The Applicant (Denver), the Opposer Cities of Thornton and Englewood, and Opposers Centennial WSD, Summit County, the State Engineer’s Office (SEO) and the Farmer’ Irrigation and Reservoir Co. (FRICO) have each filed motions under CRCP Rule 56(h).

The parties seek a determination of whether the water quality standards promulgated pursuant to the Clean Water Act (CWA), 33 U.S.C. § 1251, et seq., and the Colorado Water Quality Control Act (WQCA), C.R.S. § 25-8-1-101, et seq., preempt or control this Court’s determination, pursuant to C.R.S. §§ 37-80-120 (3) and 37-92-305 (3) and (5), of the appropriate quality of substitution/augmentation water.

1. Summary of the Pleadings.

    

   1. Denver alleges that the Water Quality Control Division and its Commission have exclusive authority to set water quality standards and discharge limitations, and that both the SEO and Water Courts must defer to the decisions of these agencies. As applied to the facts of this case, Denver asserts that the Bi-City WWTP has a valid NPDES discharge permit, that the issuance of the permit allows Denver to use Bi-City effluent as a source of substitute supply, and that therefore, the water court is precluded from imposing more stringent quality standards on Denver’s substitute supply. Denver also claims that the rights of senior opposers do not include the right to dilution flows to protect water quality, and that Thornton has no standing to assert injury from Denver’s discharges that are downstream of Thornton’s diversion structures.

    

   2. Thornton argues that state and federal water quality standards do not preempt the water court’s water quality determinations with respect to augmentation and substitute supply waters. Thornton asserts that federal and state statutes and rules are relevant to, but not controlling of, the court’s determination.

    

   3. Centennial asserts that the WQCA does not apply to effluent exchanges, and therefore does not preempt the water court’s determination.

    

   4. Summit County. Summit County intervened in this case in part to oppose any order that would impair Denver’s ability to meet its rights and obligations to reuse water imported from the Colorado River drainage. These rights and obligations were established under the October 12, 1955 Decree in Consolidated Cases 2782, 5016, and 5017, U.S. District Court for the District of Colorado (the "Blue River Decree"). Such impairment would restrict the reuse, to extinction, of Denver’s transmountain water, thereby creating a windfall to those appropriations who are junior to Denver’s decreed Blue River rights. By implication, the resulting increased demand on Blue River water could potentially impair the rights of other parties to the Blue River decree who are junior to Denver’s Blue River rights, but senior to the opposers in this diligence proceeding.

    

   5. SEO. The SEO asserts that the court has authority to implement the substitute water quality provisions of §§ 37-80-120 (3) and 37-92-305 (3) and (5), independently of the water quality control program. The SEO further contends that the exercise of such authority will defeat what the General Assembly intended by enacting the WQCA. The SEO argues that, if Bi-City is forced to improve its effluent above the requirements of its NPDES permit, a gap in quality is created between actual discharges and stream standards. As a result, stream quality will increase above NPDES standards, additional NPDES permits will be issued on the stream to the extent that the stream standards are not exceeded, eventually lowering stream quality from the enhanced 37-80-120(3) level to the NPDES level. The end result would be that Thornton will ultimately receive water of NPDES quality, despite the court-imposed restrictions on Bi-City discharges. The SEO argues that, therefore, regulation of overall stream standards, in light of Thornton’s claims, should be first addressed before the Commission rather than the Water Court. Only the Commission’s refusal to act would trigger separate consideration of the issue by the water court. The SEO states that the water court should defer to the regulatory scheme established by the WQCA, and only should condition the exchange upon meeting decreed water quality requirements.

    

   II. Legal Principles

    

   1. Clean Water Act: 33 U.S.C. § 1251 (1972)

   a) Objective - the objective of the federal CWA is to "restore and maintain the chemical, physical, and biological integrity of the Nation’s waters." 33 U.S.C. § 1251 (1972). Congress' intent in enacting the CWA was: "To establish an all-encompassing program of water pollution regulation." Every point source discharge is prohibited unless covered by a permit, which directly subjects the discharger to the administrative apparatus established by Congress to achieve its goals. The "major purpose" of the CWA was "to establish a comprehensive long-range policy for the elimination of water pollution." S.Rep.No.92-414, at 95, 2 Leg. Hist. 1511. City of Milwaukee v. Illinois and Michigan, 451 U.S. 319, 101 S. Ct. 1784, 1793 (1981).

   b) Primary Methods of improving water quality -

   i) National Pollutant Discharge Elimination System ("NPDES"). Effluent limitations are promulgated by the Environmental Protection Agency ("EPA") through the NPDES program, restricting the quantities, rates and concentrations of specified substances discharged from point sources. The EPA administers the NPDES program, unless a state meets certain criteria whereupon the EPA delegates authority to the state. Colorado's NPDES program administration has been delegated to the Colorado Department of Health effective March 28, 1975.

