8

The Yakima Basin in Washington: Will Transfers Occur Without Judicial or Legislative Pressures?

The Yakima River basin is a rich agricultural area located in central Washington State on the east slope of the Cascade Mountain range (Figure 8.1). The Yakima River is a major tributary of the Columbia River, annually producing an average of about 3.4 million acre-feet (4.2 million megaliters (ML)) of streamflow. The Yakima and the Columbia once supported one of the world's great salmon runs, which was shared among the region's Indian, sport, and commercial fishermen. Today, salmon throughout the Northwest and in the Yakima basin are under great stress, and both Indian tribes and environmentalists are pressing for substantial restoration of historic runs.

The basin, with its familiar pattern in which irrigated agriculture is asked to use water more efficiently so new demands can be accommodated, is one that would seem amenable to water transfers. But for a number of reasons, pressures for reallocation have not been great enough to induce significant use of these measures. Thus one lesson that can be drawn from the Yakima case is that markets will not reallocate water from agricultural to other uses, such as tribal or environmental, without a substantial judicial or legislative change in the allocation rules, backed by an infusion of public or private resources.

Land ownership in the Yakima basin is approximately 40 percent federal, 30 percent Indian, and 30 percent private. Within 3 years of the Reclamation Act of 1902, the federal government began construc-



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Water Transfers in the West: Efficiency, Equity, and the Environment 8 The Yakima Basin in Washington: Will Transfers Occur Without Judicial or Legislative Pressures? The Yakima River basin is a rich agricultural area located in central Washington State on the east slope of the Cascade Mountain range (Figure 8.1). The Yakima River is a major tributary of the Columbia River, annually producing an average of about 3.4 million acre-feet (4.2 million megaliters (ML)) of streamflow. The Yakima and the Columbia once supported one of the world's great salmon runs, which was shared among the region's Indian, sport, and commercial fishermen. Today, salmon throughout the Northwest and in the Yakima basin are under great stress, and both Indian tribes and environmentalists are pressing for substantial restoration of historic runs. The basin, with its familiar pattern in which irrigated agriculture is asked to use water more efficiently so new demands can be accommodated, is one that would seem amenable to water transfers. But for a number of reasons, pressures for reallocation have not been great enough to induce significant use of these measures. Thus one lesson that can be drawn from the Yakima case is that markets will not reallocate water from agricultural to other uses, such as tribal or environmental, without a substantial judicial or legislative change in the allocation rules, backed by an infusion of public or private resources. Land ownership in the Yakima basin is approximately 40 percent federal, 30 percent Indian, and 30 percent private. Within 3 years of the Reclamation Act of 1902, the federal government began construc-

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Water Transfers in the West: Efficiency, Equity, and the Environment tion of Tieton Reservoir and purchased the private-investor-owned Sunnyside Valley Irrigation Project. In 1906, Congress authorized the Yakima Project. Over the following 20-year period, six storage reservoirs (with a capacity of 1,000,000 acre-feet, or 1.23 million ML) and 2,000 mi (3,200 km) of conveyance canals were built. Many uses developed for the waters of the basin, but the principal diversionary use is the irrigation of about 500,000 acres of land. Crops grown on these lands in 1986 had a value of $383 million. The principal agricultural products were 135,000 acres of forage crops, 46,000 acres of grains, 95,000 acres of fruits, 27,000 acres of vegetables, and 38,000 acres of field crops. Historically, Yakima River basin streams sustained six large anadromous fish runs. Each year, as many as 500,000 adult sockeye, Chinook (spring, summer, and fall runs), and coho salmon and steelhead trout returned to the river system after their migration to the Pacific FIGURE 8.1 Main waterways and related features, Yakima valley, Washington State.

