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BEFORE THE ENERGY FACILITY SITING COUNCIL

FOR THE STATE OF OREGON

Water for Life, Inc. ("Water for Life"), by and through their attorneys, Laura A. Schroeder and Schroeder Law Offices, P.C., and pursuant to the Hearing Officer’s order, hereby submit the following closing argument together with the attached Proposed Order which is incorporated herein:

1. WATER RIGHT APPLICATION PROCEDURE THROUGH OREGON WATER RESOURCES DEPARTMENT

   The Oregon Water Resources Department ("OWRD") has sole authority to review applications for new water rights to appropriate ground water in the State of Oregon pursuant to ORS 537.615(1). However, The Oregon Department of Energy ("ODOE") has been granted the authority to decide issues delegated to other agencies when siting an energy facility pursuant to ORS 469.373(4). In overriding the exclusive authority granted to OWRD, the legislature recognized the expertise of these agencies and protected their rule-making authority by requiring the notice and opportunity to comment be given to affected agencies. ORS 469.350(2); ORS 469.373(4). This notice and opportunity to comment is supported by the policy that energy facilities be constructed and operated consistent with the protection of the public health and safety in compliance with, among other items, water policy. ORS 469.310. Therefore, in deciding a water right application, the Hearing Officer in an energy facility siting hearing must be versed in the rules promulgated by OWRD and the corresponding statutory authority in order to abide by the policy set forth in ORS 469.310.

   In order to make use of ground water a person must apply for a permit to OWRD before withdrawing or using the water. ORS 537.615(1). According to ORS 537.620(5), once an application is received, OWRD must make a preliminary finding within 30 days. Public notice is given of the preliminary finding and a period of 30 days for written comments is established. ORS537.620(6),(7). Pursuant to ORS 537.621(1), within 60 days, OWRD will then issue a Proposed Final Order either accepting or denying the application. OWRD can only accept the application if it ensures the "preservation of the public welfare, safety and health." ORS 537.621(2). An application is presumed to meet this standard only "if the proposed use will not injure other water rights and the proposed use complies with rules of the Water Resources Commission." ORS 537.621(2) (emphasis added).

   Among these "rules of the Water Resources Commission" that must be complied with is ORS 537.629 which conditions the interference of a proposed new use with other users. Under ORS 537.629(1), OWRD has three options once it is determined a proposed ground water use will "impair or substantially interfere with existing rights to appropriate surface water by others, or that any proposed use or well will impair or substantially interfere with existing rights to appropriate ground water." (emphasis added). The options are: 1) "impose conditions or limitations to the permit to prevent" the impairment or substantial interference; 2) reject the application after a hearing; or 3) with OWRC declare a critical ground water area. ORS 537.629(1) (emphasis added). Nowhere in the statute is authority granted to OWRD to negotiate modifications with the applicant that does not completely prevent impairment or substantial interference.

   If there is a protest to OWRD’s Proposed Final Order a contested case hearing must be held. ORS 537.622. If, after a contested case proceeding, the application is determined not to preserve "the public welfare, safety and health" then the Water Resources Director "shall issue a final order rejecting the application or modifying the proposed final order as necessary to ensure the preservation of the public welfare, safety and health." ORS 537.625(1). The modifications must ensure the preservation of the public welfare, safety and health, and as noted above, this means no injury to other water rights and compliance with the rules of OWRC. ORS 537.621(2). Therefore, under the water right application procedure, an application must not injure other water rights or violate other OWRC rules or else the application must be rejected. There is no room for modification or negotiation between the applicant and OWRD that falls short of the preservation of the public welfare, safety and health standard as defined in ORS 537.525, ORS 537.621(2), and ORS 537.629(1).

