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ProjectProposalforDepartmentofEcologyWaterForecast2016

Asdescribedinourletteroftransmittal(attached),WashingtonStateUniversity(WSU)wouldbepleasedtopartnerwiththeOfficeofColumbiaRiver(OCR)forthe2016Long‐TermWaterSupplyandDemandForecast.Weproposetofocusthe2016Forecastaroundsixkeyissuesasdescribedindetailbelow.

1. Updateandexpandthe2011waterforecast(3‐tieranalysis)

Thisprojectcomprisesthreetypesofupdatestothe2011.WSUwill1)updatetheexistingforecastestimatesfortheColumbiaRiverBasinusingimprovedmodelingcapabilities(seedescriptionbelow),2)extendtheforecastwindowforward5yearswhileusingfutureclimateprojectionsfromthemostrecentCoupledModelInter‐comparisonProject(CMIP5);and3)beginthepreliminaryworktoeventuallyextendtheforecasttoWesternWashingtonWRIAs.Withthethirdoption,thiseffortincludescoordinationwithwestsidewatershedplanning,PugetSoundPartnership,KingCountydemandprojections,etc.Thisworkwillprovidea(nearly)geographicallycompletesummaryofwaterforecastsintheStateofWashingtonandcouldformafoundationforageographicallycompleteWashingtonStateWaterPlan.

Theupdatetothe2011reportwillfocusontheWRIAspecificforecastsofthediscrepancybetweenwateravailabilityandwaterdemand.Thisanalysiscombineshydrologicalandeconomicmodelingandwasdoneforapproximately20WRIAsinEasternWashington.Changesinthecropmixwerebasedonforecastsofeconomicdriversoffooddemand.DownscaledclimatemodelswereincorporatedintoVIC‐CropSysttosimulatephysicalwatersupplythroughouttheyearonadailytimestep.Theimpactofwatershortageswereincorporatedbasedonthecurtailmentofinterruptiblerightsholdersinaspatiallyexplicitwaybasedonavailablewaterrightsdata.Theintegratedhydrology/cropgrowth/economicmodelingframeworkhasdevelopedsignificantlysincethepreviousforecastundertheBioEarthandWISDMprojectsfundedbytheUSDA(http://www.cereo.wsu.edu/bioearth/andhttp://www.cereo.wsu.edu/wisdm/).Theupdatedforecastwillbenefitsubstantiallyfromthis.

DescriptionofIntegratedModelingFrameworkThefollowingelementsarenewforthe2016Forecast:

Atighterintegrationbetweenhydrologicandcroppingmodels(resultinginVIC‐CropSystv2.0)

Developmentandincorporationofamechanisticirrigationmoduleforimprovedsimulationofconsumptiveloss

Improvementinreservoirandcurtailmentmodelingforspecificlocations;e.g.,main‐stemmodelingatweeklytime‐steps(ratherthanmonthly)andincorporationofRiverWaremodelingovertheYakimaRiverbasin(whichincludesprojectsspecifictotheYakimaIntegratedPlan)

Utilizationofimprovedclimateforecastingdataandtools

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Figure1.Tosimulateflowsintothestate,wewillperformsimulationsfortheentireColumbiaRiverbasinaswellasallofWashingtonState.TheirrigationmapsarefromMODIS(OzdoganandGutman,2008)andGMIA(Siebertetal.,2005)andlandcoverarefromNationalLandCoverDataset(NLCD),theUSDACroplandDataLayer(CDL),andMODIS.

Figure2illustratestheintegrationdetailsforthebiophysicalmodelingframework.VIC‐CropSystprovidesrunoff,baseflow,aquiferrecharge,andtop‐of‐cropirrigationdemand;thisinformationispassedtothereservoirmodels.RiverWareand/orColSim(fortheYakimaandColumbiaRivers,respectively)routerunoffandbaseflowthroughthesurfaceflownetwork,andsimulatesreservoirmanagement.ThetopofthecropirrigationdemandsprovidedbyVIC‐CropSystareseparatedintosurfacevs.groundwaterdemandsandextractedfromthesystemaccordingly.Irrigationcanalconveyancelossesarealsoaccountedfor.Thereservoirmodeldeductssurfacewaterirrigationdiversionsandgivesestimatesofresultingsurfacewatervolumes,whichisthenusedtoinformreservoiroperationsandwaterrightscurtailmentdecisions.Forthisforecast,wewillenhanceourwatermanagementsimulationsbyacquiringandintegratingnewerwaterrightsinformationinadditiontoautomatinganddiscretizing(intime)ourreservoirsimulations.

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Figure 2. Integrated biophysical modeling framework to account for coupled dynamics between hydrology, cropping systems, and water management.

Figure3demonstratesthepassingofinformationbetweencoupledbiophysicalmodelsandeconomicmodelingregardingshort‐runproducerresponseinirrigationmanagementandlong‐runresponseincroppingdecisions.Economicmodelingprovidesdecisionsondeficitirrigationmanagementintheeventofwaterscarcityandtheentirebiophysicalmodelisrerununderdeficitirrigationtoquantifytheimpactsoncropproductivityanddownstreamwateravailability.

