Canyon Reg'l Water Auth. v. Guadalupe-Blanco River Auth.

Canyon Reg'l Water Auth. v. Guadalupe-Blanco River Auth.

Opinion

 [*614]  In this case we decide whether a state water authority properly relied on its existing easement as authority to construct a second water intake and pipeline to draw water from a lake to meet growing consumption demands. We hold that the easement did not grant rights for that construction. We next decide whether the water authority can condemn an easement for construction and operation of the second intake and pipeline. We hold that the prospective easement, which restricts access to only a small portion of the lake, does not practically destroy the lake's public recreational use. We therefore affirm the court of appeals' judgment in part, and reverse and remand in part.

Guadalupe-Blanco River Authority and Canyon Regional Water Authority are both agencies and political subdivisions of the State of Texas. The River Authority owns Lake Dunlap and uses it for generating hydroelectric power, flood control, public recreation, and providing water to the Water Authority. Under their contractual  [*615]  arrangement, the River Authority granted an easement  [**2] to the Water Authority, under which the Water Authority draws water through an intake and pipeline structure from the lake to its nearby pumping station. The Water Authority then sells that water to water districts and municipalities in Guadalupe, Comal, and Bexar Counties.

To satisfy increased consumption and increasingly strict aquifer restrictions, the Water Authority developed plans to expand its Lake Dunlap water treatment plant's capacity from six million gallons per day to sixteen million gallons per day. The original water intake and pipeline could not accommodate the increased volume, so the Water Authority proposed to add a second intake upriver from the existing intake and the lake's dam. Initially, the River Authority approved the proposal. But it changed its mind one month after construction began and sued the Water Authority, seeking declaratory and injunctive relief and arguing that the Water Authority's construction was outside of the scope of the easement. The Water Authority responded that the easement allowed the new intake location, and alternatively counterclaimed for condemnation of the property required to complete the project.

The River Authority obtained a temporary  [**3] restraining order halting construction, which the trial court subsequently dissolved upon being persuaded that the River Authority had an adequate remedy at law and thus did not need injunctive relief. ¹ The River Authority then moved for partial summary judgment on two grounds: (1) the easement agreement does not authorize the Water Authority's expansion, and (2) the Water Authority cannot condemn the property right to draw water that it seeks. The Water Authority moved for partial summary judgment on the ground that it has the right to condemn whatever new right-of-way is necessary to construct the second intake. The trial court concluded that the Water Authority's easement allows the Water Authority to construct the second intake and gives it limited power to identify and describe any needed right-of-way. The trial court further held that the Water Authority has the right of eminent domain to take what it needs for the second intake, but that the River Authority can seek compensation for any taking. The River Authority appealed, and the court of appeals reversed the trial court, holding that the easement allows for only one intake. 211 S.W.3d 351, 356 (Tex. App.--San Antonio 2006).  [**4] The court of appeals further held that the Water Authority presented no evidence showing that the Water Authority's "purpose could not be otherwise accomplished," id. at 358, and thus granted summary judgment for the River Authority on the condemnation claim and remanded the case to the trial court to determine attorney's fees, id. at 359.

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