Using Less of the Colorado River Takes a Willing Farmer and $45 million in Federal Funds

Wyoming native Leslie Hagenstein lives on the ranch where she grew up and remembers her grandmother and father delivering milk in glass bottles from the family’s Mount Airy Dairy.

The cottonwood-lined property, at the foot of the Wind River Mountains south of Pinedale, is not only home to Hagenstein, her older sister and their dogs, but to bald eagles and moose. But this summer, for the second year in a row, water from Pine Creek will not turn 600 acres of grass and alfalfa a lush green.

On a blustery day in late March, Hagenstein stood in her fields, now brown and weed-choked, and explained why she cried after she chose to participate in a program that pays ranchers in the Upper Colorado River basin to leave their water in the river.

“You have these very lush grasses, and you have a canal or a ditch that’s full of this beautiful clear, gorgeous water that comes out of these beautiful mountains. It’s nirvana,” Hagenstein said. “And then last year, it looks like Armageddon. I mean, it’s nothing, it’s very sad, there’s just no growth at all. There’s no green.”

The Colorado River basin has endured decades of drier-than-normal conditions, and steady demand. That imbalance is draining its largest reservoirs, and making it nearly impossible for them to recover, putting the region’s water security in jeopardy. Reining in demand throughout the vast western watershed has become a drumbeat among policymakers at both the state and federal level. Hagenstein’s ranch is an example of what that intentional reduction in water use looks like.

In Sublette County, Hagenstein said it’s rare for people to make a living solely on raising livestock and growing hay anymore. In addition to ranching, she worked as a nurse practitioner for more than 40 years before retiring. And when she looked at her bank accounts, she realized she needed a better way to meet expenses if she was going to keep the ranch afloat in the future. Hagenstein said it was a no-brainer. She signed up for the System Conservation Pilot Program (SCPP) in 2023. Through the federally funded program, she was able to make 13 times more than she would have by leasing it out to grow hay.

Since its inception as a mass experiment in water use reduction, the program has divided farmers and ranchers. Concerns over the high cost, the limited water savings, the difficulty in measuring and tracking conserved water, and the potential damage to local agricultural economies still linger. But without fully overhauling the West’s water rights system, few tools exist to get farmers and ranchers — the Colorado River’s majority users — to conserve voluntarily.

“I’m a Wyoming native,” Hagenstein said. “I don’t want to push our water downstream. I don’t want to disregard it. But I also have to survive in this landscape. And to survive in this landscape, you have to get creative.”

SCPP Participation Doubles in 2024

Driven by overuse, drought and climate change, water levels in Lake Powell fell to their lowest point ever in 2022. The nation’s second-largest reservoir provided a stark visual indicator of the Colorado River’s supply-demand imbalance. Those falling levels also threatened the ability to produce hydroelectric power and prompted officials from the U.S. Bureau of Reclamation to call on states for an unprecedented level of water conservation. The agency gave the seven states that use the Colorado River a tight deadline to save an additional 2 million to 4 million acre-feet of water. (An acre-foot is the amount of water needed to fill 1 acre of land to a height of 1 foot. One acre-foot generally provides enough water for one to two households for a year.)

States gave the federal government no plans to save that much water in one fell swoop, instead proposing a patchwork of smaller conservation measures aimed at boosting the reservoirs and avoiding infrastructural damage.

The Upper Colorado River Commission (UCRC), an agency that brings together water leaders from Colorado, Utah, Wyoming and New Mexico, offered up the “5-Point Plan,” one arm of which was restarting the SCPP.

In 2023, after the federal government announced it would spend $4 billion from the Inflation Reduction Act (IRA) on Colorado River programs, the Upper Colorado River Commission decided to reboot the SCPP, which was first tested from 2015 to 2018. The program pays eligible water users in the four Upper Basin states to leave their fields dry for the irrigation season and let that water flow downstream.

But a hasty rollout to the SCPP in 2023 meant low participation numbers. Only 64 water-saving projects were approved, and about 38,000 acre-feet of water was conserved across the four states, which cost nearly $16 million. Water users complained about not having enough time to plan for the upcoming growing season and said an initial lowball offer from the UCRC of $150 per acre-foot was insulting and came with a complicated haggling process to get a higher payment. UCRC officials said the short notice and challenges with getting the word out about the program contributed to low participation numbers in 2023.

A University of Wyoming study surveyed the region’s growers about water conservation between November 2022 and March 2023. Eighty-eight percent of respondents in the Upper Basin were not even aware that the SCPP existed.

UCRC commissioners voted to run the program again in 2024, but said this time projects should focus on local drought resiliency on a longer-term basis. UCRC officials tweaked the program based on lessons learned in 2023, and the 2024 program had nearly double the participation, with 109 projects and nearly 64,000 acre-feet of water expected to be conserved.

“I view the doubling of interest and participation from one year to the next as a significant success,” UCRC Executive Director Chuck Cullom said.

What Happens To Conserved Water?

Despite one of its stated intentions — protecting critical reservoir levels — water being left in streams by SCPP-participating irrigators is not tracked to Lake Powell, the storage bucket for the Upper Basin.