Figure3.Coupledbiophysicalandeconomicmodelingschematic.IndividualModelDescriptionsLarge‐ScaleHydrology.TheVariableInfiltrationCapacity(VIC;Liangetal.,1994)large‐scalemodelwillbeusedtosimulatethebroadaspectsofclimatechangeonregionallandsurfacehydrology,includingshallowsubsurfacemoisturedynamics,butnotdeepgroundwater

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dynamics.TheVICmodelisafully‐distributed,physically‐basedmodelwhichsolveswaterandenergybudgetsateverytimestep(from1‐24hours)andforeverygridcell.Itwasdevelopedforlarge‐scaleapplications(1/16th°forthisproject)withsub‐gridvariabilitybasedonstatisticalrelationshipsforlandcover,elevation,saturatedextent,andanumberofothervariables.CroppingSystems.CropSystis bio-physically based and uses hourly and daily time steps to capture diurnal progression of various biological, physical and chemical processes. The “growth engine” in the model is based on a combination of radiation-use efficiency (solar radiation capture) and transpiration-use efficiency (water capture), which are modulated by weather conditions affecting atmospheric evaporative demand and vapor pressure deficit, and by soil conditions and irrigation management affecting available soil water. This approach permits a tight integration of crop production, weather and management with atmospheric warming and atmospheric carbon dioxide concentration (e.g., El Afandi et al., 2010; Abraha and Savage, 2006; Stöckle et al., 2010), including responses to increased frequency of drought induced water shortages.

VIC‐CropSystIntegratedModel.WehavecompletedafullydynamiccouplingbetweenVICandCropSystwhereCropSystplugsintoVICasadynamicvegetationcyclingmodule,providingtoVICplantwateruptakefortranspirationbysoillayer,waterdemandforirrigation,andleafareaindex(Figure4).VICismodifiedtosimulatecrop‐specificpotentialevapotranspirationandtorepresentirrigationtechnology‐specificevaporationofirrigationwaterdropletsinaddition

tobaresoilandcanopy‐interceptionevaporationlosses(seeFigure5fordetails).CropSystalsosimulatescropyieldswhichareneededbytheeconomicmodel.VICinvokesCropSystforeachofitssub‐gridclassesthatareoccupiedbyacroplandcover.Ininformingcropproducerdecisions,VIC‐CropSystdoesnotresolveindividualfarmsbecausethesefarmsarerepresentedimplicitlyassub‐gridclasseswithinagridcell.Instead,VIC‐CropSyst’sstrengthliesinproducinginformationastothebroaderimplicationsofwidespreadchangesinirrigation,fertilization,orcropmanagementdecisions.However,issuesofaggregationofproductionfromtheindividualfarmtotheregionalscalearehandledexplicitlywithintheeconomicmodeling.

Figure4.VIC‐CropSystintegrationdetails.

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ReservoirsandPro‐ratableWaterRightsCurtailment.Wewilluseacombinationofwatermanagementmodules. The physical system of reservoirs and dams are represented using the Columbia Simulation Reservoir Model (ColSim) (Hamlet et al. 1999) which models the main storage reservoirs and run-of-the-river reservoirs on the Columbia River main stem. It also includes the Snake, Kootenai, Clark Fork and Pend Oreille tributaries. Smaller tributaries like the Yakima River are ignored. For the 2016 Forecast, we will update this model from a monthly to a weekly tiem-step to use routed, bias corrected VIC-CropSyst simulated stream flow as its input. Operation rules for hydropower production, flood evacuation and major flow targets are considered. In addition to ColSim, we have a simple reservoir model for the Yakima River subbasin. Multiple reservoirs in the Yakima are operated together as one system and we model the combined storage of these reservoirs based on a simplified set of operating rules as described in USBR (2002). The system is modeled to reach reservoir refill in June and simultaneously ensure that there is free reservoir space available to capture any flood events. Finally, we can also drive the Yakima RiverWare model by our VIC-CropSyst flows and demands.

Figure5.Detailsforthedevelopmentofamechanistically‐basedirrigationmoduleforVIC‐CropSyst.ModelInputsWeather.Forhistoricalweatherinformation(dailymaximumandminimumtemperatures,relativehumidity,precipitation,andwindspeed),wewillapplythe4‐kmgriddedproductdevelopedbyAbatzoglou(2011)fortheperiodof1979‐2010,whichisacombinationofinsituobservationsandreanalysisdata.Forfuture(2036‐2075)weather,wewillapplya4‐kmgriddedproductinwhichGCMresultsfromtheCoupledModelIntercomparisonProject5(CMIP5)havebeendownscaledfor3RepresentativeConcentrationPathways(RCPs4.5,6.0,and8.5)usingtheMultivariateAdaptedConstructedAnalogs(MACA)downscalingapproachas

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implementedbyAbatzoglouandBrown(2011).MACApreservesdynamicalrelationshipsbetweenvariablesandhasbeendemonstratedtobeusefulforecologicalapplications(AbatzoglouandBrown,2011).HistoricalLandCoverandUse.LandusehasbeentakenfromtheWashingtonStateDepartmentofAgriculture(WSDA)agriculturallandusegeodatabase,whichcombinesUSDA‐NASSCroplandDataLayer(CDL)with1meterNationalAgricultureImageryProgram(NAIP)imagery,FSA/USDACommonLandUnitfieldboundaries,andgroundtruthing.WSUextensionpersonnelhaveprovidedinformationregardingplanting,emergence,flowering,yieldformation,andmaturity.TheWSDAdataincludeinformationonirrigatedextent.

