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<br /> <br />,\-Iexico, Wyoming and Utah in accord with percentages established by the Act. The <br /> <br />apportioned revenues are to be used to repay the Federal investment costs of <br /> <br />participating projects located in each state. <br /> <br />In determining proposed power rates, the Service adopted a method of apportioning <br />storage project revenues which appears to deviate from the requirements of the <br />Act. Specifically, storage project revenues are applied towards repayment of <br />power investments applicable to participating projects located in Utah and <br />Wyoming (mostly Utah) without full consideration of the apportionment require- <br />ments set forth in the Act. The result is that Utah will receive more, and the <br />other states less, than their proper share of storage project revenues. If the <br />Service's method of apportionment is not in accord with the Act, storage project <br />power revenues will have to be increased by about $234- million. <br /> <br />Another issue disclosed by Our audit concerns contract terms for repayment of <br /> <br /> <br />irrigation costs. The President's water policy message of June 6, 1978, indicated a <br /> <br /> <br />need for improvements in the implementation of irrigation repayment and service <br /> <br /> <br />contracting procedures under existing Service authorities. In this regard, the Com- <br /> <br /> <br />missioner issued a memorandum dated December 29, 1973, instructing that (1) <br /> <br /> <br />contingency allowances should no longer be used in determining ability to pay and <br /> <br /> <br />(2) irrigation sales contracts should provide for recalculation and renegotiation of <br /> <br /> <br />ability to pay every 5 years. The memorandum indicated these procedures applied <br /> <br />only to water service contracts, and not to repayment contracts. We believe that <br /> <br /> <br />the policy should also apply to repayment contracts as well as water service <br /> <br /> <br />contracts issued by CRSP and its participating projects. The potential effect of <br /> <br />r.; <br />