U.S. Water News Online
PECOS RIVER BASIN, N.M. -- The unexpected passage of a
water-banking bill by the New Mexico Legislature after years of
failed attempts could give New Mexico a potent tool in getting water
to the people who need it when supply is scarce, proponents say.
It's a cautious first step that will test the concept of water
banking in the lower Pecos River Basin, where municipalities and
individuals face curtailed water rights in the not unlikely event
that New Mexico won't meet its contractual deliveries of water to
``I think it will work. I think we'll learn a lot and will
demonstrate the value of the concepts,'' said Norman Gaume, director
of the New Mexico Interstate Stream Commission, which will set the
rules for water banking under legislation passed in Santa Fe. ``It's
a big step forward.''
New Mexico has been a holdout against water banking among Western
states, many of which have added it in some form to their water
management strategies. Water banking bills introduced in the past
five Legislatures faced opposition from the New Mexico Acequia
Association and the powerful water conservancy and irrigation
districts, which control a majority of the state's surface water.
Some fancy footwork by the Legislature's stalwart proponents of
water banking, Rep. Pauline Gubbels and Sen. Sue Wilson Beffort, both
Albuquerque Republicans, and their bill drafter, Gordon Meeks of the
Legislative Council Service, resulted in a measure that managed to
appease, if not convert, the skeptics and squeak through the 2002
The acequia association had argued that the faster transfer of
water rights allowed by water banks could harm other water users and
the public by undermining the rural lifestyle. The association also
was concerned about the effect water banking would have on the
historic, cooperative function of acequias, or irrigation systems.
The irrigation and conservancy districts had argued that they didn't
want the interference and regulatory control from the state engineer
that could accompany water banking.
The bill succeeded because it restricts water banking to a
200-mile stretch of the lower Pecos below Sumner Lake, places a
three-year time limit on the experiment, lets the Interstate Stream
Commission make the rules, and leaves the acequias alone.
``The earlier proposals were for a statewide process of local
banks,'' Gubbels said. ``This was better. It's a pilot program in a
specific area. There is time to test it. We can learn what can make
Water banking isn't much different from conventional banking, with
water, instead of cash, being the commodity. It's a water management
strategy that speeds up the temporary transfer of water from those
willing to lease it to those willing to pay to use it.
Farmers and other water rights holders can deposit some or all of
their allotted water into the bank, where users pay the going market
rate to borrow it for a limited period of time. The lessor retains
ownership of the water rights, and rights placed in the bank cannot
be forfeited for non-use.
The hope is that the market system will help balance the supply of
and demand for water and result in more efficient use of the
Water rights can be leased or sold in New Mexico now, but the
process can take years, and transactions must be approved by the
state engineer. A notice of intention to move a water right or change
the point of diversion, location or purpose must be published in a
newspaper to notify the public. A person who objects can file a
protest. Protests and transfer denials are dealt with in
administrative hearings and can end up in court.
Water banking will allow transfers without the time-consuming
approval of the state engineer. ``It's a way of moving water from one
use to another in a quick process,'' said State Engineer Tom Turney.
In the case of the lower Pecos, water banking could help quickly
transfer water from senior water rights holders to junior holders in
the event of a ``priority call'' on the river.
State water officials fear New Mexico could fall short this year
in the amount of water it is required to send downstream to Texas
under the 1949 Pecos River Compact. The U.S. Supreme Court ruled in
the mid-1980s that New Mexico, which spent more than $25 million in
the past two decades to buy and lease water rights to meet compact
requirements, has under-delivered water by about 10,000 acre-feet
annually since the 1960s. An acre-foot is about 326,000 gallons. New
Mexico paid Texas a $14 million penalty.
A special master determined New Mexico fell 14,000 acre-feet short
of meeting the Pecos obligation in 2000. The under-delivery was
offset by a 22,900 acre-foot credit, but Gaume has said the remaining
credit probably will be wiped out this year, the third dry year in a
Turney has the authority to issue a priority call in the river
basin, which means water rights holders with the most recent, or
junior, rights could be shut down. Many of those junior rights are
held by urban users, including municipalities. Roswell and Ruidoso,
for example, have water rights that are junior to those of Carlsbad.
Turney said the junior rights affect a couple thousand holders and
about 18,000 acres of land on the Pecos. He said it's possible New
Mexico will under-deliver by 20,000 to 30,000 acre-feet this year.
``Judging from the snowpack now, it's a real concern. In the event
of a call -- and I'm prepared to make a call -- the junior users
would no longer have water available, and that would be
devastating,'' Turney said. ``The intention of the water banking bill
is to be able to provide those who need it with water. Instead of
going without water, they would be able to acquire it from a water
bank so they could continue to use water in times of a drought. If I
was faced with a call, I'd sure want to know how to get the water.''
The bill passed by the Legislature limits water banking to an
irrigation district, a conservancy district, an artesian conservancy
district, a community ditch, an acequia or a water users' association
in the lower Pecos River Basin for purposes of compliance with the
Pecos River Compact. In theory, water banking works within a river
system, basin or aquifer.
Potential customers of the banks will be municipalities with
junior rights, industries and the state, which could lease rights to
help meet compact obligations.
The market price for water will be determined by the local banks.
``That's something the grassroots stakeholders wanted,'' Gubbels
said. ``They didn't want the state engineer to determine the market
Prices could be set in two ways, Gaume said. The bank could
function like a stock market by matching ask and bid prices, or could
determine what it would pay to a lessor and charge to a lessee, with
the difference meeting the operating costs of the bank.
Gubbels said she believes a water market will develop. ``I think
people will be inclined to say `I'm old and tired and not making much
money. I can cut my production in half and take my chances and have a
guarantee of money in leasing some of my water,''' she said. ``It
would be guaranteed income. That's the marketing angle we hope will
develop in having a system in place.''
the U.S. Water News Archives page
Return to the U.S. Water
Use a comma to separate e-mail addresses:
Hi, I thought you might like to read this article.