TRI-STATE GENERATION AND TRANSMISSION ASSOCIATION, INC.

Transcription

1 TRI-STATE GENERATION AND TRANSMISSION ASSOCIATION, INC. HEADQUARTERS: P.O. BOX DENVER, COLORADO August 30, 2013 VIA tom.browninurajstatc.co.us 1580 Logan Street, Suite 200 Denver, CO Attn: Tom Browning RE: Tri-State Generation and Transmission Association, Inc. Comments - Pilot Project Criteria and Guidelines Dear Mr. Browning: Introductory Remarks: On behalf of Tri-State Generation and Transmission Association Inc. ("Tri-State"), thank you for the opportunity to provide input to the ("CWCB" or the "Board") as it works to develop criteria and guidelines pursuant to H.B (codified at C.R.S (8)). Tri-State shares CWCB's goal of a successful implementation of this new statute, and Tri-State representatives have attended the CWCB work sessions and worked with other stakeholders in developing these written comments. Tri-State plans to continue to participate in the CWCB's implementation of HB and may provide additional comments, input at meetings, or other involvement as the CWCB moves forward. Tri-State is a stakeholder in HB both as a water rights owner and as a power provider to the Colorado agricultural community. Tri-State generates electrical power for rural areas in Colorado and neighboring states. The Colorado agricultural community makes up a large portion of Tri-State's customers in Colorado. Tri-State recognizes that, like electrical power, water is critical to continuing prosperity for Colorado agriculture. Tri-State owns water rights in several river basins in Colorado that are or will be used in connection with electrical power generation. These water rights include a major interest in the Amity Mutual Irrigation Company on the lower Arkansas River. Tri-State has changed its Amity water rights in water court for use in connection with a future generating facility (or facilities) near Holly, Colorado. Today, Tri-State's Amity water rights continue to be used for irrigation. When the rights are eventually changed to Tri-State's new uses, the economic value of the water will remain in Prowers County and benefit the same communities that it has historically. Tri-State supports the concept of rotational fallowing as a potential tool to meet new water needs in Colorado. Tri-State's decree in Case No. 07CW74 contemplates temporary fallowing to supply some water for power purposes while maintaining long term irrigation in Prowers County. In order to succeed, the implementation of rotational fallowing programs must protect other water users from injury. It is important that the transfer of water to meet a growing CRAIG STATION ESCALANTE STATION NUCLA STATION P-O. BOX 1307 P.O. BOX 577 P.O. BOX 698 A Touchstone Energy'Cooperative T/^jT^ CRAIG, CO PREWITT. NM NUCLA, co ,

2 Page 2 municipal need should not take water away from downstream agricultural use or use to generate power for agriculture. Tri-Statc has reviewed the Draft Criteria and Guidelines for Fallowing-Leasing Pilot Project Program ("Draft Criteria") circulated by the CWCB and offers the following comments on the Draft Criteria. These comments were developed based on all the public input available, including other submitted written comments and workshops or meetings among stakeholders that were facilitated by the CWCB. There appears to be consensus on many issues for the Draft Criteria, and Tri-State encourages the CWCB to adopt the consensus view that was subject to public debate. In order to provide due process in the development of final criteria and guidelines for HB , the CWCB should disregard any ex partc communications or late comments that represent an effort to avoid a public debate about the criteria and guidelines. Tri-State's comments are organized according to sections of the Draft Criteria. Comments on the Draft Criteria LA Purpose of the Criteria and Guidelines Document Comment: If the guidelines may be modified "at any time" by the Board, the Board should describe and commit to a public process for such revisions. If the Board can arbitrarily change the criteria and guidelines without notice or due process, it will undermine the effectiveness of the guidelines. See C.R.S (8)(d) (requiring "reasonable opportunity to comment" and CWCB "consideration of any comments" regarding criteria and guidelines). Comment re fn2: This footnote is not accurate and should be deleted. The proponents of HB did not cooperate with parties who had an interest in the legislation; instead, the legislation was fast tracked late in the 2013 legislative session. For example, the proponents of the legislation declined to brief the Arkansas Basin Roundtable before introducing their bills, despite having committed to work to build consensus within the Arkansas Basin for future legislative efforts after the failure of H.B S. The criteria and guidelines should focus on the implementation of H.B and not try to re-write the history of the legislation. I.B & C Background and Goals and Purposes Comments: In addition to information from project proponents, the CWCB should include a description of other stakeholders in this section. This includes other water users on stream systems where pilot projects may be located. Many of these other users are agricultural and are part of the same group that II.B is intended to protect. In addition, the statute is clear that implementation of pilot projects needs to occur "without causing material injury to other vested water rights, decreed conditional water rights, or contract rights to water." C.R.S (8){b){IV). Therefore, the background section of the criteria and guidelines should include a description of other stakeholders and ensure that these other users are protected to A Touchstone Energy* Cooperative

