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. . uoa7ll municipal and industrial (M&I) water use within California and to satisfy the unrnet M&I demands in California, through establishment of tiered surplus criteria and trigger elevations in Lake Mead. It was not the intent of the other Basin states to maximize the use of available Colorado River water, to provide M&I and agricultural entities additional flexibility in meeting their water demands, or to provide additional water to agricultural entities. The other Basin states are supportive of a tiered approach for making surplus water available to meet unrnet M&I water needs during an interim period which ends by the year 20 15. But, they are not supportive of a five-year look-ahead approach for defining the surplus criteria or technical approaches that are based on exceedence probabilities and formulas. Currently, the other states view all of the benefits from the surplus guidelines flowing to California, whereas, the additional water use places an increased risk on the other states in terms of shortages and causes lower reservoir conditions. California, according to the other six states, needs to mitigate this increased risk. Furthermore, the other states want the interim surplus guidelines to terminate by 2015 with California's Phase II activities to be initiated during Phase I. The objective is for California to be at its basic apportionment of 4.4 mafby 2015. it was indicated that during the interim period Arizona would forgo its right to divert 46 percent of the surplus to allow California and Nevada M&I demands to be met. However, under the "70R" tier of the proposed surplus criteria, Arizona may want to receive the first block of surplus water, since M&I water demands in California and Nevada would be met through other tiers of the strategy. A copy of the six Basin states' proposed interim surplus guidelines was included in the December Board folder. The California Technical Committee (CTC), composed of technical representatives from each of the six California agencies and Board staff, has been working with the Agency Managers to explore various reservoir system operating scenarios that could be used in the Colorado River Board's 4.4 Plan (4.4 Plan). Using Reclamation's computer program, CRSSez, runs have been made to allow the Agency Managers to select a base case reservoir operating scenario, as well as a preferred alternative. This information was to be utilized to compare various operating criteria to determine the criteria that best meets the objectives contained in the 4.4 Plan without placing undue risk on other water users or other Basin states. Unfortunately, the CRSSez model was not modeling the scenarios correctly and it could not model the provisions contained in the I1D/CVWD/DOI Memorandum of Understanding. Thus, Reclamation was requested to revise the model. A revised version of the CRSSez model was received on January II, 1999. This version of the model will be tested and the necessary modeling studies run so that a comparison can be made with the surplus criteria proposed by the other Basin states. . The next meeting of the seven Colorado River Basin states is scheduled for January 26, 1999, in Phoenix, Arizona. During that meeting there will be a discussion of the I1D/CYWD/DOI Memorandum of Understanding, the process that the Department of the Interior intends to follow in development of surplus guidelines, and the interim surplus, normal and shortage criteria proposed in the Basin states letter of December 4, 1998. Following that meeting it is expected that a meeting involving only the Basin states representatives will be held to discuss how they would like to proceed in developing surplus and shortage criteria acceptable to them and how that fits into the process being undertaken by the Department of the Interior, 5