Water Banking with Dan Haller
We talk water rights and water banking with Dan Haller
Dan Haller is a Principal Water Resources Engineer at Aspect Consulting. He’s based in Yakima and his water right practice extends throughout Washington.
To get started — What is a water bank?
Water banks are institutions that help move water from those that have it to those that need it. In Washington, water banking is codified in RCW 90.42.100 and has been increasing in numbers over the last 15 years as water supply challenges have continued to increase in the state.
Most water banks make water supply available to new users by retiring an existing use (often an agricultural right) or by relying on a source of supply (often storage, above or below ground). Many programs are run in Washington that have banking functions, even if they are called something else (e.g. an exchange, a permitting program, etc.).
Water Banking Fundamentals, Aspect Consulting
Are water banks unique to Washington?
Water banks are not unique to Washington state. They exist throughout the West. A report summarizing water banks in select Western States was prepared by the Washington State Department of Ecology’s (Ecology) in 2019 and is available here.
Who typically establishes a water bank?
Water banks are chosen to serve a specific function by a specific entity. The entity forming the bank chooses the customers they plan to serve, in cooperation with Ecology through a contract process called a Trust Water Agreement. Water banks are formed and run by government agencies (e.g., state, city, county), by non-profit organizations, and by private companies.
Who do water banks generally serve?
Water banks serve a variety of different water users that would normally have to find, buy, and permit their own water right. Water banks in Washington serve small domestic needs, agricultural needs, instream flow needs, and other purposes.
Water banks provide water for new, rural development in Cle Elum, WA and greater Kittitas County
What are the benefits of purchasing water from a water bank versus a water right?
Water banks provide more certainty and reduce risk in water right transactions. This helps improve the market and those willing to participate.
In Washington, the Washington Water Code was established in 1917 and even today, it’s pretty good at moving a single water right from one person to another. There’s a process to file an application, publish a notice of what the transaction is, and if Ecology agrees the transfer can occur without impairing other water right holders, then it is approved. The process becomes less efficient if a single right is divided amongst 10 or 100 users instead of on a one-to-one basis.
The power of water banks comes from serving many common users with a single water right.
In addition to permitting efficiency, because water banks rely on Ecology’s Trust Water Rights Program, transactions are exempt from relinquishment, which is Washington’s 5-year use-it-or-lose-it forfeiture law codified in RCW 90.14.
What is the process to set-up and manage a water bank?
Water banks start with supply. Either a water right is going to be repurposed or retired in the Trust Water Rights Program, or a source of supply is developed and permitted by Ecology. The most common instances in Washington are when an agricultural right is purchased and the use retired, or when storage is either built or contracted for a new use.
The general process looks like this:
Water Source is Developed
Once the underlying source of supply is developed and permitted, two important documents between the water banker and Ecology are developed.Two Key Documents are Developed
The first document is a deed for the water right that forms the supply which is typically conveyed to Ecology and held in the Trust Water Rights Program.The second is a contract called a Trust Water Agreement that describes how the bank can manage that water held in trust.
Bank is Approved
Once the bank is approved, the bank may start marketing its availability (e.g. on Western Water Market!) and conducting transactions.
For more information and assistance with water banking:
Search water right professionals on Western Water Market
Many water right professionals listed on Western Water Market, including Dan, have experience in water baking and are available if you would like to talk more.Water Banking Takes Center Stage in Washington State in 2020 Legislative Session