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Water Right Changes, Transfers and Agreements <br />The Company has been involved in only a few number of legal actions associated with its water <br />rights. The actions have generally been aimed at improving water management flexibility and <br />equitability of water supply between shareowners on its two canal systems. The Company's Cat <br />Creek water right is currently being considered in Water Court in light of a dispute regarding the <br />abandonment of other Cat Creek rights. <br />Drainage Water Rights <br />The Company does not own any decreed drainage or seepage water rights. <br />Diversion Structures <br />There are two principal diversion points for water diversions by the Company. These include: <br />• Terrace Main Canal <br />• Alamosa Creek Canal <br />The diversion structure for the Terrace Main Canal is located on the Alamosa River in Section 27, <br />Township 36 North, Range 7 East. The diversion structure for the Alamosa Creek Canal is <br />located on the Alamosa River in Section 1, Township 35 North, Range 7 East. A map showing <br />the locations of these diversion points is provided as Attachment 1. The two canals have their <br />own water rights and are operated independently. <br />The diversion structures for both canals were originally metal but were recently refaced with <br />concrete. Both diversion structures have clock recording devices for flow measurements. The <br />Terrace Main and Alamosa Creek canals were lined in 1991 and 1992, respectively. When the <br />Terrace Main Canal was lined, a new canal was constructed, although the original Terrace Main <br />Canal (unlined) is still used for water deliveries to some shareholders. <br />Water Measurement <br />Water is measured at each of the two river diversion points for the Company. Both diversion <br />structures are equipped with continuous recorders. Water storage and releases at Terrace <br />Reservoir are monitored by the State using a staff gage at the dam. In addition, there are <br />measuring devices at individual turnouts along the canals. <br />Geographic Location and Size of Service Area <br />The Company service area is located in an area to the west of the Rio Grande and to the north of <br />the Alamosa River. Almost all lands in the service area lie to the west of the Monte Vista Canal. <br />There are approximately 15,000 acres irrigated under the Terrace system. <br />Laterals <br />Water deliveries to shareholders are made directly off of the two canals. The two primary canals <br />(Terrace Main and Alamosa Creek) are concrete lined over their entire lengths. <br />C:Acdss\Terrace.doc Terrace Irrigation Company Interview June 18, 1999 -Page 3 of 6 <br />