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Summary of Colorado Supreme Court Water Case Decisions <br />September, 2006 – October, 2007 <br /> <br />1) Natural Energy Resources Company v. Upper Gunnison River Water <br />Conservancy District, 142 P.3d 1265 (Colo. 2006), September 11, 2006 <br /> <br /> The Supreme Court affirmed the water court’s dismissal of Natural Energy <br />Resources Company’s (“NECO’s”) 2004 application seeking a finding of reasonable <br />diligence in a conditional water rights decree. NECO sought to satisfy its ongoing <br />diligence requirement under the “can and will” statutes for NECO’s conditional water <br />rights. See §§ 37-92-103(6) and 37-92-301(4), C.R.S. NECO’s 1984 original decree <br />contemplated using Taylor Park Reservoir as a forebay and afterbay for the proposed <br />higher-elevation Union Park Reservoir for the production of hydroelectric power and <br />water storage. In two subsequent applications filed in 1986 and 1988, and denied by the <br />water court, NECO had sought to expand the capacity of the Union Park Reservoir and <br />obtain numerous other rights and decreed uses for the proposed Union Park Project, <br />which was intended to transfer water from the Gunnison River Basin to Arapahoe <br />County. The Supreme Court affirmed the water court’s denial of these applications in <br />Arapahoe II. See Bd. of County Comm’rs of County of Arapahoe v. Crystal Creek <br />Homeowners’ Assoc., 14 P.3d 325 (Colo. 2000). In these two cases, the water court <br />found that NECO’s proposed use was “inimical” to the use of Taylor Park Reservoir by <br />the United States and the Uncompaghre Valley Water Users Association and would <br />constitute a “major operational change” requiring government permits. The water court <br />also found NECO had failed to prove it would secure the necessary permits for either the <br />use of Taylor Park Reservoir as a forebay or an afterbay or for the installation of a <br />pumping plant at Taylor Park Reservoir for its proposed hydroelectric installation. In the <br />2004 due diligence case, because such uses of the Taylor Park Reservoir were a <br />necessary feature of the original conditional decree, NECO needed to show it could <br />secure the necessary permits in order to satisfy the “can and will” test. However, because <br />the likelihood of NECO securing the necessary permits had been raised and finally <br />adjudicated in the 1986 and 1988 cases, the judicial principal of issue preclusion barred <br />NECO from relitigating the issue in the 2004 case. Accordingly, the Supreme Court <br />affirmed the water court’s dismissal of NECO’s application for a finding of due <br />diligence, and the water court’s cancellation of NECO’s conditional water rights. <br /> <br />2) Concering the Application for Water Rights of Central Colorado Water <br />Conservancy District, 147 P.3d 9 (Colo. 2006), November 6, 2006 <br /> <br /> Central filed two applications to change the use of a portion of the 1882 Jones <br />Ditch Water Right in Water Division 1. The water court was required to determine: (1) <br />the lawful historic use of the Jones Ditch Water Right under the 1882 appropriation, and <br />(2) Central’s share of the consumptive use of the water right. Although, by 1920, the <br />Jones Ditch irrigated at least 700 acres, the water court found that the water right was <br />limited to the volume of water sufficient to irrigate approximately 344 acres, which the <br />water court determined was the amount of acreage contemplated at the time of the 1882 <br />decree. The expanded irrigation from 1882 to 1920 could not be considered part of the <br /> 1