A contingency plan for non-federal financing on the Diamond Fork system of the Central Utah Project was on the table at a House subcommittee hearing Wednesday.
The plan would allow the Central Utah Water Conservancy District, the state CUP sponsor, to finance construction of the Diamond Fork power system and use hydroelectric power revenues to repay the costs of developing an irrigation system to convey project water collected in Strawberry Reservoir to farmers in central Utah.The current plans call for Diamond Fork to be built by the Bureau of Reclamation as part of the Colorado River Storage Project, of which the CUP is a part. But the Colorado River Storage Project will soon be out of money, and members of Utah's congressional delegation fear Congress will find Diamond Fork's $450 million price tag a little hard to accept especially during an election year.
Rep. George Miller, D-Calif., the chairman of the House Subcommittee on Water and Power, concurred during a recent field hearing in Salt Lake City that election-year politics and the shortened legislative calendar that accompanies the election year will be major complications in getting such a spending bill through Congress.
Miller conducted Wednesday's hearing in Washington, D.C., where a Utah delegation bill that requests new money for the Colorado River Storage Project was to be discussed.
With Diamond Fork included, the amount requested to finish the CUP's Bonneville Unit and several isolated projects in Utah and Colorado totals $565.4 million an amount cut by $200 million from a bill introduced by the delegation in October.
If an acceptable non-federal financing plan is fully developed and Diamond Fork is cut from the bill, the request for money would be in the neighborhood of $115 million.
Rep. Wayne Owens, D-Utah, announced at the opening of the Wednesday hearing that the state's delegation has agreed to "basic premises whereby the irrigation and drainage components will be privately financed. This means that the authorization for additional funds can in fact be reduced to a total of approximately $370 million, less than half the $754 million which originally was requested in legislation introduced last fall."
Rep. Howard Nielson, R-Utah, who followed Owens, said, "I frankly believe that the original bill, which simply raised the authorization ceiling for the project, was a better approach. I still believe we can fashion an acceptable bill. We cannot, however, do so in the dark."
Nielson said he had seen no completed copy of the bill Owens was referring to.
It appeared that staff members for Owens and Sen. Jake Garn, R-Utah, were still working out details of a bill as the committee opened its testimony.
If a financing plan for Diamond Fork is not worked out, be it federal or non-federal, other CUP costs will have to be absorbed in the rates for municipal water that is to be delivered along the Wasatch Front, mostly in Salt Lake County. Bob Weidner, an aide to Garn, said those rates could go from $200 an acre-foot to $350 an acre foot or more, if that happened.
The non-federal financing plan plan was developed under the gun by conservancy district officials after Garn requested it April 22. Laurie Snow, Garn's press secretary, said the plan, released Tuesday evening, is only a working document at this point something to provide a basis for discussion at the subcommittee hearing.
Another reason for developing the alternate financing plan is to demonstrate to Congress that Utah's congressional delegation isn't "just sitting on its hands hoping things will work out," Garn aide Bob Weidner said.
If federal money is not obtained or even sought through a Utah delegation bill, the conservancy district's plan would put the district in charge of construction and operation of Diamond Fork's power and water features, and make the district the owner of the features it builds.
Power would be marketed through Western Area Power Administration, which markets all other Colorado River Storage Project power from federal dams, with the district having an exclusive license for the development, operation and maintenance of all commercial facilities associated with the CUP's Bonneville Unit.
The plan also calls for the conservancy district to receive a yet undetermined amount of federal money to cover a portion of construction costs. The repayment of reimbursable federal money would be subject to the public power preference clause of 1939.