3 Page 3 avoid one group of irrigators who are leasing water to municipal uses as part of a pilot project from injuring their neighbors who are continuing to farm or use water for other beneficial purposes. A key group of water users that will require protection are those located downstream from any proposed pilot project. These users depend on the historical pattern of return flows from upstream irrigators as part of their water supply in the river. In addition to downstream users in Colorado, most river basins in Colorado arc subject to interstate compacts that require delivery of water to downstream states. It is critical to maintain return flows in time location and amount to protect downstream users and ensure that lease-fallowing does not jeopardize compliance with Colorado's interstate compacts. The criteria and guidelines should establish efficient and practical methods to accomplish this (specific recommendations are discussed in more detail in the comments below). Tri-State supports the objective of utilizing lease-fallow programs to reduce the need to permanently dry-up irrigated land in Colorado. However, it is important to note that the leasefallow objective can also be met through the water court process. It is possible to change water rights through the water court process and allow for continued irrigation through lease-fallow type programs, with terms and conditions to prevent injury to other water users. See e.g. C.R.S (10.6) & The focus of the lease-fallow effort should be to find ways to avoid permanent buy and dry, not to find ways to avoid water court. Finally, it is important to note that H.B authorized pilot projects. The statute is intended to provide testing opportunity for lease-fallowing, and not to singlehandcdly solve Colorado's water "gap." By definition, a pilot study is a small scale preliminary study conducted to evaluate feasibility, time, cost, and adverse effects in order to predict an appropriate sample size and improve upon the study design prior to performance of a full-scale project. The legislative declaration in section 1 of H.B reinforces this definition by calling for a "test" of lease-fallowing. The criteria and guidelines should be developed accordingly and need to consider: Scale: the maximum allowable project size should not be so large as to threaten substantial injury if there arc errors or upsets in the execution of an approved pilot project. Reporting: the engineering and accounting for the plan should assist all stakeholders in developing information about rotational fallowing and its efficacy. While the guidelines should offer streamlined approaches (discussed below), they also should ensure sufficient data collection and analysis to know whether streamlining works. Goals: specific measurable outcomes should be identified so that the efficacy of Pilot Projects can be quantified and compared project-to-project to identify best practices. An example of a measurable outcome is: what percentage of historical consumptive use water generated by the project was diverted and used by the AN EQUAL OPPORTUNITY I AFFIRMATIVE ACTION EMPLOYER A Touchstone Energy"Cooperative ^C^fl^f

