- -

TITLE 34 OF PUBLIC LAW 102-575

2

CENTRAL VALLEY PROJECT IMPROVEMENT ACT

CENTRAL VALLEY PROJECT - CALIFORNIA

INTERIM GUIDELINES:

RESTORATION FUND PAYMENTS AND

OCTOBER 1993

United States Department of the Interior

Bureau of Reclamation

Sacramento, California

REVISED

CHARGES
REVISED INTERIM GUIDELINES:

RESTORATION FUND PAYMENTS AND CHARGES

CENTRAL VALLEY PROJECT IMPROVEMENT ACT

TABLE OF CONTENTS

ABSTRACT

PART A -

PART B -

PART C -

PART D -

PART E -

PART F -

PART C -

PART H -

PART I -

PART J -

PART K -

APPENDIX

APPENDIX B:

APPENDIX C:

Pane

1

DEFINITIONS 4

DEPOSITS TO THE RESTORATION FUND 8

PRE-RENEWAL CHARGES 10

TIERED WATER RATES 13

TRANSFERRED WATER RATES 17

FRIANT SURCHARGES 21

M&I SURCHARGES 23

RESTORATION PAYMENTS 26

NOTIFICATION OF AMOUNTS TO BE PAID 34

NON-FEDERAL CONTRIBUTIONS 35

RESTORATION FUND FINANCIAL REPORTS 36

A: APPLICATION OF PAYMENTS AND SURCHARGES:

EXAMPLE CALCULATIONS 37

- CHARGES FOR DELINQUENCY PAYMENTS APPLICABLE TO

EXCHANGE CONTRACTORS 42

RESTORATION PAYMENTS: EXAMPLE CALCULATION 43

i
ABSTRACT

Obiective and Authority

To develop interim guidelines for the calculation, assessment, collection and

crediting of payments and charges to be paid by Central Valley Project

(Project) water and power beneficiaries as required by subsections 3404(c)(3),

3405(d), 3405(a)(l)(B), and 3406(c)(l), and Section 3407 of Title 34 of Public

Law 102-575. The incremental revenues collected as a result of the

requirement to pay these payments and charges shall constitute the Project

Restoration Fund (hereafter referred to as the Restoration Fund) and are to be

used by the Secretary of the Interior (Secretary) as required by Title 34.

The Restoration Fund

The Bureau of Reclamation has established the Restoration Fund account in

which to deposit and record the receipt of monies appropriated by Congress to

carry out the programs, projects, plans, and wildlife restoration, improvement

and acquisition provisions of Title 34.

De~osits

All incremental revenues collected as a result of the requirement to pay PreRenewal Charges [subsection 3404(c)(3)J, Tiered Water Rates [subsection

3405(d)], Transferred Water Rates [subsection3405(a) (1) (B)], Friant

Surcharges [subsection 3406(c)(1)], Municipal and Industrial Surcharges

[subsection 3407(d)(2)(A)] (herein collectively referred to as the NonDiscretionary Payments), which are to be assessed and collected annually’ by

Reclamation, and all Non-Federal Contributions [subsection3407(a)], if any,

which are received to advance the specific purposes of Title 34, will be

deposited into the Restoration Fund.

The other principal source of funds - - referred to in the Interim Guidelines

as Restoration Payments [subsections3407(c) and (d) (and sometimes referred

to as Discretionary Payments)] -- cannot be collected, at least through fiscal

year 1997, absent Congressional appropriations. If the total amount

appropriated on an annual average basis by Congress following enactment of

Title 34 does not equal $50 million (October 1992 price levels), the Secretary

shall - - as may be limited by the various provisions of subsection 3407(d) of

Title 34 - - automatically impose Restoration Payments in each year thereafter

sufficient to provide for the annual collection of $50 million (October 1992

price levels). The later action will change the Restoration Payments from

Discretionary Payments to Non-Discretionary Payments.

1 Consistent with Title 34, Pre-Renewal Charges will not be assessed and

collected until certain conditions are met. See Part C of these Interim

Guidelines.

1
Diagram 1 illustrates the relative relationship of the Discretionary Payments,

Non-Discretibnary Revenues and Non-Federal Contributions, if any, to the

Restoration Fund.

Authority to Use Funds

Restoration Funds to carry out the provisions of Title 34 are made available

in two ways:

1. Non-Federal Contributions for a specific purpose are available for

expenditure without Congressional action. These funds can only be

expended for the expressed purposes of the contributions and, in

contrast to the Discretionary Payments and Non-Discretionary

Revenues, are not subject to appropriation.

2. All remaining funds (which can vary from $0 to as much as $50

million annually) (October 1992 prices) are made available by

Congress through appropriations for use by the Secretary to carry

out the provisions of Title 34.

All Non-Discretionary Revenues are automatically received and deposited into

the Restoration Fund. However, these receipts cannot be used unless and until

appropriated. by Congress. At least through fiscal year 1997, the other source

of Restoration Funds -- the Discretionary Payments -- are to be assessed and

collected in response to, and to the extent required by, Congressional

appropriations. Restoration Fund revenues do not need to be collected prior

to expenditure by the Secretary, Drovided there is a reasonable expectation

that the funds will be collected as provided in these Interim Guidelines in

the subject fiscal year, and the applicable appropriations do not mandate

advance collection.

Annually, the Secretary will develop a budget and request the appropriation of

funds from the Restoration Fund for Title 34 activities. A portion of those

funds will be derived from the projected collection of Non-Discretionary

Revenues. Appropriate language will be included in the budget request to

raise the remaining amount, if any, through assessment and collection of

Discretionary Payments. However, at least through fiscal year 1997, the final

amount of Restoration Fund collections and amounts to be made available, if

any, from the Restoration Fund each year is the prerogative of the Congress

and is to be decided through the appropriation process.

2
DIAGRAM 2.

REVENUES TO BE APPLIED TO THE RESTORATION FUND,

CENTRAL VALLEY PROJECT, TITLE 34, PUBLIC LAW 102-575

—Non-Discretionary —

Revenues

2,

Discretionary

* Payments

*

*

*

*

*

*

*

*

*

*

Pre-Renewal Charges

Friant Surcharges

Transfer Revenues

Tiered Rate Revenues

M&I Surcharges

Restoration Payments

Irrigation

Water

M&I Water

*** Non-Federal Contributions

Voluntary

2 The Restoration Payments will remain Discretionary Payments at least

through fiscal year 1997. If annual appropriations following enactment of

Title 34 do not equal $50 million (October 1992 price levels), the Secretary

shall impose Restoration Payments each year thereafter sufficient to collect

annually $50 million (October 1992 price levels). Under such circumstances,

Restoration Payments become Non-Discretionary Payments.

RESTORATION

FUND

Commercial

Power

3
PART A

DEFINITIONS

As used herein, the term:

1. “Act” means the Central Valley Project Improvement Act (CVPIA), Title

XXXIV of Public Law 102-575, enacted October 30, 1992.

2. “Project” means the Central Valley Project, California.

3. “Secretary” means the Secretary of the Interior, or his designee.

4. “Project Water” means all water that is developed, diverted, stored or

delivered by the Secretary in accordance with the statutes authorizing

the Central Valley Project and in accordance with the terms and

conditions of water rights acquired for the Central Valley Project

pursuant to California law.

5. “Water Contractor” shall mean any entity or individual who is a party to

a Water Service Contract, a Repayment Contract or a Water Rights

Settlement Contract with the United States for a Project Irrigation

and/or Municipal and Industrial Water supply, which may be supplemental

to a non-Project water supply, pursuant to Section 9 of the Reclamation

Project Act of 1939, as amended and supplemented.

6. “Irrigation Water” means Project Water to be used for agricultural

purposes as set forth in the Water Contractor’s Water Service, Repayment

or Water Right Settlement Contract.

7. “Municipal and Industrial (M&I) Water” means Project Water to be used

for other than agricultural purposes as set forth in the Water

Contractor’s Water Service, Repayment or Water Rights Settlement

Contract.

8. “Repayment Contract” means a contract with the United States providing

Project Water pursuant to subsections (c)(l) and/or (d) of Section 9 of

the Reclamation Project Act of 1939.

9. “Water Service Contract” means a contract with the United States

providing Project Water pursuant to subsections (c)(2) and/or (e) of

Section 9 of the Reclamation Project Act of 1939, including Water Rights

Settlement Contracts which provide for the delivery of supplemental

Project Water.

