[Federal Register Volume 73, Number 71 (Friday, April 11, 2008)]
[Notices]
[Pages 19873-19892]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-7760]


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DEPARTMENT OF THE INTERIOR

Bureau of Reclamation


Colorado River Interim Guidelines for Lower Basin Shortages and 
Coordinated Operations for Lake Powell and Lake Mead

AGENCY: Bureau of Reclamation, Interior.

ACTION: Notice of Availability of the Record of Decision for the 
adoption of Colorado River Interim Guidelines for Lower Basin Shortages 
and Coordinated Operations for Lake Powell and Lake Mead.

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SUMMARY: The Department of the Interior, acting through the Bureau of 
Reclamation, published a Federal Register notice on November 2, 2007 
(72 FR 62272) which informed the public of the availability of the 
final environmental impact statement on the proposed adoption of 
specific Colorado River Lower Basin shortage guidelines and coordinated 
reservoir management strategies to address the operations of Lake 
Powell and Lake Mead, particularly under low reservoir conditions, 
through 2026. We are now notifying the public that the Secretary of the 
Interior signed the Record of Decision (ROD) on December 13, 2007. The 
text of the ROD is found below.

FOR FURTHER INFORMATION CONTACT: Terrance J. Fulp, Ph.D., at (702) 293-
8500 or e-mail at [email protected]; and/or Randall Peterson at 
(801) 524-3633 or e-mail at [email protected].
    The ROD is electronically available on Reclamation's project Web 
site at: http://www.usbr.gov/lc/region/programs/strategies.html. 
Alternatively, a compact disc or hard copy is available upon written 
request to: Regional Director, Lower Colorado Region, Bureau of 
Reclamation, Attention: BCOO-1005, P.O. Box 61470, Boulder City, Nevada 
89006-1470; fax at (702) 293-8156; or e-mail at [email protected].

    Dated: March 28, 2008.
Dirk Kempthorne,
Secretary, Department of the Interior.

Record of Decision; Colorado River Interim Guidelines for Lower Basin 
Shortages and the Coordinated Operations for Lake Powell and Lake Mead 
(December 2007)

    Recommending Official: Robert Johnson, Commissioner, Bureau of 
Reclamation, December 13, 2007.
    Approved: Dirk Kempthorne, Secretary of the Department of the 
Interior, December 13, 2007.

Record of Decision; Colorado River Interim Guidelines for Lower Basin 
Shortages and the Coordinated Operations for Lake Powell and Lake Mead 
Final Environmental Impact Statement (November 2007)

I. Introduction

    The Colorado River Basin (Basin) is in the eighth year of drought--
the worst eight-year period in over a century of continuous 
recordkeeping. Reservoir elevations have declined over this period and 
the duration of this ongoing, historic drought is unknown. This is the 
first long-term drought in the modern history of the Colorado River, 
although climate experts and scientists suggest droughts of this 
severity have occurred in the past and are likely to occur in the 
future. The Colorado River provides water to two nations, and to users 
within seven western states. With over 27 million people relying on the 
Colorado River for drinking water in the United States, and over 3.5 
million acres of farmland in production in the Basin, the Colorado 
River is the single most important natural resource in the Southwest.
    The Secretary of the Interior (Secretary) has a unique role on the 
Colorado River--charged with management of a vast system of dams and 
reservoirs that have provided water for the development of the 
Southwest.
    Under these conditions, conflict over water is unsurprising and 
anticipated. Declining reservoir levels in the Basin led to interstate 
and inter-basin tensions. As the agency charged with management of the 
Colorado River, the Department of the Interior (Department) had not yet 
developed operational rules for the full range of operations at Lake 
Powell and Lake Mead because these types of low-reservoir conditions 
had simply not yet occurred.
    Against this background, at the direction of the Secretary, the 
Department initiated a public process in May of 2005 to develop 
additional operational guidelines and tools to meet the challenges of 
the drought in the Basin. While water storage in the massive reservoirs 
afforded great protection against the drought, the Department set a 
goal to have detailed, objective operational tools in place by the end 
of 2007 in order to be ready to make informed operational decisions if 
the reservoirs continued to decline.
    During the public process, a unique and remarkable consensus 
emerged in the basin among stakeholders including the Governor's 
representatives of the seven Colorado River Basin States (Basin 
States). This consensus had a number of common themes: encourage 
conservation, plan for shortages, implement closer coordination of 
operations of Lake Powell and Lake Mead, preserve flexibility to deal 
with further challenges such as climate change and deepening drought, 
implement operational rules for a long--but not permanent--period in 
order to gain valuable operating experience, and continue to have the 
federal government facilitate--but not dictate--informed decision-
making in the Basin.
    Today, this Record of Decision (ROD) constitutes the Department's 
final decision after facilitating, analyzing, and considering public 
input over the past two and one-half years, during which the ongoing 
drought continued to focus nationwide attention on the Basin. A broad 
range of considerations have been analyzed, involving water supply, 
environmental protection, hydropower production, and recreation--all 
benefits that flow from the management of the Colorado River.
    This document is the ROD of the Department of the Interior, 
regarding the Preferred Alternative for Colorado River

[[Page 19874]]

Interim Guidelines for Lower Basin Shortages and Coordinated Operations 
of Lake Powell and Lake Mead (Guidelines). The Secretary is vested with 
the responsibility of managing the mainstream waters of the lower 
Colorado River pursuant to federal law. This responsibility is carried 
out consistent with applicable federal law.
    The Bureau of Reclamation (Reclamation), the agency that is 
designated to act on the Secretary's behalf with respect to these 
matters, is the lead federal agency for the purposes of the National 
Environmental Policy Act. The Final Environmental Impact Statement--
Colorado River Interim Guidelines for Lower Basin Shortages and 
Coordinated Operations for Lake Powell and Lake Mead, dated October 
2007 (FES-07-37) (Final EIS), was prepared pursuant to the National 
Environmental Policy Act of 1969 (NEPA), as amended, the Council on 
Environmental Quality's (CEQ's) Regulations for Implementing the 
Procedural Provisions of NEPA (40 Code of Federal Regulations [CFR] 
parts 1500 through 1508), Department of the Interior Policies, and 
Reclamation's NEPA Handbook. The Final EIS was filed with the 
Environmental Protection Agency (EPA) on October 26, 2007 and noticed 
by EPA (72 FR 62229) and Reclamation (72 FR 62272) in the Federal 
Register on November 2, 2007.
    The Final EIS was prepared by Reclamation to address the 
formulation and evaluation of specific interim guidelines for shortage 
determinations and coordinated reservoir operations, and to identify 
the potential environmental effects of implementing such guidelines. 
The Final EIS addresses the environmental issues associated with, and 
analyzes the environmental consequences of various alternatives for 
specific interim guidelines. The alternatives addressed in the Final 
EIS are those Reclamation determined would meet the purpose of and need 
for the federal action and represented a broad range of the most 
reasonable alternatives.
    The Bureau of Indian Affairs (BIA), Fish and Wildlife Service 
(FWS), National Park Service (NPS), Western Area Power Administration 
(Western) and the United States Section of the International Boundary 
and Water Commission (USIBWC) are cooperating agencies for purposes of 
assisting with the environmental analysis in the Final EIS.
    The BIA has responsibility for the administration and management of 
lands held in trust by the United States for American Indians (Indian) 
and Indian tribes located within the Basin. Developing forestlands, 
leasing assets on these lands, directing agricultural programs, 
protecting water and land rights, developing and maintaining 
infrastructure, and economic development are all part of the BIA's 
responsibility.
    FWS manages four national wildlife refuges along the Colorado 
River. Among its many other key functions, the FWS administers and 
implements federal wildlife laws, protects endangered species, manages 
migratory birds, restores nationally significant fisheries, conserves 
and restores wildlife habitat such as wetlands, and assists foreign 
governments with international conservation efforts.
    The NPS administers areas of national significance along the 
Colorado River, including Glen Canyon National Recreation Area, Grand 
Canyon National Park, and Lake Mead National Recreation Area. The NPS 
conserves natural and cultural resources and administers visitor use, 
and also grants and administers concessions for the operation of 
marinas and other recreation facilities at Lake Powell and Lake Mead, 
as well as concessions' operations along the Colorado River between 
Glen Canyon Dam and Lake Mead.
    Western markets and transmits power generated from the various 
hydropower plants located within the Basin operated by Reclamation. 
Western customers include municipalities, cooperatives, public utility 
and irrigation districts, federal and state agencies, investor-owned 
utilities, and Indian tribes located throughout the Basin.
    The USIBWC is the United States component of a bi-national 
organization responsible for administration of the provisions of the 
February 3, 1944 Treaty between the United States and Mexico Relating 
to the Utilization of the Waters of the Colorado and Tijuana Rivers and 
of the Rio Grande (1944 Treaty), which includes the Colorado River 
waters allotted to Mexico, protection of lands along the Colorado River 
from floods by levee and floodway construction projects, resolution of 
international boundary water sanitation and other water quality 
problems, and preservation of the Colorado River as the international 
boundary. The International Boundary and Water Commission (IBWC) 
consists of the United States Section and the Mexican Section, which 
have their headquarters in the adjoining cities of El Paso, Texas and 
Ciudad Juarez, Chihuahua, respectively.

II. Decision

    The recommendation is the approval of the following federal action: 
The adoption of specific interim guidelines for Lower Basin shortages 
and coordinated operations of Lake Powell and Lake Mead, as provided 
below in Section XI. These interim Guidelines are based upon the 
Preferred Alternative analyzed in the Final EIS, and include several 
operational refinements as a result of public input, described below in 
Section VII. The interim Guidelines would be used each year by the 
Department in implementing the Criteria for Coordinated Long-Range 
Operation of Colorado River Reservoirs Pursuant to the Colorado River 
Basin Project Act of September 30, 1968 (Long-Range Operating Criteria 
or Operating Criteria or LROC), through issuance of the Annual 
Operating Plan for Colorado River Reservoirs (AOP). The Guidelines 
would remain in effect for determinations to be made through 2025 
regarding water supply and reservoir operating decisions through 2026, 
as provided below in Section 8 of the Guidelines.
    The Preferred Alternative proposes:
     Discrete levels of shortage volumes associated with Lake 
Mead elevations to conserve reservoir storage and provide water users 
and managers in the Lower Basin with greater certainty to know when, 
and by how much, water deliveries will be reduced in drought and other 
low reservoir conditions;
     A coordinated operation of Lake Powell and Lake Mead 
determined by specified reservoir conditions that would minimize 
shortages in the Lower Basin and avoid the risk of curtailments in the 
Upper Basin;
     A mechanism to encourage and account for augmentation and 
conservation of water supplies, referred to as Intentionally Created 
Surplus (ICS), that would minimize the likelihood and severity of 
potential future shortages; and
     The modification and extension of the Interim Surplus 
Guidelines (66 Fed. Reg. 7772, Jan 25, 2001) (ISG) through 2026.

III. Background

    The Secretary, acting through Reclamation, is responsible for water 
management throughout the western United States. Reclamation's 
authority is limited throughout the west by the limiting provisions of 
Reclamation law, beginning with the Reclamation Act of 1902.
    The Secretary also has a broader and unique legal role as he 
manages the lower Colorado River system in

[[Page 19875]]

accordance with federal law, including the Boulder Canyon Project Act 
of 1928, the 1963 Decision of the U.S. Supreme Court in Arizona v. 
California, the 2006 Consolidated Decree of the U.S. Supreme Court in 
Arizona v. California (Consolidated Decree), the Colorado River Basin 
Project Act of 1968 (CRBPA), the LROC, and the Grand Canyon Protection 
Act of 1992, and other applicable provisions of federal law. Within 
this legal framework, the Secretary makes annual determinations 
regarding the availability of water from Lake Mead by considering 
various factors, including the amount of water in system storage and 
predictions for natural runoff. The CRBPA directed the Secretary to 
propose and adopt criteria: ``In order to comply with and carry out the 
provisions of the Colorado River Compact, the Upper Colorado River 
Basin Compact, and the Mexican Water Treaty, * * * for the coordinated 
long-range operation of the reservoir constructed and operated under 
the authority of the Colorado River Storage Project Act, the Boulder 
Canyon Project Act, and the Boulder Canyon Project Adjustment Act.''
    Pursuant to the CRBPA, the narrative provisions of LROC are 
utilized by the Secretary, on an annual basis, to make determinations 
with respect to the projected plan of operations of the storage 
reservoirs in the Basin. The AOP is prepared by Reclamation, acting on 
behalf of the Secretary, in consultation with representatives of the 
Basin States and other parties, as required by federal law. In the AOP, 
with respect to operations of Hoover Dam, the Secretary is required to 
determine when Normal, Surplus, or Shortage conditions occur in the 
lower Colorado River, based on various factors including storage and 
hydrologic conditions in the Basin.
    As described in the Final EIS:
     A ``Normal Condition'' exists when the Secretary 
determines that sufficient mainstream water is available to satisfy 7.5 
million acre-feet (maf) of annual consumptive use in the Lower Division 
states (Arizona, California, and Nevada). If a state will not use all 
of its apportioned water for the year, the Secretary may allow other 
states of the Lower Division to use the unused apportionment, provided 
that the use is authorized by a water delivery contract with the 
Secretary.
     A ``Surplus Condition'' exists when the Secretary 
determines that sufficient mainstream water is available for release to 
satisfy consumptive use in the Lower Division states in excess of 7.5 
maf annually. The water available for excess consumptive use is surplus 
and is distributed for use in Arizona, California, and Nevada pursuant 
to the terms and conditions provided in the ISG. The current provisions 
of the ISG are scheduled to terminate in 2016. In general terms, the 
ISG link the availability of surplus water to the elevation of Lake 
Mead. When Lake Mead is full and Reclamation is making flood control 
releases, surplus supplies are unlimited. As Lake Mead's elevation 
drops, surplus water amounts are reduced, and ultimately eliminated. 
The ISG also link surplus availability to continued progress by 
California in reducing its agricultural use of water to benchmarks 
established in the ISG. If a state does not use all of its apportioned 
water for the year, the Secretary may allow other Lower Division states 
to use the unused apportionment, provided that the use is authorized by 
a water delivery contract with the Secretary.
     A ``Shortage Condition'' exists when the Secretary 
determines that insufficient mainstream water is available to satisfy 
7.5 maf of annual consumptive use in the Lower Division states. To 
date, the Secretary has never made such a determination, as flow in the 
Colorado River has been sufficient to meet Normal or Surplus delivery 
amounts. When making a shortage determination, the Secretary must 
consult with various parties as set forth in the Consolidated Decree 
and consider all relevant factors as specified in the LROC, including 
1944 Treaty obligations, the priorities set forth in the Consolidated 
Decree, and the reasonable consumptive use requirements of mainstream 
water users in the Lower Division states. If a state does not use all 
of its apportioned water for the year, the Secretary may allow other 
Lower Division states to use the unused apportionment, provided that 
the use is authorized by a water delivery contract with the Secretary.
    As discussed above, during the period from 2000 to 2007, the 
Colorado River has experienced the worst drought conditions in 
approximately one hundred years of recorded history. This drought in 
the Basin has reduced Colorado River system storage, while demands for 
Colorado River water supplies have continued to increase. From October 
1, 1999 through September 30, 2007, storage in Colorado River 
reservoirs fell from 55.8 maf (approximately 94 percent of capacity) to 
32.1 maf (approximately 54 percent of capacity), and was as low as 29.7 
maf (approximately 52 percent of capacity) in 2004. This drought was 
the first sustained drought experienced in the Basin at a time when all 
major storage facilities were in place, and when use by the Lower 
Division states met or exceeded the annual ``normal'' apportionment of 
7.5 maf pursuant to Article II(B)(1) of the Consolidated Decree.
    Currently, the Department does not have specific operational 
guidelines in place to address the operations of Lake Powell and Lake 
Mead during drought and low reservoir conditions. To date, storage of 
water and flows in the Colorado River have been sufficient so that it 
has not been necessary to reduce Lake Mead annual releases below 7.5 
maf; that is, the Secretary has never reduced deliveries by declaring a 
``shortage'' on the lower Colorado River. Without operational 
guidelines in place, however, water users in the Lower Division states 
who rely on Colorado River water are not currently able to identify 
particular reservoir conditions under which the Secretary would reduce 
the annual amount of water available for consumptive use from Lake Mead 
to the Lower Division states below 7.5 maf. Nor are these water users 
able to identify the frequency or magnitude of any potential future 
annual reductions in their water deliveries.
    Accordingly, the Secretary, acting through Reclamation, proposes 
adoption of specific Colorado River Lower Basin shortage guidelines and 
coordinated reservoir management strategies to address operations of 
Lake Powell and Lake Mead, particularly under drought and low reservoir 
conditions. These Guidelines are found at Section XI of this ROD. This 
action is proposed in order to provide a greater degree of certainty to 
United States Colorado River water users and managers of the Basin by 
providing detailed, and objective guidelines for the operations of Lake 
Powell and Lake Mead, thereby allowing water users in the Lower Basin 
to know when, and by how much, water deliveries will be reduced in 
drought and other low reservoir conditions.
    The Secretary has also determined the desirability of developing 
additional operational guidelines that will provide for releases 
greater than or less than 8.23 maf from Lake Powell. To further enhance 
this coordinated reservoir approach, the Secretary has determined a 
need for guidelines that provide water users in the Lower Division 
states the opportunity to conserve and take delivery of water in and 
from Lake Mead for the purposes of enhancing existing water supplies, 
particularly under low reservoir conditions. In addition, the Secretary 
has determined the need to modify and extend the ISG to coincide with 
the duration of the proposed new Guidelines. This will provide an 
integrated approach for reservoir management and more

