Before the Montana Board of Natural Resources and Conservation in the matter of water reservation application nos. 69903-410 ... in the upper Missouri River Basin : Department of Fish, Wildlife and Parks' reply brief

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6J9« 313
P21>rarx>

1992

Robert N . Lane
Curtis E. Larsen
Montana Department of
Fish, Wildlife and Parks

1420 East Sixth Avenue STATE DOCUMENTS COLLECTION
Helena, MT 59620

(406) 444-4594 J UN 0 3 1992

MONTANA STATE LIBRARY
1515 E- 6th AVE.

HELENA, MONTANA 59620

EEFORE THE MONTANA BOARD OF NATURAL
RESOURCES AND CONSERVATION
**********************

IN THE MATTER OF WATER )
RESERVATION APPLICATION NOS. )
69903-410 71895-411 72578-41L )
70115-41F 71966-41S 71579-41T )
70117-41H 71997-41J 72580-41A )
70118-41H 71998- 41S 72581-411 )
70119-41H 72153-41P 72582-411 )
70270-41B 72154-41K 72583-41P )
7 1537 — 4 IP 72155 — 4 1 A 72584-41S )
71688-41L 72256-41P 72585-41M )
71889-41Q 72307-41Q 72586-41P )
71890-41K 72574-410 72587-41G )
71891-41P 72575-41K 72588-40C )
71892-41G 72576-40E 73198-411 )
71893-41K 72577—4 IP 73199-41S )
71894-411 IN THE UPPER )
MISSOURI RIVER BASIN )

DEPARTMENT OF FISH,
WILDLIFE AND PARKS'
REPLY BRIEF

**************

Introduction

This brief is filed by the Montana Department of Fish,
Wildlife and Parks (DFWP or Department) in reply to the briefs and
proposed findings of fact and conclusions of law filed by various
objector parties in this proceeding. The Department will address
the major issues raised by the objector parties' findings and
conclusions and briefs. The Department will not make a specific
rebuttal to each proposed finding or conclusion with which it takes
However, the Department believes that many of the proposed

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findings and conclusions mischaracterize and distort the evidence
in the record of this proceeding. Further, many of the witnesses'
statements and other evidence are taken out of context and used to
reach findings or conclusions which are not supported by such
evidence. In some cases, it appears a proposed finding of fact is
based on questions the parties' attorneys asked, rather than the

answers actually given by a witness.

As they did with their objector testimony, the objectors have
generally adopted each others' proposed findings and conclusions.
This approach graphically illustrates many inconsistencies in the
objectors' arguments against instream flow reservations. These
arguments lead to many incongruous positions and conclusions.

An example illustrates this point. A common theme of the
documents filed with the hearing examiner is that existing water
claims on many of the streams add up to several times the actual
annual flows of these streams, so that no water remains for
instream flows. The objectors' own witness, Roger Perkins,
testified at the hearing that these claims for existing rights are
typically inflated and overstated in most basins. (Tr. Day 3,
Perkins Cross, p. 188) . This is evident when the existing claims
_add up to nine, ten or more times the actual stream flows. These
claims tell us nothing about how much water is actually being
diverted and how much is in the stream and physically available for
instream flows. In this same vein, the objectors characterize the
instream flow requests as overstated or requesting flows that do
not exist, although the evidence shows that the flows are available

2

in most years and at most times. In fact, in most cases, the
objectors admit that the streams included in the Department's
requests have viable and healthy fish populations, even though
supposedly there is no water for them. The inconsistencies in the

objectors' arguments are obvious.

Another example illustrates the several internal
inconsistencies in the objectors' arguments against instream flows.
The Upper Musselshell Water Users suggest, in the proposed findings
filed by Cindy Younkin and Russ McElyea, that a closure of the
Musselshell basin by the Department of Natural Resources and
Conservation ( DNRC ) will serve the purposes of an instream flow
reservation, and then in their final paragraph accuse DFWP of
seeking to close most of the basins in which it has filed water
right claims. Similarly, Mr. Davis and Mr. Tucker claim to
represent clients with the same interests in this proceeding. Mr.
Davis argues that the Ruby and Beaverhead basins are already
effectively closed to new development, while Mr. Tucker argues that
the instream flow reservations in the same basins will foreclose
any new water development.

Other inconsistencies and distortions abound in the objectors'
.findings. For example, objectors represented by Mr. Gilbert take
exception to the Department's request of 650 cfs for Big Hole reach
#3. These objectors' own witness, Mr. Wesche, stated the
Department's request for this reach was justified, on account of
the fishery resources in this reach. Several objectors, including
the Upper Musselshell Water Users, assert that 7756 cfs is already

3

allocated to fish and wildlife claims in the Gallatin River, citing
the draft EIS. What these parties failed to consider is that DNRC
added up the various season-by-season claims DFWP has. These
claims are not additive; the largest claim is 1,500 cfs. The Teton
Water Users, represented by Mr. Doney, correctly assert that the
Teton River basin is overappropriated, but quibble with an instream
flow reservation, which would help prevent further deterioration of
flows in the basin. Mr. Doney ignores some two dozen new
consumptive use applications in the basin. The objector's concerns

with instream flows are misplaced.

The Department will briefly respond to the renewed motions to
dismiss, some of which raise again issues previously considered and
rejected by the hearing examiner.

Motions to Dismiss on Jurisdictional Grounds

A number of objectors have renewed motions to dismiss the
instream reservation request of DFWP, relying on language in the
recent Montana Supreme Court decision in Baker Ditch Company v._
District Court. 49 St. Rep. 17 (1991) to support an argument that

only the Water Court may establish minimum instream rights. The
---language relied upon by the objectors is raw dicta when an attempt
is made to apply the language to the reservation process. Also the
language is incorrectly interpreted by these objectors. The
objectors are relying solely on the fortuitous circumstance that
some language in the decision, when taken out of context, appears
to support their argument.

4

Baker Ditch restricted a district court judge, in the
administration of a water rights decree, to the administration of
the various rights and priorities in the decree. The district
judge was not allowed to provide water for instream flow protection
of a stream, because this would be outside the administration of
the water decree and would be, in effect, an adjudication of an
existing water right for instream purpose. The point of the
Supreme Court is that:

By statute, the water court is vested with exclusive
jurisdiction relative to all matters relating to the
determination of existing water rights within the
boundaries of the State of Montana.

Id. at 19 . Existing water rights are water rights existing prior

to July 1, 1973. Section 85-2-102(9), MCA. With the holding of

the case in mind, the language relied upon by the objectors can be

properly put in context. This language is as follows:

The Montana Water Users (sic) Act provides that the
determination and adjudication of water rights including
new water rights, which include minimum instream flow
water rights, if any, are vested in the jurisdiction of
the Water Court. See Section 3-7-501, MCA. Mildenberqer ,

48 St. Rep. at 621.

Id. at 19. Section 3-7-501, MCA, grants the Water Court exclusive
jurisdiction over the adjudication of existing water rights. The
-language, taken in the whole context of the decision and the
referenced statute, refers only to the Water Court's exclusive
jurisdiction to adjudicate existing water rights, including any
instream flow rights that may exist with a priority before July 1,
1973 . The specific and detailed water reservation statutes were
not in issue or considered in any respect in the Baker Ditch case.

