ions and management of the Alabama-Coosa-Tallapoosa River Basin
encompassing parts of Georgia and Alabama and the Apalachicola-Chattahoochee-Flint
River Basin encompassing parts of Alabama, Florida and Georgia. The U.S. Army Corps
of Engineers practices the principle of openness. We strive to maintain transparency in
our operations providing all our publics with as much data as possible via our web site,
sharing of information with state and Federal agencies, and through the media concerning
our operations and management of this system.

I would like to divide my statement into three parts: normal management, support for the
endangered species act, and the gauge calibration error at Lake Lanier.

NORMAL MANAGEMENT

The Alabama-Coosa-Tallapoosa Rivers project is a multipurpose project providing for
flood control, hydropower, navigation, water supply, water quality, recreation and fish
and wildlife conservation. The system has five Corps projects and ten Alabama Power
Company dams. The Corps projects consist of two major storage projects, Allatoona and
Carters in Georgia at the upper end of the basin and three run-of-the-river projects at the
lower end of the basin in Alabama. The Alabama Power Projects are located on the
Coosa and Tallapoosa Rivers and are operated in conjunction with Corps projects to provide a minimum seven day average flow in the system. The Corps has flood control
oversight of the Alabama Power Projects.

The ACT basin is experiencing the same drought conditions as other river basins in the
Southeast. The two upper most projects, Allatoona and Carters are experiencing inflows
averaging 30-percent of normal. Allatoona is currently 6.5-feet below normal summer
pool and Carters is 10 feet below normal. Releases from Allatoona are being kept to a
minimum with only two hours of hydropower generation a day plus a continuous 240
cubic feet per second release for water quality purposes. Carters, which is a pump back
hydropower generating system, is operating in the pump back mode only.

At the lower end of the system in the Alabama River, depths are 6-feet below project
depth to support navigation. The only releases occurring at the Corps projects are the
minimum flows coming from the upstream Alabama Power Projects. The Alabama River
situation, due to the drought, has caused one major industry to modify its water intake to
remain operational.

The Apalachicola-Chattahoochee-Flint Rivers project is also a multipurpose project
providing for flood control, hydropower, navigation, water supply, water quality,
recreation and fish and wildlife conservation. The Federal projects on the basin system
begin with Lake Sidney Lanier at the headwaters, West Point Lake, Lake Walter F.
George, George W. Andrews, and Lake Seminole at the lower end of the basin. There
are several lakes with hydropower facilities operated by private and public utilities along
the system as well.

Under normal circumstances the Corps operates and manages these reservoirs to meet all
project purposes in accordance with the draft water management plans developed in the
late 1980s. These plans establish certain zones of water levels that trigger actions when
these levels are reached. This management has proven to be successful in meeting project
purposes.

It is primarily when drought hits the system that issues begin to arise. The Corps
continues to operate and manage the system based on the above mentioned plan. This
calls for balancing the various reservoirs with available water to keep them in the same
action zones. These zones have been developed to meet as many project purposes as
possible with dwindling water availability during a drought.

As conditions worsen during times of drought, some project purposes become a higher
priority. These priorities include water supply, water quality, hydropower and fish and
wildlife conservation. Fortunately, we are often able to simultaneously meet several of
these needs with one action. For example, water released for water quality can also be
run through a generator to produce hydropower.

Like many of the systems operated and managed in the Southeast, along with most of the
nation, this river basin system is in a drought. The National Weather Service Drought
Monitor shows North Georgia is in a moderate drought and as you move southward it is characterized as a severe drought. We operate and manage this basin as a system; when
the lower basin receives less inflow, we must augment flows from stored water to
maintain balance.

ENDANGERED SPECIES ACT

The Corps and the U.S. Fish and Wildlife Service have been in consultation since 2000
concerning various mussel species and, more recently, the Gulf Sturgeon, which all fall
under the protection of the Endangered Species Act. Together we have developed an
interim operations plan to provide adequate water from the system to protect and enhance
the habitat of these species. During normal conditions, these needs have been met
through routine operation and management.

As we entered the drought period, management for these species has become more
difficult. From March through late June, our flow regimes have been in accordance with
the Interim Operations Plan (IOP) that is the subject of Formal Section 7 Consultation
with the U.S. Fish and Wildlife Service. As part of the litigation actions, the Court
ordered specific flows in late June through early July. The States and other parties to the
litigation actions, the Court ordered specific flows in late June through early July. The
States and other parties to the litigation then agreed to a flow regime that took us through
late July. Today we are once again operating in accordance with the IOP. The formal
consultation with the U.S. Fish and Wildlife Service on the IOP is on-going. The
Biological Opinion from the U.S. Fish and Wildlife Service as a result of the formal
consultation process is due September 5, 2006.

GAUGE CALIBRATION ERROR

On June 16 of this year we discovered we had a gauge calibration error at Lake Sidney
Lanier. This error led us to release additional water that would not normally have been
released during that timeframe.

In December, 2005 during routine maintenance of the gauge, it was discovered that
certain components were worn. New parts were ordered and installed, to include a device
called a selsyn. A selsyn is an encoder that reads the mechanical data provided by the
float via the pulley. It converts the mechanical data to electronic data which is sent to the
powerhouse indicating the lake level. As part of the installation, a scaling factor had to
be programmed into the selsyn and we input the factor recommended by the
manufacturer. Unfortunately we were not clear in our communications with the
manufacturer in that we had not replaced the pulley attached to the selsyn. The
manufacturer assumed both the selsyn and the pulley were new, and provided a scaling
factor for a complete new system. The result was that we inputted a scaling factor that
was not appropriate for the existing pulley attached to the new selsyn.

Between the time of installation and mid-April of this year, levels at Lake Lanier
remained relatively stable and no error was detected. Beginning in mid-April we began
making water releases for downstream needs in accordance with the IOP. The calibration error led us to believe we had a higher pool level than actually existed, indicating a
greater inflow into the lake than was actually occurring. We were operating under the
IOP, which required us to essentially release one hundred percent of basin inflows to
mimic a run of the river flow for the entire basin. As the gauge data were not correct, we
were releasing more water than was actually entering the lake by approximately one half
inch per day. Consistent with our policy of openness about our operations, we informed
congressional interests, stakeholders and the general public as soon as we learned of this
problem.

We have corrected the gauge error and we have confirmed the accuracy of all our gauges
on the system. In addition we have installed redundant gauges at all projects and updated
procedures to verify their accuracy.

SUMMARY

Thank you for the opportunity to update you on the management of the Apalachicola-
Chattahoochee-Flint Rivers project. I assure you the Corps is committed to working with
all stakeholders in the basin to provide the best management and operation of our lakes. I
am hopeful the current mediation process that is taking place among the three states and
the Army will produce a framework to bring mutual protection and balance to this
precious resource.