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ability to exchange water into the re-operated and enlarged Fryingpan-Arkansas Project <br />reservoirs to meet this year 2040 demand. Southeastern's water rights and those of the PS OP <br />participants could be affected adversely and significantly if the Water Court's decree is upheld in <br />this case. The effect on Southeastern's water rights and exchange opportunities, as well as those <br />of the PSOP participants, would be far more substantial if this case sets a precedent for similar <br />results in other parties' pending and future applications in Water Divisions 2 and 5.1 <br />The Upper Yampa Water Conservancy District ("Upper Yampa") is a water <br />conservancy district organized pursuant to § 37-45-101, et. seq., 10 C.R.S. (2003) ("Water <br />Conservancy Act"), which declares that the organization of water conservancy districts will, <br />among other things, "[p]romote the comfort, safety, and welfare of the people of the State of <br />Colorado," § 37-45-102(1)(g), and further declares it to be the policy of the State of Colorado to <br />"control, make use of, and apply to beneficial use all unappropriated waters originating in this <br />state to a direct and supplemental use of such waters for domestic, manufacturing, irrigation, <br />power, and other beneficial uses", C.R.S. §37-45-102(2)(a), and to "obtain from water <br />originating in Colorado the highest duty for domestic uses and irrigation of lands in Colorado <br />within the terms of interstate compacts." § 37-45-102(2)(b). In furtherance of the legislative <br />declaration in the Water Conservancy Act, Upper Yampa was organized in 1966 for conserving, <br />developing and stabilizing supplies of water for domestic, irrigation, and other beneficial uses in <br />the Upper Yampa Basin and its board of directors has the general powers specified in the Water <br />1 Southeastem lias filed a statement of opposirion to Case No. O 1 CW 160, Water Division No. 2, <br />Application of the City of Pueblo for Recreational In-channel Diversion Water Rights. During May 2004, <br />Southeastern entered into an interjovernmental agreement (IGA) with the City of Pueblo and others which, among <br />other things, established a cooperative Arkansas River Flow Management Program to address flow management <br />through the stream reach claimed in the City of Pueblo's RICD applicarion, and set a schedule for settling a series of <br />water court cases, including the City of Pueblo's RICD application. Southeastern's participation in the issues before <br />this Court is in no way intended to alter the commitments made to the City of Pueblo or any other party to the May <br />2004 IGA. <br />6