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I Section 4. System Efficiency, Extraordinary Conservation and Augmentation Projects <br />The States propose that the Secretary develop a policy and accounting procedure concerning <br />augmentation, extraordinary conservation, and system efficiency projects, including specific <br />extraordinary conservation projects, tributary conservation projects, introduction of non- <br />Colorado River System water, system efficiency improvements and exchange of non-Colorado <br />River System water. The accounting and recovery process would be referred to as "Intentionally <br />Created Surplus" consistent with the concept that the States will take actions to augment storage <br />of water in the Lower Colorado River Basin. The water would be distributed pursuant to Section <br />II(B)(2) of the Decree and forbearance agreements between the States. The ICS credits may not <br />be created or released without such forbearance agreements. <br />' A. The purposes of the Lake Mead Intentionally Created Surplus ("ICS") program <br />are to: <br />1. Help avoid shortages to the Lower Basin. For the purposes of determining <br />calendar year declarations of Domestic Surplus, Normal and Shortage <br />' conditions, any ICS credits would be considered system water; <br />2. Benefit both Lake Mead and Lake Powell; and <br />3. Increase the surface elevations of both Lakes Powell and Mead to higher <br />levels than would have otherwise occurred. <br />B. Extraordinary Conservation Storage Credits <br />' 1. Users of Colorado River water may create ICS credits through <br />extraordinary conservation under the following conditions: <br />' a. A Boulder Canyon Project Act Section 5 Contractor ("Contractor") <br />shall repay all outstanding system payback obligations before it <br />can create ICS credits. <br />' b. ICS credits can only be created if such water could have otherwise <br />been beneficially used. <br />' c. A Contractor notifies Reclamation by September 15 of the amount <br />of ICS credits it wishes to create for the subsequent year. <br />2. ICS credits may be created only through extraordinary conservation <br />activities. These activities include: <br />' a. Fallowing of land that currently is, historically was, and otherwise <br />would have been in the next year, irrigated. <br />' b. Canal lining programs <br />c. Desalination programs <br />7