WaterWatch of Oregon v. Water Resources Dept. ( 2021 )

71
Argued and submitted April 29; decision of Court of Appeals reversed, judgment
of circuit court reversed, and case remanded to circuit court for further
proceedings December 23, 2021
WATERWATCH OF OREGON,
Petitioner on Review,
v.
WATER RESOURCES DEPARTMENT,
Respondent on Review,
and
WARM SPRINGS HYDRO LLC,
Respondent on Review.
(CC 16CV11938) (CA A165160) (SC S067938)
501 P3d 507
Warm Springs Hydro LLC holds a hydroelectric water right associated with a
former dam that has not diverted water since 1995. WaterWatch sought to compel
the Water Resources Department to find that ORS 543A.305(3) required that
hydroelectric water right to be converted to an in-stream water right because
the use of that right for hydroelectric purposes had ceased for a period of at least
five years. Respondents argued that the hydroelectric water right was not sub-
ject to conversion because it had been periodically leased to the state for use
as an in-stream water right, which tolled the statutory five-year time period.
On cross-motions for summary judgment, the trial court granted respondents’
motions, denied WaterWatch’s motion, and dismissed WaterWatch’s petition for
judicial review. The Court of Appeals affirmed. Held: (1) The use of water as an
in-stream water right under ORS 537.348 is not “use of water under a hydroelec-
tric water right” for purposes of ORS 543A.305(3); and (2) the hydroelectric water
right in this case, which has not been used for more than five years, other than
as an in-stream water right under ORS 537.348, is subject to conversion to an
in-stream water right under ORS 543A.305(3).
The decision of the Court of Appeals is reversed. The judgment of the cir-
cuit court is reversed, and the case is remanded to the circuit court for further
proceedings.
En Banc
On review from the Court of Appeals.*
Thomas M. Christ, Sussman Shank LLP, Portland,
argued the cause and filed the briefs for petitioner on review.
______________
* Appeal from Marion County Circuit Court, Audrey J. Broyles, Judge. 304
Or App 617, 468 P3d 478 (2020).
72 WaterWatch of Oregon v. Water Resources Dept.
Also on the briefs was Brian J. Posewitz, WaterWatch of
Oregon, Portland.
Carson L. Whitehead, Assistant Attorney General, Salem,
argued the cause and filed the brief on behalf of respondent
on review Water Resources Department. Also on the brief
were Ellen F. Rosenblum, Attorney General, and Benjamin
Gutman, Solicitor General.
Crystal S. Chase, Stoel Rives LLP, Portland, argued the
cause and filed the brief for respondent on review Warm
Springs Hydro LLC. Also on the brief were David E. Filippi,
Portland, and Merissa A. Moeller, Portland.
Emily Reber, Troutman Pepper Hamilton Sanders LLP,
Portland, filed the brief for amicus curiae Northwest
Hydroelectric Association. Also on the brief was Angela J.
Levin, San Francisco, California.
BALMER, J.
The decision of the Court of Appeals is reversed. The
judgment of the circuit court is reversed, and the case is
remanded to the circuit court for further proceedings.
Cite as 369 Or 71 (2021) 73
BALMER, J.
At issue in this case is whether the hydroelectric
water right for a hydroelectric power plant that has not oper-
ated for 26 years is subject to conversion to an in-stream
water right, upon a finding that such conversion would not
injure other existing water rights. Conversion of a hydroelec-
tric water right to an in-stream water right by the Oregon
Water Resources Department (WRD) is required, upon such
a finding, “[f]ive years after the use of water under a hydro-
electric water right ceases.” ORS 543A.305(3). In this case,
the holder of a hydroelectric water right stopped operating
the associated hydroelectric power plant in eastern Oregon
(the “project”) in 1995 and the project was decommissioned;
afterward, the holder leased the water right to the state for
use as an in-stream water right. That lease has been peri-
odically renewed over the last 21 years and WRD has never
commenced the process for converting the hydroelectric water
right to an in-stream water right.
Whether the water right here should have been sub-
ject to conversion depends on the meaning and interaction
of two statutes: ORS 543A.305 (the “conversion statute”),
which, as described above, mandates the conversion of a
hydroelectric water right to an in-stream water right in cer-
tain circumstances, and ORS 537.348 (the “lease statute”),
which, among other things, allows a water right holder to
temporarily lease its water right to another for use as an
in-stream water right. WaterWatch argues that, under the
conversion statute, the hydroelectric right is subject to con-
version because no water has been used under that right
for hydroelectric purposes since 1995, and, therefore, use
has ceased. WRD and the current holder of that hydroelec-
tric water right, Warm Springs Hydro LLC (Warm Springs
Hydro),1 respond that the right is not subject to conversion
because, even though the water has not been used for hydro-
electric purposes, the water has been used for in-stream
purposes during the periodic leases of the water right to the
state under the lease statute. Therefore, respondents con-
tend, use did not entirely cease in any given five-year period.
1
We refer to the parties by their names, except when we refer to WRD and
Warm Springs Hydro together as “respondents.”
74 WaterWatch of Oregon v. Water Resources Dept.
For the reasons discussed below, we agree with
WaterWatch and hold that the hydroelectric water right now
held by Warm Springs Hydro is subject to conversion to an
in-stream water right under the terms of ORS 543A.305.
We therefore reverse the Court of Appeals’ decision and the
judgment of the circuit court and remand to the circuit court
for further proceedings.
I. LEGAL BACKGROUND
The statutes at issue in this case are part of a com-
plex and extensive set of laws governing Oregon water,
which, among other things, are variously designed to pro-
mote “the maintenance and conservation of the water
resources of this state,” ORS 196.605(1); to “encourage, pro-
mote and secure the maximum beneficial use and control” of
those resources, ORS 536.220(1)(b); to “provide domestic or
municipal and industrial water supply,” ORS 552.108(1); and
to create a “predictable, efficient regulatory framework for
environmentally acceptable development,” ORS 196.605(4).
