WaterWatch of Oregon v. Water Resources Dept.

Under ORS 543A.305, when conversion from a hydroelectric water right to an in-stream water right would not injure existing water rights, conversion is required.

In 1995, Petitioner, the holder of a hydroelectric water right, stopped operating a hydroelectric plant. After the project was decommissioned, Petitioner leased the water right Respondents as in-stream water right, renewing the lease periodically thereafter.

On appeal to the Oregon Supreme Court, the court considered whether the hydroelectric water right is subject to conversion to an in-stream water right, in light of its 26-year operation hiatus. Under the conversion statute, ORS 543A.305, conversion is required in certain circumstances. And under the lease statute, ORS 537.348, a water right holder may “temporarily lease its water right to another for use as an in-stream water right.”

Petitioner argued that the hydroelectric right is subject to conversion because hydroelectric use of the right has ceased since 1995. Respondents contended that although the water has not been used for hydroelectric purposes, the water has been used for in-stream purposes periodically under the lease, and thus, the right is not subject to conversion because use did not cease entirely for any five-year period.

The court reasoned that because Petitioners’ project relied entirely on a hydroelectric right, it was subject to conversion in 2000, five years after it ceased hydroelectric operation in 1995. Thus, the court held that, under ORS 543A.305, the hydroelectric water right held by Respondents is subject to conversion to an in-stream water right.

Reversed and remanded.