10. “Warren Act Contract” means a contract with the United States providing

for the storage and/or conveyance of non-Project Water in and/or through

Project facilities pursuant to the Act of February 21, 1911 (Public Law

4
61-406), as supplemented by Section 305 of Public Law No. 102-250 and

subsection 3408(c) of Public Law No. 102-575, between the United States

and an entity

11. “Water Rights Settlement Contract” means a contract with the United

States providing a supply of Base Water pursuant to Section 14 of the

Reclamation Project Act of 1939 (1939 Act) and probably but not

necessarily a supplemental supply of Project Water pursuant to Section 9

of the 1939 Act, as amended and supplemented.

12. “Base Water” means the quantity of non-Project Water made available to a

Water Contractor without payment to the United States and without

application of the acreage limitation provisions of Federal reclamation

law as specified in a Water Rights Settlement Contract with the United

States,

13. “Exchange Water” means the Project Water made avaIlable during each year

to the Exchange Contractors pursuant to the Exchange Contracts without

payment to the United States and without application of the acreage

limitation provisions of Federal Reclamation law.

14. “Exchange Contract” means a contract with the United States entered into

pursuant to Section 14 of the Reclamation Project Act of 1939, as

amended and supplemented, providing a supply of Project Water to an

Exchange Contractor in lieu of the Exchange Contractor exercising

certain rights to the use of other waters.

15. “Exchange Contractors” means the entities or individuals who are parties

to an Exchange Contract with the United States for an Exchange Water

supply pursuant to Section 14 of the Reclamation Project Act of 1939, as

amended and supplemented.

16. “Additional Project Water” means that Project Water made available by

the United States to a Water Contractor in a given year which is in

excess of the maximum total quantity of Project Water specified in the

long-term Water Service, Repayment or Water Rights Settlement Contract

with the Water Contractor.

17. “Flood Water” means a temporary Project Water supply made available to a

Water Contractor as a result of an unusually large water supply not

otherwise storable for Project purposes or infrequent and otherwise

unmanageable flood flows of short duration.

18. “Delivered Project Water” means all Project Water scheduled by the Water

Contractors or Exchange Contractors for delivery by the United States

consistent with the terms of the applicable contract and made available

by the United States at the approved point(s) of delivery, less that

Project Water which is not diverted but remaining under the physical

control of the Project (e.g., in a Project canal).

19. “Section 215 Water” means Flood Water made available to the Water

Contractor for agricultural purposes without application of the acreage

5
limitations and/or the full-cost provisions of Federal reclamation law

pursuant to a contract with the United States. [See 43 CFR Section

426.13(a) (3) .1]

20. “Cost of Service Water Rate” means the annual charge for Irrigation

Water and H&I Water established pursuant to the then applicable Project

Water ratesetting policy which will recover all costs assigned to the

Irrigation and M&I Water supply functions, respectively, within the

established repayment period.

21. “Irrigation Full Cost Rate” means the annual charge described in

paragraph (3) of Section 202 of the Reclamation Reform Act of 1982

(RRA), which, as determined by the Secretary, amortizes the expenditures

for construction allocable to Project irrigation facilities in service,

including all operation and maintenance (0&M) deficits funded, less

payments, over such periods as may be required under Federal reclamation

law or applicable contract provisions, with interest on both accruing

from October 12, 1982, on costs outstanding at that date, or from the

date incurred in the case of costs arising subsequent to October 12,

1982.

22. “M&I Full Cost Rate” means the annual charge described in paragraph (3)

of Section 202 of the RRA, which, as determined by the Secretary, shall

amortize the expenditures for construction allocable to M&I facilities

in service, including all operation and O&M deficits funded, less

payments, over such periods as may be required under Federal reclamation

law or applicable contract provisions, with interest on both accruing

from the dates such costs were first incurred.

23. “Non-Discretionary Payments” means those payments and charges required

by the Act to be assessed and collected by the Secretary independent of

the level of Congressional appropriations relative to the Central Valley

Project Restoration Fund.

24. “Non-Discretionary Revenues” means those incremental revenues which are

accrued as a result of the annual collection of the Non-Discretionary

Payments required by the Act and which exceed the amounts that would

have been collected in the absence of the requirement to pay the NonDiscretionary Payments.

25. “Discretionary Payments” means those payments and charges required by

the Act to be assessed and collected by the Secretary as may be required

by Congress through the annual appropriations process.

3

~ “Discretionary Revenues” are the same as “Discretionary Payments” as

100 percent of the Discretionary Payments are to be credited to the

Restoration Fund. Accordingly, there is no need to include a definition of

“Discretionary Revenues.

6
26. “Transfer Revenue” means that portion of the Transferred Water Rate as

described in Part E of the Interim Guidelines which is in excess of the

Water Contractor’s Cost of Service Water Rate, if applicable, and is to

be credited to the Restoration Fund in the absence of the requirement to

pay the Irrigation Full Cost Rate pursuant to the RRA.

27. “Ability to Pay” is that portion of the increased net farm income

attributable to the off farm water supply (supplies) after allowances

have been made for returns to farm investment and to family labor and

management.

7
PART B

DEPOSITS TO THE RESTORATION FUND

[Subsection 3407(a)]

1. Revenues to be Deoosited

The Restoration Fund shall serve as the depository in the Treasury of the

United States for all revenues received by the Secretary from the following

sources:

a. Pre-Reneval Charges [subsection3404(c)(3)] - Described in Part C of

th~se Interim Guidelines

b. Tiered Water Revenues [subsection3405(d)] - Described in Part D of

these Interim Guidelines

c. Transfer Revenues [subsection3405(a)(l)(B) - Described in Part E of

these Interim Guidelines

d. Friant Surcharges [subsection3406(c)(l)] - Described in Part F of

these Interim Guidelines

e. M&I Surcharges [subsection3407(d)(2)(A)] - Described in Part G of

these Interim Guidelines

f. Restoration Payments [subsection3407(c) & (d)] - Described in Part

H of these Interim Guidelines

g. Non-Federal Contributions [subsection3407(a)] - Described in Part J

of these Interim Guidelines

All interest and penalty charges collected for delinquent payment of

Restoration Fund payments and charges required by this Act shall be deposited

to the Restoration Fund, but will not be credited to the Water Contractor or

Power. All administrative charges collected for past due payment of

Restoration Fund charges and payments shall be deposited to the Treasury of

the United States without credit to the Water Contractor or Power.

8
2 ~‘~“‘- Accounts

On behalf of• the Secretary, Reclamation shall keep accounts of all payments

deposited in the Restoration Fund on behalf of each Water Contractor and of

the total payments received from Power. Deposits to the Restoration Fund

which are used to pay for the projects, studies or facilities set forth in

subsection 3406(b)” of the Act shall offset an equal amount of the Water

Contractors’ or Power’s assigned repayment obligations resulting from the

implementation of any activities described in the Act.

“ Many subsection 3406(b) activities are wholly or partially

reimbursable. Costs assigned to the reimbursable functions, including power

and water, are to be allocated and recovered consistent with conventional

Reclamation law and policy. Construction costs are usually capitalized

through the power and water rates. In the event Restoration Funds are used to

~upfront finance” subsection 3406(b) activities, the CVPIA requires that all

amounts so used be immediately credited to the Water Contractors and Power.

9
PART C

PRE-RENEWAL CHARGES

[Subsection 3404(c) (3)1

1. APPlicabilitY

Beginning on October 1, 1997, or January 1 following the calendar year of

completion of the programmatic environmental impact statement (PEIS) required

by Section 3409 of the Act, whichever occurs first, all Water Contractors

having an existing Water Service, Repayment or Water Rights Settlement

Contract which was in effect on October 30, 1992, excepting those Water

Contractors specifically exempted as described below, shall be assessed

annually a pre-renewal mitigation and restoration payment (hereafter referred

to as Pre-Renewal Charges) for each acre-foot of Delivered Project Water.

For the purposes of applying the Pre-Renewal Charges, Project Water shall

include any Project Water provided under a Water Rights Settlement Contract,

Additional Project Water, and/or Project Water transferred to a transferee(s)

pursuant to an approved transfer. Such assessments shall cease on the

effective date of renewal of the Water Service, Repayment or Water Rights

Settlement Contract.

