A plan devised last year to finance $370 million worth of Central Utah Project features outside traditional federal channels has grown into a $2.64 billion agreement between public power and water users in Utah, Wyoming, Colorado and New Mexico.
Terms of the agreement, released in cursory form Wednesday, indicate the proceeds of a 6-mill increase in power rates from federal hydroelectric generating stations on the Colorado River system would be divided among the four states for water projects.The increase would begin in 1991 and would escalate 4 percent per year over 15 years, then would level off for the remaining 25 years of the agreement, said Ted Rampton, water and power issues manager for the Intermountain Consumer Power Association.
In addition, public power users would contribute one-half mill each year for environmental-mitigation projects. That amount would also be matched by water users in each of the states and would total about $6 million each year.
Water and public power officials have been twisting each others' arms and haggling about the agreement for more than eight months. Not until after a March 23 meeting in Phoenix did the two groups start working on a joint information release that offered a few details of the agreement. That release took almost a week to write.
An April 11 meeting has been scheduled in Washington, D.C., after which the two sides hope to reduce the agreement to legislation - the plan goes nowhere without congressional approval.
"Generally we're looking to the Utah delegation to sponsor the legislative package," Rampton said. "It would sell a lot better with Congress if it were a joint deal."
The plum for the water users would be new money for water projects in the four states - an estimated $2.2 billion over the next 40 years. The states would be required to make a 30 percent local financing match to use the money, except in the case of the CUP where the contribution by the local sponsor would be 20 percent. Projects would also have to meet all existing federal construction and environmental standards.
The CUP is also an exception because it is already under construction, "but just out of money," Rampton said.
Completion of the CUP and other Colorado River Storage Projects is in peril because construction costs are approaching the spending ceiling authorized by Congress. A bill introduced last year that would have raised that spending ceiling was unsuccessful.
The incentive for the power users to go along with financing new water projects is that public power was facing a 6-mill rate increase anyway to pay for federal water projects authorized in 1956 that are now completed. Federal power revenues have also been committed to pay for projects that were authorized in 1956 but were never built.
With the new agreement, public power's repayment obligations for unbuilt federal water projects would be wiped out. "Those other projects that were authorized go away," and so does public power's obligation to pay for them, said Rampton.
The new money would bypass the annual congressional appropriation process and would go straight to the states, with the federal government retaining oversight over how the money was used, but not over whether money was available in a given year.
Chances are the Bureau of Reclamation, the builder of federal water projects, could also be bypassed, all or in part, with the states taking control of construction.
Just who would administer the $6 million in environmental-mitigation money each year has yet to be agreed on, Rampton said. "There are some important details that have yet to be worked through," he said. "Just the mechanics mostly."