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Nebraska gets favorable rulings from arbitrator PDF Print E-mail

Some questions still remain in dispute with Kansas

By Russ Pankonin
The Imperial Republican

Nebraska won several key rulings in the findings of arbitration with Kansas over Republican River water use and compliance with a 2002 settlement between the two states.
Arbitrator Karl Dreher released his findings late Tuesday night, June 30.
Dreher ruled in favor of Nebraska on these key issues—the amount of compensation Nebraska must pay Kansas for it overuse of water in 2005 and 2006; inconsistencies in accounting for the virgin water supply in the state; and denial of Kansas’ request that Nebraska idle more than a half-million groundwater acres in the basin.
Jasper Fanning, manager of the Upper Republican Natural Resources District in Imperial, said Dreher’s decisions prove big for the state.
However, he cautioned there are still some unresolved issues not addressed in Dreher’s findings.

Damages limited

Kansas went into arbitration in the fall of 2008, seeking $72 million in damages from Nebraska for overusing its allocation in the Republican Basin in 2005 and 2006.
In December, Dreher estimated damages at no more than $10 million in a preliminary decision.
He dealt Kansas a big setback in his final decision. He said Kansas failed to show with any certainty the amount of actual damages suffered by the state from Nebraska’s actions.
While Dreher said Kansas suffered damages from “one to several million,” Kansas did not show a “sufficiently reliable basis to form an appropriate recommendation for awarding damages.”
As a result, he said Kansas was entitled to nominal damages of only $10,000 and no damages for indirect economic impacts.
However, he left the door open for Kansas to substantiate their  claims and methodology in any subsequent arbitration or before a court.
The arbitration process, as outlined in the 2002 settlement, is non-binding on either party. This means Kansas could still take the issue to the U.S. Supreme Court, who hears all disputes between states.
Fanning said the state should feel fortunate that it is not liable for $72 million in damages. Hopefully, he said, this will encourage the state to budget funds for surface water purchases and augmentation projects so the state isn’t faced with millions in damages again.

Accounting irregularities

Dreher agreed with Nebraska that accounting procedures to determine the virgin water supply available to each state for compliance purposes is flawed.
He recommended the Republican River Compact Association reconvene its technical groundwater modeling committee to address this issue.
Fanning explained the groundwater model appears to be functioning correctly. However, the accounting methods that rely on the model data don’t correctly account for water depletions and virgin water supply.
Fanning said addressing these accounting inaccuracies will more accurately estimate virgin water supply, which should ultimately benefit Nebraska.
Dreher found that several other contentions Nebraska made about the model and accounting process were not valid and should remain the same.
Fanning noted that while this is good for Nebraska, Dreher left the question unresolved by only recommending the modeling committee to look at the issues.

Future compliance in dry years

Dreher doubted Nebraska could stay in compliance in water-short  or dry years, such as those experienced from 2002-2006. As a result, he said the NRDs and the state must look at long-term solutions, such as surface water purchases, to remain in compliance.
In order to keep Nebraska in compliance, Kansas sought to reduce Nebraska’s groundwater-irrigated acres by 515,000 acres.
Again, Dreher sided with Nebraska, saying the compact settlement gave Kansas no authority to tell Nebraska how to stay in compliance.
However, he cautioned Nebraska that he didn’t believe the current integrated management plans would be sufficient in dry years to keep Nebraska in compliance, suggesting additional allocation cuts could be one measure to be considered. Making long-term purchases of surface water was another option.
What this finding did do, Fanning said, was validate what the NRDs have already been doing by purchasing surface water to help reach compliance.
It also shows that allocation cuts are not enough and additional options, such as stream augmentation, should be considered, Fanning said.
Since damages should not be monumental, Fanning urged the state to support the funding of these alternatives to avoid future compliance problems.
A PDF of Dreher’s complete findings accompanies this story on the Republican’s website:

Arbitrator's Final Ruling 6-30-09