| OCR Text |
Show eral Governments according to the incidence of such benefits. In general, the Commission is satisfied that the public, although opposed to subsidies for private gain, will support substantial public contributions for water resources development, provided the expenditures promote the public interest. Comprehensive Accounting An essential step toward public understanding of the distribution of responsibility for the costs of multiple-purpose basin programs is provision for comprehensive systems of accounts with the basin program as the unit for accounting pur- poses. As will be pointed out in more detail in the next chapter, such a system of multipurpose program accounts should be set up in such a way that any interested citizen may see clearly just how much is invested in the total program, in its individual projects, and in its various functions. The accounts should show further the alloca- tion of project investment to primary benefi- ciaries, to States on behalf of secondary bene- ficiaries, and to the Federal Government on be- half of public benefits. They should also include corresponding expense accounts, showing for each year itemized annual costs by projects and func- tions, including operation, maintenance, replace- ment, payments in lieu of State and local taxes, together with interest and amortization to the ex- tent that these are included in the reimbursement procedure for specific benefits. These accounts should reveal the allocation of these annual costs to primary beneficiaries, local and State interests, and to the Federal Government, with a balancing income account to show repayments of the allot- ments. This proposal would enlarge the "basin ac- count" idea, which is subject to criticisms aris- ing out of its essentially single-purpose project origin, into a comprehensive reporting of all river basin costs and revenues. It would thus trans- form the "basin account" into a complete instru- ment of multiple-purpose water development policy. The "basin account" idea represents substan- tially an extension to entire basin programs of the accounting which was specifically authorized for single reclamation projects by the Reclama- tion Act. For many years this accounting prin- ciple has applied to projects constructed prima- rily for irrigation, but with hydroelectric power plants as integral parts. In simplest terms, it has meant that the Federal Government considers such projects as primarily for irrigation and ad- vances the money for both irrigation and power, interest-free. The power from such projects is sold at rates which include at least 3 percent interest, with the power revenue credited against the repayment requirements of the entire project. In this way the repayment responsibility of irri- gation has been reduced. Since the inauguration of that policy in the Reclamation Acts, however, multiple-purpose basin programs have come of age as means of regional development. Individual irrigation projects are parts of comprehensive programs, and low-cost hydroelectric power has come for- ward as a major objective in its own right to join irrigation in region building. Power develop- ments will frequently be integral parts of flood control or navigation projects as well as of irri- gation projects. Program economics must be worked out on a multiple-purpose basis covering all functions and directed at serving broad re- gional and national objectives. Under these circumstances the extension of the old single-purpose project account, with elec- tric power sold chiefly as a vehicle for Federal contribution to irrigation, to multiple-purpose basin programs designed to serve a wide range of public purposes, is open to attack on several grounds. These grounds of attack include: First, it is discriminatory as between basins; those rich in power resources like the Columbia are able to develop irrigation through power con- tributions, while those lacking power, like the Rio Grande, cannot do this. Second, in certain situations, where rates may be fixed above cost including interest, it may force power rates upward, curtailing use and limiting desirable in- dustrial development unless the amortization pe- riod is extended. Third, it may encourage unsound expansion of irrigation acreage in some 79 |
