INTERSTATE WATER COMPACTS: THEIR IMPACT ON THE WESTERN SLOPE. IvaI V. Goslin Upper Colorado River commission

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1 ./ INTERSTATE WATER COMPACTS: THEIR IMPACT ON THE WESTERN SLOPE IvaI V. Goslin Upper Colorado River commission 'Seminar on "Water and the Western Slope" Western State College Gunnison, Colorado July 19, 1977

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3 INTRODUCTION In the embryonic stage of our nation, before there was a United States of America, disagreements among groups of people or between established colonies arose, just as they can be expected to be generated among any group of people with different interests, or, even, at times, with the same interests in a limited objective. Among the colonies two distinct methods of resolving these disagreements evolved. One of these, use of the courts, we will mention only casually. The other, the interstate compact process, will be the principal subject of this discussion. Litigation Use of the court system in colonial days consisted of an appeal of a dispute to the Crown who usually referred the problem to a Royal Commission~ The Royal Commission's deliberations were generally similar to those of a lawsuit. Thus the use of litigation to settle disputes between colonies was not unknown, and probably established the precedent for later conferring upon the Supreme Court the constitutional authority to determine conflicts between states. l The U.S. Supreme Court has on more than one occasion warned of the unsatisfactory nature of the judicial process. 2 History is a great teacher. Colorado history is no exception. Colorado has experienced the pitfalls of judicial resolution of interstate conflicts. Litigation over the use of the Laramie River between Colorado and Wyoming was originally filed in It was argued three times before the Supreme Court prior to the decision in The original decree had to be modified about the time IFrankfurter and Landis, 'l'he Compact Clause of the Constitution~ a Study in Intepstate Adjustment, 34 Yale Law Jov~al 685, 1925 (hereafter Frankfurter), wherein the historical context of sett1inginterstate disputes is discussed in great detail. 2Washington v. Or'egon~ 214 U.S. 205, 29 S.Ct. 631, 52 L.Ed. 969 (1908); Minnesota v. Wisconsin J 252 U.S. 273, 40 S.Ct. 269, 64 L.Ed. 558 (1920) U.S. 419,66 L.Ed. 999(1922).

4 the ink dried.~ In 1930 Wyoming was back in Court seeking to enforce the decree, and the Court decided to allow Wyoming to amend its complaint. s In 1936 the Court decided this second suit. 6 Wyoming was back again in 1940, being dissatisfied with Colorado's behavior on the Laramie.? This is an interesting case because the Colorado Governor and Attorney General each attempted to represent the State to the exclusion of the other. The Court diplomatically stated: "In the view we take of the material matters presented we find no such differences between the two returns as to require us to determine the question of authority." Finally in 1957 the two States got together and substituted a stipulated decree for the original 1922 decree. 8 This series of events should cause serious reflection by anyone thinking of settling interstate disputes by the use of the original jurisdiction of the Supreme Court. How long did this litigation take?--46 years! Another example, not involving Colorado, that demonstrates that the Supreme Court's aid should only be invoked as a very last resort is the litigation between Arizona and California over the Colorado River. In 1930, Arizona brought suit against the Secretary of the Interior and the other six States to enjoin enforcing or carrying out of the Boulder Canyon Project Act which was supposed to effectuate the Compact. In 1934 and 1936 Arizona instituted two more suits against California and the other five States seeking to perpetuate testimony of negotiators of the Colorado River Compact and seeking judicial apportionment of the unapp:a:::opriated water. None of the three lawsuits reached the hearing stage. In 1952 the State of Arizona initiated the fourth Arizona v. California lawsuit in the U.S. Supreme Court incompliance with a 1951 mandate of the House Committee on Interior and Insular Affairs to obtain an adjudication of a water supply for the Central Arizona Project. The decision in this famous case did not come until 12 years later, in 1964, and at least one unresolved issue is again before the court. How long did this litigation take?--34 years! ~259 u.s. 496 (1922); 260 u.s. I, 66 L.Ed (1922). s282 u.s. 795 (1930), motion for leave to file complaint; 286 u.s. 494, 76 L.Ed U.S. 573, 8 L.Ed (1936). 7petition for leave to file complaint granted, 309U.S. 627, 84 L.Ed. 987 (1940); 309 u.s. 572, 84 L.Ed. 954 (1940), decision in case; rehearing denied, 310 u.s. 656, 84 L.Ed (1940) U.S. 953, 1 L.Ed.2d 906 (1957). 2

