WSP02305

• File Number: 8220.106
• Description: Animas-La Plata
• State: CO
• Basin: San Juan/Dolores
• Water Division: 7
• Date: 12/1/1994
• Author: Bookman-Edmonston
• Title: Economic Impact Study - Animas-La Plata and Colorado Ute Water Rights Settlement Act
• Water Supply Pro - Doc Type: Report/Study

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REGIONAL ECONOMY WITHOUT PROJECT
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This means that water from storage or some measure to reduce demand is required to
satisfy peak day demands, Consideration has been given in the past for increasing this
application from 2,500 acre-feet to the required water supply for a population of 40,000
(Harris),

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Gronning has recently conducted a water supply study for the city and concluded, of the
ten major alternatives (Table 3.4) for supplying long-term water supplies to the city, the ALP
alternative is the most cost-effective. Therefore, Gronning has recommended that the city
continue to proceed with participation in ALP and implement various measures to increase
supplies during the interim while ALP is under construction. These interim measures
include short-term system improvements, an inverted rate schedule, a conservation program,
and exploratory negotiations with Public Service Company of Colorado to obtain a dry-year
lease.

The Gronning report did not directly address the scenario of not developing ALP, but did
include an evaluation of nine alternatives to ALP for providing long-term water supplies
to the city. The main features of the long-term alternatives and the annual life cycle costs,
which were determined to be more costly than ALP, to serve a population of 30,000 are
listed in Table 3.4.

As shown in Table 3.4, ALP 'mder Alternative 6(a) is the least cost alternative. It could be
considered that the increased cost for the next least cost alternative would be the economic
impact on the city in terms of developing a comparable water supply. This increased cost
appears to be on the order of $250,000 to $300,000 per year for a population of 30,000. The
question then arises if this incremental cost should be added as an additional benefit of ALP
in determining a regional benefit-cost ratio. The answer to this question requires a thorough
review of the Gronning cost estimates and the Reclamation benefits assigned to the city's
M&I water supply. If Reclamation determined the assigned benefit as the cost for the next
least cost alternative, then this incremental cost should already be accounted for in the
assigned benefit. There are likely to be some differences between the Reclamation and
Gronning estimates of the cost for the next least cost alternative. It appears that this
incremental cost difference should probably not be added to the regional economic analysis.

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