WaterWatch of Oregon v. Water Resources Dept.

71

Argued and submitted April 29; decision of Court of Appeals reversed, judgment

of circuit court reversed, and case remanded to circuit court for further

proceedings December 23, 2021

WATERWATCH OF OREGON,

Petitioner on Review,

v.

WATER RESOURCES DEPARTMENT,

Respondent on Review,

and

WARM SPRINGS HYDRO LLC,

Respondent on Review.

(CC 16CV11938) (CA A165160) (SC S067938)

501 P3d 507

Warm Springs Hydro LLC holds a hydroelectric water right associated with a

former dam that has not diverted water since 1995. WaterWatch sought to compel

the Water Resources Department to find that ORS 543A.305(3) required that

hydroelectric water right to be converted to an in-stream water right because

the use of that right for hydroelectric purposes had ceased for a period of at least

five years. Respondents argued that the hydroelectric water right was not sub-

ject to conversion because it had been periodically leased to the state for use

as an in-stream water right, which tolled the statutory five-year time period.

On cross-motions for summary judgment, the trial court granted respondents’

motions, denied WaterWatch’s motion, and dismissed WaterWatch’s petition for

judicial review. The Court of Appeals affirmed. Held: (1) The use of water as an

in-stream water right under ORS 537.348 is not “use of water under a hydroelec-

tric water right” for purposes of ORS 543A.305(3); and (2) the hydroelectric water

right in this case, which has not been used for more than five years, other than

as an in-stream water right under ORS 537.348, is subject to conversion to an

in-stream water right under ORS 543A.305(3).

The decision of the Court of Appeals is reversed. The judgment of the cir-

cuit court is reversed, and the case is remanded to the circuit court for further

proceedings.

En Banc

On review from the Court of Appeals.*

Thomas M. Christ, Sussman Shank LLP, Portland,

argued the cause and filed the briefs for petitioner on review.

______________

* Appeal from Marion County Circuit Court, Audrey J. Broyles, Judge. 304

Or App 617, 468 P3d 478 (2020).

72 WaterWatch of Oregon v. Water Resources Dept.

Also on the briefs was Brian J. Posewitz, WaterWatch of

Oregon, Portland.

Carson L. Whitehead, Assistant Attorney General, Salem,

argued the cause and filed the brief on behalf of respondent

on review Water Resources Department. Also on the brief

were Ellen F. Rosenblum, Attorney General, and Benjamin

Gutman, Solicitor General.

Crystal S. Chase, Stoel Rives LLP, Portland, argued the

cause and filed the brief for respondent on review Warm

Springs Hydro LLC. Also on the brief were David E. Filippi,

Portland, and Merissa A. Moeller, Portland.

Emily Reber, Troutman Pepper Hamilton Sanders LLP,

Portland, filed the brief for amicus curiae Northwest

Hydroelectric Association. Also on the brief was Angela J.

Levin, San Francisco, California.

BALMER, J.

The decision of the Court of Appeals is reversed. The

judgment of the circuit court is reversed, and the case is

remanded to the circuit court for further proceedings.

Cite as 369 Or 71 (2021) 73

BALMER, J.

At issue in this case is whether the hydroelectric

water right for a hydroelectric power plant that has not oper-

ated for 26 years is subject to conversion to an in-stream

water right, upon a finding that such conversion would not

injure other existing water rights. Conversion of a hydroelec-

tric water right to an in-stream water right by the Oregon

Water Resources Department (WRD) is required, upon such

a finding, “[f]ive years after the use of water under a hydro-

electric water right ceases.” ORS 543A.305(3). In this case,

the holder of a hydroelectric water right stopped operating

the associated hydroelectric power plant in eastern Oregon

(the “project”) in 1995 and the project was decommissioned;

afterward, the holder leased the water right to the state for

use as an in-stream water right. That lease has been peri-

odically renewed over the last 21 years and WRD has never

commenced the process for converting the hydroelectric water

right to an in-stream water right.

Whether the water right here should have been sub-

ject to conversion depends on the meaning and interaction

of two statutes: ORS 543A.305 (the “conversion statute”),

which, as described above, mandates the conversion of a

hydroelectric water right to an in-stream water right in cer-

tain circumstances, and ORS 537.348 (the “lease statute”),

which, among other things, allows a water right holder to

temporarily lease its water right to another for use as an

in-stream water right. WaterWatch argues that, under the

conversion statute, the hydroelectric right is subject to con-

version because no water has been used under that right

for hydroelectric purposes since 1995, and, therefore, use

has ceased. WRD and the current holder of that hydroelec-

tric water right, Warm Springs Hydro LLC (Warm Springs

Hydro),1 respond that the right is not subject to conversion

because, even though the water has not been used for hydro-

electric purposes, the water has been used for in-stream

purposes during the periodic leases of the water right to the

state under the lease statute. Therefore, respondents con-

tend, use did not entirely cease in any given five-year period.

1

We refer to the parties by their names, except when we refer to WRD and

Warm Springs Hydro together as “respondents.”

74 WaterWatch of Oregon v. Water Resources Dept.

For the reasons discussed below, we agree with

WaterWatch and hold that the hydroelectric water right now

held by Warm Springs Hydro is subject to conversion to an

in-stream water right under the terms of ORS 543A.305.

We therefore reverse the Court of Appeals’ decision and the

judgment of the circuit court and remand to the circuit court

for further proceedings.

I. LEGAL BACKGROUND

The statutes at issue in this case are part of a com-

plex and extensive set of laws governing Oregon water,

which, among other things, are variously designed to pro-

mote “the maintenance and conservation of the water

resources of this state,” ORS 196.605(1); to “encourage, pro-

mote and secure the maximum beneficial use and control” of

those resources, ORS 536.220(1)(b); to “provide domestic or

municipal and industrial water supply,” ORS 552.108(1); and

to create a “predictable, efficient regulatory framework for

environmentally acceptable development,” ORS 196.605(4).

