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Water Right Changes, Transfers and Agreements <br />There are two significant legal actions that affect water supply and operations of the Company: <br />Beneficial Recharge: The Company recently applied for recognition (judicial <br />confirmation) of the practice of recharging the unconfined aquifer using water diverted <br />under direct flow water rights as a beneficial use, and the right to extract such water by <br />means of groundwater wells. This application, Case No. 96CW045, is currently pending <br />in Water Court. <br />Winter Recharge: As decreed in Case No. 79CW091, the Company may divert water <br />under direct flow water rights during the winter months for the purpose of recharging the <br />unconfined aquifer lying within its service area. Historical practices of the Company <br />related to recharge is discussed below. <br />Drainage Water Rights <br />The Company owns a right for a portion of the water captured by the Rio Grande Drain. The <br />Company is entitled to the first 40 cfs captured by the drain. The remaining water may be used <br />by the San Luis Valley Irrigation District (Farmers Union Canal) and the San Luis Valley Canal. <br />Flows in this drain have declined in recent years, and it is rarely used by the Company for <br />additional supply. Water can be taken out of the drain via a headgate where the drain intersects <br />the Prairie Ditch. <br />Diversion Structures <br />The diversion structure for the Prairie Ditch is located on the Rio Grande River in Section 8, <br />Township 39 North, Range 7 East. <br />Capacity Problems <br />There are no problems or concerns related to diversion or carrying capacity of the Prairie Ditch. <br />There is adequate canal capacity to divert the fu11367 cfs of decreed rights at the Rio Grande. <br />The Ditch is somewhat unique because it has a significant grade compared to surrounding canal <br />systems, which enhances conveyance capacity. <br />Water Measurement <br />The diversion structure of the Prairie Ditch is equipped with a weir measuring device and a <br />satellite communication system. In addition, all individual headgates are equipped with Armco <br />101 measuring devices. <br />Geographic Location and Size of Service Area <br />The service area of the Company is located to the north of the Rio Grande within Alamosa and <br />Rio Grande counties. There are approximately 24,500 acres irrigated under the system. <br />C:Acdss\PRCanal.doc The Prairie Ditch Company Interview June 21, 1999 -Page 3 of 5 <br />