4 Page 4 receiving municipality? Another would be: how well were historical return flows maintained? And: were the fallowed fields returned to productive irrigation use after being fallowed? I.D Content of the Document Comment: the list of statutory factors is incomplete. It may be simpler for this section of the document to be very short and cite to the statute rather than paraphrase it. To the extent this section summarizes HB 's list of topics for criteria and guidelines, it should not leave out critical components. These include: Priority for projects that do not require new infrastructure; A five year application window (until 2018); and Periodic reports to the. II. Criteria and Guidelines A. Summary of Selection Process Overall Comment: The "approval process" should not begin until a project is "selected." It docs not make sense to have a concurrent selection and approval process. The CWCB should select the projects before the approval process is started. Otherwise, the approval process could require significant time in review by other parties, only to find that the CWCB did not end up selecting that pilot project in the first place. There is adequate time to complete the selection process prior to the approval process. As pilot projects intended to "test" lease-fallowing, these projects should not be providing supplies that municipalities are relying on for near-term water supplies, and therefore, there should be less urgency in completing the approval process. The primary purpose should be to test if the lease-fallow concept works as a tool to assist in meeting Colorado's water "gap", not to rely on the lease-fallow supplies as a primary source of water during the pilot study. There was some discussion at the August 9, 2013 workshop about the State Water Plan and expediting pilot projects to be included in that plan. While certain pilot projects may fit well with the development of the State Water Plan, this does not imply a rush to approve pilot projects this year. H.B. 13-I24H specifically calls for selection of projects over a five year period. This statutory requirement should not be disregarded because it serves the important purpose of allowing potential pilot project applicants to develop their plans, consult with other stakeholders and cooperate to prevent injury. For example, in Tri-State's experience, it is helpful to begin discussions about a project with local interests and respond to their concerns before making an official filing; this process takes time up front but can avoid significant opposition and streamline approval after filing. In addition, the State Water Plan contemplates regular review and amendment, so there will A Touchstone Energy"Cooperative

5 Page 5 be an opportunity in the future to add approved pilot projects that fit with the State Water Plan. Comments regarding selection process: The applicant should be required to demonstrate that they have an actual end municipal user for the water. This could be through signed contracts, or perhaps by requiring the municipal user to be a co-applicant. Without an end user, a pilot project is incomplete and should not compete for selection with other projects that have committed end users. Similarly, the applicant should demonstrate that they have farmers who are committed to fallowing should the project be selected and approved. A pilot project is incomplete without participating farmers. There should be details in the guidelines for the selection process to prevent selecting all projects in year I (per H.B 's requirement for selection over a five year period). This is a new process and statute, and it is important to allow adequate time for interested water users to develop plans and avoid a rush to file. See comments regarding "Section C - Pilot Project Selection Criteria71 B. Application Fee Comment: Tri-Statc suggests that the application and administration fees should be set such that they support the CWCB and State Engineer staffing requirements to review and administer the pilot projects. C. Pilot Project Selection Criteria Comment: Tri-State suggests the following criteria to be included in the criteria and guidelines regarding the process for selecting a pilot project: 1. Require signed contract with municipal end user(s) and all participating farmers included in the project for the full length of the proposed pilot project. This avoids having hypothetical plans compete for pilot projects that may not actually be operated. The CWCB should select projects where all the participants are ready to move forward. 2. Require projects that will not require construction of new infrastructure (e.g. river headgates, pipelines, reservoirs, and treatment facilities). C.R.S (8)(d)(XIII). Pilot Projects should not be delayed in operation by the time required to permit and construct new infrastructure projects. In order to test the concept, it will be important to actually provide water to a municipality during the period of pilot project operation. However, it would be appropriate for the criteria to A Touchstone Energy*Cooperative )Vv*

6 Page 6 specify that pilot projects may contemplate construction of augmentation stations, measuring devices, or specific recharge facilities to assist in data collection, maintenance of return flows, and quantification of consumptive use necessary to operate a pilot project. 3. Require projects that will not depend on exceptional hydrological conditions to operate. Projects arc for a limited 10 year period and should be able to operate reliably during that period without requiring unusual hydrologic conditions to do so. It would be in appropriate to select a project that has a high risk of being unable to operate during an approval period because that project is unlikely to develop information regarding the effectiveness of lease-fallowing. 4. Limit each sponsor to one pilot project. A variety of approaches will be useful in seeing what works and what doesn't for trying out this new method of water transfers. 5. To "demonstrate cooperation", the criteria should call for selection of projects with less opposition. This should be presented as an incentive for a sponsor to reach out to stakeholders and form agreements early in the pilot project development so that the project can be presented to CWCB with minimal disputed issues and maximum cooperation. This cooperation is also an important method to "streamline" engineering and technical issues, as discussed below. D. Maximum Transferable Consumptive Use Comment: The guidelines should provide for a maximum size of pilot projects of no more than an average yield of 1,000 acre feet ("ac-ft") of consumptive use per year. This size reflected a consensus by most stakeholders at the August 9, 2013 workshop. In addition, it strikes an appropriate balance on size for the following reasons. The pilot projects should be large enough to be able to efficiently gather data and observe operations, but small enough to minimize injury under an "expedited review process" (in comparison to water court review). 1,000 ac-ft of CU is a reasonable maximum limit. This would equate typically to approximately 640 acres of dry-up, and probably 4 to 8 fields ( acres in size). It is not appropriate to base the maximize size based upon the maximum amount of water a municipality may ultimately want. H.B authorized pilot programs, which arc designed not to provide the maximum amount of water desired, but to test methods that may be determined appropriate to prevent injury for larger (or smaller) projects in the future. 1,000 ac-ft is a large change of water rights, even by water court standards. A 10,000 ac-ft project would exceed all but a handful of water court change cases in Colorado's history. It is not appropriate for a pilot program that is "testing" AN EQUAL OPPORTUNITY 1 AFFIRMATIVE ACTION EMPLOYER A Touchstone Energy"Cooperative

