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. 001741 . . CRSP Power Revenues Section 6(g) of the bill implements a prOVISIon of the June 30. 1986, Animas-La Plata Project cost sharing agreement which was insisted upon by the Department of the Interior. This has proved to be a controversial provision. The construction costs of the Animas-La Plata Project allocable to irrigation which are beyond the ability of the farmers to repay are repaid to the federal government from the revenues generated by the sale of hydroelectric power produced at the Colorado River Storage Project (CRSP) storage units. The CRSP Act provides that such costs be repaid within 50 years, but it does not require any particular repayment schedule. Under current procedures. repayment of such costs would not be made until the final few years of the maximum 50 year repayment period. Section 6(g) of the bill would change this practice for this one project by specifying that repayment be made over 30 years in equal annual installments. This has been characterized as "straight line amortization." in contrast to the current practice of "balloon payments" at the end of the authorized 50 year repayment period. The requirement of section 6(g) can be met without having to increase the rate charged to those who purchase CRSP power. The Western Area Power Administration has confirmed this fact in a February 27. 1987. letter to us (copy attached). I am aware of the concerns of pUblic power customers. including many CRSP power customers who are located in Colorado. about this provision. However. I believe that this provision is a fair and reasonable one limited as it is to this settlement, this project. and the specific circumstances at hand. It is required by an agreement which we have made. We . stand by it. Animas-La Plata proiect The Animas-La Plata Project. a participating project of the Colorado River Storage Project. is a linchpin of the settlement. It, along with the Dolores Project, are the only means by which the Tribes can receive substantial amounts of water without disrupting the established non-Indian economies in southwestern Colorado. Furthermore, construction of the project will partially fulfill the agreement reached in the 1968 Colorado River Basin Project Act between the Upper and Lower Basins. Section 501 (b) of that Act calls for the project to be constructed "...concurrently with the construction of the Central Arizona Project. to the end that such... [project] shall be completed not later than the first delivery of water from said Central Arizona Project...." Deliveries to the Central Arizona Project have. of course, already commenced. . -5-