See also ORS 536.310 (describing several factors considered
in formulating a state water resources program).
Those water law statutes, including the key statutes
in this case, ORS 543A.305 and ORS 537.348, were enacted
on a backdrop of common-law principles that continue to
guide Oregon water management, and we review some of
that background before addressing those key statutes.
Historically, two common-law doctrines have gov-
erned the use of surface water in Oregon and the rest of
the United States: riparianism and prior appropriation.
See Barton H. Thompson, Jr., John D. Leshy & Robert H.
Abrams, Legal Control of Water Resources 14-15 (5th ed
2013). The riparian doctrine, flowing from the English com-
mon law, assigns water rights based on the ownership of
land appurtenant to a water source. The riparian doctrine
generally applies in states on or east of the Mississippi River,
although Oregon and other West Coast states adopted some
components of riparianism. See id. at 28-33.
The prior appropriation doctrine, which originated
from rules applied by Gold Rush miners, applies in the drier,
western states. Under prior appropriation, available water
Cite as 369 Or 71 (2021) 75
is allocated on a first-in-time, first-in-right basis to anyone
who puts the water to a “beneficial use,” whether they own
land next to the water source or not. Water rights under
prior appropriation are assigned a priority date (usually the
date that water was first diverted), and in times of shortage,
rights with earlier priority dates are addressed fully before
rights with later priority dates. See id. at 168-73; Klamath
Irrigation District v. United States, 348 Or 15, 23-24, 227
P3d 1145 (2010).
At first, Oregon adopted a mixed water rights sys-
tem applying aspects of both doctrines. See, e.g., Brown v.
Baker, 39 Or 66, 70, 65 P 799, reh’g den, 39 Or 75, 66 P 193(1901) (recognizing both riparian and some appropriated
water rights). In 1909, however, the Water Rights Act, Or
Laws 1909, ch 216, established prior appropriation as “the
prevailing water law of Oregon.” Fort Vannoy Irrigation v.
Water Resources Comm., 345 Or 56, 64, 188 P3d 277 (2008).
As now codified, Oregon’s water law statutes provide
that “[a]ll water within the state from all sources of water
supply belongs to the public,” ORS 537.110, and that, subject
to existing rights and certain exceptions, “all waters within
the state may be appropriated for beneficial use, as provided
in the Water Rights Act and not otherwise.” ORS 537.120.
“Beneficial use” is not statutorily defined, but includes
at least “irrigation, domestic use, municipal water supply,
power development, public recreation, protection of commer-
cial and game fishing and wildlife, fire protection, mining,
industrial purposes, navigation, [and] scenic attraction.”
ORS 537.170(8)(a). Statutes provide for a system to cer-
tify water rights by which pre-1909 rights can be formally
adjudicated, ORS 539.140, and post-1909 rights can be per-
fected, ORS 537.250. Once a water right certificate issues,
the certificated rights continue “so long as the water shall
be applied to a beneficial use” under the terms of the cer-
tificate. ORS 537.250(3). The Water Rights Act permits the
transfer of water rights and the adjustment of time, place,
and type of permitted use, according to certain statutory
procedures. See ORS 540.520; ORS 540.530. If those proce-
dures are followed, the modification of water rights does not
impact their priority date. ORS 540.530(2)(a).
76 WaterWatch of Oregon v. Water Resources Dept.
If a water right holder does not put the water to a
beneficial use for any five successive years, the water right
is subject to forfeiture to the state. ORS 537.250(3); ORS
540.610(1). Once forfeited, water rights are then made avail-
able for reappropriation by water users. ORS 540.610(5).
That use-it-or-lose-it frame of prior appropriation
provides an incentive for water right holders to divert and
use as much water as possible to maintain their rights. But
as water conservation and sustainable river ecology became
increasingly recognized as public priorities from the 1950s
onward, states began to protect in-stream flows and encour-
age water users to allow water to remain undiverted. See
Janet Neuman, Anne Squier & Gail Achterman, Sometimes
a Great Notion: Oregon’s Instream Flow Experiments, 36
Env’t L 1125, 1133-36 (2006); Philip Roni & Tim Beechie,
Introduction to Restoration, in Stream and Watershed
Restoration 1, 5-6 (Philip Roni & Tim Beechie eds. 2013). In
Oregon, that largely began with the 1955 Water Resources
Act, which, among other things, recognized the importance
of minimum perennial in-stream flows.2 Or Laws 1955,
ch 707, § 10(3)(g).
Those minimum in-stream flows were converted to
in-stream water rights when, in 1987, Oregon passed the
In-stream Water Rights Act, the first of the key statutes in
this case. ORS 537.346(1) (converting minimum in-stream
flows); Or Laws 1987, ch 859 (the In-Stream Water Rights
Act); see generally Mary Ann King, Getting Our Feet Wet:
An Introduction to Water Trusts, 28 Harv Env’t L Rev 495,
504-05 (2004) (discussing history of in-stream water rights
in Oregon and Washington). That act recognized the validity
of in-stream water rights, which allow the amount of water
specified in the water right to be left flowing rather than be
diverted. ORS 537.332(3). Such rights had previously been
unavailable under the prior appropriation regime. The act
defines “in-stream water right” as:
2
There were limited precursors—a 1915 act withdrew certain streams flow-
ing into the Columbia Gorge from appropriation “to preserve their scenic beauty,”
including, for example, Multnomah Creek. Or Laws 1915, ch 36. A few other dis-
crete withdrawals for water quality purposes continued through the 1930s. See
Charles C. Reynolds, Comment, Protecting Oregon’s Free-Flowing Water, 19 Env’t
L 841, 844-45 (1989).
Cite as 369 Or 71 (2021) 77
“a water right held in trust by the Water Resources Depart-
ment for the benefit of the people of the State of Oregon
to maintain water in-stream for public use. An in-stream
water right does not require a diversion or any other means
of physical control over the water.”
