August 29, 2006

Magalie R. Salas, Secretary

Federal Energy Regulatory Commission

Mailing Code: DHAC, PJ-12.1

888 First Street, NE

Washington, D.C. 20426

Re: Response to Compliance and Administrative Matters

Dear Secretary Salas:

Thank you for John Estep’s letter dated August 9, 2006. Please consider this as the Grand River Dam Authority’s (“GRDA”) response to same. Additionally, please be assured that GRDA is committed to providing any further information you may deem necessary to fully and adequately report the status on any matter requested.

It is GRDA’s understanding that your letter is a request that we provide you with information related to long-standing compliance matters involving the Pensacola Project. Please note that each of the incidents which gave rise to these matters pre-date the current management and administration of GRDA. The Arrowhead Marina lawsuit was filed in June, 2003; the Payne shoreline clearing and dredging incident took place in November, 2003; construction of the habitable structures at Thunder Bay Marina occurred in early 2004; and the flooding events took place in the early 1990’s. Current management is earnestly working toward resolving these matters and has implemented new rules, guidelines and enforcement procedures to help prevent similar instances from occurring in the future.

I. Arrowhead Marina litigation

You first ask GRDA for the current status of the lawsuit related to the retaining wall and dredging at Arrowhead Marina. On June 25, 2003, Mike Brady, Dorothy Glynn Adams, and Rodger Tucker (“Plaintiffs”) filed this lawsuit in Craig County, Oklahoma. GRDA is the only remaining defendant in the case. Currently pending is GRDA’s Motion for Partial Summary Judgment filed April 12, 2004, together with supplements filed of record. Also, Plaintiff’s Motion for Partial Summary Judgment, filed June 1, 2004, is pending. The Court has not yet ruled on these Motions and it is unknown when the Motions will be ruled upon. Once the case is finally decided, GRDA remains committed to filing with FERC an after-the-fact application to permit the wall and dredging within 90 days after a final court order is issued.

As further information regarding the status of this litigation, GRDA filed, on July 22, 2005, an additional supplement to its motion informing the Craig County District Court of the U.S. Court of Appeal’s affirmation of FERC’s Order which approved the Arrowhead North Marina expansion. A copy of the U.S. Court of Appeal’s decision is attached hereto as Exhibit “A” and by reference made a part hereof for all purposes.

II. Shoreline Clearing and Dredging by William Payne

You next ask for a mitigation report describing the measures GRDA has taken, and the measures GRDA intends to take as a result of William Payne’s clearing and dredging on Grand Lake. As your letter stated, GRDA previously provided you a progress report regarding this issue on December 27, 2005. Attached hereto as Exhibit “B” is the Final Mitigation Report and by reference made a part hereof for all purposes. You will note therein that, in addition to other restoration activities related to this incident, GRDA is well on its way to constructing the first ever waterfowl refuge in the history of GRDA. The refuge entails approximately 55 acres in Delaware County, Oklahoma and has been named, “The Duck Creek Waterfowl Refuge and Educational Complex.” The complex is not only a refuge for waterfowl, but is also designed to include walkways, platforms and observations areas for educational purposes. Specific details, drawings and photographs related to this exciting project are included in Exhibit “B”.

The Final Mitigation Report attached hereto as Exhibit “B” also describes the wetland restoration efforts taken by GRDA at the Payne site by planting numerous trees and 1500 bare root seedlings. These activities were completed in February, 2006. GRDA will be filing revised Exhibit A drawings to enclose the wetlands-mitigation site within the project boundary in the near future.

GRDA respectfully requests FERC’s approval of this Final Mitigation Report.

III. Habitable Structures at Thunder Bay Marina

Just a few weeks after the current management of GRDA came on board, GRDA was notified that Thunder Bay Marina was constructing two habitable structures on one of its commercial docks. Shortly thereafter, GRDA issued a letter to Thunder Bay Marina giving them notice that the construction was possibly unauthorized and if that should be the case, the structures could be subject to removal. See, letter dated May 27, 2004 to Thunder Bay Marina attached hereto as Exhibit “C” and by reference made a part hereof for all purposes. On September 7, 2004, GRDA sent Thunder Bay Marina a letter which stated that Thunder Bay must “either make application for GRDA approval to modify Dock “E” … “or, in the alternative, you must remove any additions not in compliance with existing approved permits”. See, letter dated September 7, 2004 attached hereto as Exhibit “D” and by reference made a part hereof for all purposes. Since such time, no construction has taken place and Thunder Bay has obtained an environmental assessment covering the construction. No approval, however, of the construction has been obtained from GRDA for the modifications. As discussed herein, no decision has been made as to whether such habitable structures will be allowed on Grand Lake.

