San Antonio Water System

The San Antonio Water System ("SAWS") is soliciting Factored Bids for the purchase by SAWS of permitted transferable groundwater withdrawal rights from and out of Edwards Aquifer Authority (EAA) Initial Regular Permits and Regular Permits (“EAA groundwater rights”). Types of EAA groundwater rights that are transferable include those for industrial or municipal use, as well as that portion of irrigation permits designated as "unrestricted irrigation groundwater" by the EAA. SAWS will not accept

groundwater rights from the portion of irrigation permits designated as "base irrigation groundwater." In accordance with SAWS 2012 Water Management Plan, SAWS is seeking to acquire, at a minimum, 2,180 acre-feet of EAA groundwater rights, for calendar year 2014, but will not consider Factored Bids of less than 20-acre feet.

Factored Bids are defined as those bids that use a factor of “1” or less/more multiplied by the base price of an acre-foot of EAA groundwater rights. The Factored Bid concept is explained in more detail in Exhibit 1 attached hereto.