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<br />Regarding financial issues, the Committee
<br />recommends that the Central Arizona Water
<br />Conservation District (CAWCD) and the Bureau of
<br />Reclamation review their operations and search for
<br />cost reduction opportunities. CAWCD should also
<br />optimize its power marketing to maximize interim
<br />revenues. The Committee suggests that CAWCD
<br />adopt a policy of 'target-pricing" to increase incentives
<br />for CAP use, ensure fair prices for water purchasers,
<br />and develop appropriate expectations for future prices.
<br />To compensate for projected deficits caused by target-
<br />pricing, the Committee recommends that CAWCD
<br />obtain additional financial authority to issue bonds,
<br />and urges CAWCD to charge agricultural users current
<br />ground water costs, or less, to the extent that all CAP
<br />users benefit.
<br />
<br />The Committee recommends that the state,
<br />CAWCD and M&i subcontractors explore ways within
<br />their existing contracts to require M&I subcontractors
<br />to pay their share of OM&R costs, whether or not they
<br />take water delivery. Given the financial hardships
<br />likely to occur, this "take or pay' policy should be
<br />combined with a policy to allow subcontractors to join
<br />a replenishment district instead. The federal
<br />government should pay the fixed OM&R costs
<br />associated with CAP allocations for federal purposes,
<br />and restructure the agricultural irrigation districts'
<br />distribution system debt by offering deferral contracts.
<br />
<br />Regarding water marketing, the Committee
<br />recommends that CAWCD and the Arizona
<br />Department of Water Resources (ADWR) develop an
<br />intrastate CAP marketing program and allow CAP to
<br />benefit from implementing a fee structure for such
<br />transfers, Additionally, ADWR should study
<br />arrangements where California and Nevada take
<br />advantage of unused entitlement and canal capacity
<br />to store water in Arizona in exchange for the right to
<br />increased Colorado River diversions. The contracting
<br />state would pay the cost of the banking arrangement.
<br />The Committee notes that 'this type of program could
<br />be beneficial...because it would provide a long-term
<br />source of water to a neighboring state without
<br />reducing Arizona's Colorado River entitlement.'
<br />
<br />The Committee recommends that the state request
<br />the federal government to make settlement of Indian
<br />water rights claims in Arizona a priority, Also, the state
<br />should offer its assistance to complete Indian water
<br />right settlement negotiations. Various possibilities
<br />
<br />should be evaluated to encourage the use of non-
<br />Indian agricultural water as a water source for such
<br />settlements. Once a settlement has been completed, .
<br />tribes should be allowed to lease CAP water, first
<br />within the CAP service area, and then within the state,
<br />
<br />Concerning environmental issues, the Committee
<br />suggests three levels of water allocation be
<br />considered for environmental enhancement (50,000,
<br />100,000, and 150,000 acre-feet), with an evaluation of
<br />the impact on CAP water users, The Committee notes
<br />that a large amount of water reserved for
<br />environmental enhancement would be required on the
<br />Colorado mainstem, and recommends a taskforce
<br />discuss the economic, environmental, and political
<br />consequences of allocating CAP water for the
<br />environment. The Committee also suggests an
<br />environmental trust fund. Alternative funding sources
<br />should be explored, including a surcharge on
<br />underground storage projects using CAP water, The
<br />Committee urges, however, that revenue sources
<br />available to the CAWCD for repayment and OM&R
<br />should not be placed in the trust fund.
<br />
<br />In releasing the report, Governor Symington and
<br />co-chair Mark DeMichele, Arizona Public Service
<br />Company CEO, noted that each action
<br />recommendation was supported by a majority of the .
<br />Committee, They said: 'This report sets forth a plan
<br />for [CAP] operation which will ensure...[efficiency]...,
<br />guarantee adequate water supplies across the state,
<br />and promote and enhance quality of life in Arizona.'
<br />For copies ($5.00) call Jan Loffman (602) 542-1554,
<br />
<br />In a related water development, on October 1, the
<br />CAWCD announced that CAP is 'substantially
<br />completed,' 25 years after it was authorized in 1968,
<br />at a cost of some $4B. Its completion "triggers the
<br />start of the district's 50 year period to repay the
<br />federal government...reimbursable construction
<br />costs....' After substantial changes and modifications
<br />from its initial authorization, CAP is the most expensive
<br />water project ever built by the Bureau of Reclamation,
<br />
<br />PEOPLE
<br />
<br />Due to Council work plan priorities, Norman
<br />Johnson will serve on an interim basis as editor of this
<br />newsletter, It is expected that he will continue the
<br />excellent work per10rmed by Tony Willardson, who will
<br />reassume this responsibility next fall.
<br />
<br />The WESTERN STATES WATER COUNCIL is an organization of representatives appointed by the Governors of .
<br />member states - Alaska, Arizona, Califomia, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, North Dakota,
<br />Oregon, South Dakota, Texas, Utah, Washington, and Wyoming, and associate member state Oklahoma.
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