FERC Relicensing of the Toledo Bend Project – Hydroelectric Power Generation Drought Hydroelectric vs. Water Supply Sabine River Authority Issues

–Current license issued Oct.1963 – Expires Sept –Filed NOI/PAD September 22, 2008 –Preparing license application 2008 – 2011 –File license application September, 2011 –Re-licensing could affect all levels of Operations Lake levels Downstream releases Water supply yield Water releases for instream flows and bays & estuaries Hydroelectric power production Construction/Permitting within Project Boundary Re-Licensing the Toledo Bend Project

FERC Relicensing Challenges In the early 1960’s, the Clean Water Act, the National Environmental Protection Act, and the National Historic Properties Act had not been enacted. Before FERC will issue a new license for Toledo Bend, all those Acts must be complied with. It is the responsibility of the licensee’s (SRA-TX and SRA-LA) to prove the project is in compliance.

Length – 560 miles Drainage Area – 9,952 sq. mi. 25% in Louisiana 75% in Texas Boundary reach covered by Sabine River Compact. Available water from the boundary reach down is split equally between States. Toledo Bend Dam is located 147 miles from top of Sabine Lake. Average Inflow into Sabine Lake – 5,982,000 Ac-ft/yr Sabine River Basin Facts

Toledo Bend Project Water Supply Hydroelectric Power Recreation

Toledo Bend Reservoir  Federal Energy Regulatory Commission –Project No. 2305; license issued 1963 (LA & TX)  185,000 surface acres  Max Power Pool Elev ft MSL  Storage Capacity4,477,000 acre-feet  Average Inflow 4,200,000 acre-feet/year  Shoreline 1,200+ miles  Drainage Area 7,190 sq. miles

Water Volumes 1 Acre-foot = 325,848 gallons Toledo Bend Reservoir 4,476, ft. msl 4,200,000 Acre-feet annual average inflow Hydro Power Generation – 2 Units 28,000 acre-feet per 24 hours Haynesville Shale Hydrofracking 6.5 million gallons/ 20 acre-feet Evaporation Loss (Monthly) August – 40,000 acre-feet

“Firm Yield” “The amount of water that can be supplied from a reservoir on an annual basis during the most critical drought period of record.” Forest & Cotton, 19592,074,500 ac-ft Brown & Root, 19912,086,600 ac-ft TCB, 20051,908,000 ac-ft Louisiana’s Portion 954,000 ac-ft

172 msl 4,476,951 ac-ft Elevation and Volume Toledo Bend Reservoir 168 msl 3,788,901 ac-ft 169 msl 3,953,801 ac-ft 170 msl 4,123,426 ac-ft 171 msl 4,297,776 ac-ft

Elevation and Volume Toledo Bend Reservoir 172 ft-msl 168 ft-msl 688,000 Acre- Feet 15% of Total Volume 16% of Average Annual Inflow

LA SRA Water Sales (Toledo Bend Reservoir) Existing Contracts Annual withdrawals: 27,589 ac-ft/yr Additional options: 37,940 ac-ft/yr Contracts total: 65,529 ac-ft/yr Haynesville Shale (projected)  36,500 ac-ft/yr Non-Allocated Water 851,971 ac-ft/yr

Power Generation vs. Water Supply Power Sales Agreement – Expires 2018 – Notice of Termination due 2015 – Power Sales Revenue accounts for 40% of total SRA Revenue Water Supply – Toledo Bend: Accounts for 12% of SRA Revenue – Diversion Canal Accounts for 34% of SRA Revenue

Future Utilization of Toledo Bend Reservoir SRA’s Board of Commissioners has adopted the strategy of developing water sales as an alternative source of revenue in lieu of hydroelectric power generation. “Run of the River” for Power Generation – Environmental Flows – Controlled excess capacity releases

Water Supply Proposal Out-of-State Sale – Requires Governor’s Consent 600,000 Acre-Feet Per Year Maximum Monthly Withdrawal – 75,000 Acre-Feet/month – Equivalent to running 2-generators 2.67 days/month Drought Contingency Plan

Approx. $.008 / 1000 Gallon $.15 / 1000 Gallon

Balancing Water Supply/Lake Level SRA-LA & SRA-TX Inter-Basin Transfers – Present Law prohibits SRA-TX from transferring water outside the Sabine River Basin – Highly probable SRA-TX will be granted a permit to transfer 300,000 acre-feet per year outside the Sabine River Basin of Texas SRA-LA will reduce its allocation to 300,000 acre-feet per year Proposed Cooperative Agreement – In the event SRA-TX does not receive an Interbasin Transfer Permit, SRA-LA may enter into agreement with SRA-TX to purchase up to 300,000 acre-feet per year for lake-level mitigation and to balance operational budgets

Water Supply vs. Hydroelectric CONCLUSION Extensive Financial and Environmental Analysis have been conducted Minimal Environmental Impact and Substantial Economic and Social Benefits Consistent with purposes for which Toledo Bend was constructed Consistent with the public trust mandate of Article IX, 1 of the Louisiana Constitution