See also ORS 536.310 (describing several factors considered

in formulating a state water resources program).

Those water law statutes, including the key statutes

in this case, ORS 543A.305 and ORS 537.348, were enacted

on a backdrop of common-law principles that continue to

guide Oregon water management, and we review some of

that background before addressing those key statutes.

Historically, two common-law doctrines have gov-

erned the use of surface water in Oregon and the rest of

the United States: riparianism and prior appropriation.

See Barton H. Thompson, Jr., John D. Leshy & Robert H.

Abrams, Legal Control of Water Resources 14-15 (5th ed

2013). The riparian doctrine, flowing from the English com-

mon law, assigns water rights based on the ownership of

land appurtenant to a water source. The riparian doctrine

generally applies in states on or east of the Mississippi River,

although Oregon and other West Coast states adopted some

components of riparianism. See id. at 28-33.

The prior appropriation doctrine, which originated

from rules applied by Gold Rush miners, applies in the drier,

western states. Under prior appropriation, available water

Cite as 369 Or 71 (2021) 75

is allocated on a first-in-time, first-in-right basis to anyone

who puts the water to a “beneficial use,” whether they own

land next to the water source or not. Water rights under

prior appropriation are assigned a priority date (usually the

date that water was first diverted), and in times of shortage,

rights with earlier priority dates are addressed fully before

rights with later priority dates. See id. at 168-73; Klamath

Irrigation District v. United States, 348 Or 15, 23-24, 227

P3d 1145 (2010).

At first, Oregon adopted a mixed water rights sys-

tem applying aspects of both doctrines. See, e.g., Brown v.

Baker, 39 Or 66, 70, 65 P 799, reh’g den, 39 Or 75, 66 P 193

(1901) (recognizing both riparian and some appropriated

water rights). In 1909, however, the Water Rights Act, Or

Laws 1909, ch 216, established prior appropriation as “the

prevailing water law of Oregon.” Fort Vannoy Irrigation v.

Water Resources Comm., 345 Or 56, 64, 188 P3d 277 (2008).

As now codified, Oregon’s water law statutes provide

that “[a]ll water within the state from all sources of water

supply belongs to the public,” ORS 537.110, and that, subject

to existing rights and certain exceptions, “all waters within

the state may be appropriated for beneficial use, as provided

in the Water Rights Act and not otherwise.” ORS 537.120.

“Beneficial use” is not statutorily defined, but includes

at least “irrigation, domestic use, municipal water supply,

power development, public recreation, protection of commer-

cial and game fishing and wildlife, fire protection, mining,

industrial purposes, navigation, [and] scenic attraction.”

ORS 537.170(8)(a). Statutes provide for a system to cer-

tify water rights by which pre-1909 rights can be formally

adjudicated, ORS 539.140, and post-1909 rights can be per-

fected, ORS 537.250. Once a water right certificate issues,

the certificated rights continue “so long as the water shall

be applied to a beneficial use” under the terms of the cer-

tificate. ORS 537.250(3). The Water Rights Act permits the

transfer of water rights and the adjustment of time, place,

and type of permitted use, according to certain statutory

procedures. See ORS 540.520; ORS 540.530. If those proce-

dures are followed, the modification of water rights does not

impact their priority date. ORS 540.530(2)(a).

76 WaterWatch of Oregon v. Water Resources Dept.

If a water right holder does not put the water to a

beneficial use for any five successive years, the water right

is subject to forfeiture to the state. ORS 537.250(3); ORS

540.610(1). Once forfeited, water rights are then made avail-

able for reappropriation by water users. ORS 540.610(5).

That use-it-or-lose-it frame of prior appropriation

provides an incentive for water right holders to divert and

use as much water as possible to maintain their rights. But

as water conservation and sustainable river ecology became

increasingly recognized as public priorities from the 1950s

onward, states began to protect in-stream flows and encour-

age water users to allow water to remain undiverted. See

Janet Neuman, Anne Squier & Gail Achterman, Sometimes

a Great Notion: Oregon’s Instream Flow Experiments, 36

Env’t L 1125, 1133-36 (2006); Philip Roni & Tim Beechie,

Introduction to Restoration, in Stream and Watershed

Restoration 1, 5-6 (Philip Roni & Tim Beechie eds. 2013). In

Oregon, that largely began with the 1955 Water Resources

Act, which, among other things, recognized the importance

of minimum perennial in-stream flows.2 Or Laws 1955,

ch 707, § 10(3)(g).

Those minimum in-stream flows were converted to

in-stream water rights when, in 1987, Oregon passed the

In-stream Water Rights Act, the first of the key statutes in

this case. ORS 537.346(1) (converting minimum in-stream

flows); Or Laws 1987, ch 859 (the In-Stream Water Rights

Act); see generally Mary Ann King, Getting Our Feet Wet:

An Introduction to Water Trusts, 28 Harv Env’t L Rev 495,

504-05 (2004) (discussing history of in-stream water rights

in Oregon and Washington). That act recognized the validity

of in-stream water rights, which allow the amount of water

specified in the water right to be left flowing rather than be

diverted. ORS 537.332(3). Such rights had previously been

unavailable under the prior appropriation regime. The act

defines “in-stream water right” as:

2

There were limited precursors—a 1915 act withdrew certain streams flow-

ing into the Columbia Gorge from appropriation “to preserve their scenic beauty,”

including, for example, Multnomah Creek. Or Laws 1915, ch 36. A few other dis-

crete withdrawals for water quality purposes continued through the 1930s. See

Charles C. Reynolds, Comment, Protecting Oregon’s Free-Flowing Water, 19 Env’t

L 841, 844-45 (1989).

Cite as 369 Or 71 (2021) 77

“a water right held in trust by the Water Resources Depart-

ment for the benefit of the people of the State of Oregon

to maintain water in-stream for public use. An in-stream

water right does not require a diversion or any other means

of physical control over the water.”

Id. Thus, WRD is the trustee for all in-stream rights.

