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SYSTEM OVERVIEW <br />NPIC provides direct flow water, storage water, and transmountain water to irrigators and <br />municipalities within Water District 3 of Water Division 1 of Colorado, located between <br />Halligan Reservoir to the west and Cowan Lateral on the east. NPIC is the northernmost and <br />furthest upstream ditch system in the Water District. <br />NPIC began as the North Poudre Land, Canal and Reservoir Company in 1880. After the North <br />Poudre Land, Canal and Reservoir Company failed due to the high costs of construction, NPIC <br />acquired the land, water, and rudimentary infrastructure of the irrigation system. In December <br />1901, NPIC was incorporated as a mutual stock company. <br />NPIC originally had 8,000 shares of stock. Subsequent amendments to the articles of <br />incorporation increased the number of shares to 10,000. NPIC stock provides ownership and <br />delivery of equal amounts of all of the Company's water, including direct flow rights, storage <br />rights, and Colorado Big Thompson (C-BT) units, excluding deliveries from Fossil Creek <br />Reservoir. Fossil Creek Reservoir represents a special case in the operation of NPIC, by virtue <br />of preferred shares of stock originally issued as compensation for injury to water rights due to the <br />enlargement of Fossil Creek Reservoir. <br />The NPIC System consists of an integrated plan currently including 19 reservoirs totaling 64,487 <br />acre-feet of storage and two main canals that divert water from the North Fork and mainstem of <br />the Cache la Poudre River. The number of reservoirs in the NPIC System has changed <br />throughout the life of the company. At one point, NPIC owned 25 storage reservoirs. However, <br />excessive silt problems on Boxelder Creek and the North Fork of the Cache la Poudre resulted in <br />a number of reservoirs being silted in. Today, the siltation problem is not as significant due to <br />flood control measures on Boxelder Creek and along the North Fork Cache la Poudre River. The <br />current status of NPIC reservoirs is summarized in Table 1. <br />Fifteen of the 19 reservoirs owned by NPIC are actively being used for storage, exchange, and <br />regulation of flows throughout the System. Most of the reservoirs in the NPIC System are leased <br />for recreational purposes. The proceeds from the leasing of reservoirs helps to off-set the <br />assessments charged annually to NPIC stockholders. NPIC currently has restrictions on storage <br />on two of its reservoirs: Miners Lake and North Poudre Reservoir No. 4. Through a loan granted <br />by Colorado Water Conservation Board, NPIC is in the process of rehabilitating Miners Lake. <br />NPIC plans to rehabilitate North Poudre Reservoir No. 4 when the rehabilitation of Miners Lake <br />is completed. Two of NPIC's reservoirs (Boxelder No. 1 and Mountain Supply No. 8) are <br />currently on the State abandonment list. These reservoirs are not currently operational due to <br />excess siltation; however, NPIC is actively working to maintain active status of the water rights <br />associated with these reservoirs. Of the 64,487 acre-feet of storage in the NPIC system, <br />approximately 2,204 acre-feet is currently being or will soon be rehabilitated and 636 acre-feet is <br />on the state abandonment list. <br />NorthPoudreMemo.doc 2 of 29 <br />