[[Page 19876]]

predictability for future Lower Division water supplies.

IV. Alternatives Considered

    The purpose of the proposed federal action is to:
     Improve Reclamation's management of the Colorado River by 
considering trade-offs between the frequency and magnitude of 
reductions of water deliveries, and considering the effects on water 
storage in Lake Powell and Lake Mead, and on water supply, power 
production, recreation, and other environmental resources;
     Provide mainstream United States users of Colorado River 
water, particularly those in the Lower Division states, a greater 
degree of predictability with respect to the amount of annual water 
deliveries in future years, particularly under drought and low 
reservoir conditions; and
     Provide additional mechanisms for the storage and delivery 
of water supplies in Lake Mead to increase the flexibility of meeting 
water use needs from Lake Mead, particularly under drought and low 
reservoir conditions.
    This proposed federal action considers four operational elements 
that collectively are designed to address the purpose and need for the 
proposed federal action. The interim Guidelines would be used by the 
Secretary to:
     Determine those circumstances under which the Secretary 
would reduce the annual amount of water available for consumptive use 
from Lake Mead to the Colorado River Lower Division states below 7.5 
maf (a ``Shortage'') pursuant to Article II(B)(3) of the Consolidated 
Decree;
     Define the coordinated operation of Lake Powell and Lake 
Mead to provide improved operation of these two reservoirs, 
particularly under low reservoir conditions;
     Allow for the storage and delivery, pursuant to applicable 
federal law, of conserved Colorado River system and non-system water in 
Lake Mead to increase the flexibility of meeting water use needs from 
Lake Mead, particularly under drought and low reservoir conditions; and
     Determine those conditions under which the Secretary may 
declare the availability of surplus water for use within the Lower 
Division states. The proposed federal action would modify the substance 
of the existing ISG and the term of the ISG from 2016 through 2026.
    Six alternatives are considered and analyzed in the Final EIS. The 
alternatives consist of a No Action Alternative and five action 
alternatives. The five action alternatives are: Basin States 
Alternative, Conservation Before Shortage Alternative, Water Supply 
Alternative, Reservoir Storage Alternative, and the Preferred 
Alternative. The action alternatives reflect input from Reclamation 
staff, the cooperating agencies, stakeholders, and other interested 
parties.
    Reclamation received two written proposals for alternatives that 
met the purpose and need of the proposed federal action, one from the 
Basin States and another from a consortium of environmental non-
governmental organizations (NGO). These proposals were used by 
Reclamation to formulate two of the alternatives considered and 
analyzed in the Final EIS (Basin States Alternative and Conservation 
Before Shortage Alternative). A third alternative (Water Supply 
Alternative) was developed by Reclamation, and a fourth alternative 
(Reservoir Storage Alternative) was developed by Reclamation in 
coordination with the NPS and Western. The No Action Alternative and 
the action alternatives analyzed in the Draft EIS were posted on 
Reclamation's project Web site (http://www.usbr.gov/lc/region/programs/strategies.html) on June 30, 2006.
    A fifth alternative, the Preferred Alternative, was developed (and 
included in the Final EIS) after consideration of the comments received 
on the Draft EIS and further analysis. The Preferred Alternative was 
posted on Reclamation's project Web site on June 15, 2007 and is 
composed of operational elements from the action alternatives 
identified and analyzed in the Draft EIS.
    The Preferred Alternative is the most reasonable and feasible 
alternative; all environmental effects of this alternative, as well as 
the No Action Alternative and the remaining four action alternatives 
have been fully analyzed in the Final EIS. The identified environmental 
effects of the Preferred Alternative are well within the range of 
anticipated effects of the alternatives presented in the Draft EIS and 
do not affect the environment in a manner not already considered in the 
Draft EIS.
    Reclamation identified the Preferred Alternative and the 
Conservation Before Shortage Alternative as the environmentally 
preferred alternatives, as provided in 50 CFR 1505.2. The combination 
of the ICS mechanism and the coordinated operations between Lake Powell 
and Lake Mead maintains and enhances water supply and environmental 
benefits at both reservoirs. In addition, these alternatives strike an 
appropriate balance between the storage of water for future deliveries 
and the lack of disruption of near-term water deliveries.
    Reclamation selected from among the four key operational elements 
disclosed in the Draft EIS to formulate the Preferred Alternative. 
Reclamation has determined that the four operational elements selected 
under this alternative best meet all aspects of the purpose and need of 
the proposed federal action.

A. No Action Alternative

    The No Action Alternative represents a projection of future 
conditions that could occur during the life of the proposed federal 
action without an action alternative being implemented. It provides a 
baseline for comparison of each of the action alternatives.
    Pursuant to LROC, the Secretary makes a number of determinations at 
the beginning of each operating year through the development and 
execution of the AOP, including the water supply available to users in 
the Lower Basin and the annual release from Lake Powell. However, the 
LROC currently does not include specific guidelines for such 
determinations. Furthermore, there is no actual operating experience 
under low reservoir conditions, i.e., there has never been a shortage 
determination in the Lower Basin. Therefore, in the absence of specific 
guidelines, the outcome of the annual determination in any particular 
year in the future cannot be precisely known. However, a reasonable 
representation of future conditions under the No Action Alternative is 
needed for comparison to each action alternative. The modeling 
assumptions used for this representation are consistent with the 
assumptions used in previous environmental compliance documents for the 
ISG, the Colorado River Water Delivery Agreement, and the Lower 
Colorado River Multi-Species Conservation Program (LCR MSCP). However, 
the assumptions used in the No Action Alternative are not intended to 
limit or predetermine these decisions in any future AOP determination.

B. Basin States Alternative

    The Basin States Alternative was developed by the Basin States and 
proposes a coordinated operation of Lake Powell and Lake Mead that 
would minimize shortages in the Lower Basin and avoid risk of 
curtailments of Colorado River water use in the Upper Basin. This 
alternative includes shortages to conserve reservoir storage; 
coordinated operations of Lake Powell and Lake Mead determined by 
specified reservoir conditions; a mechanism for the creation, 
accounting, and delivery of conserved system and non-system water 
(ICS); and a modification and extension of the ISG through 2026.

[[Page 19877]]

C. Conservation Before Shortage Alternative

    The Conservation Before Shortage Alternative was developed by a 
consortium of environmental NGOs, and includes voluntary, compensated 
reductions (shortages) in water use to minimize involuntary shortages 
in the Lower Basin and to avoid risk of curtailments of Colorado River 
water use in the Upper Basin. This alternative includes voluntary 
shortages prior to involuntary shortages; coordinated operations of 
Lake Powell and Lake Mead determined by specified reservoir conditions; 
an expanded ICS mechanism for the creation, accounting, and delivery of 
conserved system and non-system water, including water for 
environmental uses; and modification and extension of the ISG through 
2026. There are two aspects of the Conservation Before Shortage 
proposal that are unique to the Conservation Before Shortage 
Alternative: A funding mechanism for the voluntary conservation 
program, and a recommendation that a portion of the conserved water be 
used to benefit the environment. However, as noted in the Final EIS, 
the viability of the Conservation Before Shortage program funding 
proposal is not known at this time. The Department currently does not 
have the authority to implement all facets of this proposal and 
additional legislation would be necessary to gain such authority.

D. Water Supply Alternative

    The Water Supply Alternative maximizes water deliveries at the 
expense of retaining water in storage in the reservoirs for future use. 
This alternative would reduce water deliveries only when insufficient 
water to meet entitlements is available in Lake Mead. When reservoir 
elevations are relatively low, Lake Powell and Lake Mead would share 
water (``balance contents''). This alternative does not include a 
mechanism for the creation, accounting, and delivery of conserved 
system and non-system water in Lake Mead. The existing ISG would be 
extended through 2026.

E. Reservoir Storage Alternative

    The Reservoir Storage Alternative was developed in coordination 
with the cooperating agencies and other stakeholders, primarily Western 
and the NPS. This alternative would keep more water in storage in Lake 
Powell and Lake Mead by reducing water deliveries and by increasing 
shortages to retain more water in storage and thereby, benefit power 
and recreational interests. This alternative includes larger, more 
frequent shortages that serve to conserve reservoir storage; 
coordinated operations of Lake Powell and Lake Mead determined by 
specified reservoir conditions (more water would be held in Lake Powell 
than under the Basin States Alternative); and an expanded mechanism for 
the creation, accounting, and delivery of conserved system and non-
system water in Lake Mead. The existing ISG would be terminated after 
2007.

F. Preferred Alternative

    The Preferred Alternative incorporates operational elements 
identified in the Basin States and Conservation Before Shortage 
alternatives. This alternative includes shortages to conserve reservoir 
storage and a coordinated operation of Lake Powell and Lake Mead 
determined by specified reservoir conditions that would minimize 
shortages in the Lower Basin and avoid risk of curtailments of use in 
the Upper Basin; and also adopts the ICS mechanism for promoting water 
conservation in the Lower Basin. It is anticipated that the maximum 
cumulative amount of ICS would be 2.1 maf pursuant to Section XI.D. of 
this ROD; however, the potential effects of a maximum cumulative amount 
of ICS of up to 4.2 maf have been analyzed in the Final EIS. This 
alternative also includes modification and extension of the ISG through 
2026.\1\
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    \1\ It is anticipated that elements of the decision adopted by 
this ROD will be implemented through a number of agreements. The 
following agreements are anticipated to be executed at or about the 
time of issuance of this ROD:
     Delivery Agreement between the United States and 
Imperial Irrigation District (IID)
     Delivery Agreement between the United States and The 
Metropolitan Water District of Southern California (MWD)
     Delivery Agreement between the United States, Southern 
Nevada Water Authority (SNWA) and the Colorado River Commission of 
Nevada (CRCN)
     Funding and Construction of the Lower Colorado River 
Drop 2 Storage Reservoir Project Agreement among the United States, 
SNWA, and CRCN
     Lower Colorado River Basin Intentionally Created 
Surplus Forbearance Agreement among the Arizona Department of Water 
Resources, the Southern Nevada Water Authority, CRCN, the Palo Verde 
Irrigation District (PVID), IID, Coachella Valley Water District 
(CVWD), MWD, and the City of Needles
     California Agreement for the Creation and Delivery of 
Extraordinary Conservation Intentionally Created Surplus among the 
PVID, IID, CVWD, MWD and the City of Needles.
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V. Basis for Decision

    In 2005, tensions among the Basin States brought the basin closer 
to multi-state and inter-basin litigation than perhaps any time since 
the adoption of the Compact. On May 2, 2005, in a decision of the 
Secretary, the Department outlined a number of fundamental 
considerations that would guide the NEPA process that concludes with 
the adoption of this ROD. These considerations include:
     Concern regarding the impacts of drought throughout the 
Colorado River Basin;
     A recognition of the recent history of close and 
productive working relationships among the Basin States;
     A belief that discussions among the states could 
facilitate the development of additional tools to improve coordinated 
operation of Colorado River reservoirs;
     A preference that operational strategies not be developed 
in the AOP setting, which is used by the Department to annually 
implement operational strategies that are developed through separate, 
public processes;
     An intention to develop operational tools that would avoid 
unnecessary, protracted or destabilizing litigation; and
     A commitment to continue to consult with and work with all 
stakeholders in the Basin.
    In light of the severity of the drought, the Department announced 
its intention to complete the development of drought and low-reservoir 
operational tools by December 2007, and to do so through an open, 
public process. In closing, the Secretary expressed the opinion that 
``all parties must work together to find creative solutions that will 
conserve reservoir storage and help to minimize the adverse effects of 
drought in the Colorado River Basin.''
    The fundamental basis for this decision is that each of the above 
foundational considerations have been honored and achieved through the 
development of a consensus seven-state recommendation that has been 
incorporated, as appropriate, into the Preferred Alternative adopted 
herein today.
    The Department selected the Preferred Alternative based on the 
Department's determination that it best meets all aspects of the 
purpose and need for the federal action, including: The need to remain 
in place for the extended period of the interim Guidelines; the 
desirability of the alternative based on the facilitated consensus 
recommendation from the Basin States; the likely durability of the 
mechanisms adopted in the Preferred Alternative in light of the 
extraordinary efforts that the Basin States and water users have 
undertaken to develop implementing agreements that will facilitate the 
water management tools (shortage sharing, forbearance, and conservation 
efforts)

[[Page 19878]]

identified in the Preferred Alternative; and the range of elements in 
the alternative that will enhance the Secretary's ability to manage the 
Colorado River reservoirs in a manner that recognizes the inherent 
tradeoffs between water delivery and water storage.
    Importantly for the long-term stable management of the Colorado 
River, adoption of this decision activates a legal agreement among the 
Basin States that contains a critically important provision: The Basin 
States have agreed to mandatory consultation provisions to address 
future controversies on the Colorado River through consultation and 
negotiation, as a requirement, before resorting to litigation. With 
respect to the various interests, positions and views of each of the 
seven Basin States, this provision adds an important new element to the 
modern evolution of the legal framework for the prudent management of 
the Colorado River.
    In recent years, in a number of settings, and facing a broad range 
of water management challenges, the Department has highlighted the 
important role of the Basin States in the statutory framework for 
administration of Basin entitlements and the significance that a seven-
state consensus represents. Multi-state consensus is a rare and unique 
achievement that should continue to be recognized and facilitated.
    With respect to the information within the scope of the proposed 
action, Reclamation concluded that the Preferred Alternative is a 
reasonable alternative and fully analyzed the environmental effects of 
this alternative in the Final EIS. The identified environmental effects 
of the Preferred Alternative are well within the range of anticipated 
effects of the alternatives presented in the Draft EIS and do not 
affect the environment in a manner not already considered in the Draft 
EIS. Thus, based on all available information, this alternative is the 
most reasonable, feasible, implementable, and durable alternative.
    Drought is not limited to the Southwest, nor are interstate 
tensions over water management. As a final basis for this decision, the 
Department believes that a model for interstate cooperation can be 
found in the elements of the Preferred Alternative adopted today.

