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I I I I I I I I I I I I I I I I I I I The results of the evaluations show that Alternative 0 (improvements to the Lone Cone and Ourley systems) displays the lowest cost per acre-foot of improved yield, Alternative L (improvements to the Lilylands system) shows the highest unit costs. The results improve somewhat for Alternative H because it is a combination of Alternatives 0 and L which means that the greater efficiency of Alternative 0 offsets the less favorable aspects of Alternative L. Finally, Alternative W (the maximum alternative) displays favorable unit costs under financing scenarios which involve no-interest loans, grants or hydropower revenues. The ability of irrigators to pay the costs of a water project based on farm income was also estimated. The resul ts of this analysis showed that as the unit cost of water decreased, the ability to pay for the water increased. A preliminary financial analysis of the San Miguel Canyon hydropower option indicates that such a project would be capable of producing net positive revenues. In addition, irrigation water could be supplied to a portion of the Norwood-Redvale area from this option. Institutional Considerations The study has reviewed the existing institutional arrangements for water management in the study area as well as some alternatives to the existing situation. Some degree of consolidation might be desirable to finance a project and to realize the efficiencies inherent in a larger water distribution system. The degree of consolidation, if any. will depend upon the water supply alternative selected, the necessary financing arrangements, future operating plans and, most importantly, the needs and desires of the project participants. Phase Two Decision This report summarizes the results of Phase One of the San Miguel Project Study in which several preliminary alternatives have been evaluated. One of the alternatives may be selected for detailed, feasibility-level analysis in Phase Two or. if none of the alternatives appear to be viable, the study will be concluded with the Phase One analysis. The study participants will use the results of the technical and financial evaluations in this report and will consider all comments received in arriving at a decision. A public meeting is scheduled for February 29, 1988 in Norwood to present the results of Phase One and to take comments, A final decision regarding Phase Two is expected at a meeting of the Board of Directors of the CWCB in mid-March 1988. Ix