Tuesday, November 23, 2010

What Are Supplemental Groups and Sole Supply?

Generally, each water right in Utah is limited to a defined quantity for a defined use. Sometimes, however, multiple water rights are used together for one particular use. For example, three water rights may be jointly used to irrigate ten acres of land, or ten water rights may be jointly used to provide water for 200 head of cattle. In such cases, the water rights are said to be "supplemental" to each and are listed together in a “supplemental group.”

The water rights in the supplemental group are usually not assigned an individual limit, which is not an issue if the same person owns all of the water rights in the supplemental group and continues to use the group for the specified use. However, when some of the water rights in the supplemental group are sold to different people and/or an owner wants to file a change application on some of the water rights in the supplemental group, a determination has to be made regarding how much of the group total is to be apportioned to each water right in the group. This is what is referred to as “sole supply.” For example, if ten water rights are in a supplemental group that provides water for 200 head of cattle, each of the ten water rights could be apportioned a sole supply of 20 head of cattle. Alternatively, five of the water rights could be apportioned a sole supply of 40 head of cattle each, and the other five water rights could be apportioned a sole supply of 0 head of cattle each. The Division of Water Rights essentially allow the water right owner(s) to apportion the sole supply in any way they want, as long as the sum of the water rights does not exceed the group total and the allocation is consistent with the governing water right documents.

The Utah Division of Water Rights has recently issued Utah Administrative Rule R655-16 regarding supplemental groups and sole supply. The Rule provides that in order to allocate sole supply among the water rights in a supplemental group, all of the water right owners in the group must sign a Declaration of Beneficial Use (formerly called a Group Contribution Statement). If a water right owner has exhausted all reasonable efforts and has been unable to locate or get signatures from all of the other water right owners, the owner may ask the Division of Water Rights to initiate an informal proceeding to allocate the sole supply. To read more about Rule R655-16, click here.

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