The agreement includes:

* Flexibility for SMUD’s operations to assure response to customers’ energy needs, reliability, and emergency needs.

* Increased flows in various streams to improve aquatic habitat.

* New releases that will provide for additional white water boating opportunities.

* Enhanced recreational boating opportunities.

* Improved summer reservoir levels to enhance recreational experiences.

* Improvements to the recreational facilities on the Upper American river project over the next 20 years.

* Allows the licensing of the proposed 400MW Iowa Hill pumped storage development.

* Allows SMUD to request up to a 50-year period for the new licence.

SMUD gas notified the Federal Energy Regulatory Commission (FERC) of the agreement in principle and will now work with the other participants to finalise the settlement agreement. The settlement will then go to FERC for review and approval, which is expected by late next year.

SMUD launched a public relicensing process in 2001 with more than 30 federal and state agencies, NGOs and individuals including the US Forest Service, US Fish and Wildlife Service, California state Department of Fish and Game, California state Water Resources Control Board, US Bureau of Land Management, National Park Service, Friends of the River and local recreational boating and fishing interests actively participating in the process.

‘We believe we have successfully bridged our differences and have found a balanced solution that accounts for energy requirements, local grid reliability, environmental needs and recreational opportunities,’ said SMUD’s Assistant General Manager Jim Shetler.

SMUD’s original 50-year licence to operate its 688MW hydro system will expire in July 2007, and the utility is asking that FERC issue another 50 year licence, which will include the new 400MW pumped storage development at Iowa Hill.