ALP Project Water Supply and Demand Study

Section 2 Animas — La Plata Water Supply and Demand Study
amount of $34,674,406 ($6,719,900 + $27,954,506 = $34,674,406). This represents approximately $3,315 per
AF or $10.17/1000 gallons).
IDC will stop accruing once the Project is transferred from construction status to operation and maintenance
(O &M) status. The IDC costs that have been accrued as of that date will then be treated as capitalized costs.
With the current schedule, the USBR anticipates transfer from construction to O &M status to occur
sometime in 2011 (email from Patrick Page, USBR, to Leo Eisel, 12.14.09).
The amount of capital cost on which IDC is calculated, is further explained in note 5, Appendix B.
2.5 COLORADO'S FIXED O &M COSTS
There will be O &M costs associated with the purchase of A -LP Project water. It is the State's intention to
transfer responsibility for these costs to the water providers who will purchase a portion of the State's
allocation. These O &M costs will be collected and managed by the Animas -La Plata Operations and
Maintenance Association.
Annual fixed O &M costs are estimated to be approximately $1,200,000, of which Colorado would pay
$126,000 (10.5 percent, see note 6, Appendix B) if it buys its full allocation; this includes an annual
contribution to an emergency and replacement reserve fund.
2.6 OTHER ( "VARIABLE ") O&M COSTS
Other O &M costs associated with pumping have been estimated by the Colorado Water Conservation Board
(CWCB) to be approximately $250,000 /year assuming it had to pump its entire allocation to Lake Nighthorse
(see note 7, Appendix B).
2.7 SUMMARY OF O &M COSTS
Therefore the total of Fixed and Variable O &M Costs is estimated to be approximately $376,000 per year in
2009 dollars or approximately $35.95 per AF /YR or $0.11 / 1,000 gallons if the State were to purchase the
entire 10,460 AF.
2.8 SUMMARY
The above discussion does not cover the entire subject of cost reimbursement for Bureau of Reclamation
Projects in detail. The above data and information, however, should provide sufficient cost information with
which to further explore interest among municipal water suppliers in the A -LP Project area in acquiring
additional raw water supply from the State of Colorado's 10,460 AF share of the A -LP Project during 2010.
Therefore, it is suggested that a capital cost (including IDC) of $3300 per AF and an O &M cost of
approximately $36 per AF /YR be used in discussions with potential buyers.
The above information and data also indicate that the State could repay the capital costs and the IDC over a
40 -year period at an interest rate of 8.135 percent.
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