20030147 Ver 2_More Info Received_20071018

COMPREHENSIVE SETTLEMENT AGREEMENT
FOR THE RELICENSING OF THE
YADKIN-PEE DEE RIVER PROJECT
FERC PROJECT NO. 2206
This Agreement is entered into this the 29th day of June, 2007, by and among the Parties
identified in Appendix A to this Agreement.
Whereas, Carolina Power & Light Company (doing business as Progress Energy
Carolinas, Inc. and referred to hereinafter as either "Progress Energy" or "Licensee") owns and
operates the Yadkin-Pee Dee River Project ("ProjecY~ under license issued by the Federal Power
Commission for project number 2206 by order dated May 19, 1958; and
Whereas, the Project consists of the Tillery Dam and Reservoir located in Stanly and
Montgomery counties North Carolina, and the Blewett Falls Dam and Reservoir located in
Anson and Richmond counties North Carolina, and
Whereas, the current license for the Project is due to expire on April 30, 2008; and
Whereas, Progress Energy engaged various stakeholders, primarily consisting of the
Parties listed in Appendix A to this Agreement, to identify and resolve issues related to the
relicensing of the Project; and
Whereas, on April 26, 2006, Progress Energy filed with the Federal Energy Regulatory
Commission ("FERC") an application for a new license for the Yadkin-Pee Dee River Project
("New Project License"); and
Whereas, following extensive discussions, research, data and information collection, and
site inspections, an Agreement in Principle was developed among the Parties to provide the
framework for the development of a binding agreement that resolves issues associated with the
relicensing of the Project; and
Whereas, using the Agreement in Principle, the Parties have reached resolution on the
issues related to the Project as set forth in this Comprehensive Settlement Agreement.
Now therefore, in consideration of the mutual covenants of the Parties described herein
and other good and valuable consideration, the Parties agree and covenant as follows:

Part I -General Provisions
1.1 Purpose and Effect of Agreement
The Parties have entered into this Comprehensive Settlement Agreement for the purpose
of resolving issues that have or could have been raised by the Parties in connection with the
FERC relicensing of the Project and to provide the necessary assurances to Progress Energy and
to receive the necessary commitments of Progress Energy regarding future financial obligations,
environmental and resource undertakings, and other licensing-related matters as specifically
addressed herein.
Progress Energy filed an application for a Major New License for its Yadkin-Pee Dee
River Project with the Commission on April 26, 2006. Included in that application is
information on the ongoing impacts of the Project developed through studies scoped and
performed in the relicensing process conducted by Progress Energy. Once executed, the parties
understand and agree that this Agreement will be filed with FERC as an Offer of Settlement that
FERC may choose to implement in a New License for the Project in lieu of the operational
proposals and certain other elements of that application.
This Agreement specifies the Licensee's obligations for the protection, mitigation and
enhancement of ecological, environmental, recreational and cultural resources affected by the
Project under a New License to be issued by FERC, as well as enforceable obligations of other
Parties to this Agreement. All rights necessary or desirable to operate, manage and maintain the
Project and to engage in power and utility operations that are not inconsistent with this
Settlement Agreement are reserved by Progress Energy. This Agreement also specifies
procedures to be used among the Parties to ensure the implementation of those License Articles
and other agreed upon contractual obligations consistent with this Agreement, and with other
legal and regulatory mandates. For these purposes, the Parties agree that this Agreement is fair
and reasonable and in the public interest. Except as specifically provided below, any Party that is
also a governmental agency agrees that the Licensee's performance of its obligations under this
Agreement will be consistent with and is intended to fulfill the Licensee's existing statutory and
regulatory obligations, as to each Party that is also a governmental agency relating to the
relicensing of the Project, with regard to the Federal Power Act, 16 U.S.C. § 791(a) et. seq.,
Federal Water Pollution Control Act (as amended), 33 U.S.C. § 1251 et. seq., the Endangered
Species Act 16 U.S.C. § 1531 et. seq., the National Historic Preservation Act 16 U.S.C. § 470F,
and the Fish and Wildlife Coordination Act 16 U.S.C. § 661 et. seq.
1.2 Definitions
1.2.1 "Agreement in Principle" shall mean the preliminary agreement dated September,
2006.
1.2.2 "Annual License" shall mean the license(s) issued on an annual basis by the
Commission, pursuant to 16 U.S.C. § 808(a), upon expiration of the current License on April 30,
2008 until such time as the Commission issues a New License for the Project, or upon expiration
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of the New License until such time as the Commission issues a subsequent new license for the
Project.
1.2.3 "Commission" or "FERC" shall mean the Federal Energy Regulatory
Commission.
1.2.4 "Comprehensive Settlement Agreement" shall mean this document, including
appendices, together with any information herein incorporated by reference. Hereinafter
"Comprehensive Settlement Agreement" maybe referred to as either "Settlement Agreement" or
"Agreement."
1.2.5 "Effective Date" means the date as stated in Section 1.3.5 of this Agreement
1.2.6 "FERC-Imposed Modification" shall exist if (1) the Commission issues a New
License that contains a license article that is not included in the L-Form (as defined by 18 C.F.R.
§ 2.9) applicable to the Project and that is not proposed by the Parties; omits a Proposed License
Article and the substance of that Proposed License Article is not otherwise enforceable by
contract under this Agreement, provided that there is no other provision in the New License that
prevents the implementation of that omitted Proposed License Article; modifies a Proposed
License Article; or otherwise takes action that is materially inconsistent with the terms of this
Settlement Agreement, and (2) a Party determines, in its sole judgment, that the Commission's
Order issuing the New License materially (i) increases a Party's overall costs and burdens of
and/or (ii) impairs a Party's bargained-for benefits under this Settlement Agreement. FERC's
inclusion of the following within Progress Energy's New License shall not be construed as a
material increase or impairment (1) language reserving authority throughout the license term to
require changes to plans or other requirements of the Licensee, (2) any reopener clause, or (3) a
license article concerning diadromous fish passage prescribed by the Department of the Interior
or the Department of Commerce. A Proposed License Article, or part thereof, will be considered
"omitted" if the Commission declares that it will not enforce the Proposed License Article, or
part thereof.
1.2.7 "Final and Non-Appealable" when used in conjunction with the issuance of the
New License, shall be deemed to have occurred on either (1) the thirty-first day after the date
FERC issues an order setting forth the New License for the Yadkin-Pee Dee River Project if no
Party seeks rehearing of such order; or (2) if any Party seeks rehearing of such an order, the
earliest date upon which no further court appeal of a FERC order issuing a New License for the
Yadkin-Pee Dee River Project, including a Petition for Writ of Certiorari to the Supreme Court
of the United States, or action by a court or by FERC with respect to such appeal, is possible.
1.2.8 "License" shall mean the regulatory authorization for construction, maintenance,
and operation of the Project subject to the jurisdiction of FERC pursuant to the Federal Power
Act, 16 U.S.C. § 791 et seq. ("the FPA").
1.2.9 "Licensee" shall mean Progress Energy, the legal entity holding the existing FPA
license for the Project as well as the legal entity to which the Commission is expected to issue
the New License for the Project and any successors in interest.
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1.2.10 "New License" shall mean the license the Parties expect to be issued by the
Commission to the Licensee pursuant to Section 15 of the Federal Power Act for the continued
operation of the Project.
1.2.11 "Offer of Settlement' shall mean an offer of settlement to be filed with FERC
pursuant to 18 C.F.R. § 385.602, which offer shall be comprised of this Settlement Agreement.
1.2.12 "Party" or "Parties" shall mean the entities that are signatories to this Agreement.
(The Parties are listed in Appendix A of this Settlement Agreement.)
1.2.13 "Project' shall mean the Yadkin-Pee Dee River Project, licensed to the Licensee
as FERC Project No. 2206 (1958).
1.2.14 "Proposed License Article(s)" shall mean the terms and conditions set forth in
Appendix F of this Settlement Agreement.
1.2.15 "Section 401" shall mean Section 401 of the Federal Water Pollution Control Act
(as amended), codified at 33 U.S.C. § 1341.
1.2.16 "Section 401 Agency" shall mean the agency of the State of North Carolina (i.e.
the Division of Water Quality) that is authorized to issue certifications pursuant to Section 401 to
the extent that such agency is acting in its capacity as a decision maker pursuant to Section 401,
and not in an unrelated capacity e.g., commenting in a proceeding before another agency.
1.2.17 "Section 401 Certification" shall mean the certification issued under Section 401
by the State of North Carolina Section 401 Agency in connection with the issuance of the New
License.
1.3 General Provisions
1.3.1 Scope of Settlement Agreement
The Parties agree that this Settlement Agreement resolves all issues among the Parties
associated with, and constitutes a comprehensive settlement of, all issues that have or could have
been raised by the Parties in connection with the FERC relicensing of the Project.
1.3.2 Procedures Regarding Certain Statutory Authorities and Obligations
The Parties have negotiated this Agreement with the intent that the terms of the
Agreement satisfy all legal obligations of all governmental agencies with statutory rights or
duties regarding the Project and/or mandatory conditioning authority over the Project. The
Parties recognize that any Party that is also a governmental agency with statutory rights or
obligations, including, but not limited to mandatory conditioning authority, must abide by all
applicable procedural and substantive laws and rules in the exercise of such authority in order to
issue lawful, mandatory conditions or recommendations, and such Party has not compromised its
authority or acted unlawfully by negotiating and entering into this Agreement. Nothing in this
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Agreement shall diminish, modify, or otherwise affect the statutory or regulatory authorities of
the agencies involved, including those with mandatory conditioning authority.
1.3.3 Commitments During Relicensing
The Parties agree to support the issuance of a New License with a 50-year license term.
In the event that FERC issues a New License with a term of less than 50 years, the Parties agree
that Progress Energy may file a request for rehearing with FERC and, if necessary, an appeal
with the United States Court of Appeals. In its request for rehearing and any subsequent appeal,
Progress Energy is authorized to state affirmatively that each Party supports the request of a New
License with a term of 50 years, unless a Party gives notice to Progress Energy within ten days
of FERC's issuance of the New License that it no longer supports a 50-year license term due to a
FERC-Imposed Modification(s). The Parties also agree either to join Progress Energy in filing
such request or to otherwise express support on the record for Progress Energy's request unless a
Party gives notice to Progress Energy within ten days of FERC's issuance of the New License
that it no longer supports a 50-year license term due to aFERC-Imposed Modification(s).
However, in no event shall a Party oppose Progress Energy's request for rehearing concerning
the term of the New License.
If FERC denies the request for rehearing, the Parties that are not governmental agencies
agree to join Progress Energy in filing an appeal with the United States Court of Appeals or to
otherwise express their support for the appeal on the record with that Court. Each Party to this
Agreement that is a governmental agency agrees either to request participation in the appeal by
their respective agency or to otherwise express that agency's support for the appeal on the record
with the Court; provided, however, that in either event, each agency shall follow its respective
protocols, and shall request participation in or express its support for the appeal only to the
extent such agency's protocols allow. In addition, the Parties agree to request, in a manner
consistent with and to the extent allowed by each Party's protocols, if any, the State of North
Carolina and the United States, respectively, to join Progress Energy in filing an appeal. This
paragraph does not apply to a Party who gives notice to Progress Energy within ten days of
FERC's issuance of the New License that it no longer supports a 50-year license term due to a
FERC-Imposed Modification. However, in no event shall a Party oppose Progress Energy's
appeal concerning the term of the New License.
The Parties' commitments herein with regard to said request for rehearing and appeal
shall be limited to the sole issue of the duration of the license term. However, any Party may
choose to and is urged to join Progress Energy in any request for rehearing and appeal that is
brought by Progress Energy to effectuate any element or elements of this Agreement.
In any proceeding relevant to the terms or interpretation of the terms of the New License,
the Parties agree to support and/or defend the conditions of the Certification by the State of
North Carolina Section 401 Agency that are consistent with the terms of this Agreement.
However, nothing in this Agreement shall be construed to limit the State of South Carolina's
(SC) or the U. S. Environmental Protection Agency's (EPA) right to provide comments to North
Carolina during that State's 401 Certification process, whether consistent or inconsistent with
this Agreement provided that the comments are based upon facts of circumstances or data that
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were unknown at the time of the signature on this Agreement, or to initiate the procedures under
33 U.S.C. § 1341(a)(2) should it be deemed necessary by SC or EPA.
In any proceeding before any agency with mandatory conditioning authority, the Parties
are encouraged to urge upon such agency that the terms of this Agreement satisfy the agency's
legal mandates and are within the agency's discretion; provided that Parties who are
governmental agencies are not by this commitment compromising or relinquishing any legal
authority or process requirements.
During the relicensing process, the Parties agree not to propose or otherwise
communicate to FERC or to any other federal or state resource agency with jurisdiction directly
related to the relicensing process any comments, recommendations, measures, prescriptions,
terms or conditions, other than ones consistent with the terms of this Agreement. Any Party that
is also a governmental agency with statutory rights or obligations, including, but not limited to
mandatory conditioning authority, agrees that any comments, recommendations, measures,
prescriptions, terms or conditions such party makes to FERC or any other federal or state
resource agency will be made in good faith under each party's respective authority and
regulatory and statutory obligations and that each may, consistent with applicable law, take into
account the process culminating in this Settlement Agreement.
1.3.4 Structure of Settlement Agreement
This Settlement Agreement consists of an Agreement signed by the Parties together with
seven appendices. The Agreement includes a "General Provisions" section and a "Settlement
Terms" section. Appendix A consists of a list of the Parties to this Agreement, which is included
to provide information regarding the giving of notice in accordance with Section 1.3.10.5 of this
Agreement and which otherwise has no significance within this Settlement Agreement.
Appendix B is a copy of the executed Low Inflow Protocol identified in Section 2.1.5. Appendix
C contains depictions of certain lands to be donated by Progress Energy to the State of North
Carolina in accordance with Section 2.5.2 of this Agreement. Appendix D contains depictions of
certain lands over which Progress Energy will impose restrictive covenants in accordance with
Section 2.5.3 of this Agreement. Appendix E contains a depiction of certain lands to be leased to
the State of North Carolina in accordance with Section 2.5.4 of this Agreement. Appendix F
consists of Proposed License Articles with respect to certain provisions of the "Settlement
Terms" section. Appendix G contains the State of North Carolina's standard Section 401
Certification conditions referenced in Section 1.3.12 of this Agreement.
To the extent that there are conflicts between the language of any Proposed License
Article in Appendix F and the language of the remainder of the Settlement Agreement (including
the other Appendices), the language of the Settlement Agreement (including the Appendices)
shall be controlling.
1.3.5 Effective Date and Term of Settlement Agreement
Once negotiations on the terms of this Settlement Agreement have been completed, the
Agreement will be presented to the Parties for signature by June 1, 2007. After the close of the
signature period, and before the Effective Date, those Parties that choose to sign the Agreement
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may agree to modify the substantive provisions of the Agreement to match the collective
interests and needs of those Parties, which may include the deletion of provisions beneficial to
non-signatories. This Settlement Agreement shall become effective among its signatories on
July 1, 2007, or, if the Parties that choose to sign the Agreement agree to modify the substantive
provisions of the Agreement, on a date on which they mutually agree. The Agreement may be
executed in separate counterparts, with each counterpart deemed to be an original having the full
force and effect thereof The Settlement Agreement shall remain in effect for the term of the
New License issued by the Commission for the Project and for any Annual License issued
subsequent thereto, unless terminated pursuant to Section 1.3.11.5. Upon the Effective Date of
this Agreement, the Agreement In Principle is terminated, and no provision in the Agreement In
Principle shall be used to interpret any provision of this Agreement.
1.3.6 Effective Date of Settlement Obligations
To the extent that the Licensee's obligations under this Settlement Agreement are
contained in the New License, those obligations shall be binding upon the Licensee upon
issuance of the New License, except to the extent such obligations may be stayed by law. For all
Parties other than the Licensee, and for the Licensee with respect to obligations not set forth in
the New License, the obligations under this Settlement Agreement shall become binding and
effective once the New License becomes Final and Non-Appealable, EXCEPT THAT, from the
Effective Date of the Settlement Agreement until termination, all Parties shall have the
obligations as set forth in this Agreement including (i) supporting approval of the Settlement
Agreement before FERC and, if there be one, in any court appeal regarding the New License
consistent with Section 1.3.3, and (ii) complying in good faith with respect to the dispute
resolution process specified herein.
1.3.7 Jurisdiction
Execution of this Agreement does not constitute a consent to jurisdiction of any court
unless such jurisdiction otherwise exists. Execution of this Agreement also does not constitute a
waiver of any immunity or privilege except as provided by law.
1.3.8 Dispute Resolution
1.3.8.1 General
Except where otherwise specifically provided in this Settlement Agreement, a dispute
that arises under or is related to any Party's compliance with any obligation arising under this
Settlement Agreement or under the New License, including a Party's failure to act or a Party's
abuse of discretion in performing such duty shall be resolved as follows:
1.3.8.2 Consensus Required
The Parties will make best efforts to reach consensus and resolve any dispute arising
under or related to the Settlement Agreement or the New License. A resolution based on
consensus shall have either the unanimous support of all Parties, or at least no opposition from
any Party. If a Party has no objection to the resolution but does not specifically endorse it, for
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purposes of this Section 1.3.8.2, the lack of opposition shall be considered to be support of the
resolution.
1.3.8.3 Consultation
In the event any dispute arises under either the New License or this Settlement
Agreement, the disputing Parties agree to engage in good faith negotiations for a period of at
least 45 days commencing once written notice of the dispute is delivered by any disputing Party
to any other disputing Party in an effort to resolve the dispute, provided that nothing in this
Agreement prevents the Licensee from taking any legally available appeal to FERC or the
Courts, which may require action in less than 45 days, where it deems necessary. During the 45-
day period, any disputing Party may request the services of a neutral mediator to assist in
resolving the dispute. If mediation is acceptable to all of the disputing Parties, such mediator
shall be jointly agreed upon by them. Before engagement of a mediator, the disputing Parties
will reach an agreement on each party's obligation for the costs of such services.
If any Party believes that another Party has failed to comply with any obligation under
this Agreement (including compliance by the Licensee with the New License), the Party shall
notify all other Parties in writing and the interested Parties shall consult and may engage a
mediator as described above. The interested Parties shall attempt to determine (i) whether non-
compliance has occurred, and (ii) in the event of non-compliance, establish a reasonable time in
which the Party must cure the non-compliance. In emergency situations, a Party may, in good
faith and for good cause, seek relief as provided by law without regard to any Consultation
requirements, such as those in this paragraph and Section 1.3.8.4 immediately below.
In the event that FERC institutes an action to enforce a License Article against Progress
Energy before the Consultation process is completed, any Party may participate in that action as
such Party considers appropriate without completing or complying with the Consultation
process.
1.3.8.4 Remedies
If after engaging in Consultation pursuant to Section 1.3.8.3, the Parties have not reached
consensus or if, in the event ofnon-compliance for which a schedule to cure the non-compliance
has been established through Consultation, the offending Party has not cured the failure within
the time established, any Party that participated in the Consultation may seek resolution before
any agency or court with jurisdiction over the matter; provided that if the dispute concerns the
Licensee's compliance with the New License and the dispute is not resolved at the conclusion of
Consultation, or if, in the event of non-compliance for which a schedule to cure the non-
compliance has been established through Consultation, the Licensee has not cured the non-
compliance within the established time, any Party that participated in the Consultation may
petition or otherwise request FERC to enforce the License Article with which the Licensee is
alleged to have failed to comply. If FERC affirmatively declines to enforce a License Article or
fails to act within a reasonable time after a petition or request to enforce has been filed which
period of time shall not be less than six months, then such Party may file with FERC a petition
for rehearing regarding the alleged failure and pursue any further remedies, including judicial
review. Except as otherwise provided in this section, nothing in this Settlement Agreement shall
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be construed as creating a right of any Party to enforce the New License against the Licensee as a
matter of contract.
If FERC's failure to enforce a License Article is unrelated to the merits of whether a
License violation has occurred but is due solely to a Commission policy and/or legal
determination or a combination of policies and determinations (including a jurisdictional
restriction on the Commission), then the State of North Carolina may bring suit to enforce any
coordinate obligation of this Agreement as a matter of contract. In that event, the Licensee shall
not raise as a defense that the suit is in any manner precluded in whole or in part on the ground
that the obligation under this Agreement can not be enforced because it is incorporated into the
FERC license.
The Parties recognize that the Section 401 Certification provides an independent legal
basis for the enforcement by the State of North Carolina of the terms of this Agreement that are
included in the Certification. Nothing in this Agreement shall be construed to limit or enhance
the State of North Carolina's ability to enforce conditions in the Section 401 Certification in
federal or State court or by State administrative means, as may be otherwise permitted by law.
In any action by the State of North Carolina to enforce the Section 401 Certificate: (1) the
Licensee shall not object to venue in Wake County or in any county in which the violation
occurred; (2) the Licensee shall not object to personal jurisdiction; and (3) the parties represent
that their intent is to resolve any alleged violation(s) on the merits, despite any other defenses the
Licensee may raise, recognizing that the Licensee has a continuing obligation to comply with
North Carolina's Water Quality Standards.
1.3.8.5 No Damages at Law
No Party shall be liable for damages at law for any breach of this Settlement Agreement
or the New License, any performance or failure to perform an obligation imposed by either or
both of them or any other cause of action arising from either or both of them. As such, the Parties
implicitly agree that specific performance shall be an appropriate remedy for any breach. This
section, however, shall not otherwise exempt the Licensee from liability for its actions under
Section 10(c) of the Federal Power Act, 16 U.S.C. § 803(c).
1.3.9 Withdrawal from Settlement Agreement
1.3.9.1. Withdrawal Once New License is Final and Non-Appealable
A Party may withdraw from this Settlement Agreement once the New License is issued
with aFERC-Imposed Modification and has become Final and Non-Appealable, provided that
the withdrawing Party has exhausted its administrative and judicial remedies in contesting such
FERC-Imposed Modification. As used in the preceding sentence, a Party will have exhausted its
administrative and judicial remedies if it undertakes all steps necessary to have aFERC-Imposed
Modification reviewed up to and including a review by the United States Court of Appeals, but
will not be required to seek a Writ of Certiorari from the Supreme Court of the United States. A
Party seeking to withdraw pursuant to this section must give notice in the manner prescribed by
section 1.3.10.5. Upon withdrawal, this Agreement will have no force or effect as to that Party.
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1.3.9.2. Withdrawal upon Denial of Request for Rehearing
A Party may withdraw from this Settlement Agreement once the New License is issued
with aFERC-Imposed Modification and FERC has denied rehearing of the Party's request for
rehearing. A Party seeking to withdraw pursuant to this section must give notice in the manner
prescribed by section 1.3.10.5. Withdrawal is authorized if (i) it has complied with the
Consultation procedures in Section 1.3.8.3 and (ii) all other Parties consent to the withdrawal. In
determining whether to consent to a Party's request to withdraw, the other Parties shall consider
the likelihood of the requesting Party's success on the merits of appealing the denial of rehearing
to the United States Court of Appeals and the requesting Party's projected costs in appealing
FERC's denial of rehearing to the United States Court of Appeals.
1.3.9.3. A License Term Less Than 50 Years is Not a Basis for Withdrawal
Progress Energy agrees that a New License with a term of less than 50 years does not
constitute a basis for withdrawal from the Agreement. However, should FERC issue a New
License with a term of less than 45 years, the Licensee may withdraw.
1.3.9.4. Withdrawal Upon Other Causes
A Party may withdraw from this Agreement if it is deprived of a significant bargained-for
benefit under this Agreement by the withdrawal of another Party.
1.3.9.5. Notice of Withdrawal
In order to withdraw, in addition to any other requirements, a Party must provide written
notice to all other Parties pursuant to Section 1.3.10.5. The notice must describe the reasons for
withdrawal in sufficient detail to allow for good faith discussion of the issues. The Party must
comply completely and in good faith with the consultation procedures required by Section
1.3.8.3. The withdrawal is effective upon completion in good faith of the consultation process,
upon completion of the rehearing and appeal requirements, or 60 days after the notice, whichever
is later.
1.3.9.6. Waiver of Right to Withdraw
Any right to withdraw under this Agreement is waived if the Party with such right does
not give notice to all other Parties of its intent to withdraw within 180 days of the New License
becoming Final and Non-Appealable, unless a Party is participating in rehearing or some other
appeal of the New License, in which case that Party's right to withdraw shall expire 180 days
after the rehearing or other appeal is Final and Non-Appealable.
1.3.10 Miscellaneous
1.3.10.1 Limitations of Applicability
This Settlement Agreement is made on the express understanding that it constitutes a
negotiated settlement of issues specific to the Project. No Party shall be deemed, by virtue of
execution of this Settlement Agreement, to have established precedent, or admitted or consented
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to any approach, methodology, or principle except as expressly provided herein. In the event this
Settlement Agreement is approved by the Commission, such approval shall not be deemed a
precedent for or controlling regarding any particular issue or contention in any other proceeding.
1.3.10.2 Successors and Assigns
This Settlement Agreement shall apply to, and be binding on, the Parties and their
successors and assigns. No change in ownership of the Project or transfer of the New License by
the Licensee shall in any way modify or otherwise affect any other Party's interests, rights,
responsibilities, or obligations under this Settlement Agreement. Unless prohibited by applicable
law, the Licensee shall provide in any transaction for a change in ownership of the Project or
transfer of the existing or New License, that such new owner shall be bound by, and shall assume
the rights and obligations of this Settlement Agreement upon completion of the change of
ownership. In the event applicable law prohibits the new owner from assuming some or all of the
rights and obligations of this Settlement Agreement, any Party may withdraw from this
Settlement Agreement, after providing written notice as set forth in section 1.3.9.5. The Licensee
shall provide written notice to the other Parties at least 90 days prior to completing such transfer
of license.
1.3.10.3 Severability
This Settlement Agreement is made on the understanding that each term is in
consideration and support of every other term, and each term is a necessary part of the entire
Settlement Agreement. Should any court hold that any section, provision, or part thereof is
invalid or unenforceable, the validity or enforceability of any other provision of this Agreement
is not affected thereby, provided that if the invalidity or unenforceability of any section,
provision or part thereof materially (1) increases a Party's overall costs and burdens or (2)
impairs a Party's bargained-for benefits under this Settlement Agreement, that Party may
withdraw in the manner prescribed by Section 1.3.9.5.
1.3.10.4 Force Majeure
In those instances where force majeure may apply, no Party shall be liable to any other
Party for breach of this Settlement Agreement as a result of a failure to perform or for delay in
performance of any provision of this Settlement Agreement due to any cause reasonably beyond
its control. This may include, but is not limited to: (a) acts of God, fire, war, insurrection, civil
disturbance, or explosion; (b) adverse weather conditions that could not be reasonably
anticipated causing unusual delay in transportation and/or field work activities; (c) restraint by
court order or order of public authority; or (d) inability to obtain, after exercise of reasonable
diligence and timely submittal of all applicable applications, any necessary authorizations,
approvals, permits, or licenses due to action or inaction of any governmental agency or authority;
and (e) labor disputes or strikes which are reasonably beyond the control of the Party seeking
excuse from performance. The Party whose performance is affected by a force majeure will
make all reasonable efforts to promptly resume performance. The Party affected by a force
majeure event shall provide written notice to the other Parties of the circumstances of the event
that it believes constitutes a force majeure event as soon as it is reasonably possible and practical
to do so. The settlement of strikes or lockouts or industrial disputes or disturbances is entirely
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within the discretion of the Party declaring force majeure, and that Party will not be required to
settle the strikes, lockouts, or industrial disputes or disturbances by acceding to the demands of
any opposing Party when such course of action is inadvisable in the discretion of the Party
declaring the force majeure.
1.3.10.5 Notices and Communications
All written notices to be given pursuant to this Settlement Agreement shall be mailed by
electronic mail, facsimile, certified first class mail return receipt requested, or overnight express
service, to each Party at the addresses listed in Appendix A or to such subsequent address as a
Party shall by written notice identify. Notices shall be deemed to be given on the same business
day as any electronic mail or facsimile transmitted before 5:00 p.m., Eastern Standard Time,
unless the intended recipient demonstrates that the electronic mail or facsimile was not timely
received, or on date of receipt if overnight express or other receipt-notification service is used.
For purposes of implementing this Settlement Agreement, the Parties agree that the
individuals listed in Appendix A shall be designated to be the primary contact person and all
written notices shall be posted to these individuals at the addresses listed in Appendix A.
Notification of changes in the contact persons or addresses must be made in writing and
delivered to all other contact persons by certified first class mail return receipt requested.
Upon reasonable request by any Party, the Licensee will make available copies of the
Settlement Agreement, together with all amendments including changes to the Parties' contact
information, to the extent that such changes have been provided in writing to the Licensee.
1.3.10.6 Responsibility for Costs
Except as expressly provided for in this Settlement Agreement, all Parties are to bear
their own costs for participating in the Settlement Agreement, provided that any State or federal
government Party's participation in the Settlement Agreement is subject to available funding.
1.3.10.7 Water Rights Unaffected
This Settlement Agreement does not grant or affirm any property right, license or
privilege to any Party or other entity in any waters or any right of use by any Party or other entity
in any waters. This Settlement Agreement does not authorize any person to interfere with the
riparian rights, littoral rights or water use rights of any other person. No person shall interpose
this Settlement Agreement as a defense in any action respecting the determination of riparian or
littoral rights or other water use rights.1.3.10.8 Cross Referenced Laws and Documents
Unless otherwise noted, any reference to any statute, regulation or other document refers
to the statute, regulation or document as it exists on the Effective Date.
1.3.10.9 No Third-Party Beneficiaries
This Settlement Agreement shall not create any right as athird-party beneficiary in any
individual or entity that is not a Party. This Settlement Agreement shall not be construed to
12

