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<br />-4- <br /> <br />& <br /> <br />l <br />~ <br /> <br />. <br /> <br />-In promulgating the regulation; the defendants took into account <br /> <br />a purported congressional preference for subsidizing federal water re- <br /> <br />source projects, and implemented that purported preference by adopting <br /> <br />a discount rate which does not reflect the real costs compared to the <br /> <br />benefits of the projects. <br /> <br />-The regulation violates the National Environmental Protection Act <br /> <br />of' 1969 (NEPA) in that: the defendants failed to interpret and administer <br /> <br />the statutory mandates within the NEPA framework; plaintiff failed to <br /> <br />identify and develop methods and procedures which will ensure that <br /> <br />environmental values will be given appropriate consideration in decision~ <br /> <br />making under the regulation; and there has been no review of the regula- <br /> <br />tion as required by Section 103 of NEPA. <br /> <br />-The "grandfather" clause which freezes the discount rate on au tho- <br /> <br />rized projects to that rate in effect on the date of authorization is <br /> <br />arbitrary and capricious, is beyond the defendants' statutory authority, <br /> <br />and is in violation of the 1936 Flood Control Act in that: it enables <br /> <br />federal water projects to be constructed even though the costs exceed <br /> <br />the benefits; it freezes into the planning process a low discount rate <br /> <br />which does not reflect the actual opportunity cost of capital; the low <br /> <br />,discount rate set under the grandfather clause biases the design of pro- <br /> <br /> <br />jects in favor of those with higher near term costs and lower near term <br /> <br /> <br />benefits; and biases federal decision-making in favor of development and <br /> <br /> <br />against preservation of the natural environment. <br /> <br />In its statement alleging injury, the plaintiff claims that federal <br /> <br />water resource projects convert free flowing and wild rivers and streams <br /> <br />into large impoundments flooding scenic areas, degrading water quality, <br /> <br /> <br />increasing siltation problems, destroying wildlife, upsetting the eco- <br /> <br />s~stem, and promoting the intrusion of human activity in wilderness areas, <br /> <br /> <br />among other adverse effects; and th~t these projects adversely affect <br /> <br /> <br />plaintiff's interests and the interest of those citizens similarly situated. <br />