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B~ Seneca Coai Company <br />. ~ Coal Compvey <br />June 2, 2006 <br />Yampa Valley Electric Association, Inc. <br />P.O. Box 217 <br />Craig, Colorado 81626 <br />To Whom It May Concern: <br />Seneca Coal Company, 36600 Routt County Road 27, P.O. Box 670, Hayden, Colorado 81639, is requesting release of <br />Phase I bond liability on 761.2 reclaimed acres of its total 4,093.0 acres currently within the pemut boundary at the <br />Seneca II-W Mine (CDMG Permit Nn. G82-057, apprncrd Deezmber 31, 1985). A surety bond in the amount of $9,707,373 <br />is currently in place of which $2,329,115 are being requested for release. Pursuant to Rule 3.03.1, a pemvttee may <br />request Phase I Bond release upon successful completion of backfilling, regrading and drainage control in accordance <br />with the approved reclamation plan. Those portions of the mine for which Phase I bond release is requested were <br />backfilled and graded from the beginning of mining, in 1990, through 2005 in accordance with the Colorado Division <br />of Minerals and Geology (CDMG) rules and regulations. The approved reclamation plan can be reviewed in its entirety <br />in the Seneca II-W Mine Pemvt Application Package located in the Hayden Public Library, Hayden, Colorado. <br />All affected lands within Seneca II-W Mine fall within the permanent program category. For the purposes of this Phase <br />I Bond Release request, the term "reclaimed" means those disturbed/mined areas where successful completion of <br />• backfilling, regrading and drainage control, in accordance with the approved reclamation plan, has been completed. <br />The Phase I reclamation activities have produced a stable landform in compliance with the approved conditions in the <br />CDMG Perrnit No. C-82-057 <br />The following is a brief srunmary of the Phase I reclamation that has been completed. Backfilling and grading was <br />conducted from 1990 through 2005 and was generally completed within 180 days following coal removal and was <br />generally within two (2) spoil ridges behind the active pit. The majority of the grading work was performed with dozers <br />and scrapers. In some cases the major backfilling was done with scrapers and draglines. All areas affected by the <br />surface mining operations, except as specifically exempted by the CDMG, were regraded on a timely basis ro a stable <br />configuration that conforms with the approved postmining land use (livestock grazing and wildlife habitat). For the <br />most part, grading was done along contour to also **++*++**++>e erosion. Any time operations were conducted on steep <br />slopes that could present safety concerns ro the operators, grading was done in a direction other than parallel ro <br />contour. Exhibit C in the Phase I Bond Release application provides representative cross-sections showing final <br />topography configuration. Amore detailed discussion of the overall mining and ieclaination can be found in-the <br />Seneca II-W Mine Permit Application, specifically Tab 12, Operation Plan and Tab 20, BackElling and Grading. <br />Included in the postmine regrading operation was the construction of small swales and hummocks ro minimize erosion <br />and to conserve soil moisture and to promote revegetation. Small stock tanks aze also utilized in the postmine grading <br />operations to minimize erosion and to provide water for livestock and wildlife. The locations of these stock ponds are <br />shown on Exhibit B in the Phase I Bond Release application. The designs and certified as-builts for the permanent <br />stock ponds can be reviewed in the Seneca II-W Mine Permit Application Tab 13, Facilities. <br />• <br />Seneca Coal Company • P.O. Box 670 • Hayden, Colorado 81639 <br />Telephone (970) 276-3707 • FAX (970) 276-3014 <br />