The In-stream Water Rights Act also established a

leasing and transfer system (the “lease statute”), by which

water right holders may, under certain conditions, lease all

or part of a water right for conversion to an in-stream water

right, maintaining the original priority date and forestall-

ing forfeiture for nonuse under ORS 540.610. ORS 537.348.

That system, as codified, provides, in part:

“(1) Any person may purchase or lease all or a portion of

an existing water right or accept a gift of all or a portion of

an existing water right for conversion to an in-stream water

right. Any water right converted to an in-stream water

right under this section shall retain the priority date of

the water right purchased, leased or received as a gift. At

the request of the person the Water Resources Commission

shall issue a new certificate for the in-stream water right

showing the original priority date of the purchased, gifted

or leased water right. Except as provided in subsections (2)

to (6) of this section, a person who transfers a water right

by purchase, lease or gift under this subsection shall com-

ply with the requirements for the transfer of a water right

under ORS 540.505 to 540.585 [(establishing procedures

for changes in use of water and transfer of water rights)].

“(2) Subject to subsections (3) to (6) of this section

[which concern split-use rights and departmental pro-

cedures], any person who has an existing water right may

lease all or a portion of the existing water right for use as an

in-stream water right for a specified period without the loss

of the original priority date. During the term of the lease,

the use of the water right as an in-stream water right shall

be considered a beneficial use. The term of the lease may

not exceed five years. There is no limitation on the number

of times that the lease may be renewed.”

(Emphases added.) Thus, those with existing water rights

may lease those rights to others in five-year (or shorter)

increments, and others may purchase, accept, or lease those

78 WaterWatch of Oregon v. Water Resources Dept.

rights, which WRD then holds in trust. The use of water

rights leased under that statute, whether they were hydro-

electric water rights or another kind of rights before they

were leased, qualifies as beneficial use and therefore fore-

stalls forfeiture for nonuse under ORS 540.610(1). We inter-

pret the In-stream Water Rights Act as applied to this case

more extensively below.

Along with regulating water rights and in-stream

flows, the Oregon legislature also has addressed hydro-

electric projects. As noted above, power generation has

long been considered a beneficial use of water in Oregon.

In 1931, the legislature created a new regulatory program

for hydroelectric projects and established the Hydroelectric

Commission (now the Water Resources Commission, Or

Laws 1985, ch 673) to govern their licensure and to oversee

development of state waters for power generation. Or Laws

1931, ch 67. Under that statute, the duration of hydroelec-

tric licenses is limited to 50 years, or, for projects regulated

by the Federal Energy Regulatory Commission (FERC), to

a term concurrent with the project’s federal license. ORS

543.260(1). (Section 6 of the Federal Power Act limits FERC

licenses to 50 years as well. 16 USC § 799.)

By the 1990s, over 50 years later, many of the state’s

hydroelectric licenses issued under the above-mentioned

statutes had expired or were nearing expiration, so the 1995

legislature created a “hydroelectric task force to recommend

a process and standards for a coordinated state review of

existing facilities.” ORS 543A.010 (task force created by Or

Laws 1995, ch 229, § 6). Based on that task force’s legislative

recommendations, the 1997 Legislative Assembly enacted

a suite of laws concerning reauthorization of hydroelectric

projects. ORS ch 543A. That legislation included one section

related to the decommissioning of hydroelectric projects.

That section, which is not at issue in this case, directs the

Water Resources Commission to adopt procedures regard-

ing project decommissioning and allows the commission to

order decommissioning of a project in certain circumstances.

ORS 543A.300.

The legislature also created another task force to

“develop recommendations for decommissioning.” Or Laws

Cite as 369 Or 71 (2021) 79

1997, ch 449, § 39(2). That task force recommended a provi-

sion that, as amended, became ORS 543A.305, the second

key statute in this case (along with the lease statute).3 ORS

543A.305, the conversion statute, establishes that, upon a

finding by the Water Resources Director that the conver-

sion will not injure other water rights, existing hydroelec-

tric water rights will be converted to in-stream water rights

“[f]ive years after the use of water under [the] hydroelectric

water right ceases.” That statute reads, in part:

“(3) Five years after the use of water under a hydroelec-

tric water right ceases, or upon expiration of a hydroelectric

water right not otherwise extended or reauthorized, or at

any time earlier with the written consent of the holder of

the hydroelectric water right, up to the full amount of the

water right associated with the hydroelectric project shall

be converted to an in-stream water right, upon a finding by

the Water Resources Director that the conversion will not

result in injury to other existing water rights. * * *

“* * * * *

“(6) If hydroelectric production is not the sole ben-

eficial use authorized by a water right, this section shall

apply only to conversion of that portion of the water right

used exclusively for hydroelectric purposes.”

ORS 543A.305 (emphasis added). In-stream water rights

created through the conversion mandated by that statute

are “maintained in perpetuity, in trust for the people of

the State of Oregon.” ORS 543A.305(2). According to the

report of the second task force, the intent of recommending

a conversion statute of some kind was “to provide water for

instream purposes while maintaining stability and the cur-

rent water regime among users.” In essence, by substituting

an in-stream water right for the hydroelectric water right

that has ceased being used (rather than allowing the water

to be reappropriated for another use), the decommissioning

of a project would not affect users up- or downstream from

the project.

3

The legislation as introduced had substantial additional provisions regard-

ing decommissioning, but they were not enacted, and the legislative history of

that bill beyond what is discussed here does not help illuminate the issues in this

case.

80 WaterWatch of Oregon v. Water Resources Dept.

With that understanding of historical and contem-

porary Oregon water law, we turn to the specific facts of the

case before us.

