Dozens of Colorado farmers, ranchers and one city offer to cut Colorado River water use in exchange for $8.7M

Coloradans gunning to join this year’s effort to save water in the Colorado River Basin could help conserve up to 17,000 acre-feet of water — much more than the 2,500 acre-feet saved in 2023 — and receive about $8.7 million in return.

The voluntary, multistate program pays water users to temporarily use less water. State and federal officials relaunched the effort, called the System Conservation Pilot Program, in 2023 in response to federal calls to cut back on water use in the drought-stressed river basin. After a stumbling relaunch in 2023, this year’s program is moving forward with more applications, more potential water savings and more money for participants.

“The changes this year — it was just much more transparent,” said Greg Vlaming, a consultant who helped nine growers apply to the program. “The application process was simple and easy. It took me less than 15 minutes per application.”

The conservation program was initially piloted from 2015 to 2018. In 2023, officials relaunched it with $125 million in federal funding as a way to cut back on water use in response to a looming water supply crisis in the Colorado River Basin. The basin supplies water for 40 million people across the western U.S., 30 Native American tribes and northern Mexico.

Interest in the program has grown steadily. During the four-year pilot, about 15 to 45 people applied each year. In 2023, the program received more than 80 applicants.

But program costs have grown as well, in part because the program’s managers have boosted reimbursement rates to keep up with rising crop prices, according to the Upper Colorado River Commission, which oversees the program.

Last year, the four Upper Basin states — Colorado, New Mexico, Utah and Wyoming — spent nearly $16.1 million in federal funding to conserve about 37,810 acre-feet of water. During the four-year pilot, the program spent half that amount, about $8.5 million, to conserve more water, about 47,000 acre-feet.

One acre-foot supports about two families of four to five people for one year.

An aerial view of farm land
Irrigation canals pass through the agricultural fields, Feb. 12, outside Delta. (Hugh Carey, The Colorado Sun)

This year’s application period closed in December with 124 applications, according to the Upper Colorado River Commission. Of those, Colorado water users submitted 56; Utah, 32; New Mexico, one; and Wyoming, 35.

The river commission, which includes representatives from the federal government and each of the Upper Basin states, is scheduled to consider the applications March 4.

Then, once a federal review is complete and all project details are finalized, applicants have the final say about whether they will participate. The commission aims to launch the conservation projects in April, said Executive Director Chuck Cullom.

In Colorado, most of the applications come from farmers and ranchers who proposed cutting their water use by temporarily fallowing fields, or by switching to crops that use less water or can better withstand drought. About 20 proposals aim to save enough water to warrant $100,000 or more in compensation per project.

The Ute Mountain Ute Farm and Ranch in southwestern Colorado proposed the state’s biggest project this year. If approved, the enterprise will use crops that require less water and will fallow nearly 900 acres of land for an estimated 2,172 acre-feet of water savings. It would receive $1.1 million in return.

David Harold, owner of the Tuxedo Corn Company in Montrose County, proposed saving 600 acre-feet of water. In return, he’d get about $305,000, roughly equivalent to the cost of a nice tractor, he said.

The program asks farmers to cut down their water use — buy-and-dry under a different name — but it’s also a way to experiment, he said. How can he respond to an uncertain water supply with as little impact to the local economy as possible and still survive as a farmer?

Harold chose not to fallow — not growing crops means fewer hands to help with production and that impacts the local economy. Instead, he decided to turn off irrigation when it was hottest and least efficient, and to grow more drought resistant crops, like Kernza and sainfoin.

Farmworkers push boxed-up corn down a conveyor belt and onto the backend of a truck
Olathe farmer David Harold, right, watches the crew collect the ears of sweet corn during the harvest season in 2019. (William Woody, Special to The Colorado Sun)

The payment was enticing, but in the long term not enough to offset all of the uncertainties that farmers face, he said. The conservation program’s reimbursement rate could change, or the program could end. There was a disaster with corn earworm in the sweet corn industry last season. State regulations, water supplies and labor costs change.

“The list goes on and on and on of why I should be doing everything I can to diversify or maneuver. Be agile. Be thoughtful,” Harold said. “The past will not be the future; what my dad did is not likely what’s going to work for me. It’s kind of daunting out there.”

Pueblo Water was the only municipal water provider to apply. The Front Range utility normally takes about 943 acre-feet of water from the Ewing Placer Ditch in the Colorado River Basin and diverts it into the Arkansas River Basin for homes and gardens around Pueblo. If accepted, it will leave all of that water in the Colorado River Basin in return for up to $479,987.

“The primary purpose we’re doing it is just because we think, for this particular year, the water’s going to be more valuable in the System Conservation Pilot Project than it’s going to be on the Arkansas River,” said Alan Ward, division manager of water resources for Pueblo Water. “I don’t think we have plans to dedicate it (the funding) to any specific purpose. Essentially what it does is it subsidizes the cost of water for our customers.”

In 2023, when participants negotiated their own reimbursement rates, compensation for the top five applicants ranged from about $70,000 to $195,000 per project, according to the Colorado Water Conservation Board.

In response to participant feedback, officials this year switched to a fixed-rate structure based on a market analysis by the federal and state governments.

Colorado participants will receive $509 per acre-foot of saved water, the highest compensation rate of the four Upper Basin states. New Mexico producers will receive $300, while those in Utah and Wyoming will receive $506 and $492, respectively. Reimbursement rates will vary for other projects, like leaving water storage in reservoirs, or municipal and industrial water savings.

“I’m not complaining about it,” Vlaming said. “But when I say $509 per acre-foot to guys, they’re like, ‘Where do I sign?’ Some of these guys are going to get paid quite well.”

For water users, negotiating their own rates was one of several problems with last year’s program, alongside a short application period and unclear communication about how to apply and how water savings were calculated.

The application process was much more streamlined this year because officials learned from the process in 2023, said Cullom, the Upper Colorado River Commission executive director.

“The process — which included pre-application interviews and discussions between the applicant and the states and the consultants — helped strengthen all the applications,” he said. “I think we improved the process. That’s some feedback we’ve heard.”

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