2. COB’S WATER RIGHT APPLICATION PROCEDURE.

COB Energy Facility ("COB") / Peoples Energy Resources Corporation originally applied for a water use permit to appropriate 16.9 cubic feet per second ("cfs") of ground water for industrial and irrigation use; 5,390 gallons per minute ("gpm") average discharge. The proposed ground water source is an aquifer in the Lost River Basin and COB is requesting to pump that water from three wells. On April 22, 2003, OWRD issued a proposed final order recommending the application be approved with certain conditions.

COB subsequently amended the application, changing the proposed energy facility's design from water-cooled to air-cooled. According to the Draft Proposed Order ("DPO"), this amendment changed the ground water use requested to 0.67 cfs total, with 0.47 cfs, or 210 gpm, for year round industrial use, and 0.20 cfs, or 90 gpm, for irrigation use between March 1 and October 31. DPO, at 313. Water for Life notes a discrepancy between the DPO and the Draft Environmental Impact Statement ("EIS") published by the Bonneville Power Administration in November 2003. Department of Energy/Environment Impact Statement #0343. The EIS calculates the rate of the irrigation water use for 90 gpm as 0.16 cfs (not 0.20 cfs). EIS, at 2-5. The source for the proposed ground water is unchanged.

On August 19, 2003, OWRD issued comments and recommendations approving the ground water application with measurement, recording and reporting conditions to monitor the effect of the groundwater appropriation. In the event of substantial interference with other water right holders, the Department set forth mitigation options. DPO, at 318; see also, OWRD Recommendation to EFSC, August 19, 2003 ("OWRD Recommendation").

Applicant contends that the Lost River Basin has two separate aquifers; one shallow, the other deep. COB claims that the shallow aquifer bottoms out at 500 feet and the deeper aquifer begins at 1,580 feet. Correspondence from Applicant to Gerald Grondin, WRD, February 12, 2003, at 9. Applicant asserts that the ground water below 1,580 feet "appears to be hydraulically separated from overlying irrigation and domestic use aquifers by roughly 1,100 feet of non-water-bearing formation." OWRD Groundwater Permit Application Supplemental Data Report, February 2002, at 2.

At the request of U .S. Fish and Wildlife Service ("USFWS"), Marshall Gannett, a hydrologist with the Water Resources Division of the U .S. Geological Survey ("USGS"), reviewed the COB application and data to ascertain whether the proposed ground water use would impact surface water flows in the Lost River. See Correspondence from Marshall Gannett, USGS, to Ron Larson, USFWS, December 23, 2002. Mr. Gannett concluded that the test and data submitted by Applicant "do not, in my opinion, support the idea that the deep water-bearing zone is hydraulically isolated from the shallow zone which is generally accepted to be in hydraulic connection with springs feeding the Lost River." Gannett, at 2.

Mr. Gannett opined that available data "strongly indicates there is some degree of hydraulic connection between the deep zone and the developed shallow zone from which irrigation pumping occurs." Id.

The evidence supporting Mr. Gannett's conclusion that the shallow and deep ground water is hydraulically connected is two-fold. First, he notes that Applicant's test of a

2,050 foot well unexpectedly caused interference with two wells in the shallow zone. Gannett, at 1. Second, Mr. Gannett compared the Applicant's tests of the 2,050 foot well with a nearby 1,000 foot well which has been monitored over the last two years. Both wells show a pattern of declining water levels during irrigation season, with recovery as irrigation season ends. Id.

The Department determined there is not a preponderance of evidence that Applicant's proposed ground water use will measurably reduce surface water flows in the Lost River; protected by state law as a scenic waterway. DPO, at 138; OWRD Recommendations, at 2.

The Department did, however, conclude that "there is some connection between the deep aquifer and the shallow aquifer." OWRD Recommendations, at 2-3. Specifically, the OWRD stated:

Despite this determination that the shallow and deep ground water is hydraulically connected, OWRD recommends issuing a permit with general and specific conditions, including ground water measurement and an artificial ground water recharge plan. DPO, at 313-319; OWRD Recommendations, at 3-9.