II. FACTUAL BACKGROUND

We take the facts, which are essentially undis-

puted, from the record in the trial court and before WRD.4

Rock Creek is a small stream in eastern Oregon that flows

into the Powder River, which, in turn, flows into the Snake

River. Rock Creek runs through the Elkhorn Mountains on

the historic lands of at least the Cayuse, Umatilla, Walla

Walla, and Nez Perce peoples, and is now partially within

the Wallowa-Whitman National Forest. The creek hosts

populations of rainbow, redband, and brook trout and is

also viable habitat for bull trout, which have been federally

designated as a threatened species under the Endangered

Species Act since 1998. 50 CFR § 17.11(h); Determination

of Threatened Status for the Klamath River and Columbia

River Distinct Population Segments of Bull Trout, 63 Fed

Reg 31,647 (June 10, 1998). Like many waters in Oregon and

throughout the West, Rock Creek has water quality issues

involving temperature, dissolved oxygen, sedimentation, and

pH levels.

In 1903, developers began building on Rock Creek

the hydroelectric power generation project at issue in this

case. The Rock Creek project would eventually include

a 70-foot-long concrete dam and intake structure, an

8,000-foot-long wooden flume, a 15-foot-long earthen dam,

a 2,720-foot-long penstock, and a powerhouse with two

400-kW generators. Completed in 1904 or 1905, the project

powered Baker City’s first electric lights and new streetcar

system. The company that owned the project eventually

merged with others to become the Eastern Oregon Light

and Power Company.

4

We also take judicial notice of the environmental assessment prepared

by FERC for the Rock Creek project. FERC, Environmental Assessment for

Hydropower License: Rock Creek Hydroelectric Project (2020) (Docket No. 12726-

002), available at https://cms.ferc.gov/sites/default/files/2020-07/P-12726-002%20

Rock%20Creek%20EA.pdf (accessed Dec 16, 2021); OEC 201(b)(2) (so permitting);

see also Fort Vannoy Irrigation, 345 Or at 84 n 19 (taking judicial notice of water

right certificate and related official documents prepared by government agency).

Cite as 369 Or 71 (2021) 81

In 1923, after the Oregon Legislative Assembly

established procedures for the perfection of water rights,

Or Laws 1909, ch 216, Eastern Oregon Light and Power

Company obtained a water right certificate from the state

allowing the use of 13 cubic feet of water per second from

Rock Creek for the purpose of “Power.” That certificate has

a priority date of 1902. (A water right that does not expire,

such as this one, is sometimes called a “power claim,” see,

e.g., ORS 543.075(4) (defining “power claimant”), but that

terminology does not affect this case, and we refer to the

right here as a “water right” throughout.)

Eastern Oregon Light and Power Company became

part of the California-Pacific Utility Company, to which

FERC issued a 50-year license for the project in 1946.

In 1988, the California-Pacific Utility Company trans-

ferred the license to what is now the Oregon Trail Electric

Cooperative (OTEC). In 1995, OTEC shut the project down

and stopped diverting water. The project’s FERC license

expired the following year. After expiration, a FERC license

must be formally “surrendered” to remove the project from

federal jurisdiction and oversight. See 16 USC § 799; 18 CFR

pt 6 (2021). FERC approved the surrender of the Rock Creek

project’s license in 2003.

In 2000, after ORS 543A.305 was enacted, but less

than five years after OTEC stopped diverting water from

Rock Creek, OTEC briefly leased its hydroelectric water

right to the state for use as an in-stream water right for

10 months. OTEC eventually transferred the remaining

components of the project and the associated water right to

another company, which renewed the in-stream water right

lease to the state from 2005 to 2009, and again from 2010 to

2011. After that, Warm Springs Hydro became involved and

acquired the water right associated with the project and

again renewed the water right lease to the state from 2015

to 2020.

At some point, WaterWatch grew concerned that

Warm Springs Hydro intended to restart the project after

the next lease term ended, 25 years after the project had last

diverted water. WaterWatch therefore petitioned WRD to

reconsider its approval of the 2015 in-stream lease renewal.

82 WaterWatch of Oregon v. Water Resources Dept.

WaterWatch contended that the periodic lease renewals

were an attempt to circumvent the conversion statute, and

that WRD was required under that statute to convert Warm

Springs Hydro’s water right to an in-stream water right

held by the state. WRD did not act on the petition, and it

was deemed denied.

WaterWatch petitioned for judicial review of WRD’s

approval of the lease renewal5 and to compel WRD to initi-

ate the conversion process. See ORS 536.075(1) (providing for

judicial review of orders other than contested cases issued

by WRD); ORS 183.484(1) (conferring jurisdiction for review

of orders other than contested cases on the circuit court);

ORS 183.490 (authorizing the circuit court to “compel an

agency to act where it has unlawfully refused to act or make

a decision or unreasonably delayed taking action or making

a decision”). Warm Springs Hydro intervened in the action,

opposing WaterWatch, and the parties filed cross-motions

for summary judgment regarding, for the most part, the

interpretation and application of the conversion process for a

hydroelectric water right that is set out in ORS 543A.305(3).

The trial court concluded that any beneficial use

of water under Warm Springs Hydro’s water right (includ-

ing in-stream water uses under a lease) restarted the five-

year clock in the conversion statute, and that beneficial use

had occurred at least once every five years since diversion

stopped. The court therefore granted summary judgment in

favor of respondents, denied WaterWatch’s motion, and dis-

missed the action.

WaterWatch appealed the trial court judgment to

the Court of Appeals, which affirmed. WaterWatch of Oregon

v. Water Resources Dept., 304 Or App 617, 468 P3d 478 (2020).

The Court of Appeals interpreted the phrase “use of water

under a hydroelectric water right” in ORS 543A.305(3)

to include “any beneficial use” of water associated with a

hydroelectric project. Id. at 630. The court reasoned that,

because the water associated with the Rock Creek proj-

ect had been periodically leased to the state and used for

5

While this case was pending, the term of the most recent lease expired, pos-

sibly rendering WaterWatch’s petition on that issue moot. The action to compel

WRD to initiate the conversion process, however, remains a live issue on appeal.

