Carangelo v. Albuquerque-Bernalillo Cnty. Water Util. Auth.

• Decision Date: 28 November 2011
• Docket Number: Docket No. 26,757
• Parties: JOHN CARANGELO, ASSESSMENT PAYERS ASSOCIATION OF THE MIDDLE RIO GRANDE CONSERVANCY DISTRICT, AMIGOS BRAVOS, and RIO GRANDE RESTORATION, Protestants-Appellants, v. ALBUQUERQUE-BERNALILLO COUNTY WATER UTILITY AUTHORITY, Applicant-Appellee, and NEW MEXICO STATE ENGINEER, JOHN R. D'ANTONIO, JR., Respondent-Appellee.
• Court: Court of Appeals of New Mexico

JOHN CARANGELO, ASSESSMENT PAYERS ASSOCIATION OF THEMIDDLE RIO GRANDE CONSERVANCY DISTRICT, AMIGOS BRAVOS,and RIO GRANDE RESTORATION, Protestants-Appellants,

v. ALBUQUERQUE-BERNALILLO COUNTY WATER UTILITY AUTHORITY, Applicant-Appellee,andNEW MEXICO STATE ENGINEER, JOHN R. D'ANTONIO, JR., Respondent-Appellee.

Docket No. 26,757

COURT OF APPEALS OF THE STATE OF NEW MEXICO

Filing Date: November 28, 2011

Opinion Number: ____

APPEAL FROM THE DISTRICT COURT OF BERNALILLO COUNTY

Theresa M. Baca, District Judge

Peter Thomas White

Santa Fe, NM

Humphrey & Ode, P.C.

Mary E. Humphrey

El Prado, NM

for Appellants

Office of the State Engineer

DL Sanders, Chief Counsel

Hillary Lamberton, Special Assistant Attorney General

Santa Fe, NM

for Appellee John R. D'Antonio, Jr., New Mexico State Engineer

Stein & Brockmann, P.A.

Jay F. Stein

James C. Brockmann

Santa Fe, NM

Katherine W. Hall, PC

Katherine W. Hall

Santa Fe, NM

Office of the City Attorney

Michael I. Garcia, Assistant City Attorney

Albuquerque, NM

for Appellee Albuquerque Bernalillo County Water Utility Authority

OPINION

KENNEDY, Judge.

{1} In this significant case, we hold that granting a permit based on an application to divert water, to which an applicant holds no appropriative right and affirmatively asserts no beneficial use of the water diverted, was unsupported by law. Accordingly, we reverse the district court and remand to the district court for further proceedings. On other matters not affecting this disposition, we have affirmed as noted below.

INTRODUCTION

{2} Protestants appeal the decision of the district court affirming the granting of Permit 4830 for diversion of native surface water from the Rio Grande following an appeal to the district court from a decision of the Office of the State Engineer (OSE). The district court entered judgment, together with specific findings and conclusions, affirming the OSE's approval of Application 4830 (the Application) and granting of Permit 4830.

{3} The City of Albuquerque (Applicant)¹ applied to the OSE to divert roughly 45,000 acre-feet per year (af/y) of the native Rio Grande water, to which Applicant had no appropriative right, to enable the use of Applicant's own San Juan-Chama Project (SJCP) water that originates in the Colorado River Basin. Applicant intended SJCP water that is carried in the Rio Grande to provide drinking water to the City of Albuquerque and Bernalillo County through Applicant's new Drinking Water Project (DWP). The contemplated diversion of the native Rio Grande surface water involves what Applicant calls "non-consumptive" and "not beneficial" water use to ensure the necessary volume and flow levels to "carry" the SJCP water into the water treatment plant for processing and distribution. Applicant has not sought and explicitly does not seek appropriative rights to the native Rio Grande water it wishes to use in this fashion. It is undisputed that, by the terms of the Permit, any native Rio Grande water thus diverted must be simultaneously returned to the river in full measure.

{4} We review Protestants' appeal of the following: (1) the denial of their motion to dismiss the Application for a permit to divert water for lack of jurisdiction, (2) the denial of Protestants' motion to invoke primary jurisdiction of the OSE to consider some matters, (3) the orders granting Applicant's and the OSE's motions for partial summary judgment, and (4) the denial of Protestants' motions for summary judgment. These issues concern three primary areas.

{5} First, we address issues to which Protestants collectively refer as "jurisdictional," concerning what is required to invoke the power of the OSE under the Water Code, NMSA 1978, Sections 72-1-1 to 72-20-103 (1907, as amended through 2009), to review the Application to divert the native Rio Grande water. As argued, this includes both subject matter jurisdiction and the power of the OSE to act implicitly or explicitly on the Application. Specifically, we are asked whether an application for a permit, or notice of application for a permit issued by the OSE, must specify or "invoke," as Protestants phrase it, particular statutory bases for action before the OSE acquires the ability to exercise its duties and powers under the Water Code to consider an application for a permit.

