This fall, facilitators from Oregon State University, private business and Representative Jackie Dingfelder, Chair of the House Energy and Environmental Committee, have conducted a series of roundtable meetings throughout the State of Oregon to discuss Oregon’s current water situation with water users and citizens of this state. The stated purpose of these meetings has been to idenitify Oregon’s water issues, opportunities and threats as viewed by water users, water purveyors, local governments, environmental groups and citizens, with an eye toward developing an Oregon plan for long-term water supply. The Governor’s office, the Oregon Legislature and the Oregon Water Resources Commission have all been activity involved and represented at these meetings.

We encourage you to attend and participate the last meeting in the roundtable series on Tuesday, October 21 in Salem Oregon.  The meeting will be begin at noon and adjourn at 6:00 pm and is free of charge to attend. For more information please visit: http://water.oregonstate.edu/roundtables/

Throughout the arid West, water users, state agencies and federal agencies have constructed reservoirs and ponds of varying size and capacity to store water for a variety of uses. Many irrigation districts or other water delivery organizations have acquired sizable reservoirs that were initially constructed by the Bureau of Reclamation or another federal agency for the storage of irrigation water.  These reservoirs create unique recreational opportunities for the citizens of the state who enjoy the use of these reservoirs for camping, fishing, boating and swimming.  In most circumstances, the recreational use occurring is promoted or encouraged by one or more state agency, though the state agency has no ownership interest in the facility.  

Owners of such facilities have a unique opportunity to enter into a recreational use contract(s) with the appropriate state agency to allow the recreational use. Recreational use contracts are beneficial to owner and operators of these facilities to protect the interests of the water organizations and users who use the water for irrigation and to maximize the fiscal opportunities to the organization.

Contracts for recreational use should include terms addressing:

1.Approved recreational uses and extent of recreational use;

2. Liability for injuries caused by recreational use;

3. Protection of stored irrigation water;

4. Duties and obligations regarding maintenance and repair work;

5. Reimbursement for maintaining a “minimum pool”.

These are a few, among many other, terms that should be included in a recreational use contract. Owners considering this action should consult legal counsel before entering a contract of this kind.

With food prices at all time highs, agricultural market prices rising, and water rights at a premium, now is the time to plan for the future.  We suggest that water users create and update water management plans with an eye to water rights security, stability, and development.  A water management plan will analyze the current state of the water rights designated and appurtenant to property or other boundary and will provide a tool to consider options for their use, development or marketing.  One can begin this work by emailing Kelley Wesson for a water rights authorization packet.

One can’t help but notice the increasing amount of wind-generation farms that are being installed throughout Oregon, Washington and the U.S.  At first glance, wind energy seems like a great idea with many people looking to jump on the bandwagon.  It provides clean renewable energy and helps stabilize energy costs and our nation’s dependence on foreign fuel sources.  However, it is not as simple as it may seem and careful feasibility and due diligence analysis must be made to determine if wind energy is right for you and your land.

There are three categories of systems that are available:

1.  Small Scale – for your own residential or commercial (office or farm) facility. These are small wind generation towers. These help to offset the individual owner’s utility costs.
Some of these systems allow the owner to be hooked up to the power grid, wherein any extra power the owner currently generates is fed directly to the grid.  Later when the owner needs power, they can take back from the grid at no-cost and use the credit on the power they previously supplied to the grid. This system is known as net metering. The owners power meter will actually track in both positive and negative directions.  Of course the owner doesn’t have to be connected to the grid and thus their power generation would be used at that moment in time unless additional equipment, like batteries, are installed to capture that generation – the stand alone system.
These smaller systems cost anywhere from $10,000 to $80,000 installed. They generally produce around 10 kilowatts (kW) to 25 kW in generating capacity, and can be up and running in about a year.

2.Community Program – group of landowners come together to install mid-sized wind generation towers and the power created is spread amongst the group.

3.  Large Scale and Utility Scale – wind farms that generate power to sell to distributors like PGE, Pacific Power, and Idaho Power for a profit.  These are the systems that usually produce 10 megawatts (“MW”) or more.  The cost is anywhere from $800,000 to $1,200,000 per turbine, in a multiple turbine system, and can be up and running in about five years, from first idea to completed construction.

