NV water right holders have little choice but to sell, say water regulators

After two decades of dwindling aquifers, landowners in northern and central Nevada are choosing to surrender their groundwater rights to the state in exchange for cash payments, and more are waiting in line. 

Everyone from family farmers to residents in mid-sized towns depend on groundwater in Nevada, but over-pumping and persistent drought means there is simply not enough water to go around.

The Voluntary Water Rights Retirement Program was allocated a total of $25 million in funding last year to address groundwater conflicts by purchasing groundwater rights from private landowners in over-pumped and over-appropriated basins in northern and central Nevada communities, and there’s been massive interest.

While the program is only available to landowners in about half of Nevada’s counties, water rights sellers have offered to sell a total of $65.5 million in water rights in a matter of months — about $40 million more than available funding. 

“Farmers want to farm,” said Jeff Fontaine, the executive director of the Central Nevada Regional Water Authority and the Humboldt River Basin Water Authority. “But a lot of them see the writing on the wall.”

Throughout the Central Nevada Regional Water Authority region — an agency created to proactively address water resource issues in the region — there are 25 over-appropriated groundwater basins, eight of which are also over-pumped. An over-pumped basin is one that is pumped at a greater rate than it is replenished.

Water regulators have until September to enter into contractual agreements and acquire those groundwater rights, but as of May the program has already received commitments to retire more than 25,000 acre-feet of ground water annually. That’s about the average amount of water in both the Boca Reservoir and Donner Lake any given year.

“We’re gonna do that in one year,” said James Settelmeyer, director of the Nevada Department of Conservation and Natural Resources, during a Joint Interim Standing Committee on Natural Resources meeting Friday.

Due to high interest in the program not every application will result in a purchase, but state water regulators noted that not a single applicant has voluntarily dropped out of the program.

“We had some of the oldest ranches in the state that were looking at selling,” Settelmeyer said, adding that the decision came down to the rising cost of digging deeper and deeper wells to reach the shrinking water table.

Water rights holders are asking “’Do I drill another well or take my old well and go down an additional 200 to 300 feet? Or do I look at this program?'” he said, adding, “there are some that are getting a bit older and may not have someone willing to take over the property.”

Nevada landowners understand they’re between a rock and a hard place, said local water regulators. 

Fontaine, the executive director of the Central Nevada Regional Water Authority and the Humboldt River Basin Water Authority, said sharply declining groundwater levels is what motivated farmers in Humboldt County’s Middle Reese River Valley and Antelope Valley to sell.

“Some of the applicants we talked to were looking at having to spend potentially hundreds of thousands of dollars to deepen their wells. And at some point they realized that the situation isn’t getting any better anytime soon,” Fontaine said, during the Friday meeting.

Most of the funding will likely go to Eureka’s Diamond Valley, a small farming community in central Nevada, and the state’s only “critical management area,” as designated by the Nevada State Water Engineer. The designation means the valley’s groundwater levels are rapidly declining, and groundwater rights holders in the area are required to create a plan to address over-pumping or risk losing their rights.

More water rights than water

If all sales go through, the state expects to retire about 30% of the annual groundwater yield in Diamond Valley, Fontaine said.

Water regulators said the program application process was designed to purchase water rights that are in regular use and to weed out water rights sellers who have not pumped over the last five years, in order to effectively address shrinking aquifers in northern and central Nevada. 

Decades of granting more water rights than actual available water has left Nevada in a difficult position. Before electricity and modern pumping technology was available, there was little threat of draining an aquifer “but times have changed,” Fontaine said.

“The state did over-appropriate these groundwater basins. The past thinking was that water users were not going to put their entire allocations to use,” he said. 

Colorado, Kansas and Oregon have set up similar programs. But those programs have not seen the level of interest and demand Nevada’s water retirement program has. 

“There was a lot of interest in this program. In fact, I would say that it exceeded our expectations,” Fontaine said.

During the meeting, water managers and conservation groups in the state emphasized the need to establish a permanent statewide voluntary water rights retirement program based on the success of the limited program currently available for select counties.

Republican Nevada State Sen. Pete Goicoechea sponsored a bill in 2023 that would have created a statewide program to buy and retire water rights. But the legislation never made it to the floor for a vote.

“As we go into the next legislative session, we have the chance to take this pilot project and its learnings and create a stable funding mechanism to ensure that we can leverage these opportunities in the future,” said Peter Stanton, the CEO of the Walker Lake Conservancy, which focuses on restoring and maintaining Walker Lake.