authorize any such third party to maintain a suit in law or equity under this Settlement
Agreement.
1.3.10.10 No Commitment of Government Funds
Nothing in this Settlement Agreement shall be construed as obligating any federal, state,
or local agency to expend in any fiscal year any sum in excess of appropriations made by
Congress or state or local legislatures or administratively allocated for the purpose of this
Settlement Agreement for the fiscal year or to involve any federal, state, or local agency in any
contract or obligations for the future expenditure of money in excess of such appropriations or
allocations nor shall it be construed to require the transfer or use of any government lands or
other resources (including personnel) except as authorized by law.
1.3.10.11 No Delegation
Nothing in this Agreement shall be construed as requiring or involving the delegation by
any government agency to any other body of any authority granted to it by Congress or the
legislature of any state.
1.3.10.12 Signatory Authority
Intending to be legally bound by the terms of this Settlement Agreement, each Party has
executed the Settlement Agreement by the signature of its duly authorized representative(s), and
by his or her signature that duly authorized representative(s) certifies that he or she has in fact
the authority to commit his or her agency or organization to the terms of this Settlement
Agreement to the maximum extent permissible by law.
1.3.10.13 Paragraph Titles for Convenience Only
The titles for the paragraphs of this Agreement are used only for convenience of
reference and organization, and shall not be used to modify, explain, or interpret any of the
provisions of this Agreement or the intentions of the Parties.
1.3.10.14 Waiver
Failure by any Party to insist upon or otherwise call upon others to account for the strict
performance of any term or covenant of this Agreement, or of any right under this Agreement
shall not be a continuing waiver. To be effective a waiver must be in writing. A Party's failure to
secure a written waiver shall not be construed as a waiver by that Party of any statute of
limitations or other limitations period. Waiver of any requirement of law shall not be, or be
evidence of, a continuing waiver or recurring waiver of such requirement of law.
1.3.10.15 No Standing
No Party will seek to use its status as a Party to this Agreement to establish standing, or
aggrieved-party status in order to challenge any action of any Party that is also a governmental
agency when that governmental agency's actions are pursuant to fulfilling its statutory duties.
13

1.3.10.16 Future Relicensing Proceedings
Nothing in this Agreement shall be construed to restrict in any way any Party's
participation in any proceeding for a New License for the Project with an effective date on or
after the expiration of the New License, nor shall any Party be restricted in any way from
participating in any proceeding associated with the application for such a new license, including
any application for a Section 401 Certification.
1.3.11 Actions upon Execution of Agreement
1.3.11.1 FERC Filings by Progress Energy
Within 30 days after the Effective Date of this Settlement Agreement, the Licensee shall
file with FERC an Offer of Settlement pursuant to Rule 602 (18 C.F.R. § 385.602) consisting of
the Settlement Agreement. The Offer of Settlement shall request FERC to incorporate all
Proposed License Articles, without modification, into the New License for the Project and to
identify all Proposed License Articles, if any, that are unenforceable by FERC.
1.3.11.2 Other Filings with FERC
The Parties shall: a) submit, individually or collectively, a statement or statements in
support of this Agreement to FERC within 45 days of the Effective Date of this Settlement
Agreement; b) ensure that their complete and final recommendations, measures, terms,
conditions, and/or prescriptions pursuant to Sections 10(a), 10(j), and 18 of the Federal Power
Act, Section 106 of the National Historic Preservation Act, and Section 7 of the Endangered
Species Act, if the Party has such authority, are consistent with the Agreement c) ensure that any
supplemental information, comments or responses to comments filed by them with FERC or any
mandatory conditioning agency in the context of the relicensing process are consistent with this
Agreement (with the exception of a Section 401 Agency with regard to its Section 401
Certification); d) use their best reasonable efforts to obtain a FERC order approving this
Agreement and issuing a New License for the Project consistent with this Agreement in a timely
manner, and e) actively support, in all relevant regulatory and judicial proceedings in which they
participate, regulatory and judicial actions consistent with this Agreement.
1.3.11.3 Adoption by FERC Without Modification
The Parties have entered into this Settlement Agreement with the express expectation and
condition that FERC will approve the Settlement Agreement and issue a New License for the
Project that incorporates, without modification, the Proposed License Articles in Appendix F.
The Parties shall request that FERC adopt the Proposed License Articles without modification.
The Parties agree that if FERC approves the Offer of Settlement and incorporates the
Proposed License Articles into the New License without modification or otherwise does not
disapprove or supersede the terms of this Agreement they will not seek rehearing of the FERC
order granting a New License for any issues covered by this Agreement, or support in any way
any such request for rehearing by any non-Party to this Agreement.
14

The Parties recognize that if FERC issues a new license to Progress Energy that is
consistent with the Agreement, the Agreement will have the status of a contract enforceable at
law and in equity (1) with respect to those provisions that FERC or a court of competent
jurisdiction determines are beyond FERC's jurisdiction to enforce and (2) as provided in Section
1.3.8.4. The Parties also acknowledge that the Agreement binds all Parties to perform any
commitments they have made therein. Furthermore, the parties agree that if FERC declines to
include in the New License one of the Proposed License Articles, that Article retains its status as
a contractual commitment under this Agreement and may be enforceable at law in state court to
the extent that it does not conflict with any provision of the New License. The Parties agree that
they have provided consideration for the Agreement by compromising rights and remedies they
could assert before FERC in this relicensing proceeding.
1.3.11.4 Modification and/or Amendment
1.3.11.4.1. Effect of FERC Adoption with Modification
If FERC adopts the Proposed License Articles with modification, the Settlement
Agreement shall be deemed amended to conform to the New License unless a Party gives notice
of objection to the New License with aFERC-Imposed Modification pursuant to Section
1.3.11.4.2, below. Absent such objection, the Parties will be bound by the terms of this
Settlement Agreement as amended.
If FERC incorporates Settlement Agreement obligations into the New License that are
intended to be specific resource commitments by and between certain Parties to the Settlement
Agreement such that the commitments were not proposed as License Articles by the Parties and
become enforceable by FERC against the Licensee (e. g., if FERC requires through a License
Article that the Licensee fund recreation commitments that were to be made by a resource
agency funded by Progress Energy), the Parties agree that any funds obligated by Progress
Energy in the Settlement Agreement to meet those commitments will be applied to the cost to
Progress Energy of meeting the New License requirement. Funds intended to provide
operational and maintenance support for public recreation areas, in whole or part, shall not be
subject to re-appropriation unless FERC obligates the Licensee for operation and maintenance of
the area. The Parties further agree that this Agreement allows this reallocation by Progress
Energy after consultation with the Parties to the original non-License commitment but without
requiring Progress Energy to engage in the Objection To New License With Modification
procedures pursuant to Section 1.3.11.4.2 below.
1.3.11.4.2. Objection To New License With Modification
If in the opinion of any Party, the Commission issues an order with a New License that
contains aFERC-Imposed Modification, such Party shall give notice of the existence of the
FERC-Imposed Modification to all the other Parties as soon as possible but no later than ten days
after the date that the Commission's order is issued. Thereafter, all Parties shall immediately
engage in Consultation in accordance with Section 1.3.8.3 in an attempt to reach consensus on (i)
conforming the Settlement Agreement to the New License with FERC-Imposed Modification or
(ii) filing a request for rehearing of the New License. If consensus has not been reached ten days
prior to the due date for the request for rehearing, such Party may file a request for rehearing of
15

the New License to challenge the FERC-Imposed Modification, which no other Party shall
oppose. All Parties shall support such request for rehearing to the greatest extent possible. Any
Party filing a request for rehearing is authorized to state affirmatively that no Party opposes such
request.
1.3.11.4.3. Request for Rehearing Shall Not Terminate Consultation
The filing of a request for rehearing shall not terminate Consultation, which shall
continue, if necessary, for the full 45-day period, mindful of the demands on Parties involved in
a request for rehearing. If at any time the Parties unanimously consent to modify the Settlement
Agreement to conform to the New License, the filing Party shall withdraw its request for
rehearing.
1.3.11.4.4. Settlement Agreement Temporarily Amended
After the conclusion of Consultation, and unless and until the New License is Final and
Non-Appealable, the Settlement Agreement shall temporarily be deemed amended by FERC's
modification if supported by (i) the Licensee and (ii) each resource agency with jurisdiction over
a resource that is a subject of the disputed license article or omission. A resource agency shall be
considered to have jurisdiction over a resource if a characteristic of the resource is within the
agency's statutory mandate and, with respect to state agencies, the resource is within the
agency's geographic jurisdiction.
1.3.11.4.5. Development of Biological Opinion by USFW S or NOAA Pursuant to Section
7 of the ESA
In the event that the U. S. Department of the Interior Fish and Wildlife Service or the U.S.
Department of Commerce National Oceanic and Atmospheric Administration issues a Biological
Opinion that contains measures, recommendations, terms or conditions that 1) modifies a
Proposed License Article or are otherwise inconsistent with the terms of this Settlement
Agreement, and 2) the Licensee determines, in its sole judgment, that the Biological Opinion
materially (i) increases its overall costs and burdens of and/or (ii) impairs its bargained-for-
benefits under the Settlement Agreement, then the Licensee may withdraw from this Agreement;
provided, however, that, prior to exercising its right to withdraw, the Licensee shall (i) comply
with the Consultation provisions in Section 1.3.8.3 and (ii) exhaust its administrative and judicial
remedies in contesting the measures, recommendations, terms or conditions up to and including a
review by the United States Court of Appeals. However, if a Party believes that an appeal of the
objectionable recommendations, terms or conditions to the Court of Appeals would be futile and
the other Parties, having considered the costs and the likelihood of the requesting Party's success
on the merits of such an appeal agree, the requesting Party may withdraw absent such an appeal.
Such agreement shall not be unreasonably denied.
1.3.11.4.6. License Articles Not Related to Settlement Agreement
Any Party may file a request for rehearing of issues arising under the FERC order issuing
the New License that are not deemed to be related to the Settlement Agreement, provided that:
(i) the Party shall notify all other Parties of its intention by electronic mail or facsimile at the
16

