WSP03378

• File Number: 8276.300
• Description: Lower Gunnison Basin Unit - Colorado River Basin Salinity Control Project
• State: CO
• Basin: Colorado Mainstem
• Water Division: 4
• Date: 7/1/1981
• Title: Lower Gunnison Basin Unit Status Report
• Water Supply Pro - Doc Type: Report/Study

The annual cost for each mg/L of salinity reduction in the Colorado
River that would result from construction of the Lower Gunnison Basin
Unit is estimated at $685,000, based upon an annual equivalent cost of
$10,410,000 and an annual reduction in salinity concentration of about
15.2 mg/L at Imperial Dam. The annual equivalent cost is the annual
value of the capital investment amortized over the estimated 50-year life
of the development at an interest rate of 7-3/8 percent. The capital
investment includes construction costs and interest during construction
at 7-3/8 percent interest over a 9-year construction period. Annual OM&R
costs and the cost of investigations made prior to authorization of the
unit are not included since they have been incurred and would have no
bearing on the decision to undertake construction.

The cost per mg/L of salinity reduction resulting from development
of the Lower Gunnison Basin Unit is shown below:

Capital investment
Construction costs
Interest during construction!/
Less prior investigation costs
Total
Annual equivalent costs
Salinity reduction at Imperial Dam (mg/L)
Annual cost per mg/L of salinity reduction
at Imperial Dam $685,000
1/ Interest was charged on advance planning and precon-
struction expenditures on each feature through the third year
of project construction. No additional interest was charged
because the improvement work would be accomplished in the off-
season between October and April with the newly constructed
portion being in service and producing benefits with the new
irrigation season each year.

$137,800,000
1,785,000
-2,460,000
137,125,000
10,410,000
15.2

The Colorado River Basin Salinity Control Act provides that 75
percent of the total costs of construction for the four authorized units
would be nonreimbursable. The remaining 25 percent would be reimbursable
and would be allocated between the Lower Colorado River Basin Development
Fund and the Upper Colorado River Basin Fund, with no more than 15
percent of the reimbursable costs allocated to the Upper Basin Fund. The
reimbursable costs would be repaid without interest within a 50-year
period after the development becomes operational. While present studies
have been predicated on a similar repayment plan for the Lower Gunnison
River Basin Unit, final repayment criteria would be determined as part of
legislation authorizing the unit.

Environmental Considerations

The major environmental consideration in the Lower Gunnison Basin
Unit area is the elimination of wetland habitat supported by seepage along
the canals and laterals.

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