New Administration Issues in Augmentation Plans
William H. Caile
WATER ADMINISTRATION
Colorado Bar Association CLE, April 4, 2008

I.          Introduction

            This presentation provides an overview of a few relatively novel practices that have been increasingly incorporated into applications for augmentation plans and, in some cases, final decrees, within the last decade.  Driven by evolving circumstances including changes in law, water shortages, and greater scrutiny of engineering analyses, plans for augmentation are becoming significantly more complex than they were when first provided for in the 1969 Act^[2] nearly forty years ago.^[3] 

            In an attempt to provide flexibility and make the most of scarce replacement water supplies, applicants seeking approval of augmentation plans are increasingly turning to complex water management and accounting practices to make the plans work and to meet the burden of proof in water court litigation.  This has, in turn, resulted in an increased burden on State water officials charged with administration of such plans.

            Some of these practices that have appeared in recent years include:

• Retiming of depletions using augmentation wells and recharge projects;

• Replacement supplies of limited duration or uncertain amount; undecreed replacement supplies;

• Use of “projection tools” to quantify allowable diversions.

            Importantly, many aspects of these practices have not been judicially vetted by the Colorado Supreme Court, and this presentation makes no representations as to whether they can be relied on to satisfy an applicant’s burden under current Colorado law.  However, in some cases these practices have already been incorporated into stipulated or “consent” decrees entered by the water courts.  As such, for better or for worse, they are part of final decrees that are being administered by State water officials today.
           
            This presentation begins with a short primer on the purpose of augmentation plans and the applicant’s burden of proof.  Next is a discussion of circumstances that have driven innovation and resulted in more complex plans.  Finally, this presentation provides an overview of the three above-referenced practices and the administrative challenges posed.

II.        Augmentation Plans

            A.        Purpose

            The 1969 Act defines an augmentation plan to include a “detailed program . . . temporary or perpetual in duration, to increase the supply of water available for beneficial use.”^[4]  An augmentation plan is intended to maximize the beneficial use of water by allowing out-of-priority uses that would otherwise be subject to curtailment by the State and Division Engineers.^[5]  Because they are designed to allow the out of priority use of water, applications for approval of augmentation plans can be controversial and highly contested water court cases.^[6] 

            B.        Burden of Proof

            An augmentation plan must be judicially approved by the water court.^[7]  The Applicant for an augmentation plan must demonstrate that the plan is sufficient to permit continuation of the applicant’s out of priority diversions by providing replacement water in the timing, location, and amount necessary to meet the lawful requirements of a senior diverter.^[8]  Decrees approving plans for augmentation must provide that the State Engineer shall “curtail all out-of-priority diversions, the depletions from which are not so replaced as to prevent injury to vested water rights.”^[9]  The applicant must establish the timing and location of the depletions caused by the out of priority use, as well as the availability of sufficient replacement water to prevent injury from those depletions.^[10]

III.       Recent Developments Impacting Augmentation Plans

            In recent years, increasing pressures on the water resource, coupled with drought and increased well use, have resulted in tensions between well users and owners of senior, surface water rights.  The following circumstances have all led towards increased scrutiny of augmentation plan applications, which in turn has led to more complex plans:

• During the 1970s through the 1990s, there was a history of large “temporary substitute supply plans” (TSSPs), some involving hundreds or thousands of irrigation wells, being approved annually in South Platte River basin by the State Engineer.  These large TSSPs included plans approved for groups like Groundwater Appropriators of South Platte (GASP) and Central Colorado Water Conservancy District (“Central”).

• Empire Lodge (2001) and Simpson v. Bijou (2003) were decisions by the Colorado Supreme Court which confirmed that the State Engineer does not have the authority to administratively approve augmentation plans or TSSPs—only the water court can adjudicate a plan to allow out of priority depletions.

• HB 02-1414, enacted in 2002, allows the State Engineer to approve substitute water supply plans (SWSPs) for limited amounts of time under limited circumstances, most notably while an application for approval of a change of water right or plan for augmentation is pending in the water court.^[11]

• SB 03-73, enacted in 2003, gave well users like GASP and Central three years to apply to the water court for a judicially approved augmentation plan.  This resulted in a surge in augmentation plan filings in the Division 1 Water Court, and greatly increased the competition for available replacement water.

• Drought: 2002 to 2003 was one of the driest periods on record in Colorado.  Many senior water rights were curtailed or suffered dramatically reduced yield.

            As a result of these circumstances, the last several years have also seen increasingly complex proposals for augmentation plans, particularly in Division 1.^[12]  Among the relatively new concepts to be including in these cases have been the retiming of depletions using augmentation wells and recharge; utilization of temporary or un-decreed replacement water sources; and use of projections as a term and condition to quantify and regulate allowable pumping.