Leasing the wind rights on your land to a developer is a viable option if you are not interested in going through the development process, and can provide you as the landowner with $3,000 to $4,000 per year for one 1.4 MW turbine, using .5 acre footprint that is spread over 50-75 acres of land.  Of course profit will be based on the amount of wind produced by that turbine, thus you want to make sure you have “windy land.”

The level of due diligence required to determine cost/benefits and feasibility will change depending on which system you are interested in.  The key things to remember and look at when assessing any of these systems are: goals including leasing versus developing, wind resources, amount of available land, energy needs or interconnection to the power grid, permitting through local and state governments, capital contributions available and amount of risk you are willing to assume, government grants and incentives and tax incentives and consequences.  There are different ways to structure these projects to make it worth the investment and minimize risks, but like property, each project is unique.  It is important to spend the time and money up-front in researching the opportunities and feasibility of any new business opportunity.

While the costs may ward off many potential developer candidates in prime site locations, there are several grants available for all systems including financing for the feasibility study.  There are also several different incentive programs available for project costs, taxes and production.  The range of these programs is great and should be considered specific to the proposed system.   With these grants and incentives, it can turn an $80,000 project into $10,000 project with a positive return on investment.  Thus with careful time and consideration spent up front, a landowner or company could turn this clean renewable energy resource into a profitable venture.

While much of Oregon’s manufacturing industry as a whole continues to decline, food manufacturing has maintained a rather steady presence over the past 50 years.

Oregon Business Magazine recently published findings made by WorkSource Oregon that show that the industry has continued to support over 20,000 jobs in the state throughout all the ups and downs of the economy.  WorkSource’s website currently reports the figure to be at 23,200, up 0.4% over the last year, while manufacturing as a whole is down by nearly 4.0%. 

To view the article, click on the following link:

http://www.oregonbusiness.com/.docs/action/detail/rid/33278/pg/10002

For more information and statistics regarding Oregon’s economy, check out the following sites:

WorkSource Oregon.

http://www.worksourceoregon.org and http://www.qualityinfo.org

Northwest Food Processors Association.

http://www.nwfpa.org

The Oregon Water Resources Department recently announced that the Department has $1.6 million available for funding under the Water Conservation, Reuse and Storage Grant Program.  Under the Program, OWRD will match up to $500,000 in funding from another source for each project.  The intent of the Program is to encourage feasibility studies and environmental analysis to investigate “innovative water conservation and reuse programs and environmentally sound storage projects.”  Applications are due September 1, 2008, and to be eligible applicants must have funding from a source other than the Program secured or in the process of being secured.  The Oregon Legislature established the Program in SB 1069 during the 2008 Session.

By Dominic Corollo

The House Subcommittee on Water and Power held a hearing adressing concerns over the impacts of invasive quagga mussels on Tuesday, June 24, 2008.

The hearing, entitled “The Silent Invasion: Finding Solutions to Minimize the Impacts of Invasive Quagga Mussels on Water Rates, Water Infrastructure and the Environment,” particularly focused on the threat the quagga mussels pose to water and power systems in the west.

The quaaga mussel is related the better-known zebra mussel.  Both species are thought to have been introduced to North America around 1988 from ballast water in ships from Eastern Europe entering the Great Lakes.  Since their introduction, both mussels have proliferated in the northern regions of the Midwest and have been documented in several western states, including California and Nevada.  Most scientists believe that quaggas have spread to new water bodies from the hulls of recreational boats.  In the right humidity and temperature range, the mussels can live up to a month out of water.

The quagga is a both a prolific feeder and breeder.  They rapidly filter algae out of the water, thereby altering the food chain and severely impacting ecosystems.  In addition to thriving off the nutrients in the water, the mussels rapidly reproduce and attach to both soft and hard surfaces, causing significant economic impact by clogging water intake structures, interfering with flows, decreasing pumping capacities, and impairing water quality.  At the hearing, aquatic specialist Dr. Charles O’Neill of Cornell University reported to the Committee that the impact of the quagga mussel has been felt across 23 states to the magnitude of $1 billion and $1.5 billion.  Dr. O’Neill explained that roughly one-half of the financial burden has been borne by the electric power generation industry, while the drinking water industry has paid out nearly one-third of the total cost. 

