The U.S. Supreme Court said Monday that it would let stand a lower court ruling in a case involving water storage in Lake Lanier. The decision was hailed as a victory by leaders in Florida and Alabama, but Georgia officials contend it was no decision at all.

The case involves an agreement between Lake Lanier water users and customers of the Southeastern Power Administration, the agency that sells hydroelectric power generated by the turbines at Buford Dam.

The out-of-court agreement, which would compensate power users for lost generating capacity, was challenged by Florida and Alabama in federal court in Washington.

The original ruling upheld the agreement, but a federal appeals court sided with Florida and Alabama and overturned the lower court in February 2008, saying that the agreement constituted a major operational change at the reservoir, which requires congressional approval.

The 2003 agreement with the corps would give Georgia about a quarter of Lake Lanier’s capacity over the coming decades and is the foundation of Georgia’s long-term plans for supplying drinking water to the rapidly growing Atlanta region. Under the settlement agreement, up to 240,858 acre-feet of Lanier would be set aside for water storage: 175,000 acre-feet for Gwinnett County, 20,675 acre-feet for the city of Gainesville and 45,183 acre-feet for the Atlanta Regional Commission.

Alabama and Florida challenged the pact, arguing that Georgia doesn’t have any legal right to the federal reservoir, which initially was built for hydropower. The two states contend withdrawals would dry up river flows into their states that support smaller municipalities, power plants, commercial fisheries and industrial users like paper mills.

In its appeal, Georgia cited both the Rivers and Harbors Acts of 1945 and 1946, as well as the Water Supply Act of 1958 as evidence of water supply storage as an authorized use of Lake Lanier.

"The (Southeastern) Power Customers believed that the lake was not authorized for water supply and a supplemental source of authority was needed," R. Todd Silliman said at the time of the appeal. Silliman is an attorney with the Atlanta law firm of McKenna, Long & Aldridge. "They felt the Water Supply Act (of 1958) was the appropriate statute providing that authority. The corps takes the view that there is some degree of authorization in the 1945 and ’46 acts. Georgia takes the position that there was authority in the original act."

On Monday, Gov. Sonny Perdue called the earlier ruling "flawed" but said the Supreme Court did not do anything to change the current operation.

"While we are disappointed with the Supreme Court’s decision today to not correct a flawed ruling by the D.C. Circuit, it is important to remember that this decision simply maintains the status quo in terms of the operation of Lake Lanier by the Army Corps of Engineers," Perdue said. "We felt strongly that Supreme Court review of this case could have resolved a major piece of our ongoing water negotiations."

U.S. Rep. Nathan Deal, R-Gainesville, whose district includes most of Lake Lanier, said the ruling should be a catalyst for bring the three states back to negotiations.

"The decision indicates that the three states need to come to some decision themselves," Deal said. "It will be difficult for any state to get legislation through Congress without the cooperation of the other two."

U.S Sen. Bill Nelson, D-Fla., hailed the decision, accusing Georgia of taking water that didn’t belong to it.

"After a two-decade dispute, Floridians can rest a little easier today because Georgia won’t be allowed to swipe their water," Nelson said in a statement.

Alabama Gov. Bob Riley called the ruling a "major victory."

"Today’s decision by the U.S. Supreme Court confirms that federal law does not permit Atlanta to take more and more water from Lake Lanier to the detriment of downstream interests in Alabama and Florida," Riley said. "Georgia tried to pull off a massive water grab, and this decision makes clear that Georgia’s actions were in blatant violation of federal law."

But the Supreme Court ruling did not weigh in on the merits of the District of Columbia Appeals Court opinion. The high court simply decided not to hear the case. Only about 150 of 4,000 appeals made annually are actually heard by the U.S. Supreme Court.

Judge Paul A. Magnuson, a senior U.S. District Court Judge from Minnesota, has been appointed to hear the remaining eight cases, which have been moved to U.S. District Court in Jacksonville, Fla.

He has said the issue of water supply will be the first decided.

Magnuson said the questions surrounding Georgia’s rights to the lake could render other issues in the case "obsolete" and allow the dispute to be resolved quickly. He said the higher court decision would "undoubtedly affect" the outcome.

Magnuson has set a deadline of Jan. 23 for motions for summary judgment on the issue of the corps’ authority to operate Lake Lanier to meet the water supply needs of the region.

Responses will be due in February and replies to those will be due in March. The earliest date for hearings on the matter would likely be April.