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Water Transfers in the West: Efficiency, Equity, and the Environment Ocean. In the 1970s a record low was hit, however, when fewer than 1,000 fish returned. The decrease has been caused by the cumulative impacts of human activities, including commercial and recreational fish harvest, construction and operation of Columbia River main stem dams, construction and operation of Yakima basin water storage reservoirs and irrigation water delivery systems, diversion of water from the Yakima basin streams, bypasses for hydroelectric power production, and general habitat degradation. Restoration of the Yakima basin will not be easy. The water of the Yakima River and its tributaries has been fully appropriated since the beginning of the twentieth century; present rights to water actually exceed the supply during most years. The water is used productively. As a result, there are severe conflicts between those who divert it for uses such as irrigation and those who seek to restore the anadromous fish runs and preserve instream flows during low water years. The Yakima basin is a basin with intense competing demands, a shortage of water to satisfy those demands, and little institutional pressure for reallocation. There are conflicting water needs for irrigation (both Indian and non-Indian), hydroelectric power, instream fisheries (both resident and anadromous), recreation, and municipal and industrial purposes. In addition, a senior treaty-based Indian claim for water that would allow expansion of present uses and restoration of fishery flows raises the issue of involuntary reallocation. How to provide adequate flows and enhancement facilities to protect and restore anadromous fish is a central issue in the Yakima basin. Unlike the other sites highlighted in this report, there is little municipal pressure to bid water away from agricultural use. Environmental needs alone are not enough to create pressure for transfers because instream uses are not recognized in the state's water rights system, although the state can set minimum flows. THE SETTING The Pacific Northwest is looked upon by many as an area of water abundance. With the Columbia River discharging approximately 180 million acre-feet (220 million ML) to the ocean each year, some would question whether there could ever be a use for “all that water.” But as is the case throughout the West, there is more demand for water in the Yakima River basin than the resource is able to sustain over time. Conflict among uses is particularly critical during below-normal water years. Within the basin is a potentially volatile mix: a rich and productive agricultural area and an Indian tribe—the Yakima Indian Na-

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Water Transfers in the West: Efficiency, Equity, and the Environment tion—with latent water rights. The large Yakima Indian Reservation (some 1.3 million acres) is located in the southern part of the basin and is occupied by a confederation of tribes who originally inhabited about 12 million acres. The enrolled membership of the tribe is 8,940, of whom approximately 60 percent live on the reservation. The Treaty of 1855 ceded title of about 90 percent of their land to the United States and created the reservation so that the tribe could become, inter alia, an agricultural people. The treaty reserved many rights within the ceded area, including rights to hunt, fish, and gather berries, roots, and plants at “all usual accustomed places.” Historically, members harvested salmon from the Yakima River by traditional scaffolds constructed along the stream bank. Irrigation in the basin commenced in the latter part of the nineteenth century, after the treaty with the Yakima Nation. In 1905 the Bureau of Reclamation began construction of water storage at Bumping Lake, Keechelus, Kachees, Cle Elum, and Tieton reservoirs. There are also three hydropower projects—Chandler, Roza, and Wapatox— that divert streamflow year-round. While these facilities contribute to the uses of the water supply, they also add to the conflicts. In 1977, the driest year experienced in the basin in modern memory, conflicts between the Yakima Nation and irrigators led to an effort to reopen a water rights decree (Kittitas Reclamation District et al. v. Sunnyside Valley Irrigation District et al., 1977) that had governed the use of water for agricultural purposes since 1945. This decree provided that the parties were to have equal rights with respect to priority in the delivery of water from the river system except for certain uses. These equal rights were declared to be proratable and were found to be subject to pro rata diminution during periods when the total water supply available was less than required for their satisfaction. The excepted uses were the early irrigation canals that existed in the basin prior to the start of the construction of the irrigation project by the Bureau of Reclamation. The rights for these canals were found to be nonproratable and superior to the proratable rights. In times of extreme water shortage, parties with nonproratable rights sometimes receive part of their water from storage in federal reservoirs even though some of these beneficiaries did not participate in repayment of the costs of construction of the reservoirs. This situation is a source of some contention within the basin. In the 1977 challenge the court ruled that the decree was being interpreted correctly by the Bureau of Reclamation, which had been given responsibility to administer its terms. This ruling led the Yakima Nation to file an action in federal district court (Confederated Tribes and Bands of the Yakima Nation v. United States et al., 1977) to deter-

