.- I IN THE DISTRICT COURT IN AND FOR WATER DIVISION N0. 5 STATE OF COLORADO Case No. IN THE MATTER OF THE APPLICATION FOR CHANGE OF WATER RIGHTS OF THE TWIN LAKES RESERVOIR AND CANAL COMPANY FINDINGS OF FACT, CONCLUSIONS OF LAW ITS TRIEUTARIES AND DEGREE IN THE ROARIHC FORK RIVER AND TH PITKIN COUNTY, COLORADO THIS MATTER, an application for Change in nature and place of use of the Independence Pass Transmountain Diversion System, Structure No. 284, Priority No. 431 (here- after referred to as with priority date of August 23, 1930, decree date of August 25, 1936, former water District No. 38, came on for hearing on April 10, 11, 14, 15 and 16, 1975. The Applicant, the Twin Lakes Reservoir and Canal Company (hereafter referred to as "Twin Lakes Company") appeared by its counsel, John U. Carlson, James E. Boicourt and Lawrence L. Fenton. The Objectors the City of Aspen, the Board of County Commissioners of the County of Pitkin, and the Snowmass water and Sanitation District appeared by their attorneys, George Vranesh and John D. Mnsick, Jr. The objectors, Colorado River Council, Valley Environ- mental Protection Association and Colorado Council of Trout Unlimited, appeared by their attorney, Fitzhugh Scott, The Court, having heard and reviewed the evidence, and considered the briefs filed, and being advised inthe premises, does enter these Findings of Fact, Conclusions of Law, and Decree: FINDINGS OF FACT 1. The application of the Twin Lakes Company for a change in nature and place of use of the IPTDS, a water right decreed by the District Court in and for Garfield County, State of Colorado, in Civil Action No. 3082, was filed with this Court on May 29, 1973. An amended Application was filed with this Court on August 29, 1974. The Application, as amended, seeks judicial confirmation'of the right to use water decreed to the IPTDS for the following purposes: direct flow and storage for irrigation, domestic, commercial, industrial, municipal and all beneficial purposes. The Application, as amended, further seeks judicial confirmation of the right to use the water decreed to the IPTDS at the following places: Any site capable of being served by deliveries from either the discharge portal of Tunnel No. 1, Independence Pass Transmountain Diversion System, into Lake Creek, a natural stream in Lake County, Colorado, which is tributary to the Arkansas River, or the storage facilities of Twin Lakes Reservoir, in Lake County, Colorado; 0n the right bank of the Colorado River, whence the East Quarter corner of Section the 6th P.M. bears N. 32' 34" W., a distance of approximately 410 feet; On the right of nertherly bank of the Colorado River at a point which bears N. 53? 13' 51" West 5798.90 feet from the North Quarter Corner of Section 35the Northwesterly bank of the Colorado River, whence the section corner common to Sections 6 and 7, T. 7 3., R. 95 W., 6th and Sections W., 6th P.M. bears S. 89? 05' W. 336$.65 feet. By terms of the original decree of August 25, 1936, the IPTDS was to be used for the storage in Twin Lakes Reservoir and for irrigation of some 56,000 acres of lands underlying the Colorado Canal (an irrigation canal) in Pueblo and Crowley Counties, Colorado. These lands are hereafter referred to as "Project Lands?. 2. Notice of the Application and the Amended Application were duly published pursuant to 1973 C.R.S. 37-92-302. 3. Statements of Opposition were timely filed by the Southeastern Colorado Water Conservancy District, Aspen International Properties, lnc., The Colorado River Water Conservation District, Colorado Rivers Council, Valley Environmental Protection Association, Colorado council of Trout Unlimited, the City of Aspen, and the Pitkin County Board of County Commissioners. Union Oil Company of Califor~ nia made an entry of appearance in this proceeding. That entry of appearance by Union Oil Company was subsequently withdrawn pursuant to agreement in open court by the Twin Lakes Company that should the Application be granted, no rights thereby would be acquired in any real estate or ditch rights-ofwway owned by Union Oil Company of California. 4. The United States of America filed a Statement of Opposition to the Amended Application. That Statement was subsequently withdrawn pursuant to a Stipulation by and between the United States and the Twin Lakes Company, the terms of which have been incorporated in this decree. 5. The Southeastern Colorado Water Conservancy District and Aspen International Properties, Inc. withdrew their Statements of Opposition prior to trial. 6. The Colorado River water Conservation District withdrew its Statement of Opposition pursuant to a Stipula- tion by and between it and.the Twin Lakes Company. 7. This action was duly re?referred to the Court by the Referee. 8. At the pre-trial conference held November 18, 1974, the Court requested briefs on certain points of law raised in the pleadings. Briefs were submitted by Objectors, Pitkin County, Aspen, and Snowmass; by Twin Lakes Company; and by John M. Sayre, Glenn G. Saunders, Charles J. Boise, Frank E. Haynes, and Kenneth Balcomb, attorneys for the Colorado River Compact Commissioner for Colorado as Emigi curiae. The Court made its ruling thereon by Order dated?March 25, 1975, a copy of Which Order is attached hereto as Exhibit A. I 9. This Application seeks to change the nature and place of use of water decreed to the IPTDS. The IPTDS is an integrated, complex system of canals, collection works, and tunnels whereby water is collected from various streams comprising the headwaters of the Roaring Fork River, a natural stream tributary to the Colorado River, and such water is diverted through a tunnel beneath the continental Divide to the Arkansas River Basin. This tunnel is denomi- nated Tunnel No. in the original decree and will be re~ ferred to as such