(2) Subject to rights existing on July 21, 1953, to the use of the waters of Big Butte Creek, and of the springs at the head which form the creek, and of its tributaries, including the rights granted in subsection (1) of this section to the City of Medford to the use of such waters and the right of future appropriation of such waters, the Eagle Point Irrigation District is granted the right to appropriate and use up to and including 100 cubic feet per second of the waters of Big Butte Creek, using the diversion site of the Eagle Point Irrigation District existing on April 1, 1953, for the purpose of generating electric energy; provided, however, that not less than 10 cubic feet per second of said waters shall be permitted to pass said diversion point and remain in the channel of said stream at all times other than times when said waters are diverted for irrigation purposes. The Eagle Point Irrigation District may:

(a) Enter into such contracts and perform such other acts as it deems necessary or desirable for the generation of electric energy and the construction and maintenance of facilities for the generation of electric energy.

(b) Enter into such arrangements as it deems proper for the use, sale or distribution of the electric energy which is generated.

(3) In performing any of the acts under subsection (2) of this section, the Eagle Point Irrigation District shall not be deemed a public utility as defined in ORS 757.005.

(4) Subsections (1) and (2) of this section shall not prevent the appropriation of the waters of Clark Creek, in Jackson County, for the development of hydroelectric power not to exceed two megawatts if the facility will be constructed and operated in compliance with recommendations by the State Department of Fish and Wildlife concerning fish conservation, including streamflow requirements based upon biological criteria. [Amended by 1953 c.572 §2; 1963 c.231 §1; 1983 c.650 §2]