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", " '(~ ':.: j t national standpoint, it is very appropriate that the project be built now. From a local viewpoint, it is unfortunate it was not built many years ago. Municipal and Industrial Water Uses General .' ,Water to meet municipal and industrial needs of the service area will undoubted- ly be developed from the surplus flows of the Animas River regardless of whether the Animas-La Plata Project is built or not. The only difference is that the multiple purpose project can serve these needs at a much lesser cost than a series of single purpose projects. Under the project plan municipal and industrial users are guaranteed their allocated water supply. The project is designed so that irrigation users can share the minor shortages that will occur without serious impact. Durango Service Area Most of the water rights from the Animas River owned by Durango and its sateD[te water service entities have a 1923 priority date. There are a total of 633 second-feet of water rights downstream on the Animas River that have senior priority dates. The pending water right suit by the Justice Department on behalf of the Southern Ute Indian Tribe will undoubtedly result in additional senior rights. Therefore, Durango's greatest need is for storage facilities that will provide water for periods in the future when it would not be permitted to divert directly from the river. The primary reason that the Animas-La Plata Project provides the cheapest source of water for the Durango service area is: (1) the project qualifies for wholesale pumping power rates that are currently less than 25 percent of the retail rates available through the local Electric Association, and (2) water storage sites in th~ Durango area are extremely costly. Industrial Water The use of industrial water will be discussed under the next heading, "Energy Impacts". Energy Impacts Consumption The Animas-La Plata is a power consuming project. It would use an average of 170 million kilowatt hours of energy annually. As provided in the authorizing act, this power would be furnished from the Upper Colorado River Storage Project. Production Even though the project consumes power, it will provide 32,500 acre-feet of water to develop coal resources of the two Ute Tribes. The energy consumed by the project would be only about one percent of the potential energy that could be pro- duced from the available water and coal. As indicated by Mr. John Bugas at the Durango Chamber of Commerce meeting on May 16, 1979, Colorado Ute Electric Association has a projected demand for 1,000 megawatts of additional generating capacity in Southwestern Colorado by 1992. This would utilize about half of the Ute's project industrial water allocation. Future expansions could utilize the remaining allocation. Although the Tribes do not have firm plans as to how they will develop their coal, the most likely assumption is -4-