Each annual report specifically addresses these points for each lease obtained during the report 

 period. 



WATER LEASE MODEL 



Section 85-2-436 (l)(b) requires FWP to develop "... a complete model of a water lease and 

 lease authorization that includes a step-by-step explanation of the process from initiation to 

 completion." FWP provided this information in the annual reports for each lease approved by 

 listing the chronology of events that occurred (a leasing log) fi-om the beginning of discussions 

 with a potential lessor through final approval of the lease by DNRC. 



WATER LEASE MONTTORTNG PLAN 



Section 85-2-436 (2) (j), MCA states that FWP shall pay all costs associated with installing 

 devices or providing personnel to measure streamfiows according to the measuring plan 

 submitted under this section. Section 85-2-436 (l)(a)(v) requires FWP to describe the methods 

 and technical means used to monitor use of water imder each lease. Monitoring plans for each 

 approved water lease have been designed and implemented. The details of each monitoring plan 

 are provided in the annual report for the year the lease was approved. 



ANNUAL REPORTS 



Beginning in 1990, aimual reports were prepared on the Water Leasing Study and submitted to 

 the commission and EQC. The last annual report written prior to this final report is for 1997. 

 The first lease agreements obtained are described in the 1992 annual report. Each report presents 

 the details of each water lease obtained as well as those that were investigated and not pursued or 

 were still under investigation when the report was completed. . 



PROTECTION OF LEASED WATER 



Four of the ten water leases approved to date are on two streams which have water 

 commissioners who administer water rights (Mill Creek and Tin Cup Creek). Both these streams 

 have many other water users besides FWP. We have had some difficulty with commissioners 

 imderstanding the concept of a water lease and how it should be administered. The concept of 

 not diverting water at a former diversion site was a confiising point for one commissioner when 

 he had to let water go past upstream diversions. He understood the concept of providing higher 

 priority water if it was to be diverted downstream but was confused by how much water, if any, 

 should be released for instream flow. He thought it was wasting water to pass it by an upstream 

 diversion which was not getting all the water it needed anyway when there was no diversion of 



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