Water is a precious resource here in Washington. Though most of the country views Washington as a lush, damp state due to the west-side’s notoriously drizzly conditions, in reality many of Washington’s counties often face water shortages and droughts.
Though demand for water in Washington continues to grow, the water supply does not, absent additional storage. Because a limited quantity of water is available for all of Washington’s present and future needs, Washington began legislating the allocation of water rights for water use in the state in 1917.
Washington allocates the use of its water resources through water rights permits and certificates that are based upon a “first in time is first in right” theory of allocation. Most of the water in Washington is already allocated or claimed for use, which can make obtaining a new water right difficult. In the Wenatchee Valley watershed (Wenatchee Water Resource Inventory Area or WRIA 45) no water is available for new permits or certificates, except as permitted by the Wenatchee Management Plan for the Wenatchee WRIA.
Fortunately, many Washington watersheds and counties are exploring new avenues to facilitate the transfer of water rights to new users or for new uses through different water markets. A water market is a general term for the mechanisms used to acquire and redistribute water to where it is needed or desired.
Currently, Washington utilizes two programs that facilitate water markets, the Trust Water Rights Program and Water Banking. The Trust Water Rights Program and water banking are interesting new ways to facilitate markets for folks in need of water to obtain access to already allocated water rights.
The Trust Water Rights Program
The Washington legislature created the Trust Water Rights Program (“TWRP”) over 20 years ago to facilitate the voluntary transfer of water and water rights. The TWRP is a repository or “vault” for holding and protecting water rights, which are then available for other uses.
The TWRP allows holders of water rights, who may not be using all of the water right, to place all or a part of the water right in the TWRP, either temporarily or permanently, to protect the right from relinquishment while maintaining the right’s original priority date.
Simply put, placing the water right in the TWRP is a way of “using” the right to protect against “losing” the right under the “use it or lose it” doctrine of relinquishment. The water rights held in the TWRP are held in trust by the Department of Ecology and authorized for use by Ecology for instream flows, irrigation, municipal, or other beneficial uses consistent with applicable regional plans for pilot planning areas, or to resolve critical water supply problems pursuant to RCW 90.42.020.
One of the primary benefits of utilizing the TWRP is that the trust enables the water right holder to withdraw the water right from trust when future needs, uses, or potential transfers are identified without risk of losing the water right to relinquishment.
Water banking is a fairly new water market in Washington State that was introduced by the Legislature in 2003 for use in the Yakima River Basin. In 2009, the legislature clarified that water banking is allowed throughout the state of Washington.
Water banks (sometimes called “water exchanges”) facilitate the legal transfer and market exchange of various types of water rights between users and are becoming increasingly utilized in the Western states.
No single definition exists for water banking because a wide variety of approaches to water banking exist. For example, in some water banks, brokers connect or solicit buyers and sellers to create sales. Another bank may act as a clearinghouse or repository for bid and offer information.
Many banks pool water supplies from willing sellers and make them available to willing buyers. Other banks are used to offset new water use so other water rights are not negatively affected (mitigation).
Though water banks may differ in their approach, the common goal of a water bank is to move the water to where it is needed the most. Water banking may be more effective at the regional or watershed level, rather than at a statewide level, because of the unique needs and circumstances of the watershed or basin in which the rights are located.
The Wenatchee Watershed Management Plan for the Wenatchee Water Resource Inventory Area, completed in 2006, recommended developing a water banking program for the entire watershed, though no program has yet to be implemented.
Implementing water banking is not without obstacles. It takes time to develop markets and create water banks and to address stakeholder concerns about water banking. Given the increased demands for water in the Wenatchee Valley, water banking may be one way of facilitating the transfer of existing water rights to new users or for new uses.
Currently, water banking is being used in several areas of Washington to provide water for mitigation (a plan for offsetting the impacts on area streams of a proposed new use) including in the central and lower Yakima basins and the upper and lower Kittitas basins.
Yakima and Kittitas counties are also considering establishing county-run water banks to alleviate the pressures of new domestic wells within the counties. The state Legislature recently introduced House Bill 2596 which would allow counties like Yakima and Kittitas to use local sales-and-use tax money toward buying water rights for the county-run water banks so that rural property owners can purchase senior water rights from the banks instead of drilling domestic wells.
As the demand for water continues to increase, Washington localities and watersheds will face increasing pressure to explore new avenues that allow for flexibility and greater ease in the transfer of water rights for new uses. The Trust Water Rights Program and water banking are two creative ways to help move the archaic water rights allocation system into the 21st century to keep up with the demands of the modern state of Washington.
Erin McCool is an attorney with the Wenatchee office of Ogden Murphy Wallace, P.L.L.C., practicing in the areas of litigation, employment & labor law, and land use & water.