Id. Thus, WRD is the trustee for all in-stream rights.
The In-stream Water Rights Act also established a
leasing and transfer system (the “lease statute”), by which
water right holders may, under certain conditions, lease all
or part of a water right for conversion to an in-stream water
right, maintaining the original priority date and forestall-
ing forfeiture for nonuse under ORS 540.610. ORS 537.348.
That system, as codified, provides, in part:
“(1) Any person may purchase or lease all or a portion of
an existing water right or accept a gift of all or a portion of
an existing water right for conversion to an in-stream water
right. Any water right converted to an in-stream water
right under this section shall retain the priority date of
the water right purchased, leased or received as a gift. At
the request of the person the Water Resources Commission
shall issue a new certificate for the in-stream water right
showing the original priority date of the purchased, gifted
or leased water right. Except as provided in subsections (2)
to (6) of this section, a person who transfers a water right
by purchase, lease or gift under this subsection shall com-
ply with the requirements for the transfer of a water right
under ORS 540.505 to 540.585 [(establishing procedures
for changes in use of water and transfer of water rights)].
“(2) Subject to subsections (3) to (6) of this section
[which concern split-use rights and departmental pro-
cedures], any person who has an existing water right may
lease all or a portion of the existing water right for use as an
in-stream water right for a specified period without the loss
of the original priority date. During the term of the lease,
the use of the water right as an in-stream water right shall
be considered a beneficial use. The term of the lease may
not exceed five years. There is no limitation on the number
of times that the lease may be renewed.”
(Emphases added.) Thus, those with existing water rights
may lease those rights to others in five-year (or shorter)
increments, and others may purchase, accept, or lease those
78 WaterWatch of Oregon v. Water Resources Dept.
rights, which WRD then holds in trust. The use of water
rights leased under that statute, whether they were hydro-
electric water rights or another kind of rights before they
were leased, qualifies as beneficial use and therefore fore-
stalls forfeiture for nonuse under ORS 540.610(1). We inter-
pret the In-stream Water Rights Act as applied to this case
more extensively below.
Along with regulating water rights and in-stream
flows, the Oregon legislature also has addressed hydro-
electric projects. As noted above, power generation has
long been considered a beneficial use of water in Oregon.
In 1931, the legislature created a new regulatory program
for hydroelectric projects and established the Hydroelectric
Commission (now the Water Resources Commission, Or
Laws 1985, ch 673) to govern their licensure and to oversee
development of state waters for power generation. Or Laws
1931, ch 67. Under that statute, the duration of hydroelec-
tric licenses is limited to 50 years, or, for projects regulated
by the Federal Energy Regulatory Commission (FERC), to
a term concurrent with the project’s federal license. ORS
543.260(1). (Section 6 of the Federal Power Act limits FERC
licenses to 50 years as well. 16 USC § 799.)
By the 1990s, over 50 years later, many of the state’s
hydroelectric licenses issued under the above-mentioned
statutes had expired or were nearing expiration, so the 1995
legislature created a “hydroelectric task force to recommend
a process and standards for a coordinated state review of
existing facilities.” ORS 543A.010 (task force created by Or
Laws 1995, ch 229, § 6). Based on that task force’s legislative
recommendations, the 1997 Legislative Assembly enacted
a suite of laws concerning reauthorization of hydroelectric
projects. ORS ch 543A. That legislation included one section
related to the decommissioning of hydroelectric projects.
That section, which is not at issue in this case, directs the
Water Resources Commission to adopt procedures regard-
ing project decommissioning and allows the commission to
order decommissioning of a project in certain circumstances.
ORS 543A.300.
The legislature also created another task force to
“develop recommendations for decommissioning.” Or Laws
Cite as 369 Or 71 (2021) 79
1997, ch 449, § 39(2). That task force recommended a provi-
sion that, as amended, became ORS 543A.305, the second
key statute in this case (along with the lease statute).3 ORS
543A.305, the conversion statute, establishes that, upon a
finding by the Water Resources Director that the conver-
sion will not injure other water rights, existing hydroelec-
tric water rights will be converted to in-stream water rights
“[f]ive years after the use of water under [the] hydroelectric
water right ceases.” That statute reads, in part:
“(3) Five years after the use of water under a hydroelec-
tric water right ceases, or upon expiration of a hydroelectric
water right not otherwise extended or reauthorized, or at
any time earlier with the written consent of the holder of
the hydroelectric water right, up to the full amount of the
water right associated with the hydroelectric project shall
be converted to an in-stream water right, upon a finding by
the Water Resources Director that the conversion will not
result in injury to other existing water rights. * * *
“* * * * *
“(6) If hydroelectric production is not the sole ben-
eficial use authorized by a water right, this section shall
apply only to conversion of that portion of the water right
used exclusively for hydroelectric purposes.”
ORS 543A.305 (emphasis added). In-stream water rights
created through the conversion mandated by that statute
are “maintained in perpetuity, in trust for the people of
the State of Oregon.” ORS 543A.305(2). According to the
report of the second task force, the intent of recommending
a conversion statute of some kind was “to provide water for
instream purposes while maintaining stability and the cur-
rent water regime among users.” In essence, by substituting
an in-stream water right for the hydroelectric water right
that has ceased being used (rather than allowing the water
to be reappropriated for another use), the decommissioning
of a project would not affect users up- or downstream from
the project.
3
The legislation as introduced had substantial additional provisions regard-
ing decommissioning, but they were not enacted, and the legislative history of
that bill beyond what is discussed here does not help illuminate the issues in this
case.
80 WaterWatch of Oregon v. Water Resources Dept.
With that understanding of historical and contem-
porary Oregon water law, we turn to the specific facts of the
case before us.
