Monday, September 16, 2013

Might be time to try a little forebearance

I've been too busy to post anything on the recent announcement by Reclamation that a shortage declaration on the lower Colorado River is likely by 2016.  But when I spotted this (pdf) on the agenda for the most recent board meeting of the Central Arizona Project, it seemed like a good time to chime in.

The fallowing and forebearance agreement between CAP and the Yuma Mesa Irrigation and Drainage District (YMIDD) is a first step to developing a relationship between water users in Arizona along the River and in the Central part of the state to try to forestall shortages to CAP customers. 

It's a pretty remarkable agreement in some ways.  Normally a forebearance agreement involves payment for water that the entity paying will be taking when the condition that triggers the forebearance occurs.  With this agreement the water that YMIDD agrees not to take delivery of will simply remain in Lake Mead.  The memo to the board talks about developing data for future verification and quantification of amounts of water saved, developing inter-agency methodologies, and figuring out what elements need to be included in a future, longer-term agreement. 

It's referred to as a pilot agreement, so I'm sure those are all important reasons for embarking on this program.  But I think there are some other, unstated reasons for doing this now.  During the last legislative session there was a bill introduced to create local water augmentation authorities - public entities with bonding authority that could leverage state loans to begin securing future water supplies for growing parts of the state.  This idea was not well-received in the Yuma area, where some local folks presented this legislation as an existential threat to the future of farming in Yuma.

Then there is the idea of keeping more water in Lake Mead.  With the renewed threat of a shortage declaration in the lower basin - just 3 quick years after the last threat (at that time CAP was looking at leaving their own water in the reservoir to forestall shortage) and only two years after a huge snowpack in the upper basin that led to a 50 foot rise in the lake level - there is pressure once again to push off to the future the dreaded shortage declaration, that hits CAP the hardest.

So what is CAP actually receiving in this deal?  If fully implemented it could result in up to 54,000 acre-feet of water staying in Lake Mead rather than going to farms in the Yuma area, at a cost of probably close to $7.5 million.  This comes out to a cost of about $137/ac-ft, if you were actually taking delivery of the full amount of water.  That would be a pretty good deal, with an acre-foot of CAP water going for $166 next year.  But this water isn't necessarily going into the CAP canal.  As I wrote about here, the real value in saving this water is in holding off a shortage declaration, which could cost CAP a lot more than 54,000 ac-ft and a couple million dollars.  This is about making an investment in their continuing water deliveries over the next several years.

Also, with the water staying in Mead you have to account for losses to evaporation.  Reclamation estimates the annual evaporative losses from the reservoir at about 800,000 acre-feet/year.  That number depends on the surface area of the reservoir, which of course depends on the elevation of the water surface - more water in the reservoir means a larger water surface and that means more evaporation.  How much of the water saved by the forebearance agreement would be lost to evaporation depends on the formulas used by Reclamation to allocate Intentionally Created Surplus (fairly large pdf), which is covered in the 2007 Shortage Sharing Agreement.  But it's something south of 50,000 acre-feet, so the actual cost of the water saved under this agreement is higher than the number I calculated above.

It still seems a little strange that CAP is proposing to spend several million dollars to park some water in a big puddle in the middle of the desert that they don't currently have plans to use.  But for all the intangible reasons noted above, it seems like it's still worth pursuing the deal - if only because of the groundwork it can lay for the future.

1 comment:

John Fleck said...

Two thoughts on this very interesting agreement. When I was in Yuma on a reporting trip a couple of years ago, I was surprised to learn that something like this hadn't already been discussed. Second, 54kaf is, what, ~6 inches of water in Lake Mead. We are truly living at the margin, aren't we?