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periods of high flow (non - irrigation season). This was determined not to be a significant impact <br />and no mitigation is required. <br />Alternative Water Supplies WFC owns absolute direct flow and storage rights which it will <br />use in conjunction with operations in the New Horizon North mining area ( "NHN Mine "). In <br />addition, Western Fuels has applied with the Water Court to confirm its appropriation of <br />conditional water rights for the NHN Mine. WFC will make these conditional water rights <br />absolute once mining activities begin and it can divert or store water and put that water to <br />beneficial use. Pursuant to those decrees and pending decrees, WFC has or will have the right to <br />use water in priority under Colorado water law. WFC's professional consulting water engineer <br />has determined that the drainage basins in which WFC will operate its NHN Mine are not <br />overappropriated, meaning that WFC will be largely able to operate its water rights in priority vis <br />a vis other water users. <br />In addition, in drought periods when water may not be available for use under WFC's existing or <br />proposed decrees, Colorado water law permits WFC to use its water out -of- priority so long as it <br />mitigates injury to senior water users. The mitigation of injury to other water users caused by <br />out -of- priority depletions is called a plan for augmentation. Typically, a plan for augmentation <br />replaces out -of- priority depletions to the stream with an alternative source of water. As a <br />precaution, WFC has filed an application for a plan for augmentation with the Water Court. <br />In this plan for augmentation, WFC will use the following alternative water sources to mitigate <br />any ground or surface water rights impacts. WFC owns 115 shares of the Colorado Cooperative <br />Ditch Company ( "CCC Ditch "). CCC Ditch owns water rights that are senior to water rights that <br />may be injured in part during dry periods by mining activities. WFC changed 27 shares of the <br />CCC Ditch for augmentation use in a previous decree (Decree in Case No. 88CW55, Water <br />Division No. 4, dated April 2, 1990). These 27 shares represent up to 2.205 cfs direct flow from <br />the CCC Ditch. By that Decree, these 27 shares allow WFC use of up to 97.8 acre -feet of senior <br />water from the CCC Ditch to augment out -of- priority depletions. WFC has the ability to change <br />additional shares of CCC Ditch to augment its future uses. WFC also plans to operate a <br />Substitute Water Supply Plan (a temporary, administrative plan that serves the same purpose as a <br />plan for augmentation) during the pendency of the Water Court application to approve the plan <br />for augmentation. The Substitute Water Supply Plan will be administered by the local Division <br />Engineer's Office on behalf of Colorado's State Engineer. A water augmentation plan has been <br />submitted to the Water Court for its approval. A copy of the approved water augmentation plan <br />will be included in Appendix 2.05.6(3) -Ic of this Section. <br />WFC's water rights engineering consultant has determined that augmentation during the non - <br />irrigation season will not be required as local water users do not irrigate during this time. Off <br />season ditch runs for filling cisterns and stock ponds will continue unabated through the HDPE <br />pipeline that will be in place to divert the 2nd Park Lateral irrigation flow. WFC will have direct <br />flow, storage water and groundwater rights to meet its water demands in non - irrigation months. <br />Section 2.05.6(3) Page 9 October 2013 (TR -05) <br />E: \New Horizon \DRMS \NHN Permit \04_Techmcal Revisions TR \TR -05 \Documents from Jason \2.05.6(3) Protection of Hydrologic Balance_TR- OS.doc <br />