The DPO acknowledges that "the [Water Resources] Department does believe there is some connection between the deep aquifer and the shallow aquifer." DPO, at 138.

Water for Life maintains that the debate is not whether a hydraulic connection exists, but to what extent pumping ground water from the deep water bearing zone will impact the shallow water bearing zone. See e.g., DPO, at 138. ("The Department believes that the amount of any interference would be relatively small, especially given the reduced maximum pumping rate of 300 gallons per minute").

1. THE SHALLOW WATER BEARING ZONE AND DEEP WATER BEARING ZONE ARE HYDRAULICLY CONNECTED.
   1. Both the Shallow and Deep Water Bearing Zones are Located Within the Highly Transmissive Bonanza Sub-Area.

      The Babson Well which intersects both the shallow water bearing zone and deep water bearing zone is located in the Bonanza sub-area. Cross Examination Transcript of Marshall Gannett, p. 45, lns. 3 – 4. The Bonanza sub-area transmits water well as a general principle. Transcript, p. 45, ln. 7. In his comparison of the four sub-areas within the Lost River basin, Gerald Grondin distinguished the Lorella sub-area from the other three sub-areas, including the Bonanza sub-area, due to the Lorella sub-area having lower transmissivity basalt than the other three areas. Transcript, p. 47, lns. 22 – 25. Accordingly, the shallow water bearing zone and deep water bearing zone are in an area with higher transmissivity basalt which adds to the probability of a hydraulic connection between the two water bearing zones. Transcript, p. 48, ln. 9.

      In Mr. Grondin’s cross examination testimony he described and distinguished the four sub-basins within the Lost River basin. The four sub-areas include the South Langell Valley sub-area, the Lorella sub-area, the Bonanza sub-area, and the Swan Lake Valley to Poe Valley sub-area. Transcript, p. 46 – 49, lns. 20 – 21. Mr. Grondin’s distinction between the sub-areas is important due to his description of each and the results expected from wells within the different sub-areas.

      Mr. Grondin’s description of the Bonanza sub-area is one of relatively uniform water levels throughout the sub-area lacking compartmentalization. Transcript, p. 48 – 50, lns. 8 – 8. In contrast, Mr. Grondin described the Lorella sub-area as "quite unique" from the rest of the sub-basin. Transcript, p. 47, ln. 12. Among the distinctions between the Lorella sub-area and the Bonanza sub-area is the fact that the Lorella sub-area has water levels that vary up to 20-feet across the sub-area. Transcript, p. 48, ln. 17. Whereas, in the Bonanza sub-area water levels may only vary less than five feet throughout the entire sub-area. Transcript, p. 48, ln. 14. As a result of the differing characteristics of the Bonanza sub-area and Lorella sub-area, information from one sub-area would not be transmittable to the other sub-area.

      Phil Brown, hydrogeologist for CH2MHill, also submitted written direct testimony. Mr. Brown’s testimony is less reliable than Mr. Grondin’s testimony. Mr. Brown relies upon observations and information from the Lorella sub-area without distinguishing between the Lorella and Bonanza sub-areas. Testimony, p. 53 – 54, lns. 1 – 9. Mr. Brown’s conclusions assume uniform characteristics between the two sub-areas, or at the very least assume the Babson well, located within the Bonanza sub-area, inexplicably reacts as if though it were in the vastly different responding Lorella sub-area. Mr. Brown’s testimony does not explain why this particular well would respond in such a manner.