hereafter. The other components of the collection system are: Lost Man Diversion Dam and Lost- Man Diversion Canal: A dam located on Lost Man Creek and utilized to raise the level of water so as to divert water into the Lost Han Diversion Canal, whereby water is carried to the Roaring Fork River. Roaring Fork Diversion_Dam, Tunnel No. 2 and Lincoln Gulch Connection Canal: The Roaring Fork Diversion Dam is located on the Roaring Fork River, just below the point of discharge of the Lost Man Canal. The Roaring Fork Diversion Dam captures the discharge of the Lost Man Diversion Canal and the natural flow of the Roaring Fork River, and raises the level of water so that such captured flows are diverted through Tunnel No. 2. The Lin- coln Gulch Connection Canal carries water discharged fume Tunnel No. 2 as well as water intercepted along the course of the canal to the central collection point for the entire IPTDS, namely Lincoln Gulch Diversion Dam. The New York Collection Canal is a canal which intercepts the flows of west Fork Gulch, New'York Gulch, and Tabor Gulch (natural streams which are tributary to Lincoln Gulch below the Lincoln Gulch Diversion Dam), and diverts water so intercepted to the Lincoln Gulch DiVersion Dam. Lincoln Gulch Diversion Dam, an on- stream dam on Lincoln Creek, captures the natural flow of Lincoln and Grizzly Greeks and receives the man?induced discharge from the New'York Collection Canal and the Lincoln Gulch Connection Canal. Water so collected is then diverted through Tunnel No. l, the trans~continental tunnel, into the drainage basin of the Arkansas River. The east portal er mouth of Tunnel No. 1 discharges water several hundred feet from Lake Creek, and water so discharged is carried in the natural channel of Lake Creek to the site of Twin Lakes Reservoir, where the water produced by the IPTDS is either stored or passed directly for direct flow irriga? tion uses under the Colorado Canal. 10. The amount of water diverted by the IPTDS is measured by a 12~foot Parshall measuring flume located at the east portal of Tunnel No. 1. All water derived from the IPTDS and passing that gauge is a complete loss to the Roaring Fork River and its tributaries; thus, as regards users of water from the Roaring Fork, diversions of the IPTDS constitute a completely consumptive use of water. 11. The uncontested evidence in this case estab? lishes that the IPTDS was constructed in order to supply a chronic shortage of water on the 56,000 irrigated acres underlying the Colorado Canal in Pueblo and Crowley Counties, Colorado. The Arkansas basin sources of supply to the Project Lands are three: two reservoir storage priorities for storage of Lake Creek water in Twin Lakes Reservoir, totalling 54,452 and a direct flow priority from the Arkansas River decreed to the Colorado Canal in the amount of 756.28 c.f.s. 12. In 1933, R.J. Tipton, a well known hydrolo- gist and engineer, concluded after a detailed study that all Arkansas River basin sources available to the Twin Lakes Company produced only 69,000 a.f. per annum, mean diversions, from 1912 to 1932, and that the mean annual shortage in water supply for the Project Lands from 1912 to 1932 was 56,300 a.f. measured at the headgate of the Colorado Canal. -6- 11:47!- d?uyhdb?h . phat absolutely decreed to Tunnel No. 1 in 1936 To obtain 56,300 a.f. at the Colorado Canal, the Twin Lakes Company must release approximately 63,000 a.f. from Twin Lakes Reservoir, for there is a 11.33% transmission loss from the reservoir to the headgate. 13. The need for an additional supply of at least 60,000 a.f. per annum average in transmountain water was explicitly laid before the Court in 1935 in the proof leading to the entry of the 1936 decree. 14. The decree of 1936 was in part conditional and in part absolute. From the terms of the 1936 decree it is apparent .361 was derived from the natural flow of Lincoln and Grizzly Greeks and the decree extablished as an overall limitation on diversions from all collection components of the IPTDS the maximum decreed rate of flow of 625 c.f.s. through Tunnel No. 1. 15. In 1944 the Tnin Lakes Company obtained a finding of diligence frOm the District Court with respect to the conditional components of the IPTDS and obtained an increase in the absolutely decreed portion of flow through Tunnel No. 1 from 367 c.f.s.to 504 c.f.s. 16. In 1966 the Twin Lakes Company next sought and obtained a finding of diligence with respect to the remaining conditiOnally decreed components of the IPTDS. Such finding of diligence was upheld by the Colorado Supreme Court in Colorado River water Conservation District v. E313 Lakes Reservoir and Canal Company, 171 Colo. 561, 468?. 2d 853 (1970). 17. The improvement work on the collection system has considerable significance in the issues now before the Court. The state of the IPTDS in 1949 was such that the Twin Lakes Company lost in excess of 9,000 a.f. of water per annum from seepage in the collection canals. The Twin Lakes Company thereafter launched a construction program to attempt to Cure the seepage losses. These losses occurred at all seasons of Operation, for the permeability of the shelf ditches which constitute the collection system.along moun? tainsides was extremely high. The initial efforts included attempts to lay plastic lining in the canals. Thereafter quantities of bentonite were spread in the collection canals with the design of sealing the ditches. Finally, commencing about 1955-56, the Twin Lakes Companies began a sustained program of installing corrugated metal pipe in the most porous reaches of collection canals. That pipelining continued until 1970, with the Twin Lakes Company undertaking some installation nearly every year from 1956 through 1970. The benefits of that program of bentoniting and pipelining are readily apparent from a comparison of average volumetric annual IPTDS divsrsions for years pre* ceding the program, and for the most recent years. Average IPTDS production for the five years 1949-1953 was 41,886 average production for the five years 1967-1971 was 51,876 a.f. From that comparison it is evident that the Twin Lakes Company's collection improvements yielded-a benefit at least corresponding to the 9,000 a.f. estimated 1053 found in the 1949 C80 study. 