Final Draft ALP Marketing Supply and Demand Study

Exhibit A
CONCEPTS AND PRINCIIPLES
FOR THE OPERATION AND
ALLOCATION OF THE OM &R COSTS
OF THE ANIMAS -LA PLATA PROJECT
Intent of the Parties. The Parties' have worked together for many ,years in support of
the Animas -La Plata Project ( "ALP") that will supply water to communities and Indian
"Tribes in Northwestern New Mexico and Southwestern Colorado. The ALP also serves
as the foundation for the settlement of the water rights claims of the Utc Mountain Ute
Tribe and Southern Ute Indian Tribe (collectively "Ute Tribes ") in Colorado and includes
an element in the proposed Navajo Nation water rights settlement in New Mexico. The
intent of these concepts and principles is to allocate fairly and appropriately the
Operation, Maintenance and Replacement ( "OM&R "} costs of the ALP and to provide for
its operation in a manner that will benefit all of the Project participants to the fullest
extent possible.
2 Applicable Law. The Association shall operate the ALP in accordance with applicable
decrees, compacts (including negotiated compact accounting principles) and other law.
3 Water Supply Optimization and Utilization. The Project water supply shall be
allocated to the Project participants on the basis of their "Statutory Water Allocations" as
set forth in the Colorado Ute Settlement Act Amendments of2000, Pub. L. No. 106 -554.
114 Stat. 2763A -258 to 2763A -266. Title 111, §§ 301 -03 (2000) (`2000 Settlement Act
Amendments "). The ALP shall be operated to optimize the Project water supply by
managing the water supplies available, whether from direct flow or from storage, as a
joint pool for the mutual benefit of the Project participants with the intent that Ridges
Basin Reservoir, sometimes called Lake Nighthorsc ( "Reservoir "), remains full whenever
practicable. The Project participants recognize, however, that at times it may be
preferable to delay pumping water to replace the Project water supply in the Reservoir
until power costs are less expensive and thus that the Reservoir may not be full at all
times.
4 Water Supply Delivery. The Management Committee shall establish procedures for the
delivery of Project water consistent with the following principles:
4.01 Project participants shall be required to advise the Management Committee of
their anticipated annual, monthly, and daily water demands. The Management
'In general, capitalized terms in this document have the same meaning as in the
Intergovernmental Agreement ( "IGA ").
'The term "Project participants" means entities receiving water from ALP. ALP's water
supply is referred to as "Project water" or "Project water supply."
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