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Show Chapter 4 Project Economics, Accounting, and Repayment Because of the current large Federal water devel- opment and control program in the Central Valley and because of the past extensive area of irrigated land in the valley, it might be assumed that extensive construction by Federal agencies had been carried on in the past. However, viewed in the light of the total water resources development in the Central Valley, the completed projects of the Federal agen- cies have not yet become of major importance. Some Federal projects were initiated before mod- ern concepts of economic analysis had been de- veloped. Hence, for the older projects only a few totals can be presented. Another difficulty arises from the nature of the present Central Valley Proj- ect, which is not a project but a program made up of a number of projects designated as units. Sev- eral units are now under construction during a period of steadily rising costs; hence, most economic data represent historical estimates rather than pres- ent or future dollar benefits and costs. Development Program as a Whole Water development programs of the Federal Government in the Central Valley will have reached a total of 555.5 million dollars upon completion of the initial features of the Central Valley Project. Of this total the largest single item is for irriga- tion, for which the total cost allocated is 222.5 million dollars. Irrigation costs are all reimburs- able, though not necessarily by the water users. It is proposed by the Bureau of Reclamation that a large fraction of the irrigation costs be subsidized by the income from power. Power costs are 131.5 million dollars. All of these costs are reimbursable. The rates must be set high enough to earn 3 percent interest on the investment, although under the present practices of the Depart- ment of the Interior the interest would not be re- turned to the Federal Treasury as payment on the power account. These costs are almost entirely associated with the Shasta and Keswick Dams and power plants, transmission lines, and the steam plant. The only other reimbursable cost is for construc- tion to serve municipal and industrial water require- ments. This amounts to 11.7 million dollars. Charges are made by selling water "wholesale," and it is expected that such sales will more than cover expenses incurred by the Federal Government for providing this water. Debris control for placer mining on certain streams has cost the Federal Treasury 5.3 million dollars. These costs are repaid in proportion to use, and reimbursement of the initial cost from mining interests will be obtained only if the facilities are used to the maximum of their capacity. These reservoirs meanwhile provide some recreation bene- fits, some power generation, and are valuable for arresting long-term downstream movement of the valley fill created by early mining. No interest is charged on the investment. The nonreimbursable costs for flood control, navi- gation, and fish and wildlife make up roughly 40 percent of the total program costs. Flood control costs have totaled 156 million dollars and are by far the largest nonreimbursable item. Over half of these costs have been met by local interests. Where protection is afforded by levees and other local works, local interests pay a significant share of the cost. The Federal Govern- ment bears the entire cost of flood protection reser- voirs. In earlier flood control programs, local con- tributions were very large, but since recent costs have been for reservoir construction, they have been 105 |