      Contrarily, Mr. Grondin’s conclusions are based on all relevant information including an accounting for the differing characteristics between the Lorella and Bonanza sub-areas. Testimony, p. 53, lns. 1 – 20. As a result, Mr. Grondin’s conclusions showed a higher transmissivity value and a drawdown that could not be explained by a leaky packer. Id. In his testimony, Mr. Grondin stated use of the Lorella sub-area in determining transmissivity would skew the statistics to a much lower transmissivity value than with use of the Bonanza sub-area alone. Id. at 54, lns. 10 – 17. Mr. Grondin’s expertise in the area has allowed him to distinguish between the unique characteristics of the Lorella and Bonanza sub-areas. Id. 43 – 44, lns. 22 – 13. This knowledge of the area and how the characteristics of each sub-area would effect the subjective determination of transmissivity results in more reliable conclusions. Therefore, Mr. Grondin’s expertise in the area in which the Babson well is located and the surrounding areas makes his testimony and relevant conclusions more reliable than those of Mr. Brown.

   2. The Preponderance of the Evidence Shows a Hydraulic Connection.

      Area expert, Mr. Grondin, stated there was some degree of hydraulic connectivity between the shallow and deep water bearing zones within the Bonanza sub-area. Transcript, p. 72, ln. 17. Mr. Grondin based his assessment of a hydraulic connection between the shallow and deep water bearing zones on his own expertise in the area as well as interference tests conducted in 1994 and 2002. Transcript, p. 43, lns. 5 – 14.

      Mr. Grondin is not alone in his assessment that the water bearing zones appear to exhibit a hydraulic connection. In his cross-examination testimony, Mr. Grondin stated that Water Resources Department’s hydrogeologist Karl Wozniak and USGS hydrologist Marshall Gannett agreed with his conclusion that a hydraulic connection existed between the shallow and deep water bearing zones. While Mr. Gannett was "more diplomatic" about his concurrence with Mr. Grondin’s assessment, according to Mr. Grondin, Mr. Wozniak believed a hydraulic connection was likely. Transcript, p. 56, lns. 22 – 25. Backed with the concurrence of two hydrological experts, Mr. Grondin used the data available to him to conclude a hydraulic connection did exist to some degree. Transcript, p. 72, ln. 17.

      1. The amount of drawdown from the shallow water bearing zone cannot be completely attributed to the flawed packer test.

         Among the information used by Mr. Grondin was CH2MHill’s 2002 Water Supply Supplemental Data Report. In this report, based on an interference test conducted by CH2MHill, drawdown observed from the shallow water bearing zone was attributed to a leaky packer used to isolate the shallow water bearing zone from the deep water bearing zone within the Babson Well. This conclusion was based on CH2MHill hydrogeologist Phil Brown’s analysis using a lower hydraulic conductivity value which included a transmissivity value of 125,000 gallons per day per foot (gpd/ft). Transcript, p. 45, lns. 14 – 15. In contrast, the transmissivity value used by Mr. Grondin was 2,500,000 gpd/ft.

         Mr. Brown reached his low transmissivity value by looking at a well with a higher gradient as well as wells within the Lorella sub-basin, and not just wells within the Bonanza sub-basin in which the Babson Well, and projected COB facility site, are located. Transcript, p. 52 – 54, lns. 25 – 5. As stated earlier (Argument I, A), the Bonanza sub-area and Lorella sub-area differ to such a degree that information from one area would not be useful in assessing the other area. As a result, Mr. Brown’s use of a high gradient well and tests performed in the Lorella sub-area tended to unfairly skew the statistics to a lower hydraulic conductivity than that reached by Mr. Grondin. Transcript, p. 53 – 54, lns. 21 – 5.

         Furthermore, it is unknown whether the "leakage rate" between the shallow water bearing zone and deep water bearing zone would remain constant over time. Gerald Grondin’s Review of Water Supply Supplemental Data Report, WFL Opening Brief, Exhibit F, at 2. The "leakage rate" is the amount of conductivity between the water bearing zones. In Mr. Grondin’s review, he noted that it was unclear whether the leakage rate "would remain constant or increase with time (months or years)." Id. (emphasis added). Mr. Grondin’s concerns were with a constant leakage rate or an increase in leakage rate not a decrease in leakage rate. As a result, according to Mr. Grondin there is the potential for the leakage from the shallow water bearing zone to the deep water bearing zone to become greater with time. If the leakage rate were to increase after months of pumping the affect on the shallow water bearing zone could be devastating. The uncertainties of how much conductivity between the water bearing zones will result after time requires the COB water right application be denied.

