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Report To The Honorable Howard M. Metzenbaum United States Senate BY THE US GtNEI<AL ACCO~~~,S; OFFICE 11, )'~~ ,-~")" , /'<l,:-....... , >1 "I I /i /1 , ;' I ,/ i: ." I/! 1/ > 1/, ',;_;'-.., II; '/ "AI';;......,.../'u "/ i)r'"fj ...." '/1. .II),. Bureau of Reclamation's Central Utah and Central Valley Projects Repayment Arrangements The Department of the Interior's Bureau of Reclamation, the federal government's principal water development and management organization in the western United States, develops and operates projects to provide water for the generation of electricity and for municipal and industrial use and irrigation. Certain project costs must be paid by the project beneficiaries. GAO was asked to examine the repayment arrangements for two of these projects: the Central Utah Project's Bonneville Unit and the Central Valley Project in California. GAO found that the current repayment contracts are inadequate to recover costs. The Bureau, however, is currently negotiating supplemental repayment contracts for the Bonneville Unit that would increase the repayment obligation for municipal and industrial water. In addition, the Bureau is developing a rate-setting policy to correct the shortfall on the Central Valley ProJect. The deficits on the Central Valley Project, nevertheless, will persist for several years until existing long-term contracts expire and are renegotiated. Other issues that could affect the recovery of projects' costs are also discussed in the report. ,\<,.D S1'-1" -:-.\ , , .y.. <? 'V~~""",f' ~, - ~ ~ ., '0.: '-' z ;'- ;-- ". C GAO/RCED-85-158 SEPTEMBER 9, 1985