GILLETTE, Wyo. – Lawmakers and water developers challenged a draft of Wyoming’s first water banking bill Friday with questions of need and whether it should apply only to Colorado River tributaries.

The draft bill discussed by the committee would limit water banking to the Green River and Little Snake River drainages, Wyoming’s Colorado River tributaries, a restriction many legislators opposed. It states that water may be banked “for any beneficial use including use for drought contingency planning and use for water compact security.”

One goal is to help ensure the state can meet water-supply obligations under the Colorado River Compact, which says Wyoming and other upper-Colorado basin states must let certain volumes flow downstream. Delivering the owed water could, without banking, require reducing irrigation or other uses in the upper basin – a prospect that’s increasingly worrisome given a 16-year drought period between 2000 and 2015.

Under the bill, water could be placed in a bank or reservoir for up to 10 years by a person with a valid water right. But “no person shall acquire any new or enlarged water right through the use of the water banking program,” the draft states.

In addition to making storage for drought and compact compliance, the bill should include another provision not yet articulated, Sen. Larry Hicks (R-Baggs) said. That would be to allow banked water to be used for endangered species conservation.

Hicks told committee members a water banking bill would also allow Wyoming, among other things, to account for water it conserves. Today, for example, the state gets no credit toward its compact obligations for water that Wyoming ranchers leave in the stream via a pilot program to increase late-season river flows by paying ranchers not to irrigate after haying season.

Once that conserved water leaves Wyoming, it becomes “system water” available to other states and users, he said. Consequently, it can’t be “shepherded” to Lake Powell with Wyoming’s brand – for release past the Lees Ferry gauge with credit to the state.

Wyoming, Colorado, Utah and New Mexico are on the hook for 75 million acre-feet of water that must flow past the Arizona gauge, just below Lake Powell, over a 10-year period.

“The reason [the conserved Wyoming water] is system water [is] we haven’t shown a beneficial use … we can’t claim it,” Hicks told members of the Select Water Committee and Water Development Commission in Gillette on Friday. “Once we establish a water bank and establish a beneficial use to that water, it’s no longer system water. That water now belongs to the State of Wyoming.”

Hicks didn’t immediately convince all members of the committee and commission the bill is necessary. Cheyenne attorney Karen Budd-Falen, whose family owns a ranch near Big Piney in the Green River drainage, appears to be among the commissions skeptics. Her family participated in the pilot conservation program that’s now in its fourth year.

In 2018, the pilot program is anticipated to conserve 14,617 acre-feet in Wyoming and generate $2.2 million to users who temporarily forego a portion of their annual diversions, according to information from the Wyoming State Engineer’s office – all without water banking legislation.

Budd-Falen said she understands some ranchers don’t like the program, funded by the Bureau of Reclamation and municipal water providers. But it made sense for her ranch, she said.

“The money was good and we’re cutting hay anyway [and not irrigating], so why not get paid,” she said. “I don’t know why we need a water banking system to do what we’re doing this year. We don’t have any storage to put the water anywhere.

Hicks said a water banking bill would allow Wyoming “to “track the trickle” that irrigators conserve through such programs. “Then you get into shepherding,” he said, whereby Wyoming can get credit for its contribution to flows at Lees Ferry.

For Wyoming, the biggest benefit could be the claiming of unappropriated water, Hicks said. “This gets to the whole ability of the State of Wyoming to exercise our full rights under the Colorado [River Compact] or any other compact,” he said.

“If we had Warren Bridge,” he said, referring to an an oft-talked-about and regularly proposed dam and reservoir on the main stem of the upper Green River, “and were storing 1.2 million-acre feet of water, it’s still not ours once it leaves the state.”

Such uncredited outflow happens at a rate of at least 400,000 acre-feet a year, he suggested.

“What it potentially allows us to do,” Hicks said of a water bank, “is take that 400,000 acre-feet that currently leaves Wyoming. We’re now going to color that,” or give it Wyoming’s brand, he said. “We’re going to put it in Fontenelle Reservoir or any other basin down the road that we want to.

“It would allow us to claim that water in the water bank and claim that use,” Hicks said. The water in the bank would be held by the State of Wyoming. Anybody in the Colorado River drainage could come to Wyoming and say they need to acquire so many acre feet, Hicks said.

“If we had 50,000 acre-feet … and we had an agreement with Bureau of Reclamation to deliver it to Lake Powell, that would be $10 million to the state of Wyoming,” Hicks said. He used a value of $200 an acre foot to calculate the value, saying he’s heard that price is “very close” to what ranchers in the pilot conservation program are receiving.

But Budd-Falen questioned whether new state government claims like those Hicks described could leave others short-changed.

“That makes me nervous,” she said of the state claiming a beneficial use for previously unappropriated water. “If the State of Wyoming goes out and starts tagging the unappropriated water … if I need  new water, where do I get my new water?

“I hate having it designated as a beneficial use because that means somebody else that comes in … that needs that water … can never get it,” Budd-Falen said. She supports Wyoming keeping control of its unappropriated water, she said, but, “I’m not convinced for the need for water banking for a beneficial use.”

Others questioned whether the draft bill contradicted one of its intended purposes. It states that the legislation would allow no person to claim a new or expanded water right, yet Hicks said he sees it as allowing Wyoming itself to claim a new beneficial use.

Budd-Falen also said the maximum 10-year transfer of water rights into a bank would make such rights unusable for endangered species preservation, contrary to Hick’s goal. “You cannot cut off an endangered fish’s water after 10 years,” she said.

The committee and commission also debated whether the bill should apply only to the Colorado River drainage – meaning the Green River and Little Snake Rivers in Wyoming – or statewide. A consultant to the Legislative Service Office that drafted the bill recommended it apply only to the Colorado River drainage. Lawmakers appeared to favor a statewide application.

Hicks brought the bill to the Select Water Committee as a courtesy, he said, because its members had attended a meeting on the topic with the Joint Agriculture, State and Public Lands and Water Resources Committee in Pinedale in June. That committee is sponsoring the draft bill and will formally consider it in September.

Meantime, lawmakers suggested complexities in the potential legislation be hammered out by a subcommittee, “We could cause quite a little bit of harm if it wasn’t put together and discussed thoroughly,” Sen. Curt Meier (R-LaGrange) said.

Hicks agreed. “Everybody in the Colorado River basin is talking about this,” he said, “so we’ve got to get it right the first time.”

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