South of Delta Transfers in Discussion for May

Nasdaq Veles California Water Index

(NQH2O) $408.67 {UNCH} as of April 23, 2025

Water Market Prices and Trading 4/14/2025 – 4/18/2025

April has seen no spot market activity South of the Delta (SOD), which is abnormal for the region. The last time no April transactions occurred was in 2017 and 2018, when allocations were 85%-100% (SWP/CVP) in 2017 and 35%-50% in 2018. Typically, April marks the shift from transfers of carryover supplies to the current year’s allocations, and an average of four spot market transfers are completed. In low allocation years, like 2020-2022, transfers are characterized as higher value/low volume. In high allocation years like 2019 and 2023, transfers are low value/high volume.

Historic April Prices, Volumes, and Allocations, 2013 – 2024

Market participants who regularly transact in April indicate they were not looking to initiate spot market transfers for 2025. These participants note that after two higher-than-average water years, their water portfolios are large enough to satisfy demands without needing to purchase additional supplies. Other participants who will need additional supplies are hoping for a final increase in allocations.

If allocations increase, potential spot market transfers will likely increase in volume and decrease in value. Final allocations for the State Water Project (SWP) are typically announced at the end of April or May, while the Central Valley Project (CVP) has historically announced final allocations as late as July. Project allocations were last increased at the end of March. Since then, the Water Supply Index for the San Joaquin Valley has increased from dry to below normal.

Current Trading Trends – Surface Water

Volume Traded:

13,935 AF Traded YTD

17% of Average Historical Volume Traded YTD

Number of Transactions:

7 Transfers Completed YTD

Latest Transfer Prices South-of-Delta (SOD):

$185/AF

South-of-Delta (SOD) Market Outlook: Spot market prices in 2025 have ranged from $185/AF to $375/AF. These prices reflect the value of carryover supplies. Prices for transfers of 2025 are currently in discussion as participants are entering negotiations for transfers to occur in May.

North-of-Delta Market (NOD) Outlook: Water transfer activity is expected to be minimal as the NOD region has high capacity and allocations. A couple of transfers are in negotiation for later in the year.

NOD-SOD Transfers Limited: Market participants are initiating discussions about potential transfers for 2025, including crop idling, reservoir release, and groundwater substitution transfers. Water transfer activity may increase in the summer when the through-Delta transfer window opens. Prices and trading volumes will depend on Delta conditions, reservoirs storage and project water allocations.

California Surface Water Markets

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