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INTRODUCTION <br />Since 1993, Western Fuels - Colorado, LLC (Western Fuels) has mined coal in the area just west <br />of Nucla, Colorado known as the New Horizon Mine. The New Horizon Mine is an open pit <br />mine that removes 60 to 120 feet of overburden material, mines the coal from the seam, replaces <br />the overburden material and restores it to the original profile. The mined area is then reclaimed <br />according to the Colorado Division of Mining and Safety ( "DRMS ") standards. <br />Western Fuels is a largely owned subsidiary of Tri -State Generation and Transmission <br />Association, Inc. All of the supplies from the New Horizon Mine are used as fuel for electricity <br />generation at Tri- State's Nucla Power Plant located south of Nucla. The mine was purchased in <br />1992 from Peabody Coal Company, which had been mining coal in the area since 1963. The <br />mine was closed down from 1988 to 1992, but was reopened by Western Fuels in 1993. <br />Since 1993, Western Fuels has been mining in the New Horizon 2 (NH 2) Permit area. <br />Sometime in the years 2012 to 2013, they will complete mining in the NH 2 area and move their <br />operations to the New Horizon North (NHN) area. It may take approximately 7 to 10 years to <br />mine all the coal in the NHN area. Western Fuels will then move their operation to the Cyprus <br />area for an undetermined amount of time. The exact location of the mine facilities and mining <br />area for Cyprus are not yet known. These areas are shown in Figure 2A in the BBA Report, <br />referenced later in this report <br />The primary means of obtaining surface irrigation water for all lands in the Nucla area is a series <br />of ditches and laterals that come out of the Highline Canal, also known as the Colorado Co- <br />operative (CC) Ditch. The Ditch is decreed for 145 cfs out of the San Miguel River. The CC <br />Ditch has 3250 shares of which Western Fuels owns 115 shares. In addition to its share <br />ownership, Western Fuels also leases additional shares from landowners in the active and <br />previously mined areas at assist with revegetation efforts until final reclamation is accomplished <br />and certified. The irrigation for revegetation and reclamation is accomplished mostly by side - <br />roll sprinkler systems. As necessary, Western Fuels uses both its owned CC Ditch shares as well <br />as leased shares to water the lands within the mining area. <br />When reclaiming the current mined area, vegetation must be restored. Depending on the terms <br />of the agreement with the landowner, the land is either restored as irrigated farm ground or dry- <br />land pasture that will not be irrigated again. To establish dry-land vegetation, it usually must be <br />irrigated for a short time for dry land grass to germinate and grow. Occasionally, DRMS will <br />dictate that all or part the parcel must be established as irrigated land, in which case the land <br />profile is restored and water is applied in accordance with standard agricultural practices. The <br />revegetation must be complete for at least 10 years before the final DRMS review. To date, none <br />of the lands reclaimed in NH 2 have been released from bond by DRMS. <br />As part of the reclamation process, certain lands have been or will be dried -up. These lands may <br />be used for consumptive use credits to offset current and future mining uses. There is also a <br />large area of pre- reclamation lands that have been permanently dried -up. These dry -up areas <br />will be identified and discussed below. <br />According to their mining operations and associated permits, Western Fuels must build and <br />maintain sedimentation ponds at the bottom of each drainage where water would leave the <br />1 <br />