Possum Kingdom Lake Association Newsletter January 2012

TCEQ Application

Approximately 7 years ago, BRA started the TCEQ application process. On January 25, 2012, in Austin, BRA was told by TCEQ commissioners that they must submit a water management plan within the next 10 months or the application to for an additional 425,000 acre ft of water would be denied.

The 3 TCEQ commissioners that heard arguments on the application were told by Bill Newchurch , with the State Office of Administrative Hearings, that BRA’s request was the most complicated permit we’ve ever reviewed. He stated the request did not specify the locations where water would be taken from the Brazos basin. Some opponents said the BRA permit request did not meet the beneficial use requirement and did not include 5-year and 10-year goals. Others stated that the amount of water requested was too much. Typically in a TCEQ application, BRA would identify a specific amount of water, at a certain location for an identified purpose.

BRA was given 10 months to prepare a water management plan. The permit would then go back to the Judges for review. TCEQ commission is expected to make a decision in 24 months on the actual permit.

County Commissioner Luis Ragle and Justice of the Peace Shawn Humphries attended the hearing. Senator Birdwell and Representative Keffer spoke on behalf of their constituents. They asked TCEQ to require a water management plan from the BRA before considering the permit. Rep. Keffer detailed the ripple effect as the droughts continue. The economic impact on the PK and Granbury communities is affected by tourist spending money and home values plummet because of low water levels resulting in fewer tax dollars for the county and school districts. Senator Estes wrote a letter to the commission asking either for them to deny the application or defer a final ruling until BRA prepares a water management plan. As BRA develops a water management plan, PKLA will make efforts to monitor or have input into the plan.

BRA Meeting January 30, 2012

The following made opening remarks to the board:

· Joe Staley representing SET Ranch asked the board to work through on finalizing the sale of land outlined in

HB 3032. This bill was passed by the legislature in 2009.

· Possum Kingdom was represented by Steve Lowder, Steve Anderson, Sam LeComte, Layne Kramer and Monte Land. They each spoke about divestiture and moving forward with the sale of residential and commercial leases. Monte Land reminded the board that in HB 3031 the intent to sell was clear. It was not until surveys were done that some leases were removed because of FERC constraints. These leases need to be sold under HB 3031 guidelines.

After going into executive session the board passed a resolution regarding the Salt Creek Graham Project. This is a flood control project that will aid in flood control for Graham.

BRA passed a resolution for $450,000 to develop a water management plan that was required at the TCEQ hearing.

Mike McClendon presented a FERC update. The new timeline indicates that decommissioning will be complete sometime in 2013. FERC will need to approve the design plan which BRA hopes to submit by March 2012. After completion of BRA work, FERC must inspect and approve work before decommissioning is complete. Details are outlined in the following paragraph.

FERC Approves Decommissioning

In a letter dated December 23, 2011 FERC approved an application to decommission the power generators at the dam and install a control conduit for the release of water. Conditions of the approval:

· 60 days prior to start of construction BRA must submit plans and schedule for work. BRA cannot start work until they have written approval from FERC. The plan should be submitted March 2012.

· 30 days before completing the work associated with the project BRA shall file a final decommissioning report.

· The license surrender shall not be effective until FERC issues a letter stating that the generators have been permanently disabled. There is no deadline date but BRA timeline projects end of the year 2013.

· Once FERC issues the final surrender letter, FERC will cease its control. Title to the buffer will vest to the lot owner. Transfer language is found in the Deed. FERC encroachments will no longer exist so title companies will be authorized to release escrow funds.