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Show WATER PRICING POLICY STUDY customers. One key issue is the fact that the Bureau of Reclamation currently requires CUWCD to purchase all CUP water on a take- or- pay basis. Another issue is the Ability to Pay policy that rules over Bureau of Reclamation project water sold to irrigators. A third key issue is the existence of water contracts. Currently, the Bureau of Reclamation requires CUWCD to purchase all CUP water on a take- or- pay basis. The Bureau issues a Block Notice for a specific block of water. The block price is determined by the Bureau based on the repayment obligation of the facilities required to provide that specific block of water. The Bureau has issued five block notices for Central Utah Project water to date. Block 1 is a block of irrigation water in the Uinta Basin totalling 9,800 A. F. All other blocks are M& I water, and vary in size from 200 A. F. to 20,000 A. F. When the Bureau issues a Block Notice, CUWCD agrees to purchase all of the water in the block from the Bureau. CUWCD then sells the water within the block to petitioners. Any water within a block that is not sold by CUWCD must still be purchased by CUWCD from the Bureau at the block price. CUWCD currently purchases such unsold water through ad valorem tax collections. Currently, M& I water petitioners pay 66% of the block price. The remaining 34% is paid by CUWCD through ad valorem tax revenues. M& I petitioners also pay OM& R costs to CUWCD for the treatment and/ or delivery of water. In the case of irrigation water, the block price charged to petitioners is based on their ability to pay. However, the repayment obligation of the facilities required to provide the block of water under the Block Notice is greater ( at least in the case of CUP water) than the petitioners ability to pay. The petitioner is only responsible for the block price, which also includes the estimated operation, maintenance and replacement ( OM& R) charges to CUWCD. The difference between the repayment cost of the block and the block price ( as determined by the petitioners ability to pay) is paid through Colorado River Storage Project ( CRSP) power sales. To illustrate this process, an example is provided in Figure ES- 9. The following example is for illustrative purposes only, the dollar amounts are not intended to represent any actual or estimated costs. Executive Summary ES- 28 |