As stated, Thunder Bay Marina has obtained an environmental assessment regarding the structures and to date, one such habitable structure (also referred to as a “cabana”) remains partially constructed and the other remains unoccupied. GRDA has held public meetings and continues to receive public opinion regarding habitable structures. Research has been performed regarding the laws and regulations related to water discharge issues and the Oklahoma Department of Environmental Quality has had input. Also, this issue has been debated numerous times in the ongoing Shoreline Management Plan stakeholder meetings.

Your letter states that GRDA should file an application for an after-the-fact permit for the structures or file a report “describing the steps we have taken, or intend to take to otherwise resolve this matter.” Please consider this letter as the report you request. It is no secret that the issue of habitable structures has been publicly discussed, time and time again, during the past year. This issue remains highly controversial in part because there are hundreds of “floating cabins”, which are habitable structures, on Grand Lake. Except for the two unoccupied structures at Thunder Bay, the rest of the habitable structures are owned by private individuals and the vast majority have been located on the lake for years. As such, the issue is not easily resolved as it might be if the only structures at issue were those on the Thunder Bay docks. Consequently, GRDA has scheduled public meetings and discussed the issue in Board meetings (also open to the public).

The three public meetings were held on November 8, 2005 (in Vinita, Oklahoma), November 10, 2005 (in Ketchum, Oklahoma), and November 29, 2005 (in Grove, Oklahoma). The agendas for these meetings are enclosed as Exhibit “E” hereto and by reference made a part hereof for all purposes. The minutes from these meetings are enclosed as Exhibit “F” hereto and by reference made a part hereof for all purposes. As indicated on the Minutes, 11 members of the public attended the November 8 meeting, 14 members of the public attended the November 10 meeting, and 30 members of the public attended the November 29 meeting. The minutes of these public meetings also reflect that there was no clear consensus on whether habitable structures should be allowed, or allowed to remain, on Grand Lake.

The GRDA Board of Directors addressed the issue of habitable structures in June, 2006. On June 7, 2006, the Assets Committee considered the issue. The Agenda and Minutes from the Assets Committee meeting are attached hereto as Exhibit “G” and by reference made a part hereof for all purposes. As reflected in the minutes, the public was also allowed to voice their opinion on habitable structures at this public meeting and six individuals spoke. Again, there was no clear consensus on the issue and the Assets Committee voted to recommend that the Board continue the item for further discussion.

As discussed below, the Stakeholder Working Groups with the Shoreline Management Plan have also discussed habitable structures but again, no clear consensus has been reached in their discussions.

GRDA, together with public input, has a controversial and emotional task to accomplish. The ultimate decision involves legal, environmental, and financial considerations. There are several options available. Some of the options include:

- Prohibiting all habitable structures as of an effective date and requiring that all (several hundred) be removed from Grand Lake;

- Allowing existing habitable structures as of an effective date, but requiring that the structures be modified to non-habitable docks containing no bathroom, kitchen, and/or bedroom facilities by an effective date;

- Allowing existing habitable structures to be grandfathered as of an effective date, but requiring all such structures to meet federal, state, and local plumbing, electrical, building, fire, and environmental codes by a certain date;

- Allowing existing private habitable structures to remain, but prohibiting the construction or installation of new private habitable structures;

- Allowing existing habitable structures on commercial marinas to remain, but prohibiting the construction or installation of new such structures;

- Allowing only private habitable structures; or

- Allowing only habitable structures on commercial facilities;

Any combination of the above may also be considered at the Board meeting prior to the submittal of the SMP to FERC.

