Strengthening Colorado’s Instream Flow Program
Healthy, flowing rivers are among Colorado’s most vital natural resources – nurturing the environment, supporting communities and powering the economy.
Water flowing in Colorado’s rivers and streams sustains a diversity of fish and a host of other species, from the tiny insects that live in the cracks between river rocks, to birds that inhabit streamside trees and brush, to large mammals that rely on streams to quench their thirst. Flowing rivers and streams dilute water pollution, provide clean drinking water supplies and support greenways in many communities, contributing to quality of life and the attractiveness of Colorado for residents and businesses. Healthy waterways are key to Colorado’s burgeoning outdoor recreation and tourism industries, which inject billions of dollars into the state’s economy each year. Colorado developed its water law system long before society recognized the value of flowing streams, at a time when settlement and growth depended on providing water to mines, farms and cities often far removed from scarce water supplies. A reflection of that 19th Century reality, Colorado’s prior appropriation or “first-in-time, first-in-right” water law system, which is still in place today, provides the right to divert water out of streams for consumptive use. When too much water is diverted from a stream, however, the aquatic environment declines.
In some cases, Colorado law can allow streams to be dried completely – destroying aquatic life, eliminating recreational uses and removing dilution flows needed to maintain water quality. Today many streams and rivers in Colorado lack sufficient flows to support healthy aquatic environments.
The pressure to divert water from Colorado’s rivers and streams is likely to increase in the future. As population continues to grow, municipal water demands will rise. Climate change is anticipated to result in reduced precipitation and increased water demands, further stressing Colorado’s rivers. A sustainable future demands strong tools to protect Colorado’s rivers and streams.
Colorado’s Instream Flow Law
In 1973, “recognizing the need to correlate the activities of mankind with some reasonablepreservation of the natural environment,” the General Assembly passed legislation allowing for the protection of flows in rivers and streams through an instream flow water right. Instream flow rights are similar to water rights for other uses – they are decreed by the water courts for a certain amount of water and are administered in priority with other water rights. But, instream flow rights are different in two major respects.
First, only the Colorado Water Conservation Board (CWCB), a state agency within the Department of Natural Resources, can hold instream flow rights. Additionally, unlike traditional rights to divert water away from a river, instream flow rights protect the natural environment by keeping water in the river.
Since 1973, the CWCB has filed for nearly 2000 new instream flow water rights covering roughly 8500 miles of streams throughout the state. Under Colorado’s “first-in-time, first-in-right” system, these newer or “junior” rights are subject to all older “senior” rights; the CWCB’s junior rights will not protect the ecological value of streams where senior rights require much or all of a river’s water. Thus, while junior instream flow rights can be an effective tool for protecting the environment of streams that are not diverted by senior rights, junior appropriations cannot restore flows to the countless streams in Colorado that are already depleted.
Instream Flow Acquisition
Recognizing that junior water rights would not adequately serve Colorado’s instream flow needs, in 1973 the General Assembly authorized the CWCB to acquire existing water rights for conversion to instream flow, through voluntary lease, purchase or donation from a willing party. As with other changes of water rights, these conversions cannot injure any other water right holder. Once converted, though, the acquired rights carry the original senior priority date and thereby help to restore flows to depleted reaches.
Unfortunately, the CWCB has had only mild success in acquiring existing rights to restore depleted streams. There are several reasons for the underutilization of the instream flow acquisition program:
- First, while the CWCB has made loans and grants of hundreds of millions of dollars for water development projects over the years, the CWCB has never had funds dedicated to purchasing or leasing water rights for instream flow. There are no financial incentives for water right holders to make water available to the CWCB’s instream flow program.
- Second, not only are incentives for putting water to instream flow use lacking, but donors of water rights to the CWCB incur significant transaction costs in converting an existing water right to an instream flow.
- Third, because of a quirk in existing water law, water rights holders that lease water to the CWCB for instream flow use run the risk of losing all or a portion of the leased water right at the termination of the lease. The General Assembly remedied this problem in 2007 for short-term, emergency loans of water to the CWCB, but the disincentive remains for longerterm agreements such as multi-year leases or long-term dry year leasing arrangements. The net result is that, in the 34 years in which it has had acquisition authority, the CWCB has obtained only a handful of water rights for instream flow, in each case by donation.
To breathe life into the CWCB’s acquisition program, the General Assembly must create incentives and eliminate the deterrents for instream flow transactions.
Recommendations for strengthening the Instream Flow Program
The General Assembly can take three key steps to revive the CWCB’s struggling instream flow acquisition programs:
- Create tax incentives for instream flow donations. A tax credit, similar to that for conservation easements on land, would help encourage voluntary instream flow donations.
- Appropriate funds for the CWCB to acquire water and to assist with transaction costs.Allocating $1 million to the CWCB’s instream flow program would free the CWCB from having to rely exclusively on charitable water rights holders willing to donate water to the state, allowing the CWCB to compensate water right holders who commit water to instream flow use and to offset the transaction costs of such deals.
- Clarify that leasing water to the CWCB’s instream flow program will not result in loss of the underlying water right. Removing the leasing penalty would protect water right holders who enter into long-term instream flow agreements with the CWCB, just as the 2007 legislation protects those who make short-term instream flow loans.
A strengthened instream flow acquisition program would offer obvious ecological benefits to Colorado’s rivers and streams.
The reinvigorated program could help conserve species and avert further Endangered Species Act listings, and it would provide a means for addressing nonconsumptive needs now being identified by the Basin Roundtables established under HB1177. Increased stream flows would improve water quality, enhance river recreation and help sustain the recreation and tourism economies and quality of life of urban and rural Colorado communities.
An improved acquisition program would also create greater flexibility for water rights holders in the use of their water rights.
For example, an irrigator could elect to rotationally fallow a portion of her land and could commit the unneeded water to the instream flow program. The irrigator would receive market-based payment for the instream flow use of her water and might also elect to further diversify her income by leasing access to her private lands and waters to anglers or other outdoor enthusiasts.
Energizing the market for instream flow water rights would create an alternative to further agricultural dry-up. Additionally, municipal water providers with currently unneeded water supplies could receive payment for temporarily leasing their water rights to the CWCB for instream flow.
Colorado’s conservation community and sportsmen urge you to support this sensible package of improvements, so that Colorado’s instream flow acquisition program can meet the new challenges facing our state in the 21st Century.
For more information contact:
- Drew Peternell & David Nickum, Trout Unlimited 303-440-2937
- Becky Long, Colorado Environmental Coalition 303-405-6714
- Dan Grossman, Environmental Defense 303-447-7213