Researchers are still trying to develop effective methods for controlling the quagga mussel where it has already been established.  Thus, many states have implemented programs designed to increase public awareness and slow the spread of the mussel into new bodies of water.  In 2002, Oregon established the Invasive Species Council to address issues relating invasive species and the Oregon State Marine Board has a Clean Marina Program that encourages boaters to thoroughly clean their boats to prevent the transfer of invasive species between water bodies.  Fortunately, Oregon has yet to document the quagga anywhere in the state, but the mussel has already found its way into certain waters in California and Nevada. 

The quagga was first documented in the west in January 2007 when it was discovered in Lake Mead.  Since that time, the mussel has been recorded throughout the Lower Colorado system, including into California.  The Statesman Journal reports that the Southern California Metropolitan Water Authority spent $6 million last spring cleaning freshwater aqueducts of quagga mussels.

While western states are beginning to ramp up efforts to slow the mussel’s proliferation, the Committee hearing highlights just how large of a problem the mussels are causing.  Many people realize the destructive environmental effects of invasive species, but the effects the mussels are having on water systems are bringing this issue to the national level.

For people interested in learning more about invasive species, visit Oregon Invasive Species Council’s website at:   http://www.oregon.gov/OISC/ .   The Oregon Invasive Species Summit is scheduled for July 22, 2008.  To see a short video feature about the quagga mussel see the Oregon Public Broadcasting website link at: http://www.opb.org/programs/ofg/videos/view/11-Quagga-Mussles For a special report about the quagga mussel by the Statesman Journal see: http://www.statesmanjournal.com/apps/pbcs.dll/article?AID=/20080210/INVASIVE06/802100309/1034 For information regarding Oregon’s Clean Marina Program, see: http://www.boatoregon.com/OSMB/Clean/ANS.shtml

The recent draining of Roslyn Lake could pose potential problems for nearby homeowners that have relied on leaks from the lake to augment their shallow wells.

The manmade lake was scheduled to be drained for some time as a necessary step in decommissioning Marmot Dam on the Sandy River. PGE warned 22 homeowners that their wells would likely be affected, but the Oregonian reports that as many as 60 could see their wells dry up. PGE denies responsibility for any costs associated with having to drill deeper wells; cost that could reach $20,000 to $30,000.

Many residents feel that they were underrepresented in the administrative process leading up to the decision to drain Roslyn Lake. Certainly, this issue appears to have received little attention.

Unfortunately, injured residents that failed to comment on the removal project could have difficulty litigating this matter. However, with the trend of decommissioning diversion dam systems similar to Marmot, the situation serves as a reminder to rural homeowners to familiarize themselves with their water rights and the vulnerabilities of their water systems.

For the Oregonian’s account, see: http://www.oregonlive.com/

     The Oregon Water Resources Congress (OWRC), the Washington State Water Resources Association (WSWRA) , and the Idaho Water Users Association (IWUA) met in Spokane Washington on May 16, 2008 for the first of three Tri-State Meetings to be held this year.    

 OWRC, WSWRA, and IWUA are all organizations which promote the protection and use of water rights for its members though legislative action and policy development. The memberships of these organizations are primarily irrigation districts, canal companies and other special districts which supply or control water for agricultural use.    

The next Tri-State meeting will be held in Boise Idaho in August followed by a November meeting in Portland Oregon. To learn more about these organizations and their members go to:

OWRC: http://www.owrc.org/
WSWRA: http://www.wswra.org/
IWUA: http://iwua.org/

Storage capacity is obviously an important aspect of any municipal or domestic water supplier’s system. Increased storage capacity does any number of things for a water provider, including reducing the strain on equipment during summer peak demand times, increasing a water provider’s day-to-day flexibility, and providing for water during times of emergency.