ADMINISTRATIVE MATTERS:

Acquisition of Flowage Easements

Your letter asks GRDA to report the status of the lawsuits which were filed as a result of flooding in the early 1990’s. Generally, although the Court found that GRDA operated the dam on the Pensacola project in a lawful manner, GRDA was found to be responsible for damages sustained by individuals as a result of the flooding. GRDA has settled approximately 88 of the nearly 100 claims and it is anticipated that the remaining claims will be set for trial, or settled, within the next year. This litigation was initiated in 1994 and lingered for years. Current management, within 24 months of the onset of its administration, resolved 88 of the claims.

Your letter states that it is your understanding that settlement negotiations are ongoing regarding the acquisition of additional flowage easements. GRDA has had recent discussions with State Senator Charles Wyrick, the U.S. Army Corps of Engineers (“Corps”), Ottawa County officials, and officials from the City of Miami, Oklahoma. The acquisition of additional easements, however, does not appear to be a viable option at this time. According to the Corps, any such additional acquisitions would require further study. But, the Corps, (which controls and operates the Project once waters reach the level of 745 msl or when the waters are anticipated to reach such level), is examining and refining language in its operator’s manual which may allow for more flexibility in pre-release strategies. GRDA will continue working with the Corps to take proactive steps to prevent any future flooding events.

Stakeholder Participation in Shoreline Management Planning

Lastly, you ask for an update on the processes and participation involved with the development of a Shoreline Management Plan (“SMP”). In June, 2005, GRDA contracted with Kleinschmidt & Associates to develop an SMP. The process began in earnest in October, 2005 when GRDA held a series of listening sessions in various locations around Grand Lake. The public meetings were held in Grove, Vinita and Ketchum. These sessions were an opportunity for Kleinschmidt, on behalf of GRDA, to solicit comments, concerns, and questions regarding management of Project lands within the Project boundary in an open forum. GRDA issued press releases in September, 2005 announcing these public meetings.

At these public meetings, individuals wishing to participate in the ongoing process were asked to sign up for potential inclusion in stakeholder working groups. From these lists, stakeholders were selected for the three working groups. An effort was made to assure representation of a wide range of private and commercial interests, as well as a regionally diverse group.

On December 7, 2005, the initial meeting of the SMP stakeholder working groups was held at the GRDA Administrative Headquarters in Vinita. Of the approximately ten federal, state, county and local municipal agencies invited to participate, a representative from the Oklahoma Department of Wildlife Conservation and the Ottawa County Commission were in attendance.

Land Use Committee

Stakeholder’s roles and responsibilities have been invaluable. Their input, although advisory, has been included in virtually every aspect of the draft version of the SMP. The stakeholders involved with the Land Use Classifications have been responsible for developing definitions that encompass land uses that currently exist around Grand Lake, as well as anticipated future uses. Development of these definitions also included recognition of shoreline topography, environmental resources performed qualitative evaluations of existing shoreline uses and environmental resources immediately adjacent to and/or within the Project Area to define and subsequently to identify location of Shoreline Management Classifications (“SMC”) areas. Definitions of SMC’s encompassed a spectrum of existing and potential shoreline development as it relates to existing environmental resources. The basis of the evaluation was a series of maps produced through manipulation of existing GIS databases that included steep slopes, palustrine wetlands, contour and bathymetric data, along with existing shoreline development data obtained by GRDA staff though a lake-wide GPS effort, review of aerial photography and the personal and corporate knowledge of GRDA staff and stakeholders. This analysis and definition resulted in distinct SMC’s, which the stakeholders applied to shoreline areas within the Project’s boundary. While stakeholders did not apply classifications to the entire Project boundary, Kleinschmidt, on behalf of and in coordination with GRDA, documented their efforts and completed the classification application. At the August, 2006 stakeholder meeting, for the first time, the group discussion involved a classification related to a methodology to measure dock or shoreline “density”. The manner and method of such “density” measurement was discussed. The group is currently discussing whether to recommend GRDA not allow additional development in areas which have reached their build out trigger unless new structures replace existing ones. In such instance, the issue of mitigation may also be considered.

