either unit would be more expensive, under present-day estimated costs, than power from alternative sources. We believe that power needs of the western slope area can be taken care of, for the time being at least, by use of energy from the recommended units. Colorado will need more power as well as storage capacity in the immediate future. Every effort should be made to assure means of meeting that need, and to that end the Congress may wish to consider authorization of the Curecanti or some other storage unit in western Colorado. 16. The States of the upper division of the Colorado River Basin recommended that provision be made for additional funds for investigations in the upper Colorado River Basin prior to the time the investigations fund recommended in the proposed report comes into operation. Their recommendation for establishment of an upper Colorado River development fund, which is not covered in the regional director's report, is incorporated herein pursuant to recommendations previously received from the States of the upper basin. In addition. the need for additional funds during the interim period prior to the time the fund is effectuated is recognized. The recommendations of the States for additional investigations funds will undoubtedly be given consideration by the Congress. 17. Colorado recommended that the La Plata project be included as a participating project. The plan for the project as presently contemplated does not appear to be economically justified at this time. The La Plata project area is, however, being reanalyzed and, in addition, further consideration can always be given to the present plan of development under changed economic conditions. If the results are favorable, the La Plata project can be recommended as a participating project at an appropriate time. 18. New Mexico recommended that the project construction schedule be revised so that the Navaho unit could be constructed at the same time as the other initial units. Although the Navaho Dam and Reservoir is no longer recommended as one of the initial storage project units, its inclusion as a part of the Navaho project will permit its construction to be initiated as soon as it is needed and concurrently with the schedule of construction for the initial storage units if necessary requirements can be met. 19. The reviewing official of the State of Nevada stated that Nevada had no objection to the report. Subsequently the Bureau of Reclamation was requested to include the detailed comments made by the State on an earlier draft of the report as a part of Nevada's official comments. This has been done, although some of the matters discussed are not applicable to the report which was under review. 20. The views of the fish and game departments of the States of Arizona, Colorado, New Mexico, and Utah, commenting on the 6-year program of the Fish and Wildlife Service, are favorable. Copies of these comments are included as a part of this report and the fish and wildlife program has been incorporated in the substantiating materials to the report of the regional director. 21. Numerous other comments have been made which are summarized in the attached digest of comments and recommendations by States and Federal agencies on the Colorado River storage project report. As is the case on any project of this magnitude there will be many details, such as exchanges of water rights, the use of existing facilities, and similar items, to be worked out by negotiations with 45515-54- -4 water users and others prior to construction of the affected parts of the project. 22. Subsequent to the review of the proposed report by the States and agencies, further careful consideration has been given to a selection of the units of the storage project which should be recommended for initial authorization. Immediate needs of the basin are for storage space to permit holdover of water for release to the lower basin as required by the Colorado River compact while allowing substantial growth in consumptive use in the upper basin, and for power generating facilities to assist in meeting power load growth in and adjacent to the Colorado River Basin. The reservoirs must be completed and filling started at the earliest practicable date, because as consumptive uses in the upper basin increase there will be less and less water available for filling the reservoirs. Under the terms of the Colorado River compact, requiring delivery of water at Lee Ferry, the Glen Canyon Reservoir, located just above this point, occupies a key position for regulating water deliveries to the lower basin. Likewise, the Echo Park Reservoir, centrally located in the upper basin and controlling the upper Green and Yampa Rivers, occupies a strategic position. In particular, as the increased use of Green River water increases its salinity, the Echo Park Reservoir will permit mixing it with the relatively pure waters of the Yampa, so that the quality of water releases from the reservoir will be improved. The powerplants of the two reservoirs likewise are strategically located to permit economically serving the major loads expected to grow in the area. For these reasons, it has been concluded that the Glen Canyon and Echo Park units should be recommended for authorization at this time with transmission facilities necessary to interconnect these and other Federal hydroelectric