Middle Rio Grande Water Market Indicator: Expect Prices to Remain High

To meet its future water needs, the Albuquerque Bernalillo County Water Utility Authority (“ABCWUA”) acquires pre-1907 Middle Rio Grande water rights from area irrigators.  ABCWUA was created by the New Mexico State Legislature in 2003 as a joint agency to handle water and wastewater administration for the City of Albuquerque and the County of Bernalillo.  The water right purchases were previously completed by the City of Albuquerque.

Since the Rio Grande Compact was signed in 1939, the river’s surface waters have been fully appropriated.  In 1956, the Rio Grande Underground Water Basin was declared, and a requirement was established for groundwater appropriators to obtain surface water rights to offset effects on the river caused by their pumping.  The New Mexico State Engineer established a policy in 2000 that requires acquisition of surface water rights prior to pumping.

Pre-1907 Middle Rio Grande surface water rights were purchased at administratively set prices between 1982 and 1994.  In 1995, the City of Albuquerque was the primary entity acquiring municipal water rights for their area, but because the state engineer ordered a moratorium on dedications, the process through which rights were transferred to the city, the city had no acquisitions that year.  Acquisitions resumed in 1996 under a policy that allowed its negotiators to offer market-driven prices.

ABCWUA purchased 4.16 AF of Middle Rio Grande water rights in 2017. Volume has steadily declined over the last few years from 50.19 AF in 2014 (see chart). Volumes were at 40.20 AF in 2015 and 32.70 AF in 2016.

In 2017, ABCWUA paid $13,000/AF.  Average prices saw a small decrease from $11,666/AF in 2014 to $11,439/AF in 2015 but have otherwise increased commensurate with the decreasing activity (see chart).



In September 2016, ABCWUA’s governing board approved a 100-year water plan, Water 2120: Securing Our Water Future. The plan calls for alternative supply strategies, such as optimizing existing supplies and capturing stormwater, rather than continuing acquisitions of pre-1907 water rights. However, the City of Rio Rancho is entering the market and is offering higher prices than ABCWUA. In order to meet the terms of one of its water rights permits, Rio Rancho must acquire 728 AF in every five-year period to offset depletions from groundwater pumping. In addition, the city finds that aggressive acquisition provides a greater level of flexibility for managing its water resources. Rio Rancho had no acquisitions in 2017. In 2016, the city purchased 750.427 AF at prices ranging from $12,500/AF to $15,000/AF, with an average price of $14,658/AF.

With Rio Rancho’s influence on market trends and ABCWUA’s policy objective to find other sources to meet demands suggesting that pre-1907 rights are becoming less available, expect prices to remain high.


Written by Marta L. Weismann