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E3ct}ibit A <br />C~IYCEPTS APVD P1~IlYCIPLES <br />FUR THE QPERATIUN AND <br />ALLU~ATIQN 4F THE UM&R ~Q5TS <br />UF THE AIVIMAS-LA PLATA PRUJECT <br />Intent vf the Parties. The Partiesl have war[ced tngether f~r mar~y years in suppart uf <br />th~ A.nimas-La Plata Project t"ALP"~ that will supply water ta cammunitics and Indian <br />'1'ribes in Narthwestern New Mexico and Sauthwestern Calorada.- "I~e ALP also serr~es <br />~s the foundati~n ~or tt~e settlement a~'the water rights ~laims ~f t~e llte Mpuntain Ute <br />'1'ribe and St~uthern Ute Indian Tribe (cvllw~cii~~ly "Ute Tribes"} in Colorado and includes <br />~rt el~•ment in tl~e pn~peased Na~aja Natinn water rights settle~nent in New Mexico. The <br />int~nt of'th~:se concepts and principles is tv allocate fairIy and appropriately the <br />{3per~tinn. Maintenance and Repiacernent ("OM&R"} costs of the ~LI.P and ta pro~ide f~r <br />its ogeration in a m~nner that wilI benetit all of the Project p~rtici~antsx ta tl~e fullest <br />extent possihle. <br />Applicable L~w. The Assaciatian shatl a~erate the ALI' in ac~ardancc with applicable <br />d~crecs, enrnpacts {including negotiated campact a~~vunting principles} and ather law. <br />Watcr Supp~y 4ptimizatiun und Utili~atinr~. T~e Proje~t water supply shalI he <br />allvcated to the Proje~t participants on #he basis of their "5tatutary ~ater ~llocations' as <br />set tart}i in the Cninrado Ute 5e~tlement Act Amendrrcents vfZ4U~, Puh. L. Nv. 1~5-554, <br />1 1~ 5t~t. 276~A-258 ta 27b:iA-~66, "1"stle III, ~~ 3~1-~3 (?UQ~) (`'?a4Q Settlement Act <br />Elmendme~ts"}. '['he ALP shall be operated io aptitnixe the Pmject water su~ply hy <br />mana~ing tt~~ water supplies a~a.ilahle, whether from direct flnw ar frnm starage, ~s a <br />joint pool far the xnutuaI benef t ef the Pmject participar-ts with the intent that Ridges <br />Basin Reservnir, snrnetimes ~a~led Lakc Nightharse ("Rese~^vnir"}, remair~s full whenc~er <br />practi~ahle. The Project participants recu~nizs, hawe~er, that at times it may he <br />preferahie to delay pumping water tn r~place the Proje~t watcr supply in thc Rcservoir <br />until power casts are less ex~ensi~~ and thus that the Reservnir may nat he full at aIl <br />times. <br />~ Water 5upply ijeln+ery. 'I`he Management Cflmmittee shall estabiish prncedures Fnr the <br />deli~ery ~f Praject ~vater consistent wit~ the fnllowin~ p~inciples: <br />4.~1 Project parti~ipants shall l~e required to a~~ise the Managem~nt Comfnittee af <br />their anticipateci annual, rnan#hly. and daily water dettaands. The Mat~agement <br />'In general, capit~lired tcrms in this document tsa~+e the same mcaning as in the <br />lnter~ovemm~ntal A~eemerit {"IGA"). <br />' The term "Froject participants" means entities recei~ing water from ELI,P. ALP's water <br />suppfy is referred tn as "Project water" c~r'`Prvject rvater supp~y." <br />Page l af 7 <br />