Public Utility District No. 1 of Pend Oreille County v. State of Washington, Dept of Ecology

This case raises the question whether the Department
of Ecology has authority to condition a water quality certification under
the Clean Water Act (33 U.S.C. sec.sec. 1251-1387) on maintenance of
minimum instream flows, where such conditions affect existing water rights.
The case also involves issues concerning RCW 90.03.380, the surface water
statute governing changes in and transfers of water rights, and issues of
abandonment and statutory forfeiture of water rights. We conclude that the
Department of Ecology has authority to impose bypass flow conditions in a
water quality certification regardless of whether the applicant has
existing water rights that may be affected. We also conclude that when
acting on change applications under RCW 90.03.380, Ecology may not deny an
application based upon public interest considerations, and that the change
statute does not apply to inchoate water rights. In addition, we conclude
that the water rights at issue were neither abandoned nor forfeited under
chapter 90.14 RCW.

FACTS

In November 1994, Public Utility District No. 1 of Pend Oreille County
(the District) applied to the Federal Energy Regulatory Commission to amend
its hydroelectric license, issued under the Federal Power Act (16 U.S.C.
sec.sec. 791-839), in order to develop the Sullivan Creek Hydroelectric
Project. The District plans to release water from Sullivan Lake to Mill
Pond Reservoir. Water from Mill Pond will then be diverted for
approximately three miles by pipeline following an existing flume right of
way to a powerhouse located near Metaline Falls. The water will then be
discharged back into Sullivan Creek at the powerhouse. The bypass reach of
Sullivan Creek from Mill Pond to the powerhouse is about three and a
quarter miles.

The District holds water rights in dispute in this case of 550 cubic
feet per second (cfs) on Sullivan Creek, Harvey Creek, and Sullivan Lake,
which include the right to store, divert, and use water to generate
hydroelectric power. A right of 110 cfs has a priority date of June 26,
1907, and includes diversion and storage rights. The remaining 440 cfs is
a permitted, unperfected right that has a priority date of June 3, 1980.
It is subject to a minimum instream flow of 10 cfs in Sullivan Creek. The
1980 right is supplementary to the 1907 right.

Before 1956, the Portland Cement Company and Lehigh Portland Cement
Company owned the Sullivan Lake Hydroelectric Project, which included the
Sullivan Lake Dam and reservoir. The reservoir was used to store water for
later release to generate power. The project included the Mill Pond dam
and diversion works, which diverted water into a wooden flume and canal
system to a forebay, from which the water was transported to the Sullivan
Creek powerhouse. The project was used to generate power from 1907 to
1956.

In 1956, a portion of the flume collapsed. Also in 1956, the District
agreed to purchase the project together with the 1907 water right, provided
a license was obtained under the Federal Power Act. In 1958, the Federal
Power Commission granted a 50-year nongenerating license that allowed the
District to use its storage right for the storage and release of water for
power generation by others. The nongenerating license included language
that indicated the Sullivan Creek project had been abandoned, but
contemplated that generation of hydroelectric power utilizing the Sullivan
Creek Project would be reestablished when feasible. In 1959, the District
requested and obtained an amendment to the license, in order to clarify
that it intended to preserve its water right for use in power production.

Following its purchase, the District took no action to maintain the
flume or intake structure that had been used to divert water for power
generation. The District decommissioned the project, removing the turbines
and filling the turbine pits with rock and gravel.

The District engaged in feasibility studies beginning in 1961, which
led to possible new projects involving construction of a new dam. In 1965,
the District applied for a new federal license for a hydroelectric project.
Maps accompanying the application indicated that the wooden flume had
collapsed. In 1964, the District applied for and obtained additional water
rights and a change in point of diversion to support the power project
under this application. Thus, a change in point of diversion of the 1907
right was approved, with the new diversion point located just south of the
confluence of Sullivan Creek and Outlook Creek, at an anticipated new
reservoir site. In 1966, Ecology approved a reservoir permit for the
proposed project. By 1969, the District concluded that the 1965
development plan was not economically feasible, and abandoned that project.
In 1978, the District had a short-term contract to sell power from a
proposed new Sullivan Creek project, including an expanded reservoir.
After the other contracting party withdrew, this project was put on hold.
No other decision to proceed with a hydroelectric project was made until
the District filed its 1994 application to amend its license in order to
generate power. The District did, however, engage in a number of
engineering studies in the meantime, and, as indicated, in 1980 it applied
for a supplementary water right for future development of the Sullivan
Creek project. The application was granted in 1986.

