Final Draft ALP Marketing Supply and Demand Study

Animas -La Plata Water Marketing Supply and Demand Study
Section 2
other alternatives than those listed below, but the study resources limited the number of alternatives
that could be explored within this study.
Alternatives for payment for the annual Fixed OM &R costs include:
Fixed OM &R Alternative 1. State assumes full responsibility for payment of fixed OM &R costs:
There are two variations for the State assuming full responsibility of Fixed OM &R costs which
include the State seeking an annual appropriation to pay the Fixed OM &R costs less amounts that
would be billed to entities using a portion of the State's allocation, either sold or leased to them.
Table 2.5 illustrates potential OM &R costs based on amount of water purchased.
The second variation to this alternative is to have the State establish a permanent escrow account
sufficient to generate the required revenues on an annual basis to pay the Fixed OM &R costs less
amounts billed to entities using a portion of the State's allocation. The size of the corpus in the
escrow account will depend on the rate of return obtainable. Table 2.6 illustrates how much
income will be accrued at various interest rates. Note that Fixed and Variable OM &R Costs should
be considered separately as pumping may not be required every year and the Variable OM &R Fund
may cover any Variable OM &R costs.
Table 2.6. Potential
Table 2.5. State of
Colorado Purchase,
Annual Interest Rate
Annual Fixed OM&R and Variable Costs
Annual Income
N
Amount Purchased
($)
2.0
Annual Fixed QM &R Cost
Variable Cost
At Start Up
Full Operation
__.._.__..._........__.._. ..._ .............
.____._._........._........ - - -- t._..._...__.
Capital Cost ! ForAmount Purchased
$610,000.
$680,000.
Pump Amount Purchased
AF
($3475 /AFj
( %ofTotal Project)
_._ -
(% *$610,000)
.._......_ ..
(% *$680,000)
($18 /AF)
-�
1,560 (IGA Minimum)
1 $5,421,547
1.6 %
$9,760
$10,880
$28,080
2,000
$6,950,701
2.0%
$1,200,000
i $12,247
$13,652
$36,000
_- .__..._....___
_
___.. _. - ......
.......,...__..._......_.__..._
$1,000,000
$30,000
_.._._._....-._.___ --
3,120
i $10,843,093 j
3.1%
$24,000
$19,105
$21,297
$56,160 W
3,180
i $11,051,614
3.2%
I $19,472
$21,707
$57,240
3,400
$11,816,191
3.4%
$20,819
$23,208
$61200
- -..... -- ........_.....
3,453
-._I ._...__...._,_ ....................... ....._._.........._.....
j $12,000,385
._..___._..._..............._._ .
3.5%
_
1 $21,144
$23,570
$62,154
10,460
-t�- $-36,352,165
- 10.5%
$64,050
$71,400
$188,280
The second variation to this alternative is to have the State establish a permanent escrow account
sufficient to generate the required revenues on an annual basis to pay the Fixed OM &R costs less
amounts billed to entities using a portion of the State's allocation. The size of the corpus in the
escrow account will depend on the rate of return obtainable. Table 2.6 illustrates how much
income will be accrued at various interest rates. Note that Fixed and Variable OM &R Costs should
be considered separately as pumping may not be required every year and the Variable OM &R Fund
may cover any Variable OM &R costs.
Table 2.6. Potential
Accrual Incomes of an OM&R
Escrow Fund
Annual Interest Rate
Starting Fund Amount
Annual Income
N
($)
($)
2.0
$2,400,000
$48,000
$1,200,600
$24,000
__.._.__..._........__.._. ..._ .............
.____._._........._........ - - -- t._..._...__.
-_.. _.._._...... - - - - --
$1,150,000 I
$23,000
i
3.01
$3,000,000
I
$90,000
$2,400,000
$72,000
$1,200,000
$36,000
$1,150,000
$34,500
__. - _.__...._.
$1,000,000
$30,000
_.._._._....-._.___ --
$800,000
I
$24,000
2 -13
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