| OCR Text |
Show DIXIE PROJECT, UTAH 17 cost if it were indexed to reflect current prices. Based on the April 1963 revised economic and financial analysis using 2% percent interest and other current procedures, project costs are allocated among the various functions as follows: irrigation, $ 30,635,000; power, $ 6- 826,000; municipal and industrial water, $ 2,518,000; flood control, $ 152,000; fish and wildlife, $ 1,563,000; and recreation, $ 2,883,000. The foregoing costs were determined by using the " separable costs- remaining benefit" method of allocation. The total estimated annual operation maintenance, and replacement costs of $ 319,900 would be allocated among the project functions as follows: irrigation, $ 174,500; power, $ 74,200; municipal and industrial water, $ 5,000; flood control, $ 300; fish and wildlife, $ 3,100; and recreation, $ 62,800. The cost allocated to irrigation would be reimbursable without interest in accordance with reclamation law. Reclamation law also provides that costs allocated to flood control and fish and wildlife are to be nonreimbursable and nonreturnable. Virgin City Reservoir would produce the majority of the recreation benefits of the project, and because of its close proximity to Zion National Park would have both regional and national significance for recreation purposes. Therefore, it is recommended that the costs of the project allocated to recreation be made nonreimbursable and nonreturnable. The repayment analysis indicates that the reimbursable costs allocated to power can be repaid with interest in 50 years and that the reimbursable costs allocated to municipal and industrial water can be repaid with interest in a 50- year period, with allowance for a 10- year interest- free deferment period as provided by the Water Supply Act of 1958. For the Dixie project this would amount to interest deferment for three- fifths of the cost of the municipal and industrial water. The irrigators in a 50- year period, which in the case of the new lands would commence after a 10- year development period, with the assistance of a 5- mill conservancy district tax would repay $ 22,- 440,000 or about 73 percent of the Federal investment allocated to irrigation. The percentage would amount to< 76 taking into consideration the fact that the ad valorem tax could continue for 60 years. At the end of the 60- year period, if revenues from all project sources have been applied toward project repayment $ 3,232,440 would remain to be repaid from revenues derived from the sale of power from Federal projects in. the Lower Colorado River Basin. The Washington County Water Conservancy District was officially formed on February 6, 1963, by action of the district court at St. George, Utah. The district has power to tax and to enter into a repayment contract with the United States. The Dixie project has engineering feasibility, and its development is economically justified in the sense that a 100- year period of analysis reflects a total benefit- cost ratio of 2.3 to 1. Thank you, Mr. Chairman. Mr. ROGERS. Thank you, Mr. West. I have just one question, Mr. West. In determining your repayment of power, what price did you use for the power? Mr. WEST. The price on power is 6.9 mills. Mr. ROGERS. NOW, do you know the cost of competitive power in this area ? ; ! |