      2. Faults within the Bonanza sub-basin add to the connectivity for the shallow and deep water bearing zones.

   In addition to the observed drawdown numbers, other evidence factors into the conclusion a hydraulic connection exists between the shallow water bearing zone and deep water bearing zone. Among these other factors are the faults, including unmapped faults, within the Bonanza sub-area. Due to the characteristics of these faults, as observed by Mr. Grondin, these faults add to the conductivity between to the shallow water bearing zone and the deep water bearing zone.

   In his Review of OWRD and CH2MHill Technical Data in Support of COB Energy Ground Water Permit Application, Ivan Gall, OWRD Hydrogeologist, asserted any unmapped faults suggested to exist by CH2MHill in its 1994 report in the Bonanza sub-area would likely provide a rapid hydraulic connection between the shallow water bearing zone and the deep water bearing zone. WFL Opening Brief, Exhibit E at 6. Mr. Gall based his assessment on Mr. Grondin’s research which indicated many of the faults in the area were transparent to flow. Id. This essentially meant the faults serve to allow water to flow through them instead of acting as barriers. Id. Therefore, if there is an unmapped fault, as CH2MHill’s own report of 1994 suggests, exists these faults would only add to the evidence showing a hydraulic connection between the shallow water bearing zone and deep water bearing zone.

   As a result, a preponderance of the evidence indicates a hydraulic connection between the shallow water bearing zone and deep water bearing zone exists. COB has failed to meet its burden as the applicant of proving by a preponderance of the evidence that the deep water bearing zone is isolated from the shallow water bearing zone. This connection means an application from the deep water bearing zone must be viewed in light of the use and pending applications of the shallow water bearing zone.

2. THE EXPEDITED PROCESS FOR SITING AN ENERGY FACILITY VIOLATES THE EXISTING RIGHTS OF PERSONS WITH PENDING WATER RIGHT APPLICATIONS IN THE SAME WATER BASIN BY PROVIDING A MEANS FOR THE COB ENERGY FACILITY TO MOVE AHEAD IN LINE OF OTHER PREVIOUSLY PENDING APPLICATIONS.

   Water right applications from the same source must be considered in the order of the application. Hillis v. Department of Ecology, 131 Wash.2d 373, 393, 932 P.2d 139 (1997) en banc. The State of Washington has a similar process to Oregon’s by which water rights are appropriated. In Washington, a water right application must be filed with the Department of Ecology which then must investigate the application against four criteria: 1) what water, if any, is available; 2) what beneficial use will the water be applied; 3) will appropriation impair existing water rights; and 4) will appropriation affect the public welfare detrimentally. Id. at 384. Like Oregon, Washington has been faced with a budget crisis and the Department of Ecology has not been funded sufficiently to investigate all the applications it has received resulting in a statewide backup of 5,000 applications. Id. at 378-379. As a result the Department of Ecology began a watershed investigation of the 62 statewide watersheds. Id. The Washington Supreme Court held applications competing for the same source must be taken in order, even though prioritizing applications based on, among other things, need within a watershed was not arbitrary or capricious. Id. at 397.

   1. Filing a Water Right Application Creates an Existing Right to the Applicants Place In Line, and Allowing COB to Move Ahead In Line Violates Prior Applicants’ Rights.

      No case in Oregon speaks directly on the point as to what interest one acquires by filing an application for a water right. Without such precedent, it is beneficial to look to other similar water appropriation schemes to determine the interest created. As noted above, the State of Washington has a similar water appropriation scheme to Oregon’s. Because of this it is helpful to look to Washington law on this matter.