We recently attended the ground breaking ceremony for South Fork Water Board’s new 2 million gallon reservoir. The excavation equipment was truly impressive, and the project should be fun to watch as it progresses over the summer. Present at the ceremony were South Fork Water Board Chair and West Linn Mayor Norm King, South Fork Water Board Vice-Chair and Oregon City Mayor Alice Norris, South Fork Water Board General Manager John Collins and staff, and the engineers, consultants and contractors overseeing and constructing the project.

Guest post by James Carver

I’ve worked for over thirty years in the field of water law in the office of the State Engineer and the Water Resources Department.  During those years I served as head of the Water Rights Division and later as Deputy State Engineer under Chris Wheeler.  I also presided over administrative hearings pertaining to water law for the State Engineer and his successor, the Director of the Water Resources Department.

Around the turn of the 19th century, Oregon saw a need for a system to document water use.  Recognizing that an orderly system for recording and prioritizing water rights would be necessary as water uses grew, the legislature, in 1909 adopted Oregon’s first comprehensive water code.  The code held priority and beneficial use as the standard for distributing water to growing agricultural and domestic needs.

Over the years, the Oregon legal system has fleshed out the scope of water rights and defined them as property rights akin to land.  The Oregon Supreme Court concluded that a perfected water right is a property right and an appurtenance to the real property on which it is used.  The legislature has also recognized new practices that satisfy beneficial use.  These include leaving water instream to ensure minimum stream flows exist to support various fish species.

Unfortunately, there is now a growing movement to distribute water based on a public benefit analysis without regard to priority.  Believers in this new distribution system argue that water rights holders have been given access to public water without a requirement for payment in return.  Therefore, they should be subject to losing the water if it is needs for the public good.  Since users never “owned” the water, it can be taken from them without compensation.  However, there are major drawbacks to such as system.

A water distribution system constantly subject to alterations based on nebulous concepts, such as the public good, will likely result in a great devaluation of land with water rights attached.  For example, lending institutions will become more hesitant to finance projects involving water because the water on which the project is based may disappear without compensation if the state decides the public good is better served by taking it.

The doctrine of prior appropriation is well established in Oregon and any departure from the current system may carry with it economic consequences that far outweigh possible benefits gained from applying more water to uses in the public good.

While irrigation districts formed under ORS 545 have no specific authority to accept municipal storm water or to convey that water, many irrigation districts have allowed near by cities to use their irrigation ditches and agricultural drains for storm water runoff. As urbanization continues to increase, the demand on the districts’ canals has reached new heights. Increased demand coupled with more environmental concerns and regulatory oversight have caused many districts to re-evaluate allowing use of their irrigation canals or agricultural drains for accepting urban, suburban and municipal drainage. Recently, the Pioneer Irrigation District initiated a lawsuit against the City of Caldwell Idaho to prevent the City from dumping municipal storm water into its irrigation canals.

From a City’s perspective, utilizing the existing delivery and drainage infrastructure is an attractive prospect. From the district’s perspective, allowing a city to use its canals requires consideration of the legal, financial and political issues that may arise. First the district must consider whether it may even accept the storm water pursuant to its authorizing statute and pursuant to it’s organizational by-laws, rules and regulations. Second the district must consider the impact the storm water will have on its users and the quality and quantity of water in its canals. If the district determines it may accept the storm water, it is imperative the terms and conditions of the city’s use of its canals and drains be specifically detailed in a storm water contract or other intergovernmental agreement. Many times these agreements can be a benefit to the district by increasing the financial resources of the district. Schroeder Laws Offices, P.C. can help districts consider these factors and make these determinations and agreements that will protect the district’s interests.

The final topic of discussion on the OWRC conference call addressed changing start card fees for constructing wells.

Start card fees, fees paid along with the notification of new well construction, partially fund the OWRD staff payroll. The fee is currently $125.00. OWRD is concerned that the fee is no longer sufficient to sustain the well inspection program and would like to establish a schedule to raise the fees moderately and frequently (as opposed to large increases every 5 or more years).

Once again, this topic generated a number of comments. The WaterWatch representative suggested that OWRD’s current cost recovery of roughly 30% through fees was not high enough and that a goal of nearly 100% recovery would be preferable. She called attention to increasing fees for issuing limited licenses and adding an additional fee for water right permit applicants who protest an OWRD order.

