PUB00153

• Year: 1994
• Title: Background and Analysis of Apportioned Revenue Colorado River Storage Project
• CWCB Section: Administration
• Description: Background and Analysis of Apportioned Revenue Colorado River Storage Project
• Publications - Doc Type: Legal Analysis

NOY-1S-94 FR:I 16:06 B. O. R. UC REG:ION

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returns to the Treasury. If, for example, the Bonneville Unit
irrigation costs were increased by $450 million, the elimination of
apportionment would lose the Treasury over $470 million in present
value dollars.

~revious Inquiries

The large sums of revenue expected to accumulate in the Treasury as a
result of apportionment have drawn periodic scrutiny in recent years.
The U.S. General Accounting Office (GAO) issued 4 reports in the late
19S0s with the contents of these reports ranging from general
overviews to examinations of various impacts on investment recovery
from power sale revenues. The latest draft report, in 1990, examined
the exclusion of indefinitely deferred projects from the power rate
base as specified by the 1983 agreement between Reclamation and
Western. The GAO suggested that the rescheduling of the deferred
projects had cost the United States $3.4 billion. However, the GAO
did not pursue the issue.

The Office of the Inspector General (IG) also examined the timing of
apportioned revenue in an April 25, 1989, report. The report
recommended that mainstem irrigation assistance for participating
projects be repaid in equal annual installments over the individual
participating project repayment periods. The IG concluded that these
straightline payments will force a 1.16mill/kWh increase in the power
rate causing a net increase of over $80 million (present value) in
returns to the Treasury. Reclamation declined to comply with the IG
recommendation based on an opinion of the Office of the Regional
Solicitor that, "[t]he recommendation requires concurrent amortization
of both storage units and participating projects, and therefore, would
require new legislation to be implemented." The conflict is that
under the requirements of the current CRSP Act, payments for
participating projects authorized under Section See) are subseqUent to
payments under Sections 5(c) (1), operation and maintenance costs of
CRSP, and S(d), CRSP investment costs. It is important to note that
this opinion may also be relevant to the "without apportionment"
scenario conducted by Western. As previo~sly stated, the repayment of
capital costs allocated to electric plant is extended from the years
2018 through 2024 (see Exhibit 5). This action wou+d place the timing
of Section S(d} repayment concurrent with the timing of Section 5(e}
assistance. Any changes in the authorizing legislation will need to
address this conflict.

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