KRC has reviewed the proposed amendment to 401 KAR 4:010, and offers these comments.
The authority of the agency to regulate water withdrawal arises under various sections of KRC Chapter 151. The agency identifies, in the preamble to the regulation, KRS 151.125. 140, 150, 160 and 170 as the statutory authority for the adoption of regulations governing water withdrawals.
A review of the applicable statutes reflects the clear intention of the General Assembly concerning the conservation and use of water resources. KRS 151.125 specifically empowers the agency Secretary ?[t]o administer and enforce the provisions of this chapter and all rules and regulations and orders promulgated thereunder; and to adopt without notice or hearing, rules and regulations governing hearings, filing of reports, and issuance of water withdrawal permits. KRS 151.125(1), (4). Additionally, enforcement powers with respect to water withdrawals that are unlawful are granted by statute.
KRS 151.140 more specifically governs issuance of water withdrawal permits, establishing a general prohibition against unpermitted withdrawals and exempting certain categories of water withdrawals from permit (including agricultural and domestic use, waters withdrawn and reinjected as part of waterflood operations, and water withdrawals for regulated electric utility plants).
KRS Chapter 151 imposes certain other specific limitations on the nature of water withdrawal permits under KRS 151.150, an applicant seeking to withdraw, divert or transfer public water must register and submit an application on forms supplied by the cabinet. Under KRA 151.160, all such water withdrawn, diverted or transferred pursuant to a permit must be recorded and reported at frequencies and in a manner determined by the agency. The permits are required to be specific in terms of quantity, time, place and rate, and represent a limited right of use and do not vest ownership not an absolute right to withdraw or use the water.
KRS 151.170 also defines the standard by which the Cabinet reviews and determines whether and under what conditions to issue a permit authorizing a water withdrawal. According to statute, the permit is to issue if an investigation conducted by the cabinet reveals that the quantity, time, place or rate of withdrawal of public water will not be detrimental to the public interests or rights of other public water users. No permit shall be denied to a responsible applicant who has established an amount of water for which he has a need for a useful purpose, provided the requested amount of water is available. (Emphasis added).
KRS 151.200 authorized the agency during drought and emergency circumstances to restrict withdrawal, notwithstanding a permit or exemption, and to temporary allocate available water until the emergency conditions have passed.
While KRS 151.110 is mentioned as relating to the proposed amendment to 401 KAR 4:010, it is instructive to review 151.110 since it establishes the policy that the agency is being empowered, authorized and obligated to implement. With regard specifically to water withdrawal, the General Assembly has declared that:
[I]t is declared to be the purpose of KRS Chapters 151 for the Commonwealth to . . . keep accurate records on the amount of water withdrawal from the streams and watercourses and reasonably regulate the amount of withdrawal of public water; And to engage in other activities as may be necessary to conserve and develop the water resources of the Commonwealth of Kentucky, and to ensure adequate supply of water for domestic, agricultural, recreational, and economic development uses.
With respect to protection of groundwater resources, KRS 151.110(2) specifically recognizes the vulnerability of the groundwater resource and its significance to the state, establishing a policy to manage groundwater for the health, welfare, and economic prosperity of all citizens.
Against this statutory background, it is clear that the existing water withdrawal regulations deserve and need fundamental revision in order to more explicitly reflect the policies and goals of the Commonwealth.
Comments On Specific Amendments
With respect to the proposed amendments, KRC is concerned with the proposal to allow an applicant to request allocation of water in advance of actual demonstrated need, for a period of up to three (3) years.
a. Public and Interagency Notice Is Needed
It is long past time that the agency utilize its broad enabling authority under KRS Chapter 151 and 224 to provide for public notice and a formal comment period on applications for water withdrawals. The lack of meaningful public notice, including notice that would be sent to planning, water resources management, fish and wildlife, and economic development agencies, allows decisions on matters as crucial as the allocation (and now the advance allocation) of water supply to occur with no review or synchronization with local government and public plans and interests. Providing interagency and public notice would allow reasoned comment on the two criteria for which the agency should seek external input whether the applicant is a responsible applicant and whether the applicants proposed need and usefulness of purpose have been established.
Interagency notification to state and local government agencies is important for another reason, which is that counties and regulated utilities have long and short-range supply plan obligations under statute, and those plans that can be dramatically affected by private water withdrawals, particularly since the agency is now proposing to allow an entity to lock up water resources for as much as three (3) years in advance of knowing whether the project is actually viable and will come to fruition.
The agency appears to acknowledge that this concept of advance allocation may cause conflict with other competing uses, since it establishes as one of the criteria, a requirement that the applicant demonstrate that there remains an amount of water that may be allocated for other competing uses[.] Yet how one would make such a finding is a mystery, since the applicant is not guided in defining what uses are competing (present uses? present permitted uses? possible expansions to those uses? new uses that like the applicant are as much as 3 years in the future?) Public notice, including interagency and intergovernmental notice, would allow for meaningful public input on other planned uses that may be in conflict.
b. Availability of Water for Withdrawal Should Be Better Defined
The agency decision on whether to issue a requested water withdrawal permit, and in setting the quantity, rate, time and place of the withdrawal, hinges on an agency determination that the amount of water requested (or lesser amount authorized) is available. KRS 151.170(2). The agency should define availability to reflect the purposes of the chapter water is available only where, under critical flow conditions during the periods for which the withdrawal is requested, the needs of existing users (domestic, recreational, etc. as outlined in 151.110(1) and (2) and of the resource itself (i.e. minimum sustained flow for aquatic life and to prevent damage to connected surface and groundwater resources) are met and the water requested is surplus to those needs and maintenance of the waterbody health.
c. Advance Allocation Must Be Better Controlled
As has been the case in the merchant power industry, where numerous project proponents secure environmental permits even though the financial support has not developed and the project viability is very much in question, the allowance of advance issuance of permits for projects that are as much as 3 years in the future may remove from availability, water resources that could be utilized by other beneficial projects within that time.
In order to prevent the acquisition and sequestering of available water withdrawals in a manner that might adversely affect local or regional economic development plans, the agency should (a) require that withdrawals be demonstrated to be consistent with, or not inconsistent with, local and regional water supply, land use and economic development plans; (b) require the applicant to provide a financing and development plan indicating that the applicant possesses the requisite capability to finance and develop the project; and (c) by restricting the amount of water withdrawal allocation so that it does not exceed a certain percentage of available capacity, so that there remains sufficient capacity in reserve even where a non-viable project has locked in some of the available capacity (similar to the approach utilized in defining and limiting the availability of mixing zones for purposes of water quality).
Thank you in advance for your consideration of these comments.
Tom FitzGerald Director