The District paid all annual state hydroelectric licensing fees in
connection with its 1907 water right. It also paid fees in connection with
the 1980 water right, although for a period of years it failed to pay the
fees for most of the 440 cfs right, due to a clerical error. In 1998, it
informed Ecology about the missing fees, and paid the late fees.

In 1992, the District proposed to reestablish power generation. The
new Sullivan Creek Project would use the same configuration for the project
as the original project, but would be bigger than the original. As noted,
in 1994 the District filed the application with the Federal Energy
Regulatory Commission to amend its federal license to allow power
generation. Because the project requires a federal license, on October 30,
1996, the District filed an application for a state water quality
certification with the Department of Ecology (Ecology), as required under
the Clean Water Act. On October 28, 1997, Ecology issued an order
certifying that the District's project complies with the act and state law,
but conditioned the certification on maintenance of additional specified
instream flows in Sullivan Creek.1 Ecology imposed these conditions to
meet state and federal clean water standards prohibiting degradation of
state waters that would interfere with or injure existing beneficial uses.
Sullivan Creek provides habitat for several fish species, including
rainbow, brown, and cutthroat trout, as well as serving as a significant
recreational and aesthetic resource.

In order to carry out its new proposed project, on June 7, 1993, the
District filed two applications to change the points of diversion of the
1907 and 1980 rights to the original diversion point of the 1907 water
right, about 7,500 feet downstream. On March 17, 1998, Ecology issued
orders denying the applications. As to the 1907 right, Ecology denied the
change application on the bases that the District had abandoned the right
based upon nonuse of the water since 1956, and that approval of the change
would be detrimental to the public interest. As to the 1980 right, Ecology
denied the change application on the bases that a change may not be granted
where inchoate water rights are concerned, that the right had been
relinquished due to failure to pay annual hydroelectric licensing fees, and
that approval would be contrary to the public interest.

The District appealed from all three orders to the Pollution Control
Hearings Board (Board). The Center for Environmental law and Policy
intervened in the appeal of the water quality certification. The Board
consolidated the appeals. The District and Ecology then filed cross
motions for summary judgment. On October 15, 1998, the Board issued an
amended summary judgment order. The Board granted summary judgment in
favor of Ecology, ruling, in relevant part, that (1) Ecology has authority
to condition a water quality certification under sec. 401 on maintenance of
specified instream flows where the applicant has existing water rights; (2)
RCW 90.03.380, the statute relating to changes and transfers of surface
water rights, does not apply to inchoate rights, and thus Ecology's denial
of a change in point of diversion of water under the 1980 right was
correct; (3) Ecology has authority to consider the public interest when
acting on an application for a change in point of diversion under RCW
90.03.380; (4) and Ecology and the Board have authority to make tentative
determinations as to the validity of water rights when acting on and
reviewing the propriety of a change application. The Board granted summary
judgment in favor of the District on the issue whether it had relinquished
its 1980 water right for failure to timely pay the annual hydroelectric
licensing fees. The Board denied summary judgment on the issue of
abandonment of the 1907 right.

The District, with Ecology's concurrence, sought interlocutory review
of the summary judgment order by this court. Review was denied.

A final adjudicatory hearing on remaining issues was held January 25
through 27, 2000. On August 15, 2000, the Board issued its amended final
findings of fact and conclusions of law and order. In relevant part, the
Board upheld the bypass flow conditions in the sec. 401 water quality
certification. The Board stated that the District's proposed project, with
its withdrawal of water from the bypass reach, will "be devastating to
existing spawning habitat." Clerk's Papers (Final Findings of Fact,
Conclusions of Law No. 45, and PCHB Order No. 97-177) at 17-18 (although
denominated a conclusion of law, this part of conclusion 45 is a finding of
fact). The Board found that "the state has reasonably required that the
power project protect an already impaired stream, due in large part from
the District's dam, from further habitat degradation." Clerk's Papers
(Final Findings of Fact, Conclusions of Law No. 26) at 11. The Board
reversed Ecology's denial of a change in point of diversion of the 1907
water right, ruling that the District did not abandon its 1907 water right
and remanding to Ecology for consideration of whether a change would be
contrary to the public interest in light of the bypass flow conditions in
the sec. 401 certification. Other issues resolved by the Board are not
pertinent to our review.