Water Contractors shall not be assessed Pre-Renewal Charges if one of the

following conditions is met:

a. The Water Contractor’s existing Water Service, Repayment or Water

Rights Settlement Contract was renewed between January 1, 1988, and

October 30, 1992, or;

b. If the PEIS is not completed by October 1, 1997, and prior to that

date the Water Contractor enters into a binding agreement with the

United States to renew the existing Water Service, Repayment or

Water Rights Settlement Contract immediately upon completion of the

PEIS and all other documentation as may be required by the I~Jational

Environmental Policy Act.

Pre-Reneval Charges are not aDplicable to Base Water, Exchange Water, Section

215 Water, Flood Water, or Warren Act Contract water.

10
With the exception of Water Contractors specifically exempt from Pre-Renewal

Charges as provided above, Pre-Renewal Charges will be applicable under

certain circumstances to Project Water which is rescheduled from one water

year (e.g., water year X) to a later water year (e.g., water year X+l).

Because the Act applies Pro-Renewal Charges only to Delivered Project Water,

rescheduled Project Water which is delivered to a Water Contractor or a

transferee pursuant to an approved transfer following the effective date of

application of the Pro-Renewal Charges shall be assessed Pro-Renewal Charges

at the rate applicable to the Water Contractor in the year of actual delivery

(e.g., year X+l).

3. Banking of Transferred Water

In those instances when transferred Project Water is banked with an

intermediary (third) party for the principal purpose of providing a future

water supply6 to the transferee, the water shall be treated as Delivered

Project Water upon delivery to the intermediary and not when withdrawn from

the bank. The Pro-Renewal Charges shall be those in effect in the year of

delivery to the intermediary.

4. Payments

The Pre-Renewal Charge shall equal one and one-half times the Restoration

Payments applicable to the Water Contractor for Irrigation and/or M&I Water as

described in Part H of these Interim Guidelines.

Pro-Renewal Charges must be paid to the United States by the Water Contractor

prior to the effective date of renewal of the Water Contractor’s existing

Water Service or Repayment Contract.

5. TvDe of Water Use

For the purpose of applying Pre-Reneval Charges to Project Water, the type of

Project Water use (Irrigation or M&I) and the resulting rate to be paid shall

be consistent with the actual use of such water by the Water Contractor or a

transferee(s) pursuant to an approved transfer. In those instances when the

Project Water is banked with an intermediary for the principal purpose of

providing a future water supply to a transferee, the type of water shall be

consistent with the ultimate intended use by the transferee consistent with

the applicable transfer agreement.

~ All proposals to reschedule Project Water to a later water year must

be approved by Reclamation.

~ The future water supply may be accomplished through a water exchange.

11
6 ~ to Other ~ and ~qi,.nhay.e~na

Pre-Renewal Charges shall be paid by the Water Contractor (the transferor) in

addition to any other applicable payments or charges as required by the Act

and other applicable provisions of Federal reclamation law (hereafter referred

to as reclamation law). Transferees are not responsible for payment to the

United States of Pre-Renewal Charges.

7. Revenues to be Credited to the Restoration Fund

All Pre-Renewal Charges shall be credited to the Restoration Fund described in

Part B of these Interim Guidelines.

12
PART D

TIERED WATER RATES

[Subsection 3405(d)]

1. ADDlicabilitv

New, renewed and amended Water Service, Water Rights Settlement or Repayment

Contracts which are executed after October 30, 1992, and which have aterm

longer than three years are subject to the Tiered Water Rate provisions of the

Act. Pursuant to such contracts, Tiered Water Rates shall be applied to all

Delivered Project Water, including that provided under a Water Rights

Settlement Contract, Additional Project Water and Project Water transferred

pursuant to an approved transfer.

Tiered Water Rates shall not be a~~lied to Base Water, Exchange Water, Section

215 Water, Flood Water, Warren Act Contract water; or to Project Water used to

produce a crop that the Secretary determines, in writing, provides significant

and quantifiable waterfowl habitat in the fields where the water is used and

the crops are produced, provided such deliveries are made and used consistent

with the terms of a binding agreement to be signed by the Water Contractor,

the participating landholder(s), and the United States.

Project Water not subject to Tiered Water Rates shall be paid for at the rate

otherwise applicable to such water.

2. Calculation and A~~lication of Tiered Water Rates

Tiered Water Rates shall be computed annually by Reclamation consistent with

the following criteria:

a. First Tier: Up to and including the first 80 percent of the Water

Contractor’s maximum combined contractual Project Water entitlement

(including Irrigation, M&I, Class 1, and Class 2 Water, if any; but

excluding Base, Exchange, Flood, Section 215, and Warren Act

Contract water, if any) shall be paid for by the Water Contractor at

the applicable contract water rate(s).

b. Second Tier: Water in excess of 80 percent and up to and including

90 percent of the Water Contractor’s maximum combined contractual

Project Water entitlement shall be paid for by the Water Contractor

at the following applicable rates:

(1) Irrigation Water: a rate equal to the average of the otherwise

applicable contract rate for Irrigation Water and the

applicable Irrigation Full Cost Rate.

13
(2) M&I Water: a rate equal to the average of the otherwise

- applicable contract rate for M&I Water and the applicable M&I

Full Cost Rate.

c. Third Tier: Water in excess of 90 percent of the Water Contractor’s

maximum combined contractual Project Water entitlement, if any,

shall be paid for by the Water Contractor at the applicable Full

Cost Rate.

Irrigation Full Cost Rates are calculated pursuant to the applicable

provisions of the RRA. The Irrigation Full Cost Rates include components to

recover applicable operation and maintenance (O&M) costs, accumulated

deficits, capital costs, and interest on unpaid capital costs. Irrigation

Full Cost Rates are computed to recover O&M costs within the year incurred;

accumulated deficits within the authorized repayment period; and capital costs

amortized at the applicable RRA interest rate over the remaining repayment

period.

M&I Full Cost Rates are calculated pursuant to a similar procedure to that

used for computing the Irrigation Full Cost Rates.

Consistent with the above, a Water Contractor shall not be subject to the

Second and Third Tier water rates if the cumulative total of all Project Water

delivered to the Water Contractor and/or a transferee(s) in a given contract

year equals 80 percent or less of the Water Contractor’s maximum combined

contractual Project Water entitlement.

Pursuant to these Interim Guidelines, all Additional Project Water, if any,

but excepting that providing significant and quantifiable waterfowl habitat,

shall be charged at the applicable Third Tier rate.

3. Rescheduled Water7

Tiered Water Rates will be applicable under certain circumstances to that

Project Water which is rescheduled for delivery from one water year (e.g.,

water year X) to a later water year (e.g., water year X+l). Because the Act

applies Tiered Water Rates only to Project Water actually delivered,

rescheduled Project Water is not subject to Tiered Water Rates unless and

until delivered to the Water Contractor or a transferee(s) pursuant to an

approved transfer, Drovided the subject Water Contractor is subject at the

time of delivery to Tiered Water Rates consistent with the above Applicability

provisions (subsection 1 of Part D).

The applicable Tiered Water Rates shall be those in effect in the year of

actual delivery (e.g., water year X+l). However, the Second and Third Tier

rates shall be applied only if the amount of rescheduled water delivered in

‘ All proposals to reschedule the delivery of Project Water to a later

water year must be approved by Reclamation.

14
the later year (e.g., water year X+l) when added to the Project Water

otherwise delivered in the later water year exceeds 80 and 90 percent,

respectively, of the maximum contractual entitlement applicable in the later

water year (e.g, water year X+l).

4. Banking of Transferred Water

In those instances when transferred Project Water is banked with an

intermediary (third) party for the principal purpose of providing a future

water supply to the transferee, the water shall be regarded as Delivered

Project Water when delivered to the intermediary party and not when withdrawn

from the bank.

5. Tvoe of Water Use

For the purpose of applying Tiered Water Rates to Project Water transferred

pursuant to the Act, the type of water use (Irrigation or M&I) and the rate to

be paid shall be consistent with the actual use of the water by the Water

Contractor or by the transferee. In those instances when the Project Water is

banked with an intermediary for the principal purpose of providing a future

water supply to a transferee, the type of water shall be consistent with the

ultimate intended use by the transferee consistent with the applicable

transfer agreement.

6. Determination of Tiered Water Rate Threshold Percentages

Reclamation’s water delivery records, which document the monthly and

cumulative quantities of Delivered Irrigation and M&I Project Water, shall be

used to determine the water deliveries, if any, in excess of 80 and 90 percent

of the maximum combined contractual entitlement.

