WSP01155

• File Number: 8220.106
• Description: Animas-La Plata
• State: CO
• Basin: San Juan/Dolores
• Water Division: 7
• Date: 4/25/1989
• Author: USDOI-OIG
• Title: Audit Report - Review of the Timely Recovery of Irrigation Investment Costs - Colorado River Storage Project - Bureau of Reclamation - No.89-67
• Water Supply Pro - Doc Type: Report/Study

non-Federal financing to complet:e Bonneville Unit construction, For
example, one financing method under consideration was through the sale of
bonds. These revenue bonds would be used to fund all or a portion of the
remaining Bonneville Unit construction costs and would be retired with
revenues from Storage proj ect power sales, According to \.Iestern and
Bureau officials, changes in the apportioned revenue process may be
required to facilitate this financing alternative. Any changes to the
met:hod of financing or the apportionment: process may impact the existing
present value benefits to the U,S, Treasury, \.Ie recognize that
non-Federal financing of a portion of the Storage Project as opposed to
Federal financing may benefit the U,S, Treasury, However, changes to the
apportionment process or further delaying repayment of the interest-free
irrigation investment may adversely impact the U,S, Treasury,

Recommendations

\.Ie recommend that the Commissioner, Bureau of Reclamation:

1, Revise the irrigation assistance repayment policy for the
Colorado River Storage Project to require recovery of the interest,free
irrigation assistance in equal annual installments over the individual
participating project repayment periods, Implementat:ion of this
recommendation will require coordination with the \.Iestern Area Power
Administration to increase power rates as necessary,

2, Require the Bureau to analyze any proposed legislative changes to
the funding or repayment of the Bonneville Unit to determine their
financial impacts on the U, S, Treasury and report the results to the
Secretary and the Congress, Implementat:ion of this recommendation will
require assistance from the \.Iestern Area Power Administration to prepare
alternative power repayment studies.

Bureau of Reclamation Resoonse

The Bureau responded to our draft report: on March 16, 1989. A synopsis
of the Bureau's response to our recommendations is included in the
following paragraphs, A complete text of the response is included as
Appendix 3. The Bureau's response also included technical comments
regarding language and data contained in the draft report. \.Ie considered
the Bureau's comments as well as comment:s we obtained from officials of
the \.Iestern Area Power Administration in preparing the final report, and
revised the report where appropriat:e,

The Bureau concurred with Recommendation 2, but did not concur wit:h
Recommendation 1. The response stated that the Bureau could not: comply
with Recommendation 1 because implementation of the recommendation would
be contrary to the provisions of the Act authorizing the Colorado River
Storage Project, The Bureau contended that the Act provides that
payments for participating project irrigation from power revenue cannot
be made until all costs applicable to Section 5(c)(1) [operation.
maintenance, and replacement costs] and 5(d) [investment costs allocated
to each storage unit] have been paid. The Bureau concluded that new
legislation would be required to implement the recommendation,

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