Financing the Central Arizona Project

Document: Financing the Central Arizona Project, May 1967? page 5What the above summary demonstrates is that the irrigation water does not pay its own costs, but is subsidized principally from either of two sources: (1) A relatively high charge for M&I water; or (2) an ad valorem tax. In most but not all water projects in the West much of the subsidy for irrigation is from surplus power revenues of one or more federal dams. There are, however, some federal water projects which have been authorized and built without subsidy from power revenues, for example, Weber Basin Project, Utah; Gila Project, Arizona; and the All-American Canal System--California. The Weber Basin Project, like the Central Arizona Project, is characterized by a substantial percentage of the water use being non-irrigation. For the Central Arizona Project it is forecast that 30% of the average available water will be used for municipal and industrial purposes by the year 2000, and almost 50% by the year 2030. The above summary of repayment of reimbursable costs also shows that irrigation would receive a $72,000,000 subsidy as surplus revenues from the sale of project power. There will not be such a large surplus if Arizona gets its full entitlement of water from the Colorado River for the entire 50-year payout period...because essentially all the 400,000 kw of pumping power will be needed for pumping. But, to be on the conservative side, it has been estimated that beginning in about 1990, Arizona will get something less than its full water entitlement, which would reduce somewhat the need for pumping power. The power excess to pumping needs would be sold at an estimated price of 5 mills, which appears 5Epson Perfection 4870 Photo, 400 dpi, 8 bit, 1,016,721 byte