2. PilotApplicationofMETRICinWashingtonState

Wewilldevelopascientificallydefensiblemodelingtoolcombiningwaterresourcesmodelingwithremotesensingvalidationmethodologiestopredictagriculturalcropdemands,irrigationreturnflows,andstreamdischargesatreachtowatershedscales.MappingEvapoTranspirationathighResolutionwithInternalizedCalibration(METRIC)isasatellitebasedimageprocessingmethodologythatcalculatesspatialdistributionoffieldscale(~30m)evapotranspirationasaresidualofsurfaceenergybalance(Allenetal.2007).ItisavariantoftheSurfaceEnergyBalanceAlgorithmforLand(SEBAL)modelwherenear‐surfacetemperaturegradientsareexpressedasindexedfunctionofradiometricsurfacetemperature(Bastiaanssenetal.1998).TheprimaryMETRICinputsareshort‐andlong‐wavethermalimagesfromsatelliteimagery(e.g.,Landsat),adigitalelevationmodel,andgroundbasedweatherdatameasuredwithintheareaofinterest.

Figure6.Waterbalancedepictingimportantcomponentsforirrigatedagriculture.

EvapotranspirationatWatershedScale

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ArelativelylargeuncertaintyinthewaterbudgetoccursduetotheinherentvariabilityinETandassociatederrorsincomputationalapproaches,parameterestimation,trackingofstatevariables,availableforcingmeteorology,atmosphericfeedbacks,andprocessdefinition(Pomeroyetal.2010).Processestousesatelliteimageryhavebeenshowntoimproveevapotranspirationestimatesalthough“nudging”ofmodeledsoilmoisturetoanassumedclimatologyandprecipitationbiasdidnotfullyaccountfortheoverestimationofsummerET(Maureretal.2001).IntheiranalysisofETuncertainty,Kingstonetal.(2009)concludedthatchoiceofETmethodcandeterminethedirectionoffuturewaterresourcesprojections.Accuratelydefiningthecompletewaterbalancerequiresextrapolationofevapotranspiration(ET)estimatesfrompoint(orlysimeterscale)toirrigationacreagethroughoutthebasin.

Figure 7. Comparison of daily ET estimates from ASCE and CropSyst for clipped alfalfa under low- and high- frequency irrigation.

CropSystevapotranspirationmethodologyisbasedontheUnitedNationsFoodandAgricultureOrganization(FAO)proceduredescribedintheFAOIrrigationandDrainagePaperNo.56(FAO1998).Thisdocumentdefinesahypotheticalshortgrasswithprescribedcharacteristicsasareferencecrop(ETo).CropSystdeterminesadailyvalueof

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maximumcropETatfullcanopybymultiplyingETobyacropspecificcoefficient.TheactualdailycropETisbasedonsimulationofcropgrowth,groundcanopycover,andwateruptakeandsoilwaterevaporationinthecontextofacompletesoilprofilewaterbalance.ThecurrentrevisionoftheWashingtonIrrigationGuidelines(WIG)isbasedonanalfalfareferencecrop(ETr)standardizedbytheAmericanSocietyofCivilEngineering(ASCE2005),withcropETdeterminedbymultiplicationofETrbyacropcoefficientthatfluctuatesthroughoutthegrowingseason.TheASCE‐basedmethodologyintheWIGisintendedtoestablishalong‐termaverageestimationofETforthepurposeofprovidingguidanceforirrigationdesignanddefinitionofwaterrights.ThemethodologyinCropSystcanbeusedforthesamepurpose,butinadditionitallowscalculatingETforirrigationscheduling,accommodatingdifferentirrigationmethodsandmanagementpracticessuchasdeficitirrigation.ThesetwomethodsproducesomewhatdifferentreferenceETvalues(ETr>ETo),butthesedifferencesarecompensatedbyadifferentsetofcropcoefficients(Kc)specifiedforeachmethod.

Figure7showsdailycropETvaluesforaclippedalfalfa(multiplecuttings)referencecropinProsser,WA(YakimaRiverbasin)usingdailyclimatedatafromtheWSUAgWeatherNet.TheCropSystKctevolvesmoreslowlytoreachanuppervalue,whiletheASCEKcpredictsfasterinitialdevelopment.Inadditiontoearlyseasondiscrepancies,AlfalfaETisnotablydifferentwhenalfalfaharvestevents(clipping)areconsidered.Overall,CropSystETisslightlylowerthantheASCEvaluesforbothlow‐andhigh‐frequencyirrigationforalfalfa.Thedifferencescanbeseenacrosscroptypes.Table1showsyearlyandten‐yearaverageETcalculatedusingtheASCEmethodologyandCropSystsimulations.GraincornETestimatedbyASCEislowcomparedtoCropSyst,withthebulkofthedifferencebasedonlowerETearlyintheseasonwhensoilwaterevaporationcanbeanimportantcomponentdependingonirrigationfrequencyandirrigationmethod.CropSystETusingdripirrigation,wheresoilwaterevaporationisonlyaminorfractionofET,isclosetograincornETestimatedbyASCE.