5 Early Compacts The earliest use of interstate compacts relating to water occurred under the Articles of Confederation before our nation ha.d a constitution. The earliest compacts were interstate agreements dealing with boundary problems, navigation, and fishing rights in interstate waters. 9 Increasing population in the American colonies and competition for agricultural lands, navigation and fishing privileges led to the negotiation of agreements that permitted these enterprises to continue under equitable limitations. It is interesting to note that the definition of compact in Webster's International Dictionary is "an interstate agreement entered into to handle a particular problem or task. I. It is more interesting to obs.erve that the colonists in a comparatively loose confederation of political entities two hundred years ago realized the wisdom of continuing operations by invoking a theme of mutual understanding in lieu of resorting to physical force. Furthermore, they later implemented this concept by providing the "compact clause" in the Constitution of the United States. During the Revolutionary War and afterwards, the American colonies assumed the position of sovereign States. It was not until the development of the u.s. Constitution that any effective limitation was placed on the concept of individual State sovereignty. In fact, it probably took the Civil War to effectively cement constitutionally-created limitations on State authority. Actually, the constitutionally-sanctioned judicial and compact methods of resolving interstate conflicts were limitations on the States l authority to wage war as a means of settlement of conflicts. The compact clause of the federal constitution also limited the authority of diplomatic negotiations by States by requiring the consent of the Congress to the results of such negotiations. We should mention that there have been some interstate agreements to which Congress has not consented. The Supreme Court has been generous in its construction of these agreements by holding them to be valid. 1o Thus there has developed a control system under higher authority at the federal level to the "civilized" settlement of interstate disputes. 9See Frankfurter, Note 1. IOSee.Frankfurter, Note 1, for a review of the Interstate Agreements without Congressional consent as of The Appendix also notes the cases under which such agreements have been reviewed. 3

6 INTERSTATE WATER COMPACTS As large numbers of peoples moved westward from the original 13 States in search of economic and social opportunities, problems moved with them. When the number of people in a given area increased to the point that water resources became short in relation to the demands placed upon them, agreements were negotiated under which the resources could be equitably used by members of society. These agreements between and among sovereign States developed into interstate river compacts. Today there are twenty major interstate river compacts in the United States that allocate water between and among States. The State of Colorado is a party to nine of them and to three interstate agreements that can be designated as subcompacts inasmuch as they are important segments of one of the nine major compacts. 11 The western slope is impacted directly by four of the nine compacts and all three of the subcompacts. Because two of the four compacts and all three subcompacts are subservient to the other two documents, the Colorado River Compact of 1922 and the Upper Colorado River Basin Compact of 1948, we will confine our remarks to these two latter interstate agreements. This procedure is deemed appropriate too, because the western slope is drained by the Colorado River. To understand the importance of these agreements to the State, one must know something of the geography of the area and history of water development in Colorado, subjects which time dictates can be treated with only a broad brush today. Water has acted as an important catalyst to both agriculture and industry in the economic development of Colorado from the time the first white settlers arrived. As in most western States, the distribution of population shows no direct correlation to the origin of available surface water in the State. As an example, about two-thirds of the Colorado people live within the South Platte River basin that produces less than ten percent of the State's average annual surface water. The Colorado River basin contains about 10% of the population, but its average annual surface runoff comprises about 70% of the total. Colorado, in relation to its neighboring States, is a high-altitude region having in excess of fifty mountain peaks reaching over 14,000 feet. Reference is often made to Colorado 11A chronological list of water allocation COTIlpacts and subcompacts involving the State of Colorado is attached. 4

7 as the "roof of the nation." Five major stream systems, the Arkansas, Colorado, Platte, and Republican Rivers, and the Rio Grande, deliver water to nine other States under compact terms. 12 Colorado is a water-producing State from the standpoint that precipitation falls upon it, and much of the runoff flows beyond its borders. 13 COLORADO'S NEED FOR INTERSTATE RIVER AGREEMENTS Colorado and her sister States became deeply involved in the westward migrations of people. Conditions were right for settlement, for acquisition of mineral and agricultural lands, and for the development of the related water resources with the blessing and encouragement of federal and State governments. Water supplies of western streams at first appeared to be limitless. By the beginning of the 20th Century it was realized that the water supplies of these same streams were far from ample in proportion to the other natural resources, such as: land, minerals, oil, gas, etc., that required water for their exploitation and processing. With the State of Colorado as a nucleus at the headwaters of important water sources, formal legal processes evolved from pressures of increasing populations claiming the use of more and more waters from streams that flowed by gravity to other States. Besides the unique position of Colorado at the "roof of the nation," Colorado also found herself in a vulnerable political situat~on with respect to other States using water from the same river systems. Colorado officials soon became aware of the fact that water users in these other States were staking claims to the consumptive use of large quantities of water from what they believed should be Colorado's rivers. There was real apprehension that these claims might develop into permanent legal rights under the doctrine of prior appropriation. There was some irony in the situation, too, because this doctrine, also known as the "Colorado doctrine," had been perfected here in earlier days to establish valid water rights for mining enterprises. It was inevitable that the requirements for more 12 Arizona; California, Kansas, Nebraska, Nevada, New Mexico, Texas, Utah, and Wyoming. 13 An interesting statement in Water> for> Tomor>r>ow, Color>ado State Water> Plan, prepared by the u.s. Bureau of Reclamation and the Department of Natural Resources of the State of Colorado, says: "With few exceptions, waters originating in other states are not available for use in Colorado. On the other hand, all the surface flows of the State, except natural losses are available by gravity to 18 other states." This statement appears to be a slight exaggeration of the actual facts, but it does indicate the nature of the problem. 5