Allowable Use Committee

The Allowable Use stakeholder group evaluated existing uses and structures in conjunction with environmental, aesthetic, social values and shoreline access expectations. This analysis first identified general uses occurring within and adjacent to the Project boundary. As the group identified these uses, they categorized them into specific “Allowable Use” groups such as Commercial, and Multi/Single Family Residential. The stakeholders then evaluated how these types of uses relate to the particular existing and potential development opportunities and environmental values within the Project boundary, and the acceptability of specific uses lake wide and within the SMC’s. These recommendations have been provided to GRDA for inclusion in the SMP. The group is currently working on developing recommendations for GRDA on allowable vegetation management practices and agricultural uses to be incorporated into the SMP where appropriate.

Permitting Committee

The objective of the group is to make recommendations for revisions and updates to clarify and standardize permitting policies and generally improve the process from the stakeholder’s perspective. To date, the group has provided recommendations on permit application standardization, requirements for supporting documentation for applications, and general process requirements. The group recommended that GRDA place particular emphasis on consolidating shoreline facilities, provided input on what information and protocols should be incorporated in dredging permits. This group, in addition to the other two committees, has also discussed the issue of habitable structures.

Information which has been provided to Stakeholder Committees

GRDA provided stakeholders with the best available information with which to formulate their analysis and base their recommendations. Under FERC’s direction, GRDA approached this information gathering and distribution using data acquired during the Project’s relicensing and other information such as the U.S. Army Corps of Engineers’ survey of the lake, USGS topographical information, National Wetland Inventory mapping, local fishing (depth) charts and an extensive inventory of existing structures accomplished by GRDA staff. Additionally, GRDA polled stakeholders for their local knowledge of resources within the Project boundary.

Communication with state and federal agencies indicated that no lake or shoreline specific resource surveys are currently available. In light of the state and federal agency, and stakeholder concerns, GRDA is currently working with the U.S. Fish and Wildlife Service and the Oklahoma Department of Wildlife Conservation to undertake qualitative resource (terrestrial and aquatic) surveys using the land use classification maps. Additionally, Kleinschmidt, on behalf of GRDA, provided stakeholders with several other shoreline management strategies employed by other licensees, wetland definitions, permitting standards, planned unit development definitions, plumbing and health standards for septic systems, and other information as requested by stakeholders. Kleinschmidt has recently finalized a proposed draft recreation plan and carrying capacity study. GRDA is in the process of reviewing and preparing final drafts to be released to the stakeholders.

Despite repeated solicitation to the Oklahoma Department of Wildlife Conservation and the U.S. Fish and Wildlife Service (collectively referred to as the Resource Agencies) for input to the SMP, GRDA did not receive any additional requests from the resource agencies for updated information until this month - August, 2006. At the August 8, 2006 meeting with the Resource Agencies, a request was made for additional information to be incorporated into the SMP. At that time GRDA agreed that it would we4lcome the Resource Agencies interpretation of the Land Use Classifications by receiving Land Use Classification maps depicting i) Limited Development, 2) Multi-purpose, and 3) Sensitive Resource Areas from the Resource Agencies perspective. This information would be helpful to GRDA and Kleinschmidt prior to final designation of the shoreline. However, rather than providing Kleinschmidt with their version of the Land Use Classification maps, the U.S. Fish and Wildlife Service has requested GRDA to update the National Wetland Inventory maps and has estimated that the update could be completed sometime in November, 2006. Certainly, GRDA would be interested in having updated information due to the time constraints GRDA is facing for the SMP, it is questionable whether the possible changes are significant enough to warrant the additional time necessary to obtain same. As stated by FERC personnel in June, 2006, the SMP is a policy guideline for lake management, and it should not be delayed with ongoing additional information requests.

Procedures Used to Incorporate Recommendations into SMP

Kleinschmidt, on behalf of GRDA, documents all stakeholder and agency meetings with meeting notes which are provided to participants prior to finalization. To date, only minor occasional comments have been received. Issues and discussions originating during these meetings are considered for incorporation into draft versions of the SMP. All comments received both in response to draft meeting minutes and other correspondence between stakeholders, agencies, the public, GRDA and Kleinschmidt are retained and used for reference in preparing various working drafts of the SMP. It is important to note that from the outset of the SMP process, GRDA advised the stakeholder working groups that they are advisory in nature. Where reasonable and dictated by prudent management of the resources, GRDA continues to incorporate the working groups’ recommendations into the content of the SMP. Upon completion of a final draft of the SMP, GRDA anticipates organizing and responding to comments made by all stakeholders, tribes and agencies, through the use of an “issue matrix” where comments are documented and responses provided.