5

The objector's argument would require the nullification of the
water reservation process and the nullification of the water
permitting process as being determinations and adjudications of
water rights. This is not the holding of Baker — Ditch or the
meaning of the quoted language. Baker Ditch merely requires a

district judge to administer a water decree according to its terms
only and cautions that the adjudication of pre-1973 existing rights

is the exclusive jurisdiction of the Water Court. The Board of

Natural Resource and Conservation (Board)

still has the

jurisdiction given to it by the legislature to grant reservations
of water for beneficial uses, including instream flows for fish,
wildlife and recreational purposes.

Motions to Dismiss on Constitutional Grounds
Several of the objectors have renewed motions to dismiss these
proceedings on the grounds that they have been denied due process
of law, and on other constitutional grounds. These motions are a
remake of motions for additional time to file testimony, which were
filed in November, 1991, by these and other objectors. The hearing
examiner denied the earlier motions, but gave the parties the
- “chance to demonstrate at a later time, if they could, how these
proceedings have prejudiced their rights. If such a showing was
made, the hearing examiner would consider providing the objectors
an opportunity to present additional evidence.

The issue concerning the purported denial of due process was
not brought up again before or during the hearing, until the latest

6

motions were filed. No party has ever shown how he or she was
denied notice and an opportunity to be heard in this case, which is
what procedural due process is all about. No one has ever stated
what property interest is being deprived on account of the
procedure used in this case. No one has ever specifically stated
how his or her objector case would have been presented any
differently if he or she had had more time to prepare. No one has
ever stated why the instream flow reservation applications should
be dismissed because certain objector parties are dissatisfied with
the course of this proceeding, when the procedure was not
determined by the instream flow reservants.

It is axiomatic that a deprivation of life, liberty or a
property interest must be at stake before procedural due process
concerns are raised. A mere affect on a person's property
interests does not implicate due process guarantees, and there is
no constitutionally required notice or opportunity for a hearing
under these circumstances. This concept was recognized by the

Montana Supreme Court in Montana Power C_o_. — v^ — Public — Service

Commn. . 206 Mont. 359, 671 P. 2d 604 (1983), which was cited by
several objectors in their briefs. In that case, the Public
"Service Commission had issued an order, without notice or prior
hearing, prohibiting the power company from going forward with a
planned merger and holding company reorganization scheme. The
court concluded this procedure offended due process, and stated
that:

The fundamental requirement of due process is the

opportunity to be heard ' at a meaningful time and

7

t

in a meaning manner. ' The notice must be
reasonably calculated to inform parties of
proceedings which may directly and adversely affect
their legally protected interests.

Id. at 368. (citations omitted, emphasis added).

Thus, under the rule of the MPC v. PSC case, a party must show
a direct and adverse affect on legally protected interests before
due process guarantees are implicated. In this case, instream flow
reservations do not have a direct and adverse affect on senior
water rights, and may in fact be beneficial to senior water rights.
Instream reservations do not consume water or take water away from
prior water right holders.

Even if the objectors' interests are affected by these
proceedings to a degree requiring their participation in the case,
the parties were given reasonable notice and an opportunity to be
heard in this matter. Constitutional guarantees of due process are
satisfied if the affected party is provided "the opportunity to be
heard 'at a meaningful time and in a meaningful manner.'" Id.

Notice of these proceedings were given by DNRC to interested
parties on or about August 1, 1991. The evidentiary hearing was
not held until February, 1992. In the meantime, the objector
parties were required to prefile testimony on December 3, 1991, and
surrebuttal testimony on December 31, 1991. Voluminous testimony
was filed by the objectors on December 3, 1991, but very little
surrebuttal testimony was filed. The parties were directed in an
order dated December 4, 1991, to show how they may have been
prejudiced by the timing of the filing of testimony. During the
hearing on the omnibus motions held on December 23, 1991, the

8

hearing examiner denied the motion for an extension of time to file
additional evidence, concluding no one had shown any prejudice
resulting from the deadlines to submit pre- filed testimony. If any
such prejudice were shown, the hearing examiner would allow the
filing or offering of additional testimony past the deadlines
previously set by the hearing examiner. None of the parties took
the hearing examiner up on this offer during the prehearing
proceedings or during the evidentiary hearing. In fact, with the
concurrence and stipulation of DFWP, several parties were allowed
to file additional evidence or testimony before or during the
hearing. See, e.q. . Whitetail Objectors' prefiled testimony. DFWP
never resisted the late filing of testimony by objectors, but was
cooperative throughout.

Considering the interests of the objectors and the need to
have a final administrative decision by July 1, 1992, all of the
parties were given the process due them under the Constitution.

In connection with their due process argument, several of the
objectors have also complained about the timing of the release of
the Final EIS by DNRC. Again, none of the parties have shown how
they were prejudiced by the release of the Final EIS in January,
-1992. No one made an offer of proof in relation to the contents of
the EIS, nor moved the hearing examiner in a timely fashion to
submit additional evidence.

The release of the Final EIS was specifically discussed during
the hearing held in Helena on November 25, 1991. At that time, the
hearing examiner made it clear that he would consider allowing the

9

submission of testimony relating to the Final EIS if a party made
a showing of prejudice on account of information contained in the
Final EIS. Further, the hearing examiner stated at that time that
the Draft and Final EISs and all the EAs would be a part or the

record.

All of the parties were on notice that the DNRC MEPA documents
would be evidence in the record of this proceeding. No one can

claim prejudice at this late date.

For all of the foregoing reasons, the motions to dismiss on

grounds of denial of procedural due process should be denied.

Objectors represented by Mr. Anderson have also raised a
substantive due process argument. These objectors claim that the
reservation statute violates; water users' rights by being
duplicative. These objectors state that the issues in water right
adjudication proceedings and this proceeding are identical, stating
that water right holders must prove priority, water rights and

water availability in both cases.

Existing water right holders are not required to prove any of
the above matters in this case. This proceeding cannot and does
not affect existing water rights. No determination is to be made
----in this proceeding of the priority and amount of existing rights.
This proceeding is not an adjudication of existing rights. The
hearing examiner so held in his Order Regarding Omnibus Motions of
Objectors.

This issue was previously raised by numerous objectors and
disposed of by the hearing examiner. This issue is also addressed

10

in DFWP ' s response to the motion to dismiss on jurisdictional
grounds. Little further discussion of this point is required. The
adjudication of existing rights has nothing to do with instream
flow reservations. The adjudication process will not make more or
less water physically available in any stream. It merely
determines pre-1973 rights. Instream flow reservations will
immediately put water to use for their intended purposes, but do
not deprive any existing water right holders of water that they
have historically used. There is no statutory or other legal
requirement that existing water rights be adjudicated before
instream flow reservations are granted. The contention to the
contrary flies in the face of the reservation statute.

