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While in individual cases there may be some variances, the basic principles are: 1. Costs allocated to irrigation (Ed. The costs of a multi-purpose water project that are attributable to irrigation, as opposed to other purposes such as flood control, hydroelectric power generation, or navigation, for example) are repaid (Ed. To the U.S. Treasury) over a period of 50 years plus whatever development period is prescribed (Ed. The 50-year plus development time repayment period applies specifically to the Colorado River Storage Project. For irrigation projects that are part of the Pick-Sloan Missouri River Basin Program, the repayment period specified in the R eclama tion Act of 1939 is 40 year s pi us a development period not to exceed 10 years). . . . Over the irrigation repayment period, the irrigation water users, through their organizations which contract with the Bureau (Ed. Bureau of Reclamation) for that purpose, repay the portion of the irrigation costs determined by the Bureau . . . to be wi thin their repayment ability. The balance is repaid from revenues from the sale of power from the project involved, over and above the power costs themselves . . . . 2. Costs allocated to power (Ed. The costs of a multi- purpose water project attributable to hydroelectric power generation) are repaid over a period of 50 years or, in the case of facilities that have a life expectancy of less than 50 years, over the period of useful life. 3. In the case of costs allocated to power, interest is charged on unamortized balances. Irrigation costs are interest free (Ed. Only the capital costs of irrigation projects are repaid over the repayment period. No interest is charged on the unpaid balance). In order to keep this explanation simple, I have deliberately chosen not to describe either the cost allocation process or the repayment requirements for municipal water supply, which is also a reimbursable function. Suffice it to say, that the principles applicable to power are in general also applicable to municipal water supply. Most projects also include non-reimbursable functions (Ed. Functions assumed to have such general benefit to the nation as a whole that they are paid by all taxpayers) -- flood control, navigation, fish and wildlife, or some combination of them. To the extent that costs of reservoirs or other multi-purpose facilities include such purposes, as well as reimbursable purposes, the costs are divided among all of the purposes. As a result, in the case of a -2-