Cite as 369 Or 71 (2021) 83

in-stream purposes at least once every five years, no five-

year period had passed since the use of that water “ceased,”

and the right was not subject to conversion. Id. at 633-34.

We allowed WaterWatch’s petition for review.

III. ANALYSIS

The question before us on review is whether the

hydroelectric water right now held by Warm Springs Hydro,

which has been leased to the state periodically for over 20

years, became subject to conversion to an in-stream water

right under the conversion statute at some point during

that period. The answer depends on whether the “use of

water under [the] hydroelectric water right cease[d],” and

if so, when. ORS 543A.305(3). WaterWatch points out that

no water has been diverted or otherwise used for hydroelec-

tric purposes under the right since 1995 and contends that

the hydroelectric right is therefore subject to conversion—

and that it should have been considered as such as early as

2000. Respondents counter that, because WRD was using

the right as an “in-stream water right” during the terms of

the periodic leases of the right to the state under the lease

statute, use has not ceased and the right therefore never

became subject to conversion. Thus, the outcome of this case

depends on the meaning of and interaction between the

conversion statute and the lease statute. We examine those

statutes in that order, looking to the statutes’ text, context,

and, as appropriate, legislative history. State v. Gaines, 346

Or 160, 171-72, 206 P3d 1042 (2009).

A. The Conversion Statute, ORS 543A.305

The conversion statute provides, in part:

“Five years after the use of water under a hydroelec-

tric water right ceases, * * * up to the full amount of the

water right associated with the hydroelectric project shall

be converted to an in-stream water right, upon a finding by

the Water Resources Director that the conversion will not

result in injury to other existing water rights.”

ORS 543A.305(3). The parties dispute what “the use of

water under a hydroelectric water right ceases” means and,

therefore, when the conversion statute is triggered. There

84 WaterWatch of Oregon v. Water Resources Dept.

are two key components to that phrase: what it means to use

water “under a hydroelectric water right” and what it means

for that use to “cease[ ].”

Regarding the first phrase, WaterWatch argues that

“the use of water under a hydroelectric water right” means

only hydroelectric use, while respondents contend that that

phrase includes any lawful, beneficial use. Turning first to

the text of the statute, we note that, by statute, the term

“water right” “includes the use of water for hydroelectric

purposes” pursuant to a state license. ORS 543A.005(8).

That definition, however, does not resolve the meaning of

“hydroelectric water right.” We therefore turn to the stat-

ute’s context, including related water law statutes. Drawing

on the legal background discussed above, we highlight the

statutes that are particularly relevant here to demonstrate

that, as WaterWatch argues, for purposes of the conversion

statute, water use “under a hydroelectric water right” can

only be hydroelectric use.

All water in Oregon belongs to the public. ORS

537.110. Water can be appropriated, however, for beneficial

use. ORS 537.120. With few exceptions, an appropriation can

be made only with a state-issued permit. ORS 537.130(2).

To get a permit, applicants must specify how they intend

to use the water. ORS 537.140(1)(a)(C). Whether or not an

application is approved depends, in part, on the nature of

the proposed use. ORS 537.160(1). Once a permit is issued,

water right holders may only appropriate water at the rate,

time, and place specified in the permit, and cannot use the

water for an unpermitted purpose. Changing the permitted

use requires a formal transfer process managed by WRD.

ORS 540.520; ORS 540.530.

We note that water rights were limited to specified

uses at common law, before the modern statutory water law

regime. See Simmons v. Winters, 21 Or 35, 44, 51, 27 P 7

(1891) (“[I]n order to make a valid appropriation of water, it is

required to be made for some beneficial purpose then exist-

ing or contemplated, and that the amount of water appro-

priated must be restricted to the quantity needed for such

purpose. * * * That much [the right holders are] entitled to

use, when needed or necessary for the purposes specified.”).

Cite as 369 Or 71 (2021) 85

In 1908, this court held that a farmer’s irrigation water

right did not grant him “title to the water, but only the right

to use it for the purposes for which it was appropriated.”

Williams v. Altnow, 51 Or 275, 301, 303, 97 P 539 (1908) (on

rehearing). We further held that the farmer could not “sub-

sequently change or enlarge his use to [other appropriators’]

injury.” Id. The modern statutory regime serves to formalize

that common-law principle, but instead of merely assigning

liability for injury resulting from improper changes in use,

the statutes require water right holders to get approval from

WRD (including a determination of potential injury) before

changing the amount, place, time, or type of their use. ORS

540.520; ORS 540.530.

To refer to a water right for a particular kind of

use, the legislature sometimes uses adjectival phrases. For

example, as used in the conversion statute, “in-stream

water right” means a right “to maintain water in-stream for

public use.” ORS 537.332(3). An in-stream water right can,

in general, be used for no other purposes than in-stream

ones, such as recreation, habitat conservation, and naviga-

tion. See ORS 537.332(5) (identifying types of “public use”

for purposes of statutory definition of “in-stream water

right”). Thus, an “in-stream water right” does not permit

both in-stream uses and other beneficial uses that are not

in-stream uses, such as irrigation or bottling, and the adjec-

tive “in-stream” serves to describe the type of use permitted

by the water right.

Similarly, we understand the phrase “hydroelectric

water right” as used in the conversion statute to refer to a

water right that permits the use of water for hydroelectric

purposes. WRD raises the possibility that a hydroelectric

water right might permit hydroelectric and other uses, but,

as explained below, we conclude that that is not the case.

It is possible, of course, for a water right to permit

multiple beneficial uses, as specifically contemplated in

part of the conversion statute: “If hydroelectric production

is not the sole beneficial use authorized by a water right,

this section shall apply only to conversion of that portion of

the water right used exclusively for hydroelectric purposes.”

