Richard R.

Hall
DORSEY & WHITNEY LLP
111 S. Main Street, Suite 2100
Salt Lake City, UT 84111-2176
[email protected]

Attorney for Deseret Power

Michael Toll (admitted pro hac vice)

Grand Canyon Trust
4404 Alcott Street
Denver, CO 80211
[email protected]
303-309-2165

Attorney for Grand Canyon Trust

Jeffrey W. Appel
Ray Quinney & Nebeker P.C.
36 South State Street, Suite 1400
Salt Lake City, Utah 84111
[email protected]
801-323-3302

Attorney for PVR Inc. and Grand Canyon Trust

BEFORE THE UTAH DIVISION OF WATER RIGHTS

IN RE: GRAND CANYON TRUST AND JOINT NOTICE OF SETTLEMENT AND

PVR, INC.’S, REQUEST FOR AGENCY REQUEST TO STAY PROCEEDINGS
ACTION PURSUANT TO UTAH CODE
SECTION 73-3-13 REGARDING
Presiding Officer: Jared Manning, P.E.
DESERET GENERATION AND
TRANSMISSION CO-OPERATIVE’S Agency Action Number: SEAA2273
LACK OF DILIGENCE IN PUTTING
WATER RIGHT 49-258 TO BENEFICIAL Water Right No. 49-258 (a38730)
USE

PLEASE TAKE NOTICE that all parties to the above-captioned proceeding—

Deseret Generation & Transmission Co-operative, PVR Inc., and the Grand Canyon Trust

JOINT NOTICE OF SETTLEMENT AND REQUEST TO STAY PROCEEDINGS - Page 1

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(collectively, the “Parties”)—have entered into a Settlement Agreement resolving this matter.

The Settlement Agreement between the Parties is attached hereto as Exhibit A, and pursuant

thereto, the Settlement Agreement is to be filed with the Utah Division of Water Rights

(“UDWR”) and made publicly available in the records for the subject water right, Water

Right No. 49-258.

Pursuant to Section 4 of the Settlement Agreement, the Parties respectfully request

that UDWR stay the above-captioned proceeding, including vacating the hearing scheduled

for August, 29, 2023, pending UDWR’s approval of the Change Application (as defined in

the Settlement Agreement) for Water Right No. 49-258. The Change Application is required

to be filed by Deseret Generation & Transmission Co-operative pursuant to Section 2 of the

Settlement Agreement.

Following UDWR’s approval of the Change Application, the parties will file a joint

request for dismissal of the above-captioned matter. Pursuant to Section 4 of the Settlement

Agreement, the joint request for dismissal will respectfully request that UDWR’s order of

dismissal expressly incorporate the terms and conditions of the Settlement Agreement, so

that the Settlement Agreement becomes an enforceable order by UDWR.

JOINT NOTICE OF SETTLEMENT AND REQUEST TO STAY PROCEEDINGS - Page 2

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Respectfully submitted on this 25th day of August, 2023.

Richard R. Hall
Dorsey Whitney, LLP
Counsel for Deseret Power

Michael Toll
Counsel for Grand Canyon Trust

/s Jeff Appel ___________________

Jeffrey W. Appel
Ray Quinney & Nebeker P.C.
Counsel for Grand Canyon Trust and
PVR, Inc.

JOINT NOTICE OF SETTLEMENT AND REQUEST TO STAY PROCEEDINGS - Page 3

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 EXHIBIT A

Settlement Agreement

[attached]

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_______________

SETTLEMENT AGREEMENT

In Re: Grand Canyon Trust and PVR Inc.’s Request for Agency Action Pursuant to Utah Code
Section 73-3-13 Regarding Deseret Generation and Transmission Co-Operative’s Lack of
Diligence in Putting Water Right 49-258 to Beneficial Use
Utah Division of Water Rights, Agency Action No: SEAA2273
_______________

This SETTLEMENT AGREEMENT (the “Agreement”) is made and entered into this 25th day of
August, 2023 (the “Effective Date”) by and between, on the one hand, Deseret Generation & Transmission
Co-operative, a regional transmission and generation cooperative, having a mailing address of 10714 South
Jordan Gateway, Suite 300, South Jordan, Utah 84095 (“Deseret”) and, on the other hand, PVR Inc., a Utah
corporation, having an address of HC 64 Box 1803, Moab, Utah 84532 (“PVR”) and the Grand Canyon
Trust, a nonprofit corporation having a headquarters address of 2601 N. Fort Valley Rd., Flagstaff, AZ
(“GCT”, collectively with PVR, the “Protestants”). Deseret and the Protestants may be referred to herein
individually as a “Party” and collectively as the “Parties.”

