New Water Study Sheds Light on Cost-Competitive Alternatives to ‘Buy And Dry’

(BOULDER, CO – January 11, 2017) A new economic study released today by Environmental Defense Fund and WestWater Research shows that Alternative Transfer Methods (ATMs) are cost competitive with traditional water acquisition methods, challenging the conventional wisdom in Colorado that it’s too expensive and risky for municipalities to lease water.

ATMs are techniques for temporarily allocating and distributing agricultural water between different users, providing more flexibility to both agriculture producers and municipalities and reducing the need to permanently transfer water rights, which can result in “buy and dry”.

To satisfy the water supply needs of Colorado’s growing population, municipalities have been buying up agricultural land for its water rights. This practice of “buy and dry” is projected to take 500,000-700,000 acres of agricultural land out of production by 2050, or roughly 20% of irrigated farmland in the state.

“We’ve known for a long time that ATMs are better for farms and ranches, better for rural communities and better for the environment,” said Brian Jackson, EDF Associate Director. “And now we can add ‘cost effective’ to the list of benefits.”

Colorado’s Water Plan, approved in 2015, promotes the use of more ATMs, setting a policy goal of 50,000 acre-feet of ATM projects in place by 2030. Progress towards this goal has lagged due to a number of technical, legal and financial challenges.

But according to the EDF/WestWater study, new policies and state initiatives have begun to ease these challenges, opening the door for ATMs to be used more broadly. “We wanted to see if these changes had the potential to make ATMs easier and less costly to implement,” said Brett Bovee, WestWater Intermountain Regional Director.

The answer is yes. And with wider adoption of ATMs and other water conservation measures, the need for “buy and dry” and water storage projects will be diminished. “This presents a new opportunity for cities to help sustain agriculture, minimize costs and incorporate environmental benefits while planning to meet water supply needs.” said Bovee.

The report identified example ATMs in Colorado and other Western states, and selected two municipalities – the Town of Windsor and the City of Fountain in Colorado – to serve as case-studies. Using a 30-year financial model and accounting for recent changes in Colorado’s water right laws, the report found that ATM approaches had similar, and in some cases, less expensive costs when compared with permanent water right acquisitions.

For example, in the Town of Windsor, researchers compared an ATM lease agreement with a permanent water right acquisition to address projected shortages over a 30-year period. The ATM lease agreement was found to save an average of $200 per acre-foot per year over the traditional approach.

“Colorado and the West will continue to grow, but we’ll need to change the way we manage water to support growth while promoting a healthy environment,” said Jackson.  “ATMs provide the flexibility we need to reallocate water to where it is needed most, without taking farms out of production or degrading our streams.

“We hope that water managers and policy makers will use this study to approach water management differently, and employ innovative ideas to meet future water needs. By doing so, cities can be part of the solution.”