ScalingCropSystpointETestimatestothewatershedscalewhileretainingpredictivepowerforfutureoperationalscenariosrequiresextensivecalibrationandfielddata.CouplingthemodelwiththeMETRICremotesensingmethodologywillgreatlyreducetheuncertaintyassociatedwiththisprocess.METRICcalculatesinstantaneousETthroughaseriesofcomputationstoestimatenetsurfaceradiation,soilheatflux,andsensibleheatfluxtotheair.AnadvantageofMETRICisthatcalibrationisdoneinternallyusingreferenceETvaluesratherthanevaporativefractions.Also,thecropcoefficientcurves,cropdevelopmentstage,andthecroptypeneednotbeknownastheimagesreflecttheseparameters.AlongwithETestimates,theseparameterswillbeusedtoverifytheCropSystmodelprediction.AlthoughMETRICiscompatiblewithanysatellitehavingthermalsensors,LandsatdataiscommonlyusedduetothehighresolutionofshortwaveandthermalbandswhichfacilitatesdetailedETinformationfromagriculturalfields.ThedrawbacksofusingLandsatimagesarethe16dayrevisittimeandthedifficultyinprocessingimagesduringcloudydays.ThelackofdailyimagesrequiresinterpolationofETusingagriddedreferenceETdataforthedaysinbetweentherevisitperiod.Uncertaintiesexistinselectionofdryand

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wetconditionsintheimageforcalibrationtherebyintheestimationofindividualfluxesoftheenergybalance.However,asETiscalculatedasresidualofenergybalance,alessbiasedestimateofETisgenerated.Currently,METRICisbeingusedinIdahotomonitorwaterrights,quantifynetgroundwaterpumpingandtoestimaterechargefromsurfaceirrigatedlands(Allenetal.2005)andhasbeensuccessfullydefendedincourtproceedings.CouplingtheCropSystandMETRICmodelswillenableaccuratepredictionsofchangesinirrigationpracticesandcroprotationandallowdevelopmentofmorerobustparametersinCropSyst.ThisisimperativeforprojectingthefutureeffectsofclimatevariationsincetheMETRICmethodologycannotbeusedtoevaluatefuturescenarios.

Table1.Ten‐yearseasonalET(mm)ofgraincorn,alfalfa,andappleatProsser,WAasestimatedbytherevisedWashingtonIrrigationGuidelinemethodology(ASCE)andCropSystsimulations(HF=high‐frequencyirrigation;LF=low‐frequencyirrigation;D=dripirrigation;U=unclipped;C=clipped).

GrainCorn Alfalfa ApplesASCE CropSyst ASCE CropSyst ASCE CropSyst HF LF D U‐HF U‐LF C‐HF C‐LF HF LF D

575 741 587 549 941 1141 1102 853 766 897 846 741 606526 711 589 530 862 1013 971 820 746 819 897 747 622531 716 586 538 894 1168 1142 941 832 862 898 751 621552 805 680 618 922 1119 1041 875 802 880 987 759 651623 823 676 624 1008 1265 1198 977 779 969 1019 837 698570 791 638 599 915 1124 1080 902 764 896 969 797 670531 752 619 561 854 1068 1044 851 767 832 904 738 630519 719 601 548 842 1042 999 842 758 813 914 697 615525 699 571 525 838 1082 1053 878 776 813 890 688 600507 747 604 552 858 1022 972 821 759 823 923 760 634

Average546 750 615 564 893 1104 1060 876 775 860 925 752 635

3. IntegratinggroundwaterandsurfacewateraccountingintheCRB

Inthe2006WaterSupplyandDemandForecast,WSUsimulatedsurfacewatersupplyandout‐of‐streamdemandswithanintegratedcomputermodelthatsimulatedtherelationshipsbetweenwatersupply,climate,hydrology,irrigationwaterdemand,cropproductivity,economics,municipalwaterdemandandwatermanagementoverthreegeographictiers.Theintegratedmodelincludedcurtailmentrulesbasedonwaterrightsthatwereinterruptibletoadoptedinstreamflows,andbasinswheresurfacerightswereroutinelyregulated(e.g.YakimaBasin1905proratables).However,theintegratedmodel

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didnotincludegroundwater/surfacewaterinteractionsandpresumedgroundwaterwasnotlimitingwhenhydratingwaterrights.

Groundwaterislimitinginmanyareasofthestateandthatlimitationhasimpactson:

Individualfarmercropchoices(e.g.orchard/grapeversusrowcrop) Economics(e.g.employmentandtaxcontributionsinareaswherelongterm

intensivewaterusemaynotbesustainable). Surfacewatersupplies–bothforinstreamandout‐of‐streamuses(astheyarere‐

routedandhencediminishedtohydratedeclininggroundwater). Publicwatersupplies(wherecleangroundwaterismoreadvantageousand

economicthantreatingsurfacewater).

Numerousareasofdeclininggroundwaterareknownorsuspectedandinsomecaseshavebeen/arebeingstudiedbyEcology,USGS,localwaterpurveyors,andothers,including:

TheOdessaSubarea,whereOCRismakingactiveinvestmentsindevelopinggroundwatersourcesubstitutionusingColumbiaRiversupplies.

The2011USGSColumbiaPlateauGroundwaterAvailabilityStudy1,whichlookedatdeclininggroundwaterareasthroughoutEasternWashington.

TheHorseHeavenHillsareainKlickitatandBentonCounties,whereOCRisstudyingthepotentialforeithersourcereplacementofexistingagriculturalsupplieswithColumbiaRiversupplyand/oraquiferstorageandrecovery.

TheWestPlainsareainSpokaneCounty,whichhasdocumentedgroundwaterdeclinesandisthesubjectofagroundwaterstudybySpokaneCounty.

TheMoxeeBlackRockarea,whichiscoveredundertheIntegratedUSGSGroundwaterStudyinthegreaterYakimaBasin.

SaddleMountainBasaltaquifersinWestRichland,whicharethesubjectofongoingmonitoringbytheCityofWestRichlandasarequirementofanewwaterrighttheCityobtainedin2010.

