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<br />OJ2487 <br /> <br />and worthy of further explora'..ion in terms of this monetary <br />benefit. Given the critical lature of choices confronting <br />the Water Conservation Board, this would appear to be <br />appropriate. <br /> <br />We have some serious reservations about the statement, "for <br />example, increasing the avail,lbility of. irrigation water <br />could be expected to produce a greater increase in economic <br />activity than would supplying a similar quantity of water <br />to municipal and industrial users, simply because water <br />availability is not a very important determinant of level <br />of economic activity in most sectors other than irrigated <br />agrioulture." Some additional explanation is needed to <br />accompany this statement,as at first glance it appearS to <br />be of doubtful validity. <br /> <br />Table 16 "Derivation of Economic Indicators Employed In <br />Evaluation of Hater Resources Development Alternatives." <br />The table appears to be dealing with additions to net <br />income, i.e., profit, resulting from irrigation and <br />supplemental irrigation. Somewhere in this economic evaluation <br />the increase in revenue resulting from irrigation should be <br />stated. Possibly the place for this would be in a regional <br />economic impact. It is tha.t revenue, i. e., purchasing of <br />equipment, seed, fertilizer, and employment, which generates <br />more effeot than the $20 per acre-foot increase in net <br />revenue indicated in Table l~. Another thing which is very <br />troublesome about this analysis is that only one reference <br />(Keleta, 1976, Adjusted to Reflect 1980 Prices) is used as <br />the basis for this derivation of economic indicators. We <br />question the validity of using only one reference for this <br />complex subject. <br /> <br />Regarding the value of municipal and industrial supplies, we <br />believe that this analysis is grossly over-simplified. He <br />question whether or not many municipalities in the South Platte <br />Basin can purchase water for "about $1,000 per acre-foot." <br />Furthermore, we would also question the technical validity <br />of using a single reference (R.L. Anderson, personal <br />communication, Research Economist, U.S. Department of <br />Agriculture, April, 1981) as the source for this information, <br />even though Mr. Anderson is a highly esteemed economist. <br />\'Ie are somewhat confused by the statement, "this is the <br />capitalized, or one time value. It can be converted to an <br />annual value by dividing by the appropriate rate of interest." <br />If the $1,000 had been divided by the 10% interest, the <br />resulting value would be $10,000 per acre-foot. <br /> <br />We would like to know the basis of assumption for the "value <br />of hydroelectric power production" which was placed at 51 <br />mills per kilowatt hour, "an estimate at the high end of the <br /> <br />3 <br />