7. Payments Due. Late Payments and Adiustments

Tiered Water Rates shall be paid in accordance with the payment terms included

in the Water Contractor’s then existing Water Service or Repayment Contract.

Similarly, specifics regarding past due payment of Tiered Water Rates shall be

accomplished in a manner consistent with the terms included in the Water

Contractor’s then existing Water Service or Repayment Contract.

Transferees are not responsible for payment to the United States of the Tiered

Water Rates which may be applicable to Project Water transferred into their

respective service areas.

15
B 1n~-4r~,,ehIt~ to Other Pavm~t-~ And ~iirt~haru~m

The responsibility of the Water Contractor to pay the applicable Tiered Water

Rates as described above shall be in addition to all other payments required

by the Act and other applicable provisions of reclamation law.

In the event Project Water is concurrently subject to a Tiered Water Rate, a

Full Cost Rate under the RRA and/or a Transferred Water Rate (see Part E of

these Interim Guidelines), the Water Contractor shall be required to pay the

higher (highest) of the applicable rates. (The application of this procedure

is shown in the examples included in Appendix A).

9. Revenues to be Credited to the Restoration Fund

All revenues received over and above what would otherwise have been collected

as a result of the application of the Tiered Water Rates (hereinafter referred

to as Tiered Rate Revenues) shall be credited to the Restoration Fund as

provided in Part B of these Interim Guidelines. In the absence of the

requirement to pay the Irrigation Full Cost Rate pursuant to the RRA, Tiered

Rate Revenues shall consist of those revenues which exceed the Water

Contractor’s assigned Cost of Service Rate(s).8 No Tiered Rate Revenues

shall be deposited or credited to the Restoration Fund for water otherwise

subject to the Irrigation Full Cost Rate provisions of the RRA.

10. Reciuests for Waterfowl Habitat Exemption

The Water Contractor is responsible for submitting formal requests and

necessary documentation for consideration for an exemption from Tiered Water

Rates based upon waterfowl habitat value. (Criteria for waterfowl habitat

exemption are to be developed by the United States Fish and Wildlife Service.)

8 In the event the Water Contractor is subject to both the Transferred

Water Rate and Tiered Water Rate provisions of this Act (but not the

Irrigation Full Cost Rate), the total credited amount of Tiered Rate Revenues

and Transfer Revenues per acre-foot shall not exceed the absolute difference

between the highest rate required to be paid and the Cost of Service Rate.

16
PART E

TRANSFERRED WATER RATES

[Subsection 3405(a) (1) (B)]

1. ADDlicabilitv

All Project Water, including Class 1 Water, Class 2 Water, and Project Water

provided pursuant to a Water Rights Settlement Contract, which is transferred

pursuant to the transfer provisions of the Act from a Water Contractor to an

entity (transferee) which was not a Water Contractor on October 30, l992,~

and is used by the transferee as:

a. Irrigation Water shall be paid for by the Water Contractor at the

Full Cost Rate applicable to the Water Contractor.

b. M&I Water shall be paid for by the Water Contractor at the M&I water

rate applicable to the Water Contractor as determined by Reclamation

consistent with the then current Project M&I ratesetting policy and

applicable reclamation law.

All Exchange Water which is transferred pursuant to the transfer provisions of.

the Act from an Exchange Contractor to an entity (transferee) which was not a

Water Contractor on October 30, 1992, and is used by the transferee as:

a. Irrigation Water shall be paid for by the Exchange Contractor at the

Full Cost Rate which would be applicable to the Exchange Contractor

if required to pay for Project water consistent with the then

current Project irrigation ratesetting policy and applicable

reclamation law.

b. M&I Water shall be paid for by the Exchange Contractor at the M&I

rate which would be applicable to the Exchange Contractor if

required to pay for Project water consistent with the then Project

M&I ratesetting policy and applicable reclamation law.

Irrigation and M&I Full Cost Rates applicable to the Exchange Contractors are

to be calculated similarly to those computed for Water Contractors. Unlike

Water Contractors, there are no surpluses or deficits applicable to the yearly

~ Entities which held short-term or interim Water Service Contracts in

effect on October 30, 1992, without a right of renewal may be a recipient of

transferred Project Water pursuant only to the authority of Section 3405 of

the CVPIA. Such entities do not qualify for within-Project (“Contractor to

Contractor”) transfers following expiration of the Water Service Contract in

effect on October 30, 1992.

17
Project water operations preformed on the behalf of the Exchange Contractors.

Accordingly, surpluses or deficits are not reflected in Irrigation or M&I

Full Cost Rates applicable to Exchange Contractors.

The Transferred Water Rates described above do not include charges for

additional Project services, if any, which may be needed to effectuate a

transfer from a Water Contractor or an Exchange Contractor to a transferee.

Charges for such additional Project services shall be computed based on the

specific circumstances of the proposed transfer.

The Transferred Water Rates are not a~~licable to Base Water or Warren Act

Contract deliveries. In addition, transfers of Project Water between entities

qualifying as Project Water Contractors on October 30, 1992,10 are not

subject to the Transferred Water Rate provisions of the Act.

2. Rescheduled Water11

Transferred Water Rates are applicable to Project Water which is rescheduled

from one water year to a later water year and delivered pursuant to an

approved transfer agreement with the United States to a transferee which was

not a Water Contractor on October 30, 1992. Because the Act applies

Transferred Water Rates only to Project Water actually delivered, rescheduled

Project Water is not subject to Transferred Water Rates until physically

delivered to such a transferee. Water which is rescheduled from one water

year and delivered in a later water year (e.g., water year X+l) to a

transferee shall be subject to the Water Contractor’s applicable Transferred

Water Rates in effect in the year of delivery (e.g., water year X+l).

3. Banking of Transferred Water

In those instances when transferred Project Water is banked with an

intermediary (third) party for the principal purpose of providing a future

water supply to the transferee, the water shall be regarded as Delivered

Project Water upon delivery to the intermediary and not when withdrawn from

the Bank.

4. Tvoe of Water Use

For the purpose of administering the Transferred Water Rate provisions of the

Act, the manner in which Project Water is used (as Irrigation Water or M&I

Water) and the resulting rate to be paid shall be consistent with the actual

use of such water by the transferee(s). In those instances when Project Water

10 See footnote 9.

11 All proposals to reschedule water to a later water year must be

approved by Reclamation.

18
is banked with an intermediary, the type of water use shall be consistent with

the ultimate intended use by the transferee consistent with the applicable

transfer agreement.

5. Payments Due. Delinauent Payments and Adiustments

a. Water Contractors. The Water Contractor (the transferor) is

responsible for full payment of all applicable Transferred Water

Rates for Project Water transferred by the Water Contractor pursuant

to the transfer provisions of the Act.

Notwithstanding any requirements for the advance payment for Project

Water as may be required by the applicable Water Service or

Repayment Contract, the total amount of Transferred Water Rate

payments, if any, owed for Project Water delivered to a

transferee(s) or an intermediary is due and payable by the Water

Contractor by the end of the month following the month of delivery.

Such amounts shall be consistent with the quantities of Project

Irrigation and M&I Water shown in Reclamation’s water delivery

report for the subject month. The water delivery report shall be

regarded by the Water Contractor as a bill for all Transferred Water

Rate payments.

Any adjustments for overpayment or underpayment shall be

accomplished through the adjustment of Transferred Water Rate

payments or other charges due to the United States relative to the

subject Water Service or Repayment Contract and payable in the next

month.

Past due payment of Transferred Water Rates shall be accomplished in

a manner consistent with the past due terms included in the Water

Contractor’s then existing Water Service or Repayment Contract.

b. Exchange Contractors. The Exchange Contractors are responsible for

full payment of all Transferred Water Rates for Exchange Water

transferred pursuant to the transfer provisions of the Act. The

total amount of Transferred Water Rate payments, if any, owed for

water delivered to a transferee(s) or an intermediary is due and

payable by the Exchange Contractor by the end of the month following

the month of delivery. Such amounts shall be consistent with the

quantities of Project Irrigation and M&I Water shown in

Reclamation’s water delivery report for the subject month. The

water delivery report shall be regarded by the Exchange Contractor

as a bill for all Transferred Water Rate payments.