earliest practicable time; and (ii) the Parties will undertake the Consultation process in Section
1.3.8.3 if any other Party disputes the request as inconsistent with the Settlement Agreement.
1.3.11.4.7. Amendment of Settlement Agreement
The Parties may amend this Settlement Agreement, as executed, before or after issuance
of the New License.
A Party proposing an amendment shall provide notice pursuant to Section 1.3.10.5. The
Notice shall state the substance and basis of the proposed amendment. The Parties shall make
best efforts to informally meet and confer within 30 days of such Notice. The proposing Party
may request to utilize the Consultation process set forth in Section 1.3.8.3 of this Agreement.
Within 60 days of the Notice, or such different period as may be established by mutual consent,
each other Party shall provide a written confirmation of its consent to or rejection of the
proposed amendment. If a Party does not respond within that period, it shall be deemed to have
rejected the proposed amendment.
If an amendment is proposed before issuance of a New License and has the unanimous
consent of the Parties, it shall go into effect upon the Parties' execution of an Amended
Settlement Agreement, which shall be promptly filed as an amended Offer of Settlement.
If an amendment is proposed after issuance of the New License and has the unanimous
consent of the Parties, the Parties shall, if such amendment warrants, seek modification of the
New License, and any related permits or authorization, to conform to the proposed amendment
of the Settlement Agreement. The proposed amendment shall not go into effect until all
authorizations, including the New License, are conformed to the proposed amendment.
However, if the proposed amendment lacks the unanimous consent of the Parties or FERC denies
modification of the New License, the lack of unanimous consent or denial of the proposed
amendment shall not constitute grounds for withdrawal under Section 1.3.9.
1.3.11.4.8. Amendment of the New License
To the extent permitted by law, a Party may petition FERC to amend the New License,
pursuant to any reopener condition contained in the New License, or to take any other action
with regard to the Licensee or the Project or may petition the Section 401 Agency to amend its
Section 401 Certification, pursuant to any reopener condition included in any Certification, or to
take any other action with regard to the Licensee or the Project, so long as the amendment or
other action would not substantially conflict with this Agreement. Before filing any such
petition or initiating any such action, the Party shall notify all other Parties and consult with any
Party that wishes to consult, but under no circumstance shall such consultation requirement be
construed to prevent a Party from pursuing any action within the time required by law or
regulation.
1.3.12. Rights, Duties, and Obligations Regarding Section 401 Certification
Except as permitted in this section, the Parties shall not: (1) request or support any
Section 401 Certification conditions for the Project that conflict with the proposed license
conditions or any other terms of this Agreement or that add substantial additional burdens, costs
17

or risks to the Licensee beyond those to which all Parties have herein agreed; (2) oppose any
Section 401 Certification conditions that are not inconsistent with the proposed license articles or
any other terms of this Agreement; or (3) oppose any Section 401 Certification conditions that
are standard State of North Carolina Section 401 Agency conditions. For purposes of this
Agreement only, the standard State of North Carolina Section 401 Certification conditions are
provided in Appendix G. The inclusion in the Section 401 Certification, and therefore in the
New License, of any conditions that are not inconsistent with the proposed license articles or any
other terms of this Agreement shall not be deemed a FERC-Imposed Modification.
The Parties reserve the right to be actively involved in any Section 401 Certification
process, and nothing in this Agreement shall prevent the Licensee from opposing any Section
401 Certification condition that it, in its sole judgment, determines is or could be inconsistent
with any provision of this Settlement Agreement.
Nothing in this Settlement Agreement is intended to or shall be construed to affect in any
way the authority of the State of North Carolina pursuant to 33 U.S.C. § 1341, and related state
statutes and rules, such as by limiting the authority of the State of North Carolina to issue,
condition, or in any way alter a Section 401 Certification or by limiting the exercise of the State
of North Carolina's discretion. Execution of this Settlement Agreement by the State of North
Carolina or any agency thereof expresses or implies no representation that the requirements of
this Settlement Agreement ensure compliance with State water quality standards and other
appropriate requirements of State law. Nothing in this Agreement shall limit the right of the
State of North Carolina from enforcing its Section 401 Certification and from taking any steps,
within the sole discretion of the State, to protect and defend its authority, such as by seeking
rehearing of any FERC action regarding issues related to the exercise of the State's authority
with regard to 33 U.S.C. § 1341. Similarly, nothing in this Agreement shall be construed to limit
SC's or EPA's right to initiate the procedures under 33 U.S.C. § 1341(a)(2) should it be deemed
necessary by SC or EPA.
1.3.13 Potential for Negotiation of Recreation Easements
Notwithstanding Section 1.3.14, in the event that the Project ceases to be a federally
licensed hydropower project prior to the expiration of the term of the New License, the Licensee
shall convey recreational easements to the United States of America and/or the State of North
Carolina for a period of time commencing at the termination of the New License and extending
through the date on which the New License was otherwise due to expire. No later than one year
prior to the date that the Project ceases to be a federally licensed hydropower project, or as soon
as reasonably practical, the Licensee shall negotiate recreation easements with the United States
and/or the State of North Carolina to ensure continued public access to the public recreational
facilities on the Project reservoirs as they exist at the time the Project ceases to be a federally
licensed hydroelectric project. Such easements will only become effective in the event that the
Project ceases to be a federally licensed hydroelectric project. However, nothing in this
Agreement shall prevent the Licensee (under which circumstances would be a former Licensee
and owner of private land encumbered by any recreational easements) from proposing to the
United States or the State of North Carolina the closure of a recreational facility that becomes a
"stranded asset' or has otherwise fallen into disuse for any reason, and agreement to such closure
shall not be unreasonably withheld by the United States or the State of North Carolina.
18

1.3.14 Termination of Settlement Agreement
This Settlement Agreement shall terminate as to all Parties and have no further force or
effect upon withdrawal of the Licensee, or upon expiration of the New License and any Annual
License issued thereafter.
Part II -Settlement Terms
21 Minimum Instream Flows and Other Stream Protection Measures
2.1.1 Introduction
Minimum instream flows have been evaluated by the Instream Flow Subgroup of the
Aquatic Resources Work Group since June of 2003. This group of stakeholders has actively
participated in Progress Energy's efforts to scope, conduct studies of, and model both the habitat
and navigation aspects of instream flows (IFIM) and the operational aspects of instream flows
(CHEOPS model) at both the Tillery and Blewett Falls Developments. Once the modeling tools
were operational and calibrated, a Technical Committee continued meeting to evaluate flow
scenarios as an integral part of this Comprehensive Settlement Agreement. Minimum instream
flows influence many Project aspects including, but not limited to, fish and other aquatic life,
recreational boating, reservoir levels, management of water resources, drought management,
water quality, and project economics. Stakeholders evaluated and attempted to balance all of
these minimum flow effects when developing the minimum instream flows for this
Comprehensive Settlement Agreement, which all signatories believe represents a reasonable
balance of all the interests in the overall water management plan for the Yadkin-Pee Dee River
Project.
2.1.2 River Inflows from APGI's Yadkin Hydroelectric Project
Progress Energy's obligation to meet the minimum flow releases described in this
Comprehensive Settlement Agreement is contingent upon Progress Energy's Tillery
Development receiving specified minimum flow releases from APGI's Yadkin Hydroelectric
Project. The following specified minimum level of inflows to Lake Tillery from Falls Dam are
necessary for Progress Energy to meet its minimum flow obligations under the terms of this
Comprehensive Settlement Agreement: February 1 to May 15 - 2,000 cfs as measured on an
average daily basis; May 16 to May 31 - 1,500 cfs as measured on an average daily basis; June 1
to January 31 - 1,000 cfs as measured on an average daily basis.
2.1.3 Blewett Falls Plant
2.1.3.1 Existing Minimum Flows
Article 21 of the existing license requires a "minimum stream flow of 150 cfs at all
times" measured at the USGS gage at Rockingham. In actuality, the minimum flow, as recorded
by the gage, has seldom dropped below 200 cfs because Progress Energy puts a generating unit
onto increase river flow at Blewett Falls when the Rockingham gage starts to approach 200 cfs.
19

2.1.3.2 New Minimum Flow Regime
From February 1 through May 15 of each year, the continuous minimum flow will be
2,400 cfs, as measured at the existing USGS gage at Rockingham, to enhance spawning habitat
in the Pee Dee River downstream of the Blewett Falls Development. From May 16 through May
31 of each year, a continuous minimum flow will be 1,800 cfs and for the remainder of the year,
June 1 through January 31, the continuous minimum flow will be 1,200 cfs, all subject to
allowable variances described below. This Agreement establishes a higher priority on the
maintenance of minimum flows than the maintenance of reservoir water levels. Therefore,
infrequently, events may require the prioritization of maintaining minimum flows over the
reservoir water levels identified in Section 2.2 of this Agreement.
2.1.3.3 Flow Adjustments to Enhance Fish Spawning
Progress Energy shall operate its Blewett Falls facility during certain times of the year in
a manner intended to enhance fish spawning conditions downstream of the Blewett Falls
Development as described and defined below. These time periods are referred to herein as "flow
adjustment operations" and they shall occur each year as either (a) one 14-day and one 10-day
period or (b) five 5-day periods. In any event, these periods of flow adjustment to enhance
spawning will be characterized by the following:
• Flow adjustment operations shall occur between February 1 and May 15.
• The specific time periods in each year will be decided upon by resource agencies,
Progress Energy, and APGI (collectively, the "Spawning Flow Management Team"). Other
entities able to demonstrate relevant fisheries expertise may participate in these discussions. If
the option of one 14-day period and one 10-day period is chosen, Progress Energy must be
notified of the specific dates at least 14 days prior to the start of each period. If the option of five
5-day periods is chosen, Progress Energy must be notified of the entire schedule at least 10 days
in advance of the start of the first of the 5-day periods.
• Periods of flow adjustment operations shall be chosen by the Spawning Flow
Management Team based on interpretation of relevant factors that might include, but are not
limited to, water temperature and weather data, projected inflow conditions, and observations of
fish spawning behavior. If the option of five 5-day periods is implemented, two of these periods
must occur between April 15 and May 15.
• Because of concerns regarding the predictability of inflows over longer periods of
time, the individual flow adjustment periods must be separated by at least one week, unless
otherwise approved by Progress Energy.
• If a period of unusually low inflow to Blewett Falls Reservoir or a Low Inflow
Protocol ("LIP'S period occurs during a previously selected flow adjustment operation period,
the release of the required minimum continuous flow (or in the case of an LIP event, the LIP
flow) will still be considered a flow adjustment period.
• If a period of higher inflow to Blewett Falls Reservoir occurs during a selected
flow adjustment operation period, wherein there is a continuous operation of all commercially
20

available turbines in the Blewett Falls powerhouse, possibly accompanied by additional spillage
over the dam crest, this period will count as a flow adjustment period so long as any interruptions
in the continuous operation of all commercially available turbines are infrequent and
unscheduled.
• If a period of intermediate inflow to the Blewett Falls Reservoir occurs (flows in
the range of 3,000 to 6,000 cfs), Progress Energy will manage releases at the Blewett Falls
powerhouse as follows:
(1) If unregulated tributary inflow to the Pee Dee River above Blewett Falls
(particularly from the Rocky River) changes significantly during a designated flow adjustment
operation period, Progress Energy can respond to these changes in flow as needed to manage
reservoir operations by increasing or reducing the number of turbines in operation without
consideration to the limits described below in (2) through (5). This would still be considered a
flow adjustment period.
(2) Except as identified in (1) above, the upramp time of each turbine at Blewett Falls
will be no less than 30 minutes from off-line to full gate.
(3) Except as identified in (1) above, the downramp time of each turbine at Blewett Falls
from full gate to off-line will be in accordance with the following guidelines:
i. After the first operating unit is taken off-line, the second operating unit to be
taken off-line shall not be taken off-line for at least two hours after the first operating unit was
taken off-line.
ii. After the second operating unit is taken off-line, the third operating unit to be
taken off-line shall not be taken off-line for at least four hours after the second operating unit
was taken off-line.
iii. After the third operating unit is taken off-line, the fourth operating unit to be
taken off-line shall not be taken off-line for at least six hours after the third operating unit was
taken off-line.
(4) On the first day of any flow adjustment operation period, Blewett Falls must
commence such related operations no later than 8 a.m. to still be considered as a full day of flow
adjustment operation.
(5) On the last day of any flow adjustment operation period, Blewett Falls units can
begin to be taken off-line no earlier than 4 p.m. By example, the schedule below would be
considered a full day of a designated flow adjustment operation period if it were the last day of
such period:
(i) 4 PM -- go from 5 units to 4 units
(ii) 6 PM -- go from 4 units to 3 units
(iii) 10 PM -- go from 3 units to 2 units
21

(6) If the five 5-day flow adjustment operation periods are chosen in any given year,
each period shall begin on a Monday morning and end on a Friday evening.
(7) If the one 14-day and one 10-day period is chosen in any given year, the actual dates
shall be such as to minimize the number of weekend days within the 14-day period. For the 10-
day period, there will be no more than 2 weekend days.
All decisions to be made by the Spawning Flow Management Team as outlined in this
section shall require consensus as specifically defined under Section 1.3.8.2 of this
Comprehensive Settlement Agreement.
Progress Energy will prepare an annual report of the operations of the Blewett Falls
Development during the Flow Adjustment Operation periods consisting of meeting notes, flow
records from streamflow gages, and plant operations. The operations of the Tillery Plant during
the Flow Adjustment Period will be coordinated by Progress Energy and subject to dispatch by
Progress Energy in accordance with its system needs. Progress Energy anticipates that APGI
will provide a good faith effort to define its daily release schedule during these periods at least
one week in advance of the scheduled time periods and provide updates to the release schedule
once every other day until the cessation of the specific flow adjustment operation period.
The first year of implementation of the Flow Adjustment Operations shall be the calendar
year following the year of license issuance. After five years of Flow Adjustment Operations, the
Spawning Flow Management Team shall evaluate the Flow Adjustment Operations and develop
recommended changes for consideration by the resource agencies and Progress Energy. Re-
evaluation at 5-year intervals may occur if determined necessary and if agreed to by the
Spawning Flow Management Team.
2.1.3.4 Minimum Flow Variance
The new minimum flow regime will allow a variance for two 5-hour periods each year to
reduce the minimum flow release to just leakage flow for testing black-start capability of
turbines at the Blewett Falls powerhouse. These black-start tests will be restricted to occur only
in October, November, December, or January, when environmental effects of low flow fora 5-
hourperiod are expected to be minimal. Further, these tests shall not be conducted in October if
a Stage 1 or greater Low Inflow Protocol event has been triggered.
In an effort to properly manage water during unusually low flow conditions, Progress
Energy shall participate in a Low Inflow Protocol (LIP) (see Section 2.1.5). Minimum instream
flows may be reduced during these LIP periods in order to conserve water resources during
periods of low flow in the watershed.
2.1.3.5 Minimum Flow Compliance and Monitoring
Progress Energy will maintain to the standards established by the USGS a continuous
flow monitoring gage at the site of the current Rockingham USGS gage and will provide flow
data to the public, via the Internet or other appropriate means, to be updated no less than every
two (2) hours. For the first ten (10) years after issuance of the New License, Progress Energy
will contract with the USGS for operation and maintenance of this gage. Annual reporting of
22

