THERMOPOLIS (AP) - A proposed agreement that would expand the uses of state owned water stored in the Buffalo Bill Dam received preliminary approval from two state panels.

The Wyoming Water Development Commission and the Select Water Committee met jointly Thursday to discuss the agreement, which they amended by shortening its term from 10 to five years and added some flexibility in the criteria for renegotiation. It will be up for final approval after a public hearing Sept. 15 in Cody.

The decision followed a lively debate before a large crowd gathered to weigh in on the 190,000 acre-feet of unallocated water in the state's account.

Under the plan put forth by the commission, Bureau of Reclamation, Wyoming Game and Fish, Gov. Dave Freudenthal and the State Engineer's Office, some of the water would be used to increase winter in-stream flows in the Shoshone River to between 100 cubic feet per second to 350 cfs during good water years.

This would improve the fishery and power generation of the dam's three hydroelectric plants, as well as fulfill the state's commitment to multiple uses, commission director L. Mike Besson said.

"The purpose of the dam is not just for agriculture - it's for municipal, industrial, and a whole host of other types of uses," Besson said.

The state pledged to support these uses in 1982, and they were a condition of the 1994 improvement project, which added 25 feet to the dam and created the state account.

The agreement's companion marketing plan would also set 20,000 to 30,000 acre-feet aside for possible sale, as added insurance in case of a bad water year. However, in the last five years of drought, they've only used 560,000 acre-feet of the reservoir's 646,000 acre-feet capacity, according to BuRec representative John Lawson.

"The plan is a good balance and meets everyone's needs," Lawson said. "We all know that reservoirs are our insurance policies, our bank accounts. We want to make sure there's enough left in the bank account to carry you through the following year."

But negative effects of the plan may trickle down to irrigators, according to representatives of the Heart Mountain and Deaver Irrigation Districts.

"Our rights have not been harmed, but our beneficial use may be jeopardized in terms of second fills and the start of irrigation season," said Heart Mountain Irrigation District representative Jim Flowers, who asked that precipitation forecasts and snow pack be factors in calculating the flow rate before the release.

Gov. Dave Freudenthal also asked for assurance.

"We want to make sure that we're proceeding on a course that will not jeopardize the irrigators," Freudenthal said.

"If all we're going to do with that dam is raise the fish, then they should bear the costs," said Select Water Committee Sen. Laness Northrup. "That works out to $149 per fish."

However, the largest and oldest irrigation district, the Shoshone, expressed its cautious support for the plan, as long as the agreements made since 1902 continue to be honored.

The operating agreement has also netted the support of Trout Unlimited's Wyoming Water Project, TU representative Bill Wotkyns said.

"There needs to be more adequate flows in order to sustain a healthy Shoshone River fishery," Wotkyns said. "Winter flows don't mean there is fishermen in the river in the winter - the water is needed so that the fish survive the cold and harsh winters for the summertime - the height of Park County's tourist season."

The agreement was not meant to divide farmers from fishermen, Besson said.

"People in Cody and Powell recognize that it's a desirable thing to take care of the fishery," Besson said. "But in this drought, there is some angst or anxiety when it comes to the adequacy of the water supply."