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<br />In addition, tlie Bureau stated that other considerations related to <br />technical computations had apparently been overlooked. In comment number <br />one of Attachment A to the response, the Bureau asserted that our <br />conclusion failed to address the impact of hydrologic variability, <br />specifically, changes in the weather, According to the Bureau, power <br />output and projected irrigation assistance revenues are greatly <br />influenced by the weather, The Bureau contended that the present <br />repayment method allows flexibility in coping with unpredictable weather <br />patterns and contributes to a more stable power market by minimizing the <br />necessity of constant power rate adjustments. The Bureau concluded that <br />without an examination of this effect on the power market, the report <br />presents an incomplete conclusion, <br /> <br />Office of Insnector General Comments <br /> <br />Based on the Bureau's response, we consider Recommendation 2 resolved, <br />However, we do not agree with the Commissioner's reasons for not <br />concurring with Recommendation 1, <br /> <br />Based on our reading of the Colorado River Storage Project's legislative <br />history and Section 5 of the authorizing Act, we do not believe that new <br />legislation is required to implement our recommendation, Section 5(e) <br />allows for collection of revenues in excess of those needed annually to <br />cover operating costs and return storage unit investment costs within 50 <br />years, Section 5(e) provides for these excess revenues to be apportioned <br />among the states and paid annually into the general fund of the Treasury <br />for repayment of participating projects irrigation investments, The Act <br />does not require the total interest-bearing investment to be repaid <br />before participating project irrigation repayment can begin, It just <br />requires the interest-bearing debt to be repaid within 50 years of <br />completion of each unit, <br /> <br />Several part~ of the authorizing Act's legislative history discuss <br />repaying the participating project irrigation debt in equal annual <br />installments, The reference to equal was deleted from the Act because of <br />apparent concerns that power revenues would not be sufficient to repay <br />all debts concurrently, However, the Act did not, as suggested by the <br />Bureau, forbid earlier annual repayment of irrigation debt if future <br />power revenues permitted. <br /> <br />The Bureau's assertion that our conclusion failed to address the impact <br />of changes in the weather is misleading, Power output projections used <br />in the power repayment study represent reasonable estimates based on <br />historical river flows (including wet and dry weather cycles) adjusted <br />for probable future water depletions in the Upper Colorado River Basin, <br />Hence, we considered the power repayment study to be the best model <br />available to address the financial impact of our proposal, ~ith regard <br />to the Bureau's concern that our proposal will create an unstable power <br />market by necessitating constant power rate adjustments, we believe our <br />proposal can be accommodated with minimal effect on the power market, <br />Other factors such as inflation and including ne... 'Projects in the rate <br />base will have a much greater impact on the power market than our <br />proposal. <br /> <br />7 <br />