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Animas}La Plata Water Marketing Supply and Demand Study Section 2
<br />(5,230 AF Depletion) of the ALP Project water available to the State. Required capital repayment costs
<br />includ both capital charges as well as IDC charges. IDC will stop accruing once the project is
<br />transf rred from construction status to operation and maintenance (0 &M) status. The IDC costs that
<br />have ccrued as of that date will be treated as capitalized costs. IDC costs are recalculated quarterly.
<br />The CL rrent interest rate for FY2010 is 8.135 percent.
<br />With tl ie current A -LP Project construction and filling schedule, Reclamation anticipates the A -LP
<br />Projec 's transfer from construction to 0 &M status will occur sometime in 2012. The total capital
<br />repayr ient cost will continue to increase as IDC continues to accrue, with the statutory cap indexed up
<br />throug i the completion of construction.
<br />The statutory cap is described in Section 207 of P.L. 108 -447 (H.R. 4818 -142, Division C, Title II, Section
<br />207, nsolidated Appropriations Act of 2005), and affects the cost sharing and Capital Repayment
<br />costs the non - Indian A -LP Project sponsors. Specifically, the language reads as follows:
<br />"Sec. 207. Animas -La Plata Non - Indian Sponsor Obligations. In accordance with the
<br />nontribal repayment obligation specified in Subsection 6(a)(3)(B) of the Colorado Ute In-
<br />dian Rights Settlement Act of 1988 (Public Law 100 -585), as amended by the Colorado
<br />Ute Settlement Act Amendment of 2000 (Public Law 106 -554), the reimbursable cost
<br />upon which the cost allocation shall be based shall not exceed $43,000,000, plus inter-
<br />est during construction for those parties not utilizing the up -front payment option, of the
<br />first $500,000,000 (January 2003 price level) of the total project costs. Consequential-
<br />ly, the Secretary may forgive the obligation of the non - Indian sponsors relative to the
<br />$163,000,000 increase, and any effects of inflation thereon, in estimated total project
<br />costs that occurred in 2003."
<br />What t is means is that the non - Indian sponsoring agencies cost share is limited to their proportional
<br />share $43 million plus IDC for those parties not utilizing the up -front payment option, which is only the
<br />State o Colorado. The Secretary will allow the $43 million dollar cap to increase by an inflationary
<br />factor.
<br />To date (October 2010 ), Colorado's share of the IDC is $8,437,263; an updated estimate of IDC will be
<br />availabl after December 31, 2010. Entering into a repayment contract now as opposed to the time of
<br />"final c t allocation" may stop the clock on IDC charges, but such would have to be negotiated during
<br />develop nent of the repayment contract. Even though A -LP Project construction is fundamentally
<br />comple the cost savings in IDC may still be significant.
<br />The tabl below summarizes the capital cost components from: the Brown and Caldwell February 2010
<br />report, L pdated costs provided by Reclamation at the July 7, 2010 A -LP Project Workshop in Durango,
<br />Colorad (June 2010 estimate) and updated costs received from Reclamation in October 2010 (Patrick
<br />Page, 01 tober 7, 2010).
<br />Table 2.2. Capital Costs for A-LP Project
<br />Capital Costs Calculated
<br />Date Capital Costs IDC Total
<br />September 2009 $27,954,506 $6,719,900 $34,674,406
<br />1uly201O $27,914,909 $8,001,147 $35,916,056
<br />October2O1O $27,914,902 $8,437,263 $36,352,165
<br />Details o the calculation of the capital costs can be found in Appendix A. Based on the October 2010
<br />Reclama I on estimates the State Water will cost approximately $3,475 per AF. It is important to note
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<br />FINAL ALP Re rt 1 13 it LL.Docx
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