Bureau of Reclamation's Bonneville Unit of the Central Utah Project Future Repayment Arrangements

GAO testified on its concerns regarding future repayment arrangements for the Bureau of Reclamation's Bonneville Unit, Central Utah Project. In a previous report, GAO concluded that: (1) the Bureau's use of the Water Supply Act of 1958 to defer the repayment of costs associated with the majority of municipal and industrial water supplies of the Bonneville Unit was illegal; (2) such a deferment could result in the loss of up to $97 million in interest revenues to the federal government; and (3) the Bureau did not seek the required congressional approval of a 1984 modified cost allocation of the Bonneville Unit. Pursuant to the requirements of the Energy and Water Development Appropriation Act, the Bureau submitted a copy of the supplemental repayment contract between the Bureau and the district to Congress to initiate the 100-calendar day waiting period prior to the obligation or expenditure of funds that the act will make available for the Bonneville Unit. GAO believes that: (1) none of the available funds should be used for the Bonneville Unit until the supplemental repayment contract has been revised to eliminate the inappropriate deferment of construction costs and interest repayment; and (2) full disclosure of the reasons for and the impact of changes in cost allocation should be made to the cognizant committees because the allocation will reduce the interest that the Bureau collects on repayment.