II. FACTUAL BACKGROUND
We take the facts, which are essentially undis-
puted, from the record in the trial court and before WRD.4
Rock Creek is a small stream in eastern Oregon that flows
into the Powder River, which, in turn, flows into the Snake
River. Rock Creek runs through the Elkhorn Mountains on
the historic lands of at least the Cayuse, Umatilla, Walla
Walla, and Nez Perce peoples, and is now partially within
the Wallowa-Whitman National Forest. The creek hosts
populations of rainbow, redband, and brook trout and is
also viable habitat for bull trout, which have been federally
designated as a threatened species under the Endangered
Species Act since 1998. 50 CFR § 17.11(h); Determination
of Threatened Status for the Klamath River and Columbia
River Distinct Population Segments of Bull Trout, 63 Fed
Reg 31,647 (June 10, 1998). Like many waters in Oregon and
throughout the West, Rock Creek has water quality issues
involving temperature, dissolved oxygen, sedimentation, and
pH levels.
In 1903, developers began building on Rock Creek
the hydroelectric power generation project at issue in this
case. The Rock Creek project would eventually include
a 70-foot-long concrete dam and intake structure, an
8,000-foot-long wooden flume, a 15-foot-long earthen dam,
a 2,720-foot-long penstock, and a powerhouse with two
400-kW generators. Completed in 1904 or 1905, the project
powered Baker City’s first electric lights and new streetcar
system. The company that owned the project eventually
merged with others to become the Eastern Oregon Light
and Power Company.
4
We also take judicial notice of the environmental assessment prepared
by FERC for the Rock Creek project. FERC, Environmental Assessment for
Hydropower License: Rock Creek Hydroelectric Project (2020) (Docket No. 12726-
002), available at https://cms.ferc.gov/sites/default/files/2020-07/P-12726-002%20
Rock%20Creek%20EA.pdf (accessed Dec 16, 2021); OEC 201(b)(2) (so permitting);
see also Fort Vannoy Irrigation, 345 Or at 84 n 19 (taking judicial notice of water
right certificate and related official documents prepared by government agency).
Cite as 369 Or 71 (2021) 81
In 1923, after the Oregon Legislative Assembly
established procedures for the perfection of water rights,
Or Laws 1909, ch 216, Eastern Oregon Light and Power
Company obtained a water right certificate from the state
allowing the use of 13 cubic feet of water per second from
Rock Creek for the purpose of “Power.” That certificate has
a priority date of 1902. (A water right that does not expire,
such as this one, is sometimes called a “power claim,” see,
e.g., ORS 543.075(4) (defining “power claimant”), but that
terminology does not affect this case, and we refer to the
right here as a “water right” throughout.)
Eastern Oregon Light and Power Company became
part of the California-Pacific Utility Company, to which
FERC issued a 50-year license for the project in 1946.
In 1988, the California-Pacific Utility Company trans-
ferred the license to what is now the Oregon Trail Electric
Cooperative (OTEC). In 1995, OTEC shut the project down
and stopped diverting water. The project’s FERC license
expired the following year. After expiration, a FERC license
must be formally “surrendered” to remove the project from
federal jurisdiction and oversight. See 16 USC § 799; 18 CFR
pt 6 (2021). FERC approved the surrender of the Rock Creek
project’s license in 2003.
In 2000, after ORS 543A.305 was enacted, but less
than five years after OTEC stopped diverting water from
Rock Creek, OTEC briefly leased its hydroelectric water
right to the state for use as an in-stream water right for
10 months. OTEC eventually transferred the remaining
components of the project and the associated water right to
another company, which renewed the in-stream water right
lease to the state from 2005 to 2009, and again from 2010 to
2011. After that, Warm Springs Hydro became involved and
acquired the water right associated with the project and
again renewed the water right lease to the state from 2015
to 2020.
At some point, WaterWatch grew concerned that
Warm Springs Hydro intended to restart the project after
the next lease term ended, 25 years after the project had last
diverted water. WaterWatch therefore petitioned WRD to
reconsider its approval of the 2015 in-stream lease renewal.
82 WaterWatch of Oregon v. Water Resources Dept.
WaterWatch contended that the periodic lease renewals
were an attempt to circumvent the conversion statute, and
that WRD was required under that statute to convert Warm
Springs Hydro’s water right to an in-stream water right
held by the state. WRD did not act on the petition, and it
was deemed denied.
WaterWatch petitioned for judicial review of WRD’s
approval of the lease renewal5 and to compel WRD to initi-
ate the conversion process. See ORS 536.075(1) (providing for
judicial review of orders other than contested cases issued
by WRD); ORS 183.484(1) (conferring jurisdiction for review
of orders other than contested cases on the circuit court);
ORS 183.490 (authorizing the circuit court to “compel an
agency to act where it has unlawfully refused to act or make
a decision or unreasonably delayed taking action or making
a decision”). Warm Springs Hydro intervened in the action,
opposing WaterWatch, and the parties filed cross-motions
for summary judgment regarding, for the most part, the
interpretation and application of the conversion process for a
hydroelectric water right that is set out in ORS 543A.305(3).
The trial court concluded that any beneficial use
of water under Warm Springs Hydro’s water right (includ-
ing in-stream water uses under a lease) restarted the five-
year clock in the conversion statute, and that beneficial use
had occurred at least once every five years since diversion
stopped. The court therefore granted summary judgment in
favor of respondents, denied WaterWatch’s motion, and dis-
missed the action.
WaterWatch appealed the trial court judgment to
the Court of Appeals, which affirmed. WaterWatch of Oregon
v. Water Resources Dept., 304 Or App 617, 468 P3d 478 (2020).
The Court of Appeals interpreted the phrase “use of water
under a hydroelectric water right” in ORS 543A.305(3)
to include “any beneficial use” of water associated with a
hydroelectric project. Id. at 630. The court reasoned that,
because the water associated with the Rock Creek proj-
ect had been periodically leased to the state and used for
5
While this case was pending, the term of the most recent lease expired, pos-
sibly rendering WaterWatch’s petition on that issue moot. The action to compel
WRD to initiate the conversion process, however, remains a live issue on appeal.