flows will be in accordance with normal USGS practices and procedures. Compliance with
minimum flows for the Blewett Falls facility will be measured at the Rockingham gage.
Progress Energy will maintain to the standards established by the USGS a continuous
flow monitoring gage at the site of the current Rocky River gage near the mouth of the Rocky
River. Progress Energy currently pays a portion of the cost of the maintenance of this gage. If
for any reason the funding of this gage by others is lost, then Progress Energy will be responsible
for the additional funding necessary to maintain the gage. Progress Energy reserves the right to
reconsider whether or not to continue to use the USGS as the provider of this service after the
first ten (10) years following the issuance of the new license.
Minimum releases required at the Blewett Falls Development shall be presumed to have
been met if flows recorded at the streamflow gage at Rockingham are within 5% of the required
minimum release, so long as the "true-up" procedure described below is implemented. Progress
Energy will prepare an annual report documenting its compliance with minimum releases
including any "true-up" periods. To the extent practicable, Progress Energy will "true-up"
minimum flows monthly; that is, flows falling below the minimum shall be offset by flows
greater than the minimum (during minimum release periods) in the same month for a reasonably
equivalent amount of time. If any instances of recorded lower-than-required minimum flows are
not properly compensated for in the month they occur, such compensation will occur as soon as
practicable in the next month, but no later than the 15th day of that month. Progress Energy's
annual report shall indicate all periods where a "true-up" was required and show how and when
the actual "true-up" occurred. The annual report shall be filed with the NCDENR, SCDNR,
SCDHEC and FERC by March 31 of the following year. If any of the resource agencies have
significant concerns or comments on the report, a consultation meeting will be convened to
discuss these concerns. Such meeting shall be held within 45 days of the issuance of the report.
There shall be no "gaming" of the minimum flow variance allowed under this compliance
standard; that is, under no circumstance shall Progress Energy intentionally or willfully use the
existence of the variance and true-up mechanism to deliberately manipulate minimum flow
releases to coincide with demand for electricity. For example, a consistent record of lower-than-
requiredminimum flows during periods of high electrical demand shall be considered "gaming."
Certain LIP events require the release of 925 cfs as the "critical flow." The Licensee shall
endeavor to maintain this target flow; however, compliance will have been achieved if the flow
recorded during this event is between 900 and 950 cfs at the Rockingham gage.
2.1.3.6 Other Stream Protection Measures
Progress Energy has agreed to conserve for purposes of stream protection various plots of
land it owns along the Pee Dee River in the vicinity of the Project. Conservation is achieved
through either donation of lands to the State of North Carolina or through the placement of
restrictive covenants on riparian lands and within shoreline buffer zones. These measures are
described in detail in Section 2.5.
2.1.4 Tillery Plant
2.1.4.1 Existing Minimum Flows
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Article 21 of the existing license requires the discharge of a "minimum stream flow of 40
cfs at all times." The USGS measures the discharge in the Pee Dee River below Tillery Dam
from time to time during periods of no generation, and the measured minimum flow is reported
to be between 70 cfs and 90 cfs.
2.1.4.2 New Minimum Flow Regime
Progress Energy will provide a continuous year-round minimum flow at the Tillery
Development of 330 cfs except for a period of eight continuous weeks commencing as early as
March 15, but no later than March 22, when a minimum flow of 725 cfs shall be provided to
enhance American shad spawning. This release of 725 cfs will start in 2010, or at the first
passage of American shad above Blewett Falls Dam, whichever is later.
2.1.4.3 Recreational Boating Flows
Progress Energy shall release for the purposes of enhancing recreational boating flows
below the Tillery Development an additional 1,750 acre-feet of water per year above and beyond
the required minimum releases specified in Section 2.1.4.2. This recreational release volume can
be increased to 1,950 acre-feet per year if releases for recreation purposes are made for at least
four days within the period May 16 to May 31 or September 1 to September 15. These four days
can occur in the designated May time period or the designated September time period or any
combination thereof.
Within twelve (12) months of the New License becoming Final and Non-Appealable,
Progress Energy will prepare in coordination with NCDENR and NCWRC a Recreation Release
Plan for submittal to FERC. Following the first three years of Plan implementation, the Plan
shall be evaluated and modified as appropriate; however, any modification shall not consider
increasing the amount of water above 1,950 acre-feet. After the first evaluation, re-evaluation
and modification of the Recreation Release Plan at 5-year intervals may occur if determined
necessary and if agreed upon by NCDENR, NCWRC, and Progress Energy, however, any
modification shall not consider increasing the amount of water above 1,950 acre-feet. Any
decision arrived at by this group shall require consensus as defined under Section 1.3.8.2 of the
General Provisions.
2.1.4.4 Temperature of Minimum Flow Releases
Flows released at the Tillery Development for the purpose of meeting minimum flow
requirements will be done in such a way as to avoid skimming high temperature surface water
from the uppermost surface of Lake Tillery if high temperature gradients are found to occur in
the upper six inches of the lake.
2.1.4.5 Minimum Flow Compliance and Monitoring
Within 12 months of the New License becoming Final and Non-Appealable, Progress
Energy will install and maintain to the standards established by the USGS a continuous flow
monitoring gage below the Tillery Development near the State Highway 731 Bridge and will
provide flow data to the public, via the Internet or other appropriate means, to be updated no less
than every two (2) hours. For the first ten (10) years after issuance of the New License, Progress
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Energy will contract with the USGS for operation and maintenance of this gage. Annual
reporting of flows will be in accordance with normal USGS practices and procedures.
Minimum releases required at the Tillery Development are presumed to have been met if
flows recorded at the streamflow gage near the Highway 731 Bridge are within 5% of the
required minimum, as long as the "true-up" procedure described below is implemented.
Progress Energy will prepare an annual report documenting its compliance with minimum
releases including any "true-up" period. To the extent practicable, Progress Energy will "true-
up" minimum flows monthly; that is, flows falling below the minimum shall be offset by flows
greater than the minimum (during minimum release periods) in the same month and for a
reasonably equivalent amount of time. If any instances of recorded lower-than-required
minimum flows are not properly compensated for in the month they occur, such compensation
will occur as soon as practicable in the neat month, but no later than the 15th day of that month.
Progress Energy's annual report shall indicate all periods where a "true-up" was required and
show how and when the actual "true-up" occurred.
2.1.4.6 Other Stream Protection Measures
Progress Energy has agreed to conserve for purposes of stream protection various plots of
land it owns along the Pee Dee River in the vicinity of the Project. Conservation is achieved
through either donation of lands to the State of North Carolina or through the placement of
restrictive covenants on riparian lands and within shoreline buffer zones. These measures are
described in detail in Section 2.6.
2.1.5 Low Inflow Protocol
Progress Energy agrees to comply with the requirements of the Low Inflow Protocol
(LIP) dated February 2007, which was developed as part of the relicensing process. The LIP is
attached hereto as Appendix B.
2.1.6 Implementation Schedule
Minimum instream flows will be commenced within 60 days of the receipt of a New
License from FERC that is Final and Non-Appealable, assuming that APGI's new license has
been issued prior to or concurrent with Progress Energy's license and that APGI has
commenced, and continues, the releases specified in Section 2.1.2 of this Agreement.
2.2 Reservoir Water Levels
2.2.1 Introduction
Reservoir water levels and water level changes determine the amount of water storage
capacity that is available to re-regulate and shape reservoir inflow and maintain uninterrupted
minimum continuous flow releases and benefits. A seasonal schedule of differing water level
regimes allows protection of resources at high priority times of the year (e.g., spawning and
nesting seasons) and less restriction at low priority times of year (e.g., winter). Future reservoir
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water levels restrictions described in this Comprehensive Settlement Agreement are contingent
upon Progress Energy's Tillery Development receiving specific minimum flow releases from
APGI's Yadkin Hydroelectric Project as defined in Section 2.1.2. These minimum flows to Lake
Tillery from Falls Dam are necessary for Progress Energy to maintain the reservoir levels
described below in sections 2.2.2.2 and 2.2.3.2. Progress Energy will typically maintain
reservoir water levels under normal operating conditions (not including flood flow conditions)
within the ranges described in Sections 2.2.2.2 and 2.2.3.2. below.
2.2.2 Blewett Falls Plant
2.2.2.1 Existing Water Levels
The current water level regime under the existing operating license allows unrestricted
drawdowns of the Blewett Falls Reservoir of up to 17 ft; however, the intake of the Blewett Falls
powerhouse precludes drawdowns in excess of approximately 11 ft. Typical daily changes in
water levels have historically been 1 to 3 ft, year-round. Greater daily fluctuations do occur,
especially as needed for replacing flashboards and other major maintenance.
2.2.2.2 Future Water Levels
When inflows to Blewett Falls Reservoir are greater than approximately 7,400 cfs (about
40 percent of the time), the plant is operated in a near run-of--river fashion, and water levels are
controlled by inflows. When inflows to Blewett Falls Reservoir are less than approximately
7,400 cfs (about 60 percent of the time), Progress Energy shall maintain ayear-round water level
regime at Blewett Falls Lake that allows for fluctuations of up to 6 ft, between elevation 172.1
and 178.1 ft, except for system emergencies and LIP. Under this water level regime, typical daily
water level changes will be in the range of 2 to 4 ft. When flashboards are down, an additional 2
ft of drawdown to elevation 170.1 ft is necessary to safely replace the flashboards.
During the bass spawning season, April 15 to May 15, Progress Energy will limit water
level changes to 2 ft to enhance bass spawning except when additional reservoir storage is
necessary to meet minimum flow release obligations (minimum flow releases will have priority
over lake elevations) or if the flashboards fail In either of the exceptions noted above, Progress
Energy will endeavor to return to normal operations as soon as reasonably practical.
2.2.3 Tillery Plant
2.2.3.1 Existing Water Levels
The current operating license allows Lake Tillery to be drawn down up to 22 ft below the
normal full pool elevation of 277.3 ft. It has been Progress Energy's most recent practice to limit
fluctuations to 1 to 1.5 ft during normal operations and greater than 1.5 ft in anticipation of
flooding or during maintenance and system emergencies.
2.2.3.2 Future Water Levels
Progress Energy will follow aseasonally-based lake level management schedule at Lake
Tillery during the term of the New License. From December 15 through March 1, lake level
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fluctuations will be limited to 3 ft between 274.3 and 277.3, unless use of reservoir storage is
needed to meet demand for electricity. If storage is needed for electrical generation purposes
during this period, Progress Energy may use the storage available between elevations 272.3 ft
and 277.3 ft, resulting in a maximum fluctuation of 5 ft. When used for these power-related
purposes, Progress Energy will normally cycle the reservoir within these elevation limits on a
daily or multi-daily basis. Water fluctuations up to 8 ft may occur during system emergencies,
and potentially be greater during LIP periods.
From April 15 to May 15, Progress Energy will limit lake level changes to 1.5 ft below
the water surface elevation of the reservoir as measured on April 15 for bass spawning (higher
elevations are acceptable).
During all other periods of the year (except flood flow conditions), Progress Energy will
maintain lake level fluctuations to generally within 2.5 ft of full pool (elevation 277.3 ft
measured at Tillery Dam) on weekdays, and generally 1.5 ft of full pool on weekends and
holidays.
2.2.3.3 Maintenance Drawdowns
Once in every 5-year period, Progress Energy will schedule a maintenance drawdown of
up to 15 ft to occur on Lake Tillery within the September 15 to December 15 timeframe. This
drawdown will allow Progress Energy to perform routine periodic maintenance and gate testing
that cannot be accomplished when the lake level is higher.
2.2.3.4 Public Information on Water Levels
Progress Energy will add a projection of the expected daily water levels for the day on
their existing 800-899-4435 public messaging service. For the first five years of the New
License, Progress Energy will also provide an annual notice on November 15 alerting the public
to the drawdown limits that apply between December 15 and March 1.
2.2.3.5 Emergency or LIP Water Level Variance
In the case of an LIP event, Lake Tillery and the other larger reservoirs in the basin will
be called upon to use some of their storage to augment downstream flows in a coordinated
manner. Management of flows and water levels during LIP events are contained in the LIP
attached hereto as Appendix B.
2.2.4 Compliance Monitoring
Annual reports on lake level compliance will be submitted to FERC and will include
hourly readings of lake levels recorded at the both the Tillery and Blewett Falls dams.
2.2.5 Implementation Schedule
The new lake level management regime will be initiated within 120 days of the New
License becoming Final and Non-Appealable.
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2.3 Water Quality
2.3.1 Introduction
This section presents measures intended to comply with Progress Energy's 401 Water
Quality Certification to be issued by the NCDWQ. This Comprehensive Settlement Agreement
is not intended to replace the required 401 Water Quality Certification process. Water quality
monitoring has shown that tailwater dissolved oxygen (DO) levels can periodically fall below
North Carolina water quality standards. This is a seasonal problem, occurring during some
summer months when reservoirs stratify and deeper waters in the vicinity of the plant turbine
intakes lose some, or nearly all, of their oxygen content. This causes low DO water to be
discharged to the tailrace when generation takes place. The duration and frequency of these low
DO episodes depends largely upon reservoir inflow, weather, reservoir mixing forces, and
reservoir outflow.
Water quality data collection at the Tillery and Blewett Falls developments indicate that
these low DO events occur more frequent at Tillery than at Blewett Falls. Additionally,
preliminary trials of turbine venting suggest that venting with existing equipment alone may
eliminate the problem at Blewett Falls, while additional venting equipment or other DO
enhancing strategies maybe required at Tillery.
Because the relicensing time frame is inadequate to systematically investigate and resolve
the tailwater low DO issue, Progress Energy is following a DO implementation plan that will
have both Blewett Falls and Tillery tailrace DO levels in compliance with current state water
quality standards by the end of 2011. Progress Energy will operate the Project in accordance
with its 401 Certification to meet applicable water quality standards. If at any time during the
term of the New License, after all required water quality enhancement modifications have been
completed, state water quality standards are not being met as a result of Progress Energy's
hydroelectric operations, Progress Energy will immediately consult with NCDWQ to develop, if
appropriate, a plan to implement corrective actions. Progress Energy will implement the plan as
approved by NCDWQ and/or FERC.
Prior to license acceptance, if NCDWQ or FERC require additional modifications beyond
those listed in this Agreement to assure compliance with applicable state standards for DO, the
fact that such modifications are not currently specified herein shall not be construed as a material
increase of the overall costs and burdens of this Comprehensive Settlement Agreement.
2.3.2 Blewett Falls Plant
2.3.2.1 Existing Tailwater Water Quality
DO concentrations, asmeasured by Progress Energy in the tailwater area, have been
recorded on occasion below the state standard. This has occurred during periods of thermal
stratification in Blewett Falls Lake.
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2.3.2.2 Tailwater Water Quality under the New License
Progress Energy has developed a detailed implementation plan for meeting water quality
standards at Tillery and Blewett Falls dams related to dissolved oxygen as required by Section
401 of the Clean Water Act. Progress Energy agrees to meet dissolved oxygen standards by
December 2011.. The schedule includes completion of field testing DO enhancement options by
December 2008, and completing successful implementation of the best suited DO enhancement
technology by December 2011.
2.3.2.3 Implementation Plan and Schedule
Implementation of the Investigation into Turbine T~enring Measures to Enhance Tailwater
Dissolved Oxygen Concentrarions at the Tillery and Blewett Falls Hydroelectric Plants has
already begun with the preliminary turbine venting trials conducted in 2005 and 2006. More
rigorous testing of DO enhancement is on-going. As noted above, full DO enhancement to
current North Carolina water quality standards will be achieved by December 2011. Because
enhancement may be easier to achieve at Blewett Falls, DO compliance maybe completed ahead
of schedule at this site.
2.3.2.4 Compliance Monitoring
Progress Energy will provide monitoring of water temperature and dissolved oxygen.
Temperature and DO monitoring will occur immediately below the end of the Blewett Falls
tailrace with equipment installed by the Licensee in accordance with protocols approved by
NCDWQ. Annual compliance reports will be prepared by Progress Energy and submitted to
NCDWQ and FERC by April 15th of the following year in accordance with the requirements of
the 401 Water Quality Certificate. 2.3.3 Tillery Plant
2.3.3.1 Existing Tailwater Water Quality
NCDWQ has documented DO concentrations on occasion below the state standard in the
Tillery tailwater. Progress Energy's relicensing water quality studies have also confirmed
occasional low DO levels in the tailwater. This likely occurs during times of thermal
stratification in Lake Tillery.
2.3.3.2 Tailwater Water Quality under the New License
Progress Energy has developed a detailed implementation plan for meeting water quality
standards at Tillery and Blewett Falls dams related to dissolved oxygen as required by Section
401 of the Clean Water Act. Progress Energy agrees to meet dissolved oxygen standards by
December 2011.. The schedule includes completion of field testing of various DO enhancement
options by December 2008, and completing successful implementation of the best suited DO
enhancement technology by December 2011.
2.3.3.3 Implementation Plan and Schedule
Implementation of the Investigation into Turbine T~enring Measures to Enhance Tailwater
Dissolved Oxygen Concentrarions at the Tillery and Blewett Falls Hydroelectric Plants has
29

already begun with preliminary turbine venting trials conducted in 2005 and 2006. More
rigorous testing of DO enhancement is on-going. As noted above, full DO enhancement to
current North Carolina water quality standards will be achieved by December 2011.
2.3.3.4 Compliance Monitoring
Progress Energy will provide continuous monitoring of water temperature and dissolved
oxygen. Temperature and DO monitoring will occur below the Tillery Plant as required by the
401 Certificate issued by NCDWQ with equipment installed by the Licensee. The final location
of DO monitoring near the Highway 731 Bridge will be determined based upon further testing of
DO enhancement technologies and resulting patterns of DO concentrations in the Tillery
tailwater. Annual compliance reports will be prepared by Progress Energy and submitted to
NCDWQ and FERC by April 15th of the following year in accordance with the requirements of
the 401 Water Quality Certificate.
2.3.3.5 Aquatic Life Monitoring
Progress Energy will conduct post-licensing monitoring of aquatic life below Tillery
Dam. The purpose of the monitoring is to document the condition of the aquatic community in
the Pee Dee River from Tillery Dam to its confluence with the Rocky River. The extent of this
testing will be in accordance with the NCDWQ Water Quality Certificate.
2.3.3.6 Total Maximum Daily Load Processes
If, during the term of the new license, any Total Maximum Daily Load (TMDL)
processes are required for the Yadkin-Pee Dee River (or its tributaries) within the Project
Boundary of the Yadkin-Pee Dee Project or on the Pee Dee River immediately downstream of
either Tillery Reservoir or Blewett Falls Reservoir, the Licensee will participate in these
processes. Participation would be expected to include, for example, providing any existing water
quality sampling or flow release data and participating in relevant stakeholder technical teams.
2.4 Recreation Enhancements
2.4.1 Introduction
Progress Energy has developed the following plan of recreation enhancements for the
Yadkin-Pee Dee River Project in cooperation with the participants in the Comprehensive
Settlement Agreement meetings.
2.4.2 Blewett Falls Plant
2.4.2.1 Existing Recreation Facilities
There are two public boat access points on Blewett Falls Lake. An ADA-accessible
public fishing platform is located on the downstream side of the Blewett Falls powerhouse
providing access to fishing in the Blewett Falls tailrace.
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2.4.2.2 New Recreation Facilities
Within four years of the issuance of the New License for the Project that is Final and
Non-Appealable, Progress Energy will make improvements to the Anson County and Mountain
Creek (Grassy Islands) public access areas on Blewett Falls Lake. At the Anson County site,
improvements will include a vanlt-type restroom facility, improvements to boat ramps to allow
for ease of put-in over the range of proposed lake fluctuations, updated signage, anew
information kiosk, and improved parking management (i.e. identification of parking locations for
vehicles and trailers). At the Mountain Creek access site, improvements will include boat ramp
modifications as necessary, updated signage, and improved parking management. Consultation
with resource agencies will occur prior to the construction of any new facilities.
In addition, Progress Energy will upgrade the existing canoe portage at Blewett Falls
Dam to applicable North Carolina state standards.
Progress Energy shall, within 180 days of the issuance of the New License for the Project
that is Final and Non-Appealable, submit a plan and schedule for the installation of the recreation
facilities described in this article.
2.4.2.3 River Flow Information to Public
Progress Energy will provide an electronic link on the Progress Energy website to the
flow gage at Rockingham and to the flow gage to be installed by Progress Energy downstream of
Tillery Dam. Progress Energy will also provide information on its website related to recreational
boating flows to be released at Tillery Dam (see Section 2.1.4.3.).
2.4.2.4 Yadkin-Pee Dee River Trail
Within 24 months of FERC's issuance to Progress Energy of a New License for the
Project that is Final and Non-Appealable, Progress Energy will provide NCDENR a one-time
contribution of matching funds up to a maximum of twenty five thousand dollars ($25,000) for
the enhancement and/or expansion of the Yadkin-Pee Dee River Trail. Such funds are to be
used for developmental, promotional and/or implementation purposes for any portion of the Trail
extending from Tillery Dam in North Carolina to the I-95 Bridge in South Carolina.
2.4.3 Tillery Plant
2.4.3.1 Existing Recreation Facilities
There are currently five public boat launch facilities on Lake Tillery and one at the
Tillery Dam tailwater area.
2.4.3.2 Recreation Facility Enhancements
Within four years of the issuance of the New License for the Project that is Final and
Non-Appealable, Progress Energy will make improvements to the Stony Mountain public access
area to consist of vault-type sanitary facilities, trash receptacles, updated signage, new
information kiosk, and improved parking management.
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Progress Energy will also make improvements to the Norwood, Swift Island, and Lilly's
Bridge access areas. At Norwood, a shelter and picnic tables, separate men's and women's vault-
type restroom facilities, trash receptacles, updated signage, new information kiosk, and improved
parking management (i. e. identification of parking locations for vehicles and trailers) will be
provided. Also at Norwood, an enhancement to the existing dock and boat launch may be
needed to provide boat access over the range of future lake levels. At Lilly's Bridge, new
recreation facilities will consist of a shelter with picnic tables, separate men's and women's
vault-type restroom facilities, trash receptacles, updated signage, new information kiosk, and
improved parking management (i.e. identification of parking locations for vehicles and trailers).
At Swift Island, vault-type sanitary facilities, trash receptacles, updated signage, anew
information kiosk, and improved parking management (i.e. identification of parking locations for
vehicles and trailers) will be added to the site. Consultation with resource agencies will occur
prior to the construction of any new facilities.
Progress Energy will relocate to Clarks Creek the unimproved boat access site that is
currently located in the area just south of the tailrace. This new access site will include a formal
parking area, signage, information kiosk, and boat access to the Pee Dee River.
Progress Energy shall, within 180 days of the issuance of the New License for the Project
that is Final and Non-Appealable, submit a plan and schedule for the installation of the recreation
facilities described in this article.
2.4.3.3 Access and Funding for New Recreation Facility in Stanly County
Progress Energy will provide NCWRC access across Project lands and matching funds,
up to $25,000, for a shoreline public fishing area in Stanly County, to consist of an ADA-
accessiblefishing pier and a gravel parking area.
2.4.3.4 NCWRC Enforcement Facility
Progress Energy will co-fund with NCWRC ajoint-use boathouse and boat ramp facility
to be used by NCWRC for enforcement purposes on Lake Tillery and by Progress Energy for
lake management purposes. Typically, this co-funding will consist of Progress Energy
purchasing the materials and NCWRC providing the labor for the construction of the facility.
This facility is to be located in the vicinity of the proposed new public fishing access site in
Stanly County described in section 2.4.3.3.
2.4.4 County Level Formal Recreation Review Meetings
Progress Energy will meet with Stanly and Montgomery counties to discuss and review
recreation issues on Lake Tillery every four years. These discussions will include review of
public recreation needs and trends, public use, and lake access.
Future public access sites may be warranted depending on recreation demand and/or use
of existing facilities. Any siting of new facilities will consider items such as the potential for
environmental impacts and the potential impacts to existing uses.
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2.4.5 Implementation and Schedule
The recreation facilities described above will be completed within four years following
the issuance of a New License for the Project that is Final and Non-Appealable. County review
meetings (See Section 2.4.4) will follow at four-year intervals.
Progress Energy will enter into an agreement with NCWRC whereby NCWRC, for a
period of 10 years commencing from the date on which the New License is issued by FERC, will
be responsible for the operation and maintenance of the public recreation facilities made part of
the New License. Progress Energy will fund NCWRC's operation and maintenance activities
through aone-time payment of two hundred forty thousand dollars ($240,000) to be placed in an
interest bearing account for the benefit of NCWRC operation and maintenance activity related to
the Project. Funds for this purpose will be contributed by Progress Energy within 12 months of
the New License becoming Final and Non-Appealable. Prior to the end of the 10-year period
referenced above, Progress Energy and NCWRC will renegotiate the recreation facilities
operation and maintenance agreement of this section.
2.5 Additional Stream Protection Measures
2.5.1 Introduction
For the purpose of providing additional protection to stream and riparian habitats within
the river corridor potentially affected by Project operations, Progress Energy will undertake
certain measures as follows:
(1) the donation to the State of North Carolina of certain parcels of undeveloped land
owned by Progress Energy bordering the Pee Dee River;
(2) the placement of restrictive covenants for conservation purposes on certain parcels of
undeveloped land owned by Progress Energy adjacent to Project-affected waters; and
(3) the leasing of certain lands owned by Progress Energy to the State of North Carolina
for the term of the new license.
Each of the measures referenced above are more fully described below.
2.5.2 Lands to Be Donated to the State of North Carolina
Within five years of the issuance of the New License for the Project that is Final and
Non-Appealable, Progress Energy will donate to the State of North Carolina various tracts of
land it owns along the Pee Dee River below Blewett Falls Dam on both the east and west river
banks extending from Blewett Falls Dam to below the Highway 74 bridge and including lands
adjacent to the highly valued river shoals located below Highway 74. These lands also include
the Gabbro Slopes area above Highway 74 and valuable riparian and wetland complexes on the
East and West river banks. These lands to be donated, which have a total acreage of
approximately 1600 acres, are depicted in the attached Appendix C.
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Within five years of the issuance of the New License for the Project that is Final and
Non-Appealable, Progress Energy will also donate to the State of North Carolina lands it
presently owns along the eastern bank of the Pee Dee River extending downstream from the
Highway 731 bridge for approximately four (4) contiguous miles. These lands to be donated,
which have a total acreage of approximately 300 acres and will provide a protected riparian
corridor along the east shore of the Pee Dee River, are depicted in the attached Appendix C.
Until these lands are donated to the State of North Carolina, the Parties agree that interim
land management by the Licensee will use reasonable efforts to conform to the following
forestry management practices where timbering is scheduled:
(1) For loblolly pine plantations that are 30 or more years old, thin to approximately 30
trees/acres.
(2) For pine/hardwood mixed stands that are 30 or more years old, after consultation
with NCWRC, thin to approximately 30 trees/acre.
(3) For 15 to 30 year old stands of loblolly pine, thin to approximately 60 trees/acre.
(4) Reserve the ability to clear-cut parcels up to 25 acres in size where best management
practices would dictate (not including any environmentally significant areas) but only after
consultation with NCWRC.
(5) Leave an undisturbed buffer of not less than 100 feet in width along the Pee Dee
River and along both sides of any blue line streams.
(6) Predominantly hardwood stands will not be timbered.
The Licensee represents that it is responsible for providing reliable electric service to its
customers within North and South Carolina. To that end, from time to time the Licensee
constructs electrical transmission lines within its service area. The Licensee represents that such
lines are located only after consideration of many factors, including potential impacts to homes,
businesses, schools, roads, and other infrastructure; cultural and historic resources; sensitive
environmental features and natural areas; and other factors. Nothing in this Settlement
Agreement (1) is intended specifically to prohibit the Licensee from planning, designing, and
constructing a transmission or distribution line through, over or across lands described above by
this Settlement Agreement or (2) shall obviate any duty to obtain all necessary regulatory,
environmental, or other approvals. The parties recognize that the rights, duties, obligations of
this Settlement Agreement and the actions taken pursuant to this Settlement Agreement (such as
the preservation of lands described by this Settlement Agreement) may be considered in any
proceeding regarding a transmission or distribution line.
Each party assumes responsibility for its own costs associated with deed transfers
described herein.
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2.5.3 Lands Subject to a Restrictive Covenant
Progress Energy will place a restrictive covenant for conservation purposes on certain
lands it owns known as the "Diggs Tracy' along the Pee Dee River below the Highway 74
bridge, which is depicted in the attached Appendix D. Within twelve (12) months of the
issuance of a New License for the Project that is Final and Non-Appealable, Progress Energy
will execute, deliver and cause to be recorded covenants and restrictions establishing a buffer
zone adjacent to the river that would be at least 100-ft-wide along the entire tract. Within the
buffer zone, activities to be allowed would be limited to such activities as selective clearing and
controlled burning in accordance with a forest management plan approved by NCDENR, limited
unimproved foot trails not to exceed 4 ft in width and a single boat access point to the river. Foot
trails generally parallel to the river shall be no closer to the river than 50 feet. There shall be no
more than three trails perpendicular to the river within the buffer zone. Except to accommodate
the above allowable activities, the following shall be prohibited within the buffer zone: filling,
draining, flooding, dredging, impounding, clearing, burning, cutting or destroying vegetation,
cultivating, excavating, erecting, overnight camping, constructing, releasing wastes, or otherwise
doing any work within the buffer zone, introducing exotic species into the buffer zone (except
biological controls pre-approved by NCDENR); and from changing the grade or elevation,
impairing the flow or circulation of waters, reducing the reach of waters, and any other discharge
or activity requiring a permit under clean water or water pollution control laws and regulations,
as amended. The following are expressly excepted from the prohibited activities: (a)
cumulatively very small impacts associated with hunting, fishing, and similar recreational or
educational activity, consistent with the continuing natural condition of the property; (b) removal
or trimming of vegetation hazardous to persons or property; and (c) restoration or mitigation
required under law. No permanent structures would be allowed within the 100-ft buffer zone.
Within twenty four (24) months of the issuance of the New License that is Final and Non-
Appealable, Progress Energy will also place a restrictive covenant for conservation purposes on
Project lands it owns in the Grassy Islands area located at the upper reaches of Blewett Falls
Lake, which are depicted in the attached Appendix D. This area contains large bottomland
hardwood forests and an oxbow swamp with a large stand of Black Gum. These are highly
valued wetland resources of regional significance. The restrictive covenant would be defined to
permit only certain non-consumptive uses of the lands, including fishing, hunting, hiking, bird-
watching, and other low-density recreation activities. Prohibited activities will be identical to
those described above for the Diggs Tract.
Within twenty four (24) months of the issuance of the New License that is Final and Non-
Appealable, Progress Energy will place a restrictive covenant for conservation purposes on
certain lands it owns near the mouth of the Uwharrie River, which are depicted in the attached
Appendix D. The lands to be protected by a restrictive covenant include (1) those extending
from Dutchman's Creek downstream to the tip of the peninsula on the south side of the mouth of
the Uwharrie River and (2) those aY the upper end of the "bay," created by the above peninsula,
that are classified as of December 2006 as Environmental/Natural Areas in the Shoreline
Management Plan, stopping at the first tract of land classified as Impact Minimization Zone.
The restrictive covenant will allow only certain non-consumptive uses of these lands, such as
fishing, hunting, hiking, bird-watching, and other low-density recreation activities. Prohibited
35

