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<br />Section 3 of the Bill <br /> <br />If the legislation is enacted, non-federal participants like the states and power customers will pay <br />a larger portion of the cost of these capital projects. This cost sharing will be in cash, the value of <br />water dedicated from a reservoir in Colorado and the cost associated with re-operating the <br />Flaming Gorge Dam to benefit the fish. The bill also contains provisions that allow power <br />customers to contribute directly to capital project construction and allow the federal government <br />to expedite the completion of projects (thus helping to control costs that would only increase <br />over time). This is accomplished through a loan by the state of Colorado to the Secretary of <br />Energy. <br /> <br />. <br /> <br />If Congress diverted the revenues used to repay loans for higher interest project features or <br />increased power rates immediately to pay for Recovery Program capital projects there would be <br />an adverse impact on the Treasury and on power customers. <br /> <br />Therefore, Colorado is offering to loan funds to Western that could be used immediately for <br />capital projects with a repayment term and interest rate that would be designed to minimize the <br />impact of the repayment of the loan. For example, Colorado will be repaid after all high interest <br />loans are repaid. Western estimates that this will occur after 20 II and before 2057. This is <br />consistent with the provisions of the legislation and the MOV that require contract terms to be <br />designed to minimize impacts on SLCA-IP power rates. <br /> <br />CWCB Authority <br /> <br />. <br /> <br />Colorado River Recovery Program Loan Account (37-60-122.9 C.RS.) <br /> <br />In 1998, the General Assembly created a new Colorado river recovery program loan account <br />within the Construction Fund. The account was created for the purpose of making loans to the <br />Colorado and San Juan River Recovery Programs for the construction or improvement of certain <br />water related projects in Colorado. The statute specifies that the loans will be made under <br />agreements with power users of the federal Colorado River Storage Project. There is currently <br />$_ million in the account. The board was given the power to recommend loans from the new <br />loan account to the General Assembly. The board was also given the power to determine the <br />interest rate and repayment provisions of the loans. <br /> <br />Authority to Contract and Set Rates (37-60-119 C.R.S.) <br /> <br />The CWCB has the authority to undertake capital projects or loan moneys for capital projects <br />that will effect the more efficient use, development, and protection of Colorado's water and <br />hydroelectric energy resources. This statute allows the board to recoup funds from entities <br />borrowing funds from the CWCB to build projects as necessary and reasonable to recover the <br />board's capital investment, together with operational, maintenance, and interest. Interest charges <br />shall be recommended by the board at between zero and seven percent on the basis of the <br />project sponsor's ability to pay and the significance of the project to the development and <br />protection of the water supplies of the state (emphasis added). The funds recouped are credited <br /> <br />2 <br /> <br />. <br />