Kleinschmidt, on behalf of GRDA, provided stakeholders an outline for the SMP at the beginning of the SMP development process. They have subsequently been provided with a revised draft document that incorporates many of their recommendations. GRDA anticipates providing at least one additional draft document to the stakeholders for review and comment concurrent with release of the document to state and federal agencies for formal comment.

Public Input into the SMP Process

The public at large has also been encouraged to participate in the process. In an effort to educate the public on the SMP process and to seek input into the development of the SMP, GRDA has issued press releases, initiated a web address for comments and questions, and mailed an SMP newsletter to 4143 private dock permit holders, 156 commercial permit holders, 25 dock builders and 175 other stakeholders. A copy of the SMP newsletter is attached hereto as Exhibit “H” and by reference made a part hereof for all purposes. The GRDA press releases reach approximately 45 lake area papers, television and radio outlets. Also, on GRDA’s Grand Lake Live, a weekly radio show, the SMP process has been discussed on the following dates by GRDA staff: June 23, June 30, July 7, July 28, August 4, August 11, August 18, and August 25. The SMP has been discussed by GRDA staff at various community clubs and organizations such as the Vinita Lion’s Club, the South Grand Lake Chamber of Commerce, the Grand Lake Association, Grand Lake Realtor Meeting, Lake Hudson Realtor Meeting, and the Dock Builder Meeting. These efforts have resulted in a better public awareness of the process and, to date, more than 40 written responses have been received from members of the public commenting on various aspects of the SMP.

While stakeholder meetings are open to the public, to maintain the group dynamics and make progress on ongoing tasks, public feedback is not taken during these meetings. When non-working group members choose to attend, GRDA allocates a period of time at the end of the stakeholder meetings to field questions and comments from the audience. Additionally, the GRDA website contains meeting minutes and proposed and past agendas of the meetings.

Once GRDA develops its final SMP (after stakeholder and agency input), the document will be provided to the public through the use of the GRDA website. As indicated below, GRDA will make the final draft SMP available to the public when it is released for agency comment. Thirty days after its release (notice to be made via web, newspapers, etc.), GRDA intends to hold public meetings to solicit additional non-stakeholder commentary. GRDA anticipates that the SMP will also be made available to the public by FERC.

Major Milestones and Schedule for Completion

To Date:

· GRDA/FERC SMP kick-off meeting (8/23/05)

· SMP public listening sessions (10/6 & 10/7/05)

· Initial state and federal environmental agency consultation (12/6/05)

· Initial meeting of the SMP stakeholder working groups (12/7/05)

· Series of four stakeholder working group meetings (1/06-8/06)

· Release of SMP outline to stakeholders (1/13/06)

· Release of SMP classification maps to stakeholders (5/9 & 5/23/06)

· GRDA/FERC follow up meeting (6/27/06)

· State and Federal agency meeting (8/8/06)

· Release of draft SMP to stakeholder working groups: (8/18/06)

Anticipated:

· Completion of agency fieldwork/qualitative assessment by: (9/29/06)

· Receipt of Raw Data from Agency field studies: (10/13/06)

· Stakeholder Working Group meeting: (Week of 10/23/06)

· Revision of Draft SMP completed (12/29/06)

· Draft SMP and Environmental Report to agencies for formal comment (1/12/07)

· Public release of Draft SMP (including stakeholders) (1/12/07)

· Final Stakeholder meetings (Week of 2/12/07)

· Public meetings and comment on draft SMP (Week of 2/12/07)

· Receipt of agency comments on SMP (3/14/07)

· Final SMP to GRDA staff for presentation to BOD (4/27/07)

· License Amendment (SMP) filing after May GRDA Board of Directors meeting

Your letter lists several items to be addressed in the SMP and asks for an explanation if GRDA does not anticipate that any of the items will not be covered by the SMP. With the exception of the 1630 acres and heavy metal testing discussed below, all other listed items will be addressed in the SMP.

