What Is the Economic Impact of a Conservation Charge on Water Users?
Water users would bear the brunt of a conservation charge but, in general, the economic
impact to water users would be minimal. Moreover, if the proceeds from the charge were used
in part to offset the cost of implementing water conservation tools and better water management
for water users, the benefits of the fee would directly accrue to the water user.
Tables 18 and 19 below, itemize the impact to agriculture in the Rio Grande and Pecos
Basin from the assessment of a water conservation charge. Note that a conservation charge of
$2.00 per acre-foot represents less than 2% of the total farm costs incurred by the farmer.
Further, the reduction in net income (% of farm returns) resulting from the fees are less than 10%
in all regions with the exception of Carlsbad in the Pecos Basin.
Table 18: Impact of a Water Diversion Charge on Agriculture in Rio Grande Basin (2001)
$2.00 per aft for surface water and $2.00 per aft for groundwater
Diversion tax as
% of water delivery costs
% of cash operating costs
% of total farm costs