PRESTON, Idaho — A proposal for a hydroelectric dam on the Bear River 15 miles northeast of Preston received a setback Thursday after Idaho water managers denied granting a water right deemed critical for the project.

In the decision, Idaho's Water Resources Program Manager James Cefalo said that as proposed, the Oneida Narrows Dam would interfere with downstream Bear River water rights in Utah and therefore is prohibited because of a compact Idaho has with Utah.

The proposal by the Twin Lakes Canal Company involves the allocation of 17,300 acre-feet of water from the Bear River for storage in a new dam and eventual delivery to Franklin County farmers.

Clair Bosen, the canal company's president, said many farmers are already out of water this year, and more than 60 percent of the time, the company does not have enough water to meet the demands of about 17,000 acres of irrigable land.

The company wants to construct the reservoir for storage of water taken from the Bear  when unallocated shares are available in the winter. Bosen said the company's current  delivery system of 67 miles of open canal and siphons freeze up in the winter and cannot convey water for storage to three off stream reservoirs.

Bosen said the dam would have an installed capacity of 10 megawatts of power, could serve 6,700 homes and eventually pay for itself while ensuring farmers have adequate water to grow crops.

A wide range of opponents, however, are applauding the rejection of the water right application because they assert flooding the canyon with a dam would destroy one of the last free-flowing sections of the Bear River, eliminating a prime fishing and recreational spot.

"The Bear is pretty much dammed from head to toe," said Andrea Santarsiere, the Idaho conservation and legal analyst with the Greater Yellowstone Coalition."This area is publicly accessible and is unique in that aspect, with a lot of recreational interests there with fishing and whitewater boating."

Santarsiere said that section of the Bear River is also prime habitat for Bonneville cutthroat trout and any advances made in boosting its numbers would be wiped out with the hydropower project.

"It is not an appropriate place to have a dam," she said. "The Bear River is very important to the Greater Yellowstone ecosystem."

Other opponents to the proposal include PacifiCorp, which operates four hydroelectric facilities known as the Bear River Hydroelectric Project No. 20. As part of extensive settlement agreement the utility company reached through a relicensing process, PacificCorp has spent more than $500,000 in habitat improvements and public access improvements in the canyon.

That agreement, Idaho water managers noted, required extensive work to restore the Bonneville Cutthroat trout, including fish screens and passages, work that would be "lost" if the Oneida Narrows is inundated, according to the decision.

Bosen has two weeks to ask the Idaho Department of Water Resources to reconsider its decision. On Friday, he said he's already planning to appeal because he said there were mistakes in the rejection of the water right application, particularly how downstream users in Utah would be impacted.

He said the company planned to take water from its shares in Mink Creek and dump that into the Bear River to replace what was lost.

Boyd Clayton, deputy state engineer over Utah water rights, said the agency doesn't plan to weigh in the hydropower proposal, but is watching with interest.

"We believe they are very capable of managing the waters to abide by the compact we have with them and to take care of Utah's concerns," he said.

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