Lewis County Considers Establishing Water Banking Program to Help Address Supply and Permitting Gaps

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Lewis County is in the early steps of looking at establishing a water banking system to overcome supply and permitting challenges that have plagued residential, agricultural, commercial and industrial customers for years.

The Board of Lewis County Commissioners on Tuesday heard a presentation from Aspect Consulting, a contractor currently drafting a preliminary report for staff and commissioners.

It’s likely the county will need to purchase water rights as an upstart for its bank, which in itself could be an expensive venture, though grant funding through a pilot project to establish new banks from the Washington State Department of Ecology will open up Nov. 17.

“Seeding” sources, or acquiring good-standing water rights, may also prove difficult, though Aspect identified three sources the county could look to purchase on the market soon: a portion of the TransAlta Water Bank and irrigation rights from Marwood Farms and Toledo-area U.S. Golden Eagle’s land.

Lewis County Manager Erik Martin said water rights locally are simply tough to secure at the moment for developers, farmers and others.

“They often get tied up in the Department of Ecology for years when some people need to get access to water rights,” he said. “The point is that if the county had a bank of water rights, it would make it in some cases much easier to access, be it for development, agriculture or whatever the reason.”

Water banks are broadly defined by the Department of Ecology as moving “water between buyers and sellers to where it is needed most. Water banks in Washington provide mitigation for new uses by setting aside a water right so it can be allotted to new uses that would otherwise impair existing water rights.”

Commissioner Lindsey Pollock, who brought the idea forward, said the county won’t be trying to reinvent the wheel on banking. The county will likely base its program on similar active banks overseen by the Department of Ecology, but will need to base its service and function on the needs of the surrounding communities and watersheds.

“We’ll need to make it fit our unique needs here,” Pollock said.

For example, having additional water rights available through a bank could help “hotspot” communities, such as near Boistfort, Pe Ell and the Birchfield development in Onalaska that are in need of municipal use, Aspect’s report says.

There are also currently no water rights set aside on a longterm basis for future commercial-industrial uses in Lewis County, and Aspect listed those uses as “high priority” due to the potential for job creation and tax revenue increase.

Mike Gallagher, the Department of Ecology’s southwest region water resources manager, said Lewis County’s case and circumstance for developing a water bank is quite unique to the nature of developing trusts in Washington state.

As TransAlta shutters it’s final coal burner in 2025, rights from the company’s own water bank will likely be sold off to different entities and municipalities.

These senior rights — established in 1966 — are valuable, especially on the state level, Gallagher said, since they offer year-round withdrawal, as opposed to irrigation rights that are often seasonal.

“It’s a very good future benefit of future water supply for municipal, agricultural and industrial uses — from Skookumchuck all the way down to Grays Harbor,” he said.

Pollock said those water rights within TransAlta’s water bank would be contingent upon the Skookumchuck Reservoir Dam remaining operational following the company’s 2025 coal divestment. There’s been some discussion around possibly taking the dam down in order to benefit fish populations.

Unlike most westside banks, Lewis County’s would benefit from having such a constant availability of water through TransAlta. Kelsey Collins, the Department of Ecology’s statewide trust water coordinator, said there’s often not enough “top storage” — think glacial lakes and other headwaters — to meet demand in westside banks.

Eastern Washington often has the opposite problem — too much water supply and not enough demand.

“I think folks see the banks on the east side of the mountains as ‘let’s just do that everywhere,’” Collins said, when they can’t.

Many of the banks established in the Yakima Basin, for example, hold rights in federal headwaters and have been previously adjudicated, giving them special circumstances.

Back in July, the Washington state Legislature decided to allocate up to $14 million in funding to help grant applicants purchase rights to develop banks to protect local use and maintain streamflows. Lewis County will likely be among those that apply for such a grant through the pilot project. Funds associated with managing and creating the water bank could also be offset by fees.

Gallagher said the grant recipients who establish banks will be required to reserve one-third of the rights in their fund for zero use in perpetuity.

Aspect projects said water rights in Western Washington are currently selling between $2,000 and $3,000 per acre-foot, and that TransAlta blocks have been offered at about $2,750, though no sales have been conducted at that price point.

Skagit County is one of the few westside municipal governments that recently formed a water bank in conjunction with the Department of Ecology, though due to circumstances and for reasons different from Lewis County.

A 2013 Washington state Supreme Court case, known as the Swinomish Decision, found that the state didn’t have the authority to establish lone reserves, or a set supply of water, for use in the Skagit Basin because it would be inconsistent with state laws protecting flows for fish and habitat, Gallagher said.

The bank was established in 2018 and 17 homes not covered under the decision were given prioritized rights, according to the Department of Ecology. The bank now serves about 100 homes.

Aspect has recommended Lewis County prioritize bank use for industrial and business use, though Gallagher said he expects part of the county’s bank will offset some of the 4,500 new permit exempt wells that will be built in the Chehalis Basin over the next 20 years.

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