Instream flow reservations do not take water out of a stream
or otherwise consume water. Existing water right holders were not
required to prove their water rights in this case, and attempt to
defeat the applications of the instream flow reservants, since the
existing water right holders diversionary rights are not affected
by instream flows. This case is different than the continual
issuance of water permits for new consumptive uses, about which
existing water right holders may rightly be concerned. If DNRC
-“continued to issue such permits for new consumption on
overappropriated streams, then these objectors may have a valid
point. As with the rest of the objectors' points, the concern over
instream flow reservations is misplaced.

11

Several points were also raised about the priority date of the
Missouri reservations and the inability of private parties to apply
for reservations, neither of which are logical.

The claim is made that the July 1, 1985, priority date is a
deprivation of property without due process. Most existing water
right holders have much earlier priority dates. It is unclear how
the July 1, 1985, priority date amounts to a denial of due process.

Mr. Anderson states that private parties were not given the
opportunity to apply for reservations and that this denies them
equal protection. No citation of authority was made for this
argument. He states that private persons would have applied for
storage projects. Mr. Anderson does not state who would have
applied for such a project. This assertion is unsupported by any
facts about how anyone was specifically prejudiced. The facts show
an opposite conclusion.

In preparation for this proceeding, DNRC sent out some 6000
surveys to farmers and ranchers, soliciting proposals for new
projects to be included in reservation applications. CD Exh. 2, p.
6. Those that were ultimately included in applications were the
best projects DNRC could come up with. Applications for about 12
storage projects were submitted. DNRC accepted only about four of
them for inclusion in the applications submitted to the Board, even
though projects with an economic feasibility rating as low as ten
percent were included in applications. Tr. Day 3, Tubbs Cross, p.
272. In this process, DNRC spent at least $353,504 of public funds
on behalf of the conservation districts in conducting the surveys.

12

preparing applications for the conservation districts and paying
for the EIS , among other things. Tr. Day 14, Dolan Cross, p. 208.
Private persons cannot claim they were denied the opportunity to
apply for storage projects or other projects in this reservation
proceeding. One can safely assume there was not much interest in
new storage projects.

Even if private persons were not given the opportunity to
apply, such does not amount to a constitutional denial of equal
protection. Such denial was not based on any suspect
classification, such as race, sex or age, for which an equal
protection argument may have some validity. Further, private
persons have had the right for the past 18 years to apply for water
permits for storage projects under the Water Use Act. If Mr.
Anderson's clients had any feasible storage projects, they could
have applied long ago.

Completeness of EIS

Certain objectors have attacked the completeness of the
environmental impact statement by DNRC on the grounds that storage
was not considered as an alternative to instream flow reservations.

- -~5ee. Section 75-1-201(1) (b) (iii) (c) in the Montana Environmental
Policy Act. The water reservation process is to allocate the
remaining flows of streams and rivers, after existing rights,
among competing applicants. Applicants may apply for reservations
to store water, although there were very few applications for

13

HBS9

storage projects. This may be because new storage projects are
rarely financially feasible. (Bd. Exhibit 41, FEIS, p. 71).

Storage is not an alternative to an application to reserve
existing streamflows to protect instream resources. It would
require or force the construction of storage while denying an
opportunity to compete for present streamflows. Storage is a
potential augmentation of streamflows. If forcing an applicant to
pay for storage is an alternative, then perhaps another alternative
would be to consider foregoing some present irrigation to increase
streamflows. Although this is not possible, it emphasizes the
point that paying for storage is not an alternative. Finally,
storage was considered in the environmental impact statement. DNRC
concluded that hydropower and other senior claims may severely
limit water available for storage. DNRC also reviewed planned
storage projects. (Bd. Exh. 40, DEIS, pp. 66-67 and 181; Bd. Exh.
41, FEIS, pp. 70-74) .

Need Criterion

Most of the objectors and the conservation districts have made
various arguments that the instream flows requested by DFWP are not
'--"needed. These arguments have two primary themes. One argument is
that prior downriver water rights, principally for hydropower
generation, have a claim on all available water except in spring
runoff periods and, therefore, there is either no water available
for instream flow reservations or instream flows are, in effect,
protected by these downriver rights. The other argument is that

14

there is not enough water for instream flows, either because the
flows are not always there physically or because all of the water
is already appropriated for some other use. DFWP will respond by,
once again, first citing the need criterion that must be met by
instream flow reservants under the Board's administrative rules and
then by addressing the flaws and incorrect conclusions of the
arguments themselves, although the arguments are irrelevant to the
need criteria itself.

Because DFWP is not eligible to apply for an instream water
use permit for instream flows, DFWP must "... demonstrate that the
water resource values warrant reserving water for the requested
purpose" in order to satisfy the need criterion. ARM

3 6.16. 107B ( 2 ) (b) . This is a logical test for determining the need
for instream flows because it is the only way these values can be
recognized and protected and because instream flows do not compete
with existing uses as new consumptive uses would. DFWP has met
this test. The natural resource values, including the fisheries,
inherent in stream flows are not in dispute. Objectors have
generally asserted that the fish are doing just fine in most
streams, followed by an inevitable refrain that therefore the fish
"do not need the protection or recognition of any instream flow
reservations .

In support of their opposition to instream reservations,
objectors have treated instream flow rights as if they would have
the same impacts to existing rights as new consumptive rights
would. They claim a number of quite severe impacts that a simple

15

diversion and consumption of water by a new use would not have. If
the objectors are to be believed, the protection of the status quo
of presently existing flows up to a minimum level will lower water
tables, prevent return flows, take water from existing irrigation
rights, and substantially increase the cost of business for
irrigators. All of this would apparently start with the drying of
the ink on an order reserving instream flows. These consequences
would befall the state as the result of recognizing instream flows,
even though the same objectors assert the status quo of stream
flows is presently fully protected by downriver hydropower rights.
These unsubstantiated, incorrect, and often contradictory arguments
are best discussed in the framework of an understanding of how
instream flows work and how they will fit in with present uses of
water.

Recognition of instream flows is late. Instream flows are
being recognized for the first time in the basin through this
reservation process, except for a limited number of Murphy rights.
In contrast, there have been no impediments to the development of
water uses for irrigation, mining, municipalities and hydropower.
In fact, it is a logical conclusion that almost all the irrigation
"that will be developed has been developed. The limiting factors of
irrigable land, available water, and favorable economics have been
in play for over a century of development.

Instream values have not been so fortunate. These values come
into this reservation planning process after most of the water that
can be used for other purposes has been developed. This may be a

16

consequence of the late developing economic and social value of
instream flows; however, instream uses are at a competitive
disadvantage that they would not be held to if planning the best
use of our water were to start anew today. If water allocation in
the basin could be done now, instream flow would compete quite
favorably with consumptive irrigation uses based on the draft and
final EISs and the evidence in this case. However, instream flows
have suffered in many streams and rivers as the result of
consumptive water development.

DFWP makes no apology that instream flows are being considered
last in the allocation of the basin's water resources. However, it
is quite ironic that many of the objectors believe, because
irrigation was allocated water first, instream values should not be
recognized at all. The bottom line is that instream values
deserve, at least, to be recognized on their own merits under
present conditions.

