Colorado River Water Conservation Dist. v. Vidler Tunnel Water Co.

• Decision Date: 23 April 1979
• Docket Number: A,No. 5,No. 27968,5,27968
• Citation: 594 P.2d 566,197 Colo. 413
• Parties: COLORADO RIVER WATER CONSERVATION DISTRICT, Opponent-Appellant, v. VIDLER TUNNEL WATER COMPANY, Applicant, State of Colorado, Department of Natural Resources and Lee Enewold, DivisionEngineer, Water Divisionppellees.
• Court: Colorado Supreme Court

Page 566

594 P.2d 566

197 Colo. 413

COLORADO RIVER WATER CONSERVATION DISTRICT, Opponent-Appellant, v. VIDLER TUNNEL WATER COMPANY, Applicant State of Colorado, Department of Natural Resources and Lee Enewold, DivisionEngineer, Water Division No. 5, Appellees.

No. 27968.

Supreme Court of Colorado, En Banc.

April 23, 1979.

Rehearing Denied June 4, 1979.

Delaney & Balcomb, Kenneth Balcomb, Scott M. Balcomb, Glenwood Springs, for opponent-appellant.

Holme, Roberts & Owen, Peter H. Holme, Jr., Glenn E. Porzak, Denver, for applicant-appellee.

J. D. MacFarlane, Atty. Gen., David W. Robbins, Deputy Atty. Gen., Denver, Edward G. Donovan, Sol. Gen., Gregory J. Hobbs, Jr., 1st Asst. Atty. Gen., James E. Thompson, Asst. Atty. Gen., Natural Resources Section, Denver, for appellees.

CARRIGAN, Justice.

The appellant Colorado River Water Conservation District (District) here seeks reversal of the trial court's conditional water storage decree entered under the Water Right Determination and Administration Act of 1969. Section 37-92-101, Et seq., C.R.S.1973. The court awarded a conditional water storage right, with an appropriation date of August 1, 1973, to the appellee Vidler Tunnel Water Company (Vidler) for storage of 156,238 acre feet of water in its proposed Sheephorn Reservoir. The court decreed that, should appropriation be effected, the water be used for municipal, industrial, domestic, recreational, agricultural, irrigation, and electrical energy generation purposes. The right, subject to the earlier priority rights of others, was awarded on the condition that the water stored be applied to beneficial use within a reasonable time. We affirm the award of this conditional water storage right in part and reverse it in part.

Vidler is an established Colorado corporation organized to supply and deal in water for many different purposes. It owns various water rights, a water collection system, and a transmountain diversion tunnel. In March, 1973, Vidler began to formulate plans for the Sheephorn Reservoir, a part of a larger project known as the Sheephorn Project. The initial planning phase lasted until mid-May, 1973. During this time a consulting water engineer made on-site inspections and stated tentative opinions that the proposed reservoir site was feasible and that sufficient water was available to accomplish Vidler's purposes. Subsequently Vidler decided to proceed with the project.

At a cost of approximately $122,000, Vidler employed professional engineers, aerial photographers, surveyors, and attorneys to define the size and location of the reservoir and to determine the availability of water. On August 1, 1973, a surveyor commenced a field survey of the reservoir site. Based upon this field work, the survey of the high water line and the final topographic maps of Sheephorn Reservoir were completed.

In November, 1974, engineers were retained to design hydro-electric and power facilities for the reservoir and to apply for a Federal Power Commission (F.P.C.) preliminary permit for the overall project, including the Sheephorn Reservoir. This application was filed on November 26, 1975. It is currently pending before the F.P.C.

Vidler obtained financing for its expenditures through the hearing date, but the evidence did not establish future availability of financing.

The proposed Sheephorn Reservoir, with an active capacity of 152,053 acre feet and dead storage of 5,185 acre feet, is to be created on the main stem of the Colorado River in Grand County, Colorado. Testimony established that the annual firm yield will be approximately 90,000 acre feet.

On September 26, 1975, Vidler granted the City of Golden an option to purchase 2,000 acre feet of Sheephorn Reservoir water together with a right of first refusal for an additional 3,000 acre feet, all conditioned on the success of the project. Vidler intends to use about 2,000 acre feet of water from Sheephorn Reservoir to irrigate lands it owns or leases.

Vidler plans to sell the remainder of the water from the project. It has held preliminary discussions with the cities of Denver, Aurora, and Westminster, and with Grand County, and the municipal subdistrict of the Northern Colorado Water Conservancy District. However, no contracts for use of water have been entered into with any of those entities.

An extensive report, prepared by the Denver Water Department under the direction of the Denver Regional Council of Governments, projects that the future new water requirements of the cities in the Denver metropolitan area will be substantial. However, several of these municipalities have been attempting to provide for their future water needs through other sources. The evidence also disclosed that Vidler probably could sell water to entities other than those described in the report or with whom it has had preliminary discussions.

I.

A conditional water right is the "right to perfect a water right with a certain priority upon the completion with reasonable diligence of the appropriation upon which such water right is to be based." Section 37-92-103(6), C.R.S.1973. A conditional water decree determines that the first steps toward appropriating a certain amount of water have been taken and the decree establishes the date when this occurred. Section 37-92-305(1), C.R.S.1973; Four Counties Water Users Ass'n v. Colo. River Water Conservation Dist., 159 Colo. 499, 414 P.2d 469 (1966). The burden of proving these elements is upon the applicant for the conditional water right. Section 37-92-304(3), C.R.S.1973. The priority date of the completed appropriation relates back to the date established by the conditional decree so long as the applicant has proceeded with due diligence thereafter to perfect the appropriation. Section 37-92-305(1). Rocky Mountain Power Co. v. White River Elec. Ass'n, 151 Colo. 45, 376 P.2d 158 (1962).

To initiate an appropriation, two elements an intent and an act must co-exist. Elk-Rifle Water Co. v. Templeton, 173 Colo. 438, 484 P.2d 1211 (1971). First, the applicant must have an Intent to take the water and put it to beneficial use. ¹ Secondly, the applicant must demonstrate this intent by an open physical Act sufficient to constitute notice to third parties. Twin Lakes Reservoir & Canal Co. v. City of Aspen, 192 Colo. 209, 557 P.2d 825 (1976); Central Colo. Water Conservation Dist. v. Denver, 189 Colo. 272, 539 P.2d 1270 (1975); Four Counties Water Users Ass'n v. Colo. River Water Conservation Dist., supra; Fruitland Irrigation Co. v. Kruemling, 62 Colo. 160, 162 P. 161 (1916). The facts of each case must be considered on an Ad hoc basis to determine whether an appropriation has been initiated. Elk-Rifle Water Co. v. Templeton, supra.

The District does not here contest the trial court's finding that an open physical act of appropriation took place on August 1, 1973, when professional surveyors commenced a detailed field survey of the Sheephorn Reservoir. However, the District asserts that the award of the conditional decree was erroneous, for the reason that Vidler failed to prove the requisite Intent to take the water and put it to beneficial use. Specifically the District contends that Vidler offered insufficient proof to establish that the amount of water claimed was reasonable and appropriate to accomplish the purposes of the appropriation. The District claims that whether the water is needed or will actually be used by the municipalities...