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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 I Background 1 <br />