18. In 1971 the Company commenced lining Tunnel No. 1. This project was completed in 1972, and the instantaneous rate offlow of Tunnel No. 1 diVersions was increased thereby from 504 c.f.s. to 610 c.f.s. In 1973 in Casas Nos. W-721 and W-722, Water Division No. 5, the absolute decree for the IPTDS was increased to 610 c.f.s. through Tunnel No._1, and a finding of diligence was entered -3. with respect to the remaining conditional portions of the IPTDS. 19. No further work remains to be done on Thnnel No. 1 in order to cause it to carry the full 525 c.f.s. centemplated by the 1936 decree; rather, the sustained carriage of water through Tunnel No. as now lined is expected to cause the concrete lined walls of the tunnel to "slicken" and allow carriage of an instantaneous flow equal to 625 c.f.s. Whether this condition will come to pass remains to be tested by passage of tine. The physical availability of 625 c.f.s. to Tannel No. is confined to seasons c? peak run-off. 20. The original decree does not limit diversions to storage; rather the decree allows dual uses: storage as well as direct flow. Thus, the third from final paragraph of the decree provides: IS FURTHER ORDERED, ADJUDGED AND DECREED that the total amount of water which said system shall be entitled to divert from all sources at one time shall be limited to the carrying capacity of Tunnel Number 1 when completed, said carrying capacity being estimated at 625 cubic feet of water per second of time; and, further, that the water so diverted is to be supplementary to the decreed rights of the claimant The Twin Lakes Reservoir and Canal Company, out of the Arkansas River and its tributaries, and is to be allowed to flow only when the decreed rights of said claimant for storage in the Twin Lakes Reservoir and for direct irriga- tion are not supplied from its existing sources of supply." 21. The original decree also awarded an absolute decree for storage of IPTDS production in.Twin Lakes Reser- voir. Thus, in the final paragraph of the decree: "It is further ordered, adjudged and decreed that the said Twin Lakes Reservoir and Canal Company, its successors in interest, or the par- ties lawfully entitled thereto, shall also be entitled to store the water so diverted through said system for irrigation purposes, in such amount as may be necessary, with the quantity of water which may be derived from other decrees and other sources of supply, to fill the Twin Lakes ReserVoir to its capacity of 54,452 acreufeet of water once each year, with priority right relating to and dating back to August 23, 1930." 22. The change sought arises from the fact that municipal and quasi-municipal corporations have acouired approximately 65% of the capital stock of the Twin Lakes Company and seek to utilize the water deriving from the IPTDS in their municipal systems. The municipal interests who are now stockholders are the City of Colorado Springs, the Cityo&%Aurora, Pueblo West'Metropolitan District, the City of Pueblo, and the towns of 0rdway, Sugar City and Olney Springs. 23. As the municipalities begin using their IPTDS Water, the accompanying withdrawal of IPTDS Water from Project Lands will necessitate a change in irrigation prac? tices and cropping patterns. Thereafter, Project Lands Will be irrigated as pasture lands and the row crop irrigation will be reduced for lack of water supply. 24. The Cities of Colorado Springs and Aurora plan to transport IPTDS water to their municipal systems by means of the Homestake project. Water released from Twin Lakes Reservoir is recaptured from the Arkansas River, pumped out of the Arkansas River whereby the Cities of Colorado Springs and Aurora will capture the water attributable to their-ownership of Twin Lakes Company stock. 25. The deficiency in water supply for the Project Lands from.Arkansas River basin sources which existed in the 1930's persists. This is so even though less acreage (50,000 acres now as opposed to 56,000 then) is irrigated. According to the testimony offered by Applicant, for the years 1941- 1973 the average contribution of the Arkansas River to the Colorado Canal has been 47,385 and the average production from Lake Creek sources has been 8508 for a total average Arkansas basin supply of 56,993 a.f. The total annual need by the Project Lands, as established by Tipton, and confirmed in these proceedings exteeds 125,000 a.f. This computation of annual need does not include any provision for storage. 26. From its inception to the time of these proceedings, the Twin Lakes Company has spent over $4,250,000.00 to construct and perfect its IPTDS apprOpriation. The great expenditures in perfecting the IPTDS haVe measurably increased the annual yield of the IPTDS. According to the Applicant's evidence, the average of total IPTDS production for the years from 1941 throngh 1973 is 47,385 a.f. per year. Such an average does not reflect present IPTDS capabilities because the base period includes so many years during which the collection system stood unbenefitted by the bentoniting, and pipelining program that commenced in 1955. The five year average of IPTDS production for the years prior to completion of lining of Tunnel No. 1 (1967-1971) is 51,856 a.f. Lining the tunnel further adds to the capability of the system, but no period of experience to measure that benefit is available. Engineering estimates for that