AquifersintheCityofWhiteSalmon,whicharethesubjectofapilotASRproject. LincolnCountywhereOCRisfundingastudytoevaluatepassiverehydrationof

streams,lakes,andaquifersfromtheColumbiaRiver. WallaWallaalluvialandbasaltaquiferswhereEcologyisfundingwaterbanking

efforts,passivehydrationofthealluvialaquifertorestoreinstreamflows,andaquiferstorageandrecoveryofbasaltaquiferstosupportmunicipalsupplies.

WSUwillperformthefollowingtobeginintegratinggroundwateravailabilityintothemodelforecast:

1. UsingEcologydatabasesandwateravailabilityfocussheets,USGSandotherscientificliteraturereview,wewillcompileexistinginformationondeclininggroundwaterintoaGISframework,includingavailablegroundwaterdatasets,

1http://www.ecy.wa.gov/programs/wr/cwp/USGS_Study.html

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documentingstudy/modelingefforts(who,when,type,levelofeffort,limitations),etc.

2. Foreachareawheregroundwateravailabilityislikelytobelimitinginthefuture,wewillperformagapanalysisonthecurrentstateofexistingknowledgeandrecommendationsforfuturework(includingbudgetarycostestimates).Thiscouldincluderecommendationsonexpandedwellwaterlevelmonitoring,developmentofnewmodelsorupdatingofexistingmodels,andexploratorydrilling/pumptestingtocharacterizeuncertainstructuralfeatures(suchasthatfundedbyOCRfortheHorseHeavenHillsin2014).

3. Foreachareawheregroundwateravailabilityislikelytobelimitinginthefuture,wewillidentifylikelywaterrightsatriskofcurtailment.Thistaskwillincludedelineationofwaterrightsatrisk,sortingthembypriority,overlayingpotentialcurtailmentrulesbasedonmodelsofsustainableyieldifavailable,rankingofrightsinriskcategories(e.g.low,medium,high),andidentifyingtheeconomicimpactassociatedwiththenoactionalternative(e.g.farmsfallowedorconvertedtodryland,housesrelocated,seniorwaterrightsreallocatedto“higher”uses).

4. BasedonEcologyinput,selectgeographicareasofgroundwaterdeclineswillbeidentifiedforintegrationintotheforecastmodel.Actualintegrationmaybedonebydevelopinglocalizedcurtailmentrulesbasedonlikelyfuturepriorityenforcementordeveloping(linkagebetweenanexistinggroundwatermodelandthesurficialforecastmodel.

5. BasedonexistingandfutureconjunctiveusesolutionstodeclininggroundwaterbodiesthroughASR,passiverehydration,sourcesubstitutionorotherprojects,wewillforecastpotentialimpactstosurfacesources.

Beginningtointegrategroundwateravailabilityandeffectonsurfacewatersupplyintothemodelwillbetterpredictfuturewaterdemandandthereliabilityofexistingwaterrights.Beyondimprovingtheaccuracyoffuturewaterneeds,thisintegrationwillgiveEcologytoolstoengageonkeypolicyissues,suchas:

Wherearethemostatriskareasofgroundwaterdeclinesbasedonexistingwaterrightsthatusethem?

o Arepermitexemptwellscontinuingtobedevelopedinthesebodiesandasthemostjuniorprioritywaterrightsarethesedomesticsuppliesatriskofcurtailment?

o Arehighvaluecropsatriskoflossandwhatimpactdoesthathaveonthelocaleconomy?

o Whatpublicwatersystemsareatriskandwhatistheirlevelofengagementonaquiferreliability?

o Whatseniorwaterrightsexistthatarelikelytocallforcurtailmentorbepartofawaterbanksupplysolution?

o Whatdemand‐sidesolutions(e.g.conservation,xeriscaping,closurestonewexemptwells)andwhatsupply‐sidesolutions(e.g.ASR,sourcesubstitution,publicwatersystemservice)existineacharea?

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o WhereshouldOCRandEcologyprioritizeinvestmentsinwatersupplydevelopment?

Whatisthecurrentstateofthesciencenowandwhatisneededtofullyunderstandthescopeoftheproblem?

o Whatstaffandcapitalexpendituresarecommittednowtostudyandsolvetheseproblems?

o Howmuchisneededinthefuture?o Whatarethelikelysourcesoffundstoheadoffeconomicimpacts?o Whenarethosefundsneeded?o Howdoesthatlevelofinvestmentcomparetoallowingmarketforcesto

dictateoutcomes(e.g.thedo‐nothingalternative)?

4. WaterbankingoptionsforWashingtonStateandDepartmentofEcology

Althoughthetrustwaterprogramwasauthorizedin1991,waterbankshaveonlysignificantlyexpandedinthelast10yearsinresponsetoEcologyactionstoclosebasins(e.g.UpperKittitas),asinstreamflowshavebeenadopted(e.g.Dungeness,Wenatchee),inresponsetolocalcollaborationtosolvewatersupplyproblems(e.g.WallaWalla),andthroughnewlegislativefocuses(e.g.OfficeofColumbiaRiver(OCR),CabinOwners).WhileEcologyhasastatutoryroleinsettingupwaterbanks,day‐to‐dayadministrationofthebanksrangefromfullEcologyinvolvement(e.g.CabinOwnersinYakimaBasin)to3rdpartyadministration(e.g.WashingtonWaterTrustintheDungeness).

Becauseofstafflimitations,futurewaterbanksuccessislikelydependentontheabilityofEcologytostepbackfromday‐to‐dayadministrationandfocusonsettingupbankarchitecture,negotiationofsoundtrustwateragreementsthatsettheframeworkforbankoperations,andestablishingcriteriaforbankadministration.Thisvoidwillbereplacedbyotherentitiesthatcanreliablyfillthisfunctioninawaythatmeetsthepublictruststandard.Thesecouldincludenon‐profitNGO’ssuchasWashingtonWaterTrustorTroutUnlimited,localgovernmentsuchascountiesorconservancyboards,oracertificationprogramforprivatecompaniesorindividuals.

