Snoqualmie Valley Watershed Improvement District holds first of its kind water auction for 2017 irrigation

Some farmers in the Snoqualmie Valley have long been able to draw water from the river to irrigate their fields, legally, through their ownership of water rights. This spring and summer, that irrigation ability will be extended to include a half-dozen other farmers, who bid in a unique water lease auction last month.

The Snoqualmie Valley Watershed Improvement District (SVWID), formed in 2015, held its first water lease auction in January, and announced the results last week.

This wasn’t a typical auction, though, explained SVWID Executive Director Cynthia Krass, because the intent was to encourage participation and engagement. Both sellers, who owned water rights and were willing to lease all or part of them to a water bank established by the irrigation district, and the buyers, farmers who wanted access to water for irrigation this season, submitted sealed bids for the process.

“There are no other agricultural water banks that we know of in the state,” said Krass, and the auction process was new to the district, as well.

The two sellers had to meet specific requirements; their ownership of water rights gives them authority to draw only specific amounts of water from the Snoqualmie River, downstream of Snoqualmie Falls. They cannot use more water than is allowed by their water rights, either for themselves or to lease to another farmer, so they each had to ensure that they could provide the amount of water they were offering.

However, “All of the water rights we’re dealing with now are senior to the instream flow rule,” Krass told a group of interested bidders at a public information meeting in Carnation in January. A senior water right takes precedence over junior water rights, so a senior-right owner can withdraw his or her entire allowed amount of water from the river, regardless of demands from other water rights holders, as well as any instream flow requirements established by the Department of Ecology.

The district also holds a senior water right, from Tokul Creek, above Snoqualmie Falls, and offered to lease a portion of this water right in the auction.

The two other sellers and six buyers all submitted their sealed bids, per the acre-foot of water, Jan. 17.

The bids were opened Jan. 19, then analyzed for location matches. These water leases require Department of Ecology approval to transfer water from seller’s sites to buyers’ land, so location matches were important.

Next, bids and offers were analyzed and matched, in a market clearing process to determine a mean market price, the price that would be set for all leases.

The market clearing process matched bid and offer prices in descending order, starting with the highest bid matching the lowest offer that was also a location match. The market price was set as the midpoint between the last bid and offer that matched under this procedure.

“While this process is somewhat complex, this auction was designed differently than a traditional ‘highest-bid-takes-all’ approach to encourage participation and engagement,” Krass said.

The market price for all leases in 2017 was calculated as $125 per acre-foot of water, the amount of water need to cover one acre of land to one foot deep.

Based on preliminary analyses and pending Department of Ecology approval, the district is optimistic about being to provide water for irrigation to all the farmers who bid for water, Krass said.

Most of the Tokul Creek water right, 93 percent, will remain instream in 2017 for ecological benefit.

For more information about the Snoqualmie Valley Watershed Improvement District, visit www.svwid.com.

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