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IMUK, <br />- - - - <br />Return Flows from the first use of Project water were limited by the very small amounts of Project water <br />imported and sold in 2002 and 2003 due to the drought. There was 9,626 acre -feet of Return Flows sold in <br />2003 compared with 18,686 acre -feet sold in 2002. The Fountain Valley Authority exercised its Right of First <br />Refusal on their municipal measured Return Flows and that left 3,607 acre -feet for agricultural entities. There <br />was no municipal Return Flows available for the other municipal entities and the Enterprise had to transfer <br />water from the Enterprise account to cover for this shortfall. Just 165 acre -feet of Enterprise -owned Project <br />water was sold in 2003 because this water was held in reserve by the Board for emergencies. <br />The rate for purchasing Fry -Ark Return Flows in 2003 was $6.00 per acre -foot with a $0.50 per acre -foot <br />surcharge added for Safety of Dams (SOD) repayment. Enterprise -owned Project water was sold for $6.00 per <br />acre -foot plus a $1.25 per acre -foot (SOD) surcharge for agricultural entities and a $2.00 per acre -foot (SOD) <br />surcharge for municipal entities. <br />For the first nine months of 2003, the Preferred Storage Options Plan (PSOP) was a back seat issue for the <br />District. The federal legislation that is required to move the PSOP was being held up by the Colorado <br />delegation due to certain entities within the state not agreeing to the legislation. However, the impasse <br />was broken late in the year as the flow issue through Pueblo was making progress. Changes were also <br />incorporated into the legislation to comply with a request from the Bureau of Reclamation. <br />On the re- operations (Excess Capacity) side of the Project, progress was realized as Reclamation issued a <br />response to the District stating that Reclamation had the authority to enter into long -term excess capacity <br />contracts. This would allow the re- operations portion of the PSOP to now move forward. With this decision, <br />it is expected that the NEPA process for Excess Capacity can begin in 2004. The concept of a Master Contract <br />for all excess capacity needs was introduced to Reclamation and progress is being made on that subject. <br />In their response to the District, Reclamation asked that the terminology be changed from "Re- operations" to <br />"Excess Capacity." Therefore, all references to long -term storage activities and contracts will be referred to as <br />"Excess Capacity" in the future. <br />Staff prepared a one -page summary titled "Long Term Excess Capacity, and How It Works" per the request of the PSOP <br />group. This succinct summary is available to any person or constituent wanting to understand Excess Capacity. <br />The Water Quality Subcommittee of the PSOP group met with USGS and reviewed the study that USGS <br />prepared for the PSOP following the water quality monitoring performed the previous two years. This report <br />established a correlation between specific conductance and water quality as measured by salinity and its <br />various components. Additionally, the report laid out tolerances, limits and procedures for future water quality <br />monitoring, as well as guidelines for when exceedances will be considered pertinent and procedures for acting <br />upon those exceedances. <br />At year -end the subcommittee was reviewing the need to add more water quality monitoring stations to <br />establish more baselines for tributaries to the Arkansas River through the Pueblo reach of the river. <br />• 23 • <br />