8 and more water would collide with the limited supply. This collision led to disagreements among users of waters of interstate streams and, consequently, to actual or potential disputes between and among States. The result had to be either interstate litigation, an adversary approach, or use of the interstate compact, a cooperative constitutionally-approved approach through mutual understandings of the disputants. 14 compacts were not generally used for the appoptionment of water between and among States until With Colorado as one of the paramount leaders, the Colorado River Compact of 1922 was negotiated by commissioners representing the seven States of the Colorado River Basin: Arizona, California, Colorado, Nevada, New Mexico, Utah, and Wyoming, and a federal representative, Mr. Herbert Hoover. Among the various factors that precipitated action on the part of Colorado and her neighboring upstream States, the following appear to have had major influence: (a) In 1907 the Supreme Court had encouraged the use of interstate agreement or litigation in the settlement of a dispute between Colorado and Kansas involving the Arkansas River. 15 (b) The other States of the basin had for years viewed with trepidation the apparent efforts of California to dominate water usage from the Colorado River. In August 1920, the League of the Southwest~ an organization for the promotion of western development, adopted a resolution stating that the rights of the Colorado River Basin States and of the United States should be settled and determined by compact. By January 1922, each of the seven States and the United States had appointed commissioners to negotiate an agreement. (c) Simultaneously, California was pressing Congress vigorously for authorization of construction of a federally-financed regulating reservoir on the lower reaches of the river to provide flood control, electric power, and irrigation benefits. (d) In June 1922, the U.S. surreme Court handed down its decision in Wyoming v. Colopado~ 1 which, in general, upheld the doctrine of priority of appropriation of water without regard to State lines. The final negotiation of the compact took place in the atmosphere created by the Court's decision. 14United States Constitution, Article I, section la, clause 3. "No State shall, without the consent of Congress... enter into any agreement or compact with another State or with a foreign power." 151n Kansas v. Colorado, 206 u.s. 46, 97 (1907), the Supreme Court said: "... as Congress cannot make compacts between the States, as it cannot, in respect to certain matters, by legislation compel their separate action, disputes between them must be settled either by force or else by appeal to tribunals empowered to determine the right and wrong thereof." 161n Wyoming v. ColOl'ado, 259 U.S. 419 (1922). the Supreme Court in its opinion said: "As the available supply is 288,000 acre-feet and the amount covered by senior appropriations in Wyoming is 272,500 acre-feet, there remain 15,500 acre-feet which are subject to this junior appropriation in Colorado." 6

9 When the full impact of the decision in Wyoming v. Colorado was felt, Colorado and the other States of the Colorado River basin believed their fears had been confirmed that the already rapidly growing State of California was in an opportune position to appropriate the lion's share of Colorado River waters. They openly opposed the construction of storage or diversion works on the lower reach of the river that would place that area in a position to monopolize the use of the waters through prior appropriation. Delph E. Carpenter, Commissioner for the State of Colorado, effectively summarized the situation: "The upper state has but one alternative, that of using every means to retard development in the lower state until the uses within the upper state have reached their maximum. The states may avoid this unfortunate situation by determining their respective rights by interstate compact before further development in either state, thus permitting freedom of development in the lower state without injury to further growth in the upper. 17 The decision in Wyoming v. CoZorado had played the role of an effective stimulus to consummation of the Colorado River Compact which was signed on November 24, Colorado River Compact 18 In the 1920's, laws with respect to rights to use water from interstate streams were not firmly established. Each State claimed the exclusive jurisdiction to regulate the appropriation of all water within its borders. The federal government claimed jurisdiction of interstate streams. The lower reach of the Colorado River was considered navigable and subject to federal laws. At the same time people of the southwest were promoting the idea that there should be federal financing of the construction of a large multiple-purpose water development in the lower basin, principally for the benefit of California. If a stalemate of long duration were to be avoided, some type of agreement allocating the use of the river's waters among the seven basin States was necessary. The lower basin States wanted an interstate agreement because they needed the political 17 Wilbur and Ely, The Hooven' DaHi DO(fU17lcnt13.t House Document No. 717, 80th Congress, 2d Session, U.S. Government Printing Office, 1948, p. A CoZorado Rive}' Compact. (1922), 45 Stat. 1057,