      In Washington, an application for a water right does create an existing right in the application holder. Schuh v. Department of Ecology, 100 Wash.2d 180, 187, 667 P.2d 64, 68 (1983). In Schuh, the Washington Supreme Court held the Department of Ecology correctly concluded an applicant does obtain a right to his/her place in line as a result of filing the application. Id. The court deferred to the Department of Ecology’s reasoning that permits are issued in the same order as applications are received. Therefore, the applicant’s place in line becomes an existing right which will determine the permit’s priority date. Id.

      Accordingly, the approximately 40 pending applications in the Bonanza sub-area must be considered in viewing COB’s application. To allow COB to by-pass the process and move ahead of these 40 pending applications would violate those applicants’ rights to their place in line. This is further exacerbated by the report on the Lost River sub-basin Mr. Grondin is currently working to publish. If the response to this report is to declare a critical ground water area, then all the pending applications will be denied. If the COB application is pushed through and then a critical ground water area is declared, all the applications filed prior to COB’s filing will be denied effectively singling COB out as a priority for appropriation. To prioritize COB for appropriation would be an unacceptable arbitrary and capricious decision on part of the Water Resources Department, or the Energy Facility Siting Commission.

   2. Applications Must Be Taken In the Order Received When Within the Same Designated Area.

   Applications competing for the same water source must be taken in the order the application was received. Hillis, 131 Wash.2d at 397. Faced with the same backlog of applications and funding crunch as the OWRD, Washington’s Department of Ecology decided to batch applications together geographically. Id. This meant that while statewide applications may be processed out of order, within a geographic area or water basin applications were still required to be processed according to application date. Id. This is due to the existing right established when an application is filed. Id. If applications were to be taken out of order without consideration of pending applications it would run the risk of permitting a use that once the prior pending applications were handled would no longer be available. The same reasoning applies in Oregon.

   COB relies heavily on the erroneous assumption that the shallow water bearing zone and deep water bearing zone are not hydraulically connected. However, the evidence shows a hydraulic connection of some degree. Because a hydraulic connection between the two zones exists to some degree a water right application for one of the zones cannot be taken ahead of previously filed applications for the other zone. Hillis, 131 Wash.2d at 393 (applications competing for the same water source must be considered in order).

   Furthermore, the Proposed Order issued by OWRD did not take into consideration the pending applications for water rights. OWRD Proposed Order. In addition to the erroneous conclusion that no existing water rights or surface water will be injured, nothing in the Proposed Order indicates OWRD took into account the 30 – 40 pending applications that were filed prior to COB’s application for a water right. Because OWRD has failed to even take into account these pending applications the Proposed Order must be rejected, and subsequently, COB’s water right application must be denied.

   In addition, both water bearing zones are within the Lost River sub-basin, and more specifically within the Bonanza sub-area. In Hillis, the Washington Supreme Court recognized it was logical and efficient to determine the application priority on a watershed basis. Id. The Bonanza sub-area would fit this reasoning. It follows that applications within the Bonanza sub-area cannot be considered out of the order in which they were received.

3. THE PERMIT CONDITIONS DO NOT PREVENT IMPAIRMENT OF EXISTING WATER USERS.

OAR 690-380-0100(3) defining injury for transfers of water rights as preventing a water user from accessing water they previously could have and were legally entitled to. By appropriating any water to COB injury would result to the existing water users.

In addition, the affect additional appropriation will have on surface water must be assessed to determine whether a hydraulically connected ground water source will impair surface water. OAR 690-009-0040. The Bonanza Big Springs have experienced a reverse flow for the last four years. Transcript, p. 57 – 58. With a finding that the deep water bearing zone is hydraulically connected to the shallow water bearing zone, Mr. Grondin conceded pumping from the deep water bearing zone would have an impact on the surface water at Bonanza Big Springs. Transcript, p. 58 – 59.

