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Compressor in use for tunnel construction, Glen Canyon . by power revenues in Fiscal Year 1980 compares to a $2Y2 million deficit in net power revenues in Fiscal Year 1979, During fiscal year 1980, nearly two-thirds of a million dollars in repayment revenue came from municipal and industrial water sales from Glen Canyon and Navajo Units. This was all applied toward repayment of the municipal and industrial water invest- ment in the storage units. Through fiscal year 1980, municipal and industrial water revenues have repaid nearly three~fourths of the municipal and industrial water investment in the storage units. An addi- tional three-quarters of a million dollars in repayment revenues came from muni- cipal and industrial water sales from five participating projects. This amount was applied to repayment of M&I investments in the participating projects. During the year irrigators paid more than one-quarter of a millon dollars toward repayment of the irrigation allocation. To date, power revenues have paid $128 million, Municipal and industrial water revenues have paid nearly $8 million and irrigators have paid more than $2 million. All of this repayment is in addition to operating costs. Contracts have been executed for 16 of View of three selective withdrawal structures at Flaming Gorge Dam. the 24 participating projects, 15 of which are constructed or under construction. The Navajo Indian Irrigation Project is also under construction but a repayment contract is not required for this non- reimbursable Indian project. Of the eight projects on which construction has not yet started, a contract has been executed for one, two are nearing contract execu- tion, four are in the advance planning stage, and one has been postponed indefinitely. In order to provide revenues sufficient to pay annual operating costs of the storage units, provide for replacements, pay interest charges, repay costs of the storage units allocated to power, assist in repayment of storage unit costs allocated to irrigation, pay specified salinity costs, and to provide assistance in repaying the irrigation allocation of authorized participating projects within the time limits prescribed by law, it is necessary to increase the CRSP power selling rate. It is proposed to increase the current power rate about 20 percent beginning in January 1981 and to increase that rate approximately 34 percent beginning in October 1983, The proposed fiscal year 1981 rate would be about 32 percent above the original GRSP power rate, Construction of McPhee Dam's left abutment. which was in effect prior to April 1974. The proposed 1983 rate is about 77 per- cent above the original rate, These increases are reflected in the exhibit in the envelope on the inside back cover. The principal reasons for the projected increase include the inflationary rise in present and projected power system operating costs, estimated higher costs to complete construction of the authorized storage units and participating projects facilities including mitigation and envir- onmental protection costs, the increased cost of purchased energy required to fulfill contract commitments and the increase in the estimated construction and operating costs of four specific authorized Colorado River Salinity Control Projects (Public Law 93-320, 88 Stat. 266), Projections using current estimates of CRSP costs, construction schedules, and revenues from power sales (including the proposed rate increases), municipal and industrial water sales, payments by irrigators, ad valorem taxes, and miscel- laneous revenues show that payment of the reimbursable costs of the authorized Colorado River Storage Project and participating projects can be accom- plished within the authorized repayment periods. 33