On February 6, 2018, the Board of Directors repealed Imperial Irrigation District’s (IID) Equitable Distribution Plan following a Superior Court decision in 2017 finding that IID lacked legal authority in adopting the plan in 2013. Key provisions of the plan involved apportioning Colorado River water available under IID’s Priority 3 Right to 3.1 million acre-feet per year (before adjustments including transfers under the Quantification Settlement Agreement) among and between agricultural and non-agricultural water users within IID.
According to the Superior Court, there were two defects: (1) establishing a priority of non-agricultural over agricultural water users and (2) using a “straight-line” apportionment (a single amount of water per irrigated acre) that does not take into account factors, such as soil type and other characteristics that explain the variation in historic use of water by landowners. Pending the outcome of appellate review, IID’s decision reduces institutional control over the use of Colorado River water in the Imperial Valley. If the Superior Court decision is upheld on appellate review, IID will find itself devising a means to coordinate changes in land use in the Imperial Valley with the expansion of water supplies to meet growing municipal and industrial demands.
The Equitable Distribution Plan apportioned available Colorado River water first to meet the water demands of municipal users, industrial users, feed lots, dairies, fish farms and environmental water users ahead of farmers. The Superior Court found that this priority scheme created a transfer of water that violated the “no injury” and appurtenancy rules that bar the transfer of appurtenant water or water rights that injures an existing legal water user. (Under California law, IID holds water rights in trust on behalf of landowners who own the equitable and beneficial interest in the water rights. This equitable and beneficial interest is appurtenant to their lands and is a constitutionally protected property right.) As a trustee, IID cannot take the water rights of landowners and transfer those rights “to other beneficiaries without consideration.” (emphasis added)
The Equitable Distribution Plan apportioned water available to farmers by a formula with a 50% weight on historical use and a 50% weight on a “straight-line” method (apportionment based on acreage). The Superior Court found that the straight-line method is not equitable because it does not consider how different land parcels require different amounts of water due to soil types, slope and crop requirements. The court found “apportioning water among farmers using average historical data measured at field gates over a 25 to 30-year period would take into account such variables, including soil type, crop selection and rotation, and single and double cropping, would minimize any disadvantage to farmers who invested in on-farm conservation measures and would resolve all of Petitioners’ objections” to IID’s 2013 Equitable Distribution Plan. (IID has records of historical usage at each field gate dating back to 1987, the year before IID’s 1988 water conservation agreement with the Metropolitan Water District of Southern California).
The Superior Court decision is under appeal. The Superior Court commanded IID to repeal the 2013 Equitable Distribution Plan, not place a priority on supplying water to other water users (other than domestic) ahead of farmers and declared historical water use “the equitable and acceptable means of apportionment.”
The debate over the method of apportioning IID’s available water supply among water users dates from at least 1998, when IID approved its long-term water conservation and transfer agreement with the San Diego County Water Authority. The issues before the Superior Court reflect long-standing tensions over using historical water use to apportion available water supply:
- Advantages: reflect the diversity of factors driving water use on specific parcels (soil type, slope, cropping patterns)
- Disadvantages: rewards excessive water use by providing landowners higher apportionments if they do not conserve water and punishes conservation efforts by providing landowners lower apportionments if they conserve water
Apart from the apportionment of Colorado River water among agricultural water users, how does IID meet water demands of non-agricultural water users? Unless IID’s appeal results in a complete reversal of the Superior Court decision, IID must finally resolve issues after twenty plus years of Imperial Valley debate. Ongoing litigation, of course, will derail the process for more years.
There are ways to address the above concerns over sole reliance on an apportionment based on historic use. It is common practice in regulatory proceedings to identify a general method for quantifying a party’s entitlement, in this case equitable apportionment. A historical use method must specify the time period for the calculation and, especially for long time periods such as specified in the Superior Court decision, a threshold for the frequency of fields irrigated.
To avoid punishing water conservation efforts undertaken during the time period used in the calculation of historical water use, regulations can identify specific conservation efforts eligible for an adjustment to the calculation of a landowner’s historical water use. The regulations would specify information requirements for a landowner’s filing and the method of quantifying the credit.
On the other side, regulations could also be promulgated about adjustments to the calculation of historical water use for failure to undertake identified conservation efforts. Pursuing such adjustments may prove more problematic than adjustments for conservation actions undertaken. There may be legitimate reasons for the failure to undertake specific conservation efforts given the specific circumstances of agricultural lands.
Reasonable discussion must proceed within the context of three key factors concerning water use and land use in the Imperial Valley.
Cropping Rotations and Flexibility in Water Allocations. Cropping patterns on parcels vary over time within the Imperial Valley. During the 2002 Hearings Before the State Water Resources Control Board on the IID–San Diego transfer, IID submitted evidence of cropping patterns for a random sample of 50 fields in the Imperial Valley. Cropping patterns generally reflect a “seven-year cycle” of three to four years of alfalfa or hay, rotating through two to three years of single or double cropping of field crops and vegetables and culminating in a six-month period of “idling” before restarting the crop rotation again into alfalfa and hay. Water apportionments based on the Superior Court’s “long-term historical water use” rule will result in inadequate water supplies when lands are in their alfalfa or hay rotations and excess water supplies when lands are growing lower-water using crop rotations over the seven-year cycle.