10 support of the upper basin States for passage of authorizing legislation by the Congress. The upper basin States, like Colorado, favored a compact in order to protect their deferred water use against prior appropriations in the lower basin. The State of Colorado's main concern was to effectuate an equitable apportionment of the waters of the Colorado River system in perpetuity in order to assure that, in the future when it was needed, her water resource development would not be impaired or precluded. The purpose of the Colorado Compact, as stated in Article I, adequately expresses the objectives being sought and has become representative of similar statements of purpose in other compacts that followed. ARTICLE I The major purposes of this compact are to provide for the equitable division and apportionment of the use of the waters of the Colorado River System; to establish the relative importance of different beneficial uses of water; to promote interstate comity; to remove causes of present and future controversies; and to secure the expeditious agricultural and industrial development of the Colorado River Basin, the storage of its waters, and the protection of life and property from floods. To these ends the Colorado River Basin is divided into two Basins, and an apportionment of the use of part of the water of the Colorado River System is made to each of them with the provision that further equitable apportionments may be made. The Colorado River Compact is regarded as the grandfather of water allocation compacts in the United States. Among some of its more important provisions are the following: 1. The Colorado River basin was divided into two subbasins--the upper basin and the lower basin--with the line of demarkation being located at Lee Ferry, Arizona, which was defined as a point one mile below the mouth of the Paria River which is located a few miles south of the Utah-Arizona boundary. Here the waters of the entire upper basin system, including the Paria River and return flows from the upper basin projects, converge into one stream. 2. The annual beneficial consumptive use of 7,500,000 acre-feet of water was apportioned to each subbasin--to the upper basin and to the lower basin-- with the lower basin granted the right to consumptively use another million acre-feet annually if it is available. 8

11 3. States of the basin were aligned into two divisions: The States of the upper division include Colorado, New Mexico, Utah, and Wyoming. The States of the lower division are Arizona, California, and Nevada. 4. Rights of Mexico to use water under a future treaty were recognized. 5. The States of the upper division are not to cause the flow of the Colorado River at Lee Ferry to be less than 75,000,000 acre-feet in any period of ten consecutive years. 6. The Colorado River basin is defined to include "all of the drainage area of the Colorado River system and all other territory within the United States of America to which the waters of the Colorado River system shall be beneficially applied." 7. A very important term to the State of Colorado is, "colorado River system," which means "that portion of the Colorado River and its tributaries within the United States of America." 8. The Compact negotiators, believing they were dividing the use of only a papt of the river's flow, provided that at any time after October 1, 1963, if and when either basin had reached its total consumptive use as apportioned, the use of the remaining waters could be further apportioned between the two basins. 9. The Colorado was recognized as a navigable river, but "--the use of its waters for purposes of navigation shall be subservient to the uses of such waters for domestic, agricultural, and power purposes." 10. Consumption of water for agricultural and domestic purposes was made dominant over impoundment and use of water for generation of electric energy. 11. Each State was permitted to regulate and control the appropriation, use, and distribution of water within its boundaries, subject to other provisions of the compact. 12. The compact may be terminated at any time by the unanimous agreement of the signatory States, but all rights established under it shall be perpetuated. 13. The compact is not to be construed as affecting the obligations of the federal government to Indian Tribes. 9

12 It should be noted that water quality is not mentioned in the Colorado River Compact. Also, the apportionments of water are to two defined sub-basins and not to individual States. Upper Colorado River Basin compact 19 Because the Colorado River Compact did not make allocations to each of the States of the basin, interstate allocations were not completed. The upper basin States of Colorado, New Mexico, Utah, and Wyoming, rejecting the option of court adjudication, soon after the approval of the construction of Hoover Dam for the lower basin in 1928 attempted to discuss the allocation of water reserved to the upper basin States by the Colorado River Compact. Utah was not ready to work out the allocations because of lack of information. Utah hoped that the survey of the land-resources in the upper basin which the Secretary of the Interior had been directed to make by the Boulder Canyon Project Act would supply such information. The Secretary did make this survey, and the report resulting from this survey is the now famous Blue Book entitled The Colorado River~ a Natural Resourae~ House Document 419, 80th Congress, 1st Session, This report plainly indicated that federal help in developing the upper basin could not be expected until there was a settlement of the allocation of water uses in the upper basin. 20 The upper basin States did negotiate and ratify the Upper Colorado River Basin Compact. Congress also consented to this Compact in The consumptive use of water apportioned to the upper basin by the Colorado River Compact of was allocated on an annual basis by the Upper Colorado River Basin Compact to the upper basin States as follows: 22 Arizona and of Colorado New Mexico Utah Wyoming 50,000 acre-feet the remainder percent percent percent percent 1 9 Upper Colorado River Basin Compaat (1948)~ 63 Stat Letter from Director, Bureau of the Budget, to Secretary of the Interior in The COlOl>adO River (1947). House Document th Congress, 1st Session. 21Colorado River Compaat~ Article III. 22upper Colorado River Basin Compaat~ Article III. 10

