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Senator Fred Anderson <br /> April 4, 1980 <br /> Page three <br /> the sale of water, which revenues will inure to the benefit of <br /> the Board's construction fund, and <br /> (2) Obtaining the right to control the marketing of water <br /> from Ruedi will give the State the opportunity to take into account <br /> various public policy factors when such marketing decisions are <br /> made. <br /> With respect to the first point, I think it likely that water <br /> can, within the next 5 to 10 years , be sold from Ruedi for an <br /> average price of $25-30 per acre-foot (in 1980 dollars) . Even if <br /> only 30 ,000 acre-feet per year were sold, this would result in <br /> $750 ,000 to $900 ,000 of annual revenues (minus $40 ,000 to $50 ,000 <br /> per year for operating and maintaining the reservoir) . This <br /> represents an annual rate of return ranging from about 7 to 9 <br /> percent. Most importantly, this would be a perpetual source of <br /> income for future new projects . <br /> . Another way to look at the quality of the proposed investment <br /> is to consider the fact that the firm annual yield of the regula- <br /> tory capacity would cost only about $200 per acre-foot. This <br /> compares to prices that are reportedly running in excess of $2000 <br /> per acre-foot of yield on the east slope and up to $1000 per acre- <br /> foot of yield on the west slope. <br /> It is true, of course, that there would be, from a purely <br /> financial point of view, some risks in making the proposed invest- <br /> ment, as is the case with any such decision. First, the oil shale <br /> industry and the municipalities which would grow as oil shale pro- <br /> duction expanded are clearly the major potential purchasers of <br /> water. I hardly need recite the history of unrealized expectations <br /> which surround the development of oil shale . Nonetheless , present <br /> circumstances now indicate, in my opinion, that it would be reason- <br /> able to proceed with the acquisition of Ruedi water in anticipation <br /> of a market for that water firming up within the next several years . <br /> To fail to act now may mean that this opportunity will be forever <br /> lost. <br /> Second, it must be acknowledged that oil shale companies hold <br /> numerous conditional storage decrees which could be developed into <br /> 111 reliable water supplies . However, such developments will almost <br />