   ii) Stream Standards - ambient water quality standards are generally promulgated by the States and establish the desired condition of a waterway. These standards supplement effluent limitations so that numerous point sources, despite individual compliance with effluent limitations, may be further regulated to prevent ambient water quality from falling below acceptable levels.

   c) Total Maximum Daily Load Process ("TMDL") - the CWA requires each state to identify water that do not, or are not expected to, meet applicable water quality standards and list such waters pursuant to § 303(d) of the CWA. The state then establishes a priority ranking for such waters, taking into account the severity of the pollution and the uses to be made of such waters. 33 U.S.C. § 1313(d)(1)(A). In accordance with the priority ranking, each state must establish the total maximum daily loads for those pollutants that are suitable for such calculation and whose additional regulation is necessary to attain the water quality standards for that section of stream.

    

   2. Colorado Water Quality Control Act C.R.S. § 25-8-101 et seq.

   a) Objective - the WQCA was enacted in 1973, and significantly amended in 1981, to protect, maintain and improve the waters of the State of Colorado. C.R.S. § 25-8-101, et seq. The WQCA created within the Colorado Department of Heath a water quality control Commission ("Commission") and a water quality control Division ("Division") responsible for administering water pollution control in Colorado.

   b) The Commission. The Commission is a nine-member citizen board whose duties include the sole responsibility to classify state waters and promulgate water quality standards. The Commission classifies uses based on the historic use and the reasonably envisioned future use of the water in each segment, and sets water quality standards to protect those uses

   The Commission promulgates rules using a public hearing process outlined in the Colorado Administrative Procedures Act and its own procedural rules, including publication of proposed rules in the Colorado Register and the Code of Colorado Regulations. The Commission, at three year intervals, re-evaluates the adequacy of the classification of waters, water quality standards, and control regulations. The implementing agencies, including the SEO, implement such classification and standards through their own programs after consultation with the Commission and the Division.

   c) The Division. The Division is solely responsible for issuance and enforcement of permits authorizing point source discharges to surface waters of the state. The Division establishes the terms of discharge permits to protect water quality for the receiving and downstream segments. In calculating such terms, the Division considers the quality of the water immediately upstream of the discharge, the chemical and physical constituents of the discharge and the peak flow volume of the discharge relative to the low flow volume of the receiving stream above the discharge. The Division then calculates the amount of each of the regulated constituents in the discharge that, after mixing with the water in the stream immediately above the point of discharge, will result in water quality that complies with the standards set by the Commission for the segment.

    

   3. C.R.S. § 37-92-305(5)

   "In the case of plans for augmentation including exchange, the supplier may take an equivalent amount of water at is point of diversion or storage if such water is available without impairing the rights of others. Any substituted water shall be of a quality and quantity so as to meet the requirements for which the water of the senior appropriator has normally been used, and such substituted water shall be accepted by the senior appropriator in substitution for water derived by the exercise of his decreed rights."

    

   4. C.R.S. § 37-80-120(3)

   "Any substituted water shall be of a quality and continuity to meet the requirements of use to which the senior appropriation has normally been put."

    

2. ANALYSIS

Denver is seeking an absolute decree for a conditional right of exchange. In essence, Denver wishes to divert relatively clean water from the S. Platte River at the Strontia Springs outfall and the Denver-Platte Canyon intake, upstream of the Chatfield Reservoir. As a part of the exchange for this upstream water, Denver seeks to discharge treated effluent from the Bi-City WWTP, which is downstream of Chatfield Reservoir but upstream of the Burlington Ditch headgate and a Thornton pipeline that is supplied by the Burlington Ditch. Denver asserts that federal and state water quality legislation preempts §§ 37-80-120(3) and 37-92-305(5). If this is so, then the court is without authority to impose and water quality standards on Bi-City, so long as its effluent discharges meet WCQA requirements. This would be so, even if Thornton or other downstream senior diverters, had normally required and used water of higher quality than that specified by the WQCA permit.

Both the federal CWA and the WQCA expressly disclaim any preemption of state authority to regulate and allocate water rights. The CWA provides, "It is the policy of Congress that the authority of each State to allocate quantities of water within its jurisdiction shall not be superseded, abrogated or otherwise impaired by this chapter." 33 U.S.C. 1251(g). Further, the Act does not "restrict any right which any person...may have under any statute or common law to seek enforcement of any effluent standard or limitation or to seek any other relief." 33 U.S.C. 1365(e).