Any adjustments for overpayment or underpayment shall be

accomplished through the adjustment of Transferred Water Rate

payments due to the United States relative to the subject Exchange

Contract and payable in the next month. In the absence of such

future payments in the next month, overpayment shall be refunded to

the Exchange Contractor.

19
Specifics regarding past due payment of Transferred Water Rates

shall be accomplished in a manner consistent with the terms included

in Appendix B herein.

c. Transferees. Transferees are not responsible for payment to the

United States of Transferred Water Rates which may be applicable to

Project Water transferred into their respective service areas.

6. Relationship to Other Payments and Surchar~es

The responsibility of the Water Contractor or Exchange Contractor to pay the

applicable Transferred Water Rates as described above shall be in addition to

all other payments required by the Act and other applicable provisions of

reclamation law.

In the event Project Water is concurrently subject to the Transferred Water

Rate provisions of this Act, an Irrigation Full Cost Rate as required by the

RRA and/or a Tiered Water Rate (see Part D of these Interim Guidelines), the

Water Contractor or Exchange Contractor shall pay the higher (highest) of the

applicable rates. (The application of this procedure is shown in the examples

included in Appendix A).

7. Revenues to be Credited to the Restoration Fund

In the absence of the requirement to pay. the applicable Irrigation Full Cost

Rate pursuant to the PEA, all Transferred Water Rate payments in excess of the

Water Contractor’s Cost of Service Rate (hereafter referred to as Transfer

Revenues) shall be calculated and credited by Reclamation to the Restoration

Fund.12

In the absence of the requirement to pay the applicable Irrigation Full Cost

Rate pursuant to the PRA, Transferred Water Rate payments required to be made

for the transfer of Exchange Contractor water to an entity which was not a

Water Contractor on October 30, 1992, shall be deposited in full to the

Restoration Fund.

No Transfer Revenues shall be deposited or credited to the Restoration Fund

for Project Water otherwise subject to the Irrigation Full Cost Rate

provisions of the PEA as such revenues shall be credited in the normal manner

for PEA receipts.

12 In the event the Water Contractor is subject to both the Transferred

Water Rate and Tiered Water Rate provisions of this Act (but not the

Irrigation Full-Cost Rate), the total credited amount of Tiered Rate Revenues

and Transfer Revenues per acre-foot shall not exceed the absolute difference

between the highest rate required to be paid and the cost-of-service rate.

20
PART F

FRIANT SURCHARGES

[Subsection 3406(c) (1)]

1. Applicability

Beginning on October 31, 1992, all Water Contractors who receive Project Water

from the Friant Division pursuant to a Water Service, Water Rights Settlement

or Repayment Contract shall pay to the United States the applicable Friant

Surcharge for each acre-foot of Delivered Project Water, including Class 1 an6

Class 2 Water; Flood Water used for H&I purposes; Section 215 Water;

Additional Project Water; Project Water provided pursuant to a Water Rights

Settlement Contract; and/or Project Water delivered to a transferee(s)

pursuant to an approved transfer(s).

The Friant Surcharges shall continue until such time as flows of sufficient

quantity, quality and timing are provided at or below Gravelly Ford to meet

the anadromous fishery needs of the San Joaquin River identified in a plan to

be developed by the Secretary and approved by an act of Congress.

Friant Surcharges are not a~~licable to Warren Act Contract or Base Water

deliveries.

2. Rescheduled Water13

Friant Surcharges are applicable to Project Water which is released from

Friant Division facilities and rescheduled from one water year (e.g., water

year X) and delivered in a later water year (e.g., water year X+l). Because

the Act applies Friant Surcharges only to Project Water actually delivered,

rescheduled Project Water which is delivered to a Water Contractor, a

transferee or intermediary on behalf of the transferee shall be subject to

Friant Surcharges applicable to the Water Contractor in the year of actual

delivery (e.g., year X+l).

3. Bankin2 of Transferred Water

In those instances when transferred Friant Division Project Water is banked

with an intermediary (third) party for the principle purpose of providing a

future water supply to the transferee, the water shall be treated as Delivered

13 All proposals to reschedule Project Water to a later water year must

be approved by Reclamation.

21
Project Water upon delivery to the intermediary party and not when withdrawn

from the Bank. The Friant Surcharges shall be those in effect in the year of

delivery to the intermediary.

4. The Friant Surchar2es

The Friant Surcharges shall be: (a) $4.00 per acre-foot of Delivered Project

Water before or on September 30, 1997; (b) $5.00 per acre-foot of Delivered

Project Water after September 30, 1997, and through September 30, 1999; and

(c) $7.00 per acre-foot for all Delivered Project Water thereafter.

5. Payments Due. Delinuuent Payments, and Adlustments

The Water Contractor is responsible for full payment of all Friant Surcharges

for Project Water delivered to the Water Contractor, or a transferee or

intermediary pursuant to an approved transfer. The total amount of Friant

Surcharges is due and payable by the Water Contractor by the end of the month

following the month of delivery. Such amounts shall be consistent with the

quantities of Project Water shown in Reclamation’s water delivery report for

the subject month. The water delivery report shall be regarded by the Water

Contractor as a bill for all Friant Surcharge payments.

Any adjustments for overpayment or underpayment shall be accomplished through

the adjustment of Friant Surcharges or other charges due to the United States

relative to the subject Water Service or Repayment Contract and payable in the

next month.

The amount to be paid for past due payment of the Friant Surcharges shall be

computed in a manner consistent with the terms included in the Water

Contractor’s then existing Water Service or Repayment Contract.

Transferees are not responsible for payment to the United States of Friant

Surcharges applicable to Project Water transferred to them for their use.

6. Relationship to Other Pa~ents and Surchar2es

The responsibility of the Water Contractor to pay Friant Surcharges as

described above shall be in addition to all other charges required by this Act

and other applicable reclamation law.

7. Revenues to be Credited to the Restoration Fund

All Friant Surcharge Revenues shall be credited to the Restoration Fund

described in~ Part B of these Interim Guidelines.

22
PART G

H&I SURCHARGES

[Subsection3407(d) (2) (A)]

Reclamation shall assess and collect an annual charge, hereafter referred to

as the M&I Surcharge, for all Project Water which is used for M&I purposes

and:

a. Sold by the United States pursuant to a new Water Service, Water

Rights Settlement or Repayment Contract to an entity which was not a

Water Contractor prior to October 31, 1992, or

b. Transferred by an existing15 Water Contractor or Exchange Contractor

to an entity which was not a Water Contractor prior to October 31,

1992.14

The M&I Surcharge shall be paid in addition to the Transferred Water Rates

which may be applicable to Project Water transferred for M&I purposes pursuant

to the Act (See Part E of these Interim Guidelines.)

For the purposes of administering the M&I Surcharge, Project Water shall

include Class 1 and Class 2, Flood, Section 215, Exchange, Project Water

provided by a Water Rights Settlement Contract, and/or Additional Project

Water, if any.

The M&I Surcharge is not apDlicable to Base Water or Warren Act Contract

deliveries.

2. Rescheduled Water15

M&I Surcharges are applicable to Project Water which is rescheduled by an

existing Water Contractor from one water year (e.g., water year X) to a later

water year (e.g., water year X+l) and ultimately delivered to a transferee for

14 For the purposes of applying M&I Surcharges, entities which held only

short-term or interim Water Service Contracts prior to October 31, 1992,

without right of renewal, are regarded as not having been a Water Contractor

prior to October 31, 1992.

15 “Existing” shall mean having the status of a Water Contractor or

Exchange Contractor on October 30, 1992.

16 All proposals to reschedule water to a later water year must be

approved by Reclamation.

23
use as M&I water pursuant to an approved transfer agreement. Similarly, any

rescheduled Project Water which is provided by the United States pursuant to a

new Water Service or Repayment Contract to an entity which was not a Water

Contractor prior to October 31, 1992, and used for M&I purposes is subject to

M&I Surcharges. The M&I Surcharges shall be applicable in the year of

delivery of the rescheduled water. The M&I Surcharges shall be those in

effect in the year of actual delivery (e.g., water year X+l).

3. Bankinu of Transferred Water

In those instances when transferred Project Water is banked with an

intermediary (third) party for the principal purpose of providing a future

water supply to the transferee, the water shall be regarded as delivered to

the transferee upon delivery to the intermediary and not when withdrawn from

the Bank. All transferred Project Water which is banked with an intermediary

shall be treated as M&I Water if the ultimate intended use by the transferee

is for M&I purposes consistent with the applicable transfer agreement.