Article 406 of the FERC License for the Pensacola Project gives GRDA the flexibility to manage 1,630 acres of dispersed property in the project boundary using adaptive management techniques. Article 406 specifically states : “… table 1 of the Supplemental Information to New License Application for Major Project – Existing Dam, filed with the Commission on August 31, 1990, is approved and made a part of this license and shall be implemented upon issuance of this license.” The “table 1” and related supplemental information referred to in the license is attached hereto as Exhibit “I” and by reference made a part hereof for all purposes. The areas listed on Table 1 that are being managed by GRDA have been tentatively classified as sensitive areas, as defined by the SMP. Therefore, it is not necessary to include the management of those acres specifically in the SMP. A significant portion of the acres consist of islands in Grand Lake that are protected from development. The majority of the other acres are in Ottawa County. Subsequent to the issuance of the license GRDA consulted with ODWC wildlife biologist Dick Hoar about management techniques for the acres adjacent to other property owners. Following his suggestions, GRDA blocked access to the project property from vehicular traffic and the GRDA Lake Patrol monitors its use during hunting seasons. Some of the Ottawa County property is being considered by GRDA for future wetland development.

As discussed in great detail in Exhibit “J” hereto, GRDA does not anticipate that testing for heavy metal contamination in areas affected by proposed dredging activities to be discussed in the SMP because the stakeholder working groups have not discussed same. However, as discussed in Exhibit “J” hereto, GRDA has conducted an exploratory heavy metals assessment on Grand Lake to assess the current status of the threat of metals contamination. Please refer to Exhibit “J” hereto for a discussion regarding same.

Establishment of GRDA’s Office of Ecosystems Management

Lastly, in addition to the above report, GRDA would like to address measures taken over the past two years which indicate GRDA’s proven commitment to the Pensacola Project. Please consider the following:

I. In May, 2004, GRDA voluntarily established an Office of Ecosystems Management. At that time, Dr. Darrell E. Townsend II, who holds a Ph.D. in conservation and restoration ecology – was hired. In the relatively short time that Dr. Townsend has been with GRDA, he has instituted the following:[1]

- An Ecosystems Department has been created which employs, in addition to Dr. Townsend, two full time compliance officers, an enforcement assistant, a tournament fisheries director, a biologist, and a clerical assistant.

- GRDA has adopted a new vegetation management plan (VMP) to be utilized in the permitting process for necessary removal of hazardous trees or for construction of narrow corridors for shoreline access (i.e. private dock access or GRDA public lands).

- The two full time compliance officers which report to Dr. Townsend perform the following duties:

- Identify encroachments upon GRDA lands and waters;

- Identify illegal tree, brush, or other vegetation removal;

- Identify and remove dilapidated docks on GRDA waters;

- Investigate and report on ecosystem compliance complaints.[2]

- Tasked with protecting our shorelines from illegal encroachments.

- Under the provisions outlined in the VMP, the compliance officers are required to maintain a vegetation buffer zone between the waters edges and lakefront property owners to help stabilize the shorelines; preventing shoreline erosion, improving fish and wildlife habitat, absorbing excessive nutrients, improving water clarity, ultimately protecting the delicate balance between shoreline development and fish and wildlife conservation.

- GRDA has initiated a Habitat Restoration program designed to restore fish and wildlife habitat following the destruction associated with unauthorized shoreline disturbances. GRDA recognizes the importance of maintaining a buffer zone to protect the integrity of our lakes, and as such GRDA has committed to replanting areas that have been irresponsibly dozed or cleared without proper permitting.

- Following a fish kill which occurred in July, 2005 during a bass fishing tournament, GRDA drafted a new set of tournament guidelines for all fishing tournaments held on GRDA waters. These new guidelines are based on Gene Gilliland’s (Oklahoma Department of Wildlife Conservation) book “Keeping Bass Alive” which outlines the proper procedure that anglers and tournament directors alike should follow to protect the resource.[3] These guidelines and recommendations are strongly encouraged by GRDA staff.

- An educational program, T.E.A.M. (Tournament Education on Angling Mortality) has been established to help educate tournament directors and anglers on the proper techniques to protect tournament caught fish. This program will concentrate on the techniques presented in Gene Gilliland’s book mentioned above. Prior to any major tournaments, GRDA will conduct a seminar which demonstrates the proper use of required equipment and handling procedures that should be followed per GRDA’s recommended guidelines. Additionally, a similar course will be set up on GRDA’s website where anglers can log on and take a short course on the same topics. Anglers are strongly encouraged to participate in this online course.