Cite as 369 Or 71 (2021) 83
in-stream purposes at least once every five years, no five-
year period had passed since the use of that water “ceased,”
and the right was not subject to conversion. Id. at 633-34.
We allowed WaterWatch’s petition for review.
III. ANALYSIS
The question before us on review is whether the
hydroelectric water right now held by Warm Springs Hydro,
which has been leased to the state periodically for over 20
years, became subject to conversion to an in-stream water
right under the conversion statute at some point during
that period. The answer depends on whether the “use of
water under [the] hydroelectric water right cease[d],” and
if so, when. ORS 543A.305(3). WaterWatch points out that
no water has been diverted or otherwise used for hydroelec-
tric purposes under the right since 1995 and contends that
the hydroelectric right is therefore subject to conversion—
and that it should have been considered as such as early as
2000. Respondents counter that, because WRD was using
the right as an “in-stream water right” during the terms of
the periodic leases of the right to the state under the lease
statute, use has not ceased and the right therefore never
became subject to conversion. Thus, the outcome of this case
depends on the meaning of and interaction between the
conversion statute and the lease statute. We examine those
statutes in that order, looking to the statutes’ text, context,
and, as appropriate, legislative history. State v. Gaines, 346
Or 160, 171-72, 206 P3d 1042 (2009).
A. The Conversion Statute, ORS 543A.305
The conversion statute provides, in part:
“Five years after the use of water under a hydroelec-
tric water right ceases, * * * up to the full amount of the
water right associated with the hydroelectric project shall
be converted to an in-stream water right, upon a finding by
the Water Resources Director that the conversion will not
result in injury to other existing water rights.”
ORS 543A.305(3). The parties dispute what “the use of
water under a hydroelectric water right ceases” means and,
therefore, when the conversion statute is triggered. There
84 WaterWatch of Oregon v. Water Resources Dept.
are two key components to that phrase: what it means to use
water “under a hydroelectric water right” and what it means
for that use to “cease[ ].”
Regarding the first phrase, WaterWatch argues that
“the use of water under a hydroelectric water right” means
only hydroelectric use, while respondents contend that that
phrase includes any lawful, beneficial use. Turning first to
the text of the statute, we note that, by statute, the term
“water right” “includes the use of water for hydroelectric
purposes” pursuant to a state license. ORS 543A.005(8).
That definition, however, does not resolve the meaning of
“hydroelectric water right.” We therefore turn to the stat-
ute’s context, including related water law statutes. Drawing
on the legal background discussed above, we highlight the
statutes that are particularly relevant here to demonstrate
that, as WaterWatch argues, for purposes of the conversion
statute, water use “under a hydroelectric water right” can
only be hydroelectric use.
All water in Oregon belongs to the public. ORS
537.110. Water can be appropriated, however, for beneficial
use. ORS 537.120. With few exceptions, an appropriation can
be made only with a state-issued permit. ORS 537.130(2).
To get a permit, applicants must specify how they intend
to use the water. ORS 537.140(1)(a)(C). Whether or not an
application is approved depends, in part, on the nature of
the proposed use. ORS 537.160(1). Once a permit is issued,
water right holders may only appropriate water at the rate,
time, and place specified in the permit, and cannot use the
water for an unpermitted purpose. Changing the permitted
use requires a formal transfer process managed by WRD.
ORS 540.520; ORS 540.530.
We note that water rights were limited to specified
uses at common law, before the modern statutory water law
regime. See Simmons v. Winters, 21 Or 35, 44, 51, 27 P 7(1891) (“[I]n order to make a valid appropriation of water, it is
required to be made for some beneficial purpose then exist-
ing or contemplated, and that the amount of water appro-
priated must be restricted to the quantity needed for such
purpose. * * * That much [the right holders are] entitled to
use, when needed or necessary for the purposes specified.”).
Cite as 369 Or 71 (2021) 85
In 1908, this court held that a farmer’s irrigation water
right did not grant him “title to the water, but only the right
to use it for the purposes for which it was appropriated.”
Williams v. Altnow, 51 Or 275, 301, 303, 97 P 539 (1908) (on
rehearing). We further held that the farmer could not “sub-
sequently change or enlarge his use to [other appropriators’]
injury.” Id. The modern statutory regime serves to formalize
that common-law principle, but instead of merely assigning
liability for injury resulting from improper changes in use,
the statutes require water right holders to get approval from
WRD (including a determination of potential injury) before
changing the amount, place, time, or type of their use. ORS
540.520; ORS 540.530.
To refer to a water right for a particular kind of
use, the legislature sometimes uses adjectival phrases. For
example, as used in the conversion statute, “in-stream
water right” means a right “to maintain water in-stream for
public use.” ORS 537.332(3). An in-stream water right can,
in general, be used for no other purposes than in-stream
ones, such as recreation, habitat conservation, and naviga-
tion. See ORS 537.332(5) (identifying types of “public use”
for purposes of statutory definition of “in-stream water
right”). Thus, an “in-stream water right” does not permit
both in-stream uses and other beneficial uses that are not
in-stream uses, such as irrigation or bottling, and the adjec-
tive “in-stream” serves to describe the type of use permitted
by the water right.
Similarly, we understand the phrase “hydroelectric
water right” as used in the conversion statute to refer to a
water right that permits the use of water for hydroelectric
purposes. WRD raises the possibility that a hydroelectric
water right might permit hydroelectric and other uses, but,
as explained below, we conclude that that is not the case.
It is possible, of course, for a water right to permit
multiple beneficial uses, as specifically contemplated in
part of the conversion statute: “If hydroelectric production
is not the sole beneficial use authorized by a water right,
this section shall apply only to conversion of that portion of
the water right used exclusively for hydroelectric purposes.”