VI. Public Response to the Final Environmental Impact Statement

    Following the Federal Register Notice of Availability of the Final 
EIS on November 2, 2007, and as of 8 p.m. (EST), Tuesday, December 11, 
2007, Reclamation received six comment letters on the Final EIS and the 
updated draft Interim Operational Guidelines for Lake Powell and Lake 
Mead posted November 16, 2007 on Reclamation's project Web site. After 
appropriate consideration, the Department concludes that the comments 
received do not identify or raise any significant issues that would 
require supplementing the Final EIS. The major issues noted in the 
comment letters are summarized below:
    The Basin States submitted a letter expressing their appreciation 
to Reclamation and Department staff for their diligence in working with 
the Basin States and others in developing the draft Guidelines for Lake 
Powell and Lake Mead; and they further stated that the adoption of the 
Guidelines ``represent a significant and historic milestone, reflecting 
the continuation of the consultative approach to river management 
between the federal government and affected states on the Colorado 
River.''
    The San Diego County Water Authority submitted a comment letter 
fully supporting the statements in the Basin States' letter to the 
Secretary on the Final EIS. The Authority also noted their concern that 
the proposed implementation of Guidelines, specifically ICS, should not 
inadvertently conflict with the implementation of certain terms of 
October 10, 2003 Allocation Agreement. The Department agrees that the 
creation, release, or delivery of ICS or the declaration of an ICS 
Surplus Condition in a calendar year shall not constitute a 
determination by the Secretary of the existence of surplus Colorado 
River water in that calendar year for the purposes of Section 9.2.2 of 
the Allocation Agreement Among the United States of America, The 
Metropolitan Water District of Southern California, Coachella Valley 
Water District, Imperial Irrigation District, San Diego County Water 
Authority, the La Jolla, Pala, Pauma, Rincon and San Pasqual Bands of 
Mission Indians, the San Luis Rey River Indian Water Authority, the 
City of Escondido and Vista Irrigation District, dated October 10, 
2003. This understanding has also been expressly stated in the proposed 
Delivery Agreements for IID and MWD (Section V of this ROD).
    The EPA submitted a comment letter noting it had no objections to 
the proposed project and some of the details of the Final EIS pertinent 
to their views. Further, EPA encouraged Reclamation to ``play an active 
role in facilitating comprehensive water management among all water 
sectors in the Basin.'' Reclamation intends to continue to pursue its 
mission in the 17 western states, and in particular on the Colorado 
River, to assist in meeting the increasing water demands of the West 
while protecting the environment and the public's investment in these 
structures. Reclamation places great emphasis on fulfilling its water 
delivery obligations, water conservation, water recycling and reuse, 
and developing partnerships with our customers, states, and Native 
American Tribes, and in finding ways to bring together the variety of 
interests to address the competing needs for our limited water 
resources.
    The Colorado River Board of California submitted comments on behalf 
of its member agencies on the updated draft Guidelines. The majority of 
the comments were editorial and to the extent the individual comments 
improved the clarity of the Guidelines they were incorporated into the 
Guidelines found in Section XI of this ROD.
    A comment letter dated November 12, 2007, was received from a 
single member of the public and noted his concern that the terms of the 
Biological Opinion (BO) should be met and that impacts due to climate 
change on ``listed fish and birds'' are addressed. FWS issued the BO on 
the Preferred Alternative described in this ROD on December 12, 2007. 
Reclamation has agreed to implement Conservation measures to benefit 
the listed species addressed in the BO and comply with the terms and 
conditions of the incidental take statement in the BO. Acknowledging 
the potential for impacts due to climate change and increased 
hydrologic variability, the Secretary proposes that the Guidelines be 
interim in duration and extend through 2026, providing the opportunity 
to gain valuable operating experience for the management of Lake Powell 
and Lake Mead, particularly for low reservoir conditions, and improve 
the basis for making additional future operational decisions, whether 
during the Interim Period (Section 8 of the Guidelines) or thereafter. 
In addition, the Preferred Alternative has been crafted to include 
operational elements that would respond if potential impacts of climate 
change and increased hydrologic variability are realized. In 
particular, the Preferred Alternative includes a coordinated operation 
element that allows for the adjustment of Lake Powell's release to 
respond to low reservoir storage conditions in Lake Powell or Lake Mead 
as described in Section 2.7 and Section 2.3 in the Final EIS. In 
addition, the Preferred

[[Page 19879]]

Alternative will enhance conservation opportunities in the Lower Basin 
and the retention of water in Lake Mead through adoption of the ICS 
mechanism. Finally, the Preferred Alternative includes a shortage 
strategy at Lake Mead that would result in additional shortages being 
considered, after appropriate consultation, if Lake Mead elevations 
drop below 1,025 feet mean sea level (msl).
    The Defenders of Wildlife submitted a comment letter dated December 
11, 2007, on behalf of their organization, the National Wildlife 
Federation, the Pacific Institute, and the Sierra Club regarding the 
updated draft Guidelines. The comments are limited to information that 
was published in Appendix S of the Final EIS dated November 2, 2007. 
The letter offers a number of clarifying comments, raises concerns 
regarding the appropriate mechanisms for consultation between federal 
and non-federal parties, and raises detailed comments regarding the 
implementation of the ICS and Developed Shortage Supply (DSS) 
components of the Guidelines. Reclamation thoroughly reviewed the 
comments submitted and concluded that no changes to the Guidelines were 
necessary. With respect to the issues regarding consultation, 
Reclamation will continue to meet all legal obligations for appropriate 
consultation with non-federal parties and believes that the commitments 
for continued consultation with the Basin States can be implemented in 
a manner consistent with the provisions of applicable federal law. 
Moreover, Reclamation believes that some of the concerns identified in 
this comment letter have been addressed by Section 7.D of the updated 
draft Guidelines posted on December 10, 2007, which provides that the 
Lower Colorado Regional Director will establish procedures for the 
implementation of ICS and DSS after issuance of this ROD. Reclamation 
will continue to work closely with all stakeholders in the development 
of ICS and DSS procedures and in the implementation and administration 
of the Guidelines.

VII. Refinement of Operational Guidelines for the Preferred Alternative 
in Response to Public Comments

    Hydrologic modeling of the Colorado River system was used to 
determine the potential hydrologic effects of each of the alternatives 
and also provided the basis for analyzing the potential effects on 
other environmental resources (such as recreation, biology, and energy, 
etc.). Nearly all modeling assumptions were common to each alternative; 
only the assumptions specific to each alternative were different. This 
approach allowed a relative comparison of the potential effects of each 
alternative compared to the No Action Alternative and lead to the 
identification of the Preferred Alternative.
    Historically, the determination of the annual release volume for 
Lake Powell could change on a monthly basis throughout the water year. 
This approach afforded great flexibility to respond to changing monthly 
runoff forecasts yet was practical to implement since there were 
effectively only two operational tiers (a minimum objective release of 
8.23 maf per year or releases greater due to equalization or spill 
avoidance). The annual release volume for Lake Mead, however, was 
essentially determined on an annual basis primarily to provide a 
greater degree of certainty to water users with respect to the water 
supply in the Lower Basin. The modeled operation of Lake Powell and 
Lake Mead for all alternatives in the Final EIS was consistent with 
this past operational experience and provided a valid basis for 
comparison.
    However, given the more complicated proposed operation for Lake 
Powell under all of the action alternatives, Reclamation conducted 
additional investigations and subsequently refined the operational 
guidelines to include a combined monthly/annual methodology to 
determine the annual release volume for Lake Powell. This methodology 
consists of a January 1 determination of the release volume with 
appropriate April adjustments to those volumes, and providing the 
necessary flexibility to respond to changing inflow forecasts while 
ensuring that the operation does not result in excessive changes in 
monthly releases from Lake Powell.
    In addition, comments were also received in both written and oral 
form from representatives of the Basin States with respect to the 
modeling assumptions used for the Basin States Alternative and the 
Preferred Alternative, reflected in Appendix S of the Final EIS. 
Specifically, the comments were in regard to the coordinated operation 
of Lake Powell and Lake Mead when Lake Powell is relatively high and 
operating near or in the equalization tier. A concern was identified 
where the proposed operation might not respond effectively when Lake 
Powell is relatively high, Lake Mead is relatively low, and a 
reasonably high inflow forecast occurs. Reclamation conducted 
additional investigations to identify approaches to ensure some 
additional water is released from Lake Powell when this situation 
arises.
    Reclamation refined the proposed operational guidelines to 
incorporate these changes (contained in Section 6, 7, and 8 of the 
Guidelines) and published those refinements on the project Web site on 
November 16, 2007. An evaluation concluded that these refinements to 
the proposed Guidelines would not result in substantial changes with 
regard to the environmental effects and fall within the impacts already 
analyzed in the Final EIS.

VIII. Environmental Impacts and Implementation of Environmental 
Commitments

    Hydrologic modeling of the Colorado River system was conducted to 
determine the potential hydrologic effects of the alternatives. 
Modeling provided projections of potential future Colorado River system 
conditions (i.e., reservoir elevations, reservoir releases, river 
flows) for comparison of those conditions under the No Action 
Alternative to conditions under each action alternative. Due to the 
uncertainty with regard to future inflows into the system, multiple 
simulations were performed in order to quantify the uncertainties of 
future conditions and as such, the modeling results are typically 
expressed in probabilistic terms.
    Hydrologic modeling also provided the basis for the analysis of the 
potential effects of each alternative on other environmental resources. 
The Final EIS evaluated 14 resource areas: Hydrologic resources 
(including reservoir storage and releases, groundwater, and water 
deliveries), water quality, air quality, visual resources, biological 
resources (including vegetation and wildlife and special status 
species), cultural resources, Indian trust assets, electrical power 
resources, recreation (including shoreline facilities, boating and 
navigation, and sport fish populations), transportation, socioeconomics 
(including employment, income and tax revenue, municipal and industrial 
water users, and recreation economics), environmental justice, indirect 
effects of the ICS mechanism, and climate change considerations. The 
potential effects to specific resources were identified and analyzed 
for each action alternative and compared to the potential effects to 
that resource under the No Action Alternative. These comparisons are 
typically expressed in terms of the relative differences in 
probabilities between the No Action Alternative and the action 
alternatives.
    Based on the analyses in the EIS, Reclamation determined that 
specific measures to avoid or mitigate environmental harm were not 
required,

[[Page 19880]]

with the exception of conservation measures for listed species as noted 
below. For other resource areas, the impacts of the Preferred 
Alternative were well within the range of the alternatives considered, 
and generally improved conditions compared to the No Action 
Alternative. For a few resource areas, the Preferred Alternative 
resulted in minor negative impacts compared to the No Action 
Alternative, and measures to avoid such impacts were determined to be 
unnecessary or not feasible.

A. Lower Colorado River Multi-Species Conservation Plan

    It is important to note that Reclamation is already undertaking 
significant environmental mitigation measures on the Colorado River, 
including the LCR MSCP from Lake Mead to the Southerly International 
Boundary (SIB) with Mexico, and implementation of activities pursuant 
to the 1996 Glen Canyon Dam ROD for the reach of the Colorado River 
from Glen Canyon Dam to Lake Mead.
    The LCR MSCP is a 50-year cooperative effort between federal and 
non-federal entities, approved by the Secretary in April 2005. This 
program was developed to address potential effects to listed and other 
selected special status species (covered species) from identified 
ongoing and future anticipated federal discretionary actions and non-
federal activities on the lower Colorado River (covered actions). The 
development and implementation of shortage criteria on the lower 
Colorado River was one of the federal covered actions (MSCP Biological 
Assessment Section 2.2.2.1) included in the LCR MSCP and covered under 
the LCR MSCP BO (FWS 2005). The LCR MSCP BO provides Endangered Species 
Act (ESA) compliance for the effects of covered actions for a reduction 
of Lake Mead reservoir elevations to 950 feet msl and flow reductions 
of up to 0.845 maf from Hoover Dam to Davis Dam, 0.860 maf from Davis 
Dam to Parker Dam, and 1.574 maf from Parker Dam to Imperial Dam. The 
LCR MSCP identified, and it is mitigating for, impacts to the covered 
species and their habitats from the flow reduction conditions described 
above. These impacts included the potential loss of up to:
     2,008 acres of cottonwood-willow habitats;
    133 acres of marsh habitat; and
     399 acres of backwater habitat.
    To address these impacts, the LCR MSCP will:
     Restore 5,940 acres of cottonwood-willow habitat;
     Restore 512 acres of marsh habitat;
     Restore 360 acres of backwater habitat;
     Stock 660,000 razorback sucker over the term of the LCR 
MSCP; and
     Stock 620,000 bonytail over the term of the LCR MSCP.
    In addition, these habitats will be actively managed to provide 
habitat values greater than those of the impacted habitats. While the 
LCR MSCP is geared toward special status species, it is important to 
understand that all species that use the habitats impacted by the LCR 
MSCP covered activities benefit by the conservation actions currently 
being carried out under the LCR MSCP.
    Reclamation has reviewed the effects of the Preferred Alternative 
in this Final EIS and has determined that all potential effects to 
listed species and their habitats along the Colorado River from the 
full pool elevation of Lake Mead to the SIB are covered by the LCR 
MSCP. FWS has concurred with Reclamation's determination in a letter 
dated November 28, 2007.