benefit are for added produc- tion of at least 1500 a.f. per annum on the average. MIXED FINDINGS 0b FACT AND COHELUSIONS 0F LAW 27. The Water Right Act sets forth the following principles with respect to change in use: By 37-92-103 (5) a "change of water right" is defined to mean: change in the type, place or time of use, a change in the point of diversion, a change from a fixed point of diversion -11- to'alternate or supplemental points of diversion, a change from alternate or supplemental points of diversion to a fixed point of diversion, a change in the means of diversion, a change in the place of storage, a change from direct application to storage and sub- sequent application, a change from storage and subsequent application to direct appli- cation, a change from a fixed-place of storage to alternate places of storage, a change from alternate places of storage to a fixed place of storage, or any combination of such changes. The term "change of water right" includes changes of conditional water rights as well as changes of water rights." 37-92?305 (3) mandates that a change of water rights be approved if: . . such change or plan will not injub riously affect the owner of or persons entitled to use water under a vested water right or a decreed conditional water right. If it is datermined that the proposed change or plan as presented in the application would cause such injurious effect, the referee or the water judge, as the case may he, shall afford the applicant or any person opposed to the application an opportunity to propose terms or conditions which would prevent such injurious effect." By 37-92~304 (3) the burden of proof is on the applicant: "The applicant shall appear and shall have the burden of sustaining the application and in case of a change of water right the burden of showing absence of any injurious effect in the statement of opposition." 28. Should it be determined that injury would attend a change, then by 37-92-305 (4), the legislature has offered guidelines which may be applied to alleviate that injury. Those terms and conditions ?may include": A limitation on the use of the water which is subject to the change, taking into consideration the historic use and the flexibility required by annaul climatic differences; The relinquishment of part of the decree for which the change is sought -12- or the relinquishment of other decrees owned by the applicant which are used by the applicant in conjunction with the decree for which the change has been requested, if necessary to prevent an enlargement upon the historic use or diminution of return flow to the detri- ment of other apprOpriators; .A thee limitation on the diver? sion of water for whi?h the change is sought in terms of months per year; Such other conditions as may be necessary to protect the vested rights of others." 29. In the case at hand it is therefore mania festly clear that the ultimate question before the Court is whether the change in nature and place of use sought by the Twin Lakes Company will injure other appropriators. 30. The injury asserted by the Objectors boils down to a claim that if the change were permitted in accor- dance with the terms of the proposed decree tendered by the Twin Lakes Company, that (1) there would be an expanded use from that historically made by the Twin Lakes Company or (2) use greater than that permitted by the terms of the 1936, decree. 31. The Objectors argue that the Twin Lakes Company has historically operated its IPTDS in such a manner as to establish a pattern of bypassing water other~ wise available for diversion and thus creating an availability of water on the Roaring Fork on which Objectors have come to rely. The facts do not support this argument. The expenditures incurred to seal the leakage on the collection system amounted to $515,000 in the period from 1944 to 1966; from 1966?1970 the Twin Lakes Company spent an additional $123,000 in pipe? lining segments of-the collection canal; and in the lining of Tunnel No. 1 in 1971?1972 the Twin Lakes Company spent -13- $1,565,000. These projects, undertaken on a sustained basis over a long period of years, had the obvious consequence of increasing, year by year, the total annual diversion, and increasing the production of the system. It is impossible to conclude that the Twin Lakes Company slept on its rights in such a manner that would justify any reduction in entitlement in a change of use. 32. In the proposed decree submitted by Objectors, they concede that the measure of a conditional water right in change proceedings is determined by the draft on the stream contemplated at the time of the original appropriae tion. This standard is set forth for changes, conditional or absolute, in Farmers Highline Canal Res. Co. v. Golden, 129 Colo. 575 (1954) where the Supreme Court held that "The extent of needed use in the original location is the criterion on considering change of point of diversion . . . . 129 colo. at 585, 272 P.2d at 634?635. 33. The draft on the stream contemplated in 1936 for the IPTDS is therefore measured in relation to the needs of the Project Lands. The uncontradicted evidence in this case eatablishes that the Project Lands continue to experi- ence a shortage of water in amounts at least equal and probably greater than that established by Tipton in 1932. The shortage on Project Lands is of course variable, accord- ing to the water supply experienced in the Arkansas drainage. In years of extreme drouth, for example, 1954, the Arkansas sources of supply furnished only 10,000 a.f. of water towards a total annual irrigation need (excluding provision for storage) of at least 125,000 a.f. By contrast, in the rare years of bountiful water supply, such as 1965, the ArkanSas sources yielded 135,362 of which atportion was stored for later use. -14_ 34. The extreme variability of supply on the Arkansas System vastly enhances the value of Twin Lakes Reservoir, for it captures water in years of full supply for use in a later season or later year when supply is scant. 