13 The compact created the Upper Colorado River Commission as an administrative agency for the four upper division States, Colorado, New Mexico, Utah, and Wyoming. Arizona with its fixed amount of consumptive use of water and minor interests in the upper basin is not a member of the commission. The President appoints a federal representative who has the same vote as each State's commissioner and who serves as chairman. Rules and regulations are described under which the commission can order curtailment of water uses within a State or States when deemed necessary to meet delivery requirements by the upper division States to the lower basin under the terms of the Colorado River Compact. Three agreements or sub-compacts between Colorado and other signatory States23 pertaining to the use of water of interstate tributaries are included within the compact. Recognition is given and more definitive terms are applied to the La Plata River Compact of Consumptive use of water in the upper basin and in each State thereof is to be measured in terms of man-made depletions of the virgin flow 25 of the Colorado River at Lee Ferry26 instead of by the method of diversions of water minus return flows as used in other portions of the basin. EFFECTS OF WESTE&~ SLOPE INTERSTATE WATER COMPACTS ON THE STATE ; The Colorado River Compact of 1922 was supposed to remove causes for disagreement and rivalry between the upper basin States (Colorado, New Mexico, Utah, and Wyoming) and the lower basin States (Arizona, California, and Nevada) in the development of the river's resources. Under this compact prior development in the lower basin could create no paramount right to the use of water there as against future uses in the upper basin, thus supposedly leaving Colorado to develop at its own slower pace. The compact certainly did clear away road blocks raised by Colorado and her sister States previously precluding passage of legislation by the Congress to authorize major projects in 23Sub-compacts within the Uppel' ColoY'ado R-Z:ver Basin COlfpaet ar~': Little Snake River-Colorado and Wyoming, Art. XI Yampa River-Colorado and Utah, Art. XIII San Juan River-Colorado and New Mexico, Art. XIV. 24Upper Colorado River Basin Compact~ Art. X. 2 S"Virgin flow" is the flow of a stream undepleted by the activities of man. 26Uppel' Colorado River' Basin Compact" Art. II (e) states that Lee Ferry means a point in the Colorado River one mile below the mouth of the Paria River. This point is about thirteen miles downstream from the Utah Arizona state line and is the division point between the Upper and Lower Basins. 11

14 the lower basin. On December 21, 1928 the Boulder Canyon Project Act 27 which authorized the construction of Hoover Dam in the lower basin became part of the "law of the river." The fi:rst water was stored in Lake Mead behind this dam in The Colorado River Compact not only prevented a resource development war by buying time for the upper basin States, the construction of Hoover Dam provided a secondary benefit. This was the first really large structure ever built to provide for such extensive river control. There were doubts at the time as to whether such an enormous dam could be safely built. The success of Hoover Dam, both in terms of river control and electric power production, served as a precedent for the authorization and construction of large water storage units elsewhere in the world, including those we now have at Glen Canyon and Flaming Gorge in the upper basin. The Upper Colorado River Basin Compact, by its allocations of water use to the upper basin States, removed the objection of the United States to water resources development of the upper basin States. In fact, the Department of the Interior immediately entered into an active water and land resources investigation for the upper basin States. A plan of development was presented to Congress late in In 1956, after a determined effort on the part of the States of the upper basin, the Colorado River Storage Project Act became law. 29 This Act was the result of many compromises between and among the member States of the Upper Colorado River Commission, and with conservation organizations with respect to a proposed dam at Echo Park on Green River, which was withdrawn from the legislation. The Colorado River Storage Project Act authorized the construction of four large storage units capable of holding 33,583,000 acre-feet of water for river regulation, power generation, and consumptive use by exchange with downstream water users. These storage units are Glen Canyon Dam and Lake Powell on the Colorado River in Arizona and utah, Navajo Dam and Reservoir on the San Juan River in New Mexico and Colorado, Flaming Gorge Dam and Reservoir on the Green River in Utah and Wyoming, and the Curecanti Storage Unit on the Gunnison River in Colorado consisting of three dams and reservoirs--blue Mesa, Morrow Point, and Crystal. (Crystal Dam is still under construction.) The authorizing Act also 27Bou l.dey, Canyon ppoject Aet, 45 Stat House Document 364, 83d Congress, 2d Session, entitled Colorado River Stol'age Pr>oject and Participating Projects. 29 COlOl'udo River Stor'age Project Act.. 70 Stat. 105 (1956). 12