plants and to market the power, and with recreational and associated facilities as recommended by the Director of the National Park Service which are incidental to the construction of dams and reservoirs in the Dinosaur National Monument. Every effort has been made to find suitable alternatives for the Echo Park and Split Mountain units because of their encroachment on the Dinosaur National Monument, but no adequate substitute for the Echo Park unit has been found because of the increased evaporation which will take place from the greater surface areas, at lower elevations, of the alternative reservoirs. Reasons for the elimination of the initial recommendations of the Whitewater unit and of the Navaho unit as two of the initial storage project units have been covered earlier in this report. After review of the purposes to be served by the Flaming Gorge unit, which was formerly recommended for initial authorization, it is believed that it might well be deferred for future development. The Echo Park unit will probably meet immediate needs in this area and Flaming Gorge can be recommended at a later date when it is required. 23. The necessary coordination of the storage project units and the participating projects for financial assistance can be accomplished without the establishment of the upper Colorado River account recommended in the underlying report and without applying the interest component of the power revenues to irrigation repayment. In order that all reimbursable costs of the project can be repaid to the Treasury without applying the interest component of the power revenues and without the establishment of the basin account, it is our recommendation that repayment of the costs which are allocated to irrigation and assigned to be repaid from power revenues be made from net power revenues after completion of the return of the commercial power investment, including interest during construction, with interest on the unamortized balance at a rate equal to the average rate paid by the United States on its long-term loans outstanding at the date of authorization of the project. 24. The estimated cost of the recommended units of the Colorado River storage project and the initial participating projects as recommended for authorization herein is $1,134,643,000 at January 1953 price levels, itemized as follows: Seedskadee, Wyo.. Silt, Colo... Smith Fork, Colo.. Paonia, Colo... Eden, Wyo-- Shiprock (Indian) division of Navaho project, including Navaho Total___. Construction of the Shiprock division would not be initiated until a report thereon has been submitted to the States and approved by the Congress. The cost of the Eden project, Wyoming, $7,287,000, which would be one of the initial participating projects under the recommendation contained herein, is included in the above tabulation although it is already authorized by the Congress and no further authority is required to complete construction. The full cost of the Paonia project is also included, although a portion of this project has been authorized, is already constructed, and the water users have contracted to repay the construction costs. The proposed reauthorization would increase the scope of the project, and incorporate it into the storage project for repayment of that part of the costs which exceeds the water users' repayment ability. 25. In addition to the aforementioned costs, the recreational planning and construction program and the archeological, wildlife, and geological programs, to be accomplished by the National Park Service in connection with the work in Dinosaur National Monument, are estimated to cost $21 million. This work is of national significance, and the cost thereof should be nonreimbursable, and the funds should be appropriated as part of the National Park Service program. 26. Of the cost of the two initial units of the storage project, $98,300,000 would be allocated to irrigation and other water consuming uses, and $499, 400,000 would be allocated to power, under the alternative-justifiable expenditure theory of cost allocation. Allocation of costs of the participating projects will be the subject of further study in connection with preparation of detailed plans. 27. The Colorado River storage project and the initial participating projects, as recommended herein, have engineering feasibility, are economically justified, and, as a whole, would have financial feasibility if authorized by the Congress substantially in accordance with the recommendations contained herein. The project units and the participating projects recommended for initial authorization and development are sorely needed to permit meeting the requirements of the compacts and the international commitments with respect to the Colorado River and to provide for economic stability and development of the upper Colorado River Basin. Benefits from irrigation and other beneficial water consuming uses would be realized through construction of the dependent participating projects. The evaluated annual power benefits from the initially recommended units of the storage project exceed their annual costs in the ratio of 1.64 to 1. The benefit cost ratios for the initial participating projects computed in accordance with present Bureau of Reclamation practice, all exceed unity under present conditions. Irrigation revenues from the participating