WewillprovideasummaryofexistingWashingtonStatebanks,howtheywerecreated,andhowtheyareoperated.Foreachbank,wewillquantifytheEcology“footprint”todeterminetheinvestmentincreationandadministrationtheStatehasmade,alongwitha20‐yearforecastedStateexpendituremovingforward.Wewillalsocharacterizeeachbank’ssuccess,includingdecisionsissued,waterbanked,watertransacted,costofwater,andotherfactors.BuildingonandupdatingworkdonebyWestWaterResearchin2004,wewillcontrastWashingtonStatestructureswithasurveyofwaterbankingnationally,includingasurveyofeconomicliteratureonwatermarketandwaterbankdesigns.OnegoalofthisstudyistoforecastEcologyresourcesrequiredtomeetcurrentbankingneeds,andfutureresourcesneededtomaintainandexpandthem.Othergoalsofthischaracterizationaretoidentifyhowbankdesignandoperationaffectssuccessinwatertransactionsandhowtoreducetransactionbarriersandcosts(statutory,fiscal,educational)toimproveoperation,andtoexaminethepotentialforimprovingandexpandingtheportfolioofwatercontractoptions.

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WewillalsocoordinatewithEcologytodeterminewherenewbanksareneeded,andproviderecommendationsonstructureandoperations.Forexample,EcologyhasdevelopedwateravailabilityfocussheetsthatdocumentwherewatershortagesexistintheState.Theseareashavetheinitialimpetusforwaterbankcreationinordertoavoidadverseeconomicimpactsassociatedwithlackofpreparationinthefaceofpotentialwaterclosures.Wewillidentifywhereamore“regional”approach(e.g.multi‐basinperOCR,orcounty‐ledorWRIA‐ledfocus)orasitespecificapproach(e.g.BlackRockareaofMoxeeBasin)towaterbankingislikelytobemoresuccessful.

Withtheresultsofthistask,Ecologywillbeableto:

1. DocumentthehiddencostofwaterbankingonexistingstaffandtheopportunitycostitrepresentsintermsofotherEcologywork.

2. ForecastfutureEcologyresourceimpactsjusttokeepexistingbanksoperating.3. Identifypermitprocessingtimesforeachbank,andwhetherthosetimesarebank‐

structure‐limited,water‐supply‐limited,Ecology‐staff‐limited,orlimitedduetootherfactors.

4. Contrastpublicvs.privatebankingmodelsandhowexistingbanksareworking(e.g.permitsissued,watermadeavailable,atwhatprice).

5. Identifyandprioritizeopportunitiesforfuturebankcreation,theresourcegapsneededtoestablishbanks(e.g.whowilloperate,whatsuppliesexisttoseedbanks),andthelikelyfutureEcologyeconomicimpactassociatedwithbankingexpansion.

6. Usingasurveyofexistingbanksbothlocallyandnationally,identifyopportunitiestoexpandbankingasatoolwhilelimitingorrecoveringEcologystaffimpact,andpreservingtheintegrityofwaterrightpermittingthroughclearlydefinedbusinessrulesadministeredby3rdparties.

5. EvaluatingHowtheCostofWaterisInfluencingEcology’sBacklog

WhenEcology’sanditspredecessoragenciesmissionwastoauthorizewaterrightstosupportdevelopmentofthewest,waterwasessentiallyfree.Applicationcostswerelow(e.g.$2),andstafftoevaluatethe4‐parttesttoissueawaterrightwascompletelysubsidizedbytheState.Whilestatutoryprocessingfeesaresimilarlylowtoday(e.g.generally$50formostapplication),reimbursementcostsforwatersupplydevelopmentandpriorityprocessingadministrativecostsareapproachingthe“truemarketcost”ofwater.Asaresult,inthepast10yearswheretheadministrativeandtransactionalfeeshaveapproachedtruemarketcost,moreapplicantshavedeclinedwaterwhenmadeavailableanddeclinedprocessingwhenopportunitiesarise.ThisnegativeresponsetoEcology’seffortstoapplytruemarketcostsareadverselyaffectingtheagency’sabilitytoreduceit’sbacklogofwaterrightsinthefaceofLegislativepressuretomeetannualpermitprocessingtargets.

The2016WaterSupplyandDemandForecastshouldbegintotakeintoaccountthetruecostofprocessinganddevelopingwatersuppliesasitforecastsfuturewaterdemandforWashingtonState,particularlygiven2010legislativeamendmentsauthorizingOCRtorecoverthecostofdevelopingwatersupplies.Generalobservationoftherelationshipbetweenwaterdemandandpricingsuggeststhatfuturedemandwhenapplyingmarket

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basedpricingmaybeconsiderablylessthanpreviouslyestimatedbasedonthelongstandingpracticeofsubsidizingtheadministrativeandtransactionalcostofwater.Previousforecastsin2006and2011havepresumedthatwhenwaterismadeavailabletoapplicants,theywouldacceptprocessingoftheirapplicationandimplementtheirproject.Actualbehaviorbyapplicantstellsadifferentstory.WSUwillevaluateEcologycasestudiestoassesstheeffectofwaterpricingondemand,anditsassociatedimpactonEcologybacklog.Thefollowingcasestudieswillbeexamined,includingelementssuchaswaterprice,administrativeprocessingcost,geography,purposeofuse,ageofapplications,andotherfactors:

