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JUL.1B.1997 4:16PM NO.480 P.6/9 upon it for our citizens' use. It makes us feel more comfo ble to have the permit in our hands. The transfer of ownership will be subject to the laws of testate of New Mexico. but it is unclear now exactly what procedure wUI be required to transfer tile ownership. 14. Will the Indian tribes have any capital costs for their w tar? No. In exchange for taking less water, the tribes wanted t eliminate their capital costs. Those costs will be picked up by the federal government as part of Its trust responsibility, or by power revenues. AI 0, the Navajos' capital costs for their relatively small amount of water (2,340 AFY In depletions) also will be picked up by the federal governm nt or by power revenues. 15. How will the revised ALP Project be constructed? The tribes will construct it under P.L. 93-638, which allows t em to step into the shoes of a federal agency such as the Bureau of Re lamation. They. already have done some of the work on the project. su as part of the environmental compliance. We believe privatizing the project in this way will save at Ie st 15 percent of the construction cost. The parties will draft and sign a memorandum of understa ding concerning the construction to ensure our Interests are protected. Th Bureau will st1ll be involved to provide oversight and perform some of the rk. 16. How will the project be operated after construction? That Is not addressed in the current agreement. This issue ill be negotiated and decided later. 17. What are the cost impacts on the Commission? The cost to the CommissIon will be reduced from $16.64 inion or more to $8.6 million, commensurate with the reduction in depletio s. SJWC QU on ALP Agretllll8nt in cone.pt July 8, 1997 page 5