THE PROJECT Pipeline (1) (2) (5) Storage (3) Flow and Storage (14) Power (6) Users (4)

PIPELINE (5) • The Project

578 mile underground pipeline originating in the Green River Flaming Gorge system in Wyoming and ending near Pueblo Colorado

Follows I-80 (a federally designated energy corridor) through the majority of Wyoming and Existing ROW through most of Colorado

ROUTING (5) • The Project o Pipeline o Pipeline

• The Project

DIVERSION POINTS (1)

Legal filing on the Green River and Flaming Gorge Reservoir/Priority Request for Water Supply Contract

o Pipeline

• The Project

Federal Register Notice of filing on Flaming Gorge with the Bureau of Reclamation 8/22/07

Filing on the Green River with Wyoming State Engineer’s Office 12/07

DIVERSION POINTS (1) o Pipeline

• The Project

WATER DIVERTED (2)

Two separate priorities established for a new water supply

Withdrawal rates from either diversion are adjustable based on changes in flow and storage in the Green River and Flaming Gorge Reservoir respectively Anticipated draw during wet year: ~250,000 ac-ft.

Anticipated draw during average year: ~165,000 ac-ft.

Anticipated draw during dry year: ~120,000 ac-ft.

o Pipeline

• The Project

STORAGE (3)

Flaming Gorge 3.8 MAF existing reservoir

Lake Hattie Existing 100,000 AF reservoir

65,000 AF of storage available

Cactus Hill Proposed 178,000 AF reservoir

T-Cross Ranch (Marlborough Municipal Water District) Proposed 30,000 AF reservoir

Additional Storage should be added to meet policy objectives and risk management

• The Project

PROPOSED STORAGE o Storage

• The Project

FLOW & STORAGE (14) GLOBAL WARMING MODELS INDICATE GREEN RIVER BASIN TO BE

WETTER THAN AVERAGE

[T]here are differences between the two basins and augmentation potential exists. Particularly in years when the Green River flows are relatively higher than the Colorado River flows (green bars in the Figure)… In summary, there are 17 out of the 33 shown when the Green is wetter than the Colorado.

• The Project

POWER (6)

Energy required for Delivery ~125,000 kW annually

Total for 9 Pump stations from FG/GR to Pueblo

~$70 million/year operational costs

Delivery of 200,000 ac-ft. ~$.95 to $1.07 per 1000 gallons of water Cost per 1000 gallons.

Energy Generated In line

~70,000 kW

Pumped Storage Proposed 500,000 to 1,000,000 kW

• The Project

ALTERNATIVE ENERGY(6) • The Project

USERS (4)

Letters of Interest Totaling 358,500 ac-ft. as of Jan 2010 Municipal, industrial and Ag

interest

In both Wyoming to Colorado

Anticipate more interest and hard contracts closer to final permit

• The Project

USERS MAP (4) • The Project

THE COSTS Project (7)

Ratepayers (8)

PROJECT FINANCING (7)

Project will follow a PFI/PPP model Issued RFP for Design/Build/Finance/Operate

concessionaire

$5MM plus invested to date No taxpayer dollars

$250MM dollar Previous Term Sheet from a well-known global institutional investor to invest in pipeline construction

• The Costs

RATEPAYER COSTS (8)

The anticipated capital cost to ratepayers is $42 to $51 per 1000 gallons $3 B Project cost

Cost plus model to users

Compared to the most recent Prairie Waters Project (Aurora) $760 MM Project

Initial yield of 10,000 ac-ft. annually $233 per 1000 gallons

• The Costs

CURRENT STANDING Due Diligence (9)

Permitting (10)

DUE DILIGENCE (9)

Sampling of the several hundred Legal/Financial/Technical/Environmental & Research due diligence documents

• Current Standing

BOYLE REPORT

This initial feasibility assessment of the RWSP focuses on the following considerations: Water Availability – historic flows and the volumes of water that might potentially be available to the

RWSP considering Colorado River Compact entitlements to Colorado and other states and emerging water management strategies for Flaming Gorge Reservoir

Water Demands – the types and general magnitude of current and future demands that might be served by the project using the State of Colorado’s Statewide Water Supply Initiative (SWSI) as the primary data source

Preliminary Layouts of RWSP infrastructure – the types of diversion, conveyance and delivery facilities that would be needed

General Environmental Considerations – a comparison of the Green River water supply versus other potential water sources, endangered species recovery in relation to the Flaming Gorge Reservoir Environmental Impact Study, and other special species, habitat or land use.

Schedule – the likely timeframes required for future RWSP planning, design, permitting and construction activities

o Due Diligence

• Current Standing

BOYLE REPORT o Due Diligence

• Current Standing

BOYLE REPORT o Due Diligence

• Current Standing

• Risk ENVIRONMENTAL PROTECTION RECORD OF DECISION FEB. 2006 o Due Diligence

• Current Standing

BUREAU OF RECLAMATION WATER AVAILABILITY ESTIMATE o Due Diligence

• Current Standing

“Reclamation has completed an analysis of the amount of water that may be available for diversion and contracting from Flaming Gorge Reservoir. The analysis presumes that Wyoming, Colorado, and Utah will continue to develop their water supplies, continued compliance with the flow recommendations adopted in the 2006 Flaming Gorge Environmental Impact Statement and Record of Decision, and continued use of the active storage pool, which protects the power pool.” -3/20/07

