Opinion ID: 1301884
Heading Depth: 1
Heading Rank: 3

Heading: overview of surface water rights

Text: Nebraska's laws governing surface water management, regulation, and allocation present a mosaic of private and public rights. This appeal centers on two of those rights: appropriation rights and preference rights. An appropriation right is the right to divert unappropriated stream water for beneficial use. [1] Under the prior appropriation system, each appropriator's right to divert unappropriated waters from a stream for a beneficial purpose receives a date of priority. An appropriation's priority date is the date when the Department approves the appropriator's right to divert water. In a perfect world, there would be sufficient water to satisfy all appropriations for a given stream. But when a stream has insufficient water to satisfy all appropriation rights on it, the appropriator first in time is first in right. [2] That is, a senior appropriator with an earlier priority date has the right to continue diverting water against a junior appropriator with a later appropriation date when both appropriators are using the water for the same purpose. [3] But when the appropriators use the water for different purposes, a junior appropriator may nonetheless have a superior preference right over senior appropriators. Under the Nebraska Constitution and statutes, when there is insufficient water to satisfy all appropriations, certain water uses take preference over others, despite the appropriators' priority dates. [4] So in times of shortage, aggrieved water users with superior preference rights may exercise their constitutional preference to obtain relief when the prior-appropriation system would otherwise deny such users access to water. [5] Those using the water for domestic purposes have preference over those claiming it for any other purpose. [6] And those using water for agricultural purposes have preference over those using it for manufacturing and power purposes. [7] And so, the junior appropriators' use of the diverted water for agricultural purposes took preference over NPPD's use of the water for power generation. [8] Simply having a superior preference right, however, does not give that appropriator unfettered use of the water. An appropriator having a superior preference right, but a junior appropriation right, can use the water to the detriment of a senior appropriator having an inferior preference right. But the junior appropriator must pay just compensation to the senior appropriator. [9] So, although NPPD's appropriation right was senior to that of the junior appropriators, the junior appropriators could continue to divert water if they compensated NPPD. [10] Under Nebraska's statutes, if an irrigation district or appropriator with a superior preference right cannot agree with a power generator on the compensation for use of the water, then the appropriator can commence a condemnation proceeding in county court to determine the compensation. [11] In a condemnation proceeding, the county court appoints appraisers, who then return an award. [12] The compensation award cannot be greater than the cost of replacing the power that the power plant would have generated if it had retained use of the water. [13] For the Department, whether the parties agree on the compensation or the junior appropriators obtain a condemnation award, the result is the same: the Department cannot order the junior appropriators to cease diverting water to satisfy the senior appropriation for the period agreed to by the parties or contained in the condemnation award. This explanation of the rights at issue and the governing statutory schemes should provide a lens through which to view our analysis.