There are two tools to manage this discrepancy. First, allow landowners to move water apportionments among their fields from water apportionments for lower-water using crops to meet the demands of higher-water using crops with inadequate water supplies. In fact, IID uses a “farm unit” concept to achieve this flexibility. IID apportions water by field and allows landowners to use their total apportionment among fields as they see fit.
In addition, IID could allow landowners to reassign water apportionments among themselves. Therefore, landowners in crop rotations involving lower water-using crops can reassign “excess water” from current water apportionments to other landowners with inadequate water supplies to meet their water demands given where they are in their crop rotation cycle.
To date, IID has relied upon “administrative” reassignments. Each landowner’s equitable apportionment defines a “take-or-pay” obligation for apportioned water at the district’s price for water delivery. If a landowner desires to use less water than available, they can tender the unwanted water back to IID and avoid the take-or-pay obligation. IID will then make the tendered water available at the district’s price for water delivery to other landowners who wish to use more water they have receive under the Equitable Distribution Plan.
An alternative approach would be for IID to adopt rules and regulations for an “intra-district market” for water apportioned under its Equitable Distribution Plan. Landowners would enter into willing buyer-willing seller transactions at mutually agreeable prices. Voluntary trading among landowners would provide flexibility in the use of IID’s available Colorado River water. The impetus for voluntary trading will be the greatest when landowner’s water demands meet or exceed available water supplies at the price IID charges for water delivery.
Addressing Changes in Land Use. Historically, IID has met municipal and industrial demands for water as an “incidental water use.” Especially before the Quantification Settlement Agreement, IID would simply expand its use of Colorado River water to meet the small, although growing municipal and industrial water demands in the Imperial Valley. With the Quantification Settlement Agreement fixing IID’s annual Priority 3 water right at 3.1 million acre-feet, the dynamics of meeting municipal and industrial water demands has changed.
Growth in municipal and industrial water demands are tied to changes in land use. There are three potential dimensions: (1) conversion of lands from agricultural to non-agricultural uses, (2) “in-fill” development of lands already converted from agricultural to non-agricultural uses, and (3) development on previously undeveloped lands. The Superior Court decision requires IID to think through these scenarios.
Land conversions raise issues regarding the destiny of equitable apportionments based on water use in agriculture. Generally, municipal and industrial water demands are less per acre than agricultural water demands. Do the water apportionments needed to meet municipal and industrial water demands on converted lands become part and parcel of the land development transaction? What happens to the equitable apportionment based on agricultural water uses are more than municipal and industrial water demands on converted land? Do they remain with the original landowner? Alternatively, do they become part of the total available water apportioned among remaining agricultural landowners? Finally, how are the full water demands for municipal and industrial users on converted lands be met if their water needs exceed agricultural water use?
In-fill development raises comparable issues. Land conversions rarely occur immediately and fully. Instead, water demands grow on converted lands as development projects reach full build out. Should the original land conversion discussed above be tied to the water demands at full build out, even if full build out may not occur for years if at all? Who has access to the historical agricultural water use in the interim?
Development of previously undeveloped lands provides the largest challenge for a system based on agricultural water use. Undeveloped lands have no history of irrigation. What is the mechanism for redirecting water supplies for development of these lands? The Superior Court decision stated that IID cannot take landowner water rights and transfer to other beneficiaries “without consideration.” If IID created an “intra-district market” for equitable apportionments, then development of previously undeveloped lands would require acquisitions of equitable apportionments of other landowners.
This “market solution” creates its own controversy. Landowners within IID’s service area had a right to obtain water service under IID’s rules and regulations. Owners of currently undeveloped lands have simply not currently exercised their right. Must the establishment of an equitable distribution plan extinguish this right of service?
This general issue regarding the extinguishment of unexercised rights was part of the Antelope Valley Adjudication. While this is a case about groundwater, there is a similarity of issues. A groundwater right is not subject to loss from non-use. The Antelope Valley Settlement apportioned groundwater rights based on water use in 2011/2012 for trial in 2013. A class action of landowners without historical use, called the “Willis Class,” challenged the extinguishment of their groundwater rights under the settlement. The Superior Court accepted the settlement over the objections of the Willis Class. If development occurs on Willis Class lands, then an owner must acquire adjudicated groundwater rights from landowners who historically pumped groundwater. The decision is under appellate review. In implementing the Superior Court decision on its equitable distribution plan, will IID find itself addressing these issues?