Both Ecology and the District sought review in Pend Oreille County
Superior Court. The court consolidated the petitions for review. On
October 31, 2000, the Board issued a certificate of appealability pursuant
to RCW 34.05.518. Ecology then filed a motion for discretionary review by
this court, and the District filed an answer, raising additional issues.
Direct discretionary review was granted.

I. RCW 90.03.380

A. Application to Inchoate Water Rights

This court reviews the Board's orders under the state Administrative
Procedures Act. Postema v. Pollution Control Hearings Bd., 142 Wn.2d 68,
76-77, 11 P.3d 726 (2000); Dep't of Ecology v. Theodoratus, 135 Wn.2d 582,
589, 957 P.2d 1241 (1998). The court applies the standards of review in
RCW 34.05.570(3) directly to the agency record. Postema, 142 Wn.2d at 77;
Theodoratus, 135 Wn.2d at 589. Relief may be granted where the agency's
interpretation or application of the law is erroneous, the order is not
supported by substantial evidence, or the order is arbitrary or capricious.
RCW 34.05.570(3)(d),(e),(i); see Postema, 142 Wn.2d at 77; Okanogan
Wilderness League, Inc. v. Town of Twisp, 133 Wn.2d 769, 776, 947 P.2d 732
(1997).

Here, the facts are not disputed. Our review is of the agency's
interpretation of the law and application of the law to the facts. Where
statutory construction is concerned, the error of law standard applies.
RCW 34.05.570(3)(d). Under this standard, the court determines the meaning
and purpose of a statute de novo, although in the case of an ambiguous
statute which falls within the agency's expertise, the agency's
interpretation of the statute is accorded great weight, provided it does
not conflict with the statute. Postema, 142 Wn.2d at 77. The burden of
establishing the invalidity of agency action is on the party asserting the
invalidity. RCW 35.04.570(1)(a); Postema, 142 Wn.2d at 77.

The District contends that the Board erred in affirming Ecology's
denial of a change in point of diversion of water under the 1980 inchoate
water right.2 The District argues that to the extent our decisions in
Okanogan Wilderness League and R.D. MerrillCo. V Pollution Control Hearings
Board, 137 Wn.2d 118, 969 P.2d 458 (1999) hold that inchoate rights are not
subject to change under RCW 90.03 380, they should be overruled.

Applications for changes and transfers of surface water rights
generally are governed by RCW 90.03.380. As we explained in Okanogan
Wilderness League, 133 Wn.2d at 777-78, RCW 90.03.380 presumes that water
has actually been put to beneficial use, thus permitting changes in point
of diversion if, and to the extent that, the water has been beneficially
used. See also R.D. Merrill, 137 Wn.2d at 125. As we noted, the statute
thus accords with a number of western water law decisions. Okanogan
Wilderness League, 133 Wn.2d at 778 (citing cases).

The Distinct maintains, though, that we failed to distinguish between
the first sentence of the statute and the second. RCW 90.03.380(1)
provides in relevant part:
The right to the use of water which has been applied to a beneficial use in
the state shall be and remain appurtenant to the land or place upon which
the same is used . . . . The point of diversion of water for beneficial
use or the purpose of use may be changed, if such change can be made
without detriment or injury to existing rights.

In the District's view, the first sentence requires that water actually be
beneficially used before it can become appurtenant to the land, but the
second allows a change in point of diversion of water for a beneficial use
prior to applying water to a beneficial use.
We do not agree. First, statutes should be read as a whole and, here,
when read as a whole the statute's reference to "beneficial use" in the
second sentence indicates the same beneficial use

requirement as in the
first sentence -- actual beneficial use. See Donovick v. Seattle-First
Nat'l Bank, 111 Wn.2d 413, 415, 757 P.2d 1378 (1988) (statutes should be
read in its entirety).