15 provided for the construction of 11 participating irrigation projects. Ten additional participating projects have been added by enactment of subsequent amendatory laws in 1962, 1964, and There were several unique features in the Colorado River Storage Project Act related to repayment, accounting, and funding requirements not found in previous reclamation law. Some of these innovations are having great influence on natural resource development in the Colorado River Basin. This law provided: (1) for the creation of an Upper Colorado River Basin Fund to which all appropriations from the General Fund of the U.S. Treasury shall be credited as advances, except those for recreational purposes which are nonreimbursable; (2) that all revenues (power, municipal water, irrigation, or other) derived from storage units or water-using participating projects shall be credited to the Basin Fund and shall be available for paying operation, maintenance, and repair and emergency costs, and costs of power and municipal water features within 50 years with interest; (3) that each participating consumptive-use project must pay its own operation, maintenance, and emergency charges from its own revenues; (4) that costs of storage units allocated to irrigation shall be returned from revenues in the Basin Fund within 50 years; 31 (5) that revenues in the Basin Fund in excess of amounts needed to defray costs described above shall be apportioned within the Basin Fund to the credit of the States as follows: Colorado New Mexico Utah Wyoming 46.0% 17.0% 21. 5% 15.5% for the purpose of returning the cost of irrigation allocations of participating projects within 50 years that are beyond the capacity of repayment by water users; 30San Juan-Chama and Navajo Indian Irrigation Projecto Act (76 Stat. 96); Savery-Pot Hook, Bostwick Park, and Fruitland Mesa Projects Act (78 Stat. 852); Colorado River Basin Project Act (82 Stat. 885). 31 A subsequent 1974 law, P.L (88 Stat. 266), provides that excess power revenues may also be used for salinity control. 13

16 (6) that if a participating project has power and/or municipal water facilities in addition to irrigation facilities, it must pay from its own revenues the operation, repair, and maintenance and emergency charges for all of its own facilities, repayment of its power costs and its municipal water costs, and interest on the power and municipal water investment; (7) that after all the costs under (6) are paid from the revenues of a given participating project, if there are excess revenues remaining in the Basin Fund that were derived from its own power and/or municipal water facilities, the excess is credited within the Basin Fund for use within that State wherein the project is located before the percentage apportionments are made to the four States; (8) that excess power revenues credited within the Basin Fund to each State may be used for repaying costs of irrigation projects only within that State and may not be used within another State unless appropriate consent is obtained; (9) that business-type budgets must be submitted each year to the Congress; (10) Indian irrigation projects were given special treatment with regard to reimbursability of costs of construction; and (11) this Act also placed emphasis upon the potential recreational values of the upper Colorado River basin. For the first time the development of recreational facilities as a valuable social asset for the general welfare of the citizens of the nation was specifically recognized by making the costs of such facilities constructed in conjunction with water resource development non-reimbursable. This part of the law evinced a recreational consciousness on the part of its proponents that helped to pave the way for passage by the Congress of subsequent laws relating to federal responsibility with respect to outdoor recreation. Water compacts have been beneficial to western Colorado--in fact to the entire State. The chain of major events outlined above proves this point. The first link, the Colorado River Compact eliminated the possibility for the lower basin States to invoke a priority claim against us. The second link, the Upper Colorado River Basin Compact, was necessary before the construction of the Colorado River Storage Project and participating projects could be authorized by the Congress. The third 14

17 link, the Colorado River Storage Project Act, made the development of the western slope's water resource projects economically justifiable and financially sound, as well as increasing manyfold municipal and industrial water availability and hydroelectric energy, and, consequently expanding economic opportunities.,the fourth major l~~he Colorado River Basin Project Act of 1968,32 which defines ~pararneters protecting the upper basin's interests against unilateral, arbitrary operation of upper basin reservoirs by the federal government, as well as Congressional authorization of five western slope projects, would have been unlikely, if not down-right impossible, without the presence of the two compacts. Fundamentally, taking the overview, it can be said that the two major compacts set the stage for the development of the upper Colorado River basin. Certainly, there are other associated benefits from wateruse compacts to the State of Colorado. We have seen how the Upper Colorado River Basin Compact, made possible the construction of a number of water development projects that otherwise would have had to be foregone. This compact also led to close interstate cooperation in promoting Congressional legislation to authorize the Colorado River Storage Project and participating projects of which Colorado is a major beneficiary. The western slope of Colorado has benefited economically through the development of these participating irrigation projects known as Bostwick Park, Florida, Paonia, Silt, and Smith Fork. The gross crop value from these projects in 1976 was over $8 million. This, of course, does not tell the entire story of their value to the various communities of western Colorado wherein these units are located. An economic value multiplier would be required to reveal the total impact of this phase of benefits. Other projects are on the wayi such as, Fruitland Mesa, Savery-Pot Hook, Animas-LaPlata, Dallas Creek, Dolores, San Miguel, and West Divide. While making these localized projects financially sound so that all of their reimbursable costs are returned to the U.S. Treasury, the large river-regulating storage units, such as at Glen Canyon, Flaming Gorge, and Curecanti in Gunnison's back yard, have been successful beyond expectations in producing. power and revenues. During fiscal 1976, hydroelectric generation produced $60,594,150 in revenues. From upper basin power operations during last year, over $42 million were returned to the Federal Treasury--almost $12 million in interest, with the balance applied to capital costs of construction. Colorado power users were able to purchase 2 1/4 billion Kwh of electricity at a cost of over $15 million--and at rates among the lowest in the nation. 32Colorado River Basin Project Act of Z968~ P.L , 82 Stat