Instream flow reservations will simply protect flows up to the
minimum necessary for a healthy fishery against new consumptive
appropriations or expanded uses of water without a permit.
Instream flows will not consume water. They protect water still
"flowing in streams and rivers after established consumptive uses.
It is physically impossible for instream flows to interfere with
existing consumptive use rights. Instream flows can only preserve
the status quo of existing flows. All instream flows, including
downriver hydropower claims, use exactly the same water because
they do not consume water and the same water serves multiple

17

instream uses. Mater used as instream flows for the Gallatin River
or Big Hole River fisheries will flow downstream through the
hydropower turbines of the Montana Power Company (MPC) and the
united States Bureau of Reclamation (BUREC) and will also provide

flows to dilute arsenic concentrations, thus serving the instream
flow reservations requested by the Department of Health and
Environmental sciences (DHES) . Nothing can stop this multiple use.
All instream flows are concurrent, complementary and compatible,
in fact, consumptive uses may use water that served an instream

flow purpose above the point of diversion.

Another argument by some objectors is that downriver rights

for hydropower generation protect the status quo of instream flows.
To the extent these hydropower rights may be adjudicated as they
are claimed, they will call for much of the same flows as do the
instream reservations requested by DFWP. However, this supports,
rather than contradicts, recognizing instream flows for fisheries.
If the water is already required for downstream rights, the
decision facing the Board should be that much easier. Further, a
decision to recognize instream values will not prevent future
development above the hydropower facilities because hydropower
- rights demand even greater instream flows year round than do the
instream reservations. And, as will be developed below,

hydropower instream claims do not provide an equivalent protection
for instream fisheries values that the instream reservation

requests will provide.

18

The analysis is simplified by considering the controlling
hydropower claims on the Missouri River. MPC's claims for instream
flows for hydropower production on the Missouri River will be meet
only when Cochrane Dam and Hauser Dam are spilling. The claim at
Cochrane is for 10,000 cfs. ( DFVIP Proposed Findings nos. 774 and
777; and MPC Exh. 3, Gruel Direct, p. 13). The BUREC's and Corps
of Engineers' claimed hydropower rights will be met only when
Canyon Ferry Dam and Fort Peck Dam are spilling. The Corps of
Engineers' claim at Fort Peck Dam is for a hydropower capacity of
16,000 cfs, with the reservoir exceeding this capacity a total of
only six months between 1967 and 1990. (DFWP Proposed Finding No.
777; Board Exh. 40, DEIS, p. 62).. For example, this means, based
on Cochrane alone, that water would not be available for any
consumptive use in the basin above Cochrane from August through
March, and would be available in only about one year in ten during
April through July and about five years in ten during May and June.
(DFWP Proposed Finding no. 777) . As a consequence, instream flow
rights would generally have less of an impact than the hydropower
right on any proposed new consumptive uses of water.

However, the serendipitous protection of instream fisheries by
-"the possible future adjudication of hydropower rights to the full
extent claimed is not the complete protection of the fisheries
status quo that the requested instream reservations will
accomplish. New consumptive uses could be developed above Canyon
Ferry Dam without impacting MPC's claims if the downstream
hydropower generation claims of MPC are compensated by drafts of

19

water from the storage of Canyon Ferry Reservoir. These
compensating flows can be purchased through water service contracts
with the BUREC. (Bd. Exh. 40, DEIS, p. 55) . This process does not
take into account in any manner the intervening fisheries values.
Thus, new irrigation uses on large or small streams with valuable
fisheries above Canyon Ferry could be developed without impacting
MPC's claims, but the irrigation could substantially deplete
instream flows to the harm of the resource.

The objectives of hydropower claimants and instream flow
reservants are different by their very nature. MPC may reasonably
decide that the impacts of some new consumptive uses do not
substantially impact hydropower development and choose, as a matter
of policy, not to object to the new development. The adverse
impact on the local fishery may, in contrast, be significant, and
this adverse impact would then only be fully protected by a
reservation tailored to the resource values directly threatened.
Or, a new use may be nonconsumptive, such as a diversion of a
significant amount of water from a stream for a number of miles for
placer mining or a small hydropower development. This may have no
impact on downstream hydropower rights, but may be capable of
--significant harm to or the destruction of a fishery.

It is a rather weak policy argument to insist that instream
values, never recognized before in water law, must depend for their
protection on a private corporation or a federal government agency,
where both do not have a specific motive for protecting specific
instream resources and where neither can provide the same

20

protection.

The Board, on the other hand, has clear policy

direction to fully recognize by reservations those values that

depend upon water and are in the public interest.

Other, similar arguments are advanced by many objectors.
These arguments will be grouped here for the purpose of rebuttal
because they deal with the same general concepts. These

inconsistent, and often -mutually exclusive arguments, are
frequently advanced by the very same objectors. Objectors argue
that the fish are doing just fine, so there is no need for instream
flow reservations. And, all of the water is appropriated so there
is no water left for instream flows. However, instream flows will
restrict future consumptive development, such as mining and
irrigation, with great harm to the economy. The status quo will be
preserved by the present system of water rights. Finally, if
instream reservations are granted, water tables will drop and

return flows will be decreased.

The above arguments are largely refuted by simply listing
them. Their weaknesses are further revealed by comparing them to
the nature of instream flows, the record, and the criteria of the
Board for granting water reservations, objectors have frequently
"added up all the decreed rights and claimed rights on a source to
come up with a sum equalling a flow that is ten times or greater
than any flow ever recorded during the irrigation season. This
math does not take into account exaggerations in decrees or claims,
return flows, irrigation patterns or frequencies, or the other

21

physical factors that determine the impact of consumptive uses on
stream flows.

These calculations have little meaning because they greatly
exceed the water that is physically available. If a precise
mathematical modelling could be developed, it would be tested
against what is actually available by measuring the flows. The way
to determine physical availability of flows is to measure them.

Streams and rivers do flow and support fisheries even though
this crude math would "prove" otherwise. The plain fact is that
the water that is physically present in a stream is available to
serve as; instream flows while it flows to whatever destination it
has downstream. The same is not true for new consumptive uses.
These us^es may, or probably will, consume water that a senior right
holder is entitled to downstream. A water supply that is "fully
appropriated" as far as other uses are concerned, still has water
that will serve instream purposes.

The Board is not required to add together claims to arrive at
a forced conclusion that all of the water is used when direct
measurements show that water is physically available. The Board is
not required to treat water claims as prima facie evidence of their
' 'contents in this proceeding when considering the physical
availability of water. Section 85-2-227, MCA, applies only to part
2 of Title 85, Chapter 2 and not to part 3 that contains the
reservation statutes. The Montana Supreme Court in Application for
Appropriation of Water Rights for Royston, 48 St. Rep. 747 (1991)
is consistent with the statutory language in holding that water

22

right claims in a temporary preliminary decree are prima_facie
evidence in a change proceeding under part 2. Further, the court
in Bovston was concerned about readjudicating water rights in an
administrative hearing. Id. at 749. It is not necessary,
helpful, in examining the physical availability of water to

adjudicate or readjudicate water rights.

