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<br />. <br /> <br />. <br /> <br />17 <br /> <br />., <br /> <br />grazing, etc. In A-U', it a~s that appropriate land values have been <br /> <br />counted both for purchased and public lands. <br />In calculating net benefits in A-LP, fann family labor and managarent costs <br /> <br />were not subtracted. Iioif.ever, they were subtracted as a cost in calculating the <br /> <br />faJ:1lers' "ability-to-pay." In the long tel:m, fann managarent and family labor <br /> <br />IlUSt earn their ClfP)rtunity costs and their values cannot be counted as a benefit <br />available to CXNer - water costs. <br /> <br />A major error in the cost analysis relates to electric energy. The A-LP <br /> <br />project is electric power intensive because of the need to pI.lllp the water out of <br />the Animas River to a !DIeting reservoir and thence to much higher elevations. <br />'!here, because of the uneven t:errain, the water is applied by sprinklers. The <br />estimated annual power consutption is 188 x 106 kwh. <br />The law autlDrizing the project pennitted it to take priority power fran <br />the federal Colorado River power systan at the highly preferential rate of 0.3 <br />cents (0.003 dollars) per kwh. Since all of the hydro-electric power currently <br /> <br />generated by the Colorado River power systan is utilized by existing custalers, <br />the A-U"s power use will force other custalers to go outside the systan where <br />the marginal cost of thermal electric power is approximately 3.0 cents (0.03 <br />dollars) per kwh. The uOOerstatarent of arulUal power costs is thus at least <br />$5 x 106 and will grow CNer time. <br /> <br />'lhis is another illustration (along with the discount rate) where Congressional <br />I <br /> <br />attalpts to "do favors" (transfer.incale) for project beneficiaries gets confused <br /> <br />with eccnanic analysis and prevents an objective econanic analysis fran being <br /> <br />carried out. <br />