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<br />I <br /> <br />I <br /> <br />MR. BUGAS: Colorado ute has recently -- our board of directors has <br />recently approved the construction of a third unit at Craig. That unit <br />will be identical with the first two. It will have a net capability of <br />400 megawatts. To supply the water for that unit, we will use, of <br />course, as much of the 60 cubic feet per second as we can obtain from <br />the Yampa River; but it will require storage capacity to carry us <br />through the low-flow years. We are in the process of negotiating -- I <br />guess I would say we have negotiated an agreement with the Yampa -- <br /> <br />MR. FETCHER: Upper Yampa conservancy District. <br /> <br />MR. BUGAS: to participate with that district in the Yamcolo Reservoir. <br />Colorado ute will take 4,000 acre-feet from that reservoir, and the <br />agreement is that we will have the right to use that water each year. <br />And we will pay, I think it is $26 an acre-foot, to the district for the <br />water annually and pay for it whether we use the water or not. <br /> <br />NOW, that will only supply about one-half of the needs for that third <br />unit; so we have, in addition to that, purchased what is known as the <br />"Four-County Water Rights." We are in the process of going through the <br />court and having that water transferred back into the Yampa River Basin. <br />There is a yield on those rights of about 40,000 acre-feet. <br /> <br />Now, we have also entered into an arrangement with the trustee of <br />Woodmoor, which is in bankruptcy. And we have a right to purchase 1,900 <br />acres of land, which will cover the entire land that is, known as the <br />"Bear Reservoir site." That site is capable of storing about 23,000 <br />acre-feet, and hopefully we will be able to work out some arrangement <br />with the Upper Yampa district to construct that reservoir jointly with <br />them. <br /> <br />As John Fetcher knows, he kind of dropped a little bombshell on me this <br />morning. We are having a little prOblem on the bond counsel on the <br />possbility that we are a non-exempt entity for issuing non-exempt <br />bonds, and it may create some prOblems. But I am sure they can work <br />out some arrangements around that. <br /> <br />In any event, I think it can still be done through a taxable bond <br />situation. <br /> <br />That covers pretty much our arrangements in the north. Of course, the <br />Craig station is a station that we can place four units at that station <br />and plan to someday in the future, sometime after 1987, construct a <br />fourth unit there. We, hopefully, will be using water from that unit <br />from the Bear Reservoir and, of course, Yamcolo. <br /> <br />The Yampa Valley area has a vast quantity of very low sulphur coal. <br />It is a high-quality coal. It is around 10,000 to 10,500 BTU's per <br />pound. The Yampa River seems to still have a sizeable amount of water <br />available; and, of course, as long as you are going to generate elec- <br />tricity by the use of either fossil fuel, or nuclear, and you use a <br />steam driven generator, it is going to take some water. <br /> <br />-3- <br />