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<br />APPENDIX 3 <br />Page 5 of 5 <br /> <br />3 <br /> <br />5. Page 3, Paragraph 3: <br /> <br />Report: "From the power repayment study, Western develops an electric <br />power rate sufficient to (II recover all annual power operation, <br />maintenance, and replacement costs and (2) repay the capital investment <br />costs in the power facilities plus interest. The rate also includes an <br />amount to repay the capital investment in participating projects' <br />irrigation facilities that is beyond the irrigators' ability to pay.,." <br /> <br />Discussion: Mention of the Upper Basin Fund reimbursements of salinity <br />control costs for Upper Basin projects, Lower Basin projects and United <br />States Department of Agriculture programs is absent and should be <br />included. The lack of discussion regarding the impacts of these <br />salinity control costs on the repayment study suggests that they were <br />not considered in the audit analysis, <br /> <br />6. Page 5, Paragraph 1: <br /> <br />Report: Last sentence needs revision. <br /> <br />Discussion: By memorandum of February 21, 1989 (see Appendix AI, the <br />Asslstant secretary, P8A, determined that the Bureau has given <br />consideration to the recommendations and concurred with our position <br />that neither action should be implemented. <br /> <br />7. Page 6, Paragraph 5: <br /> <br />Report: "The present method of recovering the irrigation assistance <br />portlon of the Colorado River Storage Project results in a substantial <br />reduction in revenues to the U,S, Treuury." <br /> <br />Discussion: The sentence implies that a prior method was used to <br />recover lrrigation assistance which had a greater revenue generating <br />capability than, and was subsequently abandoned for, the present method, <br />Since this is not the case, the sentence is inaccurate. <br /> <br />8, Page 7, Paragraph 1: <br /> <br />Report: "Reduc~d revenues on repayments from the ,Colorado. ~ive~ St~ge <br />proJect are estimated to have a present val ue ofabout<$80'.Hl'fcnt', 't <br /> <br />Discussion: For the same reason as discussed in Comment 7 this <br />statement Should be rewritten to say, that. the audit sugge5U- <br />improvements in the present method for ,generating revenues which could <br />result in an increase in returns to the Treasury by $80 million in <br />present value terms. . <br /> <br />15 <br />