4. The M&I Surcharge

The M&I Surcharge shall be $25.00 (October 1992 price levels) per acre-foot of

Delivered Project Water. The M&I Surcharge shall be adjusted annually by

Reclamation solely to reflect fluctuations in costs as projected by the Office

of the Management and Budget for use in developing Reclamation’s annual

budgets (hereafter referred to as 0MB escalation factors).

5. Payment Due. Delincuent Payments and Adlustments

Relative to new~ Water Service, Water Rights Settlement or Repayment Contracts,

the M&I Surcharge shall be the repayment responsibility of the Water

Contractor. Pursuant to a water transfer, the M&I Surcharge shall be the

repayment responsibility of the applicable Water Contractor or Exchange

Contractor (the transferor).

Relative to new contracts, the total amount of M&I Surcharges, if any, owed by

the Water Contractor for water diverted by the Water Contractor, a

transferee(s), or an intermediary party, is due and payable by the end of the

month following the month of delivery. Such amounts shall be consistent with

the quantities of Project M&I Water shown in Reclamation’s water delivery

report for the subject month. The water delivery report shall be regarded by

the Water Contractor as a bill for all M&I Surcharge payments.

Pursuant to a water transfer, the total amount of M&I Surcharges, if any, owed

by the Water Contractor or Exchange Contractor for water diverted by an

transferee or an intermediary, is due and payable by the end of the month

following the month of delivery. Such amounts shall be consistent with the

quantities of Project M&I Water transferred as shown in Reclamation’s water

24
delivery report for the subject month. The water delivery report shall be

regarded by the Water Contractor or Exchange Contractor as a bill for the M&I

Surcharges.

Any adjustments for overpayment or underpayment shall be accomplished through

the adjustmept of M&I Surcharges or other charges due to the United States

relative to the subject water service or repayment contract and payable in the

next month. In the absence of any additional imminent repayment obligations

to the United States by the Exchange Contractor, any overpayment shall be

refunded to the Exchange Contractor.

The amount to be paid for past due payment of M&I Surcharges by Water

Contractors shall be computed in a manner consistent with the terms included

in the Water Contractor’s then existing Water Service, Water Rights Settlement

or Repayment Contract. The amount to be paid for past due payment of M&I

Surcharges by Exchange Contractors shall be computed consistent with the

provisions of Appendix B as included herein.

Transferees are not responsible for payment to the United States of the M&I

Surcharges applicable to Project Water transferred to them.

6. Relationship to Other Pa~ents and Surchar~es

The responsibility of the Water Contractor or Exchange Contractor to pay the

M&I Surcharge is in addition to all other charges required by this Act and

other applicable reclamation law.

7. Revenues to be Credited to the Restoration Fund

All M&I Surcharge revenues shall be credited to the Restoration Fund described

in Part B of these Interim Guidelines.

25
PART H

RESTORATION PAYMENTS

[Subsection 3407(c) & (d)]

1. ADDlicabilitY

Section 3407 of the Act provides that to the extent required in Congressional

acts appropriating funds to partially finance the costs to carry out

“programs, projects, plans, and wildlife restoration, improvement and

acquisition provisions” of the Act, Reclamation shall:

a. Determine, assess, and collect additional annual mitigation and

Restoration payments (hereafter referred to as Restoration Payments)

on Project Irrigation Water and M&I Water, Additional Project Water,

Project Water provided pursuant to a Water Rights Settlement

Contract, Flood Water used for M&I purposes, and Section 215 Water,

if any, which is sold and delivered to the Water Contractors, and

b. Determine a Power Restoration Payment Obligation to be assigned to

Power.

The Western Area Power Administration (Western) shall prorate the Power

Restoration Payment Obligation among various power beneficiaries and shall

assess the resulting Power Restoration Payments.17

Restoration Payments shall not be assessed on Base Water, Exchange Water,

other Project Water made available without charge to the recipient as provided

by applicable reclamation law, or Warren Act Contract deliveries.

2. Oblectives and Constraints

The Total Restoration Payment Obligation to be collected for Project M&I

Water, Project Irrigation Water and Power (hereafter referred to collectively

as the Three Functions) is to be assigned annually consistent with the

objectives and constraints set forth below:.

a. All dollar amounts referenced in the Act relative to October 1992

price levels shall be adjusted annually by Reclamation to reflect

fluctuations in costs over time. The adjustment shall be

accomplished through use of 0MB escalation factors.

17 Western has advised Reclamation that the procedures by which it will

prorate, assess and collect the Power Restoration Payment Obligation will be

established following a public process to be held by Western.

26
b. When the Total Restoration Payment Obligation assigned to the Three

Functions (the Discretionary Payments) is combined with all

projected Non-Discretionary Revenues to be deposited into the

Restoration Fund, if any, in a given fiscal year, the total of all

projected revenues shall approximate the appropriated amount for

that fiscal year unless

:

(1) The annual average amount appropriated by the Congress prior to

fiscal year 1997 is less than the targeted appropriation of $50

million (October 1992 price levels). Under such circumstances

yet consistent with all other objectives and constraints

presented herein, the Secretary shall impose Restoration

Payments in fiscal year 1998 and thereafter as may be required

to yield in each year total collections equal to $50 million

(October 1992 price levels) on a three year rolling average

basis.

(2) The Secretary has determined that all mitigation and

restoration actions required by Section 3406 of the Act are

completed. Thereafter, the amount appropriated each year and

the total of all Restoration Funds to be collected in each

fiscal year thereafter shall be reduced to $35 million (October

1992 price levels). All other objectives and constraints

applicable to Restoration Payments as detailed herein shall

remain in full force and effect following the reduction of that

ceiling.

c. The Total Restoration Payment Obligation shall not exceed $30

million (October 1992 price levels) based upon a three-year rolling

average. Following the determination by the Secretary that all

mitigation and restoration actions required by Section 3406 are

completed, the $30 million (October 1992 price levels) rollingaverage limit shall be reduced to $15 million (October 1992 price

levels). All other objectives and constraints applicable to

Restoration Payments as provided herein shall remain in full force

and effect following the reduction of that ceiling.

d. The Restoration Payments shall not exceed $6.00 and $12.00 (October

1992 price levels) per acre-foot for Project Irrigation and M&I

Water, respectively.

e. Taking into consideration all Non-Discretionary Revenues and NonFederal Contributions, if any, the Total Restoration Payment

Obligation to be assessed and collected in a given fiscal year shall

be proportioned “to the greatest degree practicable” among the Three

Fuhctions in such a way that all revenues collected, as measured

27
through the ten-year rolling average, reflect the Three Functions’

respective allocations for repayment of the Project (hereafter,

referred to as the Target Allocation18).

f. In the event the historic record demonstrates that the Secretary has

unintentionally under-collected or conversely over-collected

relative to the target cumulative amounts of total Restoration Funds

to have been collected, the Secretary shall make adjustments to the

Restoration Payments to correct for such under- or over-collections

in the next fiscal year consistent with all the other requirements

as included herein.

3. The Assignment of Restoration Payments

To meet the above objectives and constraints, Reclamation shall:

a. Set the Total Restoration Payment Obligation to be collected,

including the Power Restoration Payment Obligation, at $30 million

(October 1992 price levels) each and every year unless

:

(1) The appropriated amount when compared to the most recent

projected total of all Non-Discretionary Revenues dictates

that a lesser or greater amount than $30 million (October

1992 price levels) of Restoration Payments is needed during

the subject fiscal year to meet the amount appropriated.

(2) The three year rolling annual average of the total

Restoration Payments based on the two most recent years’

actual and the prior fiscal year’s most recent Restoration

Funds revenue projections indicate that the total

Restoration Payments collected during that three-year period

shall exceed (or conversely, shall fall short of) the $30

million (October 1992 price levels) average limit.

Reclamation shall adjust the $30 million (October 1992 price

levels) target as appropriate.

(3) The rolling average limit has been reduced to $15 million

(October 1992 price levels) as discussed in subsection 2.c.

of Part H of these Interim Guidelines. Pursuant to this

situation, subsections 3.a (1) and 3.a (2)~ of Part H will be

appropriately modified.

b. In support of the Target Allocation, Reclamation shall develop and

use during each fiscal year the most recent available allocation

which will reflect actual project accomplishments for the most

18 The respective allocations for repayment of the Project shall be

exclusive of any Water Contractor obligations to provide for the repayment of

distribution and drainage service constructed for or financed by the United

States for the exclusive use of individual Water Contractors.

