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Waste Not, Want Not: Throwing The Baby Out?

NOTE: The Idaho law in this article was current as of the date of its publication in 2011, and may not be current.

Synopsis: This short note will discuss the question of whether an existing water right may be fractionalized and partially assigned to a third-party to provide more than one beneficial use from the same diversion.

Introduction: In Idaho, a water right is usually granted to a single entity for a single beneficial use and only for the time period that such use continues.[1]However, many water rights in Idaho are used for two beneficial uses, such as stockwater and irrigation.[2]This note argues that two entities, such as a municipality and a power generation for-profit company, may enjoy two separately recognized rights in water originating from a single diversion point. This could occur by assigning a portion of the original municipal right at the point it becomes wastewater to a for-profit power generator.

What is the “nature of the use” of water?

One of the characteristics of a water right in Idaho is the nature of the use. “The requirement of beneficial use is repeatedly referred to throughout the Idaho Code. Beneficial use is enmeshed in the nature of a water right, which is explained in I.C. § 42-101.”[3]However, I.C. § 42-101 discusses the nature of property in water and not specifically the nature of the uses to which it is beneficially put. We can divine from that statute that the nature of a water right is “essential to the industrial prosperity of [Idaho] . . . all [of Idaho’s] agricultural development,” and those applying it to beneficial use must use it economically.[4]Thus, the nature-of-use element of a water right is better defined as domestic, commercial, industrial, irrigation, stockwater mining, or municipal.

Pursuant to I.C. § 42-202B(5), a municipal provider means:

(a) a municipality that provides water for municipal purposes to its residents and other users within its service area; (b) any corporation or association holding a franchise to supply water for municipal purposes, or a political subdivision of the state of Idaho authorized to supply water for municipal purposes, and which does supply water, for municipal purposes to users within its service area; or (c) a corporation or association which supplies water for municipal purposes through water system regulated by the state of Idaho as a “public water supply” as described in section 39-103(12) Idaho Code.

According to I.C. § 42-202B(6), the definition of “municipal purposes” is:

[W]ater for residential, commercial, industrial, irrigation of parks and open space, and related purposes, excluding use of water from geothermal sources for heating, which a municipal provider is entitled or obligated to supply to all those users within a service area, including those located outside the boundaries of a municipality served by a municipal provider.

Power to the People?

The definition of municipal purposes does not appear to include power generation. Normally, water diverted for municipal purposes returns to the control of the State of Idaho after undergoing wastewater treatment, or by surface water runoff into streams, lakes, or underground sources such as aquifers through soil drainage. If a municipality would like to generate power for its citizens prior to the treated waters returning to the “waters of the state, when flowing in the natural channels,” would the Department of Water Resources (IDWR) recognize that beneficial use under the definition of municipal purposes, or would it find a hydropower water right was required?5

Idaho Code Section 42-203B assumes hydroelectric power is only generated upon natural streams “to the extent such [hydropower] right exceeds an established minimum [stream] flow.” Also, I.C. § 42-203C(1) requires a potential hydropower applicant to “appropriate water,” which by definition would be from a natural source diversion.6The statute does not address the situation of a municipal provider using wastewater that has been previously appropriated for municipal purposes. Therefore, it does not appear Idaho Code presently has a statutory mechanism for a municipal provider to have a water right to generate power from its outgoing wastewater flows prior to the return into the natural hydrologic system.

Splitting the Nature of the Use.

In Idaho, alterations in a water right are governed by I.C. § 42-222. This section provides that any person who desires to change the point of diversion or the place, period, or nature of use of the water must apply to the IDWR for approval.7A “water right” is “the legal right, however acquired, to the use of water for beneficial purposes.”8Since the word purposes is plural in the statute, the legislature has recognized that a single water right could be used for multiple beneficial purposes. Therefore, there is an expectation in the law that splitting the nature of the use is allowed.

Further, since I.C. § 42-101 requires “economical use by . . . those making a beneficial application of [water],” it is reasonable to recognize the ambiguity in the word “economical” by not restricting its definition to a recognition of the scarcity of water and the need for conservation. The definition should include the possibility of a water right user splitting the nature of the use of a particular water right for multiple beneficial purposes to foster and bolster economic growth.

Multiple Beneficial Uses of a Municipal Water Right.

Idaho Code Section 42-222 allows water right users “to change the point of diversion, place of use, period of use or nature of use of all or part of the water.” Therefore, if the nature of use of a municipal water right is 100 % for municipal purposes, a municipality should be able to apply for some percentage of that water right to be reallocated for hydropower purposes to the extent that the diverted water leaves the municipal system in the form of wastewater. Allowing a municipality to apply to IDWR for such fractionalization of the water to be diverted into multiple “natures” of use, would appear to be in accord with I.C. § 42-206 related to appropriations of water for power purposes, even though a permit to appropriate water would not be processed by a municipality.9

Assignment of the Water Right for Municipal Profit.

Pursuant to I.C. § 42-207, “the holder of a permit to appropriate water for power purposes” may assign such permit through an application process with IDWR. The application process is to make sure the assignee “possesses the qualifications set forth in section 42-206,” and meets other criteria. Since a pending permit for water rights would not be processed for alteration in the nature of the use of an existing municipal right under I.C. § 42-222, I.C. § 42-248 would apply.

Pursuant to Section 42-248, “all persons owning or claiming ownership of a right to use the water . . . shall provide notice to [IDWR] of any change in ownership of any part of the water right . . . within 120 days of [such] change.” (emphasis added.) Therefore, a municipal provider could apply to change the nature of its existing water right to add the beneficial purpose of generation of power from its wastewater. It could then assign or lease that right to a third-party for-profit power generator for either its own municipal purposes,10if it decided not to become a power generator itself,11 or for such power to be sold for profit into the electrical grid with proceeds from the sale going back into the municipal budget.12

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[1]I.C. § 42-104.

 

 

 

 

 

 

 

[2]See IDWR Water Right No. 37-4171;     http://www.idwr.idaho.gov/apps/ExtSearch/SearchWRAJ.asp.

 

 

 

 

 

 

 

[3]United States v. Pioneer Irr. Dist., 144 Idaho 106, 113, 157 P.3d 600, 607 (Idaho 2007).

 

 

 

 

 

 

 

[4]I.C. § 42-101.

5 I.C. § 42-101.

6 I.C. § 42-103.

7 I.C. § 42-222(1).

8 I.C. § 42-230 (e).

9 See I.C. § 42-207.

10 I.C. § 50-326.

11 I.C. § 50-325.

12 I.C. § 50-327.

 

 

 

 

 

 

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