AQUIFER SPURS WATER-RIGHTS BATTLE

The San Luis Valley, a desert averaging seven inches of rain a year, may be sitting on one of the continent's largest aquifers. Far from easing competition over water, though, the prospect of a vast underground water supply has triggered a battle over how the precious resource should be developed, and by whom.

``The San Luis Valley Aquifer probably has more water in it than the Ogallala Aquifer, which provides water for several major agricultural states,'' said Maurice Strong, founder and chairman of American Water Development Inc.

``It's the first time I've seen the people of this valley get together and fight something,'' said retired water division engineer H.D. McFadden. ``That's because it's an outsider coming in here to take our water.''

The outsider in question is Mr. Strong's Denver-based American Water, which wants to drill 97 wells on its 155,000-acre Baca Grant Ranch and pump as much as 200,000 acre-feet a year from the aquifer, or slightly more than 6.5 billion gallons. An acre-foot is enough water to cover one acre a foot deep.

In a December 1986 application, the company said it wanted the water for ``ranch uses'' and agricultural projects. It said it eventually would sell the water to thirsty cities like Denver.

Company officials say the development will benefit the valley, creating jobs and encouraging new industries. The company maintains in its application that the aquifer is so big it can support current claims plus new projects.

The venture is opposed by virtually everyone with a stake in the valley's current water-rights system. The case could be heard as early as this fall in a specialized state water court. The Rio Grande Water Conservation District has led a costly court opposition. It had to more than double its millage levy in December 1987. Several federal agencies are also opposed.

Rio Grande district manager Ralph Curtis said the plan could deplete as much as 38 percent of the Closed Basin Project's water.