RECITALS

A. WHEREAS, the Application to Appropriate for Water Right No. 49-258 (the “Water
Right”) was filed on February 10, 1965. To date, proof of beneficial use has not been filed for the Water
Right. In 2012, Deseret acquired the Water Right from Enefit American Oil Co., an oil shale development
company. In 2013, Deseret filed with the Utah Division of Water Rights (“UDWR”) a request for an
extension beyond 50 years to file proof of beneficial use of the Water Right under Utah Code § 73-3-
12(4)(b), which allows such extensions for wholesale electrical cooperatives that establish their need for
the water to generate electricity to meet the reasonable future power requirements of the public.

B. WHEREAS, UDWR approved Deseret’s extension request in 2014, extending the Water
Right’s proof due date to 2025 based on Deseret’s stated need for the water to generate electricity at the
company’s Bonanza power plant to meet the reasonable future power requirements of the public. Under
Utah Code § 73-3-12(3), which provides that “an application upon which proof has not been filed shall
lapse and have no further force or effect after 50 years from the date on which the application is approved,”
because proof had not been filed, the Water Right would have lapsed in 2015 but for the fact that Deseret
Power sought and obtained an extension of time beyond 50 years based on Deseret’s stated need for the
Water Right to generate electricity at the Bonanza power plant to meet the reasonable future power
requirements of the public.

C. WHEREAS, on November 16, 2021, the Protestants filed a Request for Agency Action
(the “RAA”) with UDWR alleging that Deseret was failing to satisfy its obligation under Utah Code § 73-
3-12 to exercise reasonable and due diligence in putting the Water Right to beneficial use for electrical
generation at the Bonanza power plant because Deseret had contractually granted to Enefit the exclusive
right to use the full amount of the Water Right for oil shale development.

D. WHEREAS, in response to the Protestants’ RAA, UDWR commenced an administrative

proceeding, number SEAA2273, captioned: IN RE: GRAND CANYON TRUST AND PVR, INC.’S,
REQUST FOR AGENCY ACTION PURSUANT TO UTAH CODE SECTION 73-3-13 REGARDING
DESERET GENERATION AND TRANSMISSION CO-OPERATIVE’S LACK OF DILIGENCE IN
PUTTING WATER RIGHT 49-258 TO BENEFICIAL USE (the “Proceeding”).

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E. WHEREAS, the Parties now desire to settle and dismiss the Proceeding, in accordance
with the terms and conditions of this Agreement.

TERMS AND CONDITIONS

NOW, THEREFORE, in consideration of the foregoing premises, the mutual covenants and
agreements hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged by the Parties, Deseret, PVR, and the GCT agree as follows:

1. Limitations on Type of Use and Place of Use of Water Right. Deseret agrees that the Water
Right shall not be used, by Deseret or any other entity or person, for any type of use other than in connection
with electrical power generation. Deseret also agrees that the Water Right shall not be used, by Deseret or
any other entity or person, at any place of use other than the location of Deseret’s existing Bonanza power
plant site (the “Bonanza Site”) as currently authorized under the Water Right. For the sake of clarity, this
Agreement prohibits Deseret Power and all other entities or persons from using the Water Right for fossil
fuel mining, extraction, processing, or development.

2. Water Right Change Application. Within thirty (30) days of the Effective Date, Deseret
shall file a change application for the Water Right modifying the Water Right (the “Change Application”)
as follows:

a. Type of Use. The current approved uses under the Water Right are:

i. Irrigation – Beneficial Use Amount: 10 acres

ii. Domestic – Beneficial Use Amount: 135 EDUs

iii. Mining – District: unorganized; Name: unnamed; Ores: Oil Shale

iv. Other – Industrial: mining, retorting, drilling, steam generation, cooling,

sanitation

v. Power – Name: Bonanza (A steam generation power plant, Rated at 500 MW).

The Change Application shall remove all currently approved uses except: Power – Name:
Bonanza (A steam generation power plant, Rated at 500 MW).

b. Place of Use. The current approved places of use for the Water Right include
certain lands in Uintah County in proximity to the White River (primarily south of the
White River). The Change Application shall remove as authorized places of use under the
Water Right all currently approved places of use within the following townships and
ranges:

i. Township 9 South, Range 25 East, SLBM

ii. Township 10 South, Range 24 East, SLBM
iii. Township 10 South Range 25 East, SLBM
iv. Township 11 South, Range 25 East, SLBM

Deseret shall diligently pursue the prosecution and approval of the Change Application, including
defending the Change Application in the event it is protested. The Protestants will be allowed to protest
the Change Application, and they will be deemed to have standing to do so, only if the Change Application

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fails to comply with the terms of this Agreement and only to the extent necessary to enforce the terms of
this Agreement. Deseret shall provide the Protestants a copy of the Change Application upon filing, and a
copy of the Order of the State Engineer approving the Change Application upon issuance. If the State
Engineer denies the Change Application for any reason, Deseret shall take any and all steps necessary to
rectify the issues that resulted in the State Engineer’s denial, and Deseret will refile the Change Application
pursuant to this Agreement within (30) days of the order of denial.