ORS 543A.305(6). Thus, “the water right associated with [a]

86 WaterWatch of Oregon v. Water Resources Dept.

hydroelectric project,” described in ORS 543A.305(3), might

not be solely a hydroelectric water right, and, in that case,

only the portion of the right that is used for solely hydro-

electric purposes would be subject to conversion. But water

rights that permit multiple uses are generally called “water

rights,” not a particular kind of water right (e.g., “hydroelec-

tric” or “in-stream”). ORS 543A.305(6) itself refers to a right

that authorizes multiple uses as simply “a water right.” If

a hydroelectric water right was one that authorized hydro-

electric use along with other uses, then we would expect the

legislature to have written the opening clause of that statute

to provide: “If hydroelectric production is not the sole benefi-

cial use authorized by a hydroelectric water right, * * *.” The

legislature did not write the statute that way, and the text

does not support respondents’ position.

To summarize, we understand the adjective “hydro-

electric” to describe the use permitted by a hydroelectric

water right. Although some water rights might authorize the

use of water for hydroelectric and other purposes, a “hydro-

electric water right,” by itself, permits the use of water only

for hydroelectric purposes. Here, the water right that is now

held by Warm Springs Hydro authorizes the use of water for

“Power.” We therefore understand that right to be a right

that permits the use of water solely for hydroelectric pur-

poses, that is, a hydroelectric water right, and not a right

that permits other beneficial uses.

We next consider what it means to use water “under”

a hydroelectric water right. ORS 543A.305(3). “Under,”

as used here, means “required by : in accordance with

: bound by * * * <rights ~ the law>.” Webster’s Third New Int’l

Dictionary 2487 (unabridged ed 2002). Use under a hydro-

electric water right is, therefore, use “in accordance with”

that right. Because hydroelectric water rights permit use

only for hydroelectric purposes, we conclude that “the use of

water under a hydroelectric water right” in ORS 543A.305(3)

refers to the use of water for hydroelectric purposes, as per-

mitted by such a right.

In opposition to that reading, respondents contend

that, even if a hydroelectric water right is one that authorizes

Cite as 369 Or 71 (2021) 87

hydroelectric use, the conversion statute itself does not spec-

ify any particular kind of use “under” that right, and thus,

any beneficial use of the water associated with the water

right is use “under” that right. Respondents emphasize that

the statute does not say “hydroelectric use of water under a

hydroelectric water right” or “use of water for hydroelectric

purposes,” and that the legislature has used similar phrases

elsewhere. If the legislature had meant to refer only to

hydroelectric use, they argue, it would have so specified in

the conversion statute.

That argument is not persuasive. As we have

already shown, the statute is clear despite the absence

noted by respondents of the extra modifier “hydroelectric.”

Warm Springs Hydro is correct that, as a general rule, “[t]he

legislature knows how to include qualifying language in a

statute when it wants to do so.” PGE v. Bureau of Labor and

Industries, 317 Or 606, 614, 859 P2d 1143 (1993). But we

do not expect the legislature to do so where, as here, that

qualifying language would be redundant or unnecessary to

understand the statute.

Respondents also argue, turning to context, that

the conversion statute should be read in light of Oregon’s

water rights regime more broadly and, in particular, ORS

540.610, which provides that water rights that go unused

for five successive years are subject to forfeiture. Any kind

of beneficial use tolls ORS 540.610, restarting that stat-

ute’s five-year clock. Respondents assert that the legislature

intended the conversion statute at issue here to operate the

same way, with any beneficial use tolling the conversion

statute.

That argument disregards the fact that ORS

540.610 and the conversion statute are worded differently

in a way that is meaningful here. ORS 540.610 is triggered

when the holder of a water right “ceases or fails to use all

or part of the water appropriated for a period of five suc-

cessive years.” ORS 540.610(1). That statute variably uses

the phrases “ceases or fails to use,” “the failure to use,” id.,

and “failure to use beneficially,” ORS 540.610(2). The con-

version statute, in contrast, is triggered “[f]ive years after

88 WaterWatch of Oregon v. Water Resources Dept.

the use of water under a hydroelectric water right ceases.”

ORS 543A.305(3) (emphasis added). The conversion stat-

ute’s language is plainly narrower than ORS 540.610,

supporting the interpretation that, although ORS 540.610

refers to beneficial uses generally, the conversion statute

refers to the hydroelectric use of water, not any beneficial

use.

Our interpretation is further bolstered by the stat-

utes’ respective legislative histories. ORS 540.610 codified a

longstanding principle of prior appropriation broadly appli-

cable to water rights in Oregon that was generally intended

to encourage water use, rather than having water rights go

unexercised. Or Laws 1913, ch 279, § 1; Wimer v. Simmons,

27 Or 1, 6, 39 P 6 (1895) (“[A]bandonment may be express

and immediate, * * * or it may be implied from [the appropri-

ator’s] neglect, failure of application to the purpose designed

within a reasonable time, nonuse[ ], and the like.”); see also

ORS 536.220(1)(b) (declaring that it is the policy of the state

to “encourage, promote and secure the maximum beneficial

use and control” of water resources in the state). Putting

water to any beneficial use would serve that broad purpose.

The conversion statute, by contrast, was considered as part

of a bill addressing the narrower problem of hydroelectric

project decommissioning (most provisions of which were not

enacted). House Bill (HB) 2162 (1999). The task force that

drafted an initial version of the conversion statute at the

legislature’s request wrote that the purpose of the conver-

sion requirement was “to provide water for instream pur-

poses while maintaining stability and the current water

regime among users.” To the extent that the legislature

may have taken up that purpose, we note that interpret-

ing the conversion statute to be tolled by any beneficial use

would not serve that end. Substituting one use for another—

particularly one, like hydroelectric use, that requires diver-

sion for one that does not—could affect or harm other appro-

priators, and thereby not “maintain[ ] stability” in the cur-

rent water regime.

