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<br />, <br /> <br />001207 <br /> <br />first half of the study period, demand for AWBA water was-low <br />because California and Nevada could satisfy demand through - <br />mainstream diversions. Therefore, net economic benefits and <br />financial gains declined substantially compared to benefits and <br />gains under the water supply model characterized by 19 normal <br />years and one surplus year ("A70"). However, if the Lower <br />Division states agree that one state may bank its surplus <br />apportionment Colorado River water in another state's water bank, <br />economic benefits and financial gains could increase signifi- <br />cantly under P80 depending upon the interstate agreements <br />negotiated among the Lower Division states. <br /> <br />Under A70, total demand for additional water by California and <br />Nevada could not be satisfied by the AWBA due to the 100,000 <br />acre-feet per year ceiling imposed on interstate redemption of <br />water credits. Therefore, economic and financial benefits of the <br />Arizona water banking program are limited. <br /> <br />Although economic and financial benefits are limited, positive <br />benefits accrue from interstate transactions through the AWBA. <br />The economic benefits were generated using a cost comparison <br />approach where the estimated cost of AWBA water credits is <br />compared with the estimated cost of the next best water supply <br />alternative available to major water purveyors in southern <br />california (Metropolitan Water District of Southern California <br />(Metropolitan)) and Nevada (the Southern Nevada Water Authority <br />(SNWA)). The AWBA price was estimated to be between $200 and <br />$250 per acre-foot. This price range was determined by summing <br />known and estimated costs associated with acquisition, storage, <br />and delivery of the banked water including relevant Central <br />Arizona Project (CAP) operations, maintenance, and replacement <br />(OM&R) and interest costs. The range of prices for alternative <br />water supplies for Metropolitan was estimated to be $150 to $250 <br />per acre-foot and $175 to $300 per acre-foot for SNWA. The'net <br />economic benefits on a regional basis are reflected in Table 1. <br /> <br />TABLE 1 <br />Total Net Economic Benefits <br />Regional Level <br />1998 - 2017 <br /> <br />Discount Rate (%) <br /> <br />5.75 <br /> <br />8.27 <br /> <br />Water Supply <br /> <br />Net Benefits (Million $) <br /> <br />A70 <br />P80 <br /> <br />12.8 <br /> <br />- 61. 2 <br /> <br />9.5 <br /> <br />- 47.7 <br /> <br />.550 - 4.8 <br /> <br />.351 - 3.1 <br />