Valuation of Water Rights and Water Reliability

Client: Central California Irrigation District

Location: Los Banos, CA

Summary: Cardno ENTRIX analyzed the value of water, including the development of an appropriate conceptual framework of valuation of water in different uses, including agriculture, municipal, and nonconsumptive. The framework also included the legal parameters regarding water use and water transfers by agencies in California and the importance and role of supply reliability in water pricing.

Cardno ENTRIX constructed a database summarizing more than 400 California, Arizona, and Colorado water transfers from agricultural users to municipal and other agricultural users as well as to government agencies for wildlife refuge and other nonconsumptive purposes. The study found that average prices increased rapidly in the 1990s, particularly those paid by municipalities in rapidly-growing regions, and that value correlates positively and closely to supply reliability.