IV.       New Administrative Challenges in Augmentation Plans

            A.        Retiming of Depletions: Augmentation Wells and Recharge

            1.  Augmentation Wells

            An “augmentation well” is a well that delivers water to the stream as a source of replacement water for an augmentation plan.  In other words, water is pumped directly from the well for delivery to the river, as required to replace out of priority depletions from other wells.  The following administrative issues arise with augmentation wells:

• Must be decreed for augmentation use;

• Creates its own lagged depletions that must then also be replaced by the augmentation plan;

• The credit card effect: An augmentation well does not add new water to the river, but rather delays, or “re-times” the depletion “debt” that will ultimately be owed;

            2.  Recharge Projects  

            A recharge project diverts water when it is in available under relatively junior water rights (usually during times of high flows or “free river”) and puts the water into porous ponds or ditches where it is allowed to seep back into the ground to “recharge” the alluvial aquifer and ultimately the surface flows.

• Recharge accretions are the reverse of well depletions;

• Timing of accretions to the river are calculated using the same engineering analyses as timing of depletions; generally, the greater the distance to the river, the longer it will take for depletions or accretions to impact surface flows;

• Accretions offset depletions, and are used as a source of replacement water supply in the augmentation plan;

• Complex retiming processes have been proposed using augmentation wells, recharge projects, and “recharge wells” to further manipulate the timing of depletions in order to minimize replacement obligations and increase supply.

• Allows for maximum use of available water, but can require extraordinarily complex accounting and administration.

            B.        Replacement Supplies of Limited Duration and Un-Decreed Sources

            The augmentation plan statute expressly allows for use of replacement supplies that are not available on a permanent basis: “[a] proposed plan for augmentation that relies upon a supply of augmentation water which, by contract or otherwise, is limited in duration shall not be denied solely upon [these grounds] so long as the terms and conditions of the plan prevent injury to vested water rights.”^[13]  The statute has also been amended to allow the use of “additional or alternative sources” identified after the decree is entered, if such sources are either decreed for augmentation use or used pursuant to an SWSP approved by the State Engineer pursuant to C.R.S. § 37-92-308.^[14]

• Allows use of leased water and contract water to which the applicant does not have a vested or permanent right;

• Limited availability creates a problem for the court and other water users, however, where the lagged depletions from wells will continue beyond the availability of the replacement supply;

• Water rights that have not been changed or quantified for augmentation uses may be used pursuant to a State Engineer-approved SWSP;

• Recent decrees have included provisions allowing the addition of replacement sources identified after the decree is entered;

• This can also create problems, however, because the yield of water rights used pursuant to a SWSP may be significantly less than projected, after completion of the water court process;

• Also a burden State water officials and other water users to continue to monitor and evaluate the use of changing sources of replacement supply.

            C.        Projection Tools

            To deal with the multiple variables of lagged well depletions, augmentation well depletions and recharge project accretions, together with serial and protean sources of replacement water, recent augmentation plans have also begun using “projection tools.”  A projection tool is an accounting tool imposed as a term and condition of the decree to regulate pumping and ensure the viability of the augmentation plan.  The projection tool attempts to predict the future availability of replacement supplies, ensure that sufficient replacement water will be available in the future by limiting present pumping under the plan.

            Ideally, a projection tool will operate to match depletions from current pumping with the future availability of replacement water in timing, location and amount.  To do this, the projection tool employs a form of an accounting sheet which compares the current and anticipated future depletions with anticipated future sources of replacement water over time.

            The devil lurks in the details, however.  In order to accurately predict the availability of replacement water supplies under changing and necessarily unpredictable future conditions, a projection tool relies on a set of assumptions.  These assumptions can vary, but typically include:

• The number of days of senior call annually (requiring replacement of out of priority depletions under the augmentation plan) (the “call assumption”);

• The number of days that replacement water rights will be in priority and able to divert or release water based on the same, or a different, call assumption as above;

• The anticipated yield of a replacement water right in a given year, based on the call assumption and other factors;

• The length (number of years) and frequency (yearly, monthly, daily) of the projection.

            The projection tool is intended to maximize the efficiency of the augmentation plan by calculating how much pumping is allowed today, based on how much replacement water will be available in the future.  If the projection is not accurate, however, the result may be unreplaced depletions and injury to other water rights.

V.        Conclusion

            The State and Division Engineers are responsible for administering water rights in Colorado, including increasingly complex plans for augmentation.  Colorado statutes provide that the Engineers must curtail all out-of-priority diversions, the depletions from which are not so replaced as to prevent injury to vested water rights.^[15]  The relatively new and complex augmentation practices discussed above, while intended to maximize the beneficial use of a scarce resource, are also contributing to increased administrative challenges for State water officials.