18 Participating project and storage unit reservoirs have provided beneficial economic, aesthic, and recreational impacts to western Colorado. During 1976 there were over a million visitor days recorded at Blue Mesa, Morrow Point, Crawford, Lemon, Paonia, Rifle Gap, and Silver Jack reservoirs. This figure will give you some idea of the nature and magnitude of recreational values which can be attributed to the compactdevelopment chain of events mentioned earlier. The Environmental Protection Agency under the Federal Water Pollution Control Act Amendments of has declared that salinity in the Colorado River system is a form of pollution, and therefore, falls under its Jurisdiction. On other river systems where the administration of the use of the waters is not under the terms of interstate river compacts, the attitude of the Environmental Protection Agency has been that a part of the water resource, including water from reservoirs constructed for other purposes, under edict of the federal government could be released for dilution in water quality enhancement. When the EPA and its predecessor agencies first became active on the Colorado River, this concept was also expressed. To anyone closely associated with the salinity problem, it is apparent that the presence of the two Colorado River compacts aided in reaching a solution to the salinity problem that will have far less adverse social and economic impacts on the State of Colorado than would a solution involving the use of large quantities of high quality water for dilution purposes to improve water quality in downstream States. 34 Representatives of the EPA in the beginning complained that the compacts impaired their ability to accomplish the purposes of the water pollution laws to control and enhance water quality. The important point is that the compacts inhibited the EPA in any designs it may have entertained to revolutionize the entire scheme of river management. SPECIAL PROBLEMS FOR WESTERN COLORADO A. Litigation We should not fall into the trap of attributing too much to interstate agreements. The existence of interstate river 33Pederlal Water' Pollution Contl',A Act Amendments, 86 Stat. 816 (1972). Environ 34WateY' Quality StandaY'ds f01 Salin-ity, Coloyudo Rivel' System, mental Protection Agency, 41 Federal Register (March 31, 1976). 16

19 compacts has not always prevented interstate water resource conflicts involving Western Colorado, especially in the political arena. In spite of the fine language utilized by capable negotiators in the past in writing compacts, they are susceptible to different interpretations by different parties under different political situations at later times in history. California bitterly opposed the Congressional authorization of water development projects in the upper Colorado River basin for the benefit of Colorado and her sister States on the grounds that there was insufficient water in the river, i.e., under the California interpretation that the upper basin should bear all of the shortage in water supply under the compact apportionments. 35 Arizona interprets the compact in such a way that Colorado and the other upstream States would be charged with all of the shortage in water supply, plus the delivery of one-half of the United States annual water-treaty obligation to Mexico (not onehalf of any deficiency) plus losses in the river to deliver onehalf of the Mexican water delivery. 3& Arizona also contends that the waters of the Gila River which flow through parts of New Mexico and Arizona are not included under the Colorado River Compact water apportionments; although those apportionments are made from the Colorado River system which is defined by the compact to include the colorado River and all of its tributaries within the United States. The Secretary of the Interior, although he denies he is interpreting the compacts, in his calculations of available water supply assumes that Colorado and her sister upper division States should bear the shortage and deliver to the lower basin an amount equal to one-half the entire United States' annual water delivery to Mexico in addition to 7.5 million acre-feet per year (1/10 of 75,000,000 of Article III (d) of the compact.) The effect of these interpretations, according to the Secretary of the Interior, is to leave 5.8 million acre-feet of consumption of water annually 35See Hearings on S. 1555, Second Session, 83d Congress, H.R. 270, H.R. 2836, H.R. 3383, H.R. 3384, H.R. 4488, and S. 500 of the First Session, 84th Congress. Bills to authorize the S~cretary of the Interior to Construct, Operate, and Maintain the Colorado Riv~r Storage Project and Participating Projects. 3GWate r> for> Ener>gy as Re~ated to I ater> Rights in the Color>ado RiVer> Basin~ Wesley E. Steiner. Executive Director, Arizona Water Commission. at Conference on Water Requirements for Lower Colorado River Basin Energy Needs. University of Arizona, Tucson, Arizona (May, 1975). Also. see "Impact of Energy Development," Gary D. Weatherford and Gordon C. Jacoby, Natur>al Re SOUl'ces JOUY'nal of Univer>sity of New Mex ico School of Law (January 1975). 17