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Water Transfers in the West: Efficiency, Equity, and the Environment mine the priority and quantity of its water rights. The state of Washington also filed an action that same year in state court (State of Washington v. Acquavella et al., 1977) for a general adjudication of water rights in the basin. The Yakima Nation's federal court action was deferred to the jurisdiction of the state court under provisions of the McCarran Amendment (43U.S.C.666). Part of the Yakima Nation reservation (about 130,000 acres) is irrigated by diversion of approximately 650,000 acre-feet (800,000 ML) of water each year from the river system. Supply of about half (305,000-acre-feet, or 376,000 ML) of this water is nonproratable, whereas the remainder is subject to proration. The United States, for the Yakima Nation, has claimed a total of 1,030,505 acre-feet (1,271,000 ML) of water from the river for irrigation and some 1,250,000 acre-feet (1,542,000 ML) for instream flows as part of the Acquavella general adjudication. These claims were made under the Winters reserved water rights doctrine (United States v. Winters, 1908) and as “time immemorial” rights, but the court has defined the tribe's rights very narrowly. In a partial summary judgment issued on July 17, 1990, the presiding judge in Acquavella ruled that the Yakima Nation's water rights “[h]ave been fulfilled and limited by a combination of federal reserved and Washington state law water rights,” and thereby denied the tribe 's claims to additional diversionary rights. The court further found with regard to the Yakima Nation's instream flow claims that “[t]he reserved treaty rights shall be no more than those quantities of water necessary for the maintenance of fish and aquatic life in the Yakima River and its tributaries as and to the extent that such fish and aquatic life exist at this time and no more.” A motion for reconsideration filed by the United States was granted, and on November 29, 1990, the court entered an amended partial summary judgment as final judgment. The court found that the Yakima Nation had a water right for fish with a “time immemorial” priority date but that the right had been diminished to “the minimum instream flow necessary to maintain fish life in the river.” It was further stated, “In view of ever changing circumstances, it would be inappropriate for the court to set specific, discrete quantifications. ” An appeal to the Washington State Supreme Court on behalf of the tribe is likely. The U.S. claims for instream flows have been made in amounts up to 2.1 million acre-feet (2.6 million ML) annually to satisfy anadromous fish needs, or about two-thirds of the average annual water supply. These flows are needed for upstream passage of returning adult fish, spawning and egg incubation, juvenile rearing and outmigration of “smolts” (young salmon returning to the ocean), to stop or reduce sedimentation and siltation problems, and to reduce high

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Water Transfers in the West: Efficiency, Equity, and the Environment water temperatures in the lower river. Until the claims of the Yakima Nation are quantified, it may be difficult for any other entity to assert enough water rights to effect an increase above the present instream flows sufficient to protect and enhance anadromous fish production. Resolution of these claims will likely influence the federal fishery agencies, the U.S. Fish and Wildlife Service, and the National Marine Fisheries Service, since the United States was a party to the 1945 decree. There have been a variety of federal and state legislative attempts to resolve the irrigation, tribal, and fisheries conflicts in the basin, but none has yet succeeded. In 1979, however, Congress authorized the Yakima River Basin Water Enhancement Project (P.L. 96-162, 93 Stat. 12411, 1979), and this effort is making some progress. This project has a number of purposes: to provide supplemental irrigation water to currently irrigated lands, to provide water for new irrigation on the Yakima Indian Reservation, to increase instream flows for aquatic life (anadromous fish), to develop a comprehensive plan to manage the basin's water resources, and to settle the water rights disputes raised in the Acquavella case. Authorization of this project has been followed by a number of studies and efforts by study teams, policy groups, and roundtable groups to negotiate and agree on a plan for action. Some significant steps have been taken, but there has not been full agreement on some measures considered, particularly the need for and expected benefits from agricultural water conservation measures and the construction of new storage reservoirs. Environmental groups have urged that an aggressive conservation program be the first step in the enhancement program before any new storage is built. With the passage of the Pacific Northwest Electric Power Planning and Conservation Act (P.L. 96-501, 16 U.S.C. 839, 94 Stat. 2697, 1980), funding became available through the Bonneville Power Administration (BPA) for off-site enhancement of anadromous fish habitat and construction of some fish passage facilities at existing diversion dams and fish hatcheries. More than $55 million worth of such facilities have been constructed with BPA funding as part of Phase I of the Yakima River Basin Water Enhancement Project. In 1989 the state of Washington passed a law (R.C.W. 90.38) specific to the Yakima basin with the expressed purpose “to work with the United States and various water users of the Yakima River Basin

