Statement of Aaron Thompson, Area Manager

Nebraska-Kansas Area Office

Bureau of Reclamation

Before the Natural Resources Committee of the Nebraska Legislature

On LB391

February 22, 2013

My name is Aaron Thompson.I am the Area Manager of the Bureau of Reclamation's Nebraska-Kansas Area Office located in McCook, Nebraska.

Good afternoon Senators and thank you for the opportunity to present a statement before you today.

Reclamation is interested in LB391 because it has potential to better protect the water supply of the federal irrigation projects located throughout the western half of Nebraska. The federal projects provide supplemental irrigation water to Nebraska water users.Reclamation is the water right holder for the storage in Enders Reservoir, Swanson, Hugh Butler, Harry Strunk and Harlan County Lakes, located in southwest Nebraska; Calamus and Davis Creek Reservoirs, located in north central Nebraska; and Merritt and Box Butte Reservoirs, located in northwestern Nebraska.

In the Niobrara River Basin, Ainsworth Irrigation District is responsible for the day to day operation and maintenance (O&M) of Merritt Reservoir, and provides irrigation water to about 35,000 acres of project lands within the district.Mirage Flats Irrigation District is responsible for the day to day O&M of Box Butte Reservoir, and provides irrigation to approximately 11,600 acres of project lands.The use of water in the basin by the Reclamation projects is based on the concept that Reclamation will store water in the federal reservoirs during the non-irrigation season and during other times of excess stream flow, and supply the irrigation districts with storage water to supplement the districts natural flow water rights.

Beginning in the fall of 2011, the Nebraska Department of Natural Resources (DNR) began issuing storage closing notices on Reclamation's storage permits in the Niobrara River Basin.As a result, Reclamation was required to bypass inflows through Box Butte and Merritt Reservoirs.This was the first time that a storage closing notice had been issued at Merritt Reservoir.DNR has determined that when flows at Nebraska Public Power District's (NPPD) Spencer hydropower facility are insufficient to satisfy NPPD needs, DNR issues closing notices on junior natural flow irrigation permits and storage permits.DNR's interpretation of Nebraska Statute 46-241 is that when water is needed for direct irrigation, all storage reservoirs must pass inflow.Reclamation understands Nebraska law prohibits the exercise of a storage permit when downstream direct flow rights have a need to divert for irrigation.However, in this particular case, direct flow irrigation rights are not being harmed by our storage permits because the irrigation rights were already closed.The junior direct diversion rights were closed and could not legally divert water due to the administration of water rights for the Spencer power plant facility.

Specific to the Niobrara Basin, the direct flow rights have been issued closure orders because they are subject to a call by a senior downstream water right (Spencer power plant).These direct flow irrigators do have the option of paying a fee for a subordination agreement which would allow them to utilize their junior direct flow permit during the administration. Nebraska statutes recognize the ability of an irrigation appropriator to enter into subordination agreements with a power operator.The United States of America and the Consumers Public Power District (presently NPPD - owners of the Spencer power plant) entered subordination agreements prior to the construction of the federal projects.These agreements clearly provide that NPPD is subordinated to the rights of the United States and the irrigation districts to use the water for irrigation.

Reclamation understands that releases from Box Butte and Merritt Reservoirs during the fall of 2011 and the spring of 2012 were not sufficient to enable diversions by any direct flow right subject to the administration.Therefore, water released from the federal reservoirs was not beneficially used by any Nebraska direct flow rights requiring the call for administration.This is neither consistent with Nebraska statutes nor historic operations of the basin.

Reclamation supports further amendment of LB391 revising Neb. Statute 46-241, Section (5), which would prevent the closing of storage in upstream reservoirs when downstream junior appropriators are closed and not legally entitled to divert natural flows. A reservoir should not be required to pass inflows for downstream direct irrigation if the appropriation for direct irrigation is junior to and would otherwise be denied use of said water because of another senior appropriation.Revising Neb. Statute 46-241 will protect the future water supplies of the water users of the Ainsworth and Mirage Flats Irrigation Districts who rely on storage water in Merritt and Box Butte Reservoirs.This will also protect the water supplies of other federal irrigation projects in Nebraska.

Again, thank you Chairman Carlson and committee members for hearing me on this important issue.I urge you to pass LB391 that has been amended as discussed on to the full legislature.