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Show SUMMARY OF FINDINGS Figure ES- 9 Irrigation Block Pricing Example Block Price ( Ability to Pay) $ 10/ AF This is the price paid by the petitioner to CUWCD for the water. Less: OM& R Charges S4/ AF This is the amount of the petitioner's payment retained by CUWCD to pay for OM& R costs. Equals: Share of Petitioner's Cost Applied to the Repayment Cost of Water S6/ AF This is the amount of the petitioner's payment that CUWCD pays to BORfor repayment costs. Repayment Cost of Water Less: Share of Petitioner's Cost Applied to the Repayment Cost of Water Equals: The Share of the Repayment Cost Borne by CRSP Power Sales Irrigation construction costs are to be repaid through irrigation water sales. Under Reclamation Law, irrigator repayments are limited to the lesser of the irrigator's ability to pay as determined by the Secretary of the Interior, or the cost of serving that irrigator with water. Theoretically, the rate charged to irrigation users are at no time to be less than the annual OM& R expenses applicable to and required to provide Bureau of Reclamation water. Ability to pay imposes a very real limitation on the ability of the CUWCD to utilize irrigation water pricing as a conservation tool. Financial analyses of CUP have confirmed and reaffirmed irrigators' ability to pay for project water. However, OM& R expenses have increased at rates faster than the ability of farmers to pay. The upshot is two- fold. One is that more construction costs not repaid by irrigators will be repaid to the Treasury from apportioned revenues from CRSP power sales. 8 The second is the very real possibility that price response would equate to farmers choosing to not purchase CUP water at all, either by choice, or by ceasing agricultural operations. Since current BOR pricing policy limits irrigation water prices to the irrigator's ability to pay, this latter question may, of course, be moot. The ability to use water pricing as a conservation tool is further constrained by the existence of long- term contracts. Modification of existing contracts can occur, but is likely not to be a palatable option to current M& I petitioners. 8 United States Department of the Interior, Bureau of Reclamation. Central Utah Project: Bonneville Unit- Utah. Supplement to Definite Plan Report. Department of the Interior, Bureau of Reclamation, Upper Colorado Region. May 1988. Page 123. S20/ AF $ 6/ AF S14/ AF ES- 29 Executive Summary |