- Associated Press - Friday, July 11, 2014

OMAHA, Neb. (AP) - The Nebraska Supreme Court on Friday upheld a decision favoring a public power district’s right to water over those of farmers and ranchers along northern Nebraska’s Niobrara River.

The case stems from the Nebraska Public Power District’s decision to exercise its senior water rights to the river in 2007 after years of drought reduced the region’s water supply. The district said it needed the water to produce power at Spencer Dam, but farmers and ranchers upstream sued when the department ordered them to shut off their irrigation pumps that year.

Friday’s decision was a blow to the farmers and ranchers, who had twice before prevailed before the Nebraska Supreme Court. In 2009, the high court found that state water officials were wrong to dismiss irrigators’ challenge without a hearing. In 2012, the court again ruled in favor of farmers, ordering the Nebraska Department of Natural Resources to hold another hearing to consider irrigators’ claim that the power district lost its water rights by failing to exercise them for decades.

Nebraska law says that when it comes to water, “the one first in time is first in right.” The power district acquired water rights in 1942, well before the irrigators who sued. But the law also sets up a priority system, and irrigators have the upper hand on that. So, even though the farmers received their rights after the power district, they can use the water first if they want it - but they have to pay the power district.

Irrigators argued that before 2007, the power district never exercised its right to force farmers and ranchers to pay for Niobrara water. The district also did not object to any of the more than 400 Niobrara irrigation applications approved since 1942, the farmers said, which showed that the district had “abandoned” its water rights.

The power district argued it had wrongly believed that the Niobrara River was administered by the Natural Resources Department, like other river basins in the state, and that it never intended to abandon its water rights.

In a majority opinion Friday, the state’s high court sided with the power district, noting that none of the farmers and ranchers who sued objected to new irrigation applications, either.

“(I)f we were to find that NPPD was required to protect its appropriations … by objecting to new applications, we see no reason why the roughly 400 junior appropriators that followed would not also have been required to protect theirs,” Chief Justice Michael Heavican wrote.

In a dissent, Justice William Connolly said the Natural Resource Department’s method of administering the river basin’s waters is fundamentally flawed because the power district’s appropriation is so large, the river can’t satisfy NPPD’s total allotment most of the time, much less any other irrigators.

Allowing the power district to “cause this economic harm in 2007 after acquiescing … for over 60 years is both unjust and contrary” to the way the water rights system is supposed to work, Connolly said.

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