activities will be identical to those described above related to the restrictive covenants to be
applied to the buffer zone of the Diggs Tract.
Until these lands are protected by covenant, the Parties agree that interim land
management by the Licensee will use reasonable efforts to conform to the following forestry
management practices where timbering is scheduled:
(1) For loblolly pine plantations that are 30 or more years old, thin to approximately 30
trees/acres.
(2) For pine/hardwood mixed stands that are 30 or more years old, after consultation
with NCWRC, thin to approximately 30 trees/acre.
(3) For 15 to 30 year old stands of loblolly pine, thin to approximately 60 trees/acre.
(4) Reserve the ability to clear-cut parcels up to 25 acres in size where best management
practices would dictate (not including any environmentally significant areas) but only after
consultation with NCWRC.
(5) Leave an undisturbed buffer of not less than 100 feet in width along the Pee Dee
River and along both sides of any blue line streams.
(6) Predominantly hardwood stands will not be timbered.
The Licensee represents that it is responsible for providing reliable electric service to its
customers within North and South Carolina. To that end, from time to time the Licensee
constructs electrical transmission lines within its service area. The Licensee represents that such
lines are located only after consideration of many factors, including potential impacts to homes,
businesses, schools, roads, and other infrastructure; cultural and historic resources; sensitive
environmental features and natural areas; and other factors. Nothing in this Settlement
Agreement (1) is intended specifically to prohibit the Licensee from planning, designing, and
constructing a transmission or distribution line through, over or across lands described above by
this Settlement Agreement or (2) shall obviate any duty to obtain all necessary regulatory,
environmental, or other approvals. The parties recognize that the rights, duties, obligations of
this Settlement Agreement and the actions taken pursuant to this Settlement Agreement (such as
the preservation of lands described by this Settlement Agreement) may be considered in any
proceeding regarding a transmission or distribution line.
Each party assumes responsibility for its own costs associated with the deed transfers and
restrictive covenants described herein.
2.5.4 Lands to be Leased
Progress Energy will lease to the State of North Carolina for the term of the new license,
and at the present lease rate, lands it currently owns between Morrow Mountain State Park and
the Pee Dee River, which lands are depicted in the attached Appendix E. These lands are in the
vicinity of and include the existing boat launch area at Morrow Mountain State Park. The lease
36

shall be negotiated and executed within twelve (12) months of the issuance of the New License
that is Final and Non-Appealable.
2.6 Other Miscellaneous Protection, Mitigation and Enhancement Measures
2.6.1 Blewett Falls Plant
2.6.1.1 Shoreline Management
The shoreline management practice for Blewett Falls Lake will prohibit private access,
except normal foot access, to the lake across Project lands except at the designated public access
areas. By this measure, shoreline management shall focus on natural resource protection to
preserve the largely undisturbed nature of the Blewett Falls impoundment.
2.6.1.2 Blewett Falls Lake Sediment Survey
Five years following the issuance of the New License that is Final and Non-Appealable,
Progress Energy will conduct a sediment survey in Blewett Falls Lake and a gravel recruitment
survey in the Blewett Falls tailwater. The gravel recruitment survey will repeat the study
conducted by Progress Energy during the relicensing process. If results indicate that there is still
no significant problem related to gravel recruitment, then Progress Energy will conduct another
survey after an additional 10 years.
2.6.1.3 Protection of Canoe Portage Lands
Progress Energy will provide a restrictive covenant for conservation purposes on the
Progress Energy lands along the current canoe portage route (approximately 0.3 miles)
prohibiting development on the lands needed for canoe portage, except as required for operation,
maintenance, repair, or improvement of the Project or Progress Energy's transmission or
distribution system.
2.6.1.4 Implementation of HPMP
Progress Energy will implement and enforce the new cultural resource Historic Properties
Management Plan (HPMP) at Blewett Falls. This Plan will be prepared by Progress Energy and
submitted to FERC for approval within 12 months of the issuance of the New License that is
Final and Non-Appealable.
2.6.2 Tillery Plant
2.6.2.1 Implementation of SMP and HPMP
Progress Energy will implement and enforce the existing Tillery Shoreline Management
Plan (SMP) and the new HPMP at Tillery. The new HPMP for Tillery will be prepared by
Progress Energy and submitted to FERC within 12 months of the issuance of the New License
that is Final and Non-Appealable.
37

2.7 Execution of Multiple Counterparts
This Agreement may be executed in any number of counterparts and by the different
Parties hereto in separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same Agreement. Any
signature page of this Agreement may be detached from any counterpart of the Agreement
without impairing the legal effect of any signature thereon, and may be attached to another
counterpart of the Agreement identical in form hereto except that it has attached to it one or more
signature pages. An executed facsimile copy of this Agreement may be accepted as an original.
2.8 Authority of Signatories
Each signatory to this Agreement certifies that he or she is authorized to execute this
Agreement and to legally bind the Party on whose behalf he or she executes the Agreement, and
that such Party shall be fully bound by the terms hereof upon such signature without any further
act, approval or authorization.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of
the date first written above.
38

)'"AbIGIN PPE-DEP PI20.)"EC'Z' (PEAC NO.220b)
COMPRETZPNSTV]C
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YADKIN PEE-DE,E PROJECT (FERC Np. 22Q6)
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North Carolina WiIdli£e Resanrces Commission
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Date: c'' -- I~ - ~` :~

APPENDICES

APPENDIX A
List of Parties & Contact Information

Signatory Parties &
Contact Information
Agency-Association-
Firm Signatory Contact / Email
Carolina Forest John Olmstead, John Olmstead
Association President 334 Tamarind Drive
Troy NC 27371
olmsteaj erols.com
Coastal Conservation Dana E Beach, Patrick Moore
League, SC Executive Director CCL -Suite 100
2231 Devine Street
Columbia SC 29205
patrickm scccl.org
Fairway Shores John J Carroll, Jack Carroll
Homeowners Vice President & 125 Bonet' Point Road
Association Cecil T Weaver, Mt Gilead NC 27306
Board Member Tom Weaver
600 Springwood Road
Mt Gilead NC 27306
tomweav carolina.net
Jordan Timberlands Inc. Chip Miller, Chip Miller
Timberlands Manager Jordan Timberlands Inc
1939 Highway 109 South
Mt Gilead NC 27306
cmiller 'ordanlumber.com
Montgomery County, William D Maness, Judy Stevens
North Carolina Chairman - Montgomery County
Montgomery County 444 N Main Street
Commissioners Troy NC 27371
judy montgomery-county.com
The Nature Conservancy Eric Krueger, Eric Krueger
So Carolina Chapter Director Science & The Nature Conservancy
Stewardship 960 Morrison Dr Suite 100
Charleston SC 29413
ekrueger tnc.org
NC Department of William G Ross Jr., Jim Mead
Environment & Natural Secretary NC Dept of Environment &
Resources Natural Resources
l la' Floor Archdale Building
512 N Salisbury Street
Raleigh NC 27604
[e-mail]

Signatory Parties & Contact Information
Page 2
Agency-Association-
Firm Si nato Contact / Email
NC Wildlife Resources Richard B Hamilton, Todd Ewing
Commission Executive Director NC Wildlife Resources
Commission
2551 Winding Woods Lane
Ashboro NC 27205
todd.ewing ncwildlife.org
Pee Dee River Frank Willis, Marty Barfield
Coalition Chair Weyerhaeuser
585 Willaimette Road
Bennettsville SC 29512
Marty.Barfield weyerhaeuser.com
Progress Energy Charles M Gates, Larry Mann
VP Fossil Generation Progress Energy
179 Tillery Dam Road
Mt Gilead NC 27306
Larry.mann pgnmail.com
SC Department of M Rheta Geddings, Larry Turner
Health & Assistant Bureau Chief, SC Department of Health &
Environmental Control Bureau of Water Environmental Control
2600 Bull Street
Columbia SC 29201
turnerle dheasc.gov
SC Department of John F Frampton, Danny Johnson
Natural Resources Director SC Department of Natural
Resources
1000 Assembly Street
Columbia SC 29201
johnsond dnr.sc.gov
The LandTrnst for Jason A Walser, Kevin Redding
Central North Carolina Executive Director The LandTrnst for Central North
Carolina
215 Depot Street
Salisbury NC 28145-4284
[e-mail]

APPENDIX B
Low Inflow Protocol
(Yadkin & Yadkin-Pee Dee River Projects)

Low Inflow Protocol
for the
Yadkin & Yadkin-Pee Dee River Hydroelectric Projects
GOAL
The fundamental goal of this Low Inflow Protocol (LIP) is to take staged actions in the
Yadkin-Pee Dee River Basin needed to delay the point at which available water storage
in the Yadkin Hydroelectric Project (Federal Energy Regulatory Commission -FERC
No. 2197) and the Yadkin-Pee Dee Hydroelectric Project (FERC No. 2206) (collectively,
projects) reservoirs is fully depleted while maintaining downstream flows. This LIP is
intended to provide additional time to increase the probability that precipitation will
restore streamflow and reservoir water elevations to normal ranges. The amount of
additional time that is gained during implementation of this LIP depends on the
diagnostic accuracy of the trigger points, the amount of regulatory flexibility available to
operate the projects, and the effectiveness of the projects' operators and the water users
in working together to implement required actions and achieve significant water use
reductions. It is assumed that water users in the Yadkin-Pee Dee River Basin not
subject to this LIP must comply with all applicable State and local drought response
requirements.
More specifically, this LIP establishes procedures for adjusting operations during periods
of low inflow to the Yadkin Hydroelectric Project owned and operated by Alcoa Power
Generating Inc. (APGI) and the Yadkin-Pee Dee River Hydroelectric Project owned by
Carolina Power & Light Company and operated by Progress Energy Carolinas, Inc. (PE)
(collectively, Licensees) during the term of the new FERC licenses issued for these
projects. The provisions of this LIP should be interpreted in a manner consistent with all
other provisions of the new FERC licenses.
OVERVIEW
This LIP will be implemented during periods when there is not enough water flowing into
the projects' reservoirs to meet the projects' Required Minimum Instream Flows while
maintaining reservoir water elevations within Normal Operating Ranges. This LIP
provides trigger points and operating procedures that the Licensees will follow for the
projects. This LIP also specifies water withdrawal reduction measures for other water
users in portions of the Yadkin-Pee Dee River Basin.
The Licensees will provide flow from storage in the projects' reservoirs to support
hydroelectric generation and to provide Required Minimum Instream Flows in
accordance with their respective new FERC licenses. During periods of normal inflow,
reservoir water elevations will be maintained within their Normal Reservoir Operating
Ranges. During times that inflow is not adequate to provide Required Minimum
Instream Flows and maintain reservoir water elevations within their Normal Reservoir
Operating Ranges, the Licensees will reduce releases for hydroelectric generation. If
reservoir storage continues to drop and climatologic or hydrologic conditions worsen
until trigger points defined in this LIP are reached, the Licensees will implement
additional provisions of this LIP, including meeting with the designated agencies and
water users to discuss the need for actions pursuant to this LIP. If conditions worsen,

progressive stages of this LIP will allow additional use of the available water storage
inventory, while conserving water storage volumes through required reductions in LIP
Flows and required reductions in water withdrawals.
Implementation of this LIP and movement between the various stages are based on
measurements of Stream Gage Three-Month Rolling Average Flow, U. S. Drought
Monitor Three-Month Numeric Average, and the High Rock Reservoir water elevation.
The calculation of these triggers and specific thresholds associated with each stage are
detailed in this LIP.
Recognizing that improvements to this LIP may be identified during the new FERC
license period, this LIP will be re-evaluated as defined in Key Definitions, Facts and
Assumptions No. 18.
KEY DEFINITIONS, FACTS, AND ASSUMPTIONS
Low Inflow Watch or Low Inflow Condition - A period of time when there is not
enough water flowing into the projects' reservoirs to meet the projects' Required
Minimum Instream Flows while maintaining reservoir water elevations within Normal
Reservoir Operating Ranges.
2. LIP Flows -For the purposes of this LIP, this term refers to the flows defined in
Table 6.
3. Required Minimum Instream Flows -For the purposes of this LIP, this term includes
the minimum flow requirements included in the new FERC licenses for the projects.
4. Public Information Obligations -The Licensees will develop and provide information
on their respective websites to inform the public on reservoir water elevations,
project releases, usability of public access areas, reservoir inflows, meteorological
forecasts, Historic and Actual Stream Gage Three-Month Rolling Average Flow
calculations, U.S. Drought Monitor Three-Month Numeric Average calculations, LIP
status, YPD-DMAG meeting summaries, and implementation of maintenance or
emergency operation plans.
5. Stream Gage Three-Month Rolling Average Flow- The three-month rolling average
of streamflow will be calculated at the following USGS stream gages:
• Yadkin River at Yadkin College (02116500)
• South Yadkin River near Mocksville (02118000)
• Abbotts Creek at Lexington (02121500)
• Rocky River near Norwood (02126000)
This flow will be calculated on the last day of each month by averaging the monthly
average of the current month and the two preceding months. The sum of the three-
month rolling average for these four gage stations will be compared to the Historic
Stream Gage Three-Month Rolling Average Flow for the corresponding period.
6. Historic Stream Gage Three-Month Rolling Average Flow -The daily flow for each of
the four designated USGS stream gages has been used to calculate a monthly

average flow for the period of record 1974 through 2003. Because the USGS only
began gaging flows for Abbotts Creek in 1988, the historical average for this gage
will be based on the period 1988 through 2003. The historic three-month rolling
average flow for each month of the year, presented in Table 1, was calculated on the
last day of each month of the year by averaging the monthly average flow for each
month and the preceding two months. The use of the period of record 1974 through
2003 to calculate the historic three-month rolling average flow will be evaluated every
five years during the review of this LIP {see Key Definitions, Facts, and Assumptions
No. 18).
Table 1. Historic Stream Gage Three-Month Rolling Average Flow
For Evaluation of
Flow Trigger on: Average of daily flows
during: Historic Three-Month
Rolling
Average Flow, cfs
January 1 Oct-Nov-Dec 4,000
February 1 Nov-Dec-Jan 5,200
March 1 Dec-Jan-Feb 6,250
April 1 Jan-Feb-Mar 7,700
May 1 Feb-Mar-Apr 7,550
June 1 Mar-Apr-May 6,850
July 1 Apr-May-Jun 5,350
August 1 May-Jun-Jul 4,200
September 1 Jun-Jul-Aug 3,600
October 1 Jul-Aug-Sep 3,200
November 1 Aug-Sep-Oct 3,300
December 1 Sep-Oct-Nov 3,550
7. Full Pond Elevation -Also referred to as "Full Pond", this is the elevation of a
reservoir (measured in feet, USGS datum [NGVD 1929]) that corresponds to the
point at which water would first begin to spill from each reservoir's dam if the
respective Licensee took no action. This elevation corresponds to the lowest point
along the top of the spillway (including flashboards) for reservoirs without flood
gates; and to the lowest point along the top of the flood gates for reservoirs that have
flood gates. The Full Pond Elevation for each projects' reservoirs is listed in Table 2.
Table 2. Full Pond Elevations
Reservoir Full Pond Elevation
(feet, USGS datum -NGVD 1929)
High Rock 623.9
Tuckertown 564.7
Narrows 509.8
Fal Is 332.8
Tillery 278.2
Blewett Falls 178.1
8. Normal Reservoir Operating Range -The band of reservoir water elevations within
which the Licensees normally attempt to maintain a given reservoir on a given day.
Each reservoir has its own specific Normal Reservoir Operating Range, bounded by

