Recovering a Portion of Federal Irrigation Project Construction Costs Through Revenues From Department of Energy Electric Power Sales

Pursuant to a congressional request, GAO provided information on the recovery of federal irrigation project construction costs through Department of Energy (DOE) power sales revenues, focusing on: (1) the legal requirements for cost recovery; (2) the amount of construction costs projected to be recovered; and (3) how DOE is providing for the recovery of construction costs.

GAO found that: (1) federal law requires irrigation project users to repay construction costs allocated to irrigation projects within 50 years from the date water is first delivered; (2) construction costs allocated to power projects are recovered from power sales revenues; and (3) power sales revenues are frequently used to pay construction costs allocated to irrigation that are beyond the users' ability to pay. About $14.1 billion in irrigation project construction costs are to be recovered from power revenues, of which $8.4 billion is for projects that have been authorized but not built. In addition, GAO found that: (1) two of the five DOE power marketing administrations have irrigation-related repayment responsibilities; (2) the Bonneville Power Administration (BPA) is responsible for the repayment of $2.7 billion in irrigation assistance and does not plan to repay the Treasury until the end of the authorized repayment period for each project; (3) the Western Area Power Administration (WAPA) is responsible for $11.4 million in irrigation assistance and plans to repay some of its irrigation-related debt before it is due; and (4) WAPA and BPA plan to make their first irrigation debt payments in 1985 and 1997, respectively.