Laserfiche WebLink
~.,. <br />k, SOUTH EASTE RN CO LORADO <br />Water Conservancy District <br />"}(~l!!' !)il'PSIIIlF'Jll 111 !I'LllPl'~` <br />October 16, 2008 <br />Kirk Russell <br />Colorado Water Conservation Board ; i ~~ T ~ 2D08 <br />1313 Sherman Street <br />.. ~a., ,. ,. ~ - ~:agc,,:.. - <br />Denver, CO 80203 <br />Re: Request for time extension -Arkansas Valley Conduit <br />Dear Kirk, <br />This letter is a follow-up to our letter dated October 7, 2008, and our meeting with Jennifer <br />Gimbel, Eric Hecox, Mike Serlet and you on October 14. <br />As you know, Senate Bill 07-122 authorized a Water Project Loan for the Arkansas Valley <br />Conduit project. In a footnote, the bill requires that Southeastern, as the project sponsor, enter <br />into a loan contract with CWCB within two years after the effective date of the bill. As we <br />discussed during the meeting, we are writing to ask CWCB's support for atwo-year extension of <br />this deadline in the upcoming Construction Fund bill. <br />'The question of how to find the construction of the Arkansas Valley Conduit has dominated <br />Southeastern's and its partners' efforts over the past five years. The CWCB loan authorized in <br />Senate Bi1107-122 is an instrumental part of an ahernative funding method for the Arkansas <br />Valley Conduit, which was authorized in ] 962 as part of the original authorization of the <br />Fryingpan-Arkansas Project (Fry-Ark). The 1962 authorization required 100 percent payment of <br />actual costs by the Conduit beneficiaries, which has never been economically feasible. S. 2974 <br />(see enclosure), recently reported favorably by the U.S. Senate Energy and Natural Resources <br />Committee, provides an approach that would apply current and future miscellaneous revenues <br />generated by Fry-Ark to repay the debt on certain Fry-Ark components in a different manner <br />than is currently provided for in the repayment contract between Southeastern and the United <br />States, including construction of the Arkansas Valley Conduit. Unique among Federal <br />Reclamation projects, the Fry-Ark is beginning to generate significant miscellaneous revenues <br />from storage ofnon-Project water in Fry-Ark facilities through "excess capacity" or "if-and- <br />when" contracts. S. 2974 would use this miscellaneous project revenue, generated by the Fry- <br />Ark itself, to count towards the 100 percent payment of the actual costs requirement. The <br />CWCB loan will be used to finance the local cost-share to cover the difference between the <br />miscellaneous project revenue at the anticipated project repayment. <br />As you will recall, enactment of cost-share legislation for the Arkansas Valley Conduit is <br />necessary before entering into CWCB loan contract. We are informed that S. 2974 is being <br />included in omnibus legislative package being prepared by the Chairman of the Senate Energy <br />Committee, Senator Bingaman. There is reason to believe, although no assurances, that this bill <br />will be acted upon favorably before the end of this year. if enactment before the end of the year <br />is not accomplished, many of the proponents of the omnibus bill hope to persuade Senator <br />31717 UNI~i'ED AVENUE PUEBLO, CO 81001 PHONE (719) 948-2400 FAX (719) 948-0036 <br />wc~l:~ site: www.secwrcl.orK <br />