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BACKGROUND <br />PURPOSE <br />The Rio Grande Canal Water Users Association (RGCWUA) is proposing to develop the hydropower <br />potential of their diversion dam. The total project cost is expected to be $551,000. <br />The project consists of installing a 140kW Natel SLH-100 Hydroengine in one of the existing sand <br />gates on the river on the left side of the diversion dam. The hydropower facility will then be <br />connected to the grid and power sold back to the utility. The infrastructure that exists at this site, <br />including the diversion dam, sand gate and electrical service, reduces the installation cost of this <br />facility and makes it an economically favorable hydroelectric site. <br />With current forecasted revenues, the facility will generate a positive cash flow every year with <br />substantial net revenue after the repayment of the loan. Favorable forecasted revenues are <br />dependent on negotiating a reasonable rate for the sale of power generated. The RGCWUA will be <br />able to use this additional revenue to make improvements to their system, and assist with normal <br />operations and maintenance. <br />An application has been submitted to the Federal Energy Regulatory Commission for a Small <br />Hydropower Exemption from licensing. This is considered a low impact project therefore the <br />application was submitted through the Governor's Energy Office Streamlined FERC Pilot Program. <br />The exemption is expected by the end of 2011. <br />STUDY AREA DESCRIPTION <br />The Rio Grande Canal diversion dam is located just northwest of Del Norte, Colorado in Rio Grande <br />County. The diversion dam is on the Rio Grande River and diverts water to the Rio Grande Canal. <br />The hydropower facility will be contained within the existing footprint of the diversion dam. A map <br />of the Rio Grande Canal service area is attached to this report as Appendix A. <br />PREVIOUS STUDIES <br />RGCWUA retained Applegate Group to perform a pre-feasibility level analysis of the site and the <br />economic feasibility. The results of this analysis were favorable, given potential grant money <br />available, and initiated the completion of this study. <br />Rio Grande Canal Water Users Association � Background <br />