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Colorado Supreme Court Issues Ruling Regarding Transmountain Diversions and Historical Use Analysis In Water Right Change Applications

On December 5, 2016, the Colorado Supreme Court reversed the Division 2 Water Court’s decision approving Busk-Ivanhoe, Inc.’s (Busk-Ivanhoe) application for a change of place and type of use of its transmountain water rights. In reversing and remanding the decision, the Supreme Court held that the Water Court erred in three ways: 1) by finding that storage of the water rights on Colorado’s eastern slope prior to their decreed use was lawful; 2) by including volumes of exported water paid as rental fees for storage in its historic consumptive use quantification; and 3) by finding it was required to exclude twenty-two years of non-decreed municipal use it the representative study period. [Grand Valley Water Users Ass’n v. Busk-Ivanhoe, Inc., 2016 CO 75, ___P.3d___ (Colo. 2016).]

Dating back to 1880, transmountain diversions have long been a source of controversy and heated debate in Colorado. Transmountain diversions convey water from the western slope—the western side of the Continental Divide—to Colorado’s Front Range—the eastern slope. Supporters of these diversions see them as necessary given the fact that the western slope contains seventy percent of Colorado’s surface water, but only eleven percent of the population while the eastern slope contains the rest of Colorado’s population, the majority of its economy, and consumes seventy percent of the state’s water. This recent Colorado Supreme Court decision is the latest chapter in this saga.

The Colorado Supreme Court reserved the Division 2 Water Court’s decision. In so doing, the Court examined the Water Court’s quantification of the Busk-Ivanhoe water rights through the lens of two issues: 1) whether storing the Busk-Ivanhoe water rights on the eastern slope prior to use was lawful, and 2) whether the Water Court erred in excluding the twenty-two years of undecreed use in calculating historical use.

This recent Colorado Supreme Court decision is an important in terms of both transmountain diversions and change of water right applications in general. In particular, this case shows the potential issues that may come about when an appropriator uses water rights for undecreed purposes and the consequences that may follow in a subsequent change of water right application. In the end, time will tell if and by how large of a margin the Busk-Ivanhoe’s water rights are reduced due to the periods of undecreed uses, but this case may well serve as a warning and reminder of possible repercussions to others in similar circumstances. The Court’s decision is accessible online at:–14sa303-1.pdf

(Chris Stork, Paul Noto)