In total, across 2023 and 2024, the program spent $45 million to save a little more than 1 percent of the Colorado River water allocated to Colorado, Utah, Wyoming and New Mexico.

Although engineers have calculated how much water is saved by individual projects, known as conserved consumptive use, officials are not measuring how much of that conserved water ends up in Lake Powell. And the laws that govern water rights allow downstream users to simply take the water that an upstream user participating in the SCPP leaves in the river, potentially canceling out the attempt at banking that water.

These types of temporary, voluntary and compensated conservation programs aren’t new to the Upper Basin. In addition to the pilot program from 2015 to 2018, the state of Colorado undertook a two-year study of the idea of a demand management program by convening nine work groups to examine the issue.

System conservation and demand management, while conceptually the same, have one big difference: A demand management program would track the water so that downstream users don’t grab it and create a special pool to store the conserved water in Lake Powell. With system conservation, the water simply becomes part of the Colorado River system, with no certainty about where it ends up.

This lack of accounting for the water has some asking whether the SCPP is accomplishing what it set out to do and whether it is worth the high cost to taxpayers.

Even if all the roughly 64,000 acre-feet from the SCPP in 2024 makes it to Lake Powell, it’s still a drop in the bucket for the reservoir; last year, 13.4 million acre-feet flowed into Lake Powell. The reservoir currently holds about 8.2 million acre-feet and has a capacity of about 25 million acre-feet.

“I still haven’t really seen evidence of total water savings or anything like that,” said Elizabeth Koebele, a professor of political science and director of the graduate program of hydrologic sciences at the University of Nevada, Reno. Koebele wrote her doctoral dissertation on the first iteration of the SCPP. “As far as getting water to reservoirs, I’m not sure that we’ve seen a lot of success from the System Conservation Pilot Program so far.”

And the program has been expensive. For the 2024 iteration of the program, UCRC officials offered a fixed price per acre-foot that applicants could take or leave — no haggling this time. Colorado, Utah and Wyoming paid agricultural water users about $500 an acre-foot; the Navajo Agricultural Products Industry, New Mexico’s sole participant in 2023 and 2024, received $300 an acre-foot. Projects that involved municipal or industrial water use were compensated on a case-by-case basis, and those that involved leaving water in reservoirs were paid $150 an acre-foot. The majority of projects in both years involved taking water off fields for the whole season or part of the season, known as fallowing.

The UCRC doled out nearly $29 million in payments to water users in 2024. The program paid about $45 million to participants in 2023 and 2024 combined. Some participants are using these payments to upgrade their irrigation systems, Cullom said, which helps maintain the vitality of local agriculture.

But even with this amount of money spent, Koebele said it may still not cover the costs to participants for things such as long term impacts to soil health that come with taking water off fields for a season or two. After the infusion of IRA money runs out, it’s unclear how such a program would be funded in the future.

“I also worry that we don’t have an endless supply of money to compensate users for conservation in the basin,” Koebele said. “And perhaps we need to be thinking about — rather than doing temporary conservation — investments in longer-term conservation beyond what we’re already doing.”

Western Slope Water Managers Critical of SCPP

Some groups have concerns with the SCPP beyond its issues with accounting for how much water ends up in Lake Powell.

The Glenwood Springs-based Colorado River Water Conservation District represents 15 counties on Colorado’s Western Slope. Their mission is to protect, conserve, use and develop the water within its boundaries, which has often meant fighting Front Range entities that want to take more from the headwaters of the Colorado River in the form of transmountain diversions. Sometimes, that means voicing concerns about conservation programs that it thinks have the potential to harm Western Slope water users.

River District officials have been vocal critics of the SCPP, pointing out the ways that it could, if not done carefully, harm certain water users and rural agricultural communities. Because of the way water left in the stream by participants in the SCPP can be picked up by the next water user in line, some of which are Front Range cities, at least two of the projects this year could result in less — not more — water in the Colorado River, according to comments that the River District submitted to the state of Colorado. (One of these projects dropped out in 2024.)

“Without significant improvements, it would be hard for the River District to support additional expenditures on system conservation,” said Peter Fleming, the district’s general counsel.

The River District had also wanted a say in the SCPP process in 2023, going as far as creating their own checklist for deciding project approval, but UCRC officials said the commission had sole authority to approve projects.

Water users from all sectors — including agriculture, cities and industry — are allowed to participate in the program, but, in practice, all of the 2023 and 2024 projects in Colorado involve Western Slope agricultural water users. That’s partly because the price that the SCPP offered was less than the market value of water on the Front Range.

“If you’re simply basing it on a set dollar value per acre-foot, you’re going to result in disproportionate impacts to areas of the state where the economic value of water is not as high as others,” Fleming said. “You’re going to end up with all the water coming from the Western Slope. … You shouldn’t create sacrificial lambs.”

Upper Basin Facing Increased Pressure

The Upper Basin’s conservation program is playing out against the backdrop of watershedwide negotiations with the Lower Basin states (California, Arizona and Nevada) about how to share the river after the current guidelines governing river operations expire in 2026.