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Water Transfers in the West: Efficiency, Equity, and the Environment in a program designed to satisfy both existing rights, and other presently unmet, as well as future, needs of the basin.” This law creates a class of “trust water right,” which is defined as “that portion of an existing water right, constituting net water savings, that is no longer required to be diverted for beneficial use due to the installation of a water conservation project that improves an existing system.” The Washington Department of Ecology is empowered to enter into contracts to provide funding for water conservation projects and to, thereby, acquire a percentage of the water conserved to be used for “instream flows and/or irrigation use.” No projects have been built under this new law, but it is hoped by the parties that it will aid in promoting water conservation in the basin and will result in a water supply that the state may reallocate to provide or enhance instream flows. A major limitation to the usefulness of the law is the “no injury” provision, which states-that, “[n]o exercise of a trust water right may be authorized unless the department first determines that no existing water rights, junior or senior in priority, will be impaired as to their exercise or injured in any manner whatever by such authorization” (State of Washington Law, 1989). Officials of the Bureau of Reclamation and fishery interests generally believe that improved management of the existing water supply can increase fishery production within the Yakima system. This would be accomplished by controlling flows through certain critical reaches during the spawning, rearing, and migration periods of the year. An interesting example of the management potential using the flexibility currently available in the system is the “flip-flop” operation of storage and release through the Tieton to the Naches and upper Yakima spawning reaches. Because the fish spawning runs are earlier in the season in the Naches River than in the Yakima, the storage and release patterns from the two arms of the basin are managed to encourage the salmon to spawn low in the channel and to allow for higher flows to be delivered to protect the eggs from being dewatered before the young fry hatch and emerge from the gravel. Consequently, early in the season, water is delivered to downstream irrigators from the upper Yakima, and flows are held back in the Naches. Later in the season, this pattern is reversed, with delivery coming from the Naches and flows from the upper Yakima held back. In another attempt to enhance the fishery through water management, the diversion of water to and the operation of federal facilities at the Roza and Chandler power plants were voluntarily subordinated to instream flow requirements by the Bureau of Reclamation starting in 1990 to ease the stress on anadromous fish during low-flow periods. When the flow in the river is less than the amount desired

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Water Transfers in the West: Efficiency, Equity, and the Environment for instream uses, no water will be diverted strictly for power generation purposes. The bureau is investigating other management options as well. Interests in the basin are moving ahead with Phase II of the Yakima River Basin Water Enhancement Project by installing fish screens at the intakes of a number of smaller irrigation canals. Legislation is being drafted to implement a water conservation project. Efforts are being made to reach consensus on the construction of additional basin water storage, including modification of the gates at Cle Elum Dam; a pipeline to convey runoff for storage in Kachees Lake, which would otherwise be unregulated; and other system improvements. Proponents have not given up on the idea of enlarging the storage capacity of Bumping Lake. This idea is being strongly opposed by environmentalists, at least until all avenues to improve present irrigation use efficiency have been explored. The Northwest Power Planning Council approved a project that will provide a complex of hatcheries and “acclimation ponds” that are expected to boost salmon and steelhead runs by 85,000 fish. Fish will be reared in ponds containing water from specific natural streams and then will be released into those streams. It is hoped that the surviving fish will return to the streams to spawn naturally. THIRD PARTY IMPACTS Large numbers of formal transfers of water and water rights are not currently being proposed in the Yakima River basin. Rather, considerable effort is being made to increase water use efficiency, particularly for irrigation, as a means of freeing up water to reestablish instream flows. But the retention by the state of the no injury rule in the passage of its new law concerning water efficiency and trust water will be an impediment to transfers that might be proposed in the future. The primary third party impacts illustrated in this case study affect the environment (anadromous fish and wetlands) and indigenous peoples (the Yakima Indian Nation). If the recent partial summary judgment decision in Acquavella is not reversed on appeal, the holders of the existing water rights will continue to control the basin, and there is little likelihood that they will be sympathetic to efforts to reallocate supplies to Indians or to support fisheries. The decision provides certainty and stability to the agricultural economy of the basin, but it does little to enhance the restoration of fishery resources. Some would argue that the anadromous fish are doomed anyway because of actions outside the Yakima basin, such as downstream

