Watershed Symposium 2019

Utah Water Banking Concept: Looking to the Future

Summary:
In Utah water banking could be used to meet a number of growing water demands such as maintaining a thriving agricultural community, in-stream flows for environmental and water quality, and growing municipal demand. Please come and discuss an exciting new stakeholder driven Utah water banking concept.

Full Abstract:
Water banking is a water management tool that has been employed across the west to facilitate more efficient water marketing of water rights. In Utah, water banking could be used to meet a number of growing water demands, such as maintaining a thriving agricultural community, in-stream flows for environmental and water quality and growing municipal demand.

For the last three years, a large stakeholder working group has been designing a Utah specific water banking legislation and demonstration projects. The Utah water banking concept focuses on providing a framework for local water users to design a local water bank to meet local water needs. This concept focuses on creating voluntary local banks that facilitate the temporary transfer of the use of water rights. The intent is to create and promote a transparent forum where water users can more easily connect with each other to enter leasing or other temporary arrangements for the use of water.

The Utah water banking legislation addresses several existing barriers to water marketing and provides incentives for water users to organize and operate a local water bank. For example, the legislation provides that water rights banked in a water bank are exempt from traditional requirements that the water be beneficially used (i.e. it is exempt from forfeiture), can be used for environmental and in-stream flow purposes, and provides additional authority to existing water banking-like contracts. The legislation is intended to work off and incorporate existing laws. Using existing laws creates trust in the water banking concept and provides a level of certainty and security to protect bank users. For example, for a water right to be placed in the bank, it must go through the existing Change Application process, which vets water rights for validity and provides a public protest opportunity.

The legislation accomplishes the working group’s goals by creating a very specific process and framework for local water users to set up and establish a water bank. The form, function and scale of the bank are to be determined by the local water users. However, to become a bank, local water users must submit an application to the Board of Water Resources. The water banking legislation includes criteria local water users must consider and include in their application prior to submittal. This criteria includes considerations like form of entity, governance structure, pricing scheme, bank service area and internal policies and practices. There is also an option for public entities to apply to have an existing or new contract for water use or distribution constitute a water bank and receive water banking benefits like in-stream flow designations.

To test the water banking concept the Division of Water Resources has received a $400,000 appropriation from the Utah State Legislation and has applied for an additional $400,000 WaterSMART Water Marking Grant. This money will be used to assist three “Demonstration Project” areas that establish pilot water banks in their area. The three Demonstration Projects will be in Snyderville Basin, Price area, and Cache Valley area.

The Utah water banking concept presents an exciting opportunity for Utah to explore creative methods to simultaneously use its water more effectively and meet pressing water needs and demands.