7 Page 7 various potential operating guidelines and methods to do so under a large change of use. Three 10,000 ac-ft pilot projects in one basin would equal the approximate magnitude of the largest water court change case in the history of Colorado and would not be consistent with the definition of a pilot project. Finally, there are already processes in place for large projects to implement rotational fallowing through a water court proceeding. Water court is the appropriate venue for large projects because it provides a carefully structured process to approve projects while preventing injury. For example, water court schedules provide for: more time for development and review of engineering; facilitated negotiations with the Water Referee; multiple meetings of experts to attempt to resolve disputed issues; consideration of permitting and other issues that arise for large projects, and the ability to inspect project sites. E. Geographic Areas Ineligible for a Pilot Project Comment: There are no geographic areas that should be ineligible for a pilot project so long as a proposed pilot project complies with the geographic requirements of HB 1248 (e.g. regarding transfers from the Rio Grande or across the continental divide). F. Information to be included in a pilot project application Comment: In addition to the information in the draft guidelines, applications should be required to include sufficient information for other stakeholders to fully understand and evaluate the proposed pilot project. It is important to present a complete plan in order for the applicant to demonstrate that its plan will not cause injury and to prevent shifting that burden to other water users. Specifically, the application should include the information below, and also meet the application requirements listed in section K below regarding accepted methodologies: 1. A copy of the CWCB's "selection" of the project. Not all parties who are interested in an application will have necessarily been part of the "selection" process some parties may only wish to participate in the "application" stage to protect their water rights. The applicant can bring those third parties up to speed by including the "selection" document with the application. 2. Proposed volumetric limitation on rights to be fallowed to prevent expansion of use. This is different from the maximum consumptive use in the selection process. For example, a 200 ac-ft project would be well below the 1000 ac-ft limit, but would still require volumetric limitations to ensure that 200 ac-ft of historical use is not expanded to 300 ac-ft of temporary municipal use, which would injury other water users on an ovcrappropriated stream. The volumetric limitations should be specific to A Touchstone Energy" Cooperative

8 Page 8 each pilot project and based on the historical consumptive use analysis for the lands to be temporarily fallowed. 3. Applications should specify a method of operations and paying of return flows. The criteria should require recharge for maintenance of return Hows, including specific recharge site locations and permissions to be included in application, or dedication of firm water supplies to replace all future return flow obligations. 4. For any water rights in shared ditches or a mutual ditch company, the application should specify the method for protecting co-tenants and other shareholders from injury. Applicants should be limited to claiming the pro-rata share of the water rights, and should be required to take delivery in the same manner that irrigation users under the ditch arc delivered water, and all system losses should be left within the ditch system. a. For mutual ditch companies, the Application must evidence the company's approval of any transfer if such approval is required by the company's articles, bylaws, or rules. 5. The Application should identify the specific fields to be temporarily fallowed and steps that will be taken to ensure adequate dry-up and elimination of subirrigation. In order to streamline the process, only fallowed fields should be included in the Pilot Project, with no dry-land or forage crops allowed on dry-up lands claimed for credit in any given year. 6. The application should specifically describe any augmentation stations, measuring devices, or recharge sites that will be constructed in connection with the pilot project if approved. The application should provide evidence of the applicant's access to land for any such structures and specific plans for construction, including location, design, any necessary permits (there may be none for small structures like these), and a construction schedule demonstrating the structures will be complete before the pilot project is proposed to begin operation. 7. This list is not exclusive, and Tri-State supports the other requirements laid out in I IB for inclusion in the criteria (e.g. regarding protection of fallowed lands). G. Comment and Conference Criteria Comment: It may be helpful to specify that parties may also communicate with each other outside this formal process to attempt to resolve or clarify issues; however, if there are informal communications that result in changes to the application for the pilot project, notice and opportunity to comment on the amended application must be provided to the public unless the AN EQUAL OPPORTUNITY / AFFIRMATIVE ACTION EMPLOYER A Touchstone Energy* Cooperative )Vvl

