Interruptible Water Markets in the Pacific Northwest

This paper analyzes the potential for using a market to shift water from irrigation to hydropower use in periods of low river flow in the Snake River basin of Idaho. The water could be used for irrigation in most years but in dry years would be very valuable for firming up electric power supplies. A model of crop growth and water use was utilized to estimate farmer responses and resulting farm income losses due to market‐restricted irrigation water supplies. Results indicate that estimated hydropower benefits are ten times greater than estimated lost farm income, so the proposed water market should be economically feasible.