378 P.3d 1246
Utah Ct. App.2016Background
- Kane County and San Juan County Water Conservancy Districts (the Districts) leased their state‑approved but unused water rights to Blue Castle Holdings for a proposed phased nuclear power plant near Green River, Utah; leases and storage plans required approved change applications to move points of diversion to the Green River and change the nature of use.
- Applicants sought to change diversions from smaller tributaries/Lake Powell/San Juan River to a single point on the Green River and to store water in a reservoir on the project site; Blue Castle had invested about $17.5 million toward site work and NRC Early Site Permit materials.
- The State Engineer approved both change applications in 2012 after administrative hearings; many protests followed and HEAL Utah sought de novo judicial review in district court under the administrative‑review process.
- The district court applied the "reason to believe" standard under Utah Code § 73‑3‑8 and found: (1) unappropriated water exists in the Colorado River Basin portion allotted to Utah (including the Green River); (2) the proposed diversions would not unreasonably affect the natural stream environment or public welfare based on the record; and (3) the project is physically and economically feasible and not speculative.
- HEAL Utah appealed, arguing (a) no unappropriated water exists in the proposed source; (b) the diversions unreasonably impair the stream environment and public welfare (including endangered‑species/recovery program concerns); and (c) the project is speculative and not feasible.
- The Court of Appeals affirmed, emphasizing the low "reason to believe" standard for change applications, deference to the district court’s factual findings, and HEAL Utah’s failure to marshal record evidence undermining those findings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is there reason to believe unappropriated water exists in the Green River for the proposed changes? | HEAL: Green River is over‑apportioned; Flaming Gorge releases used for ESA recovery are not legally available for appropriation. | Applicants: Much of Utah’s Colorado Basin allocation is undeveloped; measurement is based on water put to beneficial use; Flaming Gorge releases do not preclude lawful appropriation and the proposed point relies on tributary flows too. | Court: Affirmed — record supports a reasonable belief that unappropriated water exists; Flaming Gorge releases and tributary flows do not make the source legally unavailable. |
| Will the proposed diversions unreasonably affect the natural stream environment or public welfare? | HEAL: Diversions will undermine the Flaming Gorge recovery program, harm endangered fish and local recreation/agriculture, and threaten public welfare. | Applicants: Modeling and expert evidence show minimal depth/width reductions (e.g., <1.5 inches depth 99% of time) and regulatory licensing (NRC and federal/state oversight) will prevent unsafe operations. | Court: Affirmed — district court reasonably found no demonstrated unreasonable effect or public welfare detriment given the evidence and regulatory safeguards. |
| Are the proposed changes physically and economically feasible? | HEAL: Project is at an early stage, lacks NRC approvals and sufficient economic expert proof; feasibility is speculative. | Applicants: Site is physically suitable, early NRC permitting steps completed, business plan, contracts, expert testimony on energy economics and market demand support economic feasibility. | Court: Affirmed — under the low "reason to believe" standard, evidence sufficed to show feasibility. |
| Are the applications speculative or filed to monopolize water? | HEAL: Blue Castle’s plan depends on future partners and does not hold title to site; therefore use of water is speculative. | Applicants: Leases and contracts, substantial expenditures, a defined use (nuclear generation), and a development plan show good faith and non‑speculative intent. | Court: Affirmed — not speculative; applicants filed in good faith and had concrete commitments and expenditures. |
Key Cases Cited
- Little Cottonwood Water Co. v. Kimball, 289 P. 116 (Utah 1930) (approving appropriation should be favored when uncertainty exists and determining unappropriated water considers beneficial use)
- J.J.N.P. Co. v. Division of Wildlife Res., 655 P.2d 1133 (Utah 1982) (water is public property and allocation must serve public welfare)
- Green River Canal Co. v. Thayn, 84 P.3d 1134 (Utah 2003) (beneficial use is the basis, measure, and limit of water rights)
- Searle v. Milburn Irrigation Co., 133 P.3d 382 (Utah 2006) (reason‑to‑believe standard governs change applications; burden rests on applicant)
- Crafts v. Hansen, 667 P.2d 1068 (Utah 1983) (vested water rights include quality and quantity; change applications should not impair vested rights)
- Western Water, LLC v. Olds, 184 P.3d 578 (Utah 2008) (applications that are grandiose or lack lands/customers/contracts may be speculative and properly rejected)
- Power Reactor Development Co. v. Int’l Union of Electrical, Radio & Machine Workers, AFL‑CIO, 367 U.S. 396 (1961) (nuclear plant licenses must be issued consistently with public health and safety)