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Ms. Mitchell and Ms. Ris December 14, 2018 Page 7 of 9 At the application stage, the Applicants must include a “description of the source of water to be used to replace all historical return flow obligations, with evidence that the source will provide a firm yield of water.” Criteria, § II.G.1.e (emphasis added). CWCB should condition selection of the CS-U Pilot Project on Applicants’ demonstration in their application that Applicants have refined their return flow plan and identified firm replacement supplies to replace all return flow obligations from the farms, including those obligations that accrue after the ten- year term of the CS-U Pilot Project. The large scale of the CS-U Pilot Project means that return flow obligations, and the potential for injury to other water rights, will also be substantial. By presenting a firm plan to replace return flows, as opposed to a myriad of options and contingencies, Applicants will be able to focus on executing the CS-U Pilot Project and will reduce the risk that the State Engineer would terminate the project because of injury to other water rights. The Criteria permit the CWCB to extend the application deadline to more than 60 days after selection, and Tri-State would support a moderate (30 to 60 day) extension to allow the Applicants to comply with a condition requiring a firm return flow replacement plan at the application stage. C. Need to Obtain Ditch Company Approvals. The Proposal discusses the need for ditch company approvals from the Catlin Canal Company, Fort Lyon Canal Company and Rocky Ford High Line Ditch C ompany. Proposal at 8-9. The Proposal notes the need for ditch company approval of use of company facilities and carriage of non-company water. In addition, ditch company approval may be necessary to (1) transfer shares to different delivery locations under each ditch (e.g. to a location where Applicants have an augmentation station; and (2) to transfer shares to non-agricultural uses outside of the ditch. See Fort Lyon Canal Co. v. Catlin Canal Co., 762 P.2d 1375 (Colo. 1988) (holding that ditch company bylaws conditioning transfers or changes of water rights upon board approval are legally enforceable). These ditch company approvals will be critical to successful operation of the CS-U Pilot Project, and their details may have significant effects on the design of the project. For example, the locations of delivery of substitute supply water and resulting exchange reaches under the Fort Lyon may depend on transferring shares up-ditch, and the Fort Lyon Canal Company may impose terms and conditions to protect other shareholders from changes in ditch loss resulting from the transfer. The CWCB should require that submission of an application for the CS-U Pilot Project include final approvals from all three involved ditch companies. The details of such approvals are expected to provide critical guidance on pilot project operations that will protect other water users in each ditch. Having such approvals in place at the application stage will ensure that the pilot project is able to operate as approved, and will reduce the risk of a shutdown related to a subsequent board decision. The Criteria permit the CWCB to extend the application deadline to more than 60 days after selection, and Tri-State would support a moderate (30 to 60 day)