B. Glen Canyon Dam Adaptive Management Program

    The 1996 Glen Canyon Dam ROD describes detailed criteria and 
operating plans for Glen Canyon Dam operations and includes other 
management actions to accomplish this objective; among these are the 
Glen Canyon Dam Adaptive Management Program (AMP). The AMP provides a 
process for assessing the effects of Glen Canyon Dam operations on 
downstream resources and project benefits. The results of that 
assessment are used to develop recommendations for modifying Glen 
Canyon Dam operations and other resource management actions. This is 
accomplished through the Adaptive Management Work Group (AMWG), a 
federal advisory committee. The AMWG consists of stakeholders that 
include federal and state agencies, representatives of the Basin 
States, Indian tribes, hydroelectric power customers, environmental and 
conservation organizations, and recreational and other interest groups.

C. Endangered Species Act Compliance

    In compliance with the ESA, Reclamation submitted a Biological 
Assessment (BA) to FWS on September 10, 2007 and requested formal 
consultation on the Preferred Alternative. Reclamation divided the 
analysis of potential effects on listed species into three geographic 
areas: Lake Powell to the upper end of Lake Mead, Lake Mead to the SIB 
with Mexico, and potential interdependent/interrelated effects on the 
Virgin and Muddy Rivers in southern Nevada. Reclamation determined the 
effects of the Preferred Alternative within the geographic area of the 
MSCP (Lake Mead to SIB with Mexico) were covered by the earlier 
consultation on LCR MSCP, and requested FWS' concurrence on this 
determination by memo dated October 26, 2007. FWS concurred with this 
determination by memo dated November 28, 2007. For the remainder of the 
action area, Reclamation determined the Preferred Alternative may 
affect, and is likely to adversely affect the southwestern willow 
flycatcher, humpback chub, and Kanab ambersnail, and that the Preferred 
Alternative may affect, but would not be likely to adversely affect 
seven other species.
    FWS issued its BO for the Preferred Alternative by memo dated 
December 12, 2007. The BO concurred with Reclamation's ``not likely to 
adversely affect'' findings for the seven species addressed in the BA, 
and found that the adverse effects to southwestern willow flycatcher, 
humpback chub, and Kanab ambersnail would not jeopardize the continued 
existence of those species. Reclamation has included the following 
conservation measures for listed species in the action area as part of 
its proposed action:
     Nonnative Fish Control--In coordination with other 
Department of the Interior AMP participants and through the AMP, 
Reclamation will continue efforts to control both cold- and warm-water 
nonnative fish species in the mainstem of Marble and Grand canyons, 
including determining and implementing levels of nonnative fish control 
as necessary. Control of these species using mechanical removal and 
other methods will help to reduce this threat.
     Humpback Chub Refuge--Reclamation will assist FWS in 
development and funding of a broodstock management plan and creation 
and maintenance of a humpback chub refuge population at a federal 
hatchery or other appropriate facility by providing expedited 
advancement of $200,000 in funding to the FWS during calendar year 
2008; this amount shall be funded from, and within, the amount 
identified in the 2005 LCR MSCP BO. Creation of a humpback chub refuge 
will reduce or eliminate the potential for a catastrophic loss of the 
Grand Canyon population of humpback chub by providing a permanent 
source of genetically representative stock for repatriating the 
species.

[[Page 19881]]

     Genetic Biocontrol Symposium--Reclamation will transfer up 
to $20,000 in fiscal year 2008 to FWS to help fund an international 
symposium on the use and development of genetic biocontrol of nonnative 
invasive aquatic species which is tentatively scheduled for January 
2009. Although only in its infancy, genetic biocontrol of nonnative 
species is attracting worldwide attention as a potential method of 
controlling aquatic invasive species. Helping fund an effort to bring 
researchers together will further awareness of this potential method of 
control and help mobilize efforts for its research and development.
     Sediment Research--In coordination with other Department 
of the Interior AMP participants and through the AMP, Reclamation will 
monitor the effect of sediment transport on humpback chub habitat and 
will work with the Grand Canyon Monitoring and Research Center to 
develop and implement a scientific monitoring plan acceptable to FWS. 
Although the effects of dam operation-related changes in sediment 
transport on humpback chub habitat are not well understood, humpback 
chub are known to utilize backwaters and other habitat features that 
require fine sediment for their formation and maintenance. Additional 
research will help clarify this relationship.
     Parasite Monitoring--In coordination with other Department 
of the Interior AMP participants and through the AMP, Reclamation will 
continue to support research on the effects of Asian tapeworm on 
humpback chub and potential methods to control this parasite. 
Continuing research will help better understand the degree of this 
threat and the potential for management actions to minimize it.
     Monitoring and Research--Through the AMP, Reclamation will 
continue to monitor Kanab ambersnail and its habitat in Grand Canyon 
and the effect of dam releases on the species, and Reclamation will 
also continue to assist FWS in funding morphometric and genetic 
research to better determine the taxonomic status of the subspecies.
     Kanab Ambersnail Monitoring and Research--Through the AMP, 
Reclamation will continue to monitor Kanab ambersnail and its habitat 
in Grand Canyon and the effect of dam releases on the species, and 
Reclamation will also continue to assist FWS in funding morphometric 
and genetic research to better determine the taxonomic status of the 
subspecies.
     Southwestern Willow Flycatcher Monitoring and Research--
Through the AMP, Reclamation will continue to monitor southwestern 
willow flycatcher and its habitat and the effect of dam releases on the 
species throughout Grand Canyon and report findings to FWS, and will 
work with NPS and other AMP participants to identify actions to 
conserve the flycatcher.

IX. Implementing the Decision

A. Setting

    Against the backdrop of prolonged drought, in 2005, with reservoir 
elevations dropping rapidly, the Department was faced with the 
challenge of making operational decisions regarding modified operations 
of Glen Canyon Dam and Hoover Dam. One of the challenges that the 
Department faced was that there were not detailed, objective guidelines 
to determine how the operation of the two reservoirs would be modified 
in drought and other low-reservoir conditions.
    After receiving conflicting recommendations from representatives of 
the four Upper Division and the three Lower Division states, the 
Secretary issued a decision on May 2, 2005, charging Reclamation with 
the development of operational tools that can continue to assure 
productive use of the Colorado River into the future, while avoiding 
unnecessary, protracted or destabilizing litigation.
    More than two years later, the drought conditions have continued 
and the need for detailed operational guidelines is even more necessary 
today as compared with mid-2005. Reclamation has conducted an extensive 
public process, seeking input from state, tribal and local governments, 
along with input from members of environmental organizations and 
members of the general public. These Guidelines represent the 
Department's determination as to the most appropriate set of guidelines 
to adopt at this stage of the ongoing drought.

B. Scope of Guidelines

    These Guidelines are intended to be applied each year during the 
Interim Period with respect to the operation and management of the 
waters of the Colorado River stored in Lake Powell and Lake Mead. The 
relevant sections of these Guidelines address the following:
     Determine those circumstances under which the Secretary 
would reduce the annual amount of water available for consumptive use 
from Lake Mead to the Colorado River Lower Division states below 7.5 
maf (a ''Shortage'') pursuant to Article II(B)(3) of the Consolidated 
Decree;
     Define the coordinated operation of Lake Powell and Lake 
Mead to provide improved operation of these two reservoirs, 
particularly under low reservoir conditions;
     Allow for the storage and delivery, pursuant to applicable 
federal law, of conserved Colorado River system and non-system water in 
Lake Mead to increase the flexibility of meeting water use needs from 
Lake Mead, particularly under drought and low reservoir conditions; 
and,
     Determine those conditions under which the Secretary may 
declare the availability of surplus water for use within the Lower 
Division states. The proposed federal action would modify the substance 
of the existing ISG and would change the term of the ISG from 2016 
through 2026.

X. Operational Setting

A. Criteria for the Coordinated Long-Range Operation of Colorado River 
Reservoirs

    Section 602 of the CRBPA required the Secretary to propose and 
adopt criteria for the coordinated long-range operation of the 
reservoirs constructed and operated under the authority of the Colorado 
River Storage Project Act of 1956, the Boulder Canyon Project Act of 
1928 (BCPA), and the Boulder Canyon Project Adjustment Act. The 
Secretary adopted such ``Long-Range Operating Criteria'' (LROC) in 1970 
and has been operating the Colorado River consistent with the LROC 
since 1970. In 2005, the Secretary approved minor changes to the text 
of the LROC. (70 FR 15873, Mar. 29, 2005). The Secretary identified the 
bases for the limited changes as: (1) Specific change in federal law 
applicable to the Operating Criteria, (2) language in the current text 
of the Operating Criteria that was outdated, and (3) specific 
modifications to Article IV(b) of the Operating Criteria that reflect 
actual operating experience.
    It is the Department's decision that these Guidelines implement the 
LROC on an annual basis through the Interim Period and that the 
operation of the relevant Colorado River reservoirs be documented in 
each year's AOP (Subsection C, below). See also Section 7 of the 
Guidelines for further description of the relationship between the LROC 
and these Guidelines.

B. Interim Surplus Guidelines

    Beginning in 1999, the Secretary determined that there was a need 
for detailed, objective guidelines to assist in the determination of 
availability of water in excess of 7.5 maf per year to water users in 
the three Lower Division states of Arizona, California, and Nevada. One 
of the important issues facing the Department at that time was

[[Page 19882]]

the question of whether to modify the LROC to address determination of 
a Surplus Condition or whether to adopt guidelines that would implement 
the LROC with detailed provisions.
    At the time, the Department sought public input on the concept of 
modifying Article III(3)(b) of the LROC during the process that led to 
adoption of the ISG. See 64 FR 27010 (May 18, 1999). After reviewing 
the public comments received, the Department announced its intention to 
adopt ``interim implementing criteria pursuant to Article III(3) of the 
Long-Range Operating Criteria'' rather than modifying the actual text 
of the LROC. See 64 FR 68373 (December 7, 1999). This approach was 
carried through and set forth in the ROD for the ISG adopted by the 
Secretary. See 66 FR 7772, 7780 at Section XI(5) (``These Guidelines, 
which shall implement and be used for determinations made pursuant to 
Article III(3)(b) of the [Operating Criteria] * * * are hereby adopted 
* * *''). See also discussion at 70 FR 15878 (March 29, 2005) (review 
of LROC).
    It is the Department's decision in adopting these Guidelines to 
continue the approach initially adopted in the ISG, and accordingly is 
not modifying the LROC at this time. Instead, the determinations made 
under these interim Guidelines will implement the relevant provisions 
of Article II (Lake Powell) and Article III (Lake Mead) during the 
Interim Period, as defined in Section 7, herein.

C. Annual Operating Plan for Colorado River Reservoirs

    Section 602(b) of the CRBPA of 1968 requires that the Secretary 
transmit to the Congress and to the Governors of the Basin States, by 
January 1st of each year, a report describing the actual operation 
under the LROC for the preceding compact water year and the projected 
operation for the current year. This report is commonly referred to as 
the ``Annual Operating Plan'' or the ``AOP.''
    In 1992, in the Grand Canyon Protection Act, Congress required 
that, in preparing the 602(b) AOP, the Secretary shall consult with the 
Governors of the Basin States and with the general public, including 
representatives of academic and scientific communities, environmental 
organizations, the recreation industry; and contractors for the purpose 
of federal power produced at Glen Canyon Dam.
    Each year the Secretary implements the provisions of the 1968 and 
1992 statutes regarding the projected operation of Colorado River 
reservoirs and stakeholder consultation through the Colorado River 
Management Work Group. This process involves appropriate consultation 
prior to finalization of the proposed AOP. The AOP is used to 
memorialize operational decisions that are made pursuant to individual 
federal actions (e.g., ISG, 1996 Glen Canyon Dam ROD, this ROD). Thus, 
the AOP serves as a single, integrated reference document required by 
section 602(b) of the CRBPA of 1968 regarding past and anticipated 
operations.
    It is the Department's decision that these Guidelines be 
implemented on an annual basis through the Interim Period and 
documented in each year's AOP. This ROD addresses annual volumes of 
releases from Glen Canyon Dam and Hoover Dam. Accordingly, this ROD 
does not modify the authority of the Secretary to determine monthly, 
daily, hourly, or instantaneous releases from Glen Canyon Dam and 
Hoover Dam. See Section 7 of the Guidelines for further description of 
the relationship between the AOP and these Guidelines.

XI. Conditions of Implementation

A. Forbearance

1. Role of Forbearance Agreements Within the Context of the Law of the 
River and Relationship to Intentionally Created Surplus (ICS)
    For the purposes of these Guidelines, the term ``forbearance 
agreements'' refers to agreements that a party who has a right to 
surplus Colorado River water could enter into that would provide that 
party's agreement to forgo (or not exercise) its right to surplus 
Colorado River water. In any such agreements, the party agrees to 
``forbear'' or refrain from exercising its right to surplus Colorado 
River water under the specified terms and conditions of the applicable 
agreement. Through such agreements, increased flexibility of Colorado 
River water management can be achieved--resulting in greater 
conservation of water than would otherwise be accomplished.
    In Years in which the Secretary determines that sufficient 
Mainstream water is available for delivery to satisfy annual 
consumptive use in the Lower Division states in excess of 7.5 maf, 
Article II(B)(2) of the Consolidated Decree directs the Secretary to 
apportion such surplus Mainstream water 50% for use in California, 46% 
for use in Arizona, and 4% for use in Nevada. The Boulder Canyon 
Project Act and Articles II(B)(2) and II(B)(6) of the Consolidated 
Decree, taken together, authorize the Secretary to apportion surplus 
water and to deliver one Lower Division state's unused apportionment 
for use in another Lower Division state. Pursuant to such authority and 
for the purpose of increasing the efficiency, flexibility, and 
certainty of Colorado River management and thereby helping satisfy the 
current and projected regional water demands, the Secretary determined 
that it is prudent and desirable to promulgate guidelines to establish 
a procedural framework for facilitating the creation and delivery of 
ICS within the Lower Basin.
    In the absence of forbearance, surplus water is apportioned for use 
in the Lower Division states according to the specific percentages 
provided in Article II(B)(2) of the Consolidated Decree discussed 
above. In order to allow for management flexibility, the seven Colorado 
River Basin States have recommended an operational program for the 
creation and delivery of ICS. In furtherance of this recommendation, 
numerous major water users within the Lower Basin have identified their 
willingness, under specified circumstances, to participate in such an 
operational program. These parties have submitted a draft ``Forbearance 
Agreement,'' as preliminarily approved by the parties, as part of a 
package of documents (Appendix J) submitted for consideration by the 
Secretary as a necessary element to enable implementation of the 
operations contemplated by the Basin States Alternative. The Secretary 
has developed a Preferred Alternative based on this information, as 
well as other information submitted during the NEPA process.
    The parties to the Forbearance Agreement have indicated that they 
intend that the Agreement provide the appropriate legal mechanism to 
achieve successful implementation of this element of the Preferred 
Alternative. The parties have indicated that among the conditions on 
their forbearance, they will forbear only with respect to a specified 
ICS volume and only to ICS created by projects described in exhibits 
attached to the Forbearance Agreement or added thereto by written 
consent of all parties. Given the voluntary nature of the forbearance 
concept, it is appropriate for the parties to clearly identify the 
limited conditions upon which their forbearance is granted.
    Through adoption and implementation of these Guidelines, the 
Secretary will only approve the creation, delivery and use of ICS in a 
manner that is fully consistent with the provisions of the Consolidated 
Decree, including Articles II(B)(2) and II(B)(6) therein. The Secretary 
will require forbearance by the State of Arizona, the

[[Page 19883]]

Palo Verde Irrigation District, the Imperial Irrigation District, the 
Coachella Valley Water District, The Metropolitan Water District of 
Southern California, the City of Needles, and other California entities 
as appropriate, the Southern Nevada Water Authority, and the Colorado 
River Commission of Nevada for implementation of this element of these 
Guidelines (regarding ICS). If, in the opinion of the Secretary, the 
State of Arizona or the Palo Verde Irrigation District, the Imperial 
Irrigation District, the Coachella Valley Water District, The 
Metropolitan Water District of Southern California, the City of 
Needles, or other California entities as appropriate, the Southern 
Nevada Water Authority, or the Colorado River Commission of Nevada, 
unreasonably withhold forbearance, the Secretary may, after 
consultation with the Basin States, modify these Guidelines. Moreover, 
the Secretary will ensure that implementation of the ICS mechanism does 
not infringe on the rights of any third party who is a Contractor and 
who is not a party to the Forbearance Agreement.
2. Monitoring Implementation
    Under these Guidelines, Colorado River water will continue to be 
allocated for use among the Lower Division states in a manner 
consistent with the provisions of the Consolidated Decree. It is 
expected that Lower Division states and individual Contractors for 
Colorado River water have or will adopt arrangements that will affect 
utilization of Colorado River water during the Interim Period. It is 
expected that water orders from Colorado River Contractors will be 
submitted to reflect forbearance arrangements by Lower Division states 
and individual Contractors. The Secretary will deliver Colorado River 
water to Contractors in a manner consistent with these arrangements, 
provided that any such arrangements are consistent with the BCPA, the 
Consolidated Decree and do not infringe on the rights of third parties. 
Surplus water will only be delivered to entities with contracts for 
surplus water. ICS will be delivered pursuant to Section 3.C. of these 
Guidelines and a Delivery Agreement.

