Sandy Valley residents knee-deep in water woes

An international corporation is quietly buying land and applying for unallocated ground water rights in Nevada, biding its time until thirsty, fast-growing cities such as Las Vegas demand more water.

Meanwhile, two other companies are seeking unallocated water rights in Southern Nevada that could some day supply cooling water for electrical generation or supply a booming population.

The potential encroachment on their basin's water makes residents of Sandy Valley, 30 miles southwest of Las Vegas, nervous. They fear that if the companies are allowed to draw on those rights, they will steal the water underneath their feet.

And Sandy Valley residents are not the only water users who are wary. San Bernardino County, Calif., officials have weighed in on requests that could remove 7,000 acre-feet of ground water a year from Sandy Valley.

Sandy Valley's basin annually recharges 2,200 acre-feet of water, with rainfall supplying 1,500 acre-feet of that total and the rest flowing from Pahrump Valley, according to the state engineer's records.

An acre-foot of water is enough to supply a family of four for a year.

Some residents of the rural town of 3,000 are getting angry, preparing to fight what they say is speculation. They say they don't want their water sacrificed for continued growth in the Las Vegas Valley.

Layne Rosequist, Sandy Valley Sod Farm president, has been a resident since 1975 and is worried that a private company will extract water that has been underground for thousands of years. Comparing such companies to mining, he said that they extract and deplete water, while sod farming allows the water to soak back into the ground.

Large companies "have played this game before," Rosequist said, referring to acquisitions that corporations have made around the West.

"We will not settle for anything less than keeping our water," Beth Bacher, another resident, said. "There is no room for a compromise on that."

PICO Holdings of California and Canada has purchased 1.27 million acres in Northern Nevada in the past three years. That makes it the largest landowner in the state, according to Security and Exchange Commission records.

PICO owns and develops water rights through a subsidiary, Vidler Water Co. of La Jolla, Calif., according to the SEC.

Vidler has applied for 2,000 acre-feet of deep ground water in Sandy Valley. Someday that water could supply an electrical generating plant for Reliant Energy of Houston or another utility if the state deregulates power generation, according to a strategy statement by Vidler Chief Operating Officer Dorothy Timian-Palmer andposted on its website.

But that's not the only option, it says. The majority of Vidler's customers will be municipalities or local government agencies. For now, she says, securing unallocated rights is Vidler's goal.

The late author Marc Reisner was a consultant for Vidler and explained water marketing in an overview also available on its website.

"In its simplest form, the company's strategy is to generate revenues by locating, aggregating, developing and converting water rights in a highly fragmented market from agricultural to municipal and industrial use," Reisner wrote more than a year ago.

The company intends to be "active, aggressive" in supplying water to Southwest cities, Reisner wrote. "It is the company's goal to capture a significant share of the water rights industry in each of the identified major metropolitan areas of the Southwest."

Other companies have similar designs on water but have specific projects in mind, such as electrical-generating projects.

Calpine Corp. also has applied for 5,000 acre-feet of water in Sandy Valley for developing a natural-gas-fired power plant, a company spokesman said. But Calpine of San Jose, Calif., has no firm commitment to build a plant near Sandy Valley, the spokesman said.

Calpine is working with the Moapa Paiute tribe to build a natural-gas-fired plant on its reservation, about 45 miles northeast of Las Vegas. The Paiutes can secure 7,000 acre-feet of water from the state engineer.

North Valley Holdings, a small Reno company, also has applied for 2,000 acre-feet of Sandy Valley's water for a future power plant. Chief Executive Earl Kessler had no comment on the water request.

No hearings have been set on the applications, according to State Engineer Hugh Ricci.

Many Sandy Valley residents aren't talking about the deals either because they feel intimidated by the sudden attention drawn to their ground water. They are waiting for Vidler to complete tests on how much water is in the basin and on its quality. Then their experts will review the information.

Attorney Byron Mills, who is representing about 30 Sandy Valley residents and other small water holders, said bidders vying for the basin's ground water are nothing but speculators.

Mills and his father, former U.S. Attorney Lamond Mills, have met with Vidler representatives and said they will not compromise because the residents rely on their wells for survival.

