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<br />r---- <br />, <br />, <br />, <br /> <br />. <br /> <br />. <br /> <br />. <br /> <br />ANIMAS - LA PLATA PROJECT <br />SUMMARY OF BENEFIT -COST RATIOS <br />ISSUES LIST <br /> <br />1. The Salinity Control Program was established to maintain WQ while allowing <br />states to continue to develop there compact apportionments. No other water project to <br />our knowledge has ever been assessed this cost. Furthermore, a significant portion of the <br />salinity control costs are already being paid from CRSP power revenues. <br /> <br />2. There is no measureable power generation loss. Water developed by ALP would <br />not necessarily result in lost power generation as the upper basin is only required to <br />deliver 8.23 maf to the lower basin annually. The majority of water that ALP would <br />develop most likely is currently lost as evaporation in Lake Powell. <br /> <br />3. No Indian Settlement benefit considered. The tribes have already recieved 60 <br />million dollars plus the water. How much it would take to settle the claims without water <br />is not known. <br /> <br />4. The irrigation benefit was significantly reduced. The analysis allowed either the <br />farm budget approach or the land value approach to be used, but not both combined. The <br />current P&G criteria allow no indirect or public benefits to be considered (i.e. increased <br />profits to handlers of farm commodities and improvements to facilities in the <br />community). A land value of $350 per acre for non-irrigated may slightly high while a <br />land value of $700 per acre for irrigated land is clearly low by at least 50% and possibly <br />more. These were valued at $2.264 million at the time of authorization or 15% of the <br />total irrigation benefit. This benefit has not been recalculated by Reclamation. <br /> <br />5. The M&I benefit was significantly reduced. The analysis used the federal discount <br />rate (8%) rather than the none federal finance rate (either 3.25% or 7.75%) and the new <br />P&G criteria adopted by Reclamation. It would be interesting to do a B\C analysis of <br />Hoover Dam to see if it would have a positive B\C ratio using the current P&G criteria. <br /> <br />6. Interest rate of8% and 7.75% are to high. The ewCB construction fund current <br />lends at the following rates 5.75% for commerical projects, 4.25 to 5.75% for municipal, <br />and 4.25% for agricultural projects. These rates are calculated off of the 3D-year Treasury <br />Bill rates, currently at 7.25%. <br /> <br />7. Bookman - Edmundson Report calculates a B\C ratio of at least 1.67 : 1.0 which <br />considers conditions what we feel better represent the fair value of the project. However, <br />this report also considers some assumptions which may tend to overstate the fair value of <br />the project. <br />