LakeRooseveltIncrementalReleasesProject2:Ecology’sOfficeofColumbiaRiver(OCR)developed25,000acre‐feetofnewsupplyformunicipal,domestic,andindustrialuses(e.g.M&Ipurposes).ApplicantswouldbeprocessedbyOCRstaffforthestatutoryfilingfee,whichformostapplicantshadbeenpaiddecadesagoatacostof$2or$10perapplication.ApplicantswerelimitedtospecificM&IpurposesandtowaterusersgenerallywithinonemileoftheColumbiaRiveraboveBonnevilleDam.ApplicantswererequiredtoenterintoOCRwaterservicecontractstoreimburseOCRforBureauofReclamationoperationandmaintenancecostsatarateofapproximately$35/acre‐foot/yearplusinflationaryadjustments.Whenapplicantswereofferedtobeprocessed,OCRfoundthatapproximatelyone‐halfofapplicantsdeclined.Wewillcompiletheresultsofthiseffort,surveydecliningpartiesontheirdecision,andcontrastthecostofwaterforthiscasestudyagainstothersimilarinstancesofwaterpricingaffectingapplicantprocessing.

SullivanLakeWaterSupplyProject3:LiketheLakeRooseveltProject,OCRdevelopedapproximately9,400acre‐feetfornewapplicantsinsixcountiesinNEWashington.One‐halfofthissupply(4,700acre‐feet)isavailableonlyformunicipal,domestic,andindustrialuses,andanother4,700acre‐feetforotherpurposesincludingirrigation.Whileprocessingisagain“free”byOCRstaff,applicantsarerequiredtoenterintoa25yearwaterservicecontractrepayingOCR’swatersupplydevelopmentcostsat$60/acre‐foot/year,afterwhichpaymentswillcease.OCR’sofferingofthissupplytoapplicantshassimilarlyresultedinsomeprocessingdeclines.ThiscasestudyoffersanopportunitytocontrastwiththeLakeRooseveltProject,becausedifferentpurposesofuse(andthereforereturnsoninvestment)areeligible,thegeographyisdifferent(NEWashingtononly),andpricingisdifferent(25yearterminsteadofperpetualReclamationrepayment).

WenatcheeBasinCoordinatedCost‐ReimbursementProgram4:ChelanCounty,OCR,andEcologyWaterResourcesareteamingtoprocessallpendingapplicationsinthe

2http://www.ecy.wa.gov/programs/wr/cwp/cr_lkroos‐permit.html3http://www.ecy.wa.gov/programs/wr/cwp/sullivan‐permit.html4http://www.ecy.wa.gov/programs/wr/cwp/wccr.html

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WenatcheeBasin.Applicantswouldeitherreceivefirmwaterrightsiftheyqualifyunderthe4cfsreservesetforthinWAC173‐545,theinstreamflowruleEcologyadoptedin2006,oraninterruptiblewaterright.Nowaterservicecontractisrequiredfortheuseofthewater,butprocessingoftheapplicantsthemselvesaresubjecttofeesunderRCW90.03.265.Dependingonthecomplexityoftheapplication(e.g.surfacevs.groundwatersource,purpose,typeofproject),applicationprocessingisontheorderof$5,000to$15,000perapplication.When110applicantswerecontacted,only51applicants(lessthan50percent)werewillingtoparticipateintheprogram(e.g.payforwater).Again,thiscasestudyoffersadifferentgeographicarea,adifferentfeestructure(upfrontpaymentinsteadoftermasintheLakeRooseveltandSullivanLakeProjects),abroadersuiteofpurposeofuse,opportunitiesforbothfirmandinterruptiblewaterwhichaffecttheendvalueofwaterreceivedbyapplicants.Asurveyofdecliningpartiesmayrevealgreaterinsightintomotivationfordeclines(wasittooexpensive,wastheirprojectnotready,dotheythinkthey’llgetwaterforfreesomeday,etc.).

CabinOwnerMitigationProgram5:FollowingaYakimaCountySuperiorCourtdecisiontoregulatejuniorsurfacewaterusers(mostlycabinsonForestServiceland)during2001and2005droughtyears,Ecologydevelopedamitigationprogramusing60acre‐feetofseniorwaterrightstheyretiredintothetrustwaterprogram.Unlikethecasestudiesabove,nearly100percentofthoseofferedthiswateracceptitanddemandcontinuestooutpacesupply.Processingcostsundercost‐reimbursementareontheorderof$1,500,andcost‐recoveryfortheinitialacquisitionofseniorwaterrightsareontheorderof$3,500/consumptiveacre‐footofwater.Thiscasestudyoffersamuchhigherparticipationrate(i.e.expresseddemand),whichprovidesagoodcontrastwithcasestudieswithlowerdemand.Therealthreatofcurtailmentlikelyinfluencestheparticipationrate,althoughotherfactorsmayalsobeusefultounderstand,suchasthedemographicsofthisgroupcomparedtothegeneralapplicantpool,thecostforwaterandstructureoftherepaymentterms,andotherfactors.

