1. Columbia Basin Water Transactions Program: Annual Economic Report, 2010
WestWater Research June 17, 2010

2. CBWTP Mission and Origin:
Program Mission:
Improve aquatic habitats for fish and wildlife by increasing instream flows in key stream reaches within the Columbia River Basin
Collaborate with local entities to use market and incentive-based methods to achieve conservation goals
Program Origin:
Began in 2002 as a joint effort between the Bonneville Power
Administration (BPA) and the Northwest Power and Conservation
Council (NPCC)
Managed by the National Fish and Wildlife Foundation (NFWF),
a non-profit organization dedicated to fish and wildlife
conservation
Funded primarily by BPA and the NPCC

3. CBWTP Focus Region:

4. Qualified Local Entities:
Eleven “QLE’s” are eligible to submit proposals for funding from the CBWTP supporting incentive-based instream flow improvement programs in their provinces
Each QLE is uniquely positioned to implement projects that increase flows in local Columbia River tributaries through partnerships with irrigation districts, landowners, and agricultural producers.
State
Qualified Local Entity
Idaho
Idaho Department of Water Resources (IDWR)
Montana
Clark Fork Coalition (CFC)
Trout Unlimited - Montana Water Project (TU-MWP)
Montana DNRC Water Resources Division (MTWRD)
Oregon
Deschutes River Conservancy (DRC)
The Freshwater Trust (TFT)
Oregon Water Resources Department (OWRD)
Washington
Washington Water Trust (WWT)
Washington Department of Ecology (Ecology)
Walla Walla Watershed Alliance (WWWA)
Trout Unlimited - Washington Water Project (TU-WWP)

5. Economic Report Purpose:
Program’s Fourth Economic Report
Uses price and volume data from CBWTP-supported water right transactions to highlight the program’s accomplishments in 2008 and 2009
Describes trends and themes observable over time among CBWTP transactions. Information is organized into four general categories:
Program Results
Contractual Forms
Program Focus
Funding Allocation

6. 2008 and 2009 Accomplishments

7. 2008 and 2009 Summary:
2008:
Cumulative volume of 92,466 AF placed instream
Total CBWTP funds requested: $2.24 million
2009:
Cumulative volume of 83,333 AF placed instream
Total CBWTP funds requested: $2.4 million

8. Full Season Acquisitions, 2008 and 2009:
Lease Agreements
Permanent Purchases
Volume (AF)
Price ($/AF)
Average
1,232.30
$27.27
319.72
$877.86
Median
162.8
$26.91
200
$738.15
Minimum
9.52
$5.43 15
$277.78
Maximum
23,592
$70.56
2,029
$1,500.00
Number 32 21

9. Partial Season Acquisitions, 2008 and 2009:
Volume (AF)
Price ($/AF)
Average
1,182.53
$71.16
Median
816
$45.49
Minimum
45.23
$25.00
Maximum
3,134
$151.27
Number 9

10. Number of Transactions
Funding Allocation for Leases, 2008 and 2009:
Contract Length
Acquisition Method
CBWTP Funding
Number of Transactions
Short Term Lease (1-5 Years)
Full Season, 1-Year
$336,201 9
Full Season, 2-5 Years
$77,616 7
Partial Season
$855,475 6
Long Term Lease (6 Years and Up)
Full Season
$1,095,150 8
$47,455 2
TOTAL
$2,411,897 32

11. Program Results,

12. Transaction Trends, :
Since the program’s inception in 2003, the cumulative volume of water dedicated to instream flows each year has declined somewhat since 2006 due in part to an increasing number of permanent transactions and the higher cost of water.
Prices paid in permanent CBWTP acquisitions have increased since However, QLE’s continue to negotiate low permanent purchase prices relative to other transactions observed in the Columbia Basin.
Annual CBWTP lease prices increased in 2008 and 2009.

13. Transaction Trends, :

14. Leasing Activity, :

15. Contractual Forms,

16. The Importance of Innovation in Transactions:
Creative contracting has supported the CBWTP’s competitiveness in the water market by allowing the program to compete with other buyers on terms other than price.
The CBWTP’s environmental protection goals facilitate water acquisitions through a variety of contractual forms such as split season leases, source switching, and conservation.
As water right prices and competition increase throughout the Columbia Basin, further expansion and innovation in contractual forms and partnerships will help the CBWTP continue to achieve conservation objectives.

17. Number of Transactions by Contract Length:

18. CBWTP Acquisition Methods:

19. Annual Volume by Contract Term:

20. Program Focus,

21. Developments in Program Focus:
Growth in partnerships
Water acquisition funding contributed by project partners has increased since the program’s inception
Focus on preserving anadromous fisheries
The number of transactions and total expenditures dedicated to anadromous fisheries increased in 2008 and 2009
Location
Transactions distributed more evenly among eco-provinces over time

22. Growth in Partnerships:

23. Improving Anadromous Fisheries: Total Expenditures

24. Improving Anadromous Fisheries: Transaction Activity

25. Improving Anadromous Fisheries: Water Volume

26. Transaction Activity by Province:

27. Funding Allocation,

28. Recent Changes in Funding Allocation:
2008:
Substantial funding allocated to new long-term lease agreements.
The IDWR’s Pahsimeroi River transactions accounted for the majority of long-term lease expenditures
2009:
Funding allocation focused on permanent and short-term transactions.
14 permanent purchases completed by the IDWR, TU-WWP, and DRC

29. Long-Term Leases and Permanent Acquisitions:

30. Funding Allocation: Short Term Leases

31. Funding Allocation: Long Term Leases

32. Funding Allocation: Permanent Acquisitions

33. Economic Report Summary

34. Key Observations:
The wide variety of contracts and innovative agreements negotiated by QLE’s continues to improve the CBWTP’s ability to increase instream flows despite intensifying competition for water supplies.
In 2008 and 2009, program focus and funding emphasized improving habitats for anadromous fish species. The CBWTP dedicated fewer financial esources to residential fisheries.
In 2008, CBWTP funds were primarily applied to long-term lease agreements, while 2009 funds were concentrated on short-term leases and permanent acquisitions.
Lease rates in CBWTP acquisitions increased in 2008 and 2009 after remaining stable for the program’s initial 5 years. Permanent purchase prices continue to increase throughout the Columbia River Basin.

35. Annual Summary: 2007 - 2009 2007 2008 2009 Mean $25 1618 $34 1789.32
Lease Price ($/AF/Yr)
Volume (AF/ Year)
Volume (AF/Year)
Mean
$25
1618
$34
$40.86
700.38
Change from Previous Year
-2%
27%
35.64%
10.50%
20%
-60.86%
Median
$23
336
$30
297.5
$31.04
232.58
22%
54%
29.13%
-11.45% 5%
-21.80%
Low $4 46 $5
12.5
$5.71
9.52
525%
35.75%
-72.80%
-23.80%
High
$82
27,710
$90.36
$151.27
5,026.60
-17%
59%
10.20%
-14.86%
67%
-78.70%
Number 24 19
58%
-20.83%
26%