“Traded water” represents a relatively small part of all water used by Californians but it has grown significantly over the past three decades. (A good deal of the water is bought and delivered under long-term contracts through an intricate network of state and federal aqueducts.) Annual trades in the early 1980s averaged just over 100,000 acre-feet. By 2011, the annual volume of water sold was 1.3 million acre-feet. One acre-foot is about 326,000 gallons, or a 12- to 18-month supply for an average California family.
Much of the new need has come from cities which represent 40 percent of market demand with more than three times as many purchases in 2011 than in the 1990s, according to Hanak’s analysis. Typically, cities buy rural water through long-term contracts to support development not just to get through a drought.
This year’s continuing severe drought has triggered the statewide rush to secure water wherever it can be found.
On the fateful Monday when Madera’s auction results were announced, the 12 winning bids ranged from $2,000 and $2,200 per acre-foot — was accepted.
http://www.mercurynews.com/news/ci_26181042/high-bidding-farmers-battle-water-auctions