Owners of water rights to Cibola Valley Irrigation
and Drainage District (CVIDD) in southwestern Arizona seek approval
to sell or lease about 24,000 acre-feet of federal contract Colorado
River water to out-of-state buyers. This proposed transaction represents
a challenge to the state of Arizona and its efforts to control interstate
water transfers. The Arizona Department of Water Resources (ADWR) thus
far has blocked any proposed interstate sales or leases.
Officials of Consolidated-Geare, the district's major land owner,
therefore are unable to negotiate water contracts. Consolidated-Geare's
minority partner Larry Geare says, "We have generally received strong,
very strong blessing from the BuRec to reallocate the water for a higher
and better use; in this case either a long term lease to Nevada or California.
ADWR can't seem to allow it and has opposed us all the way."
Larry Linser, deputy director of ADWR, explains the department's position,
"Cibola's proposal basically involves the sale, on a party-to-party
basis, of a portion of Arizona's 2.8 million acre-feet entitlement of
Colorado River water for use in Nevada. Our position has been if there
is to be any marketing of any water across state lines it has to be
through a state-to-state process."
Given the economics of interstate water marketing, many observers
view the proposed sale or lease as an event that was waiting to happen.
Arizona has more water than it presently can use or pay for. Meanwhile,
there are willing out-of-state buyers, specifically in Nevada and California,
who need water and are willing to pay. It is not unexpected therefore
that someone in Arizona with wet water to sell would want to work out
a deal with an out-of-state buyer.
Consolidated-Geare is anxious to take advantage of the current economic
situation and views ADWR as unduly interfering with its right to sell
water and make a profit. Geare sees the situation as a free market issue.
"It is basically a question of whether you are going to let a free market
function or not," he said. "The free market -- willing buyer and willing
seller -- will determine the market price and the highest and best use.
If you put in a lot of government regulations, then that is going to
ruin the free market effect.
Although economics may favor the deal, political issues have complicated
the affair. The interstate sale or lease of water has been a thorny
issue to Arizona water officials. Arizona is not using its full Colorado
River allotment. Officials fear, however, if they allow any of the state's
allotment of Colorado River to be used out of state, Arizona may not
be able to reclaim it for in-state use when needed.
The issue is further complicated because Arizona, by insisting on
its authority to regulate interstate water transfers, is standing up
to what it perceives to be interference from the federal government.
The U.S. Bureau of Reclamation (BuRec) has proposed regulations that
would allow the Secretary of the Interior to authorize the interstate
leasing of unused water allotments.
Arizona, and other lower Colorado River Basin states, objected to
the proposed plan mainly because the federal government would gain control
of how states manage and eventually sell or lease their allotments of
Colorado River water. The Colorado River Compact States organized a
technical committee, the 7-10 Committee, to examine options to the federal
plan. Arizona has proposed a water banking concept.
Although progress is being made in negotiations with lower basin states,
much more work is needed before any plan is adopted and put into place,
Linser says. "If some type of marketing concept is approved among the
three states and authorized by our Legislature, there may be an opportunity
for Cibola to participate; for example, through an Arizona state water
bank."
Arizona, therefore, looks with disfavor at requests to transfer water
out-of-state, until it has in place a plan to regulate such transactions.
It is presently unclear what types of regulations Arizona might impose.
Some observers believe the state might adopt fairly restrictive regulations,
possibly requiring that water first be offered for sale in- state, with
prices and profits controlled.
There is an ironic twist to the situation. The popular scenario has
the federal government in the role of the overly restrictive and intrusive
guardian, with state government advocating less government control.
In this situation, how ever, the economic interest of CVIDD's water
rights owners is better served by the proposed federal regulations than
state actions thus far.
"ADWR wants to control all of the water in Arizona," Geare says. "They
basically have said there can be no movement of water without their
approval. That is a jurisdictional question that I think invites a lot
of debate."
Such a debate would involve discussion of the direct diversionary
contract CVIDD water rights holders have with BuRec. The extent to which
and, indeed, whether, this contract allows them to transfer, exchange
and lease water across state lines would be examined.
Linser says that CVIDD obviously is seeking a leasing scheme similar
to what was proposed earlier by the Secretary of Interior -- and objected
to by the states. "We oppose that," he said. "That arrangement is not
legal under the Law of the River."
Geare questions whether the 7-10 Committee will come up with a suitable
plan to resolve the situation. "It is pretty much a bureaucratic solution.
The committee excludes the people who eventually will have to pay for
the water -- the users, consumers, the developers, manufacturers. They
are not allowed to participate in the decision making."
Consolidated-Geare's proposed transaction has implications beyond
the interstate transfer of water. Various land swaps hinge upon the
successful negotiation of CVIDD water contracts and involve land in
Utah, Nevada as well as Arizona.
In Arizona this interstate water transfer is key to a proposed land
exchange to turn over the agricultural land in CVIDD to U.S. Fish and
Wildlife, thereby increasing its Cibola National Wildlife Refuge. The
refuge was established in 1962 to mitigate the impacts of dam and dike
construction along the Colorado River. At that time, CVIDD land was
acquired for the refuge, and U.S. Fish and Wildlife now is interested
in acquiring additional district lands. In return, Consolidated-Geare
would get BLM land in La Paz or Mohave County for commercial or industrial
development.
Consolidated-Geare and ADWR officials continue to meet in efforts
to resolve difficulties.