9 Page 9 change makes the project more restrictive on the Applicant and more protective of other users (similar to water court publication requirements). H. Determination of the State Engineer Comment: The criteria and guidelines should specify that non-injury requirement is the same standard as SWSPs, IWSAs and water court. a. If the CWCB approval includes the same protection as a user could get in water court, it will reduce the likelihood of appeals that can delay the project. HB states that water court review of any pilot project will use the same noninjury standard as any other water court application. CWCB should not provide an incentive to appeal to water court in order to obtain more injury protection. Instead, cooperation among stakeholders will be demonstrated by providing the same protection from injury as any other water transfer process in Colorado. This level of protection from injury is reasonable and attainable for pilot projects, based on discussions of engineers representing various stakeholders. b. In addition, HB provides that the State Engineer makes the determination on injury, not CWCB (section 2.f). It is appropriate to clarify for applicants that the injury standard is the same as for other temporary approvals or water court so that applicants can prepare to meet that standard with their submittals. 1. Consideration of Additional Requirements [No comments at this time] J. Limitations on Participation in Other Statutory Mechanisms [No comments at this time] K. Accepted Methodologies, Modeling and Accounting Practices Comment: Tri-State's consultants Mike Sayler and Daniel Nicmcla participated in a meeting with interested engineers on August 28, The engineers had a productive discussion and were able to agree on several methodologies streamlining engineering for a pilot project. The engineers agreed that streamlining docs not mean foregoing the initial consumptive use analysis, which is essential to quantify the transferable amount and the return flows that downstream users depend on. Instead, the engineers agreed that streamlining means making conservative assumptions in the historical use analysis based on available evidence, and erring on the side of protecting the river and other water users. Even though this form of streamlining requires a full consumptive use analysis, it is expected to save significant time and effort and assist in demonstrating cooperation among A Touchstone Energy*Cooperative

10 Page 10 stakeholders. All the engineers agreed that most of the time and effort in water change cases is not the initial engineering, but the subsequent back-and-forth with objectors regarding assumptions that objectors believe arc too aggressive or not adequately supported. By selecting conservative and well supported assumptions in the initial analysis, the application process is expected to go smoothly and demonstrate cooperation. Based on this discussion and agreement, Tri-State offers the following suggestions for methodology and application components to streamline pilot project engineering. Overall: The methodology, modeling and accounting procedures for the Pilot Project should be of the same rigor and standard that is needed to prevent injury for permanent dry-up. While the dry-up of a particular field in lease-fallow is temporary, the impacts due to rotation will be continuous for the length of delayed return flows from that field {potentially ten years or more after the pilot project stops operating). Since the goal of lease fallowing is to meet long-term municipal demand through rotational fallowing, the same requirement to prevent injury as a permanent dry-up should apply with regard to historical consumptive use analysis, historical return flow analysis and accounting. If the pilot project is to test how streamlined approaches may be applied to rotational leasefallowing, such streamlined approaches will need to be conservative in nature (with respect to protecting the stream), as described above. Methodology o Historical CU analysis. Applicant should use a commonly accepted water budget tool such as StateCU, IDSCU, ISAM or in-house program that operates on a monthly time step and tracks inflows, return flows, and soil moisture storage. The water budget program should use a commonly accepted method to determine the irrigation consumptive use. The modified TR-21 Modified Blancy-Criddle equation and TR-21 crop coefficients typically provide for conservative estimates of consumptive use and would be acceptable. Applicant should use an attainable irrigation efficiency that is at the low end of the acceptable range for the type of irrigation that occurred. For typical flood or furrow irrigated fields, a maximum efficiency of 50% is appropriate. The use of a conservatively low irrigation efficiency value will allow for a streamlined approach that may be able to set aside other issues such as fallow year reduction in soil moisture storage and the corresponding increase in depletions to refill the soil moisture reservoir when irrigation resumes. No partial year dry-up. Credit should only be allowed for full year dry-up. o Return flows A Touchstone Energy*Cooperative J^^.

