HEAL Utah v. Kane County Water Conservancy District

The Utah Court of Appeals recently issued its decision in the case of HEAL Utah v. Kane County Water Conservancy District. The primary issue in the case was whether the State Engineer had properly approved change applications for water use at a proposed nuclear power plant.

In 2009, two change applications were filed by Kane County Water Conservancy District and San Juan County Water Conservancy Districts (collectively, "the Districts") to move significant amounts of water upstream for use at a proposed nuclear power plant near Green River in Emery County. The Districts and Blue Castle Holdings, Inc., the developer of the power plant, had entered into water lease agreements that were contingent upon approvals of the change applications to move the water. After the change applications were published, the Division of Water Rights received nearly 80 protests. The Division held a hearing on the change applications in January 2010. In 2012, the Division issued two separate orders approving the change applications. HEAL Utah, a nonprofit organization that advocates for clean air and clean energy, appealed Division's approvals to the district court. The district court held a trial in the case, and ruled that the change applications met the statutory criteria and were therefore properly approved. HEAL Utah then appealed the district court's decision to the Utah Court of Appeals.

The Court began its opinion with a discussion of the change application process, the Colorado River Compact, and the procedural background of the case. The Court also laid out the standards of review, including that a change application is to be approved if "there is reason to believe" that (1) there is unappropriated water in the source, (2) the proposed use will not impair other water rights or interfere with the more beneficial use of water, (3) the proposed plan is physically and economically feasible and would not be detrimental to the public welfare, and (4) the applicant has the financial ability to complete the project. The Court then analyzed each of these factors based on the facts presented in this case.

First, the Court determined that there was reason to believe that there was unappropriated water in the Green River, despite the fact that Utah's allocation of the Colorado River system is "oversubscribed." The Court noted that although there are approved Utah filings--including the Districts' filings--that exceed Utah's 1.4 million acre-feet of allocated water, Utah is currently only using about 1 million acre-feet. The Court also concluded that it was proper for the Division to rely on water released from Flaming Gorge Reservoir in determining the availability of water in the Green River.

Next, the Court determined that there was reason to believe that the proposed changes would not unreasonably affect public welfare or the natural stream environment. HEAL Utah asserted that approval of the change applications would undermine the fish recovery programs on the Green River and would negatively impact the agricultural economy that depends on the Green River. The Court, however, determined that HEAL Utah had "failed to meet its burden of persuasion" on these issues.

Finally, the Court determined that there was reason to believe that the proposed changes were feasible and not speculative. The Court noted that although the power plant project is anticipated to cost between $15 and $20 billion dollars, Blue Castle had shown a financial ability to complete the project, including the $17.5 million already raised and spent on the project thus far. The Court also noted that "considerable evidence" had been presented to the district court that supported a conclusion that the project was feasible based on its location and the economic considerations associated with producing power for a growing Utah population. The Court clarified that the project was not speculative because Blue Castle has proposed a site for the plant, invested money to develop the plant, offered a detailed description for the proposed use of the water, and entered into contracts to develop the project (as distinguished from the Western Water case from 2008, in which an application was found to be speculative because the applicant had no lands, facilities, customers, or contracts to support its plan).

Based on these determinations, the Court affirmed that the change applications had been properly approved.

To read the full text of the opinion, click here.