Second, where the Legislature has intended that unperfected rights be
covered by a change statute, it has plainly provided so. Unlike the
surface water change statute, the ground water change statute does
authorize a change in the place of withdrawal under an unperfected right.
RCW 90.44.100; see R.D. Merrill, 137 Wn.2d at 130. The difference in the
two statutes shows that the Legislature intended they do not apply to the
same type of rights. See Clallam County Deputy Sheriff's Guild v. Bd. of
Clallam County Comm'rs, 92 Wn.2d 844, 851, 601 P.2d 943 (1979); State ex
rel. Bell v. Superior Court for King County, 196 Wash. 428, 433, 83 P.2d
246 (1938); State v. Hubbard, 106 Wn. App. 149, 153, 22 P.3d 296, review
denied, 145 Wn.2d 1004 (2001). We will not disturb the Legislature's
deliberate choice to treat the two types of water rights differently.

Third, the Legislature has confirmed our reading of RCW 90.03.380. In
1999, subsequent to our decision in Okanogan Wilderness League, the
Legislature enacted two statutes providing for changes in point of
diversion where inchoate rights are involved. In RCW 90.03.395, the
Legislature stated that it
intends to allow modification of the point of diversion in a water right
permit when such a modification will provide both environmental benefits
and water supply benefits and nothing in RCW 90.03.397 is to be construed
as allowing any other change or transfer of a right to the use of surface
water which has not been applied to a beneficial use.

(Emphasis added.) RCW 90.03.397 states in relevant part:
The department may approve a change of the point of diversion prescribed in
a permit to appropriate water for a beneficial use to a point of diversion
that is located downstream and is an existing approved intake structure
with capacity to transport the additional diversion, if the ownership,
purpose of use, season of use, and place of use of the permit remain the
same.
This section may not be construed as limiting in any manner whatsoever
other authorities of the department under RCW 90.03.380 or other changes
that may be approved under RCW 90.03.380 under authorities existing before
July 25, 1999.

(Emphasis added.) The Legislature has thus acknowledged our reading of RCW
90.03.380, created exceptions to the rule that inchoate surface water
rights are not subject to change in point of diversion, and emphasized that
no other change may be made if the water has not been applied to a
beneficial use.

Additionally, while the Legislature enacted these two statutes
subsequent to Okanogan Wilderness League, it did not amend RCW 90.03.380 to
allow for a change in point of diversion where inchoate water rights are
concerned.

Finally, in support of its interpretation of RCW 90.03.380, the
District claims that it is likely that a change in point of diversion may
be necessary in order to fully develop a water right, reasoning that
engineering and other considerations will result in changes in some of the
details relating to the best plans for use of a water right. However, a
surface water right, involving as it does withdrawal from a visible source,
does not present the engineering and planning difficulties that groundwater
withdrawal may present, and this may be one distinction underlying the
difference in the surface water and ground water change statutes vis- -vis
inchoate rights.

We conclude, as we did in Okanogan Wilderness League and R.D. Merrill,
that RCW 90.03.380 requires that water must have been applied to beneficial
use before a change in point of diversion is authorized under RCW
90.03.380. We uphold Ecology's denial of the change application for the
1980 inchoate right. The Board's grant of summary judgment in favor of
Ecology on this issue is affirmed.

B. Tentative Determinations

The District maintains that neither Ecology nor the Board has
authority to "adjudicate" the District's water rights and determine they
had been abandoned when deciding whether an application for change in point
of diversion should be granted. We adhere to precedent on this issue.