20 for Colorado, New Mexico, Utah, and Wyoming. 37 This arbitrary method of calculation reduces the water available to Colorado under the compacts from 3.8 to 2.98 million acre-feet per year-~ a reduction of 23 percent of the amount intended for Colorado when the compact was executed in Western Colorado should be strongly opposed to interpretations of the compact and actions of the Secretary of the Interior which result in an inequitable distribution of the benefits. These issues will have to be settled by the U.S. Supreme Court. Basic differences in philosophy among involved parties preclude seeking a more equitable apportionment of water through renegotiation of the Colorado River Compact. The issues involving inclusion of the Gila River under the compact, the determination of the upper and lower basins' responsibilities under the Mexican Treaty burden, equitable distribution of the water storage, consumptive use, and energy-generation benefits are all interrelated. They are also of great importance in the determination of the course of Western Colorado's future water development and related resources conservation programs. Western Colorado must be alert and act promptly to prevent adverse interpretations of interstate compacts from becoming so fixed in actions that they cannot be successfully overturned. B. Federai Influence As has been mentioned, the development that has occurred under the compacts has been with the use of federal funds, although it started as a joint venture between the federal and State governments. The federal impact no longer is limited to those laws which march under the banner of Reclamation. A new federal era has developed of late. This new era has been characterized by federal environmental legislation. Examples of such legislation are: The National 37 Cr>itiaal Water Pr>oblems of the Eleven Westel'rl States~ U. S. Department of the Interior (1975). The Governor of Arizona apparently believes that the Secretary of the Interior does interpret the c.ompacts in arriving at 5.a million acre-feet per year for the Upper Basin. See the governor's comments on "Report on Water for Energy in the Upper Co].orado River Basin, July 1974" in letter to the Secretary of the Interior of August 7, 1974, wherei.n the governor says, "The 5.8 maf is supportable by interpretation of Compacts and was derived on the basis of an interpretation. It may not be the final or right interpretation, but it is an interpretation." 18

21 Environmental Policy Act of 1969, P.L ; Clean Air Act; Federal Water Pollution Control Act Amendments of 1972, P.L ; Endangered Species Act of 1973, P.L There are others which could be cited. "Environment" has become a new magic word about which enthusiastic groups can rally. It has almost become a new religion. We need to be "saved" from ourselves. If we can "save" the environment, a new purification will enure to the benefit of. all mankind. Before we are crucified for our skepticism of the new era, let us proclaim that there is room for improvement in the development of wisdom in the use of our environment. We do suggest that not all that has been done in the past is unwise. Changes in certain of the aforementioned laws are needed, if we are to continue developing water resources of the western slope unencumbered by harassing and delaying litigation as well as a federal dominance so powerful we cannot get it off our backs. Let's get at that job! IN CONCLUSION In summary let us note that allocatio~of water resources by means of amicable mutual agreements have saved much time and energy through the avoidance of litigation. Compacts have defined the respective rights of all parties to the use of water, have resolved mutual interstate difficulties, and bound Western Colorado and her neighbors together with regional development ties. The federal government with its vast resources on public lands and its deep interest in water resource development has been effectively kept within reasonable bounds in its pursuit of dominance by Colorado's interstate compacts. Most federal agencies seem to feel a moral obligation to stay within the limits of interstate river compacts to which the Congress has given its approval. In fact, federal-state cooperation has led to the development of a large portion of Colorado's compactallocated water supplies. Let us also note that in Colorado, as well as in other parts of the West, exploitation is gradually being superseded by a sense of conservation. As the ultimate limit of the use of available water resources is approaching it is hoped that interstate water compacts may prove to be effective devices in aiding members of society to live together and make the most of what remains. As the goals and desires of Colorado society change, time may prove that too much rigidity in one or more of the interstate compacts could impair or preclude arriving at the best possible combination of benefits for the majority of involved people. Such changes ordinarily do not happen in one State alone. 19

22 They usually occur on a regional basis. An atmosphere may be created in which trade-offs can be possible. At that point it is hoped that reasonable men will be able to sit around the table and reach interstate agreements that will be as successful as those of the past. 20

23 APPENDIX Intep8tate Watep Allocation Compact8 to Which the State of COlOFUdo I8 a Papty Colorado River Compact, 1922, 45 Stat. 1057, La Plata River Compact, 1922, 43 Stat South Platte River Compact, 1923, 44 Stat Rio Grande Compact, 1938, 53 Stat Republican River Compact, 1942, 57 Stat. 86. Upper Colorado River Basin Compact, 1948, 63 Stat. 31. Arkansas River.Compact, 1948, 63 Stat Costilla Creek Compact, 1963, 77 Stat Animas-La Plata Project Compact, 1968, 82 Stat Subuompacts Little Snake River, 1948, in Upper Colorado River Basin Compact, Art. XI, 63 Stat. 31. Yampa River, 1948, in~upper Colorado River Basin Compact, Art. XIII, 63 Stat. 31. San Juan River, 1948, in Upper Colorado River Basin Compact, Art. XIV, 63 Stat. 31.