1989   1991   1993   1995

                                                 Supplied       Sold
                              Oregon
                         Water Banking Profile

• Emerging Water Bank Programs
    – Klamath Basin Water Lease Bank
    – Walla Walla Water Lease Bank
    – Deschutes Basin Groundwater Mitigation Bank
• Bank Format Varies
    – Lease Banks are Predominate Structure
    – Lease Banks Operate Under Existing Regulatory Structure
• Market Structure:              Bilateral Trades
• Participation:                 Supply – Open
                                 Demand – Bank Administrator
•   Activity:                    Low to High
•   Regulatory Oversight:        State
•   Administrator:               Federal and Nonprofit
•   Environmental:               Yes
                 Water Banking:
           Six Important Considerations
• What is the legal authority of the bank?
   – Does the bank have authority to execute trades?
   – Is legislation required?
• What are the banks objectives and purpose?
   – Enhancing stream flow
   – Providing drought year water supplies
• Who can participate in the bank?
• What is the market area served by the bank?
• How is water priced?
   – Fixed Price
   – Market Based
• How will community acceptance and participation be
  encouraged?
         WestWater Research
Laramie Office:               Houston Office:
121 Grand Avenue, Suite 222   1100 Louisiana, Suite 2675
Laramie, WY 82070             Houston, TX 77002
Tel: (307) 742-3232           Tel: (713) 652-2450
Fax: (307) 742-3996           Fax: (713) 652-2452

								
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