{6} Because under the New Mexico Constitution there can be no use of water that is not beneficial, we reconcile Applicant's insistence that its "non-consumptive" use is not a beneficial use with Protestants' position that a non-consumptive use of surface water in a fully appropriated system requires a new appropriation of water. See N.M. Const. art. XVI, §§ 1, 2 (stating that New Mexico recognizes existing rights to use waters of the state for beneficial purposes and that any unappropriated water is "subject to appropriation for beneficial use"). In this context, we also review the OSE's application process in this case,including the information required in an application and the applicable notice provisions for changing and applying for diversions of surface water. Specifically, we analyze whether the OSE has power to act on an application to divert water to which an applicant neither has, nor asserts, any right to use.

{7} Second, we address the issue of whether the State Engineer, John D'Antonio, should have recused from participating in the agency review of the Application. Third and last, we review the procedure and results of the district court's review of the appeal of the OSE's decision. This review includes an analysis of the impairment of water rights by the proposed diversion and whether the district court should have remanded a question concerning compliance with the Rio Grande Compact, Section 72-15-23, to the OSE for consideration under the doctrine of primary jurisdiction. We address each in turn as we reverse the decision of the district court in part and affirm in part.

PRELIMINARY FACTS AND PROCEDURAL BACKGROUND²

{8} The Rio Grande headwaters originate near Creede, Colorado, and the river discharges into the Gulf of Mexico. In 1928, Applicant obtained San Juan River water rights. This surface water is native to the Colorado River Basin and is transported across the Continental Divide through a tunnel to the Rio Grande via Heron Reservoir and the Chama River. Applicant then stores this water in Abiquiu Lake and schedules releases into the Rio Grande mainstream. The SJCP water is diverted for use in Bernalillo County. While traveling downstream in the Rio Grande, SJCP water mixes with native Rio Grande surface waters—the water that courses through the Rio Grande watershed.

{9} In past years, Applicant has used this SJCP water to offset its depletion of underground water in the Rio Grande Basin that it has pumped from Applicant's wells for municipal use. The pumping of groundwater is the subject of Permit No. RG-960 (RG-960), which was applied for in June 1993, and reapproved in September 2003, by the OSE. Part of the conditions of approval for that Permit involves Applicant's use of its SJCP surface water as needed to offset its depletions of groundwater under RG-960.

{10} The effects of pumping Rio Grande Basin groundwater from municipal wells in a growing urban area, together with new hydrologic studies indicating that the scope of the aquifer is significantly more limited than had been previously described,³ led Applicant toconclude that its entitlement to the SJCP water would provide a useful municipal drinking water supply. To proceed to utilize this resource also appeared to be a way to conserve its future groundwater resources by substituting the surface water for much of what it would otherwise have pumped from the ground. Applicant proceeded to plan for a diversion of its entire entitlement of SJCP water to use for this purpose. To accomplish this goal, Applicant concluded that an equal amount of native Rio Grande water would also need to be simultaneously diverted to "carry" its SJCP water; the native water then being returned in full to the Rio Grande without being consumed. As part of its planning process, Applicant met with various people in the OSE to discuss this huge and far-reaching project prior to eventually drafting and submitting the Application. Protestants or their representatives also attended some of these meetings.

{11} Applicant filed the Application to "Divert Surface Water From The Rio Grande" in June 2001, to enable it to construct a municipal drinking water facility. The Application is for a "new diversion permit" and specifies that up to 103,000 af/y of both SJCP water and "'native' Rio Grande water" will be diverted from the Rio Grande in equal portions. The Application specifies no use of the Rio Grande water, stating that the Rio Grande water "will not be consumptively used, but returned to the river at [Applicant's] Southside Water Reclamation Plant (SWRP) below Rio Bravo Bridge." The Application asserts an independent right to the use of SJCP water, but does not assert a basis for any entitlement to the use of the native Rio Grande water, nor does the Application seek any such entitlement or appropriation. There is no dispute that the Middle Rio Grande Basin is fully appropriated. Montgomery v. Lomos Altos, Inc., 2007-NMSC-002, ¶ 15, 141 N.M. 21, 150 P.3d 971 (recognizing the position of the OSE that the Rio Grande's surface waters are fully appropriated and that "new surface water appropriations are not allowed").

{12} Various entities protested the Application. The OSE held extensive hearings on the Application and received volumes of evidence. The decision of its hearing officer was adopted by the OSE, which granted a permit for the diversion subject to a number of specific conditions concerning the proposed diversion, such as water levels and return flows, to name but two. By the time this case reached the district court during the appeal, only Protestants remained as parties contesting the Permit.

STANDARD OF REVIEW

{13} All parties to...