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c,-, a ~ ~ CHAPl'ER III OHIO CREEK UNIT Benefit-cost Analysis Benefits Benefits from the Ohio Creek Unit would accrue from the municipal and domestic water supply and are estimated at an average of $230,000 annually. These benefits were estimated by the average annual equiv- alent cost of the cheapest single-purpose alternative that would provide water supplies comparable to supplies from the unit at the assumed points of delivery. The single-purpose alternative was considered to be a non- Federal development which is essentially the same as the development planned for the city by a consulting firm. The plan includes an inlet structure on the Gunnison River and a 7.9-mile long pipeline to convey water to the city. Construction costs of the alternative development were based on Janu- ary 1973 prices and annual operation, maintenance, and replacement costs on 1970-72 prices. Construction costs, along with interest during con- struction, were amortized on the basis of public type financing over a 25-year period with interest at ~ percent. The principal difference in the costs of the alternative plan and the Federal plan involves financing terms. Estimated costs of the alternative are shown below. Investment Construction costs Interest during construction Total Average annual cost Investment Annual operation, maintenance, and replacement costs Total $2,500,000 160,000 2,660,000 218,100 11,900 230,000 Annual equivalent costs Annual equivalent costs determined for comparison with the benefits are estimated at $149,600 as shown below. The analysis is for a 100-year periOd with interest at 5t percent. Construction costs Less investigation costs Interest during construction Project investment Operation, maintenance, and replacement costs Share of Colorado River Stor- age Project costs Total Total cost $2,3tJ5,000 -96,000 160,000 2,449,000 Average annual cost $135,300 11,500 2,800 149,600 20