In determining whether there is substantial interference with surface water the department must look at the cumulative adverse impact on surface water. OAR 690-009-0040(5)(e). Even though the observable impact may appear minimal, the fact that reverse flow has been experienced for the last four years indicates that reverse flow will only occur faster with more appropriation of the water bearing zones. Therefore, considering the cumulative effect the COB appropriation would have on the Bonanza Big Springs surface water, the COB application must be denied.

A. The Proposed Ground Water Use Does Not Ensure Preservation of the Public Welfare, Safety and Health.

The presumption of the proposed groundwater use ensuring the public welfare, safety, and health has not been established. OWRD in issuing its Draft Proposed Order of March, 2004 stated the presumption that a proposed groundwater use will ensure the preservation of public welfare, safety, and health was controlled by ORS 537.525. Under this OWRD concluded the presumption was met because:

However, nothing in the statute under which the presumption is addressed [ORS 537.621(2)], allows for conditions of a permit to be weighed when determining if the presumption is met. ORS 537.621(2) in relevant part states:

The statute does not authorize OWRD to take into consideration conditions, especially conditions which have not yet been submitted to OWRD, when determining if injury to other water rights will result. Therefore, the presumption of preservation of the public welfare, safety and health has been met.

As a result, OWRD’s own words imply that without the conditions the proposed use would injure other water rights and thus not meet the preservation of the public welfare, safety and health. In the DPO of March 16, 2004 on page 162, OWRD used the qualifying phrase "if properly conditioned." The use of this phrase must be concluded to mean without proper conditions injure would result. Since OWRD is not authorized by statute to consider conditions when determining the presumption of ORS 537.621(2), for purposes of the presumption injure to existing water rights would result according to OWRD’s findings. Therefore, the presumption is not met, and the proposed use would not ensure the preservation of the public welfare, safety and health.

B. The Mitigation Plan Has Not Been Received Effectively Depriving the Right of Protestants From Challenging Whether the Plan Will Prevent Injury to Existing Users.

Mr. Grondin testified on cross examination that the mitigation plan and its conditions have yet to be submitted to OWRD. Testimony, p. 89 – 90. Mr. Grondin also testified the trigger for determining when the mitigation plan would take effect had yet to be decided. As a result OWRD has accepted a permit based on mitigation plan yet to be seen by OWRD. Id. at. 90 – 91. This not only prevents OWRD from knowing what the plan will be and how it will affect other water users, it also prevents interested parties from commenting and challenging the mitigation plan. This mitigation plan must "prevent" impairment to existing water users. ORS 537.629(1). Without knowledge of the mitigation plan itself, those people affected by it cannot determine whether the plan prevents impairment of their existing water use.

Finally, it has not even been considered all the outstanding water right applications that would have priority dates senior to COB. If these water applications are permitted, which they almost necessarily must if COB’s application is permitted, then there could be virtually no water left in the shallow water bearing zone. As a result if COB’s pumping has even the slightest effect on the shallow water bearing zone it would prevent senior permitted water users from accessing the water they have legal right to access thus causing injury. This injury could result in a shut-down of the COB facility as a result of the mitigation plan. If this were to happen, the result would be hundred-millions of dollars worth of waste to the economy.

The COB water right application should be denied. A hydraulic connection exists between the shallow water bearing zone and the deep water bearing zone. The current uses of the shallow water bearing zone result in surface water impact creating a reverse flow at Bonanza Big Springs. Any additional withdraw from the water bearing zones will impair the surface water and the existing water users. As a result, COB’s request for appropriation of 300 gpm from the hydraulically connected deep water bearing zone will impair surface water and existing water users and should therefore be denied. Alternatively, COB’s water right application should be denied at least until further studies are conducted including, but not limited to, the publication of Mr. Grondin’s report on the Lost River basin and the resulting actions by OWRD as a result of this report.

DATED this 13^TH day of August, 2004.

SCHROEDER LAW OFFICES, P.C.