Recently Released Report
Central Valley Repayment Status and Payoff
We conducted an evaluation to determine whether the Federal Government is making steady repayment progress and is on track to recoup its investments in the Bureau of Reclamation’s (USBR) Central Valley Project (CVP) by the legally established deadline of 2030.
USBR began construction of the CVP in California in October 1937. It is currently the largest water supply project in the United States, providing water to more than 3 million acres of farmland, which produce crops worth $3 billion a year. In addition, the CVP supplies water to nearly 1 million households each year. Power generation facilities constructed as a part of the CVP provide power equivalent to the annual energy needs of 650,000 Californians. As of 2011, the total reimbursable Federal investment in CVP facilities providing water for irrigation and municipal and industrial purposes was $1.3 billion.
We found that USBR’s water ratesetting policies do not ensure that an appropriate share of capital costs and prior-year funding deficits are repaid annually. The current CVP ratesetting policies, water projection methods, and contract provisions do not ensure that sufficient revenue is available each year to recover annual operations and maintenance costs and to repay an appropriate share of the remaining Federal investment in the Project. For example, water deliveries to the CVP contractors can be highly variable, and when actual water deliveries are less than projected deliveries, revenues are insufficient for investment recovery. When water deliveries exceed projected deliveries, however, excess revenues collected by USBR must be refunded to the contractors.
Read the full report here.