FLOOD02879

• County: Statewide
• Basin: Statewide
• Title: Water Project Construction Loan Program
• Date: 8/1/1994
• Prepared By: CWCB
• Floodplain - Doc Type: Educational/Technical/Reference Information

in crop production due to the project should also be estimated. The criteria, assumptions
and methodology used for tnle project water yield and for tne increased crop production
estimate should be provided in the study report.

For projects which include a hydropower component, the estimated annual energy
production should be given in terms of megawatt- or gigawatt- hours. The assumptions,
criteria and methodology for the hydropower production analyses should be provided in
the study report.

For projects which involve the rehabilitation of existing facilities, the yield should be
expressed as the incremental difference in water supply with and without the project.
Assume, for example, a storage reservoir has been restricted to 50 percent of active
capacity and the project involves rehabilitation of this reservoir such that 100 percent of
the active storage pool can again be utilized. The yield of the rehabilitation project is the
incremental difference in yield between s1:Orage at 50 percent of active capaci~y and
storage at 100 percent of active capacity.

2. Costs

For both reconnaissance and feasibility studies, the fo Ilowing methodology is
recommended for the purpose of making cost comparisons between alternatives. The cost
analyses should consist of: (1) An estim ate of total capital costs and total annual
operation, maintenance and replacement (O,M&R) costs for each alternative, (2) An
outline of potential financing arrangements, (3) A total annual cost for each alternative
calculated by adding 0, M&R to amortized capital costs and (4) A cost per unit of project
output obtained by dividing annual cost by estimated annual output for each alternative.

Capital costs should be estimated to include planning and permitting activities,
engineering design, construction supervision, administrative and legal costs, land and
right-of-way acquisition, water rights acquisition, relocation costs, construction costs,
interest duJing construction, and an appropriate contingency factor for the type of study
being performed.

Financing arrangements should be outlined for the CWCB loan and for other sources of
funding. In most cases, the CWCB w:ill finance a portion of the total capital cost of the
project while the remainder must be fmanced from other sources. Repayments to the
CWCB and to other sources should be included in the calculation of annual costs, as
described below. Interest during construction will be charged to the CWCB portion of
capital costs for projects initiated after 1993.

A total annual cost w:ill be estimated for each alternative in the study as the sum of the
amortized capital costs plus the estimated annual costs for O,M&R for a typical year of
operation. Capital costs should be amortized separately for the: CWCB portion of project
costs and for that portion of the costs provided from other sources (unless the terms of
repayment happen to be identical). The total annual cost is then calculated as the sum
of the armual amortization requirements plus O,M&R.

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