Colorado Law Institute CLE International 11th Annual Conference: Colorado Water LawDenver, Colorado, February 1, 2013
This conference was hosted at the Four Seasons Hotel and was co-chaired by Brian M. Nazarenus of Ryley, Carlock & Applewhite and John J. Cyran of the Colorado Attorney General’s Office, Water Resources Unit. Dick Wolfe, the State Engineer and Director of the Colorado Division of Water Resources (“Division”), gave an in-depth discussion of the Division’s general principles and guidelines regarding the administration of reservoirs. He began by discussing why the guidelines were implemented. The Division created the guidelines to provide a framework for managing and lessening the complexities of operations for the more than 3,000 reservoirs in Colorado. The guidelines act as a practical guide for Division staff and are not intended to work as a legal authority, even though courts have occasionally cited to them.
The guidelines themselves are largely definitions, but nonetheless are important for water attorneys to know and recognize. For instance, the one fill rule, which states that a reservoir owner may only fill once per year, and the definition of fill year, the time a reservoir owner may fill, are two crucial details that clients need to be aware of, or they may lose a portion of their water right. An important detail with the one fill rule is that a reservoir owner may be able to receive a refill right from the Division, allowing for an additional fill. However, a refill right is only meant to replace water lost through evaporation and seepage. Additionally, the Division requires on channel out-of-priority reservoir owners to maintain natural flow through the reservoir by releasing extra water for downstream in-priority reservoirs. This is to account for extra evaporation lost from the larger surface area of the on channel reservoir. Without this method, downstream in-priority reservoirs will lose water through the out-of-priority reservoir’s evaporation. Also, water lost to seepage out of any reservoir, either into the ground or into a stream, is considered to be state water again and a loss for the water right owner. Some reservoir owners may try to stop seepage by lining their reservoirs, but they must be careful to not keep more water than their decreed right allows.
Mr. Wolfe also discussed how leftover water could count against a water right owner. Carryover water is water leftover from one fill year that carries over to the next fill year. For example, if a reservoir has 50 acre-feet of water remaining at the end of the fill year, the reservoir owner will begin the next fill year with 50 acre-feet. A crucial detail is that leftover water counts against what a reservoir owner may store during the next year, though it does not decrease an owner’s actual water decree. With the previous example, if the reservoir owner’s water right is 200 acre-feet, then the owner will only be able to fill with an additional 150 acre-feet to match the 200 acre-feet right. However, the owner’s original 200 acre-foot right will not diminish for future fill years.
Mr. Wolfe then discussed decreed capacity and physical capacity, emphasizing the two methods can sometimes conflict, so attorneys should take care when applying for water rights. Both methods begin the same way, with a conditional water right establishing a certain decreed acre-foot of water. Once the reservoir is filled, if the physical capacity is less than what was decreed in the conditional water right, then the physicalcapacity becomes the established water right. Additionally, if the decreed capacity is less than the physical size of the reservoir, then the decreed capacity becomes the established water right. Basically, whichever capacity is smaller, whether it was decreed or is the physical size of the reservoir, will become the established water right.
Then, Mr. Wolfe explained another area of potential confusion is determining measurement by either volumetric decree or gage height decree. Volumetric decree is, as one might imagine, a measurement of the actual volume of the reservoir, whereas gage height decree is a measurement of the water level in the reservoir. Depending on how a reservoir is built, an owner may find it more beneficial to measure the decreed amount one way and the owner’s attorney should be aware of these differences.
Finally, Wolfe explained Storable inflow, paper fill, out-of-priority storage, temporary detention, and surcharge all pertain to the physical holding of water in a reservoir. Storable inflow is the amount of water that is both physically and legally available for storage under an existing water right of a reservoir owner. Water that bypasses through a reservoir counts against the storage water right. The Division then uses an accounting mechanism called paper fill. This method charges the bypassed water against the actual storage water right, decreasing the remaining water right. The Division does this to ensure that senior water rights downstream or other downstream resources are protected by not allowing upstream junior water rights to store water late in the season causing a shortage for the downstream senior water rights. Out-of-priority storage permits the storage of water by an upstream, out-of-priority reservoir so long as the water can be made readily available to downstream senior storage rights when needed. Colo. Rev. Stat. § 37-80-120(1) (2012). Additionally, the upstream, out-of-priority reservoir may have to release more water than needed by the downstream senior right to account for transit loss. Temporary detention allows for an on-channel water right to detain a surcharge, the amount of water that may be impounded, for up to 72 hours in order to achieve more efficient or effective beneficial use. After 72 hours, the water right owner must cease detention and allow the water to flow freely once again.
Attorneys attending the conference were mainly concerned with paper fill. More specifically, the attorneys were concerned that water not stored by reservoir owners still counts against their storable water right. Mr. Wolfe explained that the reason it is done is to ensure that in times of a drought or an otherwise low-water season, upstream junior rights do not take advantage of the downstream senior rights. Additionally, the Division wants to maintain the natural flow of the water throughout the entire season.