B. Delivery Agreement

    Article II(B)(5) of the Consolidated Decree in Arizona v. 
California states that mainstream Colorado River water shall be 
released or delivered to water users in Arizona, California, and Nevada 
``only pursuant to valid contracts therefore made with such users by 
the Secretary of the Interior, pursuant to Section 5 of the Boulder 
Canyon Project Act or any other applicable federal statute.'' Section 5 
of the Boulder Canyon Project Act authorizes the Secretary to enter 
into such contracts.
    Numerous Contractors in Arizona, California, and Nevada now hold 
contracts which entitle them to the delivery of Colorado River water 
under the circumstances and in the priorities specified in the 
individual contracts. Contracts entered into prior to the adoption of 
these Guidelines do not, however, expressly address circumstances in 
which ICS or DSS might be created or delivered.
    To ensure the requirements of Section 5 of the Boulder Canyon 
Project Act and Article II(B)(5) of the Consolidated Decree are 
complied with, and to reduce the possibility of ambiguity, the 
Secretary anticipates entering into delivery contracts with any person 
or persons intending to create ICS or DSS. Such contracts are expected 
to address the requirements set forth in the Guidelines for the 
approval of ICS or DSS plans, the certification and verification of the 
ICS or DSS created under the plans, the ordering and delivery of ICS or 
DSS, the accounting for ICS or DSS in the annual report filed with the 
U.S. Supreme Court in accordance with Article V of the Consolidated 
Decree, and such other matters as may bear on the delivery of the ICS 
or DSS, as for example the point of delivery and place of use, if not 
already provided for under existing contracts.

C. Mexico

    The United States delivers an annual allotment of Colorado River 
water to Mexico pursuant to the treaty between the United States of 
America and Mexico relating to the utilization of waters of the 
Colorado and Tijuana Rivers and of the Rio Grande, signed February 3, 
1944, and its supplementary protocol signed November 14, 1944. In 
adopting these Guidelines the Department of the Interior is making a 
final agency action regarding the operation of Lake Powell and Lake 
Mead, and the delivery of water to water users in the United States, in 
response to the worst drought in the Basin in over a century of 
recordkeeping.
    Prior to adopting these Guidelines, the Department provided 
information on the proposed action to the USIBWC, and met with 
representatives of the Mexican Section of the IBWC and the Mexican 
Government. The Department has considered the information provided by 
the USIBWC prior to adopting these Guidelines, including information 
representing the views of the Government of Mexico. The USIBWC has 
advised that the Department may proceed with planning and 
implementation activities for these Guidelines with the understanding 
that these Guidelines are not intended to constitute an interpretation 
or application of the 1944 Treaty or to represent current United States 
policy or a determination of future United States policy regarding 
deliveries to Mexico.
    The Department notes the intention of the Governments of the United 
States and Mexico, memorialized in a Joint Statement issued August 13, 
2007, to cooperate and collaborate regarding issues related to the 
lower portion of the Colorado River under the auspices of the IBWC.

D. Intentionally Created Surplus

1. Findings
    ICS may be created through projects that create water system 
efficiency or extraordinary conservation or tributary conservation or 
the importation of non-Colorado River System water into the Mainstream. 
ICS is consistent with the concept that entities may take actions to 
augment storage of water in the lower Colorado River Basin. The ICS 
shall be delivered to the Contractor that created it pursuant to both 
Articles II(B)(2) and II(B)(6) of the Consolidated Decree and 
Forbearance Agreements. Implementation of these Guidelines for ICS is 
conditioned upon execution of Forbearance Agreements and Delivery 
Agreements as further provided for in these Guidelines.
2. Purposes
    The primary purposes of ICS are to: (a) Encourage the efficient use 
and management of Colorado River water; and to increase the water 
supply in Colorado River System reservoirs, through the creation, 
delivery and use of ICS; (b) help minimize or avoid shortages to water 
users in the Lower Basin; (c) benefit storage of water in both Lake 
Powell and Lake Mead; (d) increase the surface elevations of both Lake 
Powell and Lake Mead to higher levels than would have otherwise 
occurred; and (f) assure any Contractor that invests in conservation or 
augmentation to create ICS that no other Contractor will claim the ICS 
created by the Contractor pursuant to an approved plan by the 
Secretary.
3. Quantities
    The maximum quantities of Extraordinary Conservation ICS that may 
be accumulated in all ICS Accounts, at any time, upon the effective 
date of these Guidelines is

[[Page 19884]]

limited to the amounts provided in Section 3.B.5. of these Guidelines. 
The maximum quantities of Extraordinary Conservation ICS that may be 
created and/or delivered in any given Year are also limited to the 
amounts provided in Sections 3.B.4. and 3.C.4., respectively. As 
described in the Final EIS, Reclamation has analyzed ICS amounts in 
excess of the amounts approved by this Record of Decision and provided 
in these Guidelines. Any decision by the Secretary to increase the 
amounts in excess of the amounts provided in these Guidelines would be 
based on actual operating experience and would require modification of 
these Guidelines after consultation with the Basin States.

E. Relationship With Existing Law

    These Guidelines are not intended to, and do not:
    1. Guarantee or assure any water user a firm supply for any 
specified period;
    2. Change or expand existing authorities under applicable federal 
law, except as specifically provided herein with respect to 
determinations under the Long-Range Operating Criteria and 
administration of water supplies during the effective period of these 
Guidelines;
    3. Address intrastate storage or intrastate distribution of water, 
except as may be specifically provided by Lower Division states and 
individual Contractors for Colorado River water who may adopt 
arrangements that will affect utilization of Colorado River water 
during the effective period of these Guidelines;
    4. Change the apportionments made for use within individual States, 
or in any way impair or impede the right of the Upper Basin to 
consumptively use water available to that Basin under the Colorado 
River Compact;
    5. Affect any obligation of any Upper Division state under the 
Colorado River Compact;
    6. Affect any right of any State or of the United States under Sec. 
14 of the Colorado River Storage Project Act of 1956 (70 Stat. 105); 
Sec. 601(c) of the Colorado River Basin Project Act of 1968 (82 Stat. 
885); the California Limitation Act (Act of March 4, 1929; Ch. 16, 48th 
Sess.); or any other provision of applicable federal law;
    7. Affect the rights of any holder of present perfected rights or 
reserved rights, which rights shall be satisfied within the 
apportionment of the State within which the use is made, and in the 
Lower Basin, in accordance with the Consolidated Decree; or
    8. Constitute an interpretation or application of the 1944 Treaty 
between the United States and Mexico Relating to the Utilization of the 
Waters of the Colorado and Tijuana Rivers and of the Rio Grande (1944 
Treaty) or to represent current United States policy or a determination 
of future United States policy regarding deliveries to Mexico. The 
United States will conduct all necessary and appropriate discussions 
regarding the proposed federal action and implementation of the 1944 
Treaty with Mexico through the International Boundary and Water 
Commission (IBWC) in consultation with the Department of State.

F. Definitions

    For purposes of these Guidelines, the following definitions apply:
    1. ``24-Month Study'' refers to the operational study that reflects 
the current Annual Operating Plan that is updated each month by 
Reclamation to project future reservoir contents and releases. The 
projections are updated each month using the previous month's reservoir 
contents and the latest inflow and water use forecasts. In these 
Guidelines, the term ``projected on January 1'' shall mean the 
projection of the January 1 reservoir contents provided by the 24-Month 
Study that is conducted in August of the previous Year.
    2. ``AOP'' shall mean the Annual Operating Plan for the Colorado 
River System Reservoirs.
    3. ``Active Storage'' shall mean the amount of water in reservoir 
storage, exclusive of bank storage, which can be released through the 
existing reservoir outlet works, consistent with the Colorado River 
Basin Project Act of 1968 (82 Stat. 885).
    4. ``BCPA'' shall mean the Boulder Canyon Project Act of 1928 (28 
Stat. 1057).
    5. ``Basin States'' shall mean the seven Colorado River Basin 
States of Arizona, California, Colorado, New Mexico, Nevada, Utah, and 
Wyoming.
    6. ``Certification Report'' shall mean the written documentation 
provided by a Contractor that provides the Secretary with sufficient 
information to allow the Secretary to determine whether the quantity of 
ICS or DSS approved by the Secretary in an approved plan has been 
created and whether the creation was consistent with the approved plan.
    7. ``Colorado River System'' shall have the same meaning as defined 
in the 1922 Colorado River Compact.
    8. ``Consolidated Decree'' shall mean the Consolidated Decree 
entered by the United States Supreme Court in Arizona v. California, 
547 U.S. 150 (2006).
    9. ``Contractor'' shall mean an entity holding an entitlement to 
Mainstream water under (a) the Consolidated Decree, (b) a water 
delivery contract with the United States through the Secretary, or (c) 
a reservation of water by the Secretary, whether the entitlement is 
obtained under (a), (b) or (c) before or after the adoption of these 
Guidelines.
    10. ``DSS Account'' shall mean records established by the Secretary 
regarding DSS.
    11. ``Delivery Agreement'' shall mean an agreement consistent with 
these Guidelines entered into between the Secretary of the Interior and 
one or more Contractors creating ICS.
    12. ``Developed Shortage Supply (``DSS'')'' shall mean water 
available for use by a Contractor under the terms and conditions of a 
Delivery Agreement and Section 4 of these Guidelines in a Shortage 
Condition, under Article III(B)(3) of the Consolidated Decree.
    13. ``Direct Delivery Domestic Use'' shall mean direct delivery of 
water to domestic end users or other municipal and industrial water 
providers within the Contractor's area of normal service, including 
incidental regulation of Colorado River water supplies within the Year 
of operation but not including Off-stream Banking. For the Metropolitan 
Water District of Southern California (MWD), Direct Delivery Domestic 
Use shall include delivery of water to end users within its area of 
normal service, incidental regulation of Colorado River water supplies 
within the Year of operation, and Off-stream Banking only with water 
delivered through the Colorado River Aqueduct.
    14. ``Domestic Use'' shall have the same meaning as defined in the 
1922 Colorado River Compact.
    15. ``Forbearance Agreement'' shall mean an agreement under which 
one or more Contractors agree to forbear a right to ICS, under a water 
delivery contract or the Consolidated Decree.
    16. ``ICS Account'' shall mean records established by the Secretary 
regarding ICS.
    17. ``ICS Determination'' shall mean a determination by the 
Secretary that ICS is available for delivery.
    18. ``Intentionally Created Surplus (``ICS'')'' shall mean surplus 
Colorado River System water available for use under the terms and 
conditions of a Delivery Agreement, a Forbearance Agreement, and these 
Guidelines.
    a. ICS created through extraordinary conservation, as provided for 
in Section 3.A.1., shall be referred to as ``Extraordinary Conservation 
ICS.''
    b. ICS created through tributary conservation, as provided for in 
Section 3.A.2., shall be referred to as ``Tributary Conservation ICS.''
    c. ICS created through system efficiency projects, as provided for 
in

[[Page 19885]]

Section 3.A.3., shall be referred to as ``System Efficiency ICS.''
    d. ICS created through the importation of non-Colorado River System 
Water, as provided for in Section 3.A.4., shall be referred to as 
``Imported ICS.''
    19. ``Interim Period'' shall mean the effective period as described 
in Section 8.
    20. ``Long-Range Operating Criteria (``LROC'')'' shall mean the 
Criteria for the Coordinated Long-Range Operation of Colorado River 
Reservoirs Pursuant to the Colorado River Basin Project Act of 
September 30, 1968 (Pub. L. 90-537), published at 35 FR 8951 (June 10, 
1970), as amended March 21, 2005.
    21. ``Lower Division states'' shall mean the Colorado River Basin 
States of Arizona, California, and Nevada.
    22. ``Mainstream'' shall have the same meaning as defined in the 
Consolidated Decree.
    23. ``Off-stream Banking'' shall mean the diversion of Colorado 
River water to underground storage facilities for use in subsequent 
Years from the facility used by a Contractor diverting such water.
    24. ``ROD'' shall mean the Record of Decision issued by the 
Secretary for the Colorado River Interim Guidelines for Lower Basin 
Shortages and Coordinated Operations for Lake Powell and Lake Mead.
    25. ``Upper Division states'' shall mean the Colorado River Basin 
States of Colorado, New Mexico, Utah, and Wyoming.
    26. ``Water Accounting Report'' shall mean the annual Colorado 
River Accounting and Water Use Report--Arizona, California, and Nevada 
that includes, but is not limited to, the compilation of records in 
accordance with Article V of the Consolidated Decree.
    27. ``Water Year'' shall mean October 1 through September 30.
    28. ``Year'' shall mean calendar year.

G. Interim Guidelines for the Operation of Lake Powell and Lake Mead

    These Guidelines shall include Sections XI.A., B., E., and F. above 
and this Section XI.G. These Guidelines which shall implement and be 
used for determinations made pursuant to the Long-Range Operating 
Criteria during the effective period identified in Section 8, are 
hereby adopted:

Section 1. Allocation of Unused Basic Apportionment Water Under Article 
II(B)(6)

A. Introduction

    Article II(B)(6) of the Consolidated Decree allows the Secretary to 
allocate water that is apportioned to one Lower Division state, but is 
for any reason unused in that State, to another Lower Division state. 
This determination is made for one Year only and no rights to recurrent 
use of the water accrue to the state that receives the allocated water.