ORS 543A.305(6). Thus, “the water right associated with [a]
86 WaterWatch of Oregon v. Water Resources Dept.
hydroelectric project,” described in ORS 543A.305(3), might
not be solely a hydroelectric water right, and, in that case,
only the portion of the right that is used for solely hydro-
electric purposes would be subject to conversion. But water
rights that permit multiple uses are generally called “water
rights,” not a particular kind of water right (e.g., “hydroelec-
tric” or “in-stream”). ORS 543A.305(6) itself refers to a right
that authorizes multiple uses as simply “a water right.” If
a hydroelectric water right was one that authorized hydro-
electric use along with other uses, then we would expect the
legislature to have written the opening clause of that statute
to provide: “If hydroelectric production is not the sole benefi-
cial use authorized by a hydroelectric water right, * * *.” The
legislature did not write the statute that way, and the text
does not support respondents’ position.
To summarize, we understand the adjective “hydro-
electric” to describe the use permitted by a hydroelectric
water right. Although some water rights might authorize the
use of water for hydroelectric and other purposes, a “hydro-
electric water right,” by itself, permits the use of water only
for hydroelectric purposes. Here, the water right that is now
held by Warm Springs Hydro authorizes the use of water for
“Power.” We therefore understand that right to be a right
that permits the use of water solely for hydroelectric pur-
poses, that is, a hydroelectric water right, and not a right
that permits other beneficial uses.
We next consider what it means to use water “under”
a hydroelectric water right. ORS 543A.305(3). “Under,”
as used here, means “required by : in accordance with
: bound by * * * <rights ~ the law>.” Webster’s Third New Int’l
Dictionary 2487 (unabridged ed 2002). Use under a hydro-
electric water right is, therefore, use “in accordance with”
that right. Because hydroelectric water rights permit use
only for hydroelectric purposes, we conclude that “the use of
water under a hydroelectric water right” in ORS 543A.305(3)
refers to the use of water for hydroelectric purposes, as per-
mitted by such a right.
In opposition to that reading, respondents contend
that, even if a hydroelectric water right is one that authorizes
Cite as 369 Or 71 (2021) 87
hydroelectric use, the conversion statute itself does not spec-
ify any particular kind of use “under” that right, and thus,
any beneficial use of the water associated with the water
right is use “under” that right. Respondents emphasize that
the statute does not say “hydroelectric use of water under a
hydroelectric water right” or “use of water for hydroelectric
purposes,” and that the legislature has used similar phrases
elsewhere. If the legislature had meant to refer only to
hydroelectric use, they argue, it would have so specified in
the conversion statute.
That argument is not persuasive. As we have
already shown, the statute is clear despite the absence
noted by respondents of the extra modifier “hydroelectric.”
Warm Springs Hydro is correct that, as a general rule, “[t]he
legislature knows how to include qualifying language in a
statute when it wants to do so.” PGE v. Bureau of Labor and
Industries, 317 Or 606, 614, 859 P2d 1143 (1993). But we
do not expect the legislature to do so where, as here, that
qualifying language would be redundant or unnecessary to
understand the statute.
Respondents also argue, turning to context, that
the conversion statute should be read in light of Oregon’s
water rights regime more broadly and, in particular, ORS
540.610, which provides that water rights that go unused
for five successive years are subject to forfeiture. Any kind
of beneficial use tolls ORS 540.610, restarting that stat-
ute’s five-year clock. Respondents assert that the legislature
intended the conversion statute at issue here to operate the
same way, with any beneficial use tolling the conversion
statute.
That argument disregards the fact that ORS
540.610 and the conversion statute are worded differently
in a way that is meaningful here. ORS 540.610 is triggered
when the holder of a water right “ceases or fails to use all
or part of the water appropriated for a period of five suc-
cessive years.” ORS 540.610(1). That statute variably uses
the phrases “ceases or fails to use,” “the failure to use,” id.,and “failure to use beneficially,” ORS 540.610(2). The con-
version statute, in contrast, is triggered “[f]ive years after
88 WaterWatch of Oregon v. Water Resources Dept.
the use of water under a hydroelectric water right ceases.”
ORS 543A.305(3) (emphasis added). The conversion stat-
ute’s language is plainly narrower than ORS 540.610,
supporting the interpretation that, although ORS 540.610
refers to beneficial uses generally, the conversion statute
refers to the hydroelectric use of water, not any beneficial
use.
Our interpretation is further bolstered by the stat-
utes’ respective legislative histories. ORS 540.610 codified a
longstanding principle of prior appropriation broadly appli-
cable to water rights in Oregon that was generally intended
to encourage water use, rather than having water rights go
unexercised. Or Laws 1913, ch 279, § 1; Wimer v. Simmons,
27 Or 1, 6, 39 P 6 (1895) (“[A]bandonment may be express
and immediate, * * * or it may be implied from [the appropri-
ator’s] neglect, failure of application to the purpose designed
within a reasonable time, nonuse[ ], and the like.”); see also
ORS 536.220(1)(b) (declaring that it is the policy of the state
to “encourage, promote and secure the maximum beneficial
use and control” of water resources in the state). Putting
water to any beneficial use would serve that broad purpose.
The conversion statute, by contrast, was considered as part
of a bill addressing the narrower problem of hydroelectric
project decommissioning (most provisions of which were not
enacted). House Bill (HB) 2162 (1999). The task force that
drafted an initial version of the conversion statute at the
legislature’s request wrote that the purpose of the conver-
sion requirement was “to provide water for instream pur-
poses while maintaining stability and the current water
regime among users.” To the extent that the legislature
may have taken up that purpose, we note that interpret-
ing the conversion statute to be tolled by any beneficial use
would not serve that end. Substituting one use for another—
particularly one, like hydroelectric use, that requires diver-
sion for one that does not—could affect or harm other appro-
priators, and thereby not “maintain[ ] stability” in the cur-
rent water regime.