Full Pond Elevation and Normal Minimum Elevation. If net inflows to the reservoir are
within a reasonable tolerance of the average or expected amounts, project
equipment is operating properly, and if maintenance or emergency operation plans
have not been implemented, reservoir water elevation excursions outside of the
Normal Reservoir Operating Range should not occur. The new FERC license for the
Yadkin Project includes operating curves that establish the Normal Reservoir
Operating Range for each Yadkin Project reservoir.
9. Normal Minimum Elevation (NME~ -The elevation of a reservoir (measured in feet,
USGS datum [NGVD 1929]} that defines the bottom of the reservoir's Normal
Operating Range for a given day of the year. NME for each of the projects' reservoirs
is listed in Table 3.
Table 3. Normal Minimum Elevations {feet, USGS datum -NGVD 1929)
Month High
Rock Tucker-
town Narrows Falls Tillery Blewett
Falls
Full Pond 623.9 564.7 509.8 332.8 278.2 178.1
January 1 613.9 561.7 504.8 328.8 273.2 172.1
February 1 613.9 561.7 504.8 328.8 273.2 172.1
March 1 transition 561.7 504.8 328.8 275.7 172.1
April1 619.9 561.7 504.8 328.8 275.7 172.1
May 1 619.9 561.7 504.8 328.8 275.7 172.1
June 1 619.9 561.7 504.8 328.8 275.7 172.1
July 1 619.9 561.7 504.8 328.8 275.7 172.1
August 1 619.9 561.7 504.8 328.8 275.7 172.1
September 1 619.9 561.7 504.8 328.8 275.7 172.1
October 1 619.9 561.7 504.8 328.8 275.7 172.1
November 1 transition 561.7 504.8 328.8 275.7 172.1
December 1-15 613.9 561.7 504.8 328.8 275.7 172.1
December16-31 613.9 561.7 504.8 328.8 273.2 172.1
10. Public Water System -For the purposes of this LI P, a Public Water System is any
publicly or privately owned water system that supplies potable water to the public
having an instantaneous withdrawal capacity of one million gallons per day or more,
and withdraws from storage in the projects' reservoirs.
11.Non-Public Water User -For the purposes of this LIP, aNon-Public Water User is
any publicly or privately owned water withdrawer that withdraws water for uses other
than supplying potable water to the public, having an instantaneous withdrawal
capacity of one million gallons per day or more that withdraws from storage in the
projects' reservoirs.
12. U.S. Drought Monitor - A synthesis of multiple indices, outlooks, and news accounts
(published by the U. S. Department of Agriculture) that represent a consensus of
federal and academic scientists concerning the drought status of all parts of the
United States. Typically, the U.S. Drought Monitor indicates intensity of drought as
DO-Abnormally Dry, D1-Moderate, D2-Severe, D3-Extreme and D4-Exceptional. The
current U.S. Drought Monitor and explanatory material can be found at
http:llwww.drought.unl.eduldm/monitor.html.

13. U.S. Drought Monitor Three-Month Numeric Average - If the U.S. Drought Monitor
has a designation ranging from DO to D4 as of the last day of a month for any part of
the Yadkin-Pee Dee River Basin that drains to the Blewett Falls development, the
basin will be assigned a numeric value for that month. The numeric value will equal
the highest U.S. Drought Monitor designation {e.g. D0=0, D1=1, D2=2, D3=3 and
D4=4) for any part of the Yadkin-Pee Dee River Basin draining to Blewett Falls
development as of the last day of the month. A normal condition in the basin, defined
as the absence of a drought designation, will be assigned a numeric value of
negative one (-1). A rolling average of the numeric values of the current month and
previous two months will be calculated by APGI at the end of the month and
designated as the U.S. Drought Monitor Three-Month Numeric Average for purposes
of this LIP.
14. Critical Reservoir Water Elevation -The reservoir water elevation (measured in feet,
USGS datum [NGVD 1929]) below which a Public Water System intake, Non-Public
Water User's intake, or hydropower plant located on the reservoir cannot operate
under normal conditions. Critical Reservoir Water Elevations are defined in Table 4.
Table 4. Critical Reservair Water Elevation
Critical Reservair
Water Elevation
Reservoir measured at the dam Type
(feet USGS Datum -
NGVD1929)
High Rock 599.9 (24 ft belowfull pool) Hydropower Production
Tuckertown 560.7 {4 ft below full pool) Public Water Supply
Narrows 486.8 (23 ft below full pool) Public Water Supply
Falls 322.8 (10 ft below full pool) Hydropower Production
Tillery 268.2 (10 ft below full pool) Public Water Supply
Blewett Falls 168 {10.1 ft below full pool) Public Water Supplyl
Hydropower Production
15. Critical Flow- The flows from the projects that are necessary to prevent long-term or
irreversible damage to aquatic communities consistent with the resource
management goals and objectives for the affected stream reaches and necessary to
provide some basic level of water quality maintenance in affected river reaches. For
the purposes of this LIP, the Critical Flows are defined as follows:
• Falls Development -the Critical Flow from the Falls Development is equal to
770 cfs measured on a daily average basis.
• Tillery Development -the Critical Flow from the Tillery Development is the
same as required minimum instream flow as defined in the new FERC license
for Yadkin Pee-Dee River Hydroelectric Project.
• Blewett Falls Development -the Critical Flow from the Blewett Falls
Development is 925 cfs measured on a continuous basis.
16. Organizational Abbreviations -Organizational abbreviations include Alcoa Power
Generating Inc. (APGI), Progress Energy (PE}, NC Department of Environment and
Natural Resources (NCDENR), North Carolina Division of Water Resources
(NCDWR), North Carolina Division of Water Quality {NCDWQ), North Carolina
Wildlife Resources Commission (NCWRC), South Carolina Department of Natural

Resources (SCDNR), South Carolina Department of Health and Environmental
Control (SCDHEC), the United States Fish and Wildlife Service (USFWS), High Rock
Lake Association (HRLA), Badin Lake Association (BLA), and South Carolina Pee
Dee River Coalition (SCPDRC).
17. Yadkin-Pee Dee River Basin Drought Management Advisory Group (YPD-DMAG) -
The YPD-DMAG is established to facilitate implementation and review of this LIP.
Members of the YPD-DMAG agree to comply with this LIP. Membership on the
YPD-DMAG is open to one representative from each of the following organizations:
• APGI
• PE
• NCDWR
• NCDWQ
• NCWRC
• SCDNR
• SCDHEC
• USFWS
• Duke Power
• HRLA
• BLA
• Lake Tillery homeowners representation
• SCPDRC
• All owners of a Public Water System intake or aNon-Public Water User's
intake that withdraw from storage in one of the projects' reservoirs.
The Licensees will share the responsibility to notify NCDWR of a Low Inflow
Condition. NCDWR and SCDNR will share responsibility to coordinate with the YPD-
DMAG including notifying, setting agendas, leading discussions, and providing
call/meeting summaries. Regardless of the Low Inflow Condition, coordination will
include a meeting convened annually by NCDWR during April to discuss issues
relevant to this LIP. Membership in the YPD-DMAG may be expanded based on a
consensus of the members or at the direction of FERC. The NCDWR will maintain an
active roster of the YPD-DMAG, will prepare meeting summaries of all YPD-DMAG
meetings.
18. Revising this LIP- During the new FERC license period, the YPD-DMAG will be
convened by NCDWR and SCDNR at least once every five (5) years to review and, i1
necessary, update this LIP. Decisions on modifications to the Licensees'
responsibilities under this LIP, if any, will be determined by consensus of the
Licensees and the States of North Carolina and South Carolina (specifically
NCDWR, NCDWQ, SCDNR, SCDHEC) after consultation with other members of the
YPD-DMAG. Proposed modification to the Licensees' responsibilities will be
submitted to FERC for review and approval as necessary. Modifications to the
responsibilities of other members (not the FERC licensees) of the YPD-DMAG under
this LIP, if any, will be determined by consensus of those members after consultation
with the Licensees. Approved modifications will be incorporated through revision of
this LIP. The YPD-DMAG may appoint an ad hoc committee to consider issues
relevant to this LIP. An issue such as the substitution of a regional drought monitor

for the U.S. Drought Monitor, if developed in the future, or proportional drawdown of
storage reservoirs during LIP stages are examples of items that may be considered.
19. Consensus - The unanimous support of all Parties, or at least no opposition from
any Party.
20. Water Withdrawal Data Collection and Reporting -The owners of all water intakes
impacted by this LIP are to comply with water use reporting requirements of the
appropriate State Agencies. The YPD-DMAG can request and should receive
relevant water use information from the appropriate state agency or directly from the
owners of individual intakes.
21. Drought Response Plan Updates -All Public Water Supply System owners and Non-
public Water Users subject to this LIP will review and update their drought response
plans, or develop a plan if they do not have one, to ensure compliance and
coordination with this LIP, including the authority to enforce the provisions outlined
herein. Nothing in this LIP is intended to prevent Public Water System owners or
Non-Public Water Users from taking more restrictive actions or from complying with
any applicable law or regulation.
22. Relationship Between this LIP and Maintenance and Emergency Plans -
Maintenance and emergency plans outline the general approach the Licensees will
take under certain maintenance, emergency, equipment failure and other situations
to continue practical and safe operation of the projects; to maintain operations
consistent with the new FERC license conditions to the maximum extent possible;
and to communicate with resource agencies and the affected parties. Under these
plans, temporary modifications to Required Minimum Instream Flow releases, and
the Normal Reservoir Operating Ranges are allowed. Lowering projects' reservoir
water elevations caused by situations addressed under maintenance and emergency
plans will not invoke implementation of this LIP. Also, if this LIP has already been
implemented at the time that a situation covered by these plans is initiated, the
Licensee may suspend implementation of this LIP until the maintenance or
emergency situation has been eliminated. Notification will be provided by the
Licensees to the State Agencies as soon as practicable.
PROCEDURE
A Low Inflow Watch or Low Inflow Condition, as specifically defined below, will be
triggered by the combination of conditions defined in Table 5. This LIP will be
implemented at Stage 0 and, if the combination of conditions becomes more severe, the
stage will increase in one stage increments. The Licensees and other water users will
follow the procedure set forth in this section regarding communications and adjustments
to flows and other water demands.

Table 5. Summary of LIP Triggers
US Drought Monitor Stream Gage Three-Month
Stage High Rack Reservoir Three-Month Numeric Rolling Average
Elevation Average as a percent of the
Historical Average
< NME minus 0.5 ft and any ar any
0 OR
< NME and either > 0 or < 48
1 < NME minus 1 ft and either > 1 ar < 41
2 < NME minus 2 ft and either > 2 or <35
3 < NME minus 3 ft and either 3 ar <30
4 <'/z of (NME minus Critical and either >
4 or <30
Reservoir Water Elevation} _
The LIP Flows set forth in Table 6 will be initiated on a monthly basis and are designed
to equitably allocate the impacts of reduced water availability in accordance with the goal
of this LIP. Initiation of this LIP will be based on analysis of the trigger conditions on the
first day of each month. The High Rock Reservoir water elevation as of midnight
between the last day of the previous month and the first day of the current month will be
used in combination with the U.S. Drought Monitor Three-Month Numeric Average and
the Stream Gage Three-Month Rolling Average Flow to determine the need to declare a
Low Inflow Watch or change the stage of Low Inflow Conditions.
Table 6. LIP Flows(1), cfs
High Rack Falls~2~ Blewett Falls~2~
(daily average (daily average flow target) (continuous flow targetr'~)
,srtage maximum flow target)
Feb 1- May 16- Jun 1- Feb 1- May 1B- Jun 1- Feb 1- May i6- Jun 1-
May 15 31 Jan 31 May 15 31 Jan 31 May 15 31 Jan 31
~ 2000 1500 1000 2000 1500 1000 2400 1800 1200
~ 1450 1170 900 1450 1170 900 1750 1400 1080
2 1080 950 830 1080 950 830 1300 1150 1000
3 770 770 770 770 770 770 925 925 925
4 Additional measures maybe determined by consensus of the Licensees and State Agencies. FERC approval of
any additional measures may be required.
1 Consistent with the goal of this LIP to conserve water while maintaining downstream flows, projects will be operated to
achieve the target flows to the extent practicable as a first priority and to supplement inflows equitably from the storage
reservoirs as a second priority.
2 The LIP flow values shown in the table above reflect flow targets. These values cannot be met exactly as shown and will
likely vary slightly on a real time basis from the values shown here. It is expected that the variances from the target flows
will be minimal. In Stages 0-2 the releases from Blewett Falls will be within 5% of the target as measured at the USGS
Rockingham gage. In stages 3-4 the releases from Blewett Falls will be between 900-950 cfs as measured at the USGS
Rockingham gage.
3 Local inflows to Blewett Falls Reservoir may be large even during extended low inflow conditions. If at any time during
the implementation of the LI P local inflows to Blewett Falls Reservoir are large enough to fill Blewett Falls Reservoir to full
pond, the Downstream Licensee may temporarily increase Blewett Falls generation to avoid spill.

Stage 0 -Low Inflow Watch:
The Licensees will monitor High Rock Reservoir water elevations, the U.S. Drought
Monitor and the designated stream gages and will declare a Stage 0 Low Inflow Watch
for the month if the following conditions are present on the first day of the month:
• If the High Rock Reservoir water elevation is below the NME minus 0.5 ft under
any inflow or drought condition.
OR
• The High Rock Reservoir water elevation is below its NME.
AND EITHER
The U.S. Drought Monitor Three-Month Numeric Average for the
Yadkin-Pee Dee River Basin draining to Blewett Falls Development is
greater than or equal to zero.
OR
• The Stream Gage Three-Month Rolling Average Flow for the
monitored stream gages is less than 48% of the Historic Stream Gage
Three-Month Rolling Average Flow.
When a Stage 0 Low Inflow Watch is declared:
1. The Licensees will notify via email the NCDWR of a Stage 0 Low Inflow Watch as
soon as practicable but no later than three business days after the declaration.
2. The NCDWR will activate the YPD-DMAG and initiate monthly meetings or
conference calls to be held on the Monday before the second Tuesday. Monthly
discussions will:
a. Review provisions of this LIP.
b. Clarify communication channels between the YPD-DMAG members.
c. Review hydrological status of the basin.
d. Review the roles of each YPD-DMAG member and discuss their plans for
responding if an elevated Low Inflow Condition is declared.
e. Review information reporting by YPD-DMAG members, including a storage
history and forecast from the Licensees, a water use history and forecast from
each water user on the YPD-DMAG, and state-wide drought response status
(including, but not limited to, impact to water quality, fisheries, wildlife, etc.) from
the member agencies.
f. Public communications.

Stage 1 -Low Inflow Condition:
The Licensees will monitor High Rock Reservoir water elevations, the U.S. Drought
Monitor and the designated stream gages and will declare a Stage 1 Low Inflow
Condition for the month if the following conditions are present on the first of the month:
• The prior month LIP condition was Stage 0;
AND
• The High Rock Reservoir water elevation is more than 1 ft belowthe NME;
AND EITHER
• The U.S. Drought Monitor Three-Month Numeric Average for the
Yadkin-Pee Dee River Basin draining to Blewett Falls Development is
greater than or equal to 1.
OR
The Stream Gage Three-Month Rolling Average Flow for the
monitored stream gages is less than 41 % of the Historic Stream Gage
Three-Month Rolling Average Flow.
When a Stage 1 Low Inflow Condition is declared:
1. The Licensees will:
a. Notify NCDWR of declaration of a Stage 1 Low Inflow Condition via email as
soon as practicable but no later than two business days after the declaration.
b. Implement LIP Flows as detailed in Table 6 for each project by the seventh day
of the month in which a Stage 1 Low Inflow Condition is declared. To meet the
LIP Flows for Stage 1
• APGI will supplement Project inflows by drawing first from Narrows Reservoir
until the Narrows Reservoir drawdown below its NME matches the High Rock
Reservoir drawdown below its NME at the time that the Stage 1 Low Inflow
Condition is declared.
• APGI will supplement Project inflows by drawing from High Rock and
Narrows reservoirs approximately equally on afoot-per-foot basis below the
Normal Minimum Elevation (NME).
• PE will supplement Project inflows by drawing from either Tillery or Blewett
Falls as required.
c. Update their respective websites as noted in Key Definitions, Facts and
Assumptions No. 4.
d. Provide Public Water System intake owners and Non-Public Water Users with
weekly updates on reservoir water elevations and inflow of water into the
projects' reservoirs.

2. If they have not already done so, NCDWR will coordinate with SCDN R to conduct
monthly meetings or conference calls to be held on the Monday before the second
Tuesday. Monthly discussions will:
a. Review provisions of this LIP.
b. Clarify communication channels between the YPD-DMAG members.
c. Review hydrological status of the basin.
d. Review the roles of each YPD-DMAG member and discuss their plans for
responding if an elevated Low Inflow Condition is declared.
e. Review information reporting by YPD-DMAG members, including a storage
history and forecast from the Licensees, a water use history and forecast from
each water user on the YPD-DMAG, and state-wide drought response status
(including, but not limited to, impact to water quality, fisheries, wildlife, etc.) from
the member agencies.
f. Public communications.
3. Owners of Public Water System intakes will complete the following activities within
14 days after a Stage 1 Low Inflow Condition is declared:
a. Notify their water customers of the low inflow condition through public outreach
and communication efforts.
b. Request that their water customers implement voluntary water use restrictions, in
accordance with their drought response plans. At this stage, the goal is to
reduce water withdrawals by approximately 5% from the amount that would
otherwise be expected. These restrictions may include:
Reduction of lawn and landscape irrigation to no more than two days per
week (i.e. residential, multi-family, parks, streetscapes, schools, etc).
• Reduction of residential vehicle washing.
c. Provide a status update to the YPD-DMAG on actual water withdrawal trends
and discuss plans for moving to mandatory restrictions, if they are required.
4. Non-Public Water Users on the YPD-DMAG will complete the following activities
within 14 days after a Stage 1 Low Inflow Condition is declared:
a. Notify their employees and/or customers of the low inflow condition,
b. Request that their employees and customers conserve water through reduction
of water use, electric power consumption, and other means, and
c. Institute in-house conservation consistent with their drought management plan
and minimize consumptive uses to the extent feasible.

