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<br />'I <br /> <br />3. Present (pro & con) the practical alternatives for uniform H & I <br />marketing and pricing policies for the Federal Government in terms <br />of methods and unit prices. <br /> <br />There are several methods and lor factors that are involved in establishing <br />an equitable rate for M & I water. Time did not permit this group to <br />consider in detail the numerous other factors and the interaction these <br />factors have on the industt"ial rate. The various factors include: <br />1). Environmental costs and effects, 2). Reduction in service to <br />navigation, 3). Reduction in power revenues, and 4). Effects on <br />recreation and fish and wildlife. <br /> <br />We believe that a uniform unit price should be established for the M & I <br />water available for delivery from the six ~Iissouri River ~ain stem <br />reservoirs. As a lower limit, the rate should be at least $9 -ll.OO/A.F. <br />which would be consistent with the Industrial water rate established by the <br />Department of Interior for the water a\'ailable from the Bureau of <br />Reclamation Yellowtail and Boysen reservoirs. For the urper limit, we <br />believe the ~I & I wat.er from the main stem reservoirs should r<ccognize: <br />(1) The ability to pay " (2) <br />the willingness to pay, and (3) the market value of the product. For <br />example, if 10,000 acre-feet of water are needed for a plant capable <br />of yieldin~ 250 million cubic feet of ~as per day and the ras is marketed <br />at $1 per thousand cubic feet, the unit priCE: b3ser1 un a percentage of <br />the gross sales price for the gas to the "hole5ale, about three-tenths <br />of I percent of the ,,'1101esale price of the gas would represent a value <br />for water of about $25 per acre-foot per year. The estimated cost per <br />acre foot of wa tor developed from an al ternative source or an al ternate <br />method such as new offstream storage or ground-water source "'ould exceed <br />the upper limit of $2~/^f suggested above. <br /> <br />; <br />~ <br />i <br />. <br /> <br />A postage stamp rate should be established for the industrial watc>r marketed <br />from the main stem reservoir system which mayor may not be the same rate <br />as ..ill be applied to small municipalities. <br /> <br />In all contractural arrangements, I<e recommend that the water service <br />contracts include provisions for revie.. at 5-year intervals to insure the <br />equitabilit}' of the industrial water rate. I~e reco!J'""end the industrial <br />water be ,aarketed at a unit price of not less than $lO/AF and not 11".0re <br />than $25/AF under present conditions. The Federal Government could market <br />the industrial water directly to: (1) the individual industrial user, <br />(2) the States for resale to the industrial user, or (3) a combination <br />of (1) and (2). <br /> <br />, <br />I <br />I <br />I <br />! <br /> <br />. <br />. <br /> <br />5 <br />