>Until new water rights guidelines are finalized, all applicants receive 'unfavorable' notice
News Editor
   A letter sent to Grizzly Power by the Oregon Water Resources Department notifying the power company of an "unfavorable preliminary analysis" of its water rights application is "normal" and not any indication that the company will have its proposed natural gas-fired power plant rejected, an official with the state agency said.
   The notice, dated Jan. 4 and addressed to Frank Erwin of Grizzly Power, a subsidiary of Cogentrix, raised a red flag with some county and city officials recently and was welcomed by opponents hoping the analysis would derail plans by the North Carolina-based company to build a 980-megawatt power plant on the southern end of Jefferson County.
   But the notice, part of an initial review conducted by the Water Resources Department, is a simple consequence resulting from the absence of new mitigation guidelines that are yet to be finalized by the state agency, officials said.
   "For the Deschutes Basin, it's been like this for every applicant no matter what the use," said Kyle Gorman, manager for the South Central region of the Oregon Water Resources Department. "I don't know of anybody in the area we haven't sent that unfavorable preliminary analysis to."
   Gorman will be one of several officials representing a wide range of interests and expertise at a public information meeting regarding the proposed power plant tonight. It begins at 7 p.m. in the Maccie Conroy Building at the Jefferson County Fairgrounds.
   Cogentrix's application to the Water Resources Department requests water rights to pump approximately 5,030 acre feet of water per year out of ground aquifers. It's application to that agency is a separate document from the application Cogentrix submitted to the Energy Facility Siting Council for a site certificate on Nov. 30. That application is also currently being reviewed.
   Confusion over the strongly-worded preliminary analysis stems from a lack of proper WRD guidelines for mitigating the use of hydraulically connected ground water. The policies of these guidelines was hashed out relatively recently by a committee formed to develop a strategy for allowing continued use of groundwater to meet the needs of the Central Oregon. The "Deschutes Basin rule update process" is expected to be in completed by this spring.
   In the meantime, every applicant that applies for a water use permit is sent this notice.
   "There's no surface water available and that's what it means because of the existing water rights," Gorman said. "It's no different from any other person that's applied for a water right in the basin, whether its the City of Bend or a farmer."
   Erwin, Cogentrix's Vice President of Development, characterized the notice as an unfortunate problem leading to unnecessary anxiety.
   "It really isn't Cogentrix-specific," Erwin said. "It's an Oregon problem but that's OK."
   The initial review states that Cogentrix's proposed well "is hydraulically connected to the Crooked River and has the potential for substantial interference." It further states that the "Department will propose denial of this application unless you propose a mitigation plan, approved by the Department, that satisfactorily addresses the impact of the proposed use of ground water on surface flows."
   Although an unfavorable preliminary analysis will not be issued to every applicant seeking a water rights permit when the WRD's rules are updated, mitigation plans will still be required, said David Newton, a water rights consultant hired by Cogentrix.
   "The state is just saying, `Hey, right now we need a mitigation plan but at the same time the rules aren't done right now so there isn't anything we can do,'" Newton said. "Right now it's a very standard, straight forward part of the permit application process and we're moving forward with it."
   Cogentrix has come forward with several conceptual plans for mitigation, including conservation work within several of Bend's irrigation districts. The power company is also considering lining canals and purchasing stored water from the Ochoco Reservoir and returning it to streams.
   Gorman said the Eagle Crest Resort was the only applicant in the last three years to received an unfavorable preliminary analysis and have its permit eventually denied.