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1. F or Direct Delivery Domestic Use by MWD, 1.250 maf reduced by the amount of basic apportionment available to MWD. 2. For use by SNW A, the Direct Delivery Domestic Use within the SNW A service area in excess of the State of Nevada's basic apportionment. 3. For use in Arizona, the Direct Delivery Domestic Use in excess of Arizona's basic apportionment. For informational and planning purposes, Reclamation has estimated that the amount of surplus water expected to be pumped or released from Lake Mead during calendar year 2003 under the Full Domestic Surplus is not expected to exceed 0.660 maf(814 mcm). The actual amount of surplus could be less than this amount (in the unlikely event of the availability of any unused apportionment) and could also, based on actual Direct Delivery Domestic use, exceed this projected amount. Consistent with Section 5(B) of the Interim Surplus Guidelines, if the California contractors have not executed the Quantification Settlement Agreement by December 31, 2002, the interim surplus determinations under Section 2(B)(1) Full Domestic Surplus and Section 2(B)(2) Partial Domestic Surplus are suspended and will instead be based on the 70R Strategy. Consistent with Section 7 of the Interim Surplus Guidelines, the August 24-Month Study was used to project the January 1,2003, system storage and projected uses. Based on this projection and the definition ofthe 70R Strategy, the Normal determination will then govern releases for use in the States of Arizona, Nevada and California during calendar year 2003 in accordance with Article II(B)( 1) of the Decree. The suspension of surplus determinations under Section 2(B)(1) and 2(B)(2) of the Interim Surplus Guidelines will remain in effect until such time as California completes all required actions and complies with reductions in water use reflected in Section 5(C) of the Interim Surplus Guidelines. In the event that the California contractors and the Secretary execute said agreements during calendar year 2003, consistent with Section 5(B) of the Interim Surplus Guidelines, the interim surplus determinations under Sections 2(B)(1) and 2(B)(2) will be reinstated, following appropriate consultations. The Full Domestic Surplus will then govern the releases for use in the States of Arizona, Nevada and California for the remainder of calendar year 2003. Under a Normal determination, it is anticipated that use of mainstream Colorado River water in the Lower Basin will be reduced from approximately 8.5 maf in calendar year 2002 to 7.5 maf in calendar year 2003. This reduction for calendar year 2003 may require reductions in use by users in Nevada (approximately 37,000 acre-feet less than 2003 projected use) and California (approximately 620,000 acre-feet less than 2003 projected use). Given these reductions in available supply, and the extraordinarily low inflow amounts within the Colorado River basin during 2002, the Secretary, through Reclamation, will be reviewing Lower Basin operations to assure that all deliveries and diversions of mainstream water are in strict accordance with the Decree, applicable statutes, contracts, rules, and agreements. The Secretary anticipates addressing the potential for overuse in the Lower Basin through the adoption of an inadvertent overrun and payback policy in 2002. Absent adoption of an inadvertent overrun and payback policy, and specifically in light ofthe potential CY 2002 overuse, the Secretary December 13,2002 25