35. Since the contemplated draft of the original appropriation ranged from 40,000 to 80,000 a.f. per annum, and since the actual need for IPTDS water existed, and still exists, on the Project Lands greater than 60,000 a.f. (mea? sured at Twin Lakes Reservoir), it is clear that the change decree sought by the Twin Lakes Company does not involve an expended use over that contemplated in 1936. Accordingly the Court concludes that the change sought does not amount to an enlarged use over the original apprOpriation. 36. The Objectors' argument for imposition of a historical average on the change of use rests on the propo- sition that the Twin Lakes Company in practice did not attempt to fully utilize the absolute portions of its decree. Since the decree was in significant aspects conditional throughout the period which Objectors use for their average of diversions, and since during that period the Company was attempting to . sake absolute that conditional decree, the application of a historical average is uncalled for, and if applied, would lead to grossly unfair results. It would deny the Company the benefits of the collection system improvements as well as the tunnel lining project. By statute the legislature has ordained that a conditional water right may be the subject of a change in use. Imposition of a historical average would utterly negate what the legislature has clearly granted. 37. With reapect to vested water rights of other appropriators including the City of Aspen, the Court fails to see any impact whatsoever arising from the transfer. Rights -15- senior to the IPTDS are obviously unaffected. If properly administered the junior decrees can hardly be injured, in the sense the law comprehends that term, by the perfection of the IPTDS so as to take the entire draft contemplated by the original appropriation. Exercise of a senior priority is not injury. Flasche v. wastcolo. Co., 149 P.2d 817 (1944). Objectors aesert that attainment of diversions in amounts corresponding to the limitations of the Stipulation will constitute injury to water rights owned by the City of Aspen. That contention ignores the obvious right of the Twin'Lakes Company to perfect its IPTDS in accordance with the con- templated draft of the 1936 decree. The contention further ignores the fact that throughout the history of the IPTDS the Twin Lakes Company has diligently striven to attain the contemplated draft. Every court that has reviewed the various diligence applications of the Company (1944, 1966, 1968, 1970 and 1972) has found that the Company was acting with diligence, and that conditional components of the system were to be continued in full force and effect. These diligence proceedings constituted notice to all junior priorities that the canditional components of the IPTDS were being completed, and that the Company was proceeding to obtain the contemplated draft of 1936. Attainment of that draft is what the Objectors here complain of; however, perfection of aconditional right according to its originally contemplated draft is not injury as the law knows it; rather, it is the exercise of a senior priority. 38. By the terms of the 1936 decree the water derived from the IPTDS "is to be supplementary to the decreed rights of the claimant. . . out of the Arkansas River,aind its tributaries, and is to be allowed to flow only when the decreed rights of said claimant for storage in Twin Lakes Reservoir and for direct irrigation are not supplied from its existing sources of supply." The "existing sources" to which IPTDS was in 1936 made "supplementary" were the folldwing: 756.28 c.f.s. decreed from the Arkansas river to the Colorado Canal for direct irrigation pur- poses by decree dated March 23, 1896, and with priority date of June 9, 1890. Reservoir Priority No. 3 for storage of 20,645.3 a.f. of water decreed from.Lake Creek for storage in Twin Lakes Reservoir by decree dated July 14, 1913, and with priority date of December 15, 1896. Reservoir Priority No. 4 for storage of 33,806.70 a.f. of water decreed from Lake Creek for_ storage in Twin Lakes Reservoir by decree dated July 14, 1913, and with priority date of March 29, 1897. Thus, the total storage decreed to Twin Lakes Reservoir from eastern slope sources is 54,452 and the direct flow decree to the Colorado Canal Entitled the Company to 756.28 c.f.s. 39. The meaning and interpretation of this suppleu mentary condition is for the Court to determine as a matter of law. The Court concludes that the Supplementary condition is a measure of the full water supply contemplated in the 1936 proceedings. It is an addition to supply whereby the Tuin Lakes Company may fill its chronic shortage of water. In no legitimate sense may "supplementary" mean subordinate. Such a construction was determined to be erroneous in 2323;; v. Sheriff, 105 Colo. 193, 96P.2d 336 (1939). Black's Law Dictionary defines "supplemental" as that which is added to a thing to complete it." The supplementary language thus constitutes an index as to need for IPTDS water. With -17- reapect to direct flow application of IPTDS water, the supplementary condition Operates to preclude direct flow use of IPTDS water when the needs of the Colorado Canal are fully satisfied by the Arkansas River decree. There can be no need for additional IPTDS waterfor direct flow purposes when a full Arkansas River supply is available to the Colorado Canal, for the obvious reason that the canal may then be filled with Arkansas River water. The facts estab? lish that the Project Lands can beneficially use a full ditch (756.28 of water during the irrigation season. When, however, the