1. AVAILABILITY OF EXCESS CAP WATER

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

3. 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

4. COLORADO RIVER SUPPLY Modeling Assumptions cont’d CAP Shortage Volume -- 500 KAF CAP Surplus Volume -- 400 KAF 96 years of Colorado River hydrology used in sequential traces (1906 - 2001)

5. COLORADO RIVER SUPPLY Modeling Results DecadeShortage ProbabilitySurplus Probability 2003-2012 3%11% 2013-202218%23% 2023-203225%19% 2033-204228%19% 2043-205231%17% 2053-2062+33%12% Additional: Current Dry Cycle since 1988 - 15+ years Worst Case Scenario using Driest 10-year period of record with current conditions - results in a potential shortage in 2014.

6. KEY ASSUMPTIONS Planning Period 2005 – 2104 –20 YEAR PERIOD = 2005 – 2024 –80 YEAR PERIOD = 2025 - 2104 Entire Period = CAP Normal Deliveries GRIC Settlement Completed/Implemented All CAP Water Contracted/Used by 2050 SRP “Drought” Deliveries End After 2005

7. 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)

8. 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

11. Plan Period Enrollment Buildout MSA “buildout”

12. Enrollment Buildout Plan Period MSA “buildout”

13. 2005-20242005-20352005-2050 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

14. 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, & 2051 - 2104 Remaining Excess Supply Insufficient to Meet Projected AWBA Needs Remaining Excess Supply Insufficient to Meet Replenishment Reserve Target ABSENT Acquisition of Long-Term Supplies