Secretary Salas, page 2

Pacific Region, USDA Office of the General Counsel Telephone: 415-744-3177

33 New Montgomery, 17th Floor Fax: 415-744-3170

San Francisco, CA 94105 E-mail:

August 9, 2004

VIA ELECTRONIC FILING

Ms Magalie R. Salis, Secretary

Federal Energy Regulatory Commission

888 First Street, N.E.

Washington, DC 20426

Subject: PROGRESS REPORT

Southern California Edison – Lundy Hydroelectric Project No 1390

Dear Secretary Salas:

The Forest Service, on behalf of Southern California Edison, American Rivers, California Trout, the Bureau of Land Management, and the California Department of Fish and Game, submits a draft Settlement Agreement and Explanatory Statement as evidence of our progress regarding the ongoing discussions to address disputes regarding minimum flows and other issues associated with the Lundy Hydroelectric Project. The document is unsigned, because the settlement group made a commitment that the draft Settlement would be made public before any agencies signed the document. Copies of the draft Settlement Agreement and Explanatory Statement are being sent to the service list as well as sent electronically to parties that had participated in our settlement discussions to fulfill that commitment. Agencies and groups are free to use this material in any manner they choose. Any comments or questions at this stage should be directed to the individual parties listed above.

This is not a substitute for the FERC notice and comment provisions under 18 CFR 385.602. We expect that interested parties will file comments with the Commission when we file the executed settlement at the beginning of September 2004.


In our December 2003 status report, we had suggested that the Commission might consider assigning a “separated’ staff member to assist the settlement parties. Now that we have a draft Settlement available for review, we would like to renew that request. Input from “separated” FERC staff regarding whether the proposed settlement and explanatory statement are clear and contain sufficient information in the next few weeks could help reduce information gaps that would delay the Commission’s review process later on.

Please contact Regional Hydropower Coordinator Bob Hawkins, at 916-930-3994, if you have any questions.

Sincerely,

/s/Jack Gipsman

Jack Gipsman

Acting Regional Attorney

Office of the General Counsel

cc: FERC service list

Settlement Group (via email)