If new consumptive uses will not occur on a source of water,
then there is no harm in granting a water reservation and future
mining and irrigation development will not be impacted because
there will be none. If new consumptive uses will occur in the
future, then the protection of the instream resource at the times
the flows fall below the minimum are the very point of instream

flow reservations.

Finally, instream flows do not lower water tables, harm return
flows or prevent senior appropriators from diverting the water they
are entitled to use. If this were the case, hydropower rights or
the status quo, itself, would have accomplished these feats long

ago.

The need for instream flows are not speculative. See, ARM
„ 36.16.101(3). They are the only reservations that are not

dependent on the occurrence of some future events as all
consumptive reservation requests are. Instream reservations will
be put to use the instant that they are granted. In fact, they are
being used for a beneficial purpose right now, although these
beneficial uses lach any recognition until instream reservations

are granted.

23

DFWP has responded to a number of arguments claimed to
undermine the need for instream flows. These arguments miss the
point and are not relevant to the fundamental concepts of
protecting instream flows. The regulations of the Board do

incorporate the fundamental nature of instream flows. The value of
instream flow reservations is simply that they protect a unique
habitat and the creatures that live in it, to the enrichment of us
all. Showing that the water has these values is all the rule, ARM
36 . 16 . 107B (2) (b) , and logic requires to show that minimum stream
flows are needed. The instream reservation requests of DFWP meet
the need criterion.

amount Criterion

The amount criterion is expressed in simple, straightforward
terms in the Board's rule, ARM 316 . 16 . 107B ( 3 ) (a) . It requires a
finding "that the methodologies and assumptions used to determine
the requested amount are accurate and suitable." Expert testimony
supported the accuracy and suitability of the methods used by DFWP
to set minimum instream flows for a healthy fishery. As detailed
in DFWP ' s brief in support of its instream applications, pages 21
through 23, there was no expert testimony concluding or supporting
a conclusion that the instream flow setting methods utilized by

DFWP are not accurate or suitable.

The objectors to instream flows for fisheries have taken issue

with the Wetted Perimeter Method which was used as the primary
instream minimum flow setting method by DFWP. This opposition is

24

based on the proposed findings of Mr. Bloomquist presented on
behalf of various objectors and adopted by the other objectors.
Mr. Spaeth proposed findings on behalf of the conservation
districts that were quite similar to those of Mr. Bloomquist.
These proposed findings are not based on the opinions and
conclusions of experts, but represent a scavenging of the record
for bits and pieces of claimed doubt or claimed admissions of fatal

v

weaknesses by the very experts who clearly and strongly supported
the methodologies. In building the arguments against the Wetted
Perimeter Method and other methods, parts of the record have been
used out of context to support findings or conclusions that are not

the testimony of anyone.

DFWP will respond to the two most heavily relied upon
arguments of the objectors. The objectors first claim that the
amount of wetted perimeter is not related to the health of a
fishery in a stream. Wetted perimeter is the amount of riffle area
with water flowing over it at a given flow rate. Riffles are the
prime fish food producing areas of streams in the basin. The
objectors next argue that, unless the minimum flow requested by
DFWP is always met or exceeded, there will be a sort of dead zone
down to the lowest flow because the full extent of the wetted
perimeter requested is not always wet. Apparently, the objectors
would be satisfied if the minimum flow to be protected would be the
lowest flows on record. These conclusions are based, not on expert
conclusions, but on the logic that, if you can list a number of
factors that might have been used, but were not, and if you set

25

your own layman's standard of certainty necessary to justify an
assumption, then you can conclude as a matter of fact that a method
is not accurate or suitable. These arguments are made in the face
of expert testimony that exhaustively justified the minimum
instream flow setting methods of the department.

The department's expert and other experts testified that a
stream flow that covers most of the area of a stream's riffles will
benefit fish because of its positive effects on food supply.
Riffles are the primary production area for the fishes' food, lood
supply is considered the key regulator of fish populations in
Montana's streams during the warmer months when fish grow and newly
hatched recruits enter the population. (See, DFWP Proposed
Findings nos. 331, 347, 348, 349, 350, 351 and 371). For example,
the underlying assumption that fish will respond to increases in
riffle areas via the positive effects on food production was
demonstrated in a study reported by Pearson, et al (1970). (DFWP
Exh. 23, pp. 11 and 68). They found that pools having the larger
upstream riffles averaged higher production of coho salmon per unit
of pool area than did pools with smaller riffles. Greater riffle
area led to higher food production, which in turn increased fish
abundance in downstream pools. A logical extension
findings is that, within an individual riffle, food production
increases as wetted riffle area increases up to the point where the
available riffle habitat is at or near its maximum. Above this
point, there is little or no riffle areas to be further wetted.
The upper inflection point flow derived from the wetted perimeter

26

method quantifies the flow at which the amount of wetted riffle
area is near its maximum. When this point is reached, the stream's
capacity to produce food is also at or near its maximum.

The expert testimony thoroughly and logically supports the
underlying assumption of the wetted perimeter methodology that food
becomes a critical limiting factor as decreasing flows reduce the
wetted perimeter. There was no testimony that this assumption was
not correct.

There is no testimony or logic that only the area or perimeter
of a riffle that is always wetted supports aquatic life and
produces food for fish. If this were true, then minimum instream
flow protection would be the low flows of record. This would be no
protection at all. The facts are that nature is much more adaptive
to its own varying conditions than the extremely mechanical view of

nature insisted upon by the objectors.

Riffles are not typically subjected to the alternate drying
and rewetting that, for example, characterizes flow regimes below
power-peaking facilities. Instead, the typical hydrograph for
Montana's unregulated mountain streams shows gradual and
predictable changes in flows through the seasons. The flows peak
during spring runoff, then progressively decline until winter when
flows are commonly the lowest of the year. (See for example, DFWP
Exh. 23, p. 13). Consequently, riffles tend to gradually shrink in
size between the high flows of spring and the lower flows of fall.
This wide time span encompasses the fishes' prime growing period
when an adequate food supply is crucial to their well-being. (DFWP

Proposed Finding no. 371). The riffle margins, areas that will be
dry as flows progressively decrease over the long growing season,
are producing food when wetted. Drift of aquatic invertebrates,
lateral movements of invertebrates, and egg-laying flights of
adults keep these margins stocked with food items, maintaining
their capacity for food production. The fact that the upper
inflection point flows equal, on the average, about 40% of the
stream's average annual flows attests to the reasonableness of
upper inflection point flows as instream flow requests and to their
availability in most streams during the spring through fall period
when food production is critical. (DFWP Proposed Findings no. 366

and 371) .

In winter, when food production plays a secondary role in
regulating fish abundance, the main function of riffles is to over
winter the fishes' food base. Because stream flows are typically
at their annual lows in winter and because winter is highly
stressful on fish and other aquatic life, the policy of DFWP is to
fully protect winter flows. Full protection is generally achieved
by extending the high inflection point flow requests of spring-
summer- fall through winter, a practice followed in DFWP's
reservation application. (DFWP Proposed Findings nos. 372 and

373) .