Similarly, no provision of the WQCA "shall be interpreted so as to supersede, abrogate, or impair" water rights or "construed, enforced, or applied so as to result in material injury to water rights." C.R.S. § 25-8-104(1). A discharger who chooses consumptive types of treatment techniques, in order to meet water quality requirements, "must comply with the applicable provisions of articles 80 to 93 of title 37,and shall be obliged to remedy any material injury to water rights to the extent required under the provisions of articles 80 to 93 of title 37, C.R.S. The question of whether such material injury to water rights exists and the remedy therefor shall be determined by the water court". Id. Further, the express purpose of the WQA is to provide "additional and cumulative remedies to prevent, control, and abate water pollution and protect water quality." C.R.S. § 25-8-612(1). Hence, both federal and state legislation expressly disclaim preemption of the water court’s authority to impose higher standards on substituted or exchanged water than is required under the WQCA.

Under the WQCA, the Commission and the Division are the final authorities in administration of water pollution prevention, abatement and control. As Denver asserts, no other agency, having concurrent jurisdiction with the WQCA over these matters, can authorize the discharge of pollutants into state waters without the authorization obtained in compliance with the WQCA. § 25-8-102(4). However, the issue before the court is not whether the water court may authorize the discharge of pollutants into state waters in violation of the rules and regulations promulgated by the Commission and Division. Rather, the issue is whether the water court has the authority to prevent injury to downstream users by requiring that substitute, exchange or augmentation water meet the tests of §§ 37-80-120(3) and 37-92-305(5). Inherent in prevention of such injury is the necessity, under certain factual situations, that replacement water exceed the level of purity required under existing NPDES permits. In determining this issue, the court recognizes certain principles.

First, the CWA, WQCA, and §§ -120(3) and -305(5) must be read in harmony. If these statutory provisions cannot be harmonized, the WQCA must prevail on matters of water quality because it is the later and more specific statute. Additionally, it directly addresses the relationship between water quality and water quantity, and provides specific guidelines and parameters to address those issues. On the other hand, §§ 120(3) and 305(5) codified the common law prohibition on unreasonable discharges that seriously impair the ability of downstream seniors to use their water rights.

Second, the doctrine of primary jurisdiction, or deference doctrine, calls for judicial deference in cases involving technical questions of fact uniquely within an agency’s expertise and experience, or in cases where uniformity and consistency require administrative discretion.

A. Piecemeal Adjudication. Denver argues that, if a decreed exchange is operated by substituting effluent subject to an NPDES permit, and the receiving water has been classified for the use of the downstream senior appropriator, the effluent is, as a matter of law, an appropriate substitute supply according to §305(5). Denver further observes that water quality standards and discharge permit limitations require a degree of uniformity and consistency that this Court cannot provide by applying §§ 120(3) and 305(5) in a piecemeal fashion to individual water right applications, arguing:

The SEO echoes Denver’s position, adding that Thornton’s attempted imposition of decree conditions in individual adjudications, without addressing overall stream standards before the Commission, would afford Thornton no relief. Their reasoning is as follows.

If this court imposes higher standards on Denver’s replacement water than those established by the Commission, the overall water quality of the stream will improve on the reach of the S. Platte downstream of Denver’s replacement site(s). The Division will then allow subsequent permittees to discharge water that will reduce overall stream quality, from the level enhanced by Denver’s discharges to the level established by the Commission. The end result is that overall stream quality, while temporarily improved, will inevitably return to the level established by the Commission. One consequence of this process is that Denver’s discharges will benefit only later permittees, by temporarily allowing them to discharge water of lower quality, until overall stream quality is reduced to the level established by the Commission. The other consequence is that the quality of the water received by Thornton will only temporarily meet its historical entitlement established by the evidence in the case.

The court agrees with Thornton’s conclusion that overall stream quality will be enhanced by an adjudication that requires Denver to provide replacement water of higher quality than Commission-established standards, in order to meet the needs of downstream users, whose normal uses and needs have required such higher quality water. Denver is seeking to withdraw high quality upstream water, out-of-priority, in substitution for its present sources, reducing the amount of high quality upstream water available to the stream. Therefore, Denver must provide substitute water of like quality, or at least of a quality that is not below that which was historically used and needed by the downstream users.

The court is skeptical of Denver’s assumption that the Division would require subsequent discharges to be of a quality no higher than that required to maintain the Commission-established ambient stream standards. The Commission and Division are also charged with the responsibility of improving stream conditions. Therefore, one possible outcome is that, if stream conditions improve, the Commission will upgrade ambient stream quality standards, and the Division will impose stricter pollutant limitations on future discharge permits.

