Colorado prepares for launch of water contribution program

Tensions about water management are high on the Colorado River, as water levels in reservoirs like Lake Mead drop to record lows and the west faces severe drought conditions.

The river, which helps supply water to seven U.S. states and two Mexican ones, has faced continuing issues with water shortages due to declines in water supplies amplified by climate change and ongoing growth in water demand.

On July 31, the federal Bureau of Reclamation released a final environmental impact statement which outlines a potential framework for management of the river between 2027 and 2036. This framework would include mandatory water use cuts of up to a combined 3 million acre feet per year for the lower basin states of California, Nevada and Arizona while seeking 200,000 acre feet in voluntary reductions from the upper basin states of Colorado, New Mexico, Utah and Wyoming.

The impact statement and the associated National Environmental Policy Act (NEPA) decisionmaking process still leave an opportunity for the states on the Colorado River to reach their own agreement about future water use. However, this year, the negotiations to reach a new agreement for 2027 and beyond have been unsuccessful. 

One sticking point has been disputes about whether all states should have to make mandatory reductions in water use, as desired by the lower basin states, or whether, as upper basin states have proposed, the upper basin should only have to make voluntary reductions.

The lower basin has consistently overshot its allotment of Colorado River water in the past, although these states are currently below their allotment according to federal water accounting, while the upper basin has never used its full allotted amount.

In this context, Colorado is introducing a new near term water contribution program designed to take advantage of federal funding to encourage voluntary, compensated reductions in Colorado River water use.

At a webinar on Aug. 6, Amy Ostdiek, section chief for the Colorado Water Conservation Board (CWCB) interstate, federal and water information section, explained that this program is one of several parallel activities that the state is undertaking alongside the ongoing NEPA process.

She said that the Bureau of Reclamation has announced that $100 million in funding will be available to support the upper basin states in establishing water contribution programs that will provide “water that but for these actions would not be there” to the Colorado River.

She said that funding would likely support about two years of a program, based on previous project costs, and that, to participate and claim the funds, Colorado would need to act now to begin establishing a program.

Ostdiek said that establishing such a program would honor commitments the state has made in negotiations to making voluntary water use reductions and would show that “Colorado is committed to being part of the solution.”

The state would not start from scratch building this program, Ostdiek said. Instead, the program would build on at least 15 years of work on water conservation programs and engagement with interested groups done by the state.

Although many of these discussions and associated pilot programs took different approaches than the current program, they gave valuable lessons for the concept’s current implementation, she said.

She highlighted the System Conservation Pilot Program, which ran from 2015 to 2018 and again between 2023 and 2024 and compensated water users for voluntarily reducing their water use to help build a supply of water to alleviate drought impacts, as particularly important to the current effort.

The current effort would also build on previous studies on the feasibility of compensated reductions done by the CWCB, Ostdiek said.

She said that one consistent point of feedback from the System Conservation Pilot Program was that water users wanted a mechanism for users to get credit for water being contributed.

This led to discussions among the upper basin states about a mechanism to credit users and to account for the amount of water that could be contributed in each state, she said. 

In turn, these discussions led to a memorandum of understanding between the states and the Bureau of Reclamation that provides a mechanism for the upper basin states to contribute water to conservation activities and to account for this contributed water.

She added that the memorandum does not include a mechanism for the states to get credit for this contributed water, although it was expected that such a provision would be added later.

“We have talked to a lot of people about these concepts,” Ostdiek said. “There’s been so much discussion across the state, for the last 15, 20 plus years, about these different concepts. We’ve gotten input from every corner of the state.”

Throughout this work, several key themes have emerged, she said. These include avoiding injuries to water rights holders, ensuring that participation from all sectors of water users and all relevant regions of state is incentivized, giving water users enough notice about opportunities to engage in the program and mitigating any secondary economic impacts to communities where a large number of users engage with the program.

She said there is a strong desire to pursue projects with multiple benefits, such as projects that combine water conservation with environmental benefits.

There is also a strong desire for the state to get credit from water conservation measures it takes and for any program to benefit Colorado and other upper basin states, said Ostdiek.

She said that the current program is called a contribution program instead of a conservation program because the state wants to take it beyond simply fallowing fields or other agricultural water conservation measures to include all sectors of water users.

“So, we want to consider this very broadly,” she said. “More broadly than perhaps conservation and conserved consumptive use has been contemplated in the past.”

She said that the baseline metric for the program across the upper basin is that water being contributed would not be available without participation in the program.

Although the program will likely extend for two years with the funding the Bureau of Reclamation is offering, Ostdiek said that the state is focused on the first year and will make adjustments for subsequent years based on analysis and consideration done during the first.

The CWCB will lead the new initiative, developing criteria and considering and approving projects, she said, which will also make projects part of a state approved conservation program that will provide protection for historical consumptive use.

However, as Colorado Division of Water Resources (DWR) Director and State Engineer Jason Ullman explained, the division will be involved in reviewing projects for their potential to cause injury to other water users.

The DWR is in charge of administering water rights and managing the prior appropriations system across the state.

Ullman said that the DWR would also contribute to determining whether the water rights involved in a project are administrable and how water saved by non-use of the rights might provide habitat and other benefits in addition to supplementing river flows.

Ostdiek said that the CWCB would be discussing and adopting criteria for the adoption of water conservation projects into the program.

The current proposed criteria, she said, build on previous work with a goal of being flexible and allowing for participation while also addressing the concerns expressed during previous projects.

She said that the criteria include whether a project would result in a reduction in water use and an associated credit for the upper basin states, whether it operates within existing authorities, and whether it utilizes federal funding, such as the $100 million the Bureau of Reclamation is currently offering for the program.

Ostdiek said that another priority is including opportunities for tribal participation in the program.

Projects would need to protect water rights and prevent injury to other rights, she said, and would need to meet a minimum acreage threshold for agricultural projects.

She said that projects supporting drought resilience would be favored.

How difficult a project would be to administer and whether it is complying with ditch company bylaws or other local requirements would also be an approval criteria, said Ostdiek.

Foreseeable community impacts, such as secondary economic impacts that might result from a particular project’s participation in the program, would be another assessment criteria under the proposed scheme she said.

Ensuring projects contribute to proportional engagement in the program across all sectors and incentivizing multiple benefit projects would be the final two criteria, she added.

She said that the CWCB board discussed these draft criteria in July but will finalize them in September at its board meeting with the goal of starting taking applications shortly afterwards.

“This is where we really want to hear from you,” said Ostdiek. “What do you think really matters? What’s more important? What are we missing?”

She said that comments on the criteria can be emailed to DNR_contributionprogram@state.co.us.

Ostdiek added that the CWCB would also be doing a range of other outreach activities about the program in the near future and that further information on the program is available at https://cwcb.colorado.gov/contributionprogram.

The development of this program is occurring alongside the other upper basin states. “They’re working through their own processes to get ready to roll this out,” she said, “but we’re also going to be coordinated to make sure that this program is working for and benefitting the upper division states. … We really see this as doing our part to be part of the solution on the Colorado River,” Ostdiek said.

Blue Mesa Reservoir’s water levels remain low, highlighting ongoing drought conditions and raising concerns about water supplies, recreation. The low level is typical of lakes and reservoirs throughout the Western United. States. (Photo by John Waters)