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Show 248 WAR FOR THE COLORADO RIVER charge of not less than three percent on the investment in such power facilities. The interest component feature developed in this way: In the past, when the Federal Government paid money out of the Treasury or borrowed it for these reclamation pro- jects, this three percent interest charge on the sale of power derived from the project was repaid into the Treasury. Up until comparatively recent times, this policy was pursued without difficulty, because, according to power experts, most of the federal reclamation projects were economically sound. However, these experts state, most of these eco- nomically sound and feasible projects have now been de- veloped, and the government now is dealing with projects of questionable financial feasibility. In order to meet this situation, the Interior Department a few years ago suggested that if this interest component was not required to be repaid into the Treasury, substantial sums of money would remain available to the department to aid the development of future projects. Legislation was introduced in Congress to authorize the department to pay this money into the reclamation fund instead of the Treasury, but Congress refused to act, and the department has never received such authority. Failing in this, the solicitor of the Interior Department prepared a legal opinion which interprets the language of the reclamation law so as to permit the discretionary use of this "interest component" without its being repaid into the Treasury. For example: To construct the Central Arizona Project the Federal Government must borrow the money, on which it pays approximately 2.5 percent interest. This interest charge would ordinarily be covered by the 3 percent in- terest charge on the power sales, and the taxpayers would therefore take no loss if the interest were paid back. How- ever, under this new interpretation the Interior Department will not pay this money into the Treasury. The 2.5 per- cent interest on the borrowed money, therefore, becomes a charge against the taxpayer and must be compounded over the proposed seventy-five-year repayment period. In the case of the Central Arizona Project, this figures out to the |