Arkansas River supplies less than 756.28 c.f.s. to the Colorado Canal, there arises a corresponding entitlement to make direct flow application of the IPTDS water. That entitlement rises in amount (up to 625 as the Arkansas supply declines from 756.28 c.f.s. 40. The Twin Lakes Company has consistently div Verted IPTDS water for storage in Twin Lakes Reservoir during the non?irrigation season as well as in the irrigation season. The physical capability of the IPTDS to produce water of course varies seasonally, with the great quantity of divertable water coming in the spring or summer run-off. Operation of the TETDS in winter months has yielded comparatively small quantities of water. The application for change in use contemplates continued winter operations. No injury arises therefrom, for such practice is consistent with the original decree 41. With respect to storage in Twin Lakes Reser- voir and the Supplementary condition similar principles apply. Twin Lakes Reservoir is an on-stream reservoir; under its Eastern Slope decrees, it may store whatever instantan? eous flow Lake Creek produces provided only that senior -13- appropriators are satisfied. Thus, it may be storing at a rate of flow ranging from 1 c.f.s. or less to several thousand c.f.s. Only when Twin Lakes Reservoir has appropriated 54,452 a.f. in one year is its lawful storage entitlement under its ReSerVoir Priorities Nos. 3 and 4 satisfied. 42. Prior to construction of the IPTDS, Twin Lakes Reservoir filled only very rarely. Under the construction urged by objectors a minute contribution to reservoir storage from Lake Creek sources would preclude any simultan? eous storage whatsoever without any reference to aVailable reservoir space and the to fill that space in Twin Lakes Reservoir from IETDS. Thus, if the available Lake Creek supply for storage was only 1 and the IPTDS was then producing 500 and Twin Lakes Reservoir had empty space, no IPTDS diversions for storage would be permitted. Such a result would do violence to the clear terms of the 1936 decree. 'The last paragraph in the 1936 decree deals Specifically with storage rights in Twin Lakes Reservoir and states that the Company also be entitled to store the water so irrigation purposes when said Water is not being used for direct irrigation purposes, in such amount as may be necessary, with the quantity of water which may be derived from other decrees and from other sources of supply, to fill the Twin Lakes Reservoir to its capacity of 54,452 acre-feet of water once a (Emphasis supplied) In the Court?s View this language clearly permits Twin Lakes Company to use IPTDS water simultaneUUSly with Lake Creek water to obtain 54,452 acrewfeet of storage once a year, the limitation being that the Lake Creek water which is adjudicated for storage and not for direct irrigation moat be utilised to the extent of its availibility. -19- 43. "The Twin Lakes Company seeks to continue the supplementary condition as interpreted by the Court. Thus, although it proposes to use IPTDS water at new points, it must measure its entitlement by the same rules as prescribed under the 1936 decree: available storage space in Twin Lakes Reservoir, and available carriage space, as well as a beneficial use for waters to be diverted, in the Colo? rado Canal. 44. By the Stipulation between the Twin Lakes Company and the Colorado River Water Conservation District, there is imposed on IPTDS diversions a volumetric limitation which operates on a 10 year running average. Under the Stipulation, IPTDS diversions are limited to 570,000 a.f. over any ten years, and a maximum annual diversion of 68,000 a.f. is impoSed. These conditions constitute a reduction from the contemplated draft of the original appropriation, which was, as has been set forth above, a goal the Twin Lakes Company has consistently striven to reach. In addition to? the volumetric limitation of 570,000 a.f. in any ten years, the Twin Lakes Company will be limited by the continuance of the supplementary condition. The supplementary condition operates as a limitation on attainment of the volume other? wise permitted by the Stipulation. 45. Once the quantity of water to which the IPTDS is entitled has been determined and diversions are so limited, it is of no consequence to other Roaring Fork appro- priators how that water is used. Thus, whether that quantity of water is stored, released for direct flow use, or stored in secondary reservoirs adjacent to municipal users, has no effect on objectors. Since the volumetric limitation con- tained in the Stipulation is a restriction on what might -20- otherwise be diverted out of this basin under the originally contemplated draft, there is no reason to limit the mode of ultimate use. This conclusion is in accordance with the flexibility of use accorded to trans?basin waters by statute (1973 C.R.S. g37-82-106), and by our Supreme Court in Denver v. Fulton Irrigating Ditch Co., 179 Colo. 47, 506 P.2d 144 (1972). In Westminster v. ChurchJ 167 Colo. l, 447 P.2d 52 (1968), the Supreme Court held explicitly that change in ultimate use of storage priorities cannot be injury. Finally, Kinney states: ?After water has been once stored in reser? voirs, it becomes personal property, and may be sold, con- tracted for, and diaposed of as such property.? Vol. II, Kinney on Irrigation Water Rights, 5846 at pp. 1484-1485. Accordingly, once the computation of permitted diversions of IPTDS water has been made, the locus or mode of use of the water within that computation is of no consequence or con? cern to Objectors, and there is no legal basis to impose limitations thereon. 