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Water Transfers in the West: Efficiency, Equity, and the Environment dams on the Columbia River and fish harvest policies. Why invest in in-basin facilities such as fish screens and hatcheries, they argue, if the smolts cannot pass through the slack water pools of four large federal dams on the lower Columbia River after they negotiate all the barriers on the Yakima? Others have suggested that the only recourse is to list the salmon and steelhead as threatened or endangered species under the Endangered Species Act of 1973. Such a listing would require development of a recovery plan that could bring substantial changes in the operation of federal dams and reservoirs in the basin. It could also affect downstream facilities and operations and fish harvest policies. If there is no clear, objective, and reasonable expectation to restore the fish runs to their former size and importance, it is questionable whether they should be protected at some minimum level of survival. There is also circumstantial evidence that enhancements to the anadromous fish runs can be achieved through actions within the Yakima basin independent of any major improvements in fish passage problems in the main stem of the Columbia River. After record low numbers of returning fish in the 1970s, increases were observed up to 1986. After that, three drought years with consequently poor flow conditions during the critical out-migration period pushed adult returns down again. However, 1990 was a good flow year (primarily due to subordination of hydropower uses to instream flows), and if the 1992 run of adults is back up near 1986 numbers, it will be evidence that the flow situation in the Yakima basin is one of the major factors limiting fishery production. The Yakima Nation also wants to improve its irrigation system on the reservation and desires to market unused water off the reservation. Again, the summary judgment in Acquavella would limit the tribe to present uses. There would be no opportunity for expansion of irrigation or marketing unless they would be willing to forgo present uses. The state's Saved Water Act (State of Washington Law, 1989), while allowing water transfers from more efficient water use to instream uses, may also cause negative impacts on the environment, particularly native vegetation and wetlands associated with present irrigation systems. Three potential water transfers could have an impact in the Yakima basin. Two of the potential transfers would constitute a reallocation of the existing basin water supply from traditional uses to instream use. The third would transfer senior rights from annual grain and hay crops to the expanding perennial fruit and nut crops. The potential transfers important to this case are as follows:

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Water Transfers in the West: Efficiency, Equity, and the Environment Agricultural water that might be transferred to the Yakima Nation for anadromous fish protection and enhancement. This would be an involuntary transfer that might be brought about by either state adjudication or judicial findings. The threat of this involuntary transfer is driving efforts to create a cooperative system of management and to improve efficiency, leading to state and potentially federal legislation. Agricultural water that might be transferred to state-held “water rights trust” to enhance anadromous fisheries. This potential transfer would involve voluntary transfers promoted by state legislation to allow “conserved” water from improved irrigation efficiency to be reallocated to other uses. Major concerns are the lack of incentives for landowners to improve their on-farm efficiency because they realize no immediate gain. There are potential losses of wetlands and riparian habitats associated with fixing leaky irrigation conveyance systems. State or federal cost-sharing incentives will likely determine the extent to which these transfers occur. Agricultural water in the superior nonproratable rights that might be transferred to new agricultural use or to firm up the supply to farmers currently holding only proratable water rights. Such transfers are now allowed only during temporary situations. This transfer would be purely voluntary and is largely dependent on the outcome of state adjudication and on incentives to encourage increased efficiency of use by allowing farmers to put the “conserved” water to use on new land or to sell this portion of their right to another user. Legislation would have to clarify these points with respect to waste versus conservation. This transfer would involve less water than the other two transfers. CONCLUSIONS The prior appropriation doctrine in-use in the West and in the Yakima basin of the state of Washington is a major impediment to open public interest reallocation of water resources because the doctrine creates vested property rights that, pursuant to constitutional guarantees, cannot be taken without just compensation, and creates few incentives for reallocation when there are no large urban areas or national environmental groups to bid for the water. The doctrine does, however, provide the certainty and stability of supply that are important in an irrigated agricultural economy. This feature is particularly valuable in the Yakima basin where the crops grown include major areas of perennial plants such as orchards and vineyards.