- To better address GRDA’s rules and regulations associated with fishing tournaments, Dr. Townsend has initiated a fish mortality study (Spring and Summer 2006), designed to refine current weigh- in procedures and identify stressors that are primarily responsible for fish mortality during summer tournaments. Basic physiology parameters will be collected, including but not limited to complete white-blood cell counts, cortisol measurements, and packed cell volumes all designed to identify stress levels associated with various tournament weigh-in conditions.

- An exploratory metals study was initiated in September 2004 to determine the potential threat of heavy metals contamination in Grand Lake and Lake Hudson. Based on probable (i.e. concentrations above which adverse effects are expected to occur) and threshold (i.e. concentrations below which adverse effects are not expected to occur) effects as described in MacDonald et al. (2000), mean concentrations did not reach the probable effects level on Grand and mean concentrations for all metals analyzed were at or below the threshold effect level on Hudson, indicating that metals contamination within Lake Hudson and Grand sediments was negligible. GRDA’s assessment was based on data previously published within the Archives of Environmental Contamination and Toxicology, yet GRDA’s assessment and conclusions were not supported by the USFWS.

- At Grand Lake, an aquatic planting program has been implemented. To date, approximately five acres of plants have been successfully planted and are currently being monitored. To date, there is no indication that the plants were planted and monitored in any method other than that which is generally recognized as standard in the industry.

- The burgeoning popularity of Grand Lake has caused an increase in residential and commercial development with the majority utilizing on-site wastewater treatment facilities (i.e. septic systems). To address ecological concerns associated with this increase in development, GRDA has implemented a water resources section under the Office of Ecosystems Management.

i. Effluent from malfunctioning or improperly installed septic systems have often been identified as the major source of pollution and can pose serious threats to ecosystem function in some reservoirs. We are currently utilizing infrared technology to identify and locate discharge effluent originating from failing septic systems or pipes that may be discharging directly into the waters of the GRDA. Our intent is to characterize local septic systems and to identify associated surface and groundwater transport pathways to evaluate whether septic systems are a likely source of contamination and to document their contribution to the water quality of the GRDA.

ii. As part of that section, GRDA has implemented a recreational impact study throughout the summer of 2005 to determine the impacts of recreational boating on water quality. These results have yet to be released and are expected sometime in 2006.

iii. GRDA has also implemented a comprehensive water quality monitoring program. Monitoring data is collected monthly to supplement data currently collected by the Oklahoma Water Resources Board. This data will be utilized by GRDA to track trends and assess the status of GRDA waters.

iv. GRDA has also implemented a Zebra Mussel Monitoring program as part of its water resources section of the Office of Ecosystems Management. In connection with this program, Dr. Townsend has spoken with community and civic groups to educate the public about the dangers of zebra mussels. Also, pamphlets have been designed to help educate the public on the threats zebra mussels pose to our ecosystem. Eighteen signs have been placed primarily at boat ramps in and around the waters of GRDA.

v. An Interstate Water Quality Coordination Meeting was hosted in October, 2005. Further, to demonstrate our commitment to the resource and our continued enthusiasm in June of 2006 we sponsored and hosted a portion of the Kansas Field Conference on the Tri-State Region. The conference on "Boundaries and Natural Resources" focused on educating Kansas and Missouri state legislatures (who make future laws that could have a tremendous impact on the Grand Lake watershed since the majority of Grand Lake’s watershed lies in Kansas) on issues facing the Grand Lake watershed. Recognizing that the Grand Lake watershed does not obey political boundaries, solutions to water quality issues will have to be conquered through cooperation across state lines. The field trip and coordination meetings included various resource agencies from Oklahoma, Kansas, and Missouri for the purpose of establishing multi-state water quality controls which impact the waters of GRDA. Participants included representatives from the Kansas Department of Health and Environment, Oklahoma’s Office of the Secretary of the Environment, Oklahoma Department of Environmental Quality, Oklahoma Conservation Commission, Oklahoma Department of Agriculture, Food and Forestry, the Oklahoma Water Resources Board, and the Missouri Department of Natural Resources just to name a few.