projects will pay the operation, maintenance, and replacement costs of those projects allocated to irrigation, and, in addition, for each project recommended, will repay a part of the capital cost of the participating project. Repayment of the power allocation of each of the recommended storage project units and the power allocation of the central Utah project, including interest during construction and including interest on the unamortized balance at a rate equal to the average cost to the Government of long-term money, now estimated at 221⁄2 percent, can be accomplished by power revenues based on an average rate of 6 mills per kilowatt-hour within a 44-year period from the date the initial power unit is placed in operation. The 6-mill rate is used for illustrative purposes only. The actual selling price of the power will be established at rates consistent with sound business principles and taking into account the irrigation costs which are to be assigned for repayment from power revenues. Repayment of the irrigation allocation of the initial storage project units and the portion of the costs of the 12 non-Indian participating projects allocated to irrigation and other water-consuming uses that exceeds the repayment ability of the water users, a total of $268,829,000, and the portion, $165,525,000, of the costs of the Shiprock Indian division of the Navajo project which is expected to be assigned for repayment from power revenues will be accomplished by the application of the net power revenues after the power costs are repaid. With annual net power revenues at the 6-mill average rate of about $17 million from only the 2 initial units, as indicated on the attached financial operations study, repayment of the known irrigation costs could be accomplished within approximately 16 years after the close of the 44-year period of operations required for repayment of the power allocations of the first 2 units. Repayment of the costs of the Shiprock Indian Division would require an estimated additional 10 or 12 years. Even if all of the units, including the Shiprock division, were started and completed simultaneously, the period required for repayment of all reimbursable costs would not be in excess of the 50-year period recommended in Budget Circular A-47. Differences in complexities of construction and magnitude of the various units, lengths of development periods, and practicalities of appropriations will all dictate a staggered starting and completion schedule. 28. The units of the storage project would be operated as a system in order to produce by integration the maximum benefits from the sale of hydroelectric energy. Analyses of the power production of the nine units of the storage project on an incremental basis are contained on the attached summary sheets in order to show how each unit will fit into the system. One analysis is of the system including the 2.5 million acre-feet Curecanti Reservoir as originally planned by the Bureau of Reclamation. The other analysis includes the 940,000 acrefoot Curecanti desired by Colorado. Recommendation for authorization of other than the initial units will be supported by further additional studies. 29. The recommendations of the Bureau of Reclamation follow. They incorporate all the modifications to the recommendations of the regional director discussed above and thereby supersede all previous recommendations: It is recommended (a) That the physical plan of development of the water resources of the upper Colorado River Basin as described in the underlying report of the regional director and as modified by this supplement report be approved; (b) That authority be sought for the Secretary of the Interior, acting pursuant to the Federal reclamation laws (act of June 17, 1902) (32 Stat. 388) and acts amendatory thereof or supplementary thereto, to construct, operate, and maintain (i) the following units of the Colorado River storage project: Glen Canyon Echo Park including transmission facilities to interconnect them and other Federal plants and to market the power produced, and (ii) the following initial participating projects subject to the other appropriate portions of these recommendations: all as described in the report of the regional director but with such modification of, omissions from, or additions to the works as the Commissioner of Reclamation, with the approval of the Secretary, may find proper; (c) That, as contemplated in its authorizing legislation, the Eden project, Wyoming, which has previously been authorized and is partially constructed, be included in the plan of development and that the storage project be charged with that portion of the reimbursable construction costs of the Eden project which is in excess of the amount specified to be repaid by the water users in the act of June 28, 1949 (63 Stat. 277); and that the Paonia project, Colorado, as described in the regional director's report, which is also partially constructed, be included in the plan of development and that the storage project be charged with that portion of the reimbursable costs of the Paonia project which is in excess of the amount which will be repaid within the period specified in the act of June 25, 1947 (61 Stat. 181); (d) That, pursuant to the recommendation of the Commissioner of Indian Affairs, and in order to consolidate the recommendations of the |