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M015~ Colorado River Storage Project (CRSP) power fea- tures, the federal govern- ment will receive more than $5 billion in power revenues. This 500 percent return on investment paid by CRSP power users is much higher than the return on investment paid by the customers of any investor-owned utility. In the lower basin, pro- jects on the mainstem of the Colorado - Hoover, Davis and Parker - were built under Congressional acts other than CRSP. Typical of lower basin power activity, 50-year con- tracts for Hoover Dam power expired in 1987; about 65 percent of the power had been going to six California utilities which had underwritten the pro- ject's construction. Arizona and Nevada state power agencies had been splitting equally the remaining 35 percent of Hoover's power output. In the early 1930s, each of the latter two states had had the option to take one-third of the dam's power, but had not been able to afford to do so. As contract renewals were considered, more than 1,300 megawatts of electric- ity were at stake. With the rewriting of the contracts, the Hoover power plant was enlarged and a long dispute over the allocation of the dam's power supply was resolved: California's , share was reduced from 65 to 45 percent, the 20 per- cent difference going equally to Arizona and Nevada, and eight Southern California cities which had not received a portion of California's share during the first 50 years,were included for a share of the upgraded ' increased generation capacity. Public power is not "sold too cheaply. "Federal . power marketed to public bodies is a yardstick for competition in the power industry. In general, utili- ties blend many power sources (e.g., hydro, coal- fired) to meet customers' total power demands. The true comparison is the blended rate utilities charge customers. Most public power users are payc ing rates comparable to those charged by investor- owned utilities. For exam- ple, CRSP customer Plains Electric in New Mexico charges 5.7 cents/kWh, while investor-owned Public Service Company of New Mexico charges 6.0 cents/k Who Increasingly; poweroper- ations are being restricted for environmental and recreational purposes. For example, the CRSP Glen Canyon Dam:s eight-unit power plant can generate 1,356,000 kW, but flow restrictions have reduced generation by 25 percent to 30 percent. While producing " CRWUA less electricity, Western's revenues must remain ade- quate to meet reim- burs ability requirements. Consequently, CRSP cus- tomers receive less power for the same amount of money. Because of these impacts, other sources of power production are being studied, such as coal- and gas-fired plants and combustion turbines. Unlike existing hydroelec- tric projects, some sources will emit air pollutants and cost significantly more. Conservation is empha- sized by public bodies pur- chasing federal power. Their extensive demand and supply side conserva- tion programs and research on renewable energy have existed since before 1980. Since 1980, Western has had a program requiring documentation of cus- tomer areas' conservation projects, and the Bureau of Reclamation alternative power source studies include conservation through demand side management. '~l ~ . ; ';' ,,^, ,.~"",,,.l,, ,1li'llf