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Last modified
1/26/2010 2:16:46 PM
Creation date
10/12/2006 12:49:40 AM
Metadata
Fields
Template:
Water Supply Protection
File Number
8220.106
Description
Animas-La Plata
State
CO
Basin
San Juan/Dolores
Water Division
7
Date
7/1/1981
Author
Charles W. Howe
Title
The Animas-La Plata Project
Water Supply Pro - Doc Type
Project Overview
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<br />[.. <br />, <br /> <br />. <br /> <br />. <br /> <br />14 <br /> <br />'., <br /> <br />direct net benefits than Project B, but the workforce might be able to live in <br />existing housing for which sezvices already exist. Project B might require.the <br />constructioo of new housing, camercial facilities and public sezvices. Certainly <br /> <br />these are project costs for purposes of econanic analysis. <br /> <br />For the Animas-La Plata Project, the concept of project was extended in a <br />very unusual way. Instead of turning the water over to the Water District for <br />distributial, the Pressurized pipes necessary for bringing water to the individual <br /> <br />faDllS were incluied in the federal part of the project. This makes those canpo- <br />nents eligible for the large federal subsidies applicable to irrigation construction, <br />and q:lerating (energy) costs. <br /> <br />2. '!he discount rate. Many projects authorized before the current <br />Principles and Standards were exenpted fran current discount rate requiranents <br />and were peIIlli.tted to use the rate that was in effect at the tine of authorization. <br /> <br />For "interest during oonstJ:uction" and for annualizing the const:J:uction costs, a <br /> <br />3.25% rate was used for A-lP. <br /> <br />Not only is the discount rate of 3.25% irrelevant to contanporary conditions, <br /> <br />but it is oot used consistently throughout the econanic analysis. When the M&I <br /> <br />benefits are calculated using the "cost of the IIOSt likely alternative in the <br /> <br />absence of A-lP", the interest rate used in calculating the costs of that <br /> <br />single-purpose alternative project was 6.6%. This inconsistency has the effect of <br />raising the "benefits" fran M&I water, while the 3.25% keeps annual project costs <br /> <br />and repayment obligations low. <br />
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