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<br />which is interest free, is deferred until the interest-bearing power
<br />investment is repaid,
<br />
<br />Each year the Bureau provides the Western Area Power Administration the
<br />irrigation assistance requirements and due dates for each participating
<br />project, which Western incorporates into a power repayment study, Not
<br />all projects are included in the rate-setting years of the study,
<br />however. Under an agreement between Western and the Bureau, certain
<br />criteria must first be met, including preparing a definite plan report,
<br />acquiring water rights, obtaining environmental clearance, and signing
<br />repayment contracts with water users, The rate-setting period of the
<br />repayment study generally includes only those projects for which future
<br />construction appears certain, As a result, only $1,1 billion of the
<br />total estimated $2,3 billion of irrigation assistance is included in
<br />rate-setting period,
<br />
<br />According to Bureau and Western officials, in 1989 the Bonneville Unit of
<br />the Central Utah Proj ect should meet the criteria for inclusion in the
<br />rate-setting period, increasing the irrigation assistance repayment
<br />requirements from $1,1 billion to $1,9 billion if the irrigation portion
<br />is built, In order to complete construction of the irrigation
<br />facilities, additional funding authorization will be required,
<br />
<br />From the power repayment study, Western develops an electric power rate
<br />sufficient to (1) recover all annual power operation, maintenance, and
<br />replacement costs and (2) repay the capital investment costs in the power
<br />facilities plus interest along with the storage facility costs allocated
<br />to irrigation, The rate also includes an amount to repay the capital
<br />investment in participating projects' irrigation facilities that is
<br />beyond the irrigators' ability to pay in accordance with the revenue
<br />apportionment requirement established by Public Law 84-485 authorizing
<br />the Storage Project, The apportionment requirement is described in
<br />Appendix '1.
<br />
<br />SCOPE OF AUDIT
<br />
<br />Our fieldwork was performed at the Bureau's headquarters in Washington,
<br />D,C" and Upper Colorado Regional Office in Salt Lake City, Utah, To
<br />assist in determining the financial impacts, we requested the Western
<br />Area Power Administration in Salt Lake City, Utah, to prepare various
<br />power repayment studies, Our review was made, as applicable, in
<br />accordance with the .Standards for Audit of Governmental Organizations,
<br />Programs, Activities, and Functions,. issued by the Comptroller General
<br />of the United States. Accordingly, we included such tests of records and
<br />other auditing procedures that were considered necessary under the
<br />circumstances.
<br />
<br />The review included the participating projects' estimated irrigation
<br />assistance requirements as of September 3D, 1987, which were provided by
<br />the Bureau, We did not: independently verify the data provided by the
<br />Bureau or Western, although we did compare the costs reported by the
<br />Bureau with the costs being accounted for by Western, Since we focused
<br />our audit on a Bureau policy, we did not evaluate internal controls,
<br />
<br />2
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