Stage 2 -Low Inflow Condition:
The Licensees will monitor High Rock Reservoir water elevations, the U.S. Drought
Monitor and the designated stream gages and will declare a Stage 2 Low Inflow
Condition for the month if the following conditions are present on the first of the month:
• The prior month LIP condition was Stage 1;
AND
• The High Rock Reservoir water elevation is more than 2 ft belowthe NME.
AND EITHER
• The U.S. Drought Monitor Three-Month Numeric Average for the
Yadkin-Pee Dee River Basin draining to Blewett Falls Development is
greater than or equal to 2.
OR
The Stream Gage Three-Month Rolling Average Flow for the
monitored stream gages is less than 35% of the Historic Stream Gage
Three-Month Rolling Average Flow.
When a Stage 2 Low Inflow Condition is declared:
1. The Licensees will:
Notify NCDWR of a declaration of Stage 2 Low Inflow Condition via email as
soon as practicable but no later than two business days after the declaration.
Implement LIP Flows as detailed in Table 6 for each project by the seventh day
of the month in which a Stage 2 Low Inflow Condition is declared. To meet the
LIP Flows for Stage:
• APGI will supplement Project inflows by drawing from High Rock and
Narrows reservoirs approximately equally on afoot-per-foot basis.
• PE will supplement Project inflows by drawing from either Tillery or Blewett
Falls as required.
c. Update their respective websites as noted in Key Definitions, Facts and
Assumptions No. 4.
d. Provide Public Water System intake owners and Non-Public Water Users with
updates twice per week on reservoir water elevations and inflow of water into the
system.
e. Continue participation in monthly or more frequent meeting or conference calls of
the YPD-DMAG

2. NCDWR will coordinate with SCDNR to conduct monthly YPD-DMAG meetings or
conference calls to be held on the Monday before the second Tuesday. Monthly
discussions will:
a. Review provisions of this LIP.
b. Clarify communication channels between the YPD-DMAG members.
c. Review hydrological status of the basin.
d. Review the roles of each YPD-DMAG member and discuss their plans for
responding if an elevated Low Inflow Condition is declared.
e. Review information reporting by YPD-DMAG members, including a storage
history and forecast from the Licensees, a water use history and forecast from
each water user on the YPD-DMAG, and state-wide drought response status
(including, but not limited to, impact to water quality, fisheries, wildlife, etc.) from
the member agencies.
f. Public communications.
3. Owners of Public Water System intakes will complete the following activities within
14 days after the Stage 2 Low Inflow Condition is declared:
a. Notify their water customers of the continued low inflow condition and movement
to more stringent mandatory water use restrictions through public outreach and
communication efforts.
b. Require that their water customers implement mandatory water use restrictions,
in accordance with their drought response plans. At this stage, the goal is to
reduce water withdrawals by approximately 10% from the amount that would
otherwise be expected. These restrictions may include:
• Limiting lawn and landscape irrigation to no more than one day per week (i.e.
residential, multi-family, parks, streetscapes, schools, etc).
• Eliminating residential vehicle washing.
• Limiting public building, sidewalk, and street washing activities except as
required for safety and/or to maintain regulatory compliance.
• Limiting construction uses of water such as dust control.
• Limiting flushing and hydrant testing programs, except to maintain water
quality or other special circumstances.
• Eliminating the filling of new swimming pools.
• Enforce mandatory water use restrictions through the assessment of
penalties.
• Encourage industrial/manufacturing process changes that reduce water
consumption.
• Provide a status update to the YPD-DMAG on actual water withdrawal trends.
4. Non-Public Water Users on the YPD-DMAG will complete the following activities
within 14 days after the Stage 2 Low Inflow Condition is declared:
a. Notify their employees and/or customers of the low inflow condition through
public outreach and communication efforts.

b. Request that their employees and customers conserve water through reduction
of water use, electric power consumption, and other means.
c. Institute in-house conservation consistent with their required drought
management plans and minimize consumptive uses to the extent feasible.

Stage 3 -Low Inflow Condition:
The Licensees will monitor High Rock Reservoir water elevations, the U.S. Drought
Monitor and the designated stream gages and will declare a Stage 3 Low Inflow
Condition for the month if the following conditions are present on the first of the month:
• The prior month LIP condition was Stage 2;
AND
• The High Rock Reservoir water elevation is more than 3 ft below the NME.
AND EITHER
• The U.S. Drought Monitor Three-Month Numeric Average for the
Yadkin-Pee Dee River Basin draining to Blewett Falls Development is
greater than or equal to 3.
OR
The Stream Gage Three-Month Rolling Average Flow for the
monitored stream gages is less than 30% of the Historic Stream Gage
Three-Month Rolling Average Flow.
When a Stage 3 Low Inflow Condition is declared:
1. The Licensees will:
a. Notify NCDWR of a declaration of Stage 3 Low Inflow condition via email as soon
as practicable but no later than 48 hours after the declaration.
Implement LIP Flows to designated Critical Flows as detailed in Table 6 for each
project by the seventh day of the month in which a Stage 3 Low Inflow Condition
is declared. To meet the Critical Flows:
• APGI will supplement Project inflows by drawing from High Rock and
Narrows reservoirs approximately equally on afoot-per-foot basis.
• PE will supplement Project inflows by drawing from either Tillery or Blewett
Falls as required.
c. Update their respective websites as noted in Key Definitions, Facts, and
Assumptions No. 4.
d. Provide Public Water System intake owners and Non-Public Water Users with bi-
weekly (twice each week) updates on reservoir water elevations and inflow of
water into the system.
e. Continue participation in monthly or more frequent meeting or conference calls of
the YPD-DMAG.

2. NCDWR will coordinate with SCDNR to conduct monthly YPD-DMAG meetings or
conference calls to be held on the Monday before the second Tuesday. Monthly
discussions will:
a. Review provisions of this LIP.
b. Clarify communication channels between the YPD-DMAG members.
c. Review hydrological status of the basin.
d. Review the roles of each YPD-DMAG member and discuss their plans for
responding if an elevated Low Inflow Condition is declared.
e. Review information reporting by YPD-DMAG members, including a storage
history and forecast from the Licensees, a water use history and forecast from
each water user on the YPD-DMAG, and state-wide drought response status
(including, but not limited to, impact to water quality, fisheries, wildlife, etc.) from
the member agencies.
f. Public communications.
3. Owners of Public Water System intakes will complete the following activities within
14 days after the Stage 3 Low Inflow Condition is declared:
a. Notify their water customers of the continued low inflow condition and movement
to emergency water use restrictions through public outreach and communication
efforts. At this stage, the goal is to reduce water usage by approximately 20%
from the amount that would otherwise be expected.
b. Restrict all outdoor water use.
c. Implement emergency water use restrictions in accordance with their drought
response plans, including enforcement of these restrictions and assessment of
penalties.
d. Prioritize and meet with their commercial and industrial large water customers
and meet to discuss strategies for water reduction measures including
development of an activity schedule and contingency plans.
e. Prepare to implement emergency plans to respond to water outages.
4. Non-Public Water Users on the YPD-DMAG will complete the following activities
within 14 days after a Stage 3 Low Inflow Condition is declared:
Continue informing their customers of the low inflow condition through public
outreach and communication efforts.
Request that their customers conserve water through reduction of water use,
electric power consumption, and other means.

Stage 4 -Low Inflow Condition:
The Licensees will monitor reservoir elevations, the U.S. Drought Monitor and the
designated stream gages and will declare a Stage 4 Low Inflow Condition for the month
if the following conditions are present on the first of the month:
• The prior month LIP condition was Stage 3;
AND
The High Rock Reservoir water elevation is less than 606.9 ft USGS (November
1 through March 1) or less than 609.9 ft USGS (April 1 through October 1).~
AND EITHER
• The U.S. Drought Monitor Three-Month Numeric Average for the
Yadkin-Pee Dee River Basin draining to Blewett Falls Development is
greater than or equal to 4.
OR
The Stream Gage Three-Month Rolling Average Flow for the
monitored stream gages is less than 30% of the Historic Stream Gage
Three-Month Rolling Average Flow.
When a Stage 4 Low Inflow Condition is declared:
1. The Licensees will notify NCDWR via email as soon as practicable but no later than
48 hours after the declaration.
2. NCDWR will request a meeting of the YAD-DMAG within 5 days after the declaration
of the Stage 4 Low Inflow Condition for discussion to determine if there are any
additional measures that can be implemented to:
a. Reduce water withdrawals, reduce water releases from the projects or use
additional reservoir storage without creating more severe regional problems.
b. Work together to develop plans and implement any additional measures
identified above.
c. Communicate conditions to the public.
Additional measures may be determined by consensus of the Licensees and State
Agencies with FERC approval as necessary.
Less than one half the distance between the NME and the Critical Reservoir Water Elevation.

Recovery from LIP Stages
Recovery from this LIP will be triggered by any of the three following conditions:
• Condition 1: All three triggers associated with a lower numbered LIP Stage are
met.
OR
• Condition 2: High Rock Reservoir water elevations return to at or above the NME
PLUS 2.5 ft.
OR
• Condition 3: High Rock Reservoir water elevations return to at or above the NME
for 2 consecutive weeks.
When any of these three conditions occurs:
1. The Licensees will take the following action:
a. Condition 1: The LIP recovery will be a general reversal of the staged approach
described above.
b. Condition 2: The LIP will be discontinued.
c. Condition 3: The LIP will be discontinued.
2. The Licensees will notify the NCDWR via email within 3 business days following
attainment of any of the conditions necessary to return to a lower stage of this LIP.
Changes to less restrictive Stages will be made:
a. Condition 1: on the first of each month if a slow recovery is indicated; or
b. Condition 2: immediately if High Rock Reservoir elevations are at or above the
NME PLUS 2.5 ft.
c. Condition 3: immediately if High Rock Reservoir elevations are at or above the
NME for 2 consecutive weeks.
3. The Licensees will update their respective websites as noted in Key Definitions,
Facts and Assumptions No. 4.

APPENDIX C
Depictions of Certain Lands to be
Donated by Progress Energy to State of
North Carolina in Accordance with
Section 2.5.2 of this Agreement

Progress Energy
Buchanan Mitigation Lands
1532.9 Acres Donated
4
Legend a a;di~ea'
® Pee Dee River
~ Buchanan Mitigation Lands ~ E.4 8385.332
Miles
- DOT Roads o o.a o.s

Progress Energy
Almond Mitigation Lands
N. 1883242.51
E. 529758.51
4
Legend N.1881428.37
E. 513534.89
Almond Mitigation Lands
Pee Dee River
Miles
DOT Roads o o.z5 o.s ~

APPENDIX D
Depictions of Certain Lands Over Which
Progress Energy will Impose Restrictive
Covenants in Accordance with Section
2.5.3 of this Agreement

Progress Energy
' ~ Blewett Falls Mitigation Lands
::;
,z
:~ ~~'.
0
K
1 % ii a
-, j / j
h
~`YO
e ~ \/ ~ Q
`.. / ~~
\~ '%i/ i~ T ~ Y
,j~ ,/ //:;,% ~ / V
r, ~~ Via
\~''? //
~~ ~j,~j,
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/ ~~., i'/
y.. ~, / ~
•~, `~~ / ~~ e,
,~/~ ~~
//
a~'~'
f', r,
viii ~ ~~~ ~,~`~~
s / 1
:~.
~~ ~ ~
~ ~' ~1 {~y
.} ~ ~~
J
~' .
i ~'~
'"~ //
~~%
//
~ ..
f ;.,,
~e
0
v
OC
Qa~Z
SRq~>1~~
Legend
~1 Restrictive Covenants
Blewett Falls Lake R9iles
0 0.25 0.5 1
DOT Roads

