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003117 Page 16 analysis must be used. Consequently, reconstructed virgin flows for a 72-year period of record (1906-1977), as developed by the U. S. Bureau of Reclamation (USBR, 1983), were used as input to assess the effect of climatic variation. It is noteworthy that there exists evidence that the historic flow records for the Colorado River represent a highly peculiar period (Stockton and Jacoby, 1976). A rigorous analysis would require the use of statistical methods to synthesize a large number of equally-probable hydrologic traces which would be used in turn as input to the analytical model. This approach was not within the scope of the current study. Still other sources of potential variation or uncertainty were present. Water demands at the various nodes and for the various uses are presently insufficient to cause some' of the major interstate water allocation mechanisms of the Colorado River Basin to be invoked. Contrary to popular impressions, there is still a surplus of water in the basin. However, that surplus will surely disappear if future demands (primarily in the Upper Basin) greatly exceed present ones. In order to test the effect of increasing demand for water, two demand levels representing current and potential future conditions, were employed. Future demands were derived largely from forecasts of water development in the Upper Basin to accomodate new energy development and municipal expansion. Increased water demands in the Lower Basin were also included, even though existing institutional arrangements limit the extent to which such demands could be served by Colorado River water in the face of increased consumption in the Upper Basin. 2. Colorado Intrastate Analysis ,While the modified MODSIM model was used to evaluate the effects of runoff increases on an interstate basis, it did not provide sufficient disaggregation