SALT LAKE CITY — The state engineer is standing by his decision to grant applications to Blue Castle Holdings to use 53,600 acre-feet of water to operate a proposed two-unit nuclear power plant in Emery County.

HEAL Utah, Uranium Watch and other groups had contested the late January decision by State Engineer Kent Jones, arguing numerous factors were not properly considered, including the financial viability of the proposal submitted by Blue Castle President and CEO Aaron Tilton, a former state lawmaker.

The Green River water rights are owned by Kane County and San Juan County water conservancy districts, but would be leased to Blue Castle Holdings for the power plant.

According to the state Department of Natural Resources, the requests for Jones to reconsider his decision said he failed to consider Tilton's "financial ability" to complete the project.

Jones disagreed, responding that Tilton's proposal demonstrated an appropriate level of financial ability given the stage of the project, which would ultimately put the water to beneficial use.

John Mann, assistant state engineer, said the contesting parties may seek judicial review of Jones' decision in district court.

The multiple groups that had challenged Jones' decision on Tuesday blasted his unwillingness to budge and said it was further demonstration of Gov. Gary Herbert's pursuit of flawed energy policies.

“We’re appalled that the state engineer has so brazenly ignored law and precedent in his willingness to advance Governor Herbert’s dirty and dangerous energy agenda,” said Matt Pacenza, HEAL Utah's policy director.

Pacenza pointed out the objections raised to Tilton's proposal came from two dozen individuals and groups and that Jones' rejection of those complaints ignored concerns over other impacts, such as sufficient water availability in low-flow conditions and if the awarding of the leased-water will interfere with other users' rights.

"Bizarrely, Jones didn’t even address any of those issues in his one-page dismissal of the twin appeals," Pacenza said. "He focused only on defending his decision about the project’s finances, in the wake of growing questions about Blue Castle."

The so-called change applications for the water diversion represent Utah's only opportunity to derail the project. But Jones' ruling is just one of multiple hurdles Blue Castle has to clear for what would be Utah's first nuclear power plant. The U.S. Nuclear Regulatory Commission has an extensive, years-long review process to determine if the site is appropriate given considerations like potential seismic activity and the surrounding area's topography.

The proposed 3,000-megawatt power plant would increase Utah's electrical generation output by 50 percent, according to Tilton. Blue Castle is in the midst of the early site application process for the plant with NRC.

Critics have pointed out that one of the project's potential investors, Leaddog Capital, is a hedge fund subsequently in the hot seat with the federal Securities and Exchange Commission for allegedly defrauding investors. Tilton has repeatedly said that while Leaddog may have expressed interest in the project, Blue Castle never received any funding or backing from the fund.

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