28
recent completed water year.

19 The use of a rolling 10-year

average allocation based upon aggregating over time the individual

annual Project allocations will result in the assessment and

collection of Restoration Fund revenues - - as may be limited by the

other constraints and hydrologic variability - - in amounts expected

to be “to the greatest degree practicable” close to the Target

Allocation.

c. In recognition of the (a) absolute ceilings relative to the M&I and

Irrigation Restoration Payments; (b) the requirement to assess and

collect Restoration Payments from the Three Functions as measured

over a ten-year rolling average - - “to the greatest degree

practicable” -- in accordance with the Target Allocation; and (c)

the expectation that the future Project hydrology will require Power

to periodically assume responsibility for Restoration Payment

shortfalls by the Water Contractors, the Water Contractors will be

automatically charged each and every fiscal year the maximum

permitted Restoration Payment per acre-foot [that is, $6.00 (October

1992 price levels) and $12.00 (October 1992 price levels) per acrefoot of Project Irrigation and M&I Water, respectively.]

(Hereafter, this policy shall be referred to as the Maximum

Restoration Payment Policy.) The remaining portion of the Total

Restoration Payment Obligation shall be assigned to Power.

The Maximum Restoration Payment Policy shall remain in full force

and effect unless and until the record of historic actual revenues

demonstrates that the percentage allocations to either or both of

the Irrigation and M&I Water supply functions will exceed their

allocable shares relative to the Target Allocation.

d. In the event the Maximum Restoration Payment Policy is discontinued

r4ative to the Irrigation and/or M&I water supplies functions, that

portion of the Total Restoration Payment Obligation to be allocated

to the Irrigation and/or M&I water supply functions, whichever or

both are determined to be in excess of their allocable shares

relative to the then Target Allocation, shall be directly calculated

through application of the percentage allocation determined by

Secretary to be necessary to bring the function closer to the Target

Allocation. (Hereafter this procedure shall be referred to as the

Direct Calculation Method.) The necessary corrections may be

implemented over time as necessary to stabilize the various

Restoration Payments impacted by the change in procedure.

19 Due to the time lag in analyzing actual project accomplishments, the

allocation to be used for fiscal year 1998, for example, will in fact reflect

actual Project accomplishments for fiscal year 1996. The 10-year rolling

allocation for the period fiscal year 1994 thorough fiscal year 2003, for

example, will actually represent project accomplishments from fiscal year 1992

through fiscal year 2001. This procedure represents the “closest” allocation

possible relative to concu.rrent (real-time) Project accomplishments.

29
The portions of the Total Restoration Payment Obligation assigned to

the Project Irrigation and H&I Water supply functions through

application of the Direct Calculation Method shall be prorated

respectively over all Project Irrigation and M&I Water projected to

be sold and delivered during the subject fiscal year, but shall be

limited to no more than the applicable Restoration Payment

limitations. The remaining portions of the Total Restoration

Payment Obligation which are not assigned to the M&I or Irrigation

water supply functions through the Direct Calculation Method or the

Maximum Restoration Payment Policy, as applied consistent with these

Interim Guidelines, shall be assigned to Power.

Application of the Direct Calculation Method does not preclude

reinstatement at a later date of the Maximum Restoration Payment

Policy as may be appropriate.

A sample calculation illustrating many of the above limits, constraints and

procedures applied to a modified 1984 through 1992 hydrology is presented in

Appendix C or these Interim Guidelines. Consistent with the example hydrology

and various other assumptions explained in Appendix C, the Maximum Restoration

Payment Policy remained in full force relative to both the Irrigation and M&I

Water supply functions throughout the term of the example.

4. Ability to Pay Limitations

a. ApDlicability. The Restoration Payment for Project Irrigation Water

may be reduced to reflect a Water Contractor’s ability to pay as

determined and adjusted by the Secretary at no less than 5-year

intervals. Ability to pay limitations on Restoration Payments are

not a~~licable to M&I Water.

b. Determinations. Ability to pay determinations shall be consistent

with Reclamation Instructions20, and following the development of

appropriate criteria shall take into account the “benefits”

resulting from implementation of this Act.

c. Recuests. The Water Contractor must submit to Reclamation a formal

request for consideration for a reduction in the Restoration Payment

due to ability to pay limitations. The costs of performing the

required ability to pay studies shall be the responsibility of the

requesting Water Contractor.

d. Reassignment of Costs. Any portion of the Restoration Payments in

excess of a Water Contractor’s ability to pay shall be reassigned to

the Commercial Power function for repayment in the fiscal year in

which the reassignment is made, unless the Restoration Payment

20 Reclamation Instructions are internal guidance documents which detail

various procedures and policies applicable to a range of authorized

Reclamation functions.

30
applicable to the Water Contractors for Irrigation Water in the

subject year is less than $6.00 (October 1992 price levels) per

acre-foot as determined by the Direct Calculation Method. Under the

later circumstance, any amounts in excess of a Water Contractor’s

documented ability to pay shall be added first to the Restoration

Payment applicable to the total remaining Project Irrigation Water

supply until the resulting Restoration Payment by the other Water

Contractors reaches $6.00 (October 1992 price levels) per acre-foot.

Thereafter, any remaining outstanding amounts will be added to the

Power Restoration Payment Obligation.

e. Order of Financial Relief. If an ability to pay calculation

demonstrates that a Water Contractor has an ability to pay something

more than its applicable O&M costs but less than the total of its

assigned 0&M, capital and Restoration Payment, partial relief shall

be designated as first applying to the most recent of the applicable

obligations and then to other less senior obligations in descending

order of seniority.

5. Variability in Restoration Pa~ents

Consistent with the above (Sections 1 through 4 of Part H), the required

Restoration Payments and Total Power Restoration Payment Obligation may vary

considerably from fiscal year to fiscal year due to the following:

a. Uncertainty in any fiscal year over the extent to which Congress

will appropriate funds from the Restoration Fund. With the

exception of the circumstances which mandate the collection of $50

million annually as described in subsection 2.b.(l) of Part H of

these Interim Guidelines, Congress can appropriate as little as $0

or as much as $50 million (October 1992 price levels) to be made

available from the Restoration Fund in any fiscal year.

b. The magnitude of water transfers, particularly those transfers

intended for M&I purposes, to non-Project entities.

c. The projected water supplies upon which the Restoration Payment is

applied. For example, in the event of a low water supply, the total

of all Restoration Payments to be collected from the Irrigation and

M&I Water supply functions will be constrained by the projected

water supply and the maximum Restoration Payment limitations

applicable to the water supply functions. In order to collect the

required amount of Restoration Funds, an additional allocation must

be made to Power in excess of that indicated by the Target

Allocation.

d. Ability to pay limitations as may be applicable to Water Contractors

having an Irrigation Water supply.

e. Changes in Project accomplishments and, thereby, the Target

Allocation over time.

31
~; Dnhg~Ait1g~,i Water21

Restoration Payments are applicable to Project Water which is rescheduled from

delivery in one water year (e.g., water year X) to delivery in a later water

year (e.g., water year X+1). Because the Act applies Restoration Payments

only to Project Water actually delivered, rescheduled water which is delivered

to a Water Contractor or a transferee or an intermediary consistent with an

approved transfer shall be subject to Restoration Payments in the year of

actual delivery (e.g., year X+l).

7. Banking of Transferred Water

In those instances when Project Water is banked with an intermediary party for

the principle purpose of providing a future water supply to the transferee,

the water shall be treated as Delivered Project Water when delivered to the

intermediary party and not when withdrawn from the Bank. The Restoration

Payment shall be that in effect in the year of delivery to the intermediary.

8. TyPe of Water Use

The manner in which Project Water is used (as Irrigation Water or M&I Water)

and the resulting Restoration Payment to be paid shall be consistent with the

actual use of such water by the Water Contractor or transferee(s). In those

instances when Project Water is banked with an intermediary, the type of water

shall be consistent with the ultimate intended use by the transferee

consistent with the applicable transfer agreement.