46. The IPTDS poses unique considerations in terms of administration, in that the water is derivad from the Roaring Fork River, in water Division 5, the water is measured at the east portal of Tunnel No. and at Twin Lakes Reservoir in Water Division 2, and the ultimate beneficial use has been in Water Division 2. Because the tub elements of an appropria? tion -- diversion and application to a beneficial use -- occur in different divisions, the Court concludes that proper administration requires consultation and reporting between the water authorities for the two divisions. 47. The application also seeks the right to use a portion of IPTDS waters in Division No. 5, the basin of origin of the water supply. Under the decree sought by the -21- Twin Lakes Company, any water so utilized is a deduction from Water which otherwise would be diverted thrOugh Tunnel 1. of such water in Division 5 cannot injure other appropri- ators on the Roaring Fork, and should therefore be allowed. WHEREFORE, IT IS ORDERED, ADJUDGED AND DECREED: The Application of Twin Lakes Reservoir and Canal Company for a change in nature and place of use of its Independence Pass Transmountain Diversion System, Priority No. 431, is granted on the following terms and conditions: 1. The provisions of the decree of August 25, 1936, relating to the IPTDS, and the supplementary decrees thereto are modified by this decree only as is hereinafter specified. Provisions of said original decree and supple- mentary decrees pertaining to all other matters are continued in full force and effect. 2. Subject to the terms of this decree, Twin Lakes Company shall hereafter be entitled to use the water gathered and collected frOm the IPTDS, PriOrity 431, for these purposes: direct flow and storage for irrigation, domestic, commercial, industrial, municipal and all bene- ficial purposes. 3. Subject to the terms of this decree, Twin Lakes Company shall hereafter be entitled to use the water gathered from the IPTDS, Priority 431, at these places: Any sites capable of being served by deliv- eries from either the discharge portal of Tunnel No. 1 into Lake Greek or the storage of Twin Lakes Reservoir in Lake County, Colorado. Such new places of use will include, but are not limited to, the municipal water works of -22- the Cities of Aurora, Pueblo, and Colorado Springs, and the Pueblo'West Metropolitan District; The following three points of diversion from the Colorado River: (1) 0n the right bank of the Colorado River, whence the East Quarter corner of Secthe 6th P.M. bears N. 32? 34' W. a distance of approximately 410 feet; (ii) 0n the right or northerly bank of the Colorado River at a point which bears N. 53? 13' 51" West 5798.90 feet from the North Quarter Corner of Section 35the Northwesterly bank of the Colo- Rado River, whence the section corner common to Sections W., 6th P.M., and Sections W., 6th P.M., bears S. 890 05' W. 3364.65 feet. 4. Nothing in this decree shall create or consti- tute a judicial determination of the existence in Twin Lakes Company of any easement, rightwofwway or other interest in or over lands of Union Oil Company of California or the United States of America for any ditch, canal, flume, headgate, tunnel or other structure for the diversion or carriage of water. I 5. .The total diversions out of the tributaries of the Colorado River from which the Twin Lakes Company now derives, or from which it may, pursuant to conditional decrees now entered in Civil Action 5884, or applied for in Case Wn1869, or at some future date shall, derive its water supply, shall be volumetrically limited to the amount available in priority as follows: to no more than 570,000 acre feet of water in any period of ten years; to no more than 68,000 acre feet of water in any one year; computation of diversions by Twin Lakes Company shall be made with reference to the record of water discharge from the Independence Pass Transmountain Diversion System Tunnel No. 1 East Portal, located in Lake County, Colorado, and recorded releases at Grizzly Reservoir for diversion from the Roaring Fork or Colorado Rivers. Should Twin Lakes Company construct its con- ditionally decreed Lost Man Reservoir, water stored therein shall not be included in the limitation on diversions until the same is delivered via said Tunnel No. or otherwise released from storage for a bene- ficial use. In determining the allowable diversion in acre feet by Twin Lakes Company in a current year, there shall be-subtracted from 570,000 the sum of the Twin Lakes Company diversions of the previous nine years (as the same are limited by subparagraph above) and the remainder shall constitute the permissible total diver? sion for the current year, provided, however, that in no event shall the remainder exceed the limitation of subparagraph above. In determining annual and decennial total diversions, a year shall commence October 1 and conclude September 30, thereby corresponding to "Water year" records compiled by the State Engineer of Colorado. Diversions by Twin Lakes Company fer benefi- cial use in the Colorado River basin shall be released at Grizzly Reservoir. Said releases shall be made at times when water so released would otherwise be available for diversion through said Tunnel No. 1. Diversions by Twin Lakes Company for bene- ficial use in the Colorado River basin shall be located -24- at one or more of the following points: (1) On the right bank of the Colorado River, whence the East Quarter corner of Secthe 6th P4M. bears No. 32? 34' W., a distance of approximately #10 feet; (ii) 0n the right or northerly bank of the Colorado River at a point which bears N. 53? 13' 51" west 5793.90 feet from the North Quarter Corner of Section 35the Northwesterly bank of the Colo- rado River, whence the section corner common to Sections W., 6th P.M., and Sections W., 6th P.M. bears S. 89? 05' W. 336&.65 feet. Nothing contained in this subparagraph shall bar Twin Lakes Company from seeking, in subsequent legal proceedings, a change in the above Specified points. 