For those reasons, we reject respondents’ invitation

to read the conversion statute as parallel to the forfeiture

statute, ORS 540.610, and we interpret “the use of water

Cite as 369 Or 71 (2021) 89

under a hydroelectric water right” to refer only to use for

hydroelectric purposes.6

Having established what it means to use water

under a hydroelectric water right, we next consider what it

means for that use to “cease[ ].” WaterWatch and WRD pro-

vide only limited argument as to the proper interpretation

of the word “cease[ ].” WaterWatch asserts that “ ‘ceases,’ in

the context of ‘decommissioning,’ means a discontinuation of

use intended to be permanent.” WaterWatch also posits that,

whatever “cease” means, use of the water here must have

ceased no later than 2003 because, by that point, “it was not

possible, legally or physically, to use the water for [hydro-

electric] purpose[s].” WRD, for its part, largely ignores the

word “ceases,” although it does substitute at one point the

phrase, “the use of water stopping.” Warm Springs Hydro,

on the other hand, interprets “cease[ ]” more thoroughly, and

although we disagree with their ultimate statutory con-

clusion here, our interpretation of “cease[ ]” largely follows

theirs, as laid out below.

“Cease[ ],” as used intransitively here, means “to

come to an end : break off or taper off to a stop” or, alterna-

tively, “to give over or bring to an end an activity or action

: discontinue.” Webster’s at 358. Both of those dictionary

definitions connote permanence by referring to the “end” of

activities, rather than a pause. Id. Of course, what the con-

cept of permanence entails in the context of ceasing to use

water could be unclear, but the legislature specified in this

statute that there is a five-year timeline by which to measure

whether use has “cease[d].” Applying the above definitions to

6

Warm Springs Hydro cautions that, in adopting the above position whereby

the conversion statute refers only to hydroelectric use while the forfeiture statute

refers to any use, this court would be creating a “new rule of law specific to hydro-

electric rights,” one that, in effect, may put a five-year clock on maintenance or

upgrades for hydroelectric projects in Oregon. That argument is misplaced. The

legislature enacted ORS 543A.305, and it expressly applies only to hydroelectric

water rights and does so more narrowly than the broader forfeiture scheme.

We also note that hydroelectric projects may still avoid conversion of their

water rights by changing the authorized use of their rights through the process

set out in ORS 540.520 and ORS 540.530. ORS 543A.305(7). Through that pro-

cess, hydroelectric projects faced with the prospect of a lengthy closure may be

able to maintain their ability to restart power generation in collaboration with

WRD.

90 WaterWatch of Oregon v. Water Resources Dept.

the conversion statute, we understand the statute to be trig-

gered once five years have passed during which water was

not used under a hydroelectric water right. Pausing tempo-

rarily is not the same as “ceas[ing],” so a temporary pause is

insufficient to trigger the statute.

Put another way, if the use of water under the hydro-

electric water right resumes within five years of a stoppage,

then that stoppage was temporary, and use did not “come

to an end” and therefore did not cease. Id. If use under the

hydroelectric right does not resume within five years of a

stoppage, then that stoppage is considered permanent, and

use has ceased—triggering the conversion statute. In that

respect, as the Court of Appeals noted, the first sentence of

ORS 543A.305(3) operates similarly to ORS 540.610, which

also refers to “ceas[ing]” use. WaterWatch of Oregon, 304 Or

App at 633. We observe that that reading comports with

the unavoidable need for hydroelectric projects to occasion-

ally pause diversion for emergencies, maintenance, or other

reasons.

WaterWatch’s assertion that “cease[ ]” means “a dis-

continuation of use intended to be permanent” is unfounded.

WaterWatch is correct that this statute was considered as

part of a larger bill on decommissioning, most of which, as

noted, was ultimately not enacted, but that context does

not lead to the result WaterWatch supposes, and even if

it did, the text could not bear such a result. By its text,

ORS 543A.305(3) is triggered five years after “the use” of

water ceases, not five years after a project’s owners decide

to decommission it or stop using water with the intent of

not resuming. The text indicates that when the statute is

triggered is an objective question, not an intent-based one.

WaterWatch’s reading, along with reaching far beyond the

text of the statute to incorporate the concept of intent, would,

as Warm Springs Hydro points out, require WRD and the

courts to attempt to discern whether a pause in the use of

water under a hydroelectric right was “intended” to be tem-

porary or permanent. Besides requiring the court to supply

the details for a standard which is not expressed in the text,

that standard would leave water users and WRD with no

clear indication of when conversion proceedings might be or

must be initiated.

Cite as 369 Or 71 (2021) 91

Respondents concede that the water associated

with the hydroelectric water right that is now held by Warm

Spring Hydro has not been used for hydroelectric purposes

since 1995. That use ceased.

Therefore, looking only at the conversion statute, the

hydroelectric water right for the Rock Creek project should

have been subject to conversion to an in-stream water right

five years later, in 2000. Respondents argue, however, that

the lease statute—which allows water associated with a

diversionary water right, like the hydroelectric water right

here, to be used for in-stream purposes—has the effect of

tolling the five-year period in the conversion statute. We

turn to that argument.

B. The Lease Statute, ORS 537.348

Respondents contend that, under their interpreta-

tion of the conversion statute, the water right is not subject

to conversion because the water was put to a lawful, benefi-

cial use at least once every five years since hydroelectric use

stopped. The use they refer to is the state’s use of the water

as an in-stream flow under the terms of the periodic leases

of the water right to the state under the lease statute. The

lease statute permits, among other things, the lease of an

existing water right “for conversion to an in-stream water

right.” ORS 537.348(1). In respondents’ view, that in-stream

use means that “the use of water under [the] hydroelectric

water right” has not ceased and that the conversion statute

therefore has not been triggered. ORS 543A.305(3).

WaterWatch observes that, under the lease stat-

ute, a leased water right is temporarily “converted to an

in-stream water right.” ORS 537.348(1). WaterWatch rea-

sons that, after conversion, the right is no longer a hydro-

electric water right. Thus, WaterWatch concludes, the use of

water under a right converted to an in-stream water right

by operation of ORS 537.348(1) is use under that in-stream

right and is no longer use under the previous hydroelectric

right.