B. Application to Unused Basic Apportionment

    Before making a determination of a Surplus Condition under these 
Guidelines, the Secretary will determine the quantity of apportioned 
but unused water excluding ICS created in that Year from the basic 
apportionments under Article II(B)(6), and will allocate such water in 
the following order of priority:
    1. Meet the Direct Delivery Domestic Use requirements of MWD and 
Southern Nevada Water Authority (SNWA), allocated as agreed by said 
agencies;
    2. Meet the needs for Off-stream Banking activities for use in 
California by MWD and for use in Nevada by SNWA, allocated as agreed by 
said agencies; and
    3. Meet the other needs for water in California in accordance with 
the California Seven-Party Agreement as supplemented by the 
Quantification Settlement Agreement.

Section 2. Determination of Lake Mead Operation During the Interim 
Period

    In the development of the AOP, the Secretary shall use the August 
24-Month Study projections for the following January 1 system storage 
and reservoir water surface elevations to determine the Lake Mead 
operation for the following Calendar Year as described in this Section 
2.

A. Normal Conditions

1. Lake Mead above elevation 1,075 feet and below elevation 1,145 feet
    In years when Lake Mead elevation is projected to be above 1,075 
feet and below elevation 1,145 feet on January 1, the Secretary shall 
determine either a Normal Condition, or, under Section 2.B.5., an ICS 
Surplus Condition.

B. Surplus Conditions

1. Partial Domestic Surplus
    [Adopted January 16, 2001; Deleted December 13, 2007.]
2. Domestic Surplus
    (Lake Mead at or above elevation 1,145 feet and below the elevation 
that triggers a Quantified Surplus (70R Strategy).)
    In years when Lake Mead content is projected to be at or above 
elevation 1,145 feet, but less than the amount which would initiate a 
Surplus under Section 2.B.3., Quantified Surplus, or Section 2.B.4., 
Flood Control Surplus, on January 1, the Secretary shall determine a 
Domestic Surplus Condition. The amount of such Surplus shall equal--
    a. From the effective date of these Guidelines through December 31, 
2015 (through preparation of the 2016 AOP):
    (1) For Direct Delivery Domestic Use by MWD, 1.250 maf reduced by 
the amount of basic apportionment available to MWD.
    (2) For use by SNWA, the Direct Delivery Domestic Use within the 
SNWA service area in excess of the State of Nevada's basic 
apportionment.
    (3) For use in Arizona, the Direct Delivery Domestic Use in excess 
of Arizona's basic apportionment.
    b. From January 1, 2016 (for preparation of the 2017 AOP) through 
December 31, 2025 (through preparation of the 2026 AOP):
    (1) For use by MWD, 250,000 af per Year in addition to the amount 
of California's basic apportionment available to MWD.
    (2) For use by SNWA, 100,000 af per Year in addition to the amount 
of Nevada's basic apportionment available to SNWA.
    (3) For use in Arizona, 100,000 af per Year in addition to the 
amount of Arizona's basic apportionment available to Arizona 
Contractors.
3. Quantified Surplus (70R Strategy) \2\
---------------------------------------------------------------------------

    \2\ 70R is a spill avoidance strategy that determines a surplus 
if the January 1 projected system storage space is less than the 
space required by the flood control criteria, assuming a natural 
inflow of 17.4 maf (the 70th percentile non-exceedence flow). See 
ISG Final EIS at Section 2.3.1.2.
---------------------------------------------------------------------------

    In years when the Secretary determines that water should be 
delivered for beneficial consumptive use to reduce the risk of 
potential reservoir spills based on the 70R Strategy the Secretary 
shall determine a Quantified Surplus Condition and allocate a 
Quantified Surplus sequentially as follows:
    a. Establish the volume of the Quantified Surplus. For the purpose 
of determining the existence, and establishing the volume, of 
Quantified Surplus, the Secretary shall not consider any volume of ICS 
as defined in these Guidelines.
    b. Allocate and distribute the Quantified Surplus 50 percent to 
California, 46 percent to Arizona, and 4 percent to Nevada, subject to 
c. through e. that follow.
    c. Distribute California's share first to meet basic apportionment 
demands and MWD's demands, and then to California Priorities 6 and 7 
and other surplus

[[Page 19886]]

contracts. Distribute Nevada's share first to meet basic apportionment 
demands and then to the remaining demands. Distribute Arizona's share 
to surplus demands in Arizona including Off-stream Banking and 
interstate banking demands. Nevada shall receive first priority for 
interstate banking in Arizona.
    d. Distribute any unused share of the Quantified Surplus in 
accordance with Section 1.
    e. Determine whether MWD, SNWA and Arizona have received the amount 
of water they would have received under Section 2.B.2., if a Quantified 
Surplus Condition had not been determined. If they have not, then 
determine and meet all demands provided for in Section 2.B.2.
4. Flood Control Surplus
    In years in which the Secretary makes space-building or flood 
control releases \3\ pursuant to the 1984 Field Working Agreement 
between Reclamation and the Army Corps of Engineers (as may be 
amended), the Secretary shall determine a Flood Control Surplus for the 
remainder of that Year or the subsequent Year. In such years, releases 
will be made to satisfy all beneficial uses within the United States, 
including unlimited Off-stream Banking.
---------------------------------------------------------------------------

    \3\ Under current practice, surplus waters are made available to 
Mexico pursuant to the 1944 Treaty (when Mexico may schedule up to 
an additional 0.2 maf) when flood control releases are made. These 
Guidelines are not intended to affect that practice. Any issues 
relating to the implementation of the 1944 Treaty, including any 
potential changes in approach relating to surplus declarations under 
the 1944 Treaty, would be addressed with Mexico as appropriate 
through the USIBWC.
---------------------------------------------------------------------------

5. ICS Surplus
    a. In years in which Lake Mead's elevation is projected to be above 
elevation 1,075 feet on January 1, a Flood Control Surplus has not been 
determined, and delivery of ICS has been requested, the Secretary may 
determine an ICS Surplus Condition in lieu of a Normal Condition or in 
addition to other operating conditions that are based solely on the 
elevation of Lake Mead.
    b. In years in which a Quantified Surplus or a Domestic Surplus is 
available to a Contractor, the Secretary shall first deliver the 
Quantified Surplus or Domestic Surplus before delivering any requested 
ICS to that Contractor. If available Quantified Surplus or Domestic 
Surplus is insufficient to meet a Contractor's demands, the Secretary 
shall deliver ICS available in that Contractor's ICS Account at the 
request of the Contractor, subject to the provisions of Section 3.C.

C. Allocation of Colorado River Water and Forbearance and Reparation 
Arrangements

    [Content of 2001 ISG Section 2.C., Allocation of Colorado River 
Water and Forbearance and Reparation Arrangements, is now found at 
III.A., as modified.]

D. Shortage Conditions

    1. Deliveries to the Lower Division States during Shortage 
Condition Years shall be implemented in the following manner:
    a. In years when Lake Mead content is projected to be at or below 
elevation 1,075 feet and at or above 1,050 feet on January 1, a 
quantity of 7.167 maf shall be apportioned for consumptive use in the 
Lower Division States of which 2.48 maf shall be apportioned for use in 
Arizona and 287,000 af shall be apportioned for use in Nevada in 
accordance with the Arizona-Nevada Shortage Sharing Agreement dated 
February 9, 2007, and 4.4 maf shall be apportioned for use in 
California.
    b. In years when Lake Mead content is projected to be below 
elevation 1,050 feet and at or above 1,025 feet on January 1, a 
quantity of 7.083 maf shall be apportioned for consumptive use in the 
Lower Division States of which 2.4 maf shall be apportioned for use in 
Arizona and 283,000 af shall be apportioned for use in Nevada in 
accordance with the Arizona-Nevada Shortage Sharing Agreement dated 
February 9, 2007, and 4.4 maf shall be apportioned for use in 
California.
    c. In years when Lake Mead content is projected to be below 
elevation 1,025 feet on January 1, a quantity of 7.0 maf shall be 
apportioned for consumptive use in the Lower Division States of which 
2.32 maf shall be apportioned for use in Arizona and 280,000 af shall 
be apportioned for use in Nevada in accordance with the Arizona-Nevada 
Shortage Sharing Agreement dated February 9, 2007, and 4.4 maf shall be 
apportioned for use in California.
    2. During a Year when the Secretary has determined a Shortage 
Condition, the Secretary shall deliver Developed Shortage Supply 
available in a Contractor's DSS Account at the request of the 
Contractor, subject to the provisions of Section 4.C.

Section 3. Implementation of Intentionally Created Surplus

    [Content of 2001 ISG Section 3., Implementation of Guidelines, is 
now found at Section 7., as modified herein.]

A. Categories of ICS

1. Extraordinary Conservation ICS
    A Contractor may create Extraordinary Conservation ICS through the 
following activities:
    a. Fallowing of land that currently is, historically was, and 
otherwise would have been irrigated in the next Year.
    b. Canal lining programs.
    c. Desalination programs in which the desalinated water is used in 
lieu of Mainstream water.
    d. Extraordinary conservation programs that existed on January 1, 
2006.
    e. Extraordinary Conservation ICS demonstration programs pursuant 
to a letter agreement entered into between Reclamation and the 
Contractor prior to the effective date of these Guidelines.
    f. Tributary Conservation ICS created under Section 3.A.2. and not 
delivered in the Year created.
    g. Imported ICS created under Section 3.A.4. and not delivered in 
the Year created.
    h. Other extraordinary conservation measures, including but not 
limited to, development and acquisition of a non-Colorado River System 
water supply used in lieu of Mainstream water within the same state, in 
consultation with the Basin States.
2. Tributary Conservation ICS
    A Contractor may create Tributary Conservation ICS by purchasing 
documented water rights on Colorado River System tributaries within the 
Contractor's state if there is documentation that the water rights have 
been used for a significant period of Years and that the water rights 
were perfected prior to June 25, 1929 (the effective date of the 
Boulder Canyon Project Act). The actual amount of any Tributary 
Conservation ICS introduced to the Mainstream shall be subject to 
verification by the Secretary as provided in Section 3.D. Any Tributary 
Conservation ICS not delivered pursuant to Section 3.C. or deducted 
pursuant to Section 3.B.2. in the Year it was created will, at the 
beginning of the following Year, be converted to Extraordinary 
Conservation ICS and will thereafter be subject to all provisions 
applicable to Extraordinary Conservation ICS. Tributary Conservation 
ICS may be delivered for Domestic Use only.
3. System Efficiency ICS
    A Contractor may make contributions of capital \4\ to the Secretary 
for use in

[[Page 19887]]

projects designed to realize system efficiencies that save water that 
would otherwise be lost from the Mainstream in the United States. An 
amount of water equal to a portion of the water conserved would be made 
available to contributing Contractor(s) by the Secretary as System 
Efficiency ICS.\5\ System efficiency projects are intended only to 
provide temporary water supplies. System Efficiency ICS will be 
delivered to the contributing Contractor(s) on a schedule of annual 
deliveries as provided in an exhibit to a Forbearance Agreement and 
Delivery Agreement. The Secretary may identify potential system 
efficiency projects, terms for capital participation in such projects, 
and types and amounts of benefits the Secretary could provide in 
consideration of non-federal capital contributions to system efficiency 
projects, including identification of a portion of the water saved by 
such projects.
---------------------------------------------------------------------------

    \4\ To the extent permitted by federal law, monies to pay 
construction, operation, maintenance, repair, and/or replacement 
costs.
    \5\ Should other Contractor(s) elect to participate in a system 
efficiency project following the Secretary making an amount of water 
available to the contributing Contractor(s), the Secretary shall 
reduce the amount of water in the contributing Contractor(s)' ICS 
Account(s) and credit the electing Contractor(s)' ICS Account(s) in 
an equal amount in accordance with the terms of the Secretary's 
agreement for the funding of the system efficiency project.
---------------------------------------------------------------------------

4. Imported ICS
    A Contractor may create Imported ICS by introducing non-Colorado 
River System water in that Contractor's state into the Mainstream. 
Contractors proposing to create Imported ICS shall make arrangements 
with the Secretary, contractual or otherwise, to ensure no interference 
with the Secretary's management of Colorado River System reservoirs and 
regulatory structures. Any arrangement shall provide that the 
Contractor must obtain appropriate permits or other authorizations 
required by state and federal law. The actual amount of any Imported 
ICS introduced to the Mainstream shall be subject to verification by 
the Secretary as provided in Section 3.D. Any Imported ICS not 
delivered pursuant to Section 3.C. or deducted pursuant to Section 
3.B.2. in the Year it was created will be converted, at the beginning 
of the following Year, to Extraordinary Conservation ICS and thereafter 
will be subject to all provisions applicable to Extraordinary 
Conservation ICS.

B. Creation of ICS

    A Contractor may only create ICS in accordance with the following 
conditions:
    1. A Contractor shall submit a plan for the creation of ICS to the 
Secretary demonstrating how all requirements of these Guidelines will 
be met in the Contractor's creation of ICS. Until such plan is reviewed 
and approved by the Secretary, subject to such environmental compliance 
as may be required, such plan or any ICS purportedly created through it 
shall not be a basis for creation of ICS. An ICS plan will consist of 
at a minimum the following information:
    a. Project description, including what extraordinary measures will 
be taken to conserve or import water;
    b. Term of the activity;
    c. Estimate of the amount of water that will be conserved or 
imported;
    d. Proposed methodology for verification of the amount of water 
conserved or imported; and
    e. Documentation regarding any state or federal permits or other 
regulatory approvals that have already been obtained by the Contractor 
or that need to be obtained prior to creation of ICS.
    A Contractor may modify its approved plan for creation of ICS 
during any Year, subject to approval by the Secretary. A Contractor 
with an approved multi-Year plan for System Efficiency ICS is not 
required to seek further approval by the Secretary in subsequent Years 
unless the Contractor seeks to modify the plan.
    2. There shall be a one-time deduction of five percent (5%) from 
the amount of ICS in the Year of its creation. This system assessment 
shall result in additional system water in storage in Lake Mead. This 
one-time system assessment shall not apply to:
    a. System Efficiency ICS created pursuant to Section 3.B. because a 
large portion of the water conserved by this type of project will 
increase the quantity of system water in storage over time.
    b. Extraordinary Conservation ICS created by conversion of 
Tributary Conservation ICS that was not delivered in the Year created, 
pursuant to this Section 3.B. because 5% of the ICS is deducted at the 
time the Tributary Conservation ICS is created.
    c. Extraordinary Conservation ICS created by conversion of Imported 
ICS that was not delivered in the Year created, pursuant to this 
Section 3.B. because 5% of the ICS is deducted at the time the Imported 
ICS is created.
    d. ICS created under demonstration programs in 2006 and 2007 which 
has already been assessed the 5% system assessment.
    3. Except as provided in Sections 3.A.2. and 3.A.4., Extraordinary 
Conservation ICS can only be created if such water would have otherwise 
been beneficially used.
    4. The maximum total amount of Extraordinary Conservation ICS that 
can be created during any Year is limited to the following:
    a. 400,000 af for California Contractors;
    b. 125,000 af for Nevada Contractors; and
    c. 100,000 af for Arizona Contractors.
    5. The maximum quantity of Extraordinary Conservation ICS that may 
be accumulated in all ICS Accounts, at any time, is limited to the 
following:
    a. 1.5 maf for California Contractors;
    b. 300,000 af for Nevada Contractors; and
    c. 300,000 af for Arizona Contractors.
    6. Except as provided in Sections 3.A.2. and 3.A.4., no category of 
surplus water can be used to create Extraordinary Conservation ICS.
    7. The quantity of Extraordinary Conservation ICS remaining in an 
ICS Account at the end of each Year shall be diminished by annual 
evaporation losses of 3%. Losses shall be applied annually to the end-
of-the-Year balance of Extraordinary Conservation ICS beginning in the 
Year after the ICS is created and continuing until no Extraordinary 
Conservation ICS remains in Lake Mead. No evaporation losses shall be 
assessed during a Year in which the Secretary has determined a Shortage 
Condition.
    8. Extraordinary Conservation ICS from a project within a state may 
only be credited to the ICS Account of a Contractor within that state 
that has funded or implemented the project creating ICS, or to the ICS 
Account of a Contractor within the same state as the funding entity and 
project and with written agreement of the funding entity.
    9. A Contractor must notify Reclamation of the amount of ICS it 
wishes to create for the subsequent Year pursuant to an existing, 
approved plan. A Contractor may request mid-Year modification(s) to 
reduce the amount of ICS created during that Year, subject to the 
requirements of this Section 3.B. A Contractor cannot increase the 
amount of ICS it had previously scheduled to create during the Year.

