OCR Text |
Show DIXIE PROJECT, UTAH 81 Utah, and by exchange, arrangements have been worked out in the region, to make available 8,000 acre- feet of industrial water annually to Cedar City. The project has three small powerplants, two with 5,600 kilowatts and one with a rated capacity of 2,000 kilowatts. The project develops a small amount of flood control and a very small portion of the total cost of the project has been allocated to flood control. It does develop valuable recreational, fish, and wildlife benefits in the region. We presented this project to the Senate committee in 1963. We found at that time that something in excess of $ 3 million of project costs were above the ability of the local entities to repay, on the basis of established reclamation law and policy- in the case of agricultural water, 50 years plus a 10- year development period. As far as power costs are concerned, the repayment period is 50 years with interest, and the same for municipal and industrial water. We proposed at that time that the necessary additional revenues, some $ 3 million above and beyond the ability of the local people to pay, as we saw it at that time, be returned to the Treasury of the United States, either from surplus power revenues at the Hoover Dam powerplant after amortization, or from a Pacific Southwest development fund, which might be authorized by the Congress in accordance with a plan proposed and being developed by the Department of the Interior. Since that time, the people of Utah, as has already been noted, have indicated a willingness to assume the full financial responsibility for the repayment of the cost in accordance with the reclamation law, of the projects we are discussing here this morning. In the first place, the total Federal cost of the project has been reduced in the amount of $ 1,904,000 by the offer of the State of Utah to assume the responsibility for highway relocation. That normally would be a project cost. So that instead of a total Federal cost of $ 44,822,000, the total Federal cost would be $ 42,918,000. ; 3 The restudy of the appropriate charges for municipal and industrial water result in a municipal- industrial water rate of $ 22.21 an acre- foot, instead of $ 22.12 an acre- foot, as we had computed it when we presented it to the Senate committee in 1963, The city of St. George has indicated its willingness to contract for all of the power output of the three comparatively small powerplants. We had originally indicated the cost of this power at 6.9 mills per kilowatt- hour. They have now indicated a willingness to pay 7.15 mills per kilowatt- hour for the power produced at the powerplant. With, all these things taken into account, the reduced Federal cost because of the State of Utah's willingness to pay for highway relocation, the slight increase in municipal and industrial water rates and the, again, comparatively small increase in power rates, we now find that it is possible to meet the financial requirements in accordance with reclamation law and policy for the Dixie project within the permissible period established by law. We find that at the end of the repayment period, on the basis of these calculations, a surplus of revenues exists in the amount of $ 50,- 000. |