Respondents, in contrast, posit that ORS 537.348(1)

and ORS 537.348(2) describe two different kinds of leases.

Under their reading, rights leased under subsection (1) of the

92 WaterWatch of Oregon v. Water Resources Dept.

lease statute are “converted” to in-stream water rights (and

are, WRD admits, no longer hydroelectric water rights), but

rights leased under subsection (2) of that statute are merely

“use[d] as” in-stream water rights. In respondents’ view, the

lease of a water right might be subject to subsection (1) or

(2), but not both. Respondents contend that the lease here

was subject to subsection (2), not subsection (1), and that,

therefore, the hydroelectric water right is not subject to con-

version to an in-stream water right under subsection (1).

WRD misreads the statute. By its plain text, ORS

537.348(1) describes how “[a]ny person” may acquire by

purchase, lease (as lessee), or gift, all or part of an existing

water right “for conversion to an in-stream water right.” The

transfer of a water right by such a purchase, lease, or gift,

must comply with the procedural requirements under ORS

540.505 to 540.585, the subsection states, except as provided

in ORS 537.348(2) to (6). ORS 537.348(2) then describes how

a person with an existing water right may lease that right

(as lessor) to another person “for use as an in-stream water

right for a specified period.” Subsection (2) further specifies

that the term of such lease may not exceed five years and

that such leases may be renewed any number of times. The

remainder of ORS 537.348 contains provisions concerning

split-use water rights and procedural requirements that are

not relevant here.

Subsections (1) and (2) are complementary and

describe, among other things, a unified leasing system: Sub-

section (1) applies to those acquiring or leasing (as lessee)

a water right that is to be converted to an in-stream water

right; subsection (2) applies to those who are leasing (as les-

sor) an existing water right for the conversion described in

subsection (1). Both subsections describe the same leases.

If those two subsections were intended to set up

different types of leases, as WRD contends, there would

be no reason for the legislature to specify that transferors

under subsection (1) must comply with the other transfer

statutes (ORS 540.505 to 540.585) “[e]xcept as provided in

subsections (2) to (6) of this section.” ORS 537.348(1). The

simplest and most straightforward reading of the statute as

a whole is not that the subsections somehow create different

Cite as 369 Or 71 (2021) 93

leasing programs, but that subsection (1) describes the ways

in which persons may acquire water rights for conversion

to in-stream water rights, and subsections (2) through (6)

describe the ways in which these particular kinds of trans-

fers diverge from those governed only by the broader trans-

fer statutes. WRD’s reading, by contrast, would render por-

tions of the statute meaningless.7

We note that our understanding is consistent with

WRD’s own regulations, which define “[i]nstream lease” to

mean “the conversion of all or a portion of an existing water

use subject to transfer to an instream water right for a spec-

ified time-period as authorized by ORS 537.348(2).” OAR

690-077-0010(14) (emphases added). Although that defini-

tion does not supersede the statutory text, it supports our

interpretation, and we observe that respondents’ position

here—that subsection (2) does not involve the “conversion”

of existing water rights to in-stream water rights—appears

to conflict with that regulatory definition, which expressly

defines a lease under subsection (2) to constitute a “conver-

sion.” Id.

With that understanding of ORS 537.348, it is

apparent that any water right leased under that statute is

“converted to an in-stream water right,” either temporarily,

for the term of a lease, or permanently, following a transfer

through purchase or gift. The person holding the water right

may then “obtain a new certificate for the in-stream water

right.” Id. Once a hydroelectric right has been converted to

an in-stream water right, it is no longer a hydroelectric water

right for the duration of the conversion. Any use of the water

under the resulting in-stream water right is use under that

right, not use under the previous hydroelectric water right.

7

The version of ORS 537.348 enacted in 1987, Or Laws 1987, ch 859, § 9(1),

did not have the “except” text quoted above, which was added in 2013, Or Laws

2013, ch 165, § 1. To the extent that previous versions of ORS 537.348 may have

applied to the original lease and early renewals of the water right at issue here,

we understand those versions to similarly set up a single leasing system and not

to create separate leasing systems in subsections (1) and (2). In the original 1987

version of ORS 537.348, for example, which did not have any of the subsequently

added text on split use or other topics, subsection (1) still authorized the acqui-

sition of water rights for conversion, while subsection (2) authorized holders of

existing water rights to lease those rights for acquisition through subsection (1).

Or Laws 1987, ch 859, § 9.

94 WaterWatch of Oregon v. Water Resources Dept.

That conclusion aligns with our previously stated under-

standing of a hydroelectric water right as one that permits

the use of water for hydroelectric purposes; after conversion,

use of water for hydroelectric purposes is no longer permit-

ted, so there is no hydroelectric water right.

C. Application

We now apply the above understanding of the con-

version and leasing statutes to the water right at issue here.

As explained above, without some other statutory authori-

zation, the use of water under a hydroelectric water right is

use of that water for hydroelectric purposes. Five years after

the use of water under a hydroelectric water right ceases,

that right is subject to conversion to an in-stream water

right held in trust by WRD in perpetuity. ORS 543A.305(2).

The Rock Creek project, which relies on a solely hydroelec-

tric water right, has not used water for hydroelectric pur-

poses since 1995. The water right associated with that proj-

ect therefore was subject to conversion in 2000.

The periodic leases of the hydroelectric water right

to the state under the lease statute do not change the appli-

cation of the conversion statute. When OTEC leased the

hydroelectric water right to the state in 2000, and during

each subsequent lease renewal by subsequent right holders,

the right was temporarily converted to an in-stream water

right. The parties agree that any beneficial use forestalls

forfeiture, so that temporary use tolled ORS 540.610. But

only use under the hydroelectric right tolls the conversion

statute. After 1995, there was no use under the hydroelectric

right, and the conversion statute was therefore triggered.

The decision of the Court of Appeals is reversed.

The judgment of the circuit court is reversed, and the case

is remanded to the circuit court for further proceedings.