After failing to come to an agreement, the Upper and Lower basins submitted competing proposals to the U.S. Bureau of Reclamation. Lower Basin officials committed to a baseline of 1.5 million acre-feet in cuts, plus more when conditions warrant. They also called for the Upper Basin to share in those additional cuts when reservoirs dip below a certain level.

Upper Basin officials have balked at the notion that their water users should share in any cuts, saying they already suffer shortages in dry years. The source of the problem, they say, is overuse by the Lower Basin.

Plus, without ever having violated the 1922 Colorado River Compact by using more than the 7.5 million acre-feet allotted to them, they say there’s no way to enforce mandatory cuts on the Upper Basin.

But under increased pressure from the Lower Basin, and facing a drier future as climate change continues to rob the Colorado River of flows, Upper Basin water managers have made one small concession. In their proposal, they have offered to continue “parallel activities” like the SCPP, but said these programs will be separate from any post-2026 agreement with the Lower Basin. The congressional authorization for the SCPP expires at the end of 2024, and it’s unclear whether water managers will implement a program in 2025 or beyond.

Inherent in the Upper Basin’s stance is a contradiction: Why maintain that both the source of the problem and responsibility for a solution rest with the Lower Basin, but then agree to do the SCPP or a conservation program like it?

“I think that they’re basically saying that the Lower Basin needs to get their act together before we actually really need to come to the table in a realistic way,” said Drew Bennett, a University of Wyoming professor of private-lands stewardship. “I think they feel like, ‘We don’t actually really need to do anything.’ That the SCPP is actually above and beyond what they need to be doing. Is that reality? I don’t know. But I think that’s sort of the message they’re trying to send in negotiations.”

Grower Attitudes Key To Program Success

Some experts say the program’s real value is not getting water into depleted reservoirs. It is testing out a potential tool to help farmers and ranchers adapt to a future with less water. They frame it as an experiment that provides crucial information and lessons on how an Upper Basin conservation program could be scaled up. It also continues to ease water users into the concept of using less should a more permanent water conservation program come to pass.

“This program kind of, I think, helps grease the skids for that process that gets people comfortable for how it operates,” said Alex Funk, who worked for the Colorado Water Conservation Board in 2019 and helped to guide the state’s demand management study with regard to agricultural impacts. “Just seeing the doubling of the amount of acre-feet conserved under the second year and then the interest shows that, yeah, I think there could be some longevity to the program. … I think one has to be optimistic because I don’t see how the Upper Basin navigates a post-2026 future without such a program.”

Funk now works as senior counsel and director of water resources at the nonprofit Theodore Roosevelt Conservation Partnership. The group receives funding from the Walton Family Foundation, which also funds a portion of Colorado River coverage from KUNC and The Water Desk.

Cullom, executive director of the agency that runs the SCPP, pushed back on the idea that it is intended to help correct the supply/demand imbalance on the river, which he said is the fault of the Lower Basin.

“The intent of the program is to develop new tools for the upper division water users to adapt to a drier future,” he said. “We’re trying to develop tools that benefit the local communities and producers and water users in the four upper division states through drought resiliency, new tools, the ability to explore crop switching and irrigation efficiencies.”

Of all the challenges in setting up a program such as this — funding, pricing, calculating water saved, getting the word out — the biggest may be the attitudes of water users themselves, some of whom have a deep-seated mistrust of the federal government. Like Hagenstein, all of the water users that Aspen Journalism and KUNC interviewed for this story said financial reasons were the biggest driver behind their participation in the SCPP.

Bennett’s research also explained some of the reasons why growers may be hesitant to enroll in conservation programs such as the SCPP. It found that farmers and ranchers trusted local organizations to administer conservation programs significantly more than state or federal ones.

If demand management strategies were deployed, 74 percent of survey respondents said they’d prefer to have a local agency manage the program, as opposed to a state or federal agency. Only about 14 percent of growers said there is a high level of trust between water users and water management agencies in their states. The same percentage said their state’s planning process was adequate for dealing with water supply issues.

These findings point to a stumbling block that the UCRC and other agencies must overcome if they hope to create a longer-term conservation program.

Hagenstein, the Wyoming rancher, has experienced those attitudes firsthand. She has been on the receiving end of insults and name-calling because of her participation in the SCPP.

But Hagenstein says the SCPP has allowed her to have money in her pocket to continue ranching long term.

“I didn’t anticipate it would be so beneficial,” she said. “It bought us time to stay in ranching is the long and the short of it. So, I’m most grateful for the abundance that the federal government offered us. … You know, some would call it a golden goose.”

This story was reported and produced collaboratively by Aspen Journalism, a nonprofit, investigative news organization, and Northern Colorado-based public radio station KUNC, and is a part of KUNC’s ongoing coverage of the Colorado River supported by the Walton Family Foundation. Additional editing resources and other support for this story came from The Water Desk, an independent initiative of the University of Colorado Boulder’s Center for Environmental Journalism.