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Final ~~ ~plementation Committee Report Page 8 of 23 The Winter Water Spill Credit will not apply to Winter Water stored by other Off-Channel Applicants of the Winter Water Storage Program. . The Winter Water Spill Credit will only apply to Winter stored water spilled from Pueblo Reservoir in accordance with the order of spill as prescribed in Amendment No.4 to Contract No. 5-07-70-W0086. It will not apply to any releases of Winter Water requested by entities or as required by the Winter Water Storage Program Decree. The Winter Water Spill Credit can be used as a credit towards purchase of Project Water or as a credit towards future Winter Water Storage charges. The Winter Water Spill Credit may be carried forward indefinitely by an eligible entity until used for purchase of Project water or Winter Water storage. Historical records of the Winter Water Storage Program indicates that eligible Applicants' average storage in Pueblo Reservoir under the Winter Water Storage Program was approximately 48,000 acre-feet and maximum storage in Pueblo Reservoir under the Winter Water Storage Program was approximately 62,000 acre-feet. The Winter Water Spill Credit will apply to the actual amount of Winter Water spilled from Pueblo Reservoir in any year, but shall not exceed a maximum of 62,000 acre-feet. The Winter Water Spill Credit will not apply to any Winter Water Storage in Pueblo Reservoir by the Applicants in excess of 62,000 acre-feet. . 2.4 Funding the Winter Water Spill Credit- Funding for the Winter Water Spill Credit will come from those entities participating in Re-operations. The funds will be collected in the form of a surcharge based on the amount of storage utilized under a re-operations contract of each entity. It is expected that Re-operations contracts will begin in 2005. Therefore money must be available at that point in case there is a spill in the first year. Those entities that have decided to participate in Re-operations will need to begin contributing to this fund in 2003. Collections for 2003 and 2004 will be $60,000 each year. This amount will be prorated to the participants based on their percentage of Re-operations space used. Beginning in 2005 and continuing until there is a balance sufficient to cover two consecutive average spills, each participant in re-operations will continue to pay a surcharge. This collection total should range between $40,000 and $70,000 each year and will be charged on a proportionate basis of total storage space under contract. The fund will be monitored each year and if there is a shortage, or if there are sufficient funds, then the surcharges will be adjusted accordingly. At some point the fund should be self-funding, as the fund will be collecting enough interest to keep itself solvent. If the fund should ever drop below $300,000 then the surcharge will be reinstated until the fund is able to sustain itself. Depending on an estimated level of participation in re-operations and the amount of the winter water spills, the surcharge on re-operations contracts will range between a low of $ .73 per acre foot to a high of $ 2.75 per acre foot, with an expected surcharge of $1.75. This surcharge will be collected upon signing a re-operations contract and each year thereafter for the duration of the contract. The fund will be reviewed each year with the participants to determine if there is a need for a collection and how much that collection will be. . The table on below shows how the Winter Water Spill Credit Fund will operate. These numbers are based on an average spill of 47,000 acre-feet. However as noted above, this credit could go as high as 62,000 acre feet in any given year. If the spill were to be 62,000 acre-feet then the collections would have to be adjusted to compensate for this higher payout. If all of the spills were 62,000 acre-feet, then the collections would need to be about $70,000 per year. 3/20/02