The second basis for the court’s skepticism is Denver’s implied premise that no future dischargers will be subject to the jurisdiction of the water court. Admittedly, those who obtain their water supply from municipal systems, or from water districts, will be subject only to the WQCA and will answer only to the Division. However, those who seek adjudication of new or changed water rights will be subject to the limitations of §§ 120(3) and 305(5).

Therefore, overall stream quality will not inevitably regress to existing WQCA standards, following water court adjudications that result in replacement of water that exceeds those standards.

B. Judicial Deference.

In determining whether this court should defer to the Commission's and Division’s decisions, regarding water quality standards for replacement water, the court considers three factors:

1. Whether the technical questions of fact involved are within the competence of the court to understand and resolve,
2. Whether water court adjudications in individual cases will create inconsistency in the application of WCQA standards, and
3. Whether the public interest will be served by this court’s deferring to the judgment of the Commission and the Division.

Water courts regularly decide issues involving complex scientific evidence, e.g., changes in aquifer boundaries that turn upon questions of stream conductivity and aquifer transmissivity. Prior to the enactment of the CWA and related legislation, the water courts resolved disputes centering on the application of §§ 120(3) and 305(5). In any event, the courts are not required to establish statewide water quality standards that apply, across the board, to all point-source discharges into the state stream system. The narrow issue, in each adjudication under §§ 120(3) and 305(5), is whether the quality of an Applicant’s replacement water falls below that normally required and used by an Opposer. If an opposer asserts that he/she normally required and used water of a quality that exceeds existing standards established under the WQCA, then the burden falls upon that opposer to prove that assertion. If the opposer does so, then the applicant must establish that the proposed replacement water meets the enhanced quality standard. The court’s findings are fact specific and bind only the parties to the Application, and have no effect on others who divert from or discharge into the stream system. Thus, the scientific and technical issues in individual adjudications are no more complex than such issues have traditionally been.

The Commission and Division have exclusive jurisdiction over the quality of discharges to the stream; therefore, the water court cannot regulate the quality of a given discharge. It may only determine whether the quality of such discharge meets the opposers’ entitlement under §§ 120(3) and 305(5), or whether the applicant must use replacement water of higher quality than that which it proposes. This determination is not beyond the competence of the water court to understand and resolve and cannot result in inconsistent application of WQCA standards.

As noted above, the court cannot permit an applicant to introduce water into the stream system, in violation of his/her discharge permit. The limit of the court’s authority is to require, in certain fact-specific cases, that replacement water be of higher quality than is required by WQCA standards.

In sum, then, the court must defer to the Commission standards and Division permits, insofar as they establish minimum water quality standards for discharges into the stream system. However, the court may not abdicate its authority to impose higher water quality standards in specific cases, where such stricter standards are necessary to the implementation of §§ 120(3) and 305(5). As a practical matter, if an opposer asserts that he/she normally required and used water of a quality that exceeds existing standards established under the CWQA, then the burden falls upon that opposer to prove that assertion. If the opposer does so, then the applicant must establish that the proposed replacement water meets the enhanced quality standard.

The public interest will not be served by this court’s deferring to the judgment of the Commission and the Division, in applications for water rights that involve questions of enhanced water quality. The WCQA neither contemplates, nor is designed for, the resolution of disputes over water rights. Denver argues that WCQA standards preempt the court from establishing enhanced standards and supersede the quality requirements of all individual diverters irrespective of the level of quality that the diverters have historically needed and used. This principle would not serve the general public, because it would not foster the purpose of the Act to increase water quality. This principle would not serve the interests of senior water rights because, in certain fact situations, the quality of the water available to senior diverters would diminish. Finally, the impairment of water rights, which would result from diminished water quality, contravenes the express provisions of both federal and state water quality legislation, which provide that water quality legislation shall not interfere with vested water rights.

1. Conclusions of law

The Colorado Water Quality Control Act, C.R.S. § 25-8-1-101, et seq., and the Federal Clean Water Act 33U.S.C. § 1251, et seq., preempt the authority of other agencies, including the water court, to establish minimum quality standards of water discharged into the streams of this state.

C.R.S. §§ 37-80-120(3) and 37-92-305(5) empower the water court to impose water quality standards higher than the minima established by the WQCA in cases that include questions of change, exchange, augmentation or other replacement water; and, in which the evidence establishes that an opposer needs and has used water of a quality higher than the standards established by the WCQA.

Replacement water that meets the quality standards established by the WCQA is rebuttably presumed to meet the requirements of the senior appropriators’ normal use.

The burden is upon the party, asserting the need for higher quality water, to prove that water meeting the quality standards established by the WCQA does not meet that party’s normal requirements.

Water Division No. 1