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I I I I I I I I I I I ~ I I I I I I I I I n~,","41 t: .J ........_ INTRODUCTION Western Water Consultants, Inc. (WWC) was retained by the Wyoming Water Development Commission to quantify the downstream flow impacts should three potential reservoir projects in the Little Snake River Basin be constructed. The three projects which have conditional water right filings are the Pot Hook and Powder Wash Projects owned by the Colorado River Water Conservation District (CRWCD) and the Three Forks Project owned by The Pittsburg and Midway Coal Mining Company (P&M). The final report on the potential effects of these projects was completed July 31, 1990 (WWC, 1990) and shows that each of the projects would have a significant impact on the flow of the Little Snake River near Lily, Colorado (at the mouth of the Little Snake River). Since the study showed that the project would significantly affect the river, WWC was requested to estimate the present market value of the P&M water rights for the Three Forks Project in light of the general prospects for the development of this project. The Scope of Work set forth in the contract specified that ..."1. The present value of ~ potential future project revenues, net of present development costs, should be considered as follows: "a. The uncertainty of the future market for the use of project water supplies and the uncertainty in obtaining construction permits for the project shall be reviewed and the revenues for the life of the project assigned to a future starting point based on that review: e.g. if the development prospects are strong then revenues could be assumed to start as soon as 5-10 years from the present: on the other hand, if the prospects are highly uncertain, they might not be assumed to start for 50-100 years. 1