It is true that neither Ecology nor the Board has the authority to
adjudicate water rights. Rettkowski v. Dep't of Ecology, 122 Wn.2d 219,
858 P.2d 232 (1993). However, this court has held that Ecology is required
to tentatively determine the existence of a water right before it can
approve a change in point of diversion of water under that right. Okanogan
Wilderness League, 133 Wn.2d at 778-79; R.D. Merrill, 137 Wn.2d at 127.
This is because RCW 90.03.380 authorizes a change in point of diversion
only where water has been applied to beneficial use, and only where the
change will not cause detriment or injury to existing rights. RCW
90.03.380; see Okanogan Wilderness League, 133 Wn.2d at 777-78; R.D.
Merrill, 137 Wn.2d at 125-26. Therefore, quantification of the right is
necessary before a change in point of diversion may be approved. Okanogan
Wilderness League, 133 Wn.2d at 779. "If a right has not been beneficially
used to its full extent, or if the right has been abandoned, then issuance
of a certificate of change, in the amount of the original right, could
cause detriment or injury to other rights." Id. Ecology may therefore
deny an application for a change if it determines that the water right has
been abandoned or relinquished. However, in light of the fact that Ecology
does not have the right to finally adjudicate water rights, its tentative
determination as to whether a right has been abandoned or relinquished can
not be a final determination of the validity of the water right. Id.

Ecology has authority to tentatively determine whether a water right
has been abandoned or relinquished when acting on an application for a
change in point of diversion under RCW 90.03.380, and the Board may also do
so when reviewing action on a change application. The Board's summary
judgment ruling on this issue is affirmed.

C. Public Interest

With regard to the 1907 110 cfs water right, the Board reversed
Ecology's finding that the right had been abandoned, but remanded this
matter so that Ecology could decide whether approval of the change in point
of diversion would be contrary to the public interest in light of the sec.
401 bypass flow conditions. The District contends that the Board erred in
concluding that Ecology could deny an application for a change in point of
diversion of water under a "public interest" standard. We agree.

Initially, the reasons for the Board's decision do not support its
conclusion. The Board reasoned that this court held that Ecology has an
obligation to consider the public interest as it may have evolved since the
time of issuance of an original water right certificate. The case upon
which the Board relied, Theodoratus, 135 Wn.2d 582, is inapposite. There,
the court noted that under RCW 90.03.320, Ecology must consider the good
faith of the applicant and the public interests when deciding whether to
extend the time for completion of a project and application of water to
beneficial use, and may condition any extension to satisfy any public
interest concerns that arise. Theodoratus, 135 Wn.2d at 597. This is
because RCW 90.03.320 expressly requires consideration of public interests
in such circumstances. Theodoratus does not support the Board's conclusion
as to RCW 90.03.380, which does not contain such authorization. The Board
also relied on the fact that the groundwater code allows for consideration
of the public interest when acting on a change application. Again,
however, the groundwater statute affirmatively requires consideration of
the public interest in such circumstances. RCW 90.44.100 (requiring
findings as prescribed in the case of an original application; see RCW
90.03.290 (incorporated by RCW 90.44.060)). RCW 90.03.290, concerning
applications for new permits to appropriate surface waters, expressly
requires Ecology to consider the public interest when determining whether
to issue a permit.

RCW 90.03.380, the surface water change statute, provides, in
contrast, that a change in point of diversion may be granted if the change
can be made "without detriment or injury to existing rights," and, as
noted, the water must have been put to beneficial use, Okanogan Wilderness
League, 133 Wn.2d at 777-78,4 The statute's meaning appears plain as to
what prerequisites must be met in order to obtain a change in point of
diversion, and consideration of the public interest is not required. See
State v. J.M., 144 Wn.2d 472, 480, 28 P.3d 720 (2001) (where statute's
meaning is plain, court gives effect to that meaning).

However, Ecology cites other statutes that it says gives it authority
to consider the public interest when acting on a change application.
Ecology maintains that while there is no express language in RCW 90.03.380
concerning a public interest test, Ecology has authority derived from other
statutes to consider the public interest. Ecology points to RCW 90.03.005
(policy of the state to promote the use of the public waters to obtain
maximum net benefits), and RCW 90.54.020(2), and (10) (in allocation of
waters among potential uses and users, the securing of maximum net benefits
is directed; expressions of the public interest will be sought at all
stages of water planning and allocation). Ecology urges that we read these
statutes together with RCW 90.03.380 and harmonize all the statutes.

These statutes do not provide the authorization Ecology claims.
First, when an applicant originally seeks to withdraw the public waters,
the public interest is a necessary part of the determination to issue a
permit to withdraw water. RCW 90.03.290. Therefore, at the point in time
that an allocation of public waters is made, the public interest is
considered, furthering the policy in RCW 90.03.005 and RCW 90.54.020.
However, when an application for change under RCW 90.03.380 is made, the
allocation of public waters has already occurred, and the right involved is
a perfected water right.

