Issues Paper, Central Utah Project

Page 122

60 more than M§I and power benefits, more of the joint invest­ment costs are assigned to agriculture. The advantages of doing this are twofold. First, the agricultural investment is interest-free. So that the more of the CUP capital costs assigned to it, the lower are the total repayment costs. Second, the use of revenues produced by other federal elec­tric generating facilities to subsidize agriculture has far more support than the use of those funds to subsidize private energy companies or urban lawn watering. Most of the invest­ment costs allocated to agriculture are not paid by area residents at all but by federal power funds. 2. The M§I Water Investment Gift Purchasers of M§I water will repay the $245,607,000 capital cost over 40 years at 3.22 percent interest. The annual payment if this repayment were, in fact, stretched over 40 years would be $11,010,000. The annual payment if 7 percent interest had to be paid would be $18,420,000. Thus M§I users get an annual gift of $7,410,000 which has a present value (40 years, 7 percent) of $98,790,000. M§I users are allocated 99,000 af. Thus the free investment in each acre-foot is about $1,000 or about $264 in a "full service equiva­lent" household.* Again a substantial "free" gift to resi- *Average per capita water consumption for 1970-75 was mea­sured by the Salt Lake City Water Department at 0.264 af/yr. It should be noted that repayment for M§I water will not be spread over 40 years. Since interest has to be paid on that portion, all revenues will first go to repay M§I debts, then