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~Sn ~11 & ilm r <br />L.L.P. <br />LAW OFFICES <br />1200 Seventeenth Street, Suite 1900 <br />Tabor Center <br />Denver. Colorado 80202 <br />(303)634-2000 <br />Far: (303) 634-2020 <br />iiiiiiiuiiiiiiiiii <br />999 <br />PHOENI%. ARIZONA <br />TUCSON. ARIZONA <br />IRVINE. CALIFORNIA <br />DEN VER. COLORADO <br />S ALT LAKE CITY. UTAH <br />Robert D. Comer <br />303-634-2015 <br />rcomer@swlaw.com <br />To: Mike Long, Director, Division of Minerals and Geology (via email) <br />From: Robert D. Comer <br />Date: November 13, 2001 <br />Enclosed please find the November 2001 monthly report for the Powderhorn Coal <br />Company. Please let me know should you have any questions. <br />Powderhorn Coal Company <br />November Progress Report to the Colorado Division of Minerals and Geology <br />Reorganization <br />On a positive note, it appears [hat the Frontier bond experience may be drawing to a <br />close. On Friday, October l9, 2001, the United States Bankruptcy Court for the Eastern District <br />of Kentucky ("Court") conducted a confirmation hearing for Quaker Coal Company ("Quaker") <br />and has accepted the competing plan submitted by American Electric Power (AEP). Following <br />that decision, AEP and Quaker entered into settlement discussions, and on October 26, 2001, the <br />Court entered under seal a Settlement Letter between AEP and Quaker. As a result thereof, the <br />assets of Powderhorn Coal Company have or will be transferred to AEP or a subsidiary thereof. <br />Now that the ownership issue is resolved, AEP, the Board and the Division can proceed <br />to resolve the outstanding issues. In particular, AEP plans to provide a replacement form of <br />financial assurance for the Frontier bond. AEP will resolve this issue in the near term. At that <br />point, AEP would like to discuss with the Board the prospect of rescinding its Order of June 14, <br />2001, dismissing NOV numbers CV-2000-010 and 2001-005. At that point, the Parties could <br />then jointly move to have the litigation dismissed before the Mesa County Court. A copy of the <br />90-day Status Report requested by the that Court is attached. <br />Additionally, AEP hopes that the Board will also consider a Technical Revision to its <br />Reclamation Plan allowing for a variance to delay demolition of certain administrative buildings <br />and the utility suspension bridge crossing the Colorado River. AEP understands and believes <br />that significant value is added to its property by retention of these structures and would like to <br />further evaluate whether to retain or remove all or some of these features. The Reclamation Plan <br />calls for demolition of these structures by year-end. <br />AEP recognizes that additional requirements will arise, and it promptly will initiate the <br />procedures to change the owner/operator name for its permits. AEP appreciates the indulgence <br />Snell & Wilmer u a member of LEX MUNDI, a leading association of independent law lions. <br />