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Water Transfers in the West: Efficiency, Equity, and the Environment Management considerations in the Yakima basin are becoming more broad based. This is caused primarily by the threat of the Yakima Nation 's reserved water rights, which would become senior to present rights, as well as the acknowledged water use inefficiencies inherent in the present facilities and water use practices. The system could be made more efficient, and this improvement would free up water that could be held in trust by the state for reallocation to instream uses. However, improvement in water delivery efficiency would occur at considerable cost, and the general public beneficiaries of such improvements (taxpayers, public interest groups, fishermen, and so on) have seldom indicated a willingness to pay. There are, of course, examples of water efficiency improvements that have been financed by municipal interests for the water saved. If currently used water is to be reallocated to other uses in this basin, it appears that the public must find a way to pay for the improvements necessary to make that possible or effect it through the higher courts. Incentives could be created to encourage improvements in water use efficiency that would then free up large volumes of water for other uses. Such incentives might include financial assistance programs, changes in law to promote and reward conservation efforts, and changes in state water transfer law to make it responsive to market demand. The Yakima River basin is an area where flow augmentation from outside the basin may be a viable tool to mitigate the effects of present in-basin uses. As indicated, the Columbia River annually discharges about 180 million acre-feet (220 million ML) of water to the Pacific Ocean. There may still be opportunities to divert some of this water into the Yakima. Laws and regulatory processes also need to recognize and protect instream flows and the environment of an area in the public interest. Officials charged with administration of resources and protection of the public trust must aggressively exercise their authority. It may not be within the purview of state administrative officials to operate outside the limits of statutory law. The public trust doctrine has been adopted as part of the state's water law by courts in California, Idaho, and North Dakota, but what role it will play in reallocation remains uncertain. One method to reallocate water may be for federal and/or state authorities to buy out marginal agricultural lands and retire the associated water rights for dedication to instream uses. Some of the solutions for the problem of anadromous fish protec-

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Water Transfers in the West: Efficiency, Equity, and the Environment tion and enhancement in the Yakima basin may be gained from the results of petitions seeking endangered species listing for four species of Snake River sockeye and Chinook salmon. Those petitions will result in biological reports on the status of the fish runs and the possible development of recovery plans. They may bring about requirements for modification of dams and reservoirs and their operation to protect the species. The Bureau of Reclamation can play an important management role within the confines of federal and state law by promoting multiple uses the existing supply of the hydrological system. In addition, the Yakima River Basin Water Enhancement Project can be offered as a viable example of comprehensive river basin planning aimed toward more efficient management of existing water supplies. However, it is not likely to succeed in meeting the multiple use goals within the basin without substantial investments in water conservation and new storage, as well as intensive management on a basinwide scale by the Bureau of Reclamation. The Yakima basin is unique among the cases studied in this report in that the most likely water transfers are from agriculture to different types of agriculture and from agriculture to instream flows. Furthermore, the motivation behind these potential transfers would be different. Shifts from annual crops (primarily grains) to perennial crops, along with restoration of the anadromous fish runs, necessitate an emphasis on efficient use, reallocation, and management to produce more benefits with existing supplies. REFERENCES Confederated Tribes and Bands of the Yakima Nation v. United States et al. United States District Court ( 1977). Kittitas Reclamation District et al. v. Sunnyside Valley Irrigation District et al., Civil No. 21, United States District Court ( 1977). State of Washington v. Acquavella et al., No. 77-2-01484-5, Superior Court of Yakima County ( 1977). State of Washington Law, Chapter 90.38 RCW ( 1989). United States v. Winters, 207 U.S. 564 ( 1908).