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<br />.-,,- <br /> <br />. <br /> <br />. <br /> <br />Agenda Item 19 <br />September 22, 1989 <br /> <br />The repayment studies which Western currently has underway <br />apparently are indicating that there will need to be a very <br />substantial increase in the power rate in order to collect <br />enough money over time to repay the Central Utah Project. On <br />the other hand, the portion of each dollar collected which goes <br />to the other three states will result in aggregate revenues <br />over time which are greater than what will be needed to repay <br />the cost of the projects in those states, particularly so in <br />the case of Wyoming and New Mexico. <br /> <br />It appears that one of two things may happen in the face of <br />this situation: <br /> <br />(1) The legislation to be introduced on the Central Utah <br />Project could contain a provision which would delete <br />the apportionment formula from the 1956 CRSP Act, or <br /> <br />(2) Colorado, Wyoming, and New Mexico could be called <br />upon to allow Utah to use their apportioned revenues <br />per the underlined language in the above quotation <br />from the 1956 Act. <br /> <br />I have not had an opportunity to research the history of the <br />pertinent statutory language and I am therefore not entirely <br />clear on what was intended by it, For example, what is the <br />"legally constituted authority" of a state? Also, if a state <br />were to give its consent, is Utah "borrowing" future revenues <br />which in some way have to be repaid or is the "lending" state <br />simply foregoing the future apportionment of revenues? <br /> <br />One also needs to keep in mind that what really counts in <br />terms of project construction are congressional appropriations, <br />not the paper accounting procedures concerning the future <br />collection of power revenues for repayment of the federal <br />investment. From this point of view, foregoing the <br />apportionment of power revenues as a repayment device has no <br />practical effect as long as Congressional appropriations to <br />complete the Dolores and Animas-La Plata Projects are <br />forthcoming. The principle involved is, however, a different <br />matter, <br /> <br />Recommendation <br /> <br />Pending introduction of the CUP legislation or a formal <br />proposal from Utah or Western to use the consent provision in <br />the 1956 Act, I do not believe there is any need for Board <br />action. However, I do recommend that I be directed to consult <br />with interested parties in western Colorado in anticipation of <br />this issue coming to a head in the near future. <br /> <br />JWM/gl <br /> <br />-3- <br />