(1) The Water Resources Department may approve an application for less water than applied for, or upon terms, limitations and conditions necessary for the protection of the public interest, including terms, limitations and conditions relating to the release of water from an impoundment or diversion structure necessary to prevent rapid fluctuation in the stream level below the structure which may create a hazard to life or property, if there exists substantial reason therefor. In any event the department shall not approve an application for more water than can be applied to a beneficial use.
(2) The department may approve an application for a municipal water supply to the exclusion of all subsequent appropriations, if the exigencies of the case demand.
(3) When conditions beyond the control of the owner or operator of an impoundment or diversion structure, to which terms, limitations and conditions made as provided in subsection (1) of this section relate, threaten the safety of the structure and the release of water from the structure contrary to such terms, limitations and conditions is or may be necessary to remove the threat:
(a) The terms, limitations and conditions shall not apply to such release of water.
(b) The owner, operator or person in immediate charge of the structure shall immediately notify the department by telegraph or telephone of the situation.
(c) The owner, operator or person in immediate charge of the structure shall immediately notify, to the best of the person’s ability, those persons whose life or property may be threatened by the release of water.