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<br />. <br /> <br />Existing studies for the system include investments in power generating <br />facilities (and credits for expected revenues from these facilities) <br />not yet authorized but projected to be constructed in the years 2016- <br />2030; irrigation investment through the end of the '21st century (and <br />associated aid to irrigation of $3.1 billion), much of which is not <br />authorized for construction, and repayment of which is projected <br />for completion about midpoint of the 22nd century. <br /> <br />Irrigation development envisioned in the repayment studies is in its <br /> <br />infancy. Much of it is not "authorized," and there are obvious ques- <br /> <br />tions as to whether it ever will be in the terms reflected in the repay- <br />ment studies. Notwithstanding that fact, multipurpose and power con- <br /> <br />struction and operation and maintenance (O&M) costs of currently existing <br /> <br /> <br />facilities are allocated to this future irrigation development. The <br /> <br /> <br />result of this procedure is to increase the aid to irrigation, which is <br /> <br /> <br />interest-free. Such an allocation also leads to distortion of current <br /> <br /> <br />annual O&M costs because it causes a significant amount ($1.9 million <br /> <br /> <br />in the lS-month period ending September 30, 1976) of Corps annual O&M <br /> <br /> <br />expenses to be classified as nonreimbursable expenditures. It also <br /> <br /> <br />reduces the interest and repayment requirements on the power function, <br /> <br />lowers current power revenue requirements, and reduces funds returned <br /> <br />to the Treasury, by what we believe to be a substantial amount to date. <br /> <br />Our conclusion is that the financial posture of Pick-Sloan is, at best, <br /> <br /> <br />based on an uncertainty. At worst, it is based on an unreality. The <br /> <br /> <br />net effect is that no one knows, within reasonable limits of accuracy, <br /> <br />7 <br /> <br />