"They (Vidler officials) see water as a commodity and turn around and sell it to Las Vegas or the highest bidder," Byron Mills said. "A place like Sandy Valley depends on ground water, and most people cannot afford to drill their wells deeper when the water level drops."

Since 1980 the area has been declared a designated basin, which means to get water rights, property owners must prove they will put it to a beneficial use and not deplete the ground water.

That decision rests in Ricci's hands.

First, as state engineer, he determines if there is enough water to supply existing residents. If there is plenty of water, he determines if its proposed generating or industrial use benefits the area. If that harms residents, Ricci can deny the requests.

If any of the three bidders wins water rights, the use can be changed by asking the state engineer to hold more hearings, Ricci said. A water right for commercial use, for example, could become a city water supply later.

Vidler applied for water to supply commercial development sought by the Primm family, which built casinos along Interstate 15 near the California border, Ricci said.

Vidler requested tapping the deepest, oldest ground water on behalf of the Primms, Ricci said. A hearing has not been set because ground water tests are continuing.

Douglas Clemetson of the Northern Nevada development firm Nevdex -- Nevada Development in Excellence -- which represents the Primms, said that while the casinos have been sold to MGM MIRAGE, future area development the family wants to pursue hinges on water.

Vidler is searching for water "anyway we can get it," Clemetson said.

Vidler met with Sandy Valley residents and intends to address their concerns, Palmer said, by supplying water to the rural community if withdrawing it from the ground does harm.

"I have every intention of making that community of people happy," Palmer said. "I will do my best."

Palmer insists Vidler is willing to work with the residents, a goal explained on its website as offering a public-private partnership to small water companies and growing areas.

But the potential of working with a bigger municipality -- the Las Vegas metropolitan area -- is there, Mills points out.

If any of the bidders successfully claims a share of Sandy Valley's water, the rights could be saved until the Southern Nevada Water Authority needed more, then sold, Mills said.

The authority launched a quest of its own for more water, and the Las Vegas Valley Water District paved the way in the 1980s by filing for water rights all over the state.

Nevada receives a 300,000 acre-foot annual share of the Colorado River. As unexpected growth has swallowed that, local water officials have sought water rights along the Muddy and Virgin rivers, northeast of Las Vegas, and from ground water.

The authority hasn't received those water rights yet -- and hasn't needed them -- but it's planning for a future when it will.

Although the authority has no plans to blanket the desert along I-15 to the California border with pipelines and pumps, it does supply select communities such as Jean and Blue Diamond, spokesman Vince Alberta said.

It takes water officials at least 10 years to plan expanded services, and it takes four years to install pipes and pumps, he said.

However, water planners are keeping an eye on the area southwest of Las Vegas, waiting to see if growth along I-15 requires expansion, he said. For example, the proposed Ivanpah airport may generate development, but it could take years for scientists to study the environmental effects, he said.

Meanwhile, PICO, Vidler and other companies are not waiting until there is a water crisis. They have been working to buy land and secure water rights elsewhere in Nevada, and in Arizona and Colorado.

In Nevada, Vidler has applied for 100,000 acre-feet of water in Lincoln County. It plans to share 17,000 acre-feet of that with Mesquite, which is about 50 miles south of the water's source, according to SEC commission records.

Another 6,700 acre-feet would be used for building a power plant.

Palmer called the Lincoln water deal "a partnership," adding that the company will not move into a community without its consent.

Vidler bought Fish Springs Ranch with its 8,000 acre-feet of water in Honey Lake Valley north of Reno, and Robison Ranch in White Pine County, 40 miles west of Ely, with its 20,000 acre-feet, in the past two years. The SEC report reflected Vidler's intent to sell water to Southern Nevada in the future from Robison Ranch.

The Northern Nevada parcels also contain wildlife and other potentially sensitive habitats that PICO could offer to federal agencies to trade for other lands for development, the SEC records say.

In Arizona, the company secured a permit on Sept. 26 to recharge 100,000 acre-feet of water a year into La Paz County, 75 miles northwest of Phoenix. The company already controls 55,913 acre-feet of ground water in the Harquahala Valley, outside Phoenix, with an eye to selling it to the city.

The water is being stored in Arizona's ground for future use, and Vidler can then sell its underground resource.

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