C. Delivery of ICS

    The Secretary shall deliver ICS in accordance with the following 
conditions:
    1. The delivery shall be consistent with the terms of a Delivery 
Agreement with a Contractor regarding ICS.
    2. The Secretary has determined an ICS Surplus Condition.
    3. The existence of Forbearance Agreements necessary to bring the 
delivery of the ICS into compliance with Articles II(B)(2) and II(B)(6) 
of the Consolidated Decree.

[[Page 19888]]

    4. A limitation on the total amount of Extraordinary Conservation 
ICS that may be delivered in any Year is as follows:
    a. 400,000 af for California Contractors;
    b. 300,000 af for Nevada Contractors; and
    c. 300,000 af for Arizona Contractors.
    5. If the May 24-Month Study for that Year indicates that a 
Shortage Condition would be determined in the succeeding Year if the 
requested amounts for the current Year under Section 3.C. were 
delivered, the Secretary may deliver less than the amounts of ICS 
requested to be delivered.
    6. If the Secretary releases Flood Control Surplus water, 
Extraordinary Conservation ICS accumulated in ICS Accounts shall be 
reduced by the amount of the Flood Control Surplus on an acre-foot for 
acre-foot basis until no Extraordinary Conservation ICS remains. The 
reductions to the ICS Accounts shall be shared on a pro-rata basis 
among all Contractors that have accumulated Extraordinary Conservation 
ICS.
    7. If a Contractor has an overrun payback obligation, as described 
in the October 10, 2003 Inadvertent Overrun and Payback Policy or 
Exhibit C to the October 10, 2003 Colorado River Water Delivery 
Agreement, the Contractor must pay the overrun payback obligation in 
full before requesting or receiving delivery of ICS. The Contractor's 
ICS Account shall be reduced by the amount of the overrun payback 
obligation in order to pay the overrun payback obligation.
    8. If more ICS is delivered to a Contractor than is actually 
available for delivery to the Contractor in that Year, then the excess 
ICS delivered shall be treated as an inadvertent overrun until it is 
fully repaid.
    9. A Contractor may request mid-Year modification(s) to increase or 
reduce the amount of ICS to be delivered during that Year because of 
changed conditions, emergency, or hardship, subject to the requirements 
of this Section 3.C.
    10. The Contractor shall agree in the Delivery Agreement that the 
records of the Contractor relating to the creation of ICS shall be open 
to inspection by the Secretary and by any Contractor or Basin State.

D. Accounting for ICS

    The Secretary shall develop procedures to account for and verify, 
on an annual basis, ICS creation and delivery. At a minimum such 
procedures shall include the following:
    1. A Contractor shall submit for the Secretary's review and 
verification, appropriate information, as determined by the Secretary, 
contained in a Certification Report, to demonstrate the amount of ICS 
created and that the method of creation was consistent with the 
Contractor's approved ICS plan, a Forbearance Agreement, and a Delivery 
Agreement. Such information shall be submitted in the Year following 
the creation of the ICS.
    2. The Secretary, acting through the Lower Colorado Regional 
Director, shall verify the information submitted pursuant to this 
section, and provide a final written decision to the Contractor 
regarding the amount of ICS created. The results of such final written 
decisions shall be made available to the public through publication 
pursuant to Section 3.D.3. and other appropriate means. A Contractor 
and any party to an applicable Forbearance Agreement may appeal the 
Regional Director's verification decision first to the Regional 
Director and then to the Secretary; and through judicial processes.
    3. Each Year the Water Accounting Report will be supplemented to 
include ICS Account balance information for each Contractor and shall 
address ICS creation, deliveries, amounts no longer available for 
delivery due to releases for flood control purposes, deductions 
pursuant to Section 3.B.2., deductions due to annual evaporation losses 
pursuant to Section 3.B.7., any amounts of ICS converted to 
Extraordinary Conservation ICS, and ICS remaining available for 
delivery.

Section 4. Implementation of Developed Shortage Supply

    [Content of 2001 ISG Section 4., Effective Period & Termination, is 
now found at Section 8., as modified herein.]

A. Categories of DSS

1. Tributary Conservation DSS
    A Contractor may create Tributary Conservation DSS by purchasing 
documented water rights on Colorado River System tributaries within the 
Contractor's state if there is documentation that the water rights have 
been used for a significant period of Years and that the water rights 
were perfected prior to June 25, 1929 (the effective date of the 
Boulder Canyon Project Act). The actual amount of any Tributary 
Conservation DSS introduced to the Mainstream shall be subject to 
verification by the Secretary as provided in Section 4.D. Tributary 
Conservation DSS may be delivered for Domestic Use only.
2. Imported DSS
    A Contractor may create Imported DSS by introducing non-Colorado 
River System water in that Contractor's state into the Mainstream, 
making sufficient arrangements with the Secretary, contractual or 
otherwise, to ensure no interference with the Secretary's management of 
Colorado River System reservoirs and regulatory structures. Any 
arrangement shall provide that the Contractor must obtain appropriate 
permits or other authorizations required by state and federal law. The 
actual amount of any Imported DSS introduced to the Mainstream shall be 
subject to verification by the Secretary as provided in Section 4.D.

B. Creation of DSS

    A Contractor may only create DSS in accordance with the following 
conditions:
    1. A Contractor shall submit a plan for the creation of DSS to the 
Secretary demonstrating how all requirements of these Guidelines will 
be met in the Contractor's creation of DSS. Until such plan is reviewed 
and approved by the Secretary, subject to such environmental compliance 
as may be required, such plan, or any DSS purportedly created through 
it, shall not be a basis for creation of DSS. A DSS plan will consist 
of at a minimum the following information:
    a. Project description, including what extraordinary measures will 
be taken to conserve or import water;
    b. Term of the activity;
    c. Estimate of the amount of water that will be conserved or 
imported;
    d. Proposed methodology for verification of the amount of water 
conserved or imported; and
    e. Documentation regarding any state or federal permits or other 
regulatory approvals that have already been obtained by the Contractor 
or that need to be obtained prior to creation of DSS.
    A Contractor may modify its approved plan for creation of DSS 
during any Year, subject to approval by the Secretary.
    2. There shall be a one-time deduction of five percent (5%) from 
the amount of DSS in the Year of its creation. This system assessment 
shall result in additional system water in storage in Lake Mead.
    3. DSS may only be created during a Year when the Secretary has 
determined a Shortage Condition.
    4. DSS may only be created by a project that is approved by the 
Secretary for creation prior to the Secretary determining a Shortage 
Condition.
    5. A Contractor must notify Reclamation of the amount of DSS it

[[Page 19889]]

wishes to create for the subsequent Year pursuant to an existing, 
approved plan. A Contractor may request mid-Year modification(s) to 
reduce the amount of DSS created during that Year, subject to the 
requirements of this Section 4.B. A Contractor cannot increase the 
amount of DSS it had previously scheduled to create during the Year.

C. Delivery of DSS

    The Secretary shall deliver DSS in accordance with the following 
conditions:
    1. The delivery shall be consistent with the terms of a Delivery 
Agreement with a Contractor regarding DSS.
    2. The Secretary has determined a Shortage Condition.
    3. Delivery of DSS shall not cause the total deliveries within the 
Lower Division states to reach or exceed 7.5 maf in any Year.
    4. Delivery of DSS shall be in accordance with Article II(B)(3) of 
the Consolidated Decree.
    5. If a Contractor has an overrun payback obligation, as described 
in the October 10, 2003 Inadvertent Overrun and Payback Policy or 
Exhibit C to the October 10, 2003 Colorado River Water Delivery 
Agreement, the Contractor must pay the overrun payback obligation in 
full before requesting or receiving delivery of DSS. The Contractor's 
DSS Account shall be reduced by the amount of the overrun payback 
obligation in order to pay the overrun payback obligation.
    6. If more DSS is delivered to a Contractor than is actually 
available for delivery to the Contractor in that Year, then the excess 
DSS delivered shall be treated as an inadvertent overrun until it is 
fully repaid.
    7. A Contractor may request mid-Year modification(s) to increase or 
reduce the amount of DSS to be delivered during that Year because of 
changed conditions, emergency, or hardship, subject to the requirements 
of this Section 4.C.
    8. The Contractor shall agree in the Delivery Agreement that the 
records of the Contractor relating to the creation of DSS shall be open 
to inspection by the Secretary or by any Contractor or Basin State.
    9. DSS may only be delivered in the Year of its creation. Any DSS 
not delivered pursuant to this Section 4.C. in the Year it is created 
may not be converted to Extraordinary Conservation ICS.

D. Accounting for DSS

    The Secretary shall develop procedures to account for and verify, 
on an annual basis, DSS creation and delivery. At a minimum such 
procedures shall include the following:
    1. A Contractor shall submit for the Secretary's review and 
verification appropriate information, as determined by the Secretary, 
contained in a Certification Report, to demonstrate the amount of DSS 
created and that the method of creation was consistent with the 
Contractor's approved DSS plan and a Delivery Agreement. Such 
information shall be submitted in the Year following the creation of 
the DSS.
    2. The Secretary, acting through the Lower Colorado Regional 
Director, shall verify the information submitted pursuant to this 
section, and provide a final written decision to the Contractor 
regarding the amount of DSS created. The results of such final written 
decisions shall be made available to the public through publication 
pursuant to Section 4.D.3. and other appropriate means. The Contractor 
may appeal the Regional Director's verification decision first to the 
Regional Director and then to the Secretary; and through judicial 
processes.
    3. Each Year the Water Accounting Report will be supplemented to 
include DSS information for each Contractor and shall address DSS 
creation, deliveries, and deductions pursuant to Section 4.B.2.

Section 5. California's Colorado River Water Use Plan Implementation 
Progress

A. Introduction

    [Adopted January 16, 2001; Deleted December 13, 2007.]

B. California's Quantification Settlement Agreement

    [Adopted January 16, 2001; Deleted December 13, 2007.]

C. California's Colorado River Water Use Reductions

    The California Agricultural (Palo Verde Irrigation District, Yuma 
Project Reservation Division, Imperial Irrigation District, and 
Coachella Valley Water District) usage plus 14,500 af of Present 
Perfected Right (PPR) use would need to be at or below the following 
amounts at the end of the Year indicated in Years other than Quantified 
or Flood Control Surplus (for Decree accounting purposes all reductions 
must be within 25,000 af of the amounts stated):

------------------------------------------------------------------------
                                                           Benchmark
                                                            quantity
                                                          (California
           Benchmark date  (calendar year)                agricultural
                                                       usage & 14,500 AF
                                                         of PPR use in
                                                              MAF)
------------------------------------------------------------------------
2003.................................................           \6\ 3.75
2006.................................................           \6\ 3.64
2009.................................................           \7\ 3.60
2012.................................................               3.47
------------------------------------------------------------------------

    In the event that California has not reduced its use in accordance 
with the limits set forth above in any Year in which the Benchmark 
Quantity applies, the surplus determination under Section 2.B.2. of 
these Guidelines will be suspended and will instead be based upon the 
70R Strategy, for up to the remainder of the term of these Guidelines. 
If however, California meets the missed Benchmark Quantity before the 
next Benchmark Date or the 2012 Benchmark Quantity after 2012, the 
surplus determination under Section 2.B.2. shall be reinstated as the 
basis for the surplus determination under the AOP for the next 
following Year(s).
---------------------------------------------------------------------------

    \6\ The Benchmark Quantities in 2003 and 2006 were met.
    \7\ The 2009 Benchmark Quantity is modified from 3.53 maf due to 
construction delays that have been experienced for the All-American 
Canal Lining Project.
---------------------------------------------------------------------------

    As part of the AOP process during the Interim Period of these 
Guidelines, California shall report to the Secretary on its progress in 
implementing its California Colorado River Water Use Plan.

Section 6. Coordinated Operation of Lake Powell and Lake Mead During 
the Interim Period

    [Content of 2001 ISG Section 6., Authority, is now found at Section 
9., as modified herein.]
    During the Interim Period, the Secretary shall coordinate the 
operations of Lake Powell and Lake Mead according to the strategy set 
forth in this Section 6. The objective of the operation of Lake Powell 
and Lake Mead as described herein is to avoid curtailment of uses in 
the Upper Basin, minimize shortages in the Lower Basin and not 
adversely affect the yield for development available in the Upper 
Basin.
    The August 24-Month Study projections of the January 1 system 
storage and reservoir water surface elevations, for the following Water 
Year, shall be used to determine the applicable operational tier for 
the coordinated operation of Lake Powell and Lake Mead as specified in 
the table below.
    Consistent with the provisions of this Section 6, equalization or 
balancing of storage in Lake Powell and Lake Mead shall be achieved as 
nearly as is

[[Page 19890]]

practicable by the end of each Water Year. When equalizing or balancing 
the contents of the reservoirs, scheduled Water Year releases from Lake 
Powell will be adjusted each month based on forecasted inflow, and 
projected September 30 Active Storage at Lake Powell and Lake Mead. In 
this Section 6, the term ``storage'' shall mean Active Storage.
    When determining lake elevations and contents under this Section 6, 
no adjustment shall be made for ICS.
    Coordinated operation of Lake Powell and Lake Mead as described 
herein will be presumed to be consistent with the Section 602(a) 
storage requirement contained in the Colorado River Basin Project Act.
    Releases from Lake Powell for coordinated operations will be 
consistent with the parameters of the Record of Decision for the Glen 
Canyon Dam Final Environmental Impact Statement and the Glen Canyon Dam 
Operating Criteria (62 Fed. Reg. 9447, March 3, 1997).
    Notwithstanding the quantities set forth in this Section 6, the 
Secretary shall evaluate and take additional necessary actions, as 
appropriate, at critical elevations in order to avoid Lower Basin 
shortage determinations as reservoir conditions approach critical 
thresholds. Any actions shall also be consistent with avoidance of 
curtailment of consumptive uses in the Upper Basin.
[GRAPHIC] [TIFF OMITTED] TN11AP08.000

    April adjustments to Lake Powell operations in the Upper Elevation 
Balancing Tier (as specified in Sections 6.B.3. and 6.B.4.) shall be 
based on the April 24-Month Study projections of the September 30 
system storage and reservoir water surface elevations for the current 
Water Year. Any such adjustments shall not require re-initiation of the 
AOP consultation process. In making these projections, the Secretary 
shall utilize the April 1 final forecast of the April through July 
runoff, currently provided by the National Weather Service's Colorado 
Basin River Forecast Center.

