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Ridgway Reservoir Micro-Hydro Project Loan Feasibility Page 11 of 42 researching ways to address the super-saturated nitrogen condition that is affecting the sport fishery in the downstream reach of the Uncompahgre River. Minor impacts to the local environment can be expected to occur during construction. These would include air quality effects caused by dust during excavation and site grading, and possibly some very minor effects to local water quality caused by disturbances of the stream bed during construction of the tailrace and draft tube. The powerhouse will be in an area previously disturbed by construction. It currently consists of a gravel parking and maintenance staging area. PERMITTING The Project is being pernutted via a Lease of Power Privilege through the Bureau of Reclamation. In a letter to the Bureau of Reclamation dated August 18, 2009, Tri-County Water requested that Reclamation begin the Lease of Power Privilege process to develop hydropower at Ridgway Dam. On June 2, 2010, Reclamation published a Notice of Intent in the Federal Register that it would accept proposals, select lessee, and contract for hydroelectric power development at Ridgway Dam. On December 1, 2010 Tri-County Water submitted a formal application requesting a LOPP from Reclamation to develop the project. Tri-County Water was the only applicant requesting the right to develop hydropower at Ridgway Dam. On January 28, 2011, Reclamation contacted Tri-County Water with a positive response regarding the application. As part of the pernutting process for the project, the Bureau is currently completing NEPA review for the project, including preparation of any environmental assessment. Related to the NEPA process, a public scoping meeting was held in Ridgway on Apri126`h. It is expected that the Lease of Power Privilege will be iinalized after completion of the NEPA process. In addition to the Lease of Power Privilege, construction of the project may also require a Section 404 permit from the Corps of Engineers because there will be construction and placement of fill below the ordinary high water line in the Uncompahgre River. The District will coordinate with the Corps to determine if this permit will be required. In addition, approval will be required from San Miguel Power Association (SMPA), which owns the transmission line to which the project will interconnect. SMPA is supportive of the project and has recently completed an interconnection study for the project in order to determine the optimal interconnection configuration and expected costs. SHORT-TERM PROJECT STEPS Additional Engineering Design The District will complete additional engineering design regarding the new facility including the turbine/generator, powerhouse, water delivery system and electrical grid interconnection. Later this summer, the District will be