Dewatering of streams by consumptive uses has harmed the
fishery in many streams, primarily during the summer growth period.
While winter flows are also critical to the health of a fishery,
these winter flows are controlled primarily by nature, as

28

occur in the winter.

comparatively little consumptive uses
Therefore, DFWP has correctly concentrated on establishing minimum
instream flows for the spring through fall period when there are
competing uses for the water. The high inflection point

establishes the minimum flows necessary to protect a healthy

fishery.

Streamflow Estimates

Several findings of fact were proposed relating to the
streamflow estimates conducted by the United States Geological
Survey (USGS) . These estimates were prepared for DFWP in order to
meet the requirement of the Board's regulations that all
applications must contain an analysis of the physical availability
of flows. ARM 36.16. 105B ( 2 ) . USGS employee Charles Parrett
directed the work that was preformed to provide these estimates,
and testified during the hearing. The USGS prepared a report
entitled "Estimates of Monthly Streamflow Characteristics at
Selected Sites in the Upper Missouri River Basin, Montana, Base
Period Water Years 1937-86." This report provided estimates of
flows for the streams included in DFWP's application.

It is not clear that all of the objectors understood the
purpose of the USGS study. The study provides monthly estimates of
the streamf lows at the selected sites at various times during dry
to wet years. These streamflow estimates were not used to derive
the Wetted Perimeter flow recommendations, as alluded to by several
objectors. DFWP personnel derived the WETP flows included in the

Department ' s reservation request. The actual streamflovs were

measured as part of the WETP measurements.

The objectors attempt to show that the streamflow estimates
are unreliable. However, the USGS methods are the best available
methods, and were approved in advance by DNRC, as required by ARM

36.16.105B(2) (b) . (Tr. Day 6, p. 150).

The objections to the reliability of the USGS are not borne
out upon close examination of the record. As stated above, Roger
Perkins testified for the conservation districts and the objectors.
During the conservation districts case on day three of the hearing,
the following exchange of questions and answers with Mr. Perkins

occurred:

Q. Mr. Perkins, I think you testified
during direct examination by Mr. Spaeth that
you can reach conclusions about a project
without visiting the site; is that correct.

A. Yes.

Q. One of the sources of information
that you stated you rely on to reach those
conclusions are USGS water studies; is that

right?

A. USGS seven-and-a-hal f -minute
topographic maps was what I was alluding to,
as well as the water supply, the water supply
papers, yes.

q. so you will sometimes rely on USGS
stream— flow information?

A. Yes.

Q. Do you find them a reliable source
of information?

A. Yes. When we've had
compare USGS measurements with
measurements that we've made,

occasion to
independent
they've been

30

very close. The USGS does an excellent job of
measuring water.

Tr. Day 3, Perkins Recross, p. 211-12. (emphasis added).

In preparing his objector testimony, Perkins specifically
relied on the USGS report in preparing his Table 1, as revised m
his surrebuttal testimony, where he argues that instream flow
requests on certain streams should be limited to a percentage of
the streamflow estimates made by USGS on ungauged streams. CD Exh.

23 and CD Exh. 25.

Thus, Mr. Parkins, the objectors' own witness, found the USGS
streamflow estimates to be a good and reliable source of
information.

The objectors also continue to rely on the testimony of Gary
Elwell , even though it is of little or no practical purpose or use.
Mr. Elwell attempted to show that using a base period
estimating streamflows of 1930-90, rather than the 1937-86 period
used by the USGS, revealed lower, and presumably more reliabl
stream flow estimates. This conclusion was completely undermined
by Mr. Parretfs testimony. Mr. Parrett prepared graphs which
showed that using longer streamflow records produced mean annual
' flow records that more closely correlated with his original
estimates than did Mr. Elwell's estimates. These graphs were made
a part of the record as Holland-Grasshopper Exh.'s 1 and 2 . Mr.
Elwell's efforts to choose a base period to specifically include

drought periods introduced bias into his estimates.

The objectors do not draw any relevant conclusions from their
numerous proposed findings on the USGS stream flow study. Some

31

error in estimating streamflows is unavoidable. The standard
errors in the USGS study were within acceptable limits and did not
bias the estimates up or down. The study and report do in fact
serve a useful purpose in providing stream flow estimates for
streams where such information would not otherwise be available.
The study was relied upon by DNRC in the EIS and by several
witnesses in their testimony. The stream flow estimates show that
the instream flows requested by DFWP are available much of the time
on the streams included in DFWP's application.

wat-.fir Availability

There is no criteria or logic that requires a showing of the
physical availability of water for instream reservations, although
proponents of consumptive uses must show that water is legally
available for their projects to demonstrate that the consumptive
use will not adversely impact existing water rights. While DFWP
not required to show that unappropriated water is available,
sponsors of consumptive use reservations must make this showing as
part of the adverse impact test. Instream flow reservations do not
adversely impact existing water rights because they do not divert

or consume water.

DFWP has met the application content requirements of ARM
36. 16. 105B(2) by providing "an analysis of the physical
availability of flows" and ARM 36 . 16 . 105B ( 2 ) (a) by showing "the
physical availability of flows on a monthly basis" on gauged
streams. These application content requirements are not criteria

32

that must be met before an instream flow reservation can be
granted. There is no requirement in the reservation statutes and
rules that flows must be shown to exist during all periods of the
year in the amount of the instream reservation requests before an
instream flow reservation may be granted. If this were the case,
the lowest flow on record during a drought would automatically
become the minimum flow for an instream reservation. This is an
incorrect reading of the rule and contradicts the concept of the
Board establishing minimum instream flows to protect instream
values where the protection is in the public interest.

However, the rule requiring an applicant to analyze the
physical availability of water does serve a useful purpose. It
provides the Board with a factual background against which to
consider reservation requests and to compare competing requests for
differing uses. DFWP has also addressed water availability and its
significance in the reservation process in other parts of this
brief, in its brief in support of instream reservations and in its
brief opposing a motion to dismiss certain instream reservation
requests. Further, DFWP has shown that water is physically
available to protect fisheries and resource values by the very fact
that the fisheries and resource values exist.

Public Interest Criterion

For the public interest criterion of the statute, the
objectors have relied primarily on the proposed findings and
conclusions of the Upper Musselshell Water Users (UMUA) . The focus

33

of this reply will be on the proposed findings and conclusions of
these objectors. The objectors admit that hundreds of millions of
dollars are spent in Montana as a result of instream flows. UMUA
Proposed Finding 30, but do not feel it is in the public interest

to legally recognize these instream flows.

The objectors do not provide any specific benefit/cost
findings. The objectors' primary purpose in their proposed
findings and conclusions is to attack the testimony of Dr. John
Duf field, who testified for DFWP. The focus of this attack is
primarily on the Contingent Valuation Method (CVM) study, which was
undertaken by Dr. Duf field in 1990. The purpose of the study was
to derive nonmarket recreational values of water to be used in
comparison to values of water for irrigation and other consumptive
purposes. These values were then used as a measure of the indirect
costs of new consumption of water in the Missouri River basin.

