Archives for category: appraisals

Water Values and Electricity

March 26, 11 //
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First, thanks to David Zetland for recognizing this article on Aquanomics. I’d also like to thank David for not giving it the attention I thought it deserved, so I could repost it here.

Western Resource Advocates published the Every Drop Counts Report in January, 2011.

A good summary is provided here, but if you decide to read the entire 65 page document, you’ll also note that almost every section concludes with the same findings…. Policy and application vary from state to state and within different geographic regions. In other words, these markets are highly fragmented and localized. This is great if you are familiar with the local market, but an obvious barrier to trade and challenge facing the larger water market.

Personally, my cry is for STANDARDS–just for starters.

As a side, I also question the accuracy of some of the water prices presented, but I’ll save that discussion for a separate post.

the challenge of water right appraisals

April 7, 09 //
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Appraising water rights is easier said than done.  Here are four reasons why:

1. Water represents a dynamic resource continually changing in space and time. Sound familiar?  Just imagine the 3rd priority water right on the stream under the prior appropriation doctrine. You can appraise this water right at a high value one year and find out it is not available the next year, due to low water conditions.

2. Uncertainty regarding the quantification and administration of water rights. Many Western state’s ongoing adjudication processes have yet to settle the differences between water right claim abstracts and actual water.

3. The water market is young.  A limited number of comparable sales fail to create an accurate baseline for water values.

4. The four most popular appraisal methods a) land price differential, b) income capitalization, c) comparable sales and d) replacement cost-  all have their drawbacks.  But, we will save that topic for a later discussion.