Series: Colorado Water Law Basics #9 - What can I do with Paper Water?

Figure 1: Water flow in the Cherry Creek system.

In a recent LWS blog, we discussed the water rights administrative tool related to a paper fill of a reservoir. So, is paper water the water that is used to paper fill a reservoir??

No, it is actually quite different. Paper water is a term that has been used to describe water that has been decreed and is available for use by the owner of the water right; however, because the right is either too junior to reliably be in priority, or the stream simply doesn’t produce enough water to satisfy the right, or both, the right doesn’t actually provide any (or very little) water supply. Hence the term paper water. It is very difficult to put paper water to any beneficial use such as drinking water.

An excellent example of paper water is the Cherry Creek system upstream of Cherry Creek Reservoir in the southern Denver metro area. Figure 1 shows a graph of the flow in Cherry Creek over an extended period of time (1941-2010) (red line). While this was the total water supply availability in Cherry Creek over this period, there are water rights decrees for approximately 60,000 acre-feet (green line). Given a maximum annual flow of just over 20,000 acre-feet during a 70-year period, and an average annual flow of less than 10,000 acre-feet, it is clear that 60,000 acre-feet of rights can’t be satisfied.

As this figure clearly shows, there are many water rights holders that will never, or rarely, obtain any water, even though they have a valid Water Court decree. And Cherry Creek is not the only example of an over-appropriated basin in Colorado.

WHAT DO I NEED TO KNOW RELATED TO WATER AVAILABILITY IN DECREES?

So why is it important that there are water rights decrees that confer a legal right to use water but don’t actually provide any water, or only minimal water during extremely wet periods?

A lot of the answer is related to a common misunderstanding that if you have a water right you have something of great value: This may, or may not, be true.

There are many stories of entities accepting Water Court decrees as a source of water, only to find out later that the decree doesn’t produce any water, or at least much less than what the decree states. In some cases, large sums of money have been spent buying water rights that look great on paper, but that’s the only place they look good!

The availability of water to a water right hinges on both the physical supply of water and the legal reliability of the water right. Therefore, understanding the source of water in a decree is vital. Surface flows in Colorado can follow very extreme patterns, with high flows during spring runoff periods and significantly lower flows during other times of the year. Depending on the uses of the water right, this flow pattern could be useful for the development of the right or could make it unreliable. Either way, it is important to develop an understanding of the physically-available flow characteristics as one means to evaluate the reliability of the water right.

To make matters more complicated, physical water supply availability doesn’t ensure that water is available to a water right because the Doctrine of Prior Appropriation requires senior water rights are satisfied first. Therefore, if you have a junior water right you may be subject to “call,” i.e., there is not enough water in the stream to satisfy all users so senior water rights can claim all of the available water. For junior rights, even during periods of high flow, there is the potential that the right is not in priority so, even though there is sufficient water in the stream to satisfy the right, if it is not in priority you have to let the water flow past to senior users. So it is equally important to understand the appropriation date of the water right and, therefore, its reliability. To understand the legal reliability of a water right requires extensive research of the historic water rights call pattern, coupled with the analysis of the physically-available flow.

HOW DO I KNOW IF I HAVE A VALUABLE WATER RIGHTS DECREE?

So how do you know the value of a Water Court decree if you are untrained in reading and assessing these decrees? The answer is to engage a professional who routinely conducts these kinds of analyses, such as an engineer or a water lawyer. Even then, care needs to be exercised on who to have evaluate a decree. Water rights engineering and water law are very specialized areas of engineering and law practice. LWS has a very experienced team of water rights experts who can not only review and interpret decrees, but can also provide valuations of water rights based on an analysis of the physical and legal supply of water available to specific water rights.

Because of the complexity of water rights issues, it is important to consult a water resources engineer and water attorney if you are considering the buying or selling of a water right, or the development of a new water right (see LWS blog: “Why do I need an Engineer and a Lawyer to obtain a Water Right?”). Watch for our upcoming blog on water rights valuations.

So, to answer the question “what can I do with paper water?,” the answer is to educate yourself on any water rights you are considering purchasing, or any water right(s) you propose to develop, so you have a complete understanding of how much and when that particular water right will likely yield water prior to proceeding with either adjudicating a new right or purchasing an existing right. In that way, you will likely avoid having a decree for paper water instead of real wet water.

If you need help with interpreting, assessing, and/or valuing your water rights, give the water rights team at LWS a call (303-350-4090) or an email.

Bruce Lytle bruce@lytlewater.com

Chris Fehn chris@lytlewater.com

Ben Bader ben@lytlewater.com

Anna Elgqvist anna@lytlewater.com