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Appendix I Background on and Overview of the ADimas-La Plata Project In 1990, the Service issued a draft biological opinion that the Animas-La Plata project, as proposed, would jeopardize the continued existence of the endangered Colorado squawfish. Responding to the 1990 draft opinion, the Bureau and the Service consulted to develop a "reasonable and prudent alternative" for the project (referred to hereinafter as the "alternative") that allowed construction of certain facilities of the project. (App. IV provides information on the alternative.) In 1992, several environmental groups filed a lawsuit that delayed the start of the project's construction by challenging the validity of the Bureau's 1980 environmental impact statement for the project.4 In responding to the lawsuit, the Bureau began preparing a supplemental environmental impact statement and deferred beginning construction of the project. The Bureau expects to issue the supplemental statement in December 1995 and, after the issuance of the Record of Decision, begin construction. In July 1994, the Department of the Interior's Inspector General issued a report addressing the Animas-La Plata project.5 The Inspector General reported that the project had a negative benefit-cost ratio, in part because the Bureau overstated the anticipated benefits resulting from uses of the water for irrigation. The Inspector General recommended that the Bureau reevaluate the economic costs and benefits of the project; infonn the Congress of the results of this reevaluation; and, if warranted, seek congressional approval to refonnulate the project (limiting its size and scope). Responding to these recommendations, the Bureau noted that it was updating its economic analysis for the project. The Bureau completed this update in June 1995. The analysis showed that while the project had a positive benefit-cost ratio under the economic evaluation procedures used when it was authorized by the Congress in 1968, it has a negative benefit-cost ratio under contemporary economic evaluation procedures. Interior had previously recognized that the full project has a negative benefit-cost ratio, noting in October 1987 letters addressed to the Chairman, Senate Committee on Energy and Natural Resources, and to the Chairman, House Committee on Interior and Insular Affairs, that ". . . the Animas-La Plata Project is not economically feasible. . . ." At that time, Interior supported going forward with the project because it would settle 'Four Comers Action Coalition, et at. v, Dennis UndetWood, et aL Civil Action No, 92-z..341, U,s. District Court for the District of Colorado. Complaint filed April 23, 1992, 5Development Status of the Dolores and the Animas-La Plata Projectsl Bureau of Reclamation, 94-I..s84 (July 1994), pagell GAOIBCED-96-1 Anlmu-La Plata Project '.. ~ ~ ~b~ .' V' ~: J