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. , e . e Secretary Gale Norton October 14, 2004 Page 2 The Western Area Power Administration ("Western") is forecasting about 4300 Gigawatt-hours ("GWh") of energy production in FYOS. Of that amount, about 3200 GWh comes from water releases made through Glen ClII1YOn Dam. If the Glen Canyon Power Plant were unable to produce power, Western would have to purchase over $200M worth of power to firm up contractual commitments, and in so doing would exhaust the Upper Colorado River Basin Fund. Power purchases at such an unprecedented level would doubtlessly result in sIuIrp increases in the power rate paid by custOmers to Western. This increase would most likely be well above the prevailing market rate and consequently Western's customers would turn elsewhere and thus be unlikely to purchase CRSP power. Furthermore, presuming that Western did not attempt to meet its firm power commitments, the need to sen the Tf'II1"ining power at a rate high enough to meet the mmual operating and maintenance costs for CRSP facilities would likely push the cost of CRSP power above market rate, thus P""" lizing publicly owned utilities. Given the possibility that Lake Powell could drop below the minimum elevation . necessary to produce power and keep the recovery programs fully funded, we request that you strongly consider including otpp,opIiations in the President's budget requests to keep each of the mentioned, important programs fulIy funded in the event that Upper Colorado River Basin Development fund revenues derived from CRSP power production become inadequate. Should you have any queations, please don't hesitate to contact me. Thank you in advance for your considerstion and assistance in this important matter. With best regards, PTT/jwsijs cc: Governor Dave Freudenthal Upper Colorado River Commissioners Commissioner, U.S. Bureau of Reclamation Upper Colorado Regional Director, U.S. Bureau of Reclamation