11 Page 11 Historical return flows should be determined using a commonly accepted methodology such as Glover or AWAS with appropriate, locally determined aquifer parameters. Historical return flows should be maintained in one of two ways: Pay as you go. Under this method, groundwater and surface water return flow factors are determined from the water budget analysis. Return flows are then maintained by applying the factors to future deliveries and delivering the ground water return flow to a recharge pit and the surface water return flow to the river. Applicant should demonstrate in advance that the recharge pits work and reasonably replicate the timing and location of ground water return flow obligations. Surface water return flows must be returned to the stream above the ditch headgatc where they historically occurred. If return Hows cannot be maintained based upon the predetermined factors, all consumptive use credits are stopped until return Hows are once again maintained. Project return flow obligations and dedicate firm water supply to replace the return flows through the entire return flow period (e.g. by dedicating sufficient existing water in a storage vessel that can make releases in the future to maintain return flows after accounting for evaporation in storage). o Some normalization of URFs is acceptable once at least 90% of historical return flows have occurred. o Applicant must demonstrate how return flows will be shepherded past dry-up points. The location of historical return flows from each fallowed field should be presented on a map Submittals The following tables of monthly and annual values for the entire study period should be provided to allow streamlined review for the CWCB and other water users: Water rights diversions Pro-rata water rights diversions for subject farm Off-farm system losses (ditch loss and off farm lateral losses) Farm headgate deliveries Surface return flows Crop potential evapotranspiration Effective precipitation Consumptive irrigation requirement (C1R) Total deep percolation A Touchstone Energy*Cooperative ^fl

12 Page 12 o o o On-farm depletion (water delivered to farm hcadgatc that is either consumed by CIR in the same month or stored as soil moisture). The following maps should be provided: Location of farm and fields to be fallowed at 1:24k scale Aerial photo of farm and fields to be fallowed at 1:24k scale Location of recharge facilities at 1:24k scale Location of all structures where deliveries will be taken during plan operations (augmentation stations, farm headgates) Location where historical return flows from each farm have historically accrued Accounting. Accounting forms should be completed as part of the application and approved prior to use. Daily accounting with monthly reporting is adequate, Operations Applicant should identify how the plan will operate including: Location of deliveries and measurement Method and location of return flow replacements Monthly depletion and return flow percentages applied to deliveries Example accounting should be completed for one or more years of historical diversions to illustrate plan operations and return flow replacement both during and after the plan year. Proposed Terms and Conditions Applicant should propose initial terms and conditions to prevent injury and expansion of use, including: Location of measuring devices Monthly and annual volumetric limits L. Ongoing Requirements of an Approved Pilot Project Comment: The criteria should include the following requirements for approved pilot projects: Submission of accounting on sufficiently frequent basis to document maintenance of return Hows and limitations on consumptive use credits that were required by the State Engineer/CWCB approval of the pilot project Need to provide for reports by Applicant on actual operation (see statute). A Touchstone Energy'Coopenitive )^ff

13 Page 13 The applicant should document compliance with any terms and conditions in the approval (e.g. providing results of a recharge test before actual recharge operations begin) Thank you for the opportunity to provide comments. If you have any questions about these comments, please contact Laura Chartrand at Sincerely, MGS:lc:eme Michael G. Sorensen, Senior Manager Fuel and Water Resources A Touchstone Energy*Cooperative A. fl -A'