3. Future Change Applications. Following UDWR’s approval of the Change Application,

Deseret agrees not to pursue a new change application or any similar authorization that would allow any
authorized types of use of the Water Right other than electrical power generation, or that would allow any
authorized places of use of the Water Right other than the Bonanza Site, without the prior written approval
of the Protestants, which shall not be unreasonably conditioned, withheld, or delayed. In determining what
constitutes unreasonable conditions, withholding, or delay, the Parties agree that the only permissible types
of use for, or places of use of, the Water Right are those necessary and useful for electrical power generation,
and do not include any types of use, or places of use, related to fossil fuel development.

4. Stay and Dismissal of Proceeding. As of the Effective Date, the Parties agree to suspend
the Proceeding until such time as the Change Application is approved by UDWR. Within two (2) days of
the execution of this Agreement, the Parties shall notify UDWR of the Agreement and file a request to stay
the Proceeding (the “Stay Request”). The Stay Request shall include this Agreement as an attachment,
which shall be filed in UDWR’s records for the Water Right and shall be publicly available. Upon approval
of the Change Application, the Parties shall file a joint request for dismissal of the Proceeding, which shall
include a request that UDWR’s order of dismissal expressly incorporate the terms and conditions of this
Agreement, so that this Agreement becomes an enforceable order by UDWR.

5. Future Extension Requests. The Protestants acknowledge that Deseret will be seeking
future requests for extension of the Water Right pursuant to the provisions of Utah Code § 73-3-12(4) based
on a showing that the Water Right is required by Deseret (or an affiliate, successor, or assign), as a
wholesale electrical cooperative, to meet the reasonable future electrical requirements of the public, with
the most immediate request to be filed in 2025. The Protestants agree not to protest such future extension
requests so long as: (1) Deseret is in compliance with the terms of this Agreement, and (2) the extension
request demonstrates that Deseret, as a wholesale electrical cooperative, needs the Water Right to meet the
reasonable future electrical requirements of the public, as required under Utah Code § 73-3-12(4).
Furthermore, the Protestants shall not encourage, facilitate, or support the protest of such an extension
request by Deseret by another party.

6. Deseret’s Other Water Rights. This Agreement, and the terms and conditions contained
herein, pertains solely to Water Right No. 49-258, and shall not apply to, or in any way limit, regulate or
effect, Deseret’s use of its other water rights.

7. Miscellaneous. In addition to the foregoing, the Parties to this Agreement agree as follows:

a. No Admission of Liability. The Parties acknowledge and agree that this Agreement
does not constitute an admission of liability or wrongdoing of any nature whatsoever by any of the Parties,
and that this Agreement shall not be used as evidence of any liability or wrongdoing for any purpose
whatsoever except as may be necessary to enforce the terms and conditions of this Agreement.

b. Entire Agreement. This Agreement constitutes the entire agreement between the
Parties pertaining to the subject matter contained in it and supersedes all prior and contemporaneous
agreements, representations, and understandings of the Parties with respect thereto.

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c. Binding Effect. This Agreement shall be binding upon, and shall inure to the benefit
of, the Parties to it and their respective successors and assigns.

d. Severability. In the event that any provision of this Agreement shall be held invalid
and unenforceable, such provision shall be severable from, and such invalidity and unenforceability shall
not be construed to have any effect on, the remaining provisions of this Agreement.

e. Enforcement. The terms and conditions of this Agreement are enforceable both in
a court of competent jurisdiction and in a proceeding before UDWR.

f. Attorney’s Fees. In any litigation or other proceeding relating to the breach of any
covenant of any Party to this Agreement, the prevailing Party or Parties (as the case may be) shall be entitled
to recover its out-of-pocket costs and reasonable attorneys’ fees, including those incurred at trial or on
appeal.

g. Expenses. Each Party shall bear its own costs and expenses incurred in connection
with the negotiation of this Termination, and all other documents prepared in connection therewith.

h. Further Assurances. The Parties agree to execute any additional documents or

agreements necessary to facilitate the intent of this Agreement.

i. Governing Law. This Agreement shall be governed by the laws of the State of
Utah.

j. Modification. This Agreement shall not be modified except in writing signed by

the parties.

k. Counterparts. This Agreement may be executed electronically and in

counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same
document.

l. Authority. Each signatory represents that he or she has the full authority to legally
bind the party on whose behalf he or she has executed this Agreement.

[Signatures on Following Page]

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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the day and year
first above written.

DESERET:

DESERET GENERATION & TRANSMISSION

CO-OPERATIVE
a regional transmission and generation cooperative

By: Jeffrey M. Peterson

VP & General Counsel

Dated this 25th day of August, 2023

PVR:

PVR Inc.,
a Utah corporation

/s Jeff Appel
By: Jeffrey W. Appel
Ray Quinney & Nebeker P.C.

Counsel for PVR Inc. and Grand Canyon Trust

Dated this 25th day of August, 2023

GCT:

Grand Canyon Trust,

a nonprofit corporation

By: Michael Toll

Counsel for Grand Canyon Trust

Dated this 25th day of August, 2023

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