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Company appealing denial of water rights bid in New Mexico

September 24, 2018

Lawyers for a corporation seeking to siphon 17.6 billion gallons of water from deep beneath the grassy Plains of San Agustin in Western New Mexico are appealing the state engineer’s decision to deny the water rights bid.

In his July 31 decision, a hearing examiner in State Engineer Tom Blaine’s office noted the “striking absence of information” in Augustin Plains Ranch LLC’s application, and denounced as speculative the company’s plan to sell off the water rights to as-yet-undetermined municipalities in Central and Northern New Mexico.

New Mexico law prohibits water speculation and requires that water rights be put to a beneficial use. No municipalities in the seven-county region listed in the application have signed contracts. Only one — the city of Rio Rancho — has indicated a potential interest in striking a deal with Augustin Plains Ranch.

In contrast, the Albuquerque-Bernalillo County Water Utility Authority vocally opposed the plan, which would put the equivalent of more than half the total annual water use of Bernalillo County into the hands of a corporation.

But for the project’s proponents, the application’s denial amounted to a wrong-headed overreach by the state’s water regulator. In other cases, it hasn’t been necessary to secure contracts in advance of a water rights application’s approval. “The standard the state engineer has applied in this case is the most stringent standard I’ve seen applied in any state,” said Jeffrey Wechsler, an attorney for Augustin Plains Ranch.

Wechsler said the anti-speculation doctrine, as conceived in all the water-poor states of the Western U.S., is meant to prevent a “dog-in-the-manger” scenario, where a company comes in, stakes a claim with no immediate plans to use the water, and thus prevents any one else from accessing it.

That, he said, is not Augustin Plains Ranch’s intention.

“They put out very explicit plans for exactly how they were going to use the water, and in what time frame and where it was going to go,” Wechsler said, adding that the state engineer could have added a stipulation that the water rights be allocated within a certain time frame.

The Modena family, originally from Milan, Italy, owns the land and a majority stake in the company. The family purchased the Catron County land, located near Datil, in the 1970s. Investors have bought in as the project has taken shape, including a United Kingdom-based private equity company.

For the coalition of environmentalists and landowners near the Catron County plains who oppose the company’s plan, the State Engineer’s Office made the right call.

“New Mexico needs to do what New Mexico needs to do to protect its water,” said Douglas Meiklejohn, executive director of the Santa Fe-based Environmental Law Center and a pro bono lead attorney for opponents.

Lawyers for Augustin Plains Ranch plan to file their official appeal in the state District Court in Socorro later this month, Wechsler said.

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