YakimaSub‐BasinMitigationProgram:EcologyiscurrentlyrunningaprogramtocontactapplicantsinYakimasubbasinswherewateravailabilityisknowntobeofconcern.Applicantsaregiventheopportunitytomitigatefortheirapplication,placetheirapplicationon‐holdwhiletheypursueapplications,processtheirapplicationwithoutmitigation(likelyadenial),assigntheirapplicationtoanotherparty,orwithdrawtheirapplication(canceltheirproject).Mitigationcostsarelikelyontheorderof$1,000to$3,000perconsumptiveacre‐footforprocessing,andapplicantswouldbeartheadditionalcostoffindingandpermittingtheirmitigation,asopposedtotheState‐runmitigationmodelsdescribedabove.Datafrom4subbasinsarenowavailabletocontrastwiththeState‐runmodels.

5http://www.ecy.wa.gov/programs/wr/cro/sb6861.html

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Wewillsurveyresponderstobetterunderstandtheirmotivations.DoesaState‐administeredorindividual‐ledmitigationprogramcreatebetterprocessingresults?Howdoesthecostofwateraffectprocessing?HowdoesthepotentialfortheYakimaIntegratedPlananditswatersupplydevelopmentaffectuserschoosingtoplacetheirapplication“on‐hold”?Atwhatpointare“old”applicationsmorelikelytobeuntenableandbecancelledbyapplicantsortheirsuccessors?HowlongwillEcologyallowapplicantstoseriallyrejectofferedmitigationorfailtoself‐mitigatefortheirprojects?

Byevaluatingrecentcasestudies,WSUcanbetterforecast“real”waterdemandthatEcologyandOCRshouldbetargeting.Ifchargingforwaterandrecoveringthecostforwatersupplydevelopmentisthenewnorm,thentheexistingbacklogisnotagoodindicatoroffuturedemand.Marketforcesforwaterarehighlyinfluencedbygeography,byEcologywateravailabilitydecisions(e.g.Kittitasrule‐making,cabin‐ownercurtailments),andbythestructureofwaterpricing(up‐frontlargerpaymentsasinWenatcheecoordinatedcost‐reimbursementversus“forever”termcostsasinLakeRooseveltcontracts).OCR’sstatutorygoalistoprocessnewout‐of‐streamuseswhilealsoimprovinginstreamflows.Understandingyourcustomersiskeytodefiningcostrecoveryandprocessingprogramsthatattractcustomersratherthanturnthemaway.Wewillproviderecommendationsonhowtodesignfuturecost‐recoveryprogramstobestmeetapplicantneeds.

6. ResearchRelatingtotheYakimaRiverBasinIntegratedPlan

WewillperformserviceandresearchontwodifferentfrontsrelatingtotheYakimaBasinIntegratedPlan(YBIP).

1. ReviewofBenefit‐CostAnalysesforYBIPProjectscostingover$100Million.Aslegislativelymandatedin2013Legislativebill5367‐S2.SL(section10),theStateofWashingtonWaterResearchCenter(SWWRC)willperformand/orcoordinatereviewsofbenefit‐costanalysesofYBIPprojectswithacostgreaterthan$100million.Therearetwosuchprojectsforwhichreviewswillneedtobeprovidedinthisfundingcycle:theKeechelustoKachessConveyance,andtheKachessDroughtReliefPumpingPlant.TheSWWRCwillenlistagroupoffourspecialistsinthefieldsofengineering,hydrology,biology,andeconomicsorotherappropriatefieldstoperformthereviewsasnecessary.

2. Longrunwaterneedsandthevalueofrelaxingwaterconstraints:climateandlongrunagriculturalresponseundertheYBIP.TheexistingYBIPeconomicanalysesandinfrastructuredesignplansarebasedonagoalofassuringagainstcurtailmentofproratablewaterrightsbelow70%offullentitlements,andprovideestimatesoftheextenttowhichtheYBIPprojectsprovidethatassurance,andaccountforclimateandthepotentialforclimatechangeinverylimitedways.AlegislativelymandatedstudyunderwaybytheSWWRCcanaddressthesequestionsinonlyvery

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limitedwaysduetofundingandtimelimitations,aslegislativelymandated.Weproposeheretoexaminelong‐runoutcomesmuchmorerigorously,byincorporatingmoresophisticatedandcompleteclimatechangescenarios,andaddressanimportantlimitationoftheagriculturalresponseanalysisthatwillbeperformedfortheongoingYBIPeconomicanalysis.AnimportantlimitationoftheanalysisoftheYBIPstudybeingreviewedaspartofthelegislativerequestisthedecisiontokeepimportantfarmleveladaptationdecisionsfixedincludingcropmix,irrigationtechnology,andcropyields.AspartofthenextforecastweproposetoextendtheYBIPanalysistoincorporatetheeffectofthese“long‐runresponses”.Thepreviousmodelingofagricultureimpactsusedwhateconomistswouldcalla“short‐run”modelinthattheonlyresponsetodroughtwasfallowingofacresintheyearasrequiredtomeetthewaterbudgetattheirrigationdistrictlevel.Ifdroughtsincreaseinfrequencyandmagnitude,asisexpectedunderachangingclimate,thenacompleteanalysiswouldalsoconsiderthatfarmerswilladjusttheircropmixtoputinmoredroughttolerantcropsandinvestinmoreefficientirrigationsystems.ModelingtoolsbeingdevelopundertheBioEarthprojectfundedbyUSDAwillbeusedtoincorporatelong‐runresponsestoprovidemorepreciseandaccurateestimatesofthemarginalvalueofreducingwaterconstraintsforirrigatedagricultureinparticular,whichistheprimarywateruserinthebasin.Wewillutilizethismoresophisticatedagriculturalresponsemodelbyapplyingittoamorerobustsetofclimatechangescenariosthancanbedoneundertheexisting(ongoing)YBIPstudy.