Second, even if any question remained, principles of statutory
construction reinforce our conclusion. As noted, the statute governing
applications for new water rights, RCW 90.03.290, and the statute
permitting extensions of time to complete projects and put beneficial water
to use both provide for consideration of the public interest, as does the
groundwater change statute, RCW 90.44.100. The presence of the "public
interest" requirement in these other statutes and the omission of the
requirement in RCW 90.03.380 indicate a difference in legislative intent.
Clallam County Deputy Sheriff's Guild, 92 Wn.2d at 851; State ex rel. Bell,
196 Wash. at 433; Hubbard, 106 Wn. App. at 153. Because the Legislature
omitted consideration of the public interest from RCW 90.03.380 where it
included such a requirement in other closely related statutes, we conclude
that Legislative intent is clear that a "public interest" test is not a
proper consideration when Ecology acts on a change application under RCW
90.03.380. In addition, RCW 90.03.380(1) directs that if the water has
been beneficially used, and "{i}f it shall appear that . . . such change
may be made without injury or detriment to existing rights, the department
shall issue to the applicant a certificate . . . granting the right for . .
. such change of point of diversion{.}" (Emphasis added.) Use of the word
"shall" in this statutory context indicates that Ecology must permit the
change if the statutory prerequisites are met. See Cazzanigi v. Gen. Elec.
Credit Corp., 132 Wn.2d 433, 443, 938 P.2d 819 (1997).

Ecology advances public policy arguments in favor of public interest
review when a change application is made. In particular, Ecology posits
that one could essentially avoid public interest review by applying for a
permit to appropriate water, undergoing public interest review, obtaining a
water right, and then seeking to change it without further public interest
review. We recognize this may be a legitimate concern, but believe the
answer lies in persuading the Legislature to amend the change statute. As
one of the amici curiae point out, several western states have change
statutes expressly requiring consideration of the public interest when
action is taken on an application for a change or transfer of rights.
Ecology does not have authority to consider the public interest when
deciding whether to grant an application for a change in point of diversion
of water under RCW 90.03.380. The Board's grant of summary judgment in
favor of Ecology on this issue is reversed.

II. Abandonment

Ecology denied the District's application for a change in the point of
diversion of water under the 1907 water right on the ground that it had
been abandoned. The Board ruled that the District did not abandon the
right, and remanded the application to Ecology. Ecology maintains the
Board erred in concluding the 1907 110 cfs right was not abandoned.

As explained, in order to determine whether a change application may
be granted under RCW 90.03.380, Ecology must tentatively quantify the right
in order to determine whether the right qualifies for a change. Okanogan
Wilderness League, 133 Wn.2d at 737-38. If the right has been extinguished
through relinquishment or abandonment, it is not subject to a certificate
of change. Id.

Abandonment is a common law doctrine recognized in this state's
decisional law. See, e.g., Okanogan Wilderness League, 133 Wn.2d at 781-
81, 784; R.D. Merrill, 137 Wn.2d 126-27; Jensen v. Dep't of Ecology, 102
Wn.2d 109, 685 P.2d 1068 (1984); Miller v. Wheeler, 54 Wash. 429, 103 P.
641 (1909). While, as we noted in Okanogan Wilderness League, 133 Wn.2d at
784, the court in dicta in Department of Ecology v. Acquavella, 131 Wn.2d
746, 757-58, 935 P.2d 595 (1997) said that RCW 90.14.130-.180 codifies the
common law of abandonment, that is not the case. Statutory forfeiture does
not require intent to abandon, as does abandonment. Thus, the statutes do
not codify the common law doctrine. Moreover, some of the statutes in
chapter 90.14 RCW expressly acknowledge abandonment as well as statutory
forfeiture. RCW 90.14.160, .170, and .180 each refer to both abandonment
and statutory forfeiture for nonuse for a five-year period. RCW 90.14.180,
in particular, expressly recognizes abandonment, as opposed to statutory
forfeiture for five years' nonuse, in connection with any appropriation
perfected under the surface and ground water codes. RCW 90.14.160 refers
to both as to any water right acquired through appropriation prior to
enactment of the water code, or by custom or general adjudication. Thus,
to the extent any question may remain following our decision in Okanogan
Wilderness League, 133 Wn.2d 769, as to whether the common law abandonment
doctrine remains viable after 1967, we take this opportunity to put the
matter to rest. The common law doctrine of abandonment still exists as
part of this state's water law. Our decisions so hold, and the Legislature
has clearly not abolished the doctrine; rather it has expressly recognized
it.