The objectors have generally ignored the economic analysis
undertaken by DNRC in the draft and final EISs. DNRC concluded
that the instream flow alternative provided the highest benefits to
society. Bd. Exh. 41, Final EIS, p. 37. DNRC concluded as follows

with respect to the various alternatives:

As stated earlier in this section, this
analysis is general because actual costs and
benefits cannot be known until after the Board
determines which reservations are to be
granted. From this general analysis, however,
several conclusions can be made. The large
benefits derived from municipal water
consumption are attributable to the high value
of water for such a use and the small effect
that withdrawals would have on other
downstream uses, including hydropower
production. The high costs for the

34

Consumptive Use Alternative are due to the
large amounts of water consumed by irrigation
projects and the relatively small return in
net benefits. However, comparison of the
quantified values of the Instream Alternative
and the Municipal Alternative clearly shows
that at least some proposed irrigation
projects can have net benefits to society.

Finally, any of these alternatives would have
more net dollar benefits than the No Action
Alternative or the Water Quality Alternative.

Id.

Thus, regardless of what the objectors have to say abouu the
CVM study and Dr. Duffield's testimony, the instream alternative is

still the best action for the Board to take.

In its analysis, DNRC did not attempt to calculate and include
direct benefits from instream flows to the reservant, as it did for
all of the consumptive use projects. This may have been
appropriate for evaluating all of the various alternatives under
the same set of economic circumstances and assumptions. Part of
the purpose of Professor Duffield's analysis and testimony for DFWP
was to calculate direct benefits to DFWP from its instream flow
requests, which DNRC did not do. "Direct benefits" is defined in
the Board's regulations to mean "all benefits to the reservant
derived from applying water to the use for which it is granted."
There are valuable natural resources in the basin for which DFWP
applied for instream reservations. The objectors readily admit
this in their proposed findings. As an applicant for a

reservation, DFWP is entitled to consideration and recognition of
the direct benefits it and the public derive from instream flows.

The objectors correctly divided the instream flow requests of

35

DFWP into two groups; those that are in competition with other
reservation applications and those that are not in competition with
other applications. The CVM study was used only with respect to
the reaches where there was competition from other reservation
applications. Another method, the Travel Cost Method, was used by
Professor Duffield in his testimony to calculate direct benefits
for the reaches with no competition. The no-competition reaches
constitute the bulk of DFWP's requests — 242 of the 283 reaches
requested .

By devoting most of their attention to the CVM study and the
reaches with competing requests, the objectors obfuscate the point
that the CVM study had absolutely nothing to do with measuring the
benefits and costs of DFWP's requests on the reaches with no
competition. The objectors devote less than a page to the no-
competition reaches in their proposed findings, even though almost
all of the objectors are located on streams where there are no
competing reservation requests. This includes all of the objectors
in the upper part of the basin (e.q. , Big Hole, Beaverhead, Ruby
drainages) and the Musselshell River objectors. The CVM study and
the testimony concerning the streams with competing reservation
requests are simply irrelevant to their objections. The CVM study
was used only to compare values of water with competing use
requests by the municipalities, conservation districts and BUREC.
The objectors have no legal interest in assailing the benefit/cost
analysis for the streams with competing claims.

36

For DFWP's requests where there are no competing uses, DNRC
did not attempt to quantify benefits and costs of instream
reservations, but concluded that the "benefits of granting these
requests would exceed the costs unless other new water uses with
higher values are identified." Bd. Exh. 40, DEIS, p. 255. No new
uses for these reaches were identified.

For those reaches with no competition, Professor Duf field
acknowledged in his prefiled testimony that he made only a
preliminary analysis of instream flow values. DFWP Exh. 31,
Duffield Dir., p. 18. As DNRC concluded (Draft EIS, p. 255), it is
only necessary to show that there are some benefits from instream
flow reservations for these reaches. Professor Duffield used
recreation values he derived from a Travel Cost Method (TCM) study
which was conducted in 1987. DFWP Exh. 32.

Professor Duffield did not, as asserted in the UMUA proposed
findings, assume that the DFWP requested flows were available every
day of the year. There is no citation to the record for this
assertion in the proposed findings. This is only what Mr. McElyea
was trying to get Professor Duffield to say at the hearing. Tr.
Day 10, p. 206. Rather, Professor Duffield used the annual flow
amounts requested by DFWP and the actual annual flows at the mouth
of a stream based on the nearest USGS long term gauge. Based on
these numbers, he derived an approximate value for DFWP instream
flow requests on no-competition streams. Contrary to Mr. McElyea' s
assertions, as the flows go lower in these streams, the values

37

attributable to those flows go up, since the reservation request is
a greater fraction of the total flows. Tr. Day 10, pp. 211, 214.

The objectors assert that indirect costs include objections to
transfers or other changes in existing rights. Yet, in their own
words, there is presently a "dearth of water transfers under the
current system." UMUA Proposed finding 50. DFWP’s Yellowstone
reservation and Murphy right experience and the present state of
affairs show that instream reservations will not significantly
hinder changes in existing rights. Since instream values are in
the millions of dollars and any direct or indirect costs are
negligible, these reservation requests are clearly in the public
interest. No further refinement of these instream values is
necessary to find that the instream reservations are in the public

interest.

When the Missouri River basin is viewed as a whole, there are
not only no competing uses for 242 streams and stream reaches,
there are also not that many objections. The objectors' attempt to
show there are many objectors to DFWP's requests and few
supporters. The objectors believe that their objections cover the
whole basin. However, there are over 150 streams and stream
reaches in DFWP's requests for which there are no competing uses
ani no specific objector testimony. This number does not include
streams in which the only competing uses are municipal uses. DFWP
agrees that municipal uses generally have the highest value and

should be given first priority.

38

For those streams where there are competing uses, the
objectors seem to miss the point of a benefit/cost analysis. This
analysis was done from the standpoint of irrigation, and shows the
benefits and costs of new irrigation projects. All of the proposed
irrigation projects would have costs to instream uses. For
purposes of such an analysis, one must assume that the projects
would be diverting and consuming the amounts of water for which
they have applied. It is not appropriate to consider whether a
smaller amount should have been requested or would result in a more
efficient allocation of the water resources. The analysis must be
based on the amount of water requested on a project by project
basis. Further, it is not appropriate to assume that the projects
would not be able to divert on account of senior instream rights.

In order to measure the social costs of such projects, the
costs to instream uses must be considered. Scenarios about whether
or how Montana Power Company may protect its instream hydropower
rights has no meaning in this context. To assume that the projects
would have no costs because the power company will protect its
rights is to assume that the projects have no value and should not
be granted, since they would have no water with which to irrigate.

A related water availability issue in the benefit/cost
analysis is the assumption that the flows requested for the
projects will be available during the times requested. The actual
flows that may be available at any particular time are irrelevant
in a benefit/cost analysis. If the flows are not always available,
that merely decreases the benefits and costs to be measured for

39

irrigation projects, but all in the same ratio, so that the
relative conclusions are not affected.

