Title: WaterWatch of Oregon v. Water Resources Dept.
Citation: N/A
Docket Number: S067938
State: Oregon
Issuer: Oregon Supreme Court
Date: December 23, 2021

No. 51	
December 23, 2021	
71
IN THE SUPREME COURT OF THE
STATE OF OREGON
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)
En Banc
On review from the Court of Appeals.*
Argued and submitted April 29, 2021.
Thomas M. Christ, Sussman Shank LLP, Portland, 
argued the cause and filed the briefs for petitioner on review. 
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.
______________
	
*  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.
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 hydroelectric 
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 
Department 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 legisla­
tive recommendations, the 1997 legislature 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 sec­
tion, which is not at issue in this case, directs the Water 
Resources Commission to adopt procedures regarding proj­
ect 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 undisputed, 
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 popula­
tions 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 through­
out the West, Rock Creek has water quality issues involv­
ing 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 pow­
ered Baker City’s first electric lights and new streetcar sys­
tem. 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; 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 * 
* 
* .” 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 closures 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 - 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.