Here are some of the likely effects on landowners of the new Edwards Aquifer Authority v. Day decision by the Texas Supreme Court:
(1) Landowners within the jurisdiction of the Edwards Aquifer Authority, who prior to this thought that they had no hope of pumping more groundwater than allowed by permits based on their historic use, may now have the power to force the Authority to revise its rules to allow them the right to pump more groundwater or else pay them the value of the pumping rights denied.
(2) Correspondingly, the Edwards Aquifer Authority may have to either (i) revise its rules to reopen its permitting process to landowners previously ineligible for withdrawal rights, and thereby diminish the value of permits previously issued only to those who could demonstrate the requisite historic beneficial use (most likely by reducing the amount that each permittee is entitled to pump), or (ii) expend such large sums of money on compensation and costs of litigation that it will have to raise the fees charged to its existing permittees to painful, unanticipated levels.
(3) Groundwater Conservation Districts throughout the state may have to revise their rules for allocation of pumping rights in order to manage the groundwater determined to be available so as to attain the “desired future conditions” required by amendments to the Texas Water Code in 2005.
(4) Correspondingly, a landowner in a District who has been denied a withdrawal permit, or who under existing rules may not have applied, may have a constitutional “takings” claim like that recognized by the Court in the Day case that he or she can press for either just compensation or amendment of the District’s permitting rules.
(5) The value of previously granted groundwater rights that have been traded or held for future trading may have been diluted, to the extent that their value was based on privileged pumping rights denied to others within the District who could not demonstrate the requisite historic use.
The market for sales and leases of groundwater in the state has been placed on a more solid foundation by this recent court decision, but other factors and the possible effects listed above make this arena complex.