6. All water diverted may be stored or applied directly to beneficial uses. 7. Twin Lakes Company shall have the right to use, reuse, make successive use of, and make disposition after use, of the water diverted through said Tunnel No. 1. 8. Nothing herein shall affect the lawful authority of the Division Engineer for water Division No. 5 to administer the water rights subject to this decree, according to priority, or to call for installation of such measuring devices as may be appropriate, pursuant to Colorado law. 9. In the eVent Twin Lakes Cempany in the ten years immediately preceding the current water year for which calculation of permissible diversions is being made, shall have diverted more water than it is entitled to divert pur- suant to this decree, Twin Lakes Company shall be re? quired to curtail diversions until a quantity of water equal to Trim Lakes? Company's overdraft shall have been by-passed to the Roaring Fork River and/or Lincoln Gulch. 10. The modifications herein permitted are subject to the same inherent conditions which are contained in the original decree of 1936, namely: No entitlement to divert exists when the following two conditions are concurrently present: Twin Lakes Reservoir has stored in a "water year" its deereed capacity of 54,452 acre-feet, and There is 756.28 c.f.s. available in priority from the Arkansas River at the headgate of the colorado Canal to a water right with a priority date of June 9, 1890, with a decree date of March 23, 1896, for direct flow irrigation uses. To the extent that the Arkansas River water avail- able in priority as described in above is less than 756.28 and water could otherwise beneficially be used for the irrigation of lands, there arises a corresponding entitlement to divert that amount of water from the IPTDS. Such water may itself be stored or applied directly to bene? ficial uses. To the extent that there is Lake Creek water available for storage in Twin Lakes Reservoir, under the priorities of December 15, 1896, and March 29, 1897, decreed July 14, 1913, during the current water year, the right to store IPTDS water shall be correspondingly reduced. -25- 11. Any and all rights granted to Twin Lakes Company by this decree shall have no effect whatsoever upon the claims of the United States of America, including reserved rights, as nay be adjudicated in Case No. Division No. 5. 12. The Division Engineer for water Division No. 2 shall in a prompt and timely manner furnish to the Division Engineer for Water Division No. 5 such diversion and reseru voir storage records as to enable the Division Engineer for Division 5 to administer the Independence Pass Transmountain Diversion System, Priority No. 431, in accordance with the terms and conditions of this decree. To that end, the Divi- sion Engineer for water Division No. 2 shall supply the Division Engineer for water Division No. 5 the daily records for: . The water available in priority from the ., 5 Arkansas River at the head etc of the Colorado Canal to M/Jko A was.? {one we? a, ?ow; 949 a ?g (Awe, Ms; Wfo a decreE?date of march 23, 1896, for direct flow irrigation (a . use. W51 The storage records for Twin Lakes Reservoir, including the water stored under the Lake Creek priorities. The discharge recorded at the East Portal of Tunnel No. of the Independence Pass Transmountain Diversion System. In addition, the Division Engineer for Water Division No. 2 shall advise by telephone or telegram to the Division Engineer for water Division No. 5 within a period not to exceed 24 hours subsequent to the simultaneous occurrence of the two conditions set forth in paragraph 10 above. Done this dayr of?? 1976, in Glenwood Springs, Colorado. BY THE COURT: -27- water sought for the ensuing year. The testimony of officials of those cities in hearings lately held before this Court Was to the same effect. Further, the portion of the water right to be used for new purposes is insubstantial when compared with the water attributable to the remaining 44,047.45 shares of capital stock of the Twin Lakes Reservoir and Canal Company. The water attributable to the said remaining 44,047.45 shares will continue to be used in Crowley County for irrigation purposes in accordance with the original decree. WHEREFORE, IT IS ORDERED, as an Interlocutory Decree, that: 1. The City of Colorado Springs shall be entitled to use, for its municipal water system, the water derived from the Independence Pass TransMountain Diversion System, Priority 431, Water District No. 38, in the amount attributable to the ownership of 5464.5 shares of capital stock of The Twin Lakes Reservoir and Canal Company, for municipal, industrial, commercial, domestic and irrigation purposes in Calendar year 1975. 2. The City of Aurora shall be entitled to use, for its municipal water system, the water derived from the Independence Pass Transmountain Diversion System, Priority 431, Water District 38, in the amount attributable to the ownership of 77.015 shares of the capital stock of The TWin Lakes ReserVOir and Canal Company, for municipal, industrial, commercial, domestic, and irrigation purposes in calendar year 1975. 3. This Interlocutory Decree is made to avert hardship for the Cities of Aurora and Colorado Springs, and a matter of temporary relief in the Court,s discretion. Nothing contained herein shall constitute a final determination, order, finding or judgment with respect to any of the factual issues raised and legal allega? tions made, and new pending before this Court in Case nor constitute an interlocutory decree with respect to water attributable to shares other than those owned by the Cities of Colorado Springs and Aurora. BY THE COURT: at udge APPROVED AS TO FORM: VRANESH MUSICK HOLLAND HART Jo?h U. Carlson Attorneys for The Twin Lakes Reservoir and Canal Company