The Committee members expressed some agreement with the idea that OWRD should move towards a more comprehensive fee based structure with a goal of 50% cost recovery. Other attendees believed that water users would support increased fees because added revenue could allow OWRD to augment staff and work through application backlogs.

The next topic in the OWRD legislative concepts discussion is the creation of a water development fund.

OWRD discussed updating statutory language found in ORS 541.700-541.855 addressing financial aid to communities constructing water supply projects. OWRC members expressed some concern with this item because it involved project funding. Director Ward suggested that discussion of monitory issues could be postponed until the OWRC meeting taking place in Burns, OR on May 29 and 30 because there will be a more defined draft budget in place at that time.

There should be more lengthy discussions on this topic in the near future.

Good morning! The third part in my series of posts addresses some proposed changes to irrigation district transfer rules.

Currently, when an individual transfers the place of use of a water right any supplemental rights must be transferred with it or canceled. However, the statutes controlling irrigation districts do not explicitly allow for transfer of supplemental rights when primary rights are transferred. OWRD would like to update the irrigation district statutes, specifically ORS 540.570 and 540.580 to bring them in line with other transfer statutes.

The attendees had few substantive comments and generally agreed that a change in statutory language would be appropriate.

The second topic addressed during the OWRC teleconference was modifying language pertaining to statewide mitigation banks.

OWRD wants to modify statutory language to give itself explicit authority to create statewide mitigation banks. These mitigation banks can be used to offset effects of new water supply projects.

This proposed statutory change drew a few comments from attendees. A representative from WaterWatch expressed her organization’s concern that new statutory language must be precise so as to avoid creating loopholes that allow users to access water without adhering to the monthly rate limitations placed on the source permits. However, a representative from Special Districts Association of Oregon expressed a need for greater flexibility across regions so as to allow different water needs to come together.

The Oregon Water Resources Commission (“OWRC”) had its monthly conference call on Monday. In attendance were a majority of the OWRC members including: Ray Williams, Jay Rasmussen, Susie L. Smith, Dan Thorndike and Charles Barlow. Oregon Water Resources Department (“OWRD”) Director, Phil Ward, and a handful of his staff members were in attendance. Those attending the call at the OWRD offices in Salem included Kimberley Priestley (WaterWatch), Anita Winkler (Oregon Water Resources Congress), Katie Fast (Oregon Farm Bureau Federation) and Amanda Rich (Special Districts Association of Oregon).

The agenda covered legislative concepts that OWRD will be developing during the 2009 and 2011 sessions. I will post short summaries on each concept over the course of the next week. Today I’m going to talk about the first topic that OWRC addressed: instream leasing.

Currently instream leasing is not an option for a holder of a water right claim involved in an adjudication. A final decree must be issued before instream leases can occur. OWRD would like to open instream leasing to claims in an adjudication as soon as a final order is issued so water right holders can lease water and show beneficial use during seasons when the user does not need the water.

There wasn’t significant discussion on this topic. Tomorrow I’ll be talking about statewide mitigation banks.

Our work in Armenia involves reviewing contracts between the State and a couple of the largest water purveying companies in the world, Veolia and Suez, which are headquartered in France.

Interestingly, we have found that these French companies, through their subsidiaries Veolia Water North America and United Water, also have contracts in Oregon, Washington, and Idaho. Examples include Operation and Maintenance contracts between Veolia and the cities of Wilsonville, OR and Vancouver, WA, and contracts between United Water and Boise, ID.

Links to these companies can be found at www.veoliawaterna.com and www.unitedwater.com.

Yesterday, I had the privilege of teaching a Water Law Bootcamp for Water for Life. Over forty people attended at the Baker County Fairgrounds in Baker City Oregon. Unlike previous presentations, attendees focused their questions primarily on due diligence water rights review in real estate transactions and valuations of water rights when lending on water righted properties. Apparently in these economic times, realtors and lenders are giving much more scrutiny to what water rights exist on the property subject to a transaction.