For those reasons, we reject respondents’ invitation
to read the conversion statute as parallel to the forfeiture
statute, ORS 540.610, and we interpret “the use of water
Cite as 369 Or 71 (2021) 89
under a hydroelectric water right” to refer only to use for
hydroelectric purposes.6
Having established what it means to use water
under a hydroelectric water right, we next consider what it
means for that use to “cease[ ].” WaterWatch and WRD pro-
vide only limited argument as to the proper interpretation
of the word “cease[ ].” WaterWatch asserts that “ ‘ceases,’ in
the context of ‘decommissioning,’ means a discontinuation of
use intended to be permanent.” WaterWatch also posits that,
whatever “cease” means, use of the water here must have
ceased no later than 2003 because, by that point, “it was not
possible, legally or physically, to use the water for [hydro-
electric] purpose[s].” WRD, for its part, largely ignores the
word “ceases,” although it does substitute at one point the
phrase, “the use of water stopping.” Warm Springs Hydro,
on the other hand, interprets “cease[ ]” more thoroughly, and
although we disagree with their ultimate statutory con-
clusion here, our interpretation of “cease[ ]” largely follows
theirs, as laid out below.
“Cease[ ],” as used intransitively here, means “to
come to an end : break off or taper off to a stop” or, alterna-
tively, “to give over or bring to an end an activity or action
: discontinue.” Webster’s at 358. Both of those dictionary
definitions connote permanence by referring to the “end” of
activities, rather than a pause. Id. Of course, what the con-
cept of permanence entails in the context of ceasing to use
water could be unclear, but the legislature specified in this
statute that there is a five-year timeline by which to measure
whether use has “cease[d].” Applying the above definitions to
6
Warm Springs Hydro cautions that, in adopting the above position whereby
the conversion statute refers only to hydroelectric use while the forfeiture statute
refers to any use, this court would be creating a “new rule of law specific to hydro-
electric rights,” one that, in effect, may put a five-year clock on maintenance or
upgrades for hydroelectric projects in Oregon. That argument is misplaced. The
legislature enacted ORS 543A.305, and it expressly applies only to hydroelectric
water rights and does so more narrowly than the broader forfeiture scheme.
We also note that hydroelectric projects may still avoid conversion of their
water rights by changing the authorized use of their rights through the process
set out in ORS 540.520 and ORS 540.530. ORS 543A.305(7). Through that pro-
cess, hydroelectric projects faced with the prospect of a lengthy closure may be
able to maintain their ability to restart power generation in collaboration with
WRD.
90 WaterWatch of Oregon v. Water Resources Dept.
the conversion statute, we understand the statute to be trig-
gered once five years have passed during which water was
not used under a hydroelectric water right. Pausing tempo-
rarily is not the same as “ceas[ing],” so a temporary pause is
insufficient to trigger the statute.
Put another way, if the use of water under the hydro-
electric water right resumes within five years of a stoppage,
then that stoppage was temporary, and use did not “come
to an end” and therefore did not cease. Id. If use under the
hydroelectric right does not resume within five years of a
stoppage, then that stoppage is considered permanent, and
use has ceased—triggering the conversion statute. In that
respect, as the Court of Appeals noted, the first sentence of
ORS 543A.305(3) operates similarly to ORS 540.610, which
also refers to “ceas[ing]” use. WaterWatch of Oregon, 304 Or
App at 633. We observe that that reading comports with
the unavoidable need for hydroelectric projects to occasion-
ally pause diversion for emergencies, maintenance, or other
reasons.
WaterWatch’s assertion that “cease[ ]” means “a dis-
continuation of use intended to be permanent” is unfounded.
WaterWatch is correct that this statute was considered as
part of a larger bill on decommissioning, most of which, as
noted, was ultimately not enacted, but that context does
not lead to the result WaterWatch supposes, and even if
it did, the text could not bear such a result. By its text,
ORS 543A.305(3) is triggered five years after “the use” of
water ceases, not five years after a project’s owners decide
to decommission it or stop using water with the intent of
not resuming. The text indicates that when the statute is
triggered is an objective question, not an intent-based one.
WaterWatch’s reading, along with reaching far beyond the
text of the statute to incorporate the concept of intent, would,
as Warm Springs Hydro points out, require WRD and the
courts to attempt to discern whether a pause in the use of
water under a hydroelectric right was “intended” to be tem-
porary or permanent. Besides requiring the court to supply
the details for a standard which is not expressed in the text,
that standard would leave water users and WRD with no
clear indication of when conversion proceedings might be or
must be initiated.
Cite as 369 Or 71 (2021) 91
Respondents concede that the water associated
with the hydroelectric water right that is now held by Warm
Spring Hydro has not been used for hydroelectric purposes
since 1995. That use ceased.
Therefore, looking only at the conversion statute, the
hydroelectric water right for the Rock Creek project should
have been subject to conversion to an in-stream water right
five years later, in 2000. Respondents argue, however, that
the lease statute—which allows water associated with a
diversionary water right, like the hydroelectric water right
here, to be used for in-stream purposes—has the effect of
tolling the five-year period in the conversion statute. We
turn to that argument.
B. The Lease Statute, ORS 537.348
Respondents contend that, under their interpreta-
tion of the conversion statute, the water right is not subject
to conversion because the water was put to a lawful, benefi-
cial use at least once every five years since hydroelectric use
stopped. The use they refer to is the state’s use of the water
as an in-stream flow under the terms of the periodic leases
of the water right to the state under the lease statute. The
lease statute permits, among other things, the lease of an
existing water right “for conversion to an in-stream water
right.” ORS 537.348(1). In respondents’ view, that in-stream
use means that “the use of water under [the] hydroelectric
water right” has not ceased and that the conversion statute
therefore has not been triggered. ORS 543A.305(3).
WaterWatch observes that, under the lease stat-
ute, a leased water right is temporarily “converted to an
in-stream water right.” ORS 537.348(1). WaterWatch rea-
sons that, after conversion, the right is no longer a hydro-
electric water right. Thus, WaterWatch concludes, the use of
water under a right converted to an in-stream water right
by operation of ORS 537.348(1) is use under that in-stream
right and is no longer use under the previous hydroelectric
right.