9. Payments Due. Delincuent Payments, and Adjustments for Water Contractors

The Water Contractor (the transferor) is responsible for full payment of all

Restoration Payments for Project Water delivered to the Water Contractor, or a

transferee, or intermediary. The total amount of Restoration Payments owed

for water delivered is due and payable by the Water Contractor by the end of

the month following the month of delivery. Such amounts shall be consistent

with the quantities of Project Irrigation and M&I Water shown in Reclamation’s

water delivery report for the subject month. The water delivery report shall

be regarded by the Water Contractor as a bill for all Restoration Payments.

Any adjustments for overpayment or underpayment shall be accomplished through

the adjustment of Restoration Payments or other charges due to the United

States relative to the subject Water Service, Water Rights Settlement or

Repayment Contract and payable in the next month.

22. All proposals to reschedule water to a later year must be approved by

Reclamation.

32
The amount to be paid for past due payment of Restoration Payments shall be

computed in a manner consistent with the terms included in the Water

Contractor’s then existing Water Service, Water Rights Settlement or Repayment

Contract.

Transferees are not responsible for payment to the United States of

Restoration Payments applicable to Project Water transferred to them.

10. Relationship to Other Prolect Water Pa~ents and Surchar2es

The responsibility of the Water Contractors to pay their applicable

Restoration Payments as described above shall be in addition to all other

payments required by the Act and other applicable provisions of reclamation

law.

11. Pa~ent by Power of Restoration Pa~ents

Western (Western) shall prorate the Power Restoration Payment Obligation among

the various Project power beneficiaries and shall bill them for the resulting

Restoration Payments. Provisions regarding delinquency, payments dates, and

payment adjustments shall be addressed in an agreement between Western and

Reclamation.

12. Revenues to be Credited to the Restoration Fund

All Restoration Payments shall be credited to the Restoration Fund described

in Part B of these Interim Guidelines.

33
PART I

NOTIFICATION OF AMOUNTS TO BE PAID

1. Reclamation shall include in its annual preliminary water rate

publications all applicable payments and charges required by the Act to

be paid by the Water Contractors during the forthcoming fiscal year.

For the purposes of implementing and maintaining the Restoration Fund,

the applicable payments and charges as required by the Act shall be

regarded as final for the subject fiscal year. The preliminary water

rates are usually made available on or about July 1 of each year.

2. Concurrent with the release of the annual preliminary water rate

publications, Reclamation shall notify Western of the Power Restoration

Payment Obligation to be directly assigned to Power and the amount, if

any, which will be indirectly assigned to Power as a result of the per

acre-foot Restoration Payment limits applicable to the Irrigation and

M&I Water supply functions. The Power Restoration Payment Obligation

and the amount, if any, which will be indirectly assigned to Power as a

result of the per Restoration Payment limits applicable to water shall

be regarded as final relative to the subject fiscal year. Reclamation

will notify Western of any amounts to be paid by Power as a result of

ability to pay limitations.

34
PART .1

NON- FEDERAL CONTRIBUTIONS

[Subsection3407(a)]

1. Monies donated by Non-Federal entities shall be credited to the

Restoration Fund to foster one or more specific purposes.

2. Such Non-Federal Contributions shall be expended by the United States

only for the purpose(s) specified by the Contributor(s) and shall not be

subject to appropriation.

3. The Secretary shall not accept a Non-Federal Contribution for credit to

the Restoration Fund prior to the execution of a written agreement

between the Contributors and the United States. (Bases of negotiation

and other matters concerning the content and execution of the proposed

agreement shall be developed and forwarded to Reclamation’s Washington

Office for review and approval prior to execution of a written

agreement.)

35
PART K

RESTORATION FUND FINANCIAL REPORTS

[Subsection3407(f)]

1. By September 30, 1994, and annually thereafter, the Secretary shall

prepar~ and submit a detailed financial report to the following five

Congressional committees:

a. Senate Committee on Energy and Natural Resources;

b. Committee on Appropriations of the Senate;

c. House Committee on Natural Resources;

d. House Committee on Merchant Marine and Fisheries; and

e. Committee on Appropriations of the House of Representatives.

2. The financial report shall detail:

a. All deposits made to the Restoration Fund during the prior

fiscal year including the source(s) of each deposit;

Restoration Fund expenditures by authorized activity and

responsible entity (entities) during the prior fiscal year; and.

the beginning and end-of-year balances of the Restoration Fund,

and

b. Upcoming fiscal year’s projections of deposits to and

expenditures from the Restoration Fund, and the beginning and

anticipated end-of-year balances of the Restoration Fund.

3. In addition, said financial report shall reflect all State of California

and reimbursable and nonreimbursable Federal expenditures other than

those from the Restoration Fund incurred in the subject fiscal year to

carry out the provisions of this Title.

36
APPENDIX A

APPLICATION OF PAYMENTS AND SURCHARGES

:

EXAMPLE CALCULATIONS

1. Friant Unit Water Contractor X has received approval from Reclamation to

transfer 200 acre-feet (AF) of its 10,000 acre-feet (AF) maximum Project

contractual entitlement to entity Y, who was never a CVP Water

Contractor prior to October 30, 1992. Entity Y proposes to use this

water for M&I purposes. The deliveries to Entity Y are scheduled for

February, the last month of the Water Contractor’s contractual water

year. Consistent with Reclamation’s monthly water delivery records,

Water Contractor X anticipates the use of 9,100 AF of its maximum

combined contractual entitlement prior to February.

Water Contractor X’s contractual irrigation water rate is $4.00 per AF.

The Water Contractor’s Cost of Service Rate and Full Cost Rate for

irrigation water are $8.00 and $12.00 per AF, respectively. The Water

Contractor’s contractual, current, and M&I Full Cost rates are $6.00,

$10.00 and $15.00 per AF, respectively.

a. For purposes of this simplified example and excluding all other

payments and surcharges required by the Act or other applicable

reclamation law, what water rate must be paid by Water Contractor X

for all water scheduled to be transferred?

Analysis and Response:

Impacts of Tiered Water Rates - Reclamation records shows that the

contract qualifies as a “new, renewed or amended contract” consistent

with the provisions of Part D of the interim guidelines. Accordingly

the Water Contractor will encounter the following Tiered Water Rate

thresholds:

Max. Contractual Entitlement 10,000 AF

> 90 Percent Threshold > 9,000 AF

> 80 Percent Threshold > 8,000 AF

Because the Water Contractor anticipates the use of 9,100 AF of its

maximum contractual entitlement prior to the time of the transfer, it is

anticipated that the 200 AF of transferred water will exceed the 90

percent threshold. The water is proposed to be used for M&I purposes;

therefore, M &I rates are applicable. The Water Contractor will pay the.

M&I Full Cost Rate of $15.00 per AF.

37
Impacts of Transferred Water Rate Reuuirements - Under the Transferred

Water Rate provisions, water used for M&I purposes must be paid for at

the Water Contractor’s current applicable M&I rate, that is at $10.00

per AF.

Pa~ent of the Highest Rate - The Interim Guidelines require the Water

Contractor to pay the higher of the Transferred Water Rate or Tiered

Water Rate when both are applicable. In this example, the Water

Contractor is required to pay $15.00 per AF for all water transferred

for M&I purposes pursuant to the subject proposal.

b. What would the rate be if the water were to be used by the

transferee for agricultural purposes?

Analysis and Response:

Impacts of Tiered Water Rates - The water is proposed to be used for

agricultural purposes; therefore, irrigation water rates are applicable.

Consistent with the prior analysis, the Water Contractor anticipates the

use of 9,100 AF of its contractual entitlement prior to the time of the

transfer. Therefore, it is projected that the 200 AF of transferred

water will exceed the 90 percent threshold and thereby be subject to the

Irrigation Full Cost Rate of $12.00 per AF.

Impacts of Transferred Water Rate Reuuirements - Under the Transferred

Water Rate provisions, water used for agricultural purposes must be paid

for at the Water Contractor’s Irrigation Full Cost Rate, that is at

$12.00 per AF.

Pa~ent of the Highest Rate - The Interim Guidelines require the Water

Contractor to pay the higher of the Transferred or Tiered Water Rate

when both are applicable. In this example, the applicable Tiered and

Transferred Water Rates are the same. The Water Contractor is required

to pay $12.00 per AF for all water transferred for agricultural purposes

pursuant to the subject proposal.

c. What other surcharges and payments must Water Contractor X pay

relative to the transferred water?

38
Analysis and Response:

Water Contractor X must pay:

- - the applicable Friant Surcharge