1. The views expressed are those of the author(s) and should not be attributed to the Economic Research Service or USDA. The Swan Falls Agreement: 30 Years Later Special Thanks to University of Idaho Extension and United States Department of Agricultural Economics Research Service

2. The views expressed are those of the author(s) and should not be attributed to the Economic Research Service or USDA. Swan Falls History Idaho Power was purposing to build a coal fire plant South of Boise call Pioneer in 1978. Three rate payers ( Purdy’s, Peavey’s, and Faulkner’s) challenged Idaho Power in front of the Idaho Public Utilities Commission that the company was not protecting it water rights Idaho Power Company, in its initial response, maintained that all of its water rights for hydropower generation were subordinated as a result of its rights at the Hells Canyon Complex. The Commission ruled in favor of the ratepayers. On appeal to Idaho Supreme Court, The Idaho Supreme Court, however, decided the issue in favor of the ratepayers, holding that the subordination at Hells Canyon did not extend upstream to the Swan Falls water rights. Idaho Power than sued over 7,500 groundwater users above Milner Dam who were junior to their 1920s Swan Falls Water rights.

3. The views expressed are those of the author(s) and should not be attributed to the Economic Research Service or USDA. History Continued Given the catastrophic consequences to irrigated agriculture the State, through the Governor and the Attorney General, entered into negotiations with Idaho Power Company. The State’s primary interests were to protect existing water uses, and to ensure that the State would control the allocation of water between hydropower and other uses. The interest of the Idaho Power Company was to maintain adequate water levels in the Snake River for hydropower generation at its Swan Falls facility. The State’s primary interests were to protect existing water uses, and to ensure that the State would control the allocation of water between hydropower and other uses. The Agreement had four major parts: 1)Idaho Power Company agreed to not contest the State’s authority to place the Company’s hydropower water rights in excess of the minimum flow in a State controlled trust. 2)The state of Idaho would do a statewide adjudication to quantify the amount of water being used.

4. The views expressed are those of the author(s) and should not be attributed to the Economic Research Service or USDA. Swan Falls History Continued 3)the parties reaffirmed that the flow at Milner Dam may be reduced to zero, and that for purposes of the administration of surface and groundwater rights tributary to the Snake River below Milner Dam, no water above Milner is to be considered. 4) This agreement only applied to water rights Senior to June 30, 1984. The trust water rights would be evaluated after 20 years to see if those water rights after 1984 were beneficial to the state of Idaho and whether or not to continue the beneficial uses designation after an evaluation by the state of Idaho. 5) Enlargement water rights are water rights issued pursuant to Idaho Code § 42-1426 for enlargements of the place of use of previously acquired water rights (so long as there in no increase to the rate of diversion). These enlargement water rights, despite having a priority date based on the date of enlargement, are subordinate to all water rights senior to April 12, 1994, including the Swan Falls hydropower water rights. Expansion water rights are water rights issued pursuant to Idaho Code § 42-1416B for expanded uses in critical ground water areas. Expansion water rights have a priority date of June 30, 1985. Both enlargement and expansion water rights are trust water rights, and may be subject to curtailment if the minimum stream flows at Murphy gage drop below 3,900/5,600 cfs.

5. The views expressed are those of the author(s) and should not be attributed to the Economic Research Service or USDA. Trust Water Rights State of Idaho

6. The views expressed are those of the author(s) and should not be attributed to the Economic Research Service or USDA. What We Know Now Trust water rights or enough water to irrigate 20,000 acres. 88-102,000 acres affected because of stacked water rights or partial water rights Over 100-110 commercial, industrial, and municipal water rights affected Idaho Water Resource Board (IWRB) on July 9, 2014 passed Resolution

7. The views expressed are those of the author(s) and should not be attributed to the Economic Research Service or USDA. IWRB Resolution BEFORE THE IDAHO WATER RESOURCE BOARD IN THE MATTER OF THE SWAN FALLS ) A RESOLUTION AGREEMENT MINIMUM FLOWS ) NOW, THEREFORE BE IT RESOLVED, that, the Idaho Water Resource Board hereby establishes a “Debit System” for making its Palisades storage water available to augment flows at the Murphy Gage in the event the adjusted average daily flow at the Murphy Gage drops below the Murphy minimum flows during calendar year 2014. NOW, THEREFORE BE IT FURTHER RESOLVED, that within the “Debit System,” in the event river flows drop below the Murphy minimum flows, the Idaho Power Company shall be entitled to call for delivery of water from the IWRB’s Palisades storage space, in a volume equivalent to the shortfall at the Murphy Gage, on a schedule determined by the Idaho Power Company, until the volume of the shortfall is replaced or the IWRB storage water is fully utilized. NOW, THEREFORE BE IT FURTHER RESOLVED that the costs and administrative fees for delivery of the Palisades storage water to the Murphy Gage shall be borne by the IWRB; and NOW, THEREFORE BE IT FURTHER RESOLVED, that if successful in calendar year 2014, the IWRB intends to extend this “Debit System” into the future; however, the IWRB intends to engage the Trust Water Right owners and develop a mechanism whereby in the future the costs and administrative fees for delivery of the Palisades storage water to the Murphy Gage will be borne by the Trust Water Right owners.

8. The views expressed are those of the author(s) and should not be attributed to the Economic Research Service or USDA. Hydrograph 1981-2014

9. Idaho, 2 nd irrigation withdrawals Source: Estimated Use of Water In the United States in 2005, U.S. Geological Survey, Circular 1344

10. The views expressed are those of the author(s) and should not be attributed to the Economic Research Service or USDA.

12. Idaho switches from gravity to sprinklers

13. Idaho, 2 nd largest Ag state in the West 13

14. Idaho, 6 th in irrigated acres Source: 2012 Census of Agriculture, National Agricultural Statistics Service (USDA, 2014)

15. The views expressed are those of the author(s) and should not be attributed to the Economic Research Service or USDA.

16. Idaho, 2013 record high cash receipts Source: USDA-NASS, University of Idaho Growth rate of last 34 years: +1.4% 10yr growth rate +4.3%

17. Over half of total farm gate cash receipts are livestock sales 17 Source: University of Idaho

18. MV Crop Acreage (905,000 acres)

19. AgBiz -- the biggest contributor to Idaho’s base of economy 19 $24 billion in 2011 Source: Eborn, Taylor, and Watson: University of Idaho

20. Magic Valley Ag Quick Facts Over 50% of Idaho’s farm gate cash receipts. More than ¼ of Idaho’s GDP. 70% of Idaho’s dairy herd and dairy cows to people 2.5 to 1. Idaho’s top four ag counties (Cassia, Gooding, Twin Falls, Jerome) Agribusiness is 60% of the Magic Valley exports Agribusiness create directly or indirectly over ⅓ of 89,000 Magic Valley jobs. Almost 2 of every 3 dollars in sales from the Valley’s businesses are directly or indirectly created by exports from agribusiness. Dairy processing alone accounts for over 1 of every 5 dollars of sales and 1 in 7 Magic Valley jobs

22. Scenario Parameters Dairy processing multiplier: $2.50 per $1 exports Crops multipliers: $1.50 per $1 exports Jobs multipliers: 7.5 jobs per $1,000,000 million exports Tax coefficient: $5,200 per job –Individual income, corporate income and sales taxes –About 80% of state budget –No local taxes i.e. property tax

23. Steven Hines University of Idaho Jerome County Extension 324-7578 shines@uidaho.edu Joel Packham University of Idaho Cassia County Extension 878-9164 jpackham@uidaho.edu Garth Taylor University of Idaho 885-7533 gtaylor@uidaho.edu