Respondents, in contrast, posit that ORS 537.348(1)
and ORS 537.348(2) describe two different kinds of leases.
Under their reading, rights leased under subsection (1) of the
92 WaterWatch of Oregon v. Water Resources Dept.
lease statute are “converted” to in-stream water rights (and
are, WRD admits, no longer hydroelectric water rights), but
rights leased under subsection (2) of that statute are merely
“use[d] as” in-stream water rights. In respondents’ view, the
lease of a water right might be subject to subsection (1) or
(2), but not both. Respondents contend that the lease here
was subject to subsection (2), not subsection (1), and that,
therefore, the hydroelectric water right is not subject to con-
version to an in-stream water right under subsection (1).
WRD misreads the statute. By its plain text, ORS
537.348(1) describes how “[a]ny person” may acquire by
purchase, lease (as lessee), or gift, all or part of an existing
water right “for conversion to an in-stream water right.” The
transfer of a water right by such a purchase, lease, or gift,
must comply with the procedural requirements under ORS
540.505 to 540.585, the subsection states, except as provided
in ORS 537.348(2) to (6). ORS 537.348(2) then describes how
a person with an existing water right may lease that right
(as lessor) to another person “for use as an in-stream water
right for a specified period.” Subsection (2) further specifies
that the term of such lease may not exceed five years and
that such leases may be renewed any number of times. The
remainder of ORS 537.348 contains provisions concerning
split-use water rights and procedural requirements that are
not relevant here.
Subsections (1) and (2) are complementary and
describe, among other things, a unified leasing system: Sub-
section (1) applies to those acquiring or leasing (as lessee)
a water right that is to be converted to an in-stream water
right; subsection (2) applies to those who are leasing (as les-
sor) an existing water right for the conversion described in
subsection (1). Both subsections describe the same leases.
If those two subsections were intended to set up
different types of leases, as WRD contends, there would
be no reason for the legislature to specify that transferors
under subsection (1) must comply with the other transfer
statutes (ORS 540.505 to 540.585) “[e]xcept as provided in
subsections (2) to (6) of this section.” ORS 537.348(1). The
simplest and most straightforward reading of the statute as
a whole is not that the subsections somehow create different
Cite as 369 Or 71 (2021) 93
leasing programs, but that subsection (1) describes the ways
in which persons may acquire water rights for conversion
to in-stream water rights, and subsections (2) through (6)
describe the ways in which these particular kinds of trans-
fers diverge from those governed only by the broader trans-
fer statutes. WRD’s reading, by contrast, would render por-
tions of the statute meaningless.7
We note that our understanding is consistent with
WRD’s own regulations, which define “[i]nstream lease” to
mean “the conversion of all or a portion of an existing water
use subject to transfer to an instream water right for a spec-
ified time-period as authorized by ORS 537.348(2).” OAR
690-077-0010(14) (emphases added). Although that defini-
tion does not supersede the statutory text, it supports our
interpretation, and we observe that respondents’ position
here—that subsection (2) does not involve the “conversion”
of existing water rights to in-stream water rights—appears
to conflict with that regulatory definition, which expressly
defines a lease under subsection (2) to constitute a “conver-
sion.” Id.With that understanding of ORS 537.348, it is
apparent that any water right leased under that statute is
“converted to an in-stream water right,” either temporarily,
for the term of a lease, or permanently, following a transfer
through purchase or gift. The person holding the water right
may then “obtain a new certificate for the in-stream water
right.” Id. Once a hydroelectric right has been converted to
an in-stream water right, it is no longer a hydroelectric water
right for the duration of the conversion. Any use of the water
under the resulting in-stream water right is use under that
right, not use under the previous hydroelectric water right.
7
The version of ORS 537.348 enacted in 1987, Or Laws 1987, ch 859, § 9(1),
did not have the “except” text quoted above, which was added in 2013, Or Laws
2013, ch 165, § 1. To the extent that previous versions of ORS 537.348 may have
applied to the original lease and early renewals of the water right at issue here,
we understand those versions to similarly set up a single leasing system and not
to create separate leasing systems in subsections (1) and (2). In the original 1987
version of ORS 537.348, for example, which did not have any of the subsequently
added text on split use or other topics, subsection (1) still authorized the acqui-
sition of water rights for conversion, while subsection (2) authorized holders of
existing water rights to lease those rights for acquisition through subsection (1).
Or Laws 1987, ch 859, § 9.
94 WaterWatch of Oregon v. Water Resources Dept.
That conclusion aligns with our previously stated under-
standing of a hydroelectric water right as one that permits
the use of water for hydroelectric purposes; after conversion,
use of water for hydroelectric purposes is no longer permit-
ted, so there is no hydroelectric water right.
C. Application
We now apply the above understanding of the con-
version and leasing statutes to the water right at issue here.
As explained above, without some other statutory authori-
zation, the use of water under a hydroelectric water right is
use of that water for hydroelectric purposes. Five years after
the use of water under a hydroelectric water right ceases,
that right is subject to conversion to an in-stream water
right held in trust by WRD in perpetuity. ORS 543A.305(2).
The Rock Creek project, which relies on a solely hydroelec-
tric water right, has not used water for hydroelectric pur-
poses since 1995. The water right associated with that proj-
ect therefore was subject to conversion in 2000.
The periodic leases of the hydroelectric water right
to the state under the lease statute do not change the appli-
cation of the conversion statute. When OTEC leased the
hydroelectric water right to the state in 2000, and during
each subsequent lease renewal by subsequent right holders,
the right was temporarily converted to an in-stream water
right. The parties agree that any beneficial use forestalls
forfeiture, so that temporary use tolled ORS 540.610. But
only use under the hydroelectric right tolls the conversion
statute. After 1995, there was no use under the hydroelectric
right, and the conversion statute was therefore triggered.
The decision of the Court of Appeals is reversed.
The judgment of the circuit court is reversed, and the case
is remanded to the circuit court for further proceedings.