PERMITTING (10)

U.S. Army Corps of Engineers (“COE”) initiated formal EIS/NEPA process (03/09) ENSR, AECOM,

Submitted (to COE) formal Letters of Interest totaling 358,000 acre feet from 17 entities representing municipal, agricultural and private users in Colorado and Wyoming (01/10)

COE developing Purpose and Need, finalized public scoping, initiated socio-economic studies and preliminary water modeling (02/10)

Initiated preliminary permit application to FERC for permitting hydropower production and water supply (09-11)

• Current Standing

RISK QUESTIONS Compact Curtailment (11)

Water Rights (12)

Concerns and Mitigation (13)

Administration will be particularly important should it be necessary for Colorado water rights to be curtailed to supply the Lower Basin. Colorado law will determine what Colorado water will be curtailed in the event of a Compact “call”.

Under the Colorado River Compact, there will be no “call” unless the Upper Basin fails to deliver 7.5 million acre-feet at Lee Ferry during any consecutive 10-year period. Since the Compact was adopted, this never has happened. The ability to adjust over a 10-year period, substantial under-use of Wyoming’s Compact share, the role of Lake Powell, and the agreement among the Upper and Lower Basin states to coordinate the operation of Lakes Powell and Mead so as to avoid curtailment of uses in the Upper Basin all militate against there being a Compact “call”.

Should there, nonetheless, be an under delivery to the Lower Basin over a 10-year period, the Upper Basin Compact specifies how the shortfall shall be met. If an Upper Basin state has taken more than its share of water, that state first must replace its overdraft. New Mexico’s Compact apportionment is almost fully used now; Utah will increase its use substantially with the Lake Powell pipeline. Therefore, it is reasonable to expect that curtailment would operate first against water rights in New Mexico and Utah.

Should further curtailment be necessary, each state will bear part of the obligation, based upon its water use from the Colorado River system during the preceding year. This situation would require Colorado to determine which of its water rights, including the Green River project, must be curtailed. Water rights perfected before November 24, 1922 are excluded.

COMPACT CURTAILMENT (11) • Risk

“... for the purposes, among others, of regulating the flow of the Colorado River, storing water for beneficial consumptive use, making it possible for the States of the Upper Basin to utilize, consistently with the provisions of the Colorado River Compact, the apportionments made to and among them in the Colorado River Compact and the Upper Colorado River Basin Compact, respectively, providing for the reclamation of arid and semiarid land, for the control of floods, and for the generation of hydroelectric power, as an incident of the foregoing purposes …” (Reclamation 2004).

WATER RIGHTS (12) • Risk

Under the Upper Colorado River Compact, water diverted in one state and put to beneficial use in another is charged against the Compact allocation of the state of use.

Based upon an analysis of historical flows, the Bureau of Reclamation has determined that the Upper Basin is entitled to slightly over 6 million acre-feet of water each year. Colorado’s apportionment of the amount available is 51.75 %.

Other states have proceeded to develop their remaining Compact apportionments. New Mexico is pursuing the Navajo – Gallup project pursuant to the Bureau’s determination. Utah is proceeding with the Lake Powell pipeline to St. George. These developments will nearly consume both states’ Compact apportionments, but they have chosen to move forward to meet their water needs.

As part of the on-going SWSI process, the Colorado Water Conservation Board has assessed the amount of water available to Colorado under its Compact share. The CWCB study determined that even after development between now and 2030, Colorado will have an undeveloped share of 302,000 – 654,000 acre-feet available.

The Bureau of Reclamation has modeled the amount of water available to be contracted to RWSP. The Bureau assumed that the Upper Basin states would develop new projects they have identified, that flows below Flaming Gorge Reservoir would be maintained at the levels established by a recent Record of Decision as needed to protect endangered fish, and that reservoir water levels would be maintained as needed to generate electricity.

WATER RIGHTS (12) • Risk

Environmental Impacts to Green River

Impacts to Flaming Gorge

Routing

Non-Native Species Transfer

Water Quality

Recreation Impacts to non-native fly fisheries

Reservoir levels

Impacts to non-native salmon spawn

Socio-Economic West Slope Interests

Project Administration

Agricultural Needs

Wyoming Impact Issues

Tourism

Development

Recreation

CONCERNS & MITIGATION (13) • Risk

Flaming Gorge Pipeline Lake Powell Pipeline

570+ Mile Pipeline

Diversion Point in Wyoming From Legal Colorado River

Tributary

For use in WY and CO

Diverting ~200,000 ac-ft.

Anticipate FERC as lead EIS agency

130+ Mile Pipeline

Diversion Point in Arizona From Legal Colorado River

Tributary

For use in UT

Diverting ~100,000 ac-ft.

FERC lead EIS agency based on hydropower elements

There are those who suggest that Colorado [and Wyoming] should not develop [their] remaining Compact entitlement because further development might precipitate a Compact call. Other states, however, are proceeding. If Colorado [and Wyoming] hesitates, [they] subsidize development by [their] sister states, while depriving [themselves] of needed water. In most if not all years, water is available for Colorado [and Wyoming’s] use. It would be far better to develop [their] entitlement, then to manage the resource in dry years so as to avoid a Compact call than to forego the water.

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