During the early 2000s, the price skyrocketed from well under $10,000 per acre-foot to nearly $20,000 per acre-foot.
Also, irrigators entered into 16 one-year lease contracts with the Board of Water Works of Pueblo through a special lease offer of $20 per acre-foot. Similar lease transactions explain the continued increase in 2007, with Arkansas Valley water users entering into 16 one-year leases with the Board of Water Works of Pueblo.
After a quick price jump to just over $90 per acre-foot during 1988-1989, Colorado average lease prices sharply decline and remain low until prices again begin increasing in 2002.
For the first half of the study period, average prices generally fall in the $1,000 to $2,000 per acre-foot range, while for the second half, prices generally are in the $4,000 to $5,000 per acre-foot range.
The 10,000 acre-foot barrier is broken in 1992; after 1992, the total quantity dips below the 10,000 acre-foot mark only four times in the following fifteen years.
Until 2002, establishing any price trend is challenging as prices demonstrate sharp peaks and valleys ranging from less than $10 per acre-foot to more than $70 per acre-foot, and 2002 marks the beginning of a concrete trend of increasing average prices with a jump up to $111 per acre-foot.
Adding 2007 data changes the picture, since prices rise from about $350 per acre-foot in 2006 to over $5,000 per acre-foot in 2007.
The allocative inefficiency resulting from the patchwork of water supply parameters is reflected in district-level marginal water supply values (implicit values) that range from $10 to $108 per acre-foot (table 2).
Previous studies predict that farmers in the region would respond to water markets with prices of $50 per acre-foot and less (Vaux and Howitt, 1984; Dinar and Letey, 1991; Weinberg et al., 1993).
The combination of water supply reductions and surcharges is predicted to dampen response to water markets, even if water can be sold at a price of $100 per acre-foot. This result contrasts with previous studies and recent water bank experience and indicates the need for care in analysis and policy recommendations when options will be implemented as part of a package of reforms.
When phase one comes on line in 2005, the replenishment project will provide 65,000 acre-foot
annually, according to Lisa Lawson, spokeswoman for the Orange County Sanitation District.