1. Thomas C. Turney, P.E. 1 Agreement Between Interstate Stream Commission and the Holder of OSE Permit RG-57125 Middle Rio Grande Conservancy District July 12, 2010

2. Thomas C. Turney, P.E. 2 Agreement Agreement that allows Interstate Stream Commission (ISC) to assume Rio Grande depletion obligations under Permit RG-57125 in part though Rio Grande Compact relinquishment water

3. Thomas C. Turney, P.E. 3 Summary of Concerns Ultimately, there will be major impact to the Middle Rio Grande Conservancy District (MRGCD) as a result of what are called Dedication/Retirement permits. ISC Agreement is a major change in interpretation of Rio Grande Compact. There could be serious impact to the MRGCD as a result of the Agreement. I would advise MRGCD to study the issue carefully and deliberately and then take a position that supports the District and its irrigators.

4. Thomas C. Turney, P.E. 4 History of Dedication/Retirement Permits Created by State Engineer around 1970  Allow water to be pumped now  Actual water rights to be acquired later  Agricultural uses would be converted to M & I Ground water pumping affects nearby surface water  Ultimately 1 to 1 impact  Water rights required at time of impact to river  Intent of dedications/retirement permits is to replace river depletions caused by new pumping by retiring irrigated lands—therefore keeping the river whole. Highly popular  Allow development now while deferring water right acquisition process and costs until many years or decades later.

5. Thomas C. Turney, P.E. 5 History of Dedications/Retirement Permits Dedications were done for many years In 1994, certain aspects relating to public notice and non-filing of a formal application were declared inappropriate by Attorney General Retirements permits were subsequently issued RG 57125 is a retirement type permit OSE Middle Rio Administrative Guidelines-2000  Stringent controls--require Retirement Permits to have actual water rights in hand prior to an applicant beginning pumping

6. Thomas C. Turney, P.E. 6 Location of Dedication/ Retirement Permits

7. Thomas C. Turney, P.E. 7 7

8. 8 Rio Grande Compact History 1929 Compact 1935-Texas sued NM and MRGCD over excessive diversion  Precipitated by construction of El Vado Reservoir after signing of 1929 Compact  Lawsuit ultimately led to current 1938 Compact At start of Compact negotiations, Texas, Colorado and New Mexico expressed their basic positions. One of the provisions of New Mexico dealt directly with MRGCD:  “3. Provide that NM and the MRGCD shall not be deprived of their rights to the full development and operation of the MRGCD, as shown by its plans on file with the State Engineer, for the development, irrigation and cultivation of approximately 123,000 acres from waters of the Rio Grande.”

9. Thomas C. Turney, P.E. 9 Rio Grande Compact History History of the negotiations shows that the State Engineer wanted to preserve ability to store water in El Vado Reservoir. Sets of a schedule for delivery of water  River gauges  Otowi and below Elephant Butte Reservoir Provides for a system of debits and credits  Calculated by measuring actual deliveries against scheduled deliveries

10. NM’s Rio Grande Compact Cumulative Delivery Debit/Credit

11. Thomas C. Turney, P.E. 11 Rio Grande Compact Debits  Requires NM to hold in storage an amount equal to debit (Article VI)  Allows Texas to demand release of this stored water (Article VIII) Credit  NM cannot allow water to be stored in El Vado when water levels in Elephant Butte are below a certain amount (Article VII)  NM can relinquish its credits and store water in El Vado. (Article VII)  Texas must approve relinquishment (Article VII)

12. Thomas C. Turney, P.E. 12 Concerns Water must be delivered to Texas under Rio Grande Compact. History of the Compact shows that credit water is an administrative tool designed into the Compact to provide water to MRGCD when water levels in Elephant Butte Reservoir are low. ISC has adopted a new interpretation of credit water that gives ISC ownership of credit waters stored in El Vado Reservoir. ISC proposes to use these credit water to offset groundwater pumping effects of the holder of OSE Permit RG 57125. This new interpretation, if continued to expand to other dedication/retirement permits, could ultimately result in an under delivery of water to Texas Potential of a lawsuit in the United States Supreme Court if NM fails to meet its delivery obligation under RG Compact is very real. If this happens, cost to NM is going to be enormous. $50-100 million?

13. Thomas C. Turney, P.E. 13 Lawsuits Texas sued NM in 1935 over storage issues in El Vado Reservoir Texas sued NM in 1955 (?) over storage issues in El Vado Reservoir Texas threatened litigation against NM in 2002 because of compact delivery issues in Lower Rio Grande. Legislature appropriated $12 million for threat of litigation. Texas has no hesitation about suing if they determine they are being impacted by NM

14. Thomas C. Turney, P.E. 14 Questions to Ask What is theory of relinquishment credits belonging to ISC? The License of RG 57125 requires:  Any depletion effects which are not offset by return flow credit must be offset by the retirement of existing water rights on the Rio Grande through an application for permit to retire those rights to the State Engineer.  The has been no application made to the State Engineer. Is a waiver from License going to be sought by the ISC? What will be impact of relinquishment as other dedication/retirement permit holders want on board?

15. Thomas C. Turney, P.E. 15 Questions What is causing credit to occur?  Conservation practices of MRGCD?  Return flow form municipal WWTP return flow?  San Juan Chama Water being used to offset depletions? Are SJC water being released in a time to benefit the Compact instead of MRGCD irrigators? This would be contrary to original representation by NM Compact Commissioner.  Release of P&P water rights being released at end of irrigation season? If relinquishment policy fails, who will bear the cost of acquiring offsetting water rights? Has or will the legislature appropriate funds to pay for acquisition of real water rights?

16. Thomas C. Turney, P.E. 16 Questions How will administration of credit water delivery actually be done? How will debits be handled by the ISC? The economic analysis does not refect the cost to NM if under delivery to Texas occurs. This cost is going to be substantial.

17. Conclusion Issues surrounding dedication/retirement permits are large. The claim that ISC is making to ownership of credit water is a major change in interpretation of the Rio Grande Compact. MRGC needs to ask hard questions. The potential for under delivery of water to Texas is real and its implications should be seriously considered. MRGCD should proceed slowly in considering approval of the ISC proposed contract and take all steps necessary to protect the District and its irrigators. Thomas C. Turney, P.E. 17