Progress Energy
Tillery Mitigation Lands
w

Legend
~~~~ 100 ft Buffer Where Available
~~ Restrictive Covenants Lands
PEC Property
® Lake Tillery Feet
~L~rE~uu:fiwd.L. -- 0 340 680 1,360

APPENDIX E
Depiction of Certain Lands to be Leased
to the State of North Carolina in
Accordance with Section 2.5.4 of this
Agreement

'. ,`:Y. .,~ yl -`,(,Y~.~ r.t,`~, ,". ='~'' •':A , .`~., Legend
~,; ,, ~,. Tillery Project Boundry
~~s•~; ; a ;, . ~+,•~ t~ ,'€ . , LAYER
a • ~, ~ `' f~ art r } c~~l~'~' L t 3. r},~
"`'7~' ~ j] ' ' • ~ PB NOSURVEY
.~~ ~.,
r £~
,s
) r ~.'1 •~.e~ .a'pp' {~(' y ~`4.
'"~ • ~.
r • ~ ~ . ~, ~.. ~~~ ilf V '~~ri ., ~~ ~4i • {
' ~TT ,.ice = o ~-' ~i,:
~~i
~ ,oaf; i ~ !'~ ~~ {~ ? lr~, ..,
~. t
y' l ~•,
t~ ,F.•
~, T /~
\.,

APPENDIX F
Draft License Articles

DRAFT LICENSE ARTICLES
FOR THE RELICENSING OF THE
YADKIN-PEE DEE RIVER PROJECT
Article 101 Minimum Flow Regime
From February 1 through May 15 of each year, the continuous minimum flow will be
2,400 cfs from the Blewett Falls Development as measured at the current USGS gage at
Rockingham. From May 16 through May 31 of each year, the continuous minimum flow will be
1,800 cfs, and for the remainder of the year, June 1 through January 31, the continuous minimum
flow will be 1,200 cfs, all subject to allowable variances described below. Licensee's obligation
to meet the minimum flow releases described in this Article is contingent upon the Tillery
Development receiving the following minimum flow releases from the upstream Yadkin
Hydroelectric Project (FERC No. 219'x: February 1 to May 15 - 2,000 cfs as measured on an
average daily basis; May 16 to May 31 - 1,500 cfs as measured on an average daily basis; June 1
to January 31 - 1,000 cfs as measured on an average daily basis. This Article establishes a
higher priority on the maintenance of minimum flows than the maintenance of reservoir water
levels. Events may require the prioritization of maintaining minimum flows over the reservoir
water levels identified in Article 110.
Article 102 Flow Adjustments to Enhance Fish Spawning
Licensee shall operate the Blewett Falls facility during certain times of the year in a
manner intended to enhance fish spawning conditions downstream of the Blewett Falls
Development as described and defined below. These flow adjustment operations shall occur
each year as either (a) one 14-day and one 10-day period or (b) five 5-day periods. In any event,
these periods of flow adjustment to enhance spawning will be characterized by the following:
• Flow adjustment operations shall occur between February 1 and May 15.
• The specific time periods in each year will be decided upon by a Spawning Flow
Management Team comprised of resource agencies, the Licensee, and the licensee of the
upstream Yadkin Project. Other entities able to demonstrate relevant fisheries expertise may
participate in these discussions. If the option of one 14-day period and one 10-day period is
chosen, Licensee must be notified of the specific dates at least 14 days prior to the start of each
period. If the option of five 5-day periods is chosen, Licensee must be notified of the entire
schedule at least 10 days in advance of the start of the first of the 5-day periods.
• Periods of flow adjustment operations shall be chosen by the Spawning Flow
Management Team based on interpretation of relevant factors that might include, but are not
limited to, water temperature and weather data, projected inflow conditions, and observations of

fish spawning behavior. If the option of five 5-day periods is implemented, two of these periods
must occur between April 15 and May 15.
• Because of concerns regarding the predictability of inflows over longer periods of
time, the individual flow adjustment periods must be separated by at least one week, unless
otherwise approved by Licensee.
• If a period of unusually low inflow to Blewett Falls Reservoir or a Low Inflow
Protocol ("LIP'S period occurs during a previously selected flow adjustment operation period,
the release of the required minimum continuous flow (or in the case of an LIP event, the LIP
flow) will still be considered a flow adjustment period.
• If a period of higher inflow to Blewett Falls Reservoir occurs during a selected
flow adjustment operation period, wherein there is a continuous operation of all commercially
available turbines in the Blewett Falls powerhouse, possibly accompanied by additional spillage
over the dam crest, this period will count as a flow adjustment period so long as any interruptions
in the continuous operation of all commercially available turbines are infrequent and
unscheduled.
• If a period of intermediate inflow to the Blewett Falls Reservoir occurs (flows in
the range of 3,000 to 6,000 cfs), the Licensee shall manage releases at the Blewett Falls
powerhouse as follows:
(1) If unregulated tributary inflow to the Pee Dee River above Blewett Falls
(particularly from the Rocky River) changes significantly during a designated flow adjustment
operation period, Progress Energy can respond to these changes in flow as needed to manage
reservoir operations by increasing or reducing the number of turbines in operation without
consideration to the limits described below in (2) through (5). This would still be considered a
flow adjustment period.
(2) Except as identified in (1) above, the upramp time of each turbine at Blewett Falls
will be no less than 30 minutes from off-line to full gate.
(3) Except as identified in (1) above, the downramp time of each turbine at Blewett Falls
from full gate to off-line will be in accordance with the following guidelines:
i. After the first operating unit is taken off-line, the second operating unit to be
taken off-line shall not be taken off-line for at least two hours after the first operating unit was
taken off-line.
ii. After the second operating unit is taken off-line, the third operating unit to be
taken off-line shall not be taken off-line for at least four hours after the second operating unit
was taken off-line.
iii. After the third operating unit is taken off-line, the fourth operating unit to be
taken off-line shall not be taken off-line for at least six hours after the third operating unit was
taken off-line.
2

(4) On the first day of any flow adjustment operation period, Blewett Falls must
commence such related operations no later than 8 a.m. to still be considered as a full day of flow
adjustment operation.
(5) On the last day of any flow adjustment operation period, Blewett Falls units can
begin to be taken off-line no earlier than 4 p.m. By example, the schedule below would be
considered a full day of a designated flow adjustment operation period if it were the last day of
such period:
(i) 4 PM -- go from 5 units to 4 units
(ii) 6 PM -- go from 4 units to 3 units
(iii) 10 PM -- go from 3 units to 2 units
(6) If the five 5-day flow adjustment operation periods are chosen in any given year,
each period shall begin on a Monday morning and end on a Friday evening.
(7) If the one 14-day and one 10-day period is chosen in any given year, the actual dates
shall be such as to minimize the number of weekend days within the 14-day period. For the 10-
day period, there will be no more than 2 weekend days.
All decisions to be made by the Spawning Flow Management Team as outlined in this
article shall either have the unanimous support of all team members or no opposition from any
team member.
Licensee will prepare an annual report of the operations of the Blewett Falls
Development during the Flow Adjustment Operation periods consisting of meeting notes, flow
records from streamflow gages, and plant operations. The operations of the Tillery Plant during
the Flow Adjustment Period will be coordinated by Licensee and subject to dispatch by Licensee
in accordance with its system needs.
The first year of implementation of the Flow Adjustment Operations shall be the
calendar year following the year of license issuance. After five years of Flow Adjustment
Operations, the Spawning Flow Management Team shall evaluate the Flow Adjustment
Operations and develop recommended changes for consideration by the resource agencies and
Licensee. Re-evaluation at 5-year intervals may occur if determined necessary and if agreed to
by the Spawning Flow Management Team.
Article 103 Minimum Flow Variance
The minimum flow regime will allow a variance for two 5-hour periods each year to
reduce the minimum flow release to just leakage flow for testing black-start capability of
turbines at the Blewett Falls powerhouse. These black-start tests will be restricted to occur only
in October, November, December, or January. These tests shall not be conducted in October if a
Stage 1 or greater Low Inflow Protocol event has been triggered. Further, minimum instream
3

flows may be reduced during Low Inflow Protocol periods in order to conserve water resources
during periods of low flow in the watershed.
Article 104 Minimum Flow Compliance and Monitoring
Licensee will maintain to the standards established by the USGS a continuous flow
monitoring gage at the site of the current Rockingham USGS gage and will provide flow data to
the public, via the Internet or other appropriate means, to be updated no less than every two (2)
hours. For the first ten (10) years after issuance of this license, Licensee will contract with the
USGS for operation and maintenance of this gage. Annual reporting of flows will be in
accordance with normal USGS practices and procedures. Compliance with minimum flows for
the Blewett Falls facility will be measured at the Rockingham gage.
Licensee will maintain to the standards established by the USGS a continuous flow
monitoring gage at the site of the current Rocky River gage near the mouth of the Rocky River.
Licensee currently pays a portion of the cost of the maintenance of this gage. If for any reason
the funding of this gage by others is lost, then Licensee will be responsible for the additional
funding necessary to maintain the gage. However, Licensee may elect to discontinue the use of
USGS as the provider of this service after the first ten (10) years following the issuance of this
license.
Minimum releases required at the Blewett Falls Development shall be presumed to have
been met if flows recorded at the streamflow gage at Rockingham are within 5% of the required
minimum release, so long as the "true-up" procedure described below is implemented. Licensee
will prepare an annual report documenting its compliance with minimum releases including any
"true-up" periods. To the extent practicable, Licensee will "true-up" minimum flows monthly;
that is, flows falling below the minimum shall be offset by flows greater than the minimum
(during minimum release periods) in the same month for a reasonably equivalent amount of time.
If any instances of recorded lower-than-required minimum flows are not properly compensated
for in the month they occur, such compensation will occur as soon as practicable in the next
month, but no later than the 15th day of that month. Licensee's annual report shall indicate all
periods where a "true-up" was required and show how and when the actual "true-up" occurred.
The annual report shall be filed with the North Carolina Department of Environment and Natural
Resources (NCDENR), the South Carolina Department of Natural Resources (SCDNR), the
South Carolina Department of Health and Environmental Control (SCDHEC) and FERC by
March 31 of the following year. If any of the resource agencies have significant concerns or
comments on the report, a consultation meeting will be convened to discuss these concerns.
Such meeting shall be held within 30 days of the issuance of the report.
There shall be no "gaming" of the minimum flow variance allowed under this compliance
standard; that is, under no circumstance shall Licensee intentionally or willfully use the existence
of the variance and true-up mechanism to deliberately manipulate minimum flow releases to
coincide with demand for electricity. For example, a consistent record of lower-than-required
minimum flows during periods of high electrical demand shall be considered "gaming."
4

Certain Low Inflow Protocol events require the release of 925 cfs as the "critical flow."
Licensee shall endeavor to maintain this target flow; however, compliance will have been
achieved if the flow recorded during this event is between 900 and 950 cfs at the Rockingham
gage.
Article 105 Minimum Flow Regime
Licensee will provide a continuous year-round minimum flow at the Tillery Development
of 330 cfs except for a period of eight continuous weeks commencing as early as March 15, but
no later than March 22, when a minimum flow of 725 cfs shall be provided to enhance American
shad spawning. This release of 725 cfs will start in 2010, or at the first passage of American
shad above Blewett Falls Dam, whichever is later.
Article 106 Recreational Boating Flows
Licensee shall release for the purposes of enhancing recreational boating flows below the
Tillery Development an additional 1,750 acre-feet of water per year above and beyond the
required minimum releases specified in Article 105. This recreational release volume can be
increased to 1,950 acre-feet per year if releases for recreation purposes are made for at least four
days within the period May 16 to May 31 or September 1 to September 15. These four days can
occur in the designated May time period or the designated September time period or any
combination thereof.
Within twelve (12) months of the effective date of this license, Licensee will prepare in
coordination with NCDENR and the North Carolina Wildlife Resources Commission (NCWRC)
a Recreation Release Plan for submittal to FERC. Following the first three years of Plan
implementation, the Plan shall be evaluated and modified if appropriate; however, any
modification shall not consider increasing the amount of water above 1,950 acre-feet. After the
first evaluation, re-evaluation and modification of the Recreation Release Plan at 5-year intervals
may occur if determined necessary and if agreed upon by NCDENR, NCWRC, and Licensee,
however, any modification shall not consider increasing the amount of water above 1,950 acre-
feet. Any decision arrived at by this group shall either have the unanimous support of all or no
opposition from any member.
Article 107 Minimum Flow Compliance and Monitoring
Within 12 months of the effective date of the New License, Licensee will install and
maintain to the standards established by the USGS a continuous flow monitoring gage below the
Tillery Development near the State Highway 731 Bridge and will provide flow data to the public,
via the Internet or other appropriate means, to be updated no less than every two (2) hours. For
the first ten (10) years after issuance of the New License, Licensee will contract with the USGS
5

for operation and maintenance of this gage. Annual reporting of flows will be in accordance
with normal USGS practices and procedures.
Minimum releases required at the Tillery Development are presumed to have been met if
flows recorded at the streamflow gage near the Highway 731 Bridge are within 5% of the
required minimum, as long as the "true-up" procedure described below is implemented.
Licensee will prepare an annual report documenting its compliance with minimum releases
including any "true-up" period. To the extent practicable, Licensee will "true-up" minimum
flows monthly; that is, flows falling below the minimum shall be offset by flows greater than the
minimum (during minimum release periods) in the same month and for a reasonably equivalent
amount of time. If any instances of recorded lower-than-required minimum flows are not
properly compensated for in the month they occur, such compensation will occur as soon as
practicable in the next month, but no later than the 15th day of that month. Licensee's annual
report shall indicate all periods where a "true-up" was required and show how and when the
actual "true-up" occurred.
Article 108 Low Inflow Protocol
Progress Energy will comply with the requirements of the Low Inflow Protocol dated
February 2007.
Article 109 Implementation Schedule
Minimum instream flows will be commenced within 60 days of the effective date of the
New License, provided that the new license for the upstream Yadkin Project (Project No. 2197)
has been issued prior to or concurrent with this license and that the Yadkin Project has
commenced, and continues, the releases specified in Article 101.
Article 110 Water Levels at Blewett Falls
When inflows to Blewett Falls Reservoir are less than approximately 7,400 cfs, Licensee
shall maintain ayear-round water level regime at Blewett Falls Lake that allows for fluctuations
of up to 6 feet, between elevation 172.1 and 178.1 feet, except for system emergencies and Low
Inflow Protocol events. When flashboards are down, an additional 2 feet of drawdown to
elevation 170.1 feet is necessary to safely replace the flashboards.
During the bass spawning season, April 15 to May 15, Licensee will limit water level
changes to 2 feet except when additional reservoir storage is necessary to meet minimum flow
release obligations (minimum flow releases will have priority over lake elevations) or if the
flashboards fail In either of the exceptions noted above, Licensee will endeavor to return to
normal operations as soon as reasonably practical.
6

Article 111 Water Levels at Lake Tillery
Licensee will follow aseasonally-based lake level management schedule at Lake Tillery
during the term of the New License. From December 15 through March 1, lake level
fluctuations will be limited to 3 feet between 274.3 and 277.3, unless use of reservoir storage is
needed to meet demand for electricity. If storage is needed for electrical generation purposes
during this period, Licensee may use the storage available between elevations 272.3 feet and
277.3 feet. When used for these power-related purposes, Licensee will normally cycle the
reservoir within these elevation limits on a daily or multi-daily basis. Water fluctuations up to 8
feet may occur during system emergencies, and potentially be greater during Low Inflow
Protocol periods.
To enhance bass spawning, from April 15 to May 15, Licensee will limit lake level
changes to 1.5 ft below the water surface elevation of the reservoir as measured on April 15.
During all other periods of the year (except flood flow conditions), Licensee will
maintain lake level fluctuations to generally within 2.5 ft of full pool (elevation 277.3 ft
measured at Tillery Dam) on weekdays, and generally 1.5 ft of full pool on weekends and
holidays.
Article 112 Maintenance Drawdowns
Once in every 5-year period, Licensee will schedule and perform a maintenance
drawdown of up to 15 ft to occur on Lake Tillery within the September 15 to December 15
timeframe. This drawdown will allow Licensee to perform routine periodic maintenance and
gate testing that cannot be accomplished when the lake level is higher.
Article 113 Public Information on Water Levels
Licensee will add a projection of the expected daily water levels for the day on its
existing 800-899-4435 public messaging service. For the first five years of the New License,
Licensee will also provide an annual notice on November 15 alerting the public to the drawdown
limits that apply between December 15 and March 1.
Article 114 Emergency or LIP Water Level Variance
In the case of a Low Inflow Protocol (LIP) event, Lake Tillery and the other larger
reservoirs in the basin will be called upon to use some of their storage to augment downstream
flows in a coordinated manner. Management of flows and water levels during LIP events are
contained in the Low Inflow Protocol identified in Article 108.
7

Article 115 Compliance Monitoring
Annual reports on lake level compliance will be submitted to FERC and will include
hourly readings of lake levels recorded at the both the Tillery and Blewett Falls dams.
Article 116 Implementation Schedule
The new lake level management regime will be initiated within 120 days of the effective
date of the New License.
Article 117 Tailwater Water Quality under the New License
Licensee will meet State of North Carolina dissolved oxygen standards by December
2011.
Article 118 Compliance Monitoring
Licensee will monitor water temperature and dissolved oxygen immediately below the
end of the Blewett Falls tailrace and below the Tillery Plant with equipment installed in
accordance with protocols approved by the North Carolina Department of Water Quality
(NCDWQ. The final location of DO monitoring below the Tillery Plant will be determined
based upon further testing of DO enhancement technologies and resulting patterns of DO
concentrations in the Tillery tailwater. Licensee will prepare annual compliance reports and will
submit these reports to NCDWQ and FERC by April 15th of the following year.
Article 119 Aquatic Life Monitoring
Licensee will conduct post-licensing monitoring of aquatic life below Tillery Dam. The
purpose of the monitoring is to document condition of the aquatic community in the Pee Dee
River from Tillery Dam to its confluence with the Rocky River. The extent of this testing will be
in accordance with the NCDWQ Water Quality Certificate.
Article 120 Recreation Facilities
Within four years of the effective date of the New License, Licensee will make
improvements to the Anson County and Mountain Creek (Grassy Islands) public access areas on
Blewett Falls Lake. At the Anson County site, improvements will include avault-type restroom
8

facility, improvements to boat ramps to allow for ease of put-in over the range of proposed lake
fluctuations, updated signage, a new information kiosk, and improved parking management (i. e.
identification of parking locations for vehicles and trailers). At the Mountain Creek access site,
improvements will include boat ramp modifications as necessary, updated signage, and improved
parking management. Licensee will consult with resource agencies prior to the construction of
any new facilities.
Licensee will upgrade the existing canoe portage at Blewett Falls Dam to applicable
North Carolina state standards.
Licensee shall, within 180 days of the effective date of the New License, submit a plan
and schedule for the installation of the recreation facilities described in this article.
Article 121 Yadkin-Pee Dee River Trail
Within 24 months of the effective date of the New License, Licensee will provide
NCDENR a one-time contribution of matching funds up to a maximum of twenty five thousand
dollars ($25,000) for the enhancement and/or expansion of the Yadkin-Pee Dee River Trail.
Such funds are to be used for developmental, promotional and/or implementation purposes for
any portion of the Trail extending from Tillery Dam in North Carolina to the I-95 Bridge in
South Carolina.
Article 122 River Flow Information to Public
Licensee will provide an electronic link on its website to the flow gage at Rockingham
and to the flow gage to be installed downstream of Tillery Dam. Licensee also will provide
information on its website related to recreational boating flows to be released at Tillery Dam.
Article 123 Recreation Facility Enhancements
Within four years of the effective date of the New License, Licensee will make
improvements to the Stony Mountain public access area to consist of vault-type sanitary
facilities, trash receptacles, updated signage, new information kiosk, and improved parking
management.
Licensee will also make improvements to the Norwood, Swift Island, and Lilly's Bridge
access areas. At Norwood, a shelter and picnic tables, separate men's and women's vault-type
restroom facilities, trash receptacles, updated signage, new information kiosk, and improved
parking management (i. e. identification of parking locations for vehicles and trailers) will be
provided. Also at Norwood, an enhancement to the existing dock and boat launch may be
needed to provide boat access over the range of future lake levels. At Lilly's Bridge, new
recreation facilities will consist of a shelter with picnic tables, separate men's and women's
vault-type restroom facilities, trash receptacles, updated signage, new information kiosk, and
improved parking management (i.e. identification of parking locations for vehicles and trailers).
9

At Swift Island, vault-type sanitary facilities, trash receptacles, updated signage, anew
information kiosk, and improved parking management (i.e. identification of parking locations for
vehicles and trailers) will be added to the site. Licensee shall consult with resource agencies
prior to the construction of any new facilities.
Licensee will relocate to Clarks Creek the unimproved boat access site that is currently
located in the area just south of the tailrace. This new access site will include a formal parking
area, signage, information kiosk, and boat access to the Pee Dee River.
Licensee shall, within 180 days of the effective date of the New License, submit a plan
and schedule for the installation of the recreation facilities described in this article.
Article 124 Access and Funding for New Recreation Facility in Stanly County
Licensee will provide NCWRC access across Project lands and matching funds, up to
twenty five thousand dollars ($25,000), for a shoreline public fishing area in Stanly County, to
consist of an ADA-accessible fishing pier and a gravel parking area This facility will be
completed within four years following the effective date of the New Licensee.
Article 125 NCWRC Enforcement Facility
Licensee will co-fund with NCWRC ajoint-use boathouse and boat ramp facility to be
used by NCWRC for enforcement purposes on Lake Tillery and by Progress Energy for lake
management purposes. This facility is to be located in the vicinity of the proposed new public
fishing access site in Stanly County described in Article 128. This facility will be completed
within four years following the effective date of the New Licensee.
Article 126 Lands Subject to a Restrictive Covenant
Within twenty four (24) months of the effective date of the New License, Licensee shall
execute, deliver and cause to be recorded covenants and restrictions for conservation purposes
establishing a buffer zone on Project lands it owns in the Grassy Islands area located at the upper
reaches of Blewett Falls Lake.
Within twenty four (24) months of the effective date of the New License, the Licensee
shall also execute, deliver and cause to be recorded covenants and restrictions for conservation
purposes establishing a buffer zone on Project lands it owns near the mouth of the Uwharrie
River. The Project lands to be protected by a restrictive covenant include (1) those extending
from Dutchman's Creek downstream to the tip of the peninsula on the south side of the mouth of
the Uwharrie River and (2) those at the upper end of the "bay," created by the above peninsula,
that are classified as of December 2006 as Environmental/Natural Areas in the Shoreline
Management Plan, stopping at the first tract of land classified as Impact Minimization Zone.
10

The restrictive covenant placed on these tracts of Project lands will limit activity to only
certain non-consumptive uses of the lands, including fishing, hunting, hiking, bird-watching, and
other low-density recreation activities. Within the buffer zone, activities to be allowed would be
limited to such activities as selective clearing and controlled burning in accordance with a forest
management plan approved by NCDENR, limited unimproved foot trails not to exceed 4 ft in
width and a single boat access point to the river. Foot trails generally parallel to the river shall
be no closer to the river than 50 feet. There shall be no more than three trails perpendicular to
the river within the buffer zone. Except to accommodate the above allowable activities, the
following shall be prohibited within the buffer zone: filling, draining, flooding, dredging,
impounding, clearing, burning, cutting or destroying vegetation, cultivating, excavating, erecting,
overnight camping, constructing, releasing wastes, or otherwise doing any work within the buffer
zone, introducing exotic species into the buffer zone (except biological controls pre-approved by
NCDENR); and from changing the grade or elevation, impairing the flow or circulation of
waters, reducing the reach of waters, and any other discharge or activity requiring a permit under
clean water or water pollution control laws and regulations, as amended. The following are
expressly excepted from the prohibited activities: (a) cumulatively very small impacts associated
with hunting, fishing, and similar recreational or educational activity, consistent with the
continuing natural condition of the property; (b) removal or trimming of vegetation hazardous to
persons or property; and (c) restoration or mitigation required under law. No permanent
structures would be allowed within the 100-ft buffer zone.
Article 127 Shoreline Management
The shoreline management practice for Blewett Falls Lake will prohibit private access,
except normal foot access, to the lake across Project lands except at the designated public access
areas. By this measure, shoreline management shall focus on natural resource protection to
preserve the largely undisturbed nature of the Blewett Falls impoundment.
Article 128 Blewett Falls Lake Sediment Survey
Five years following the effective date of the New License, Licensee will conduct a
sediment survey in Blewett Falls Lake and a gravel recruitment survey in the Blewett Falls
tailwater. The gravel recruitment survey will repeat the study conducted by Progress Energy
during the relicensing process. If results indicate that there is still no significant problem related
to gravel recruitment, then Licensee will conduct another survey after an additional 10 years.
Article 129 Protection of Canoe Portage Lands
Licensee will execute, deliver and cause to be recorded a restrictive covenant for
conservation purposes on the lands it owns along the current canoe portage route (approximately
0.3 miles) prohibiting development on the lands needed for canoe portage, except as required for
11

operation, maintenance, repair, or improvement of the Project or Licensee's transmission or
distribution system.
Article 130 Implementation of Historic Properties Management Plan
Within twelve months of the effective date of the New License, Licensee shall submit to
FERC for approval separate Historic Properties Management Plans (HPMP) for the Blewett Falls
Development and the Tillery Development.
Article 131 Implementation of Shoreline Management Plan
Licensee will implement and enforce the Tillery Shoreline Management Plan approved
by the Commission by order dated November 24, 2004.
12

APPENDIX G
State of North Carolina
Standard 401 Certification Conditions

State of North Carolina
Standard 401 Certification Conditions
Pursuant to Section 1.3.12, the following are the standard State of North Carolina Section
401 Certification conditions, which the State may include in the Section 401 Certification and
which no party shall oppose.
a. The Applicant shall identify and report in writing existing and proposed consumptive
uses to DWQ and the N. C. Division of Water Resources (DWR). The Applicant shall
report the existing or projected (as appropriate) average consumptive withdrawal and
maximum capacity for each withdrawal. The applicant shall report existing
consumptive uses to DWQ and DWR within 60 days of the acceptance of the License
and shall report proposed new or expanded consumptive uses to DWQ and DWR
within 30 days of receiving a request for the proposed new or expanded withdrawal
and before submitting any requests to FERC.
b. The Applicant shall conduct its activities in a manner consistent with State water
quality standards (including any requirements resulting from compliance with section
303(d) of the Clean Water Act, 33 U.S.C. § 1313(d)) and any other appropriate
requirements of State law and federal law. If DWQ determines that such standards or
laws are not being met (including the failure to sustain a designated or achieved use
or to comply with any new or amended water quality standards or other appropriate
requirements of State or federal law) or that State or federal law is being violated, or
that further conditions are necessary to assure compliance, DWQ may reevaluate and
modify this Certification to include conditions appropriate to assure compliance with
such standards and requirements in accordance with 15A NCAC 2H.0507(d). Before
modifying the Certification, DWQ will notify the Applicant and FERC, provide
public notice in accordance with 15A NCAC 2H.0503 and provide opportunity for
public hearing in accordance with 15A NCAC 2H.0504. Any new or revised
conditions will be provided to the Applicant in writing, will be provided to the U.S.
Army Corps of Engineers for reference in any permit issued pursuant to Section 404
of the Federal Water Pollution Control Act, 33 U.S.C. § 1344, for the project, and
shall also become conditions of the License. The conditions of this Certification are
not modified or superseded by any condition or article of the License.
c. This Certification does not grant or affirm any property right, license or privilege in
any waters or any right of use in any waters. This Certification does not authorize any
person to interfere with the riparian rights, littoral rights or water use rights of any
other person, and this Certification does not create any prescriptive right or any right
of priority regarding any usage of water. No person shall interpose this Certification
as a defense in any action respecting the determination of riparian or littoral rights or
other water use rights. No consumptive user is deemed by virtue of this Certification
to possess any prescriptive or other right of priority with respect to any other
consumptive user regardless of the quantity of the withdrawal or the date on which
the withdrawal was initiated or expanded. This Certification issues on the express
understanding of DENR that, pursuant to Federal Power Act section 27, 16 U.S.C. §
906214.1

821, the License does not establish or determine a proprietary right to any use of
water. It establishes the nature of the use to which a proprietary right may be put
under the Federal Power Act.
906214.1 2