Abandonment is, as indicated, "the intentional relinquishment of a
water right." Okanogan Wilderness League, 133 Wn.2d at 781 (citing Jensen,
102 Wn.2d at 115; Miller, 54 Wash. at 435). Intent is determined according
to the conduct of the parties. Okanogan Wilderness League, 133 Wn.2d at
781. The burden of proof of abandonment is on the party alleging
abandonment. Id. Nonuse alone does not constitute abandonment. Id.
(citing A. Dan Tarlock, Law of Water Rights and Resources sec. 5.18{1}, at
5-106 (1996)). Nonuse is, however, evidence of intent to abandon, and long
periods of nonuse raise a rebuttable presumption of intent to abandon, thus
shifting the burden of proof to the water right holder to explain reasons
for the nonuse. Okanogan Wilderness League, 133 Wn.2d at 781, 782-83.

Here, Ecology contends that there has been a long period of nonuse
raising the presumption of intent to abandon. Even if we agreed, we would
conclude that the District has not abandoned its 1907 water right.

As noted, water under this right was used to generate power until
1956. While it is true that in 1956 a portion of the flume collapsed, and
the District thereafter decommissioned the project insofar as power
production is concerned, the District continued to engage in studies,
acquired and changed water rights for purposes of power production, and
tried to develop projects for hydroelectric power production. The District
began feasibility studies in 1961, which led to possible new projects and
to the District's application for a new federal license in 1965. In
connection with its proposed new project, it applied for and obtained
additional water rights and a change in point of diversion of its 1907
right. In 1966, Ecology approved a reservoir permit for the proposed
project. Although the District concluded by 1969 that the project was not
feasible after all, its efforts to that point do not show intent to abandon
its water rights. From 1978 to 1984, the District collaborated on another
proposed project, with a contract to sell the power generated to another
power company. This proposal, too, fell through. While the District did
not pursue plans for another project until it began the process for the
present one, it did engage in a number of engineering studies in the
meantime. In 1980, it applied for a supplementary water right for future
development of the Sullivan Creek project. The District also continued to
use its concomitant storage right. Further, the District paid the annual
state hydroelectric licensing fees in connection with its 1907 water right.

Although, as Ecology points out, the nongenerating license originally
issued to the District included language that indicated the Sullivan Creek
project had been abandoned, the evidentiary force of this is diluted by the
fact that the license also contemplated that generation of hydroelectric
power utilizing the Sullivan Creek Project would be reestablished when
feasible. Moreover, in 1959, the District requested and obtained an
amendment to the license to make clear that it intended to keep its water
right for use in power production.

Under these facts as a whole, which are not disputed by Ecology, we
conclude that the District has established that it did not intend to
abandon its 1907 water right.

Ecology argues, though, that the facts show only speculative intent to
use water at an undetermined point in the future. See Thorp v. McBride, 75
Wash. 466, 135 P. 228 (1913) (claim that water would be used in the future
for irrigation, mining, domestic and power completely speculative); In re
Clark Fork River Drainage Area, 274 Mont. 340, 908 P.2d 1353 (1995) (50
years of nonuse; only reason advanced to show no intent to abandon was lack
of economic viability of mining in the area, where water claimed was for
mining purposes); S.E. Colo. Water Conservancy Dist. v. Twin Lake Assocs.,
Inc., 770 P.2d 1231 (Colo. 1989). Ecology also cites City & County of
Denver v. Snake River Water Dist., 788 P.2d 772 (Colo. 1990), where the
court found the presumption of abandonment raised by a long period of
nonuse of water right by a company that purchased a nonoperating power
plant and its associated water right, and rejected the argument that no
intent to abandon could be found because the owner had sold small portions
of the water right on two occasions during a 29 year period.

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