Joint Recovery Plan Update ADWR, AWBA & CAP AWBA Quarterly Meeting September 4 th , 2013

1. Joint Recovery Plan UpdateADWR, AWBA & CAPAWBA Quarterly MeetingSeptember 4th, 2013

2. “Effective planning and coordination among AWBA, ADWR, CAP, CAP customers, recovery partners and others is essential to successful recovery…” --Recovery of Water Stored by the Arizona Water Banking Authority: A Joint Plan by AWBA, ADWR and CAP. August 2013 Draft, page 3.

3. Progress to Date • Drafted Sections 1-4 • Shared with the Ad Hoc group • Received initial feedback • Waiting for written edits/comments • Developing Sections 5-7 • Broader distribution will occur when the remaining sections of the draft document are complete

4. Today’s Focus • Review first 4 Sections of Plan - set the stage for the who, what, where, when and why • Emphasis on Section 4 “Likelihood, Timing & Magnitude” • Before the end of the year, we will present the remaining Sections that address how recovery will occur (implementation)

5. Section 1: Background, Scope and Purpose • Section provides broad context • Scope includes recovery of the AWBA’s credits in support of its goals and obligations: • To firm CAP M&I priority subcontractors and P-4 on-River M&I users during shortage • To meet the State’s obligations to firm up to 23,724 AF of NIA priority CAP pursuant to Indian water rights settlements • To meet interstate water banking obligations with Nevada

6. Section 1: Background, Scope and Purpose (continued) • Clarify roles of the primary institutions • Establish planning-level certainty • Analyze and project the timing & magnitude of potential recovery (through 2045) • Identify potential recovery partnerships and opportunities • Identify key recovery decision points and actions within the planning horizon

7. Section 2: Roles and Responsibilities • AWBA • CAP • ADWR • Reclamation • CAP’s Recovery Partners • Beneficiaries • Other Interested Parties

8. Section 3: Funding, Purpose, and Location of Credits • AWBA has accrued 3.8 million AF of credits through 2012 (3.2 MAF for intrastate and 600,000 MAF interstate needs) • Several factors determine where recovery of these credits will occur • Funding Sources • Statutory Purposes • Location of Storage

9. Credits By AMA & Funding Source

10. Location of Credits

11. Section 4: Likelihood, Timing & Magnitude of Recovery • Factors Affecting Recovery • Modeling Approach • Synthesizing Results

12. Section 4: Likelihood, Timing & Magnitude of Recovery • Factors affecting Recovery • Shortage • Non-shortage

13. Shortage Factors • Recovery of AWBA credits will be required when the reduction in Arizona’s supply intersects demand of users (pools) for which the AWBA has firming goals or obligations

14. Shortage: Supply Factors • To Arizona • Basin Hydrology • Upper Basin Demands • Initial Reservoir Condition • Reservoir Operations • Within Arizona • Colorado River Uses and Priorities • CAP Uses and Priorities

15. Shortage: Demand Factors • On-River • Agricultural Use • Rate of municipal growth • CAP • Use of long-term entitlements • Rate of municipal growth • Use of Indian contracts

16. Non-Shortage Factors • Outage on the CAP system (outside scope of this Plan) • Interstate ICUA Requests • Rate of Nevada’s municipal growth

17. Modeling • Analysis of recovery factors requires use of models • The Joint Plan relies on two models • Reclamation’s Colorado River Simulation System (CRSS) • Custom recovery model that calculates the probability of specific recovery volumes through time based on range of supply and demand conditions

18. CRSS Modeling Assumptions “Arizona Baseline”

19. Basin Hydrology 1906 to 2010

20. Upper Basin Demands Arizona Baseline Trendline Historical Use

21. Reservoir Operations Interim Guidelines (2007) and Minute 319

22. Shortages to Arizona “Arizona Baseline”

23. Recovery Model • The recovery model incorporates the 105 different water supply traces from the CRSS model and matches those against a range of projected on-River and CAP demands.

24. On-River Demand

25. On-River P-4 Demand Muni Ag Muni Ag

26. CAP Demand Historic Projected Full Use Excess Long-Term Contracts 1.415 MAF

27. CAP Demand Historic Projected Full Use Excess Long-Term Contracts 1.415 MAF

28. Nevada Demand

29. Scenarios

30. Model Results DRAFT Mid-Term Near-Term Long-Term

31. Model Results DRAFT In 2023, there is a 35% probability of needing 7,000 AF of recovery, and a 17% probability of needing 14,000 AF

32. DRAFT There is a 75% probability that recovery needs will be less than this line. >25% Probability

33. Scenario A DRAFT

34. Scenario A DRAFT

35. Scenario A DRAFT

36. Scenario A DRAFT

37. Scenario A1 DRAFT

38. Scenario A2 DRAFT

39. Scenario B DRAFT

40. Scenario B1 DRAFT

41. Scenario B2 DRAFT

42. Summary Table DRAFT

43. Scenario B2 Remaining Credits

44. Summary of Results • Earliest projected intrastate recovery is 2017 (1% probability; Indian NIA and On-River) • Less than 35% probability of needing any recovery before the Mid-Term planning period (2024-2034) • No M&I recovery projected until Long-Term planning period (2035-2045) • Bulk of intrastate credits remain past 2045 • Timing and magnitude of Nevada’s request plays significant role in Mid-Term and Long-Term planning periods

45. Next Steps • Develop Sections 5-7 which deal with how the recovery will occur • Recovery Methods • Opportunities by AMA • General Costs • Implementation • Future Activities & Commitments