vi. In June, 2006, GRDA hosted the “Soil Profiling” workshop in a cooperative effort between GRDA, Oklahoma State University and the Oklahoma Conservation Commission. The workshop was intended for professionals responsible for installing or inspecting waste water treatment facilities around Grand Lake.

vii. Scheduled for October, 2006 GRDA will again host another watershed meeting, the third of its kind for 2006. The Grand Lake Education and Research meeting involves scientists and water quality specialists across the tri-state region (Kansas State University, Oklahoma State University, and the University of Missouri) will be descending on GRDA headquarters in Vinita. Discussion topics include current research and demonstration projects, opportunities for cooperative research/demonstration/ education projects (i.e. EPA Targeted Watershed proposals, USDA Integrated Watershed Extension-Research grants), and upcoming conferences, field days and activities of interest.

Information gained from these meetings has proven very beneficial to the Grand Lake watershed and continues to bring conservation and restoration issues to the forefront. The mutual respect we have seen for each agency’s efforts is really a testament to the contributions everyone (including GRDA) is making to the stewardship of the natural resources of the Grand River System.

- A comprehensive shoreline inventory and GIS database has been implemented to enhance the comprehensive shoreline management plan. This system collects data on docks, railways, breakwaters, walkways, waterlines and hazardous structures located on GRDA property. This process has also streamlined the permitting process where dock waivers can be considered by the GRDA Board of Directors. Information can be presented to the Board and relationships of the surrounding area can be projected on a screen where critical cove measurements and dock lengths can be accurately calculated saving valuable members’ time by eliminating the need for site visits.

- Dr. Townsend has been invited to speak at the Federal Energy Regulatory Commission’s (FERC) Southeastern and Midwest Shoreline Management Workshops in 2005(?) to demonstrate the use of the GIS system mentioned above and procedures on dock compliance implemented by his department in that same year.

- Dr. Townsend has been invited to speak at FERC’s 2006 southeastern Shoreline Management Workshop to be held on September 26, 27, and 28 at South Carolina Electric & Gas Company’s Saluda Project in Columbia, South Carolina.

- A Clean Marina Program has been initiated. This program, although entirely voluntary, is one in which GRDA strongly encourages all marina operators to participate. This program is one of many steps GRDA is taking to protect our most valuable resource – the waters of GRDA. Marina operators who successfully fulfill the GRDA requirements will be presented with an “eco-friendly” flag to be proudly displayed at their marina and will be listed on GRDA’s website as an environmentally friendly marina.

- GRDA has initiated a green team, “A Grand Project”, which provides up to 30 five-foot trees, planting assistance, and appropriate signs to the communities we serve. GRDA’s objective is to work with customers to establish a planting in a public setting (i.e. park, school, or entrance to communities) that provides valuable trees and demonstrates our commitment, as a public power member of the community, to conservation and restoration of our natural resources.

- A public promotion of “Eagle Pass” has been initiated. The American Bald Eagle is the only eagle unique to North America. It ranges over most of the continent, from the northern areas of Alaska and Canada, to the Northern parts of Mexico. Every year these magnificent birds can be seen here on Grand Lake where they come to spend the winter from mid-November through March. Eagle Pass is intended to provide the public with an excellent opportunity to view these birds conducting their daily activities in their natural environment.

- The first annual, “Shoreline Cleanup” was initiated and took place in September, 2005 on Grand Lake. A similar cleanup was held on Lake Hudson in November, 2005. GRDA has taken an aggressive effort to balance the public and private interests on the project.

In conclusion, GRDA works everyday to manage the Pensacola Project in a fashion which fairly balances public and private interests together with the FERC licensing requirements. GRDA welcomes FERC’s interest and input into these ongoing matters. If you have any questions, please feel free to call me.

Sincerely,

Kevin A Easley, CEO

Grand River Dam Authority

enclosures

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[1] Except for the aquatic plantings, which are paid for from the GRDA Fish and Wildlife Mitigation Fund, all of the following programs have been paid for by GRDA and were not performed as a result of any regulatory compliance requirement.

[2] GRDA has borne the entire cost of implementing these new compliance procedures. There is no regulatory requirement that GRDA implement and employ same.

[3] Gene Gilliland is an employee of the Oklahoma Department of Wildlife Conservation.