These issues surrounding water supply and land use will intensify in the Imperial Valley. Population in Imperial Valley has been steadily increasing over the past 50 years, increasing from less than 70,000 in 1970 to over 180,000 by 2015 (data from U.S. Bureau of Census). Like its sister municipalities south of the border, the cumulative annual growth rate of population is 2%. Continuation of this trend will put increased pressure on finding a viable, long-term solution to meeting local municipal and industrial water demands.
In 2009, IID undertook an Integrated Water Resource Management Plan quantifying the expected increase in municipal, commercial and industrial water demand (see chart). Long-term, IID projected a long-term reallocation of 100,000 acre-feet per year to non-agricultural water uses. The plan discussed the concept of a “MCI exchange” where new water supplies for non-agricultural uses would be secured through voluntary transactions with agricultural water users. The Equitable Distribution Plan choose instead to give non-agricultural water users priority over agricultural water users so that as non-agricultural water use expanded the amount of water available to agricultural water users is reduced. As discussed above, the Superior Court rejected this approach.
The solar energy boom in the Imperial Valley will also put a spotlight on the issue of land conversion and the treatment of equitable apportionments based on historical agricultural use. According to Imperial County’s Renewable Energy Fact Sheet, the capacity of on-line Solar PV projects in 2017 has reached almost 1,200 megawatts. Many of these projects were sited on historically irrigated lands. Using the Tenaska Imperial Solar Energy Center West as a benchmark, a 150-megawatt project requires 1,100 acres. Land conversions from agriculture to solar energy projects will significantly reduce of water demands on thousands of acres of converted lands. There will be tranches of agricultural equitable apportionment available for reallocation by either regulation or market transactions.
IID’s 3.1 Million Acre-Foot Priority 3 Right Is Not Based on Historic Use. The Superior Court held that “appropriative rights to Colorado River water which are subject to an annual cap under the Quantification Settlement Agreement (“QSA”) of three million one hundred thousand (3,100,000) acre feet, which is based on historical use.” This statement is incorrect and has practical implications.
The 3.1-million-acre-foot cap originates from a 1996 public settlement offer tendered by IID board to resolve disputes with the Coachella Valley Water District over the 1934 Compromise Agreement. The proposed cap equals the 3.85-million-acre-foot agricultural entitlement under the 1934 Agreement among California parties less the 10-year average of estimated consumptive use of Colorado River water by Priority 1&2 (Palo Verde Irrigation District and the Bard Water District) and the Coachella Valley Water District for the 10-year period through 1995 (see table). During that time period, IID’s annual consumptive use of Colorado River water equaled about 2.89 million acre-feet. In other words, the 3.1-million-acre-foot cap exceeded IID’s historic water use by 210,000 acre-feet. IID stood firm on this quantification throughout the QSA negotiations. The “extra” 210,000 acre-feet provided an incentive for IID to voluntarily agree to a quantified cap on its Priority 3 Colorado River water rights. This quantification is part of the comprehensive terms of the QSA.
Calculation of IID’s 3.1 Million Acre-Foot Cap
|Priority 1&2||420,000||10-Year average of diversions less measured and unmeasured return flows|
|Imperial Irrigation District||3,100,000||3.85 Million acre-feet less Priority 1&2 and Coachella|
|Coachella Valley Water District||330,000||10-Year average of diversions less measured and unmeasured return flows|
|Total||3,850,000||Agricultural Water Entitlement under 1934 Settlement Agreement|
There is a practical significance to the fact that IID’s cap is not based on historical use. Generally, one would anticipate that taking the historical average of water use over a defined time period would have the sum of the components (agricultural use, non-agricultural use) equal the total (total use of Colorado River water). This need not be the case for a historical use apportionment for IID. If the time period for the historical use apportionment were the same used for IID’s public offer in 1996, there would be an additional 210,000 acre-feet of water available under IID’s cap to be allocated among the parties. Using a different time period may changes the numbers, it will not change the basic issue. A comprehensive equitable apportionment based on historical use must address how to divide the “extra water” among the parties.
The Superior Court decision is under appellate review. As often the case in water, the courtroom is one forum for debating issues and devising solutions. Any reversal of the Superior Court decision will probably come in the form of a remand on identified issues for further litigation. In the interim, IID’s water use is subject to the 3.1-million-acre-foot cap.
With no equitable distribution plan, IID has less control for living under the QSA. Whatever its deficiencies, the Equitable Distribution Plan administered limits to water orders within IID consistent with the overall cap on use of Colorado River water in the Imperial Valley. With no specific limits, IID faces the prospect of overruns and future payback obligations until legal disputes are resolved, in one form or another.
The various factions in the Imperial Valley, including IID will ultimately become involved in a negotiated settlement. The intricacies of a reasonable equitable apportionment plan have too many dimensions for their solutions to be found in court orders. The timing of settlement depends on the desire to continue litigation to a “bitter-end” whose end-game will be incomplete for the long-run management of the Imperial Valley’s water resources. Does the Imperial Valley “get to work” today in light of the Superior Court decision or wait until a later point in the long and winding journey of further litigation?
Written by Rodney T. Smith, Ph.D.