April 21, 2011

Category: Arkansas Environmental, Energy, and Water Law

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Author: Walter G. Wright The Piedmont Triad Regional Water Authority ("Authority") in North Carolina was organized to develop a public water supply for a region of the state. In 1988 the Authority petitioned the North Carolina Environmental Management Commission to use the power of eminent domain to divert water from the Deep River Basin to construct a lake. The Authority ultimately received a certificate authorizing it to acquire the land by eminent domain and divert by inter-basin transfer up to 30.5 million gallons of water per day. It also obtained a Clean Water Act 404 Permit from the Army Corps of Engineers authorizing it to construct the dam and it was subsequently built. L&S Water Power, Inc. and other entities are downstream riparian owners who operate hydroelectric power plants on the Deep River. They filed suit arguing that the Authority had taken their riparian rights and they were entitled to compensation. The North Carolina Court of Appeals in L&S Water Power, Inc., et al. v. Piedmont Triad Regional Water Authority, 2011 N.C. App. LEXIS 734 (April 19, 2011) upheld a trial court decision that found: 1) The Authority had used its power of eminent domain to build the project in furtherance of developing a public water supply; 2) The project would continue to reduce rate of water flow in the Deep River; and 3) The L&S Water Power, Inc. and the other Plaintiffs' ability to produce electricity would be negatively impacted by reduction of the stream flow of the Deep River. As a result, the Plaintiffs were deemed to be entitled to be compensated for the loss of stream flow and that their riparian rights could be valued by the loss of electricity capable of being produced as a result of the reduction of stream flow. The North Carolina Court of Appeals opinion addresses the issues associated with the taking of riparian rights. In addition, in addressing this issue, the court discusses the appropriate application of the reasonable use doctrine and whether or not the statutory authority associated with authorization of the dam were correctly taken into account. In addition, the opinion discusses whether the trial court had failed use the 7Q10 to determine average annual flow of the Deep River. A copy of the opinion can be downloaded below.
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