The above discussion makes it clear why DNRC, in the EIS, and
Professor Duf field, in his testimony, assumed the diversion amounts
requested by the conservation districts. This is a valid
assumption for a benefit/cost analysis performed from the
standpoint of irrigation.

To properly calculate the costs of new consumptive projects,
it was necessary to calculate instream recreational values. Since
these are nonmarket values , a nonmarket valuation method had to be
used. The CVM is such a method. Professor Duffield readily
acknowledged that his CVM study had some limitations. Some biases
are inherent in any survey, and these biases can affect the results
either up or down. The best professional practice was used to
eliminate possible survey biases and other limitations in the
survey.

The UMUA objectors also fail to interpret the law and rules
correctly when they assert that benefits and costs to persons
outside of Montana should not to be considered. The rules of the
Board do not limit the analysis to the boundaries of the state, and
it is against sound economic theory to do so. The rules
specifically state that all direct and indirect costs are to be
considered. ARM 36 . 16. 107B(4) . Neither DNRC in the EIS nor
Professor Duffield assumed this provincial attitude in their
analysis .

40

The objectors and the conservation districts also take issue
with Professor Duffield's failure to take into account federal
subsidies as a benefit to be derived by irrigation. Apparently
these parties failed to consider that the conservation district's
witness, John Tubbs, testified, while under redirect examination by
the conservation districts' attorney and under cross examination,
that it was inappropriate and not justifiable to include government
subsidies in a benefit/cost analysis. Tr. Day 3, pp. 276-278, 280-
281. These parties also failed to consider the fact that their
witness, Roger Perkins, testified that the DNRC staff correctly
calculated irrigation benefits and that they had done a fine job
and were well-qualified. Tr. Day 3, p. Ill; CD Exh. 2 (Methodology
Review by Perkins) . The conservation districts' witnesses provided
the information for the valuation of irrigation benefits that was
used both in the EIS and by Duf field in his testimony. To take
issue with Duffield's analysis on this point is another example of
a key distortion of the record. The objectors and conservation
districts have contradicted their own witnesses to make arguments
against instream flows.

The objectors and conservation districts were unable to
undermine the basic benefit/cost analysis conducted by DNRC and
Professor Duffield. They have not even tried to controvert the
findings in the EIS, which demonstrate that instream flows should
be granted. In fact, the UMUA objectors propose the following

conclusions of law:

7. All pertinent statutes and rules of the

State of Montana have been adhered to in

41

review of this reservation application both by
the Montana Department of Natural Resources
and Conservation and the Montana Board of
Natural Resources and Conservation.

8. Based upon the above Findings of Fact and
specifically based upon any condition,
limitation or modification of the ful
application appearing in the above findings,
all pertinent criteria delineated in M.C.A.

§85-2-316 and any rules adopted thereunder
providing for the adoption of an order

reserving water have been met.

■

These objectors have implicitly concluded that the proceedings
were conducted fairly, and that DNRC completed a satisfactory EIS
under MEPA.

The opposing parties' main points of attack deal primarily
with the analysis relating to the benefits and costs of the
irrigation projects, most of which are not economically feasible,
even without consideration of their indirect costs to instream

flows .

Adverse Affect

A reservation granted by the Board may not adversely affect
existing rights. Section 85-2-316 (9) (e) , MCA and ARM
36.16. 107B ( 8 ) . As discussed previously in this brief and DFWP s
initial brief in support of its instream reservation requests,
instream flow reservations cannot physically interfere with
existing water rights, whether consumptive or nonconsumptive. The
reservation statutes, rules of the Board, and the Constitution of
Montana in Article IX, Section 3, protect existing rights,
instream flows will not withdraw or consume water, but will protect

42

the status of instream flows uP to the minimum flows panted in the

that if DFWP needs to protect any reservation
Objectors argue that, i participate in the

• v rhanaes in senior rights, P

againS a-h services of a water commissioner,

adjudication, or to use e fails on

senior rights will he adverseiy affected. This argument fails

ds First an abiiity to use those procedures and

t„o grounds Fir ^ or nervation against

statutes designed to prot lnherent and necessary

changes or illegal uses of instream flow

element of that water right or reservation. ^ ^

reservation cannot be protected, then the reserve

f no use in protecting instream values. In
practical purposes of no be

prot» -.ing instream flows where necessary, DFWP

• at of all water right holders to protect
the common right o

. ht If SUch protection amounted to adverse

their property right. If sue P issued

. riahts, then no new permits could

affect on existing right ,

S5.2.3il MCA, requires that new permits may - -
because Section 85-2 311, > a

adversely affect existing rights. This reasoning would

nullity of the permitting and reservation statutes ' ^

-SecoVrii> .nW’s -protection of- instre*
f. . w--' had ^ r\a minimi-

/iSjrtt-i -Fiver ‘reservations has had _

"c- e +-V10 nhiectcrs cori'e*-- - -*-w

chances by senior right holders. Some of the ob3ec
c-nanges y object to changes in the

recognized that DFWP would only be ab e

^ i s moved upstream from below

point of diversion when the divers ^ ^ ^ diverslon

to above DFWP' s monitoring po • In certain

point is moved from a mainstem to

43

circumstances , this could have a significant adverse impact on a
tributary fishery. Surely, DFWP is entitled to protect the
instream values in these kinds of situations.

DATED: April 1992.

Department of Fish, Wildlife and Parks

Agency Legal Counsel

CERTIFICATE OF SERVICE

I hereby certify that (ofpartment? filed

Montana Department of Fish, Wlldllfe® A[JD parks' REPLY BRIEF.

and tW° ^ tme

and accurate copies to:

foSpa^enrilVtural Resources and conservation

1520 East Sixth
Helena, MT 59620

locations:

Loren Tucker
p.O. Box 36
Virginia City,

MT 59755

j. B. Anderson
112 S. Washington
Dillon, MT 59725

Gary Spaeth

111 N. Broadway Ave.

Red Lodge, MT 59068

Steve Brown
1313 11th Avenue
Helena, MT 59601

Paul B . Smith
P.O. Box 565
Boulder, MT 59632

James Hubble
p.O. Box 556
Stanford, MT 59479

44

Holly J. Franz

Gough, Shanahan, et. al .

p.O. Box 1715

Helena, MT 59624-1715

Monte J. Boettger
507 Montana Bldg.
Lewistown, MT 59457

Cindy Younkin
p.O. Box 1288
Bozeman, MT 59715

Ted J. Doney
p.O. Box 1185
Helena, MT 59601

W.G. Gilbert III
P.O. Box 345
Dillon, MT 59725

John Bloomquist
p.O. Box 1302
Dillon, MT 59725

Mona Jamison
P.O. Box 1698
Helena, MT 59601

Dale Schwanke
P.O. Box 2269
Great Falls, MT 59403

Keith Strong

p.O. Box 1566

Great Falls, MT 59403

Carl Davis
p.O. Box 187
Dillon, MT 59725

John Chaffin
p.O. Box 31394
Billings, MT 59107

45