AVAILABILITY OF EXCESS CAP WATER

Colorado River Allocations Upper Basin – 7.5 MAF Lower Basin MAF CA – 4.4 MAF AZ – 2.8 MAF On-river users ………. 1.3 ± MAF CAP (junior priority) ± MAF NV – 0.3 MAF MX – 1.5 MAF

COLORADO RIVER SUPPLY Modeling Assumptions Current Reservoir Conditions (Jan.1, 2003) –Lake Mead (Elevation 1152, 17 maf storage, 61% capacity) –Lake Powell (Elevation 3620, 14 maf storage, 57% capacity) 70R Surplus Criteria 80% Protection of 1,050’ Lake Mead elevation YDP Operational in 2009 Upper Basin Limit = 4.8 maf Interim Surplus Guidelines Through 2016

COLORADO RIVER SUPPLY Modeling Assumptions cont’d CAP Shortage Volume KAF CAP Surplus Volume KAF 96 years of Colorado River hydrology used in sequential traces ( )

COLORADO RIVER SUPPLY Modeling Results DecadeShortage ProbabilitySurplus Probability %11% %23% %19% %19% %17% %12% Additional: Current Dry Cycle since years Worst Case Scenario using Driest 10-year period of record with current conditions - results in a potential shortage in 2014.

KEY ASSUMPTIONS Planning Period 2005 – 2104 –20 YEAR PERIOD = 2005 – 2024 –80 YEAR PERIOD = Entire Period = CAP Normal Deliveries GRIC Settlement Completed/Implemented All CAP Water Contracted/Used by 2050 SRP “Drought” Deliveries End After 2005

CAP WATER SUPPLY & CONCEPTUAL DELIVERY PRIORITY SCHEMATIC Colorado River Flow Upper Basin Demands Reservoir Storage Other Lower Basin Demands CAP Losses Arizona’s Colorado River Supply CAP Water Supply Arizona’s “On-River” Demands M&I Subcontracts (Includes CAGRD M&I Subcontract) Indian On-reservation Contracts M&I Indian Lease Contracts NIA Allocation – Excess Water NIA Excess Commitment (2004 – 2030) Remaining Excess Supply CAGRD Remaining Annual Obligation SRP “Drought Supply” Direct Use Excess M&I Incentive CAGRD Reserve & AWBA M&I Firming Shared Pool Other AWBA Purposes (On-River, Indian Settlement, Interstate Storage)

CAP DEMAND PROJECTION PROCESS Project Build out Schedules INDIAN ON- RESERVATION DEMANDS Customer Development Plans Outlook 2003 Water Use Studies Tribal Development Plans M&I SUBCONTRACT DEMANDS M&I INDIAN LEASE DEMANDS EXCESS DEMANDS CAWCD Ag Pool Policy (2004 – 2030) CAGRD Build out Plan AWBA Demands NIA – EXCESS WATER DEMANDS CAGRD Plan of Operation BOR Projections Estimated Direct Use & Incentive Demands Projected SRP Demands

Plan Period Enrollment Buildout MSA “buildout”

Enrollment Buildout Plan Period MSA “buildout”

Annual Obligation 854,900 (1,533,000) 2,010,500 (3,636,000) 4,243,700 (7,339,000) Secondary Excess 357,000 (477,000) 432,000 (642,000) 447,000 (867,000) Replenishment Reserve 1,372,100 (2,150,000) 1,443,000 (3,400,000) 1,452,000 (3,900,000) AWBA (M&I Firming)** 1,372,100 (1,600,000) 1,443,000 (1,600,000) 1,452,000 (1,600,000) TOTAL3,956,100 (5,760,000) 5,328,400 (9,278,000) 7,594,600 (13,706,000) REMAINING EXCESS WATER AVAILABLE (after NIA commitment)* **Does not include 1.1 maf Interstate +.6maf Indian Firming *Demands shown in Blue

EXCESS WATER SUPPLY CONCLUSIONS Ag Pool Commitment 2004 – 2030 will be met Remaining Excess Supply Insufficient to Meet Projected Annual Obligations in 2016, 2018 – 2030, & Remaining Excess Supply Insufficient to Meet Projected AWBA Needs Remaining Excess Supply Insufficient to Meet Replenishment Reserve Target ABSENT Acquisition of Long-Term Supplies