A. Equalization Tier

    In each Water Year, the Lake Powell equalization elevation will be 
as follows:

                Lake Powell Equalization Elevation Table
------------------------------------------------------------------------
                 Water year                        Elevation (feet)
------------------------------------------------------------------------
2008.......................................  3,636
2009.......................................  3,639
2010.......................................  3,642
2011.......................................  3,643
2012.......................................  3,645
2013.......................................  3,646
2014.......................................  3,648
2015.......................................  3,649
2016.......................................  3,651
2017.......................................  3,652
2018.......................................  3,654
2019.......................................  3,655
2020.......................................  3,657
2021.......................................  3,659
2022.......................................  3,660
2023.......................................  3,662
2024.......................................  3,663
2025.......................................  3,664
2026.......................................  3,666
------------------------------------------------------------------------

    1. In Water Years when Lake Powell elevation is projected on 
January 1 to be at or above the elevation stated in the Lake Powell 
Equalization Elevation Table, an amount of water will be released from 
Lake Powell to Lake Mead at a rate greater than 8.23 maf per Water Year 
to the extent necessary to avoid spills, or equalize storage in the two 
reservoirs, or otherwise to release 8.23 maf from Lake Powell. The 
Secretary shall release at least 8.23 maf per Water

[[Page 19891]]

Year and shall release additional water to the extent that the 
additional releases will not cause Lake Powell content to be below the 
elevation stated in the Lake Powell Equalization Elevation Table or 
cause Lake Mead content to exceed that of Lake Powell; provided, 
however, if Lake Powell reaches the elevation stated in the Lake Powell 
Equalization Elevation Table for that Water Year and the September 30 
projected Lake Mead elevation is below elevation 1,105 feet, the 
Secretary shall release additional water from Lake Powell to Lake Mead 
until the first of the following conditions is projected to occur on 
September 30: (i) The reservoirs fully equalize; (ii) Lake Mead reaches 
elevation 1,105 feet; or (iii) Lake Powell reaches 20 feet below the 
elevation in the Lake Powell Equalization Elevation Table for that 
year.

B. Upper Elevation Balancing Tier

    1. In Water Years when the projected January 1 Lake Powell 
elevation is below the elevation stated in the Lake Powell Equalization 
Elevation Table and at or above 3,575 feet, the Secretary shall release 
8.23 maf from Lake Powell if the projected January 1 Lake Mead 
elevation is at or above 1,075 feet.
    2. If the projected January 1 Lake Powell elevation is below the 
elevation stated in the Lake Powell Equalization Elevation Table and at 
or above 3,575 feet and the projected January 1 Lake Mead elevation is 
below 1,075 feet, the Secretary shall balance the contents of Lake Mead 
and Lake Powell, but shall release not more than 9.0 maf and not less 
than 7.0 maf from Lake Powell in the Water Year.
    3. When operating in the Upper Elevation Balancing Tier, if the 
April 24-Month Study projects the September 30 Lake Powell elevation to 
be greater than the elevation in the Lake Powell Equalization Elevation 
Table, the Equalization Tier will govern the operation of Lake Powell 
for the remainder of the Water Year (through September).
    4. When operating under Section 6.B.1, if the April 24-Month Study 
projects the September 30 Lake Mead elevation to be below 1,075 feet 
and the September 30 Lake Powell elevation to be at or above 3,575 
feet, the Secretary shall balance the contents of Lake Mead and Lake 
Powell, but shall release not more than 9.0 maf and not less than 8.23 
maf from Lake Powell in the Water Year.
    5. When Lake Powell is projected to be operating under Section 
6.B.2. and more than 8.23 maf is projected to be released from Lake 
Powell during the upcoming Water Year, the Secretary shall recalculate 
the August 24-Month Study projection of the January 1 Lake Mead 
elevation to include releases above 8.23 maf that are scheduled to be 
released from Lake Powell during the months of October, November, and 
December of the upcoming Water Year, for the purposes of determining 
Normal or Shortage conditions pursuant to Sections 2.A. or 2.D. of 
these Guidelines.

C. Mid-Elevation Release Tier

    1. In Water Years when the projected January 1 Lake Powell 
elevation is below 3,575 feet and at or above 3,525 feet, the Secretary 
shall release 7.48 maf from Lake Powell in the Water Year if the 
projected January 1 elevation of Lake Mead is at or above 1,025 feet. 
If the projected January 1 Lake Mead elevation is below 1,025 feet, the 
Secretary shall release 8.23 maf from Lake Powell in the Water Year.

D. Lower Elevation Balancing Tier

    1. In Water Years when the projected January 1 Lake Powell 
elevation is below 3,525 feet, the Secretary shall balance the contents 
of Lake Mead and Lake Powell, but shall release not more than 9.5 maf 
and not less than 7.0 maf from Lake Powell in the Water Year.

Section 7. Implementation of Guidelines

    [Content of 2001 ISG Section 7, Modeling and Data Authority, is now 
found at Section 7.A., as modified herein.]

A. AOP Process

    During the Interim Period, the Secretary shall utilize the AOP 
process to determine operations under these Guidelines concerning the 
coordinated operations of Lake Powell and Lake Mead pursuant to Section 
6 of these Guidelines, and the allocation of apportioned but unused 
water from Lake Mead and the determinations concerning whether Normal, 
Surplus or Shortage conditions shall apply for the delivery of water 
from Lake Mead, pursuant to Section 1 and Section 2 of these 
Guidelines.

B. Consultation

    The Secretary shall consult on the implementation of these 
Guidelines in circumstances including but not limited to the following:
    1. The Secretary shall first consult with all the Basin States 
before making any substantive modification to these Guidelines.
    2. Upon a request for modification of these Guidelines, or upon a 
request to resolve any claim or controversy arising under these 
Guidelines or under the operations of Lake Powell and Lake Mead 
pursuant to these Guidelines or any other applicable provision of 
federal law, regulation, criteria, policy, rule, or guideline, or 
regarding application of the 1944 Treaty that has the potential to 
affect domestic management of Colorado River water, the Secretary shall 
invite the Governors of all the Basin States, or their designated 
representatives, and the Department of State and USIBWC as appropriate, 
to consult with the Secretary in an attempt to resolve such claim or 
controversy by mutual agreement.
    3. In the event projections included in any monthly 24-Month Study 
indicate Lake Mead elevations may approach an elevation that would 
trigger shortages in deliveries of water from Lake Mead in the United 
States, the Secretary shall consult with the Department of State, the 
USIBWC and the Basin States on whether and how the United States may 
reduce the quantity of water allotted to Mexico consistent with the 
1944 Treaty.\8\
---------------------------------------------------------------------------

    \8\ These Guidelines are not intended to constitute an 
interpretation or application of the 1944 Treaty or to represent 
current United States policy or a determination of future United 
States policy regarding deliveries to Mexico. The United States will 
conduct all necessary and appropriate discussions regarding the 
proposed federal action and implementation of the 1944 Treaty with 
Mexico through the IBWC in consultation with the Department of 
State.
---------------------------------------------------------------------------

    4. Whenever Lake Mead is below elevation 1,025 feet, the Secretary 
shall consult with the Basin States annually to consider whether 
Colorado River hydrologic conditions, together with the anticipated 
delivery of water to the Lower Division States and Mexico, is likely to 
cause the elevation of Lake Mead to fall below 1,000 feet. Upon such a 
consideration, the Secretary shall consult with the Basin States to 
discuss further measures that may be undertaken. The Secretary shall 
implement any additional measures consistent with applicable federal 
law.
    5. During the Interim Period the Secretary shall consult with the 
Basin States regarding the administration of ICS.
    6. During the Interim Period the Secretary shall consult with the 
Basin States regarding the creation of ICS through other extraordinary 
conservation measures pursuant to Section 3.A.1.h.
    7. During the Interim Period the Secretary shall consult with the 
Basin States regarding the creation of System Efficiency ICS pursuant 
to Section 3.A.3.
    8. The Secretary shall consult with the Basin States to evaluate 
actions at critical elevations that may avoid

[[Page 19892]]

shortage determinations as reservoir elevations approach critical 
thresholds.

C. Mid-Year Review

    In order to allow for better overall water management during the 
Interim Period, the Secretary may undertake a mid-year review to 
consider revisions to the AOP. The Secretary shall initiate a mid-year 
review if requested by any Basin State or by the Upper Colorado River 
Commission. In the mid-year review, the Secretary may modify the AOP to 
make a determination that a different operational tier (Section 2.A., 
B., or D., or Section 6.A., B., C., or D.) than that determined in the 
AOP will apply for the remainder of the Year or Water Year as 
appropriate, or that an amount of water other than that specified in 
the applicable operational tier will be released for the remainder of 
the Year or Water Year as appropriate. The determination of 
modification of the AOP shall be based upon an evaluation of the 
objectives to avoid curtailment of uses in the Upper Basin, minimize 
shortages in the Lower Basin and not adversely affect the yield for 
development available in the Upper Basin. In undertaking such a mid-
year review, the Secretary shall utilize the April 1 final forecast of 
the April through July runoff, currently provided by the National 
Weather Service's Colorado Basin River Forecast Center, and other 
relevant factors such as actual runoff conditions, actual water use, 
and water use projections. For Lake Mead, the Secretary shall revise 
the determination in any mid-year review for the current Year only to 
allow for additional deliveries from Lake Mead pursuant to Section 2 of 
these Guidelines.

D. Operations During Interim Period

    These Guidelines implement the LROC and may be reviewed 
concurrently with the LROC five-year review. The Secretary will base 
annual determinations regarding the operations of Lake Powell and Lake 
Mead on these Guidelines unless extraordinary circumstances arise. Such 
circumstances could include operations that are prudent or necessary 
for safety of dams, public health and safety, other emergency 
situations, or other unanticipated or unforeseen activities arising 
from actual operating experience.
    Beginning no later than December 31, 2020, the Secretary shall 
initiate a formal review for purposes of evaluating the effectiveness 
of these Guidelines. The Secretary shall consult with the Basin States 
in initiating this review.
    Procedures will be established for implementation of ICS and DSS by 
Reclamation's Lower Colorado Regional Director.

Section 8. Interim Period and Termination

    [Adopted January 16, 2001; Deleted and Modified December 13, 2007.]

A. Interim Period

    These Guidelines will be effective upon the date of execution of 
the ROD for Colorado River Interim Guidelines for Lower Basin Shortages 
and Coordinated Operations of Lake Powell and Lake Mead and will, 
unless subsequently modified, remain in effect through December 31, 
2025 (through preparation of the 2026 AOP).
    The Department promulgated these Guidelines based on consideration 
of multiple sources of information, including existing applicable 
guidelines, information submitted by the general public, an Agreement 
and recommendation submitted by the representatives of the Governors of 
the seven Colorado Basin States, modeling, and other information 
contained in environmental compliance documentation. The Secretary 
recognizes that the Basin States' recommendation was developed with the 
intent to be consistent with existing law, as addressed by Section 9 of 
the April 23, 2007, Agreement among the Basin States.
    The Secretary recognizes that differences exist with respect to 
interpretations of certain provisions contained in the Law of the River 
and the proper application of those provisions, including, for example, 
Section 602(a) of the Colorado River Basin Project Act of 1968. In lieu 
of a formal determination regarding such disputes, the Secretary will 
apply the operational criteria in these Guidelines. By way of further 
example, positions and rights concerning the calculation of the 
quantity of Section 602(a) storage and releases of water from Lake 
Powell are reserved. The Secretary, through the adoption of these 
Guidelines, makes no determination with respect to the correctness of 
any interpretation of Section 602(a) storage and release requirements 
or other positions of the individual Colorado River Basin States.
    Actual operations under these Guidelines shall not represent 
interpretations of existing law by the Secretary, nor predetermine in 
any manner the means of operation that the Secretary may adopt 
following the Interim Period. Releases from Lake Powell or Lake Mead 
pursuant to these Guidelines shall not prejudice the position or 
interests of either the Upper or Lower Division States, or any Colorado 
River Basin State, with respect to required storage or deliveries of 
water pursuant to applicable federal law, either during or after the 
Interim Period.

B. Effective Period--Special Provisions

    1. The provisions for the delivery and accounting of ICS in Section 
3 shall remain in effect through December 31, 2036, unless subsequently 
modified, for any ICS remaining in an ICS Account on December 31, 2026.
    2. The provisions for the creation and delivery of Tributary 
Conservation ICS and Imported ICS in Section 3 shall continue in full 
force and effect until fifty years from the date of the execution of 
the ROD.
    3. The provisions for the creation and delivery of DSS in Section 4 
shall continue in full force and effect until fifty years from the date 
of the execution of the ROD.

C. Termination of Guidelines

    Except as provided in Section 8.B., these Guidelines shall 
terminate on December 31, 2025 (through preparation of the 2026 AOP). 
At the conclusion of the effective period of these Guidelines, the 
operating criteria for Lake Powell and Lake Mead are assumed to revert 
to the operating criteria used to model baseline conditions in the 
Final Environmental Impact Statement for the Interim Surplus Guidelines 
dated December 2000 (i.e., modeling assumptions are based upon a 70R 
Strategy for the period commencing January 1, 2026 (for preparation of 
the 2027 AOP)).

Section 9. Authority

    These Guidelines are issued pursuant to the authority vested in the 
Secretary by federal law, including the Boulder Canyon Project Act of 
1928 (28 Stat. 1057), the Colorado River Storage Project Act (70 Stat. 
105), and the Consolidated Decree issued by the U.S. Supreme Court in 
Arizona v. California, 547 U.S. 150 (2006) and shall be used to 
implement Articles II and III of the Criteria for the Coordinated Long-
Range Operation of Colorado River Reservoirs Pursuant to the Colorado 
River Basin Project Act of September 30, 1968 (Pub. L. 90-537), as 
amended.

 [FR Doc. E8-7760 Filed 4-10-08; 8:45 am]
BILLING CODE 4310-MN-P