POSSUM KINGDOM LAKE ASSOCIATION NEWSLETTER FEBRUARY 2011

P. O. Box 492 Graford, Texas www.pklakeassn.org

January BRA Board Meeting

Ken Monroe represented the Lake Association at the meeting in Sugarland. Agenda item #8, Report and possible discussion on Water Management, contained Possum Kingdom information. This report was given by Brad Brunett regarding lake levels at Possum Kingdom, Granbury and Lake Whitney. This report is being prepared as part of the TCEQ System Operation Permit requested by BRA for permission to sell additional 500,000 acre feet of water. The objective of the report is to develop management procedures for Possum Kingdom, Granbury and Whitney, that meets water supply needs and considers major items/issues affected by lake levels and lake management. Water flow requirements and lake levels are being studied so that management efforts would have the least negative effect on lake and river residents. Included in the report is the total number of floating and fixed docks at each lake, historical hydrology information and water supply intakes. BRA stated that they plan on holding public meetings in February and March. Audio minutes of this meeting including this report are on line at www.brazos.org. A final report will be presented to the BRA board at their April meeting.

FERC and Decommissioning of Morris Shepard Dam

On November 8, 2010, BRA Board passed a resolution to take the necessary steps to surrender the FERC license and to decommission the hydroelectric generation facility at Possum Kingdom Lake.

On November 9, 2010, a letter was sent to FERC from BRA outlining the process of surrendering the FERC license. The letter states that BRA intends to immediately begin preparing an application to surrender the license and circulate a draft application among interested federal and state agencies by February, 2011. BRA would file a final license surrender application with FERC approximately four months later. The relevant dates are outlined as follows:

Mid-Feb 2011 Brazos completes draft surrender application and circulates to relevant agencies.

Mid-Feb—Mid-April, 2011 Agencies have 60 days to review and comment on the draft application.

Mid-April—Mid-June, 2011 BRA addresses agency comments, prepares final surrender application and files

application with FERC.

BRA will then begin the process of disabling the power generation by sealing off the two penstocks, disabling the generators and disconnecting the facility from the power transmission system.

Upon decommissioning the generating facilities, BRA states that they will fulfill any conditions that FERC imposes as FERC jurisdiction is eliminated. BRA proposes to continue to operate the lake as it currently does, including the minimum flow release provision contained in the existing license for fish and wildlife needs. Additionally, BRA would install new control outlets to the dam in order to provide the capability to continue downstream water needs. BRA will continue operation of ten public use areas. They will continue to revitalize and upgrade the parks and trail system. The outline of decommissioning process shows completion date of December 2012.

The Lake Association will make every effort to monitor the decommissioning process and keep our membership informed.

Lease Sales

According to the January 21, 2011 Lake Country Sun, 84% of the 1,535 leaseholds that were available for purchase have signed contracts.

Please keep in mind that the purchase price will remain at 90% of the 2008 appraisal until October 20, 2011.

Brazos Electric vs. BRA

This case has been referred to the Texas Supreme Court. There is no timeline on when the case will be heard.