Four states in the drought-stricken Colorado River Basin, including Colorado, want credit for conserving water, but water users and officials have big questions about how to make it happen.
Last year, taxpayers paid farmers and ranchers $16 million to cut their water use in the Colorado River Basin, but the water saved on one farm simply reentered streams, where it could be used by anyone downstream. For years, officials in Colorado, New Mexico, Utah and Wyoming have been considering ways to get credit for that conserved water — to track it, store it in a reservoir, and save it to help the states in the future. Representatives from the four states voted in June to develop a proposal exploring the idea by mid-August.
But building a long-term program to track and store conserved water raises questions about equity, funding, economic impacts and whether the idea is feasible at all.
People are concerned about the bigger picture, said Andy Mueller, general manager of the Colorado River District in Colorado.
“If we’re going to conserve water up here, and if the federal government is going to pay for that conservation with taxpayer dollars, it seems to us that storing it and using it for important public purposes makes sense, rather than sending it downstream to just encourage continued consumption of water [by downstream states],” Mueller said.
Cutting back on water use is a big topic of conversation in the Colorado River Basin, which supplies water to 40 million people and is enduring warmer temperatures and a two-decade megadrought.
Officials from each of the seven states in the basin are weighing who might have to cut their use and how to manage the basin’s reservoirs in high-stakes negotiations over the river’s future after the current rules expire in 2026.
The Upper Basin released a proposal in March that outlined its plan to manage the river after 2026 as part of these negotiations. That proposal includes a commitment to pursue voluntary, temporary and compensated conservation programs.
The June vote of the Upper Colorado River Commission aimed to take that commitment one step forward. The state and federal representatives on the commission want to design a conservation-for-credit program in advance so it’s set up and ready to go if needed.
The commission’s plan could help inform the states’ negotiations, said Amy Ostdiek, who is part of Colorado’s negotiating team and works on interstate water issues for the state’s top water policy agency, the Colorado Water Conservation Board.
“We’ve heard this from water users a lot. … If we’re going to continue doing conservation-type activities, can we explore ways to quote-unquote get credit for it?” Ostdiek said. “It’s worth exploring. … There’s a lot we’d need to work out before we get there.”
Frisco resident, Lynn Moulton, fly fishes in the Dillion Reservoir at the mouth of the Snake River, July 2, 2024, in Dillon. (Hugh Carey, The Colorado Sun)
Big questions from water users
Officials and water users have been kicking around the idea of tracking and storing conserved water for credit for years, and the commission’s August proposal will be the latest iteration of those discussions.
One heavily debated program, called demand management, offered a path toward storing conserved water in a reservoir to help Upper Basin states. But Colorado hit pause on analyzing the idea in 2022 as other Upper Basin states slogged through intense feasibility studies.
Taxpayers paid $16 million in 2023 to conserve water through another program, the System Conservation Pilot Program. Because the program does not track conserved water, there is no certainty where it ends up.
“It inherently just flows downstream and continues to be used by the Lower Basin,” Mueller said. “It really doesn’t do anything other than feed the continued use of the water, rather than encourage conservation of the water.”
The commission’s proposal will try to answer key questions for a program that tracks and stores conserved water, said Chuck Cullom, executive director of the Upper Colorado River Commission. But how will water managers track the actual water down streams, through reservoirs and across state lines? What is a “conservation credit” and how can it be earned? What role would location play?
Mueller of the Colorado River District said the location of the projects ties into big potential equity issues.
Most of Colorado’s participants in the system conservation pilot program so far have been farmers and ranchers on the Western Slope, he said. They helped conserve water by fallowing fields and switching to crops that used less water. But if a farmer stops production, or fallows acres of land to conserve water, it can cut jobs on the farm and spending in the community.
A paid conservation program has to be designed to incentivize participation from all regions of Colorado where Colorado River is used, which includes Front Range cities from Fort Collins down to Colorado Springs and beyond, Mueller said.
Joe Bernal, a rancher in Loma who is participating in the System Conservation Pilot Program, said his concern was how a conservation-for-credit program would be administered.
“Would they work with ditch companies, or would they go with individuals? How much would they offer?” he said. “Would they … help ditch companies and communities protect the viability of agriculture?”
Other water users want to know which reservoirs would store conserved water for credit.
Storing conserved water closer to a river’s source — in high-elevation Upper Basin reservoirs rather than farther downstream — would give the four states more say in when, how much and from where water is released.
Plus, local water users want to conserve water in good years and save it in a nearby reservoir to provide a cushion during the next dry year, said Ken Curtis, general manager of the Dolores Water Conservancy District.
Farmers and ranchers in his district are already doing just that: This year, they volunteered to be paid to save water through the system conservation program, and they’re storing it in the nearby McPhee Reservoir to boost carryover water supplies for next year, Curtis said.
The commission’s proposal also aims to define the requirements conservation projects would have to meet to qualify and how years of past water use would come into play.
How to factor in past water use is important to two tribes in Colorado, the Ute Mountain Ute and Southern Ute Indian tribes, said Peter Ortego, general counsel for the Ute Mountain Ute Tribe.
Both tribes have water in a southwestern reservoir that they plan to put to use in the future, but haven’t used yet. Their water does not qualify for use in current paid conservation programs, which raises the question of whether it could qualify for a newer, reimagined conservation-for-credit program, Ortego said.
A program to help the Upper Basin
As officials try to tackle big questions, one thing is clear: Upper Basin water watchers do not want to conserve water if it will just flow downstream to support current use in the Lower Basin.
Congress is currently considering a bill to extend the system conservation pilot program, which does not track where conserved water goes. Meanwhile, officials are dusting off years of analyses about the demand management program, which expires in 2026.
The demand management program created an “account” for up to 500,000 acre-feet of conserved water in Lake Powell. One acre-foot roughly equals the annual use of two to three households.
It’s been frustrating to know the demand management account exists in Lake Powell and to see water being conserved through the system conservation pilot program, or SCPP, that just flows through the reservoir, said James Eklund, a former Colorado water official who helped forge the program and owns a ranch in the pilot program.
“All it needed was to be tagged as DM (demand management) water instead of SCPP water — and it would be water we’d have in our account as Upper Basin states. And we’d be able to point to that water in negotiations,” Eklund said.
But that program is very prescriptive, Ostdiek said.
The account could be used for one purpose: fulfilling the Upper Basin’s interstate water sharing obligations outlined in the 1922 Colorado River Compact, even if river conditions worsen drastically and trigger mandatory cuts in the Upper Basin. The shorthand for this worst-case scenario is a “compact call” or “compact compliance.”
The commission’s upcoming proposal could explore more general uses for credits, including or beyond compact compliance, Ostdiek said.
“I think we need to do some more exploring on what the concept of credit actually means to individual states,” she said, “and think about what the goals would be of that type of approach.”
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