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<br />--t <br />..~ <br />- <br />M <br /> <br />1...-' <br /> <br />c <br />- <br /> <br />.. <br /> <br />- <br /> <br />. <br /> <br />- <br /> <br />- <br /> <br />I <br />I- <br />I <br /> <br />. <br /> <br />- <br /> <br />- <br /> <br />GOVERNOR'S CENTRAL ARIZONA PROJECT ADVISORY COMMITTEE <br /> <br />to environmental enhancement purposes. The amount of water to be allocated and <br />the size of the trust fund should be studied further. <br /> <br />. <br /> <br />Any costs associated with Project features dedicated to environmental purposes <br />should be nonreimbursable to the federal government. <br /> <br />Policy Issue: How important is the reservation of CAP water supplies for future municipal <br />and industrial use in the state? <br /> <br />Municipal and industrial water use has always been a critical purpose of the <br />CAP. Its importance grows as major urban development occurs in the <br />Phoenix and Tucson metropolitan areas. Initial allocations of CAP water <br />were based on requests to purchase water and on projected future demand <br />for water. The allocation was capped at about 640,000 acre feet to reflect <br />what was thought to be the limit of the reliable CAP supply. Some of the <br />waterproviders who believed that additional watersupplies would be needed <br />for their service areas in the future have made arrangements with Indian <br />Tribes to lease CAP water from them. <br /> <br />Key Considerations: <br /> <br />. <br /> <br />Consideration should be given to the reallocation of additional CAP water for <br />municipal and industrial use even though an amount in excess of 640,000 acre feet <br />is less reliable than the original allocations. <br /> <br />. <br /> <br />In order to foster the economic development and growth of our communities, CAP <br />water provided to M & I users should be subsidized initially to increase utilization. <br />Ultimately, CAP water must be priced at its actual cost but such pricing should <br />occur gradually to reduce the impact of "rate shock." <br /> <br />. <br /> <br />The current command and control method of distributing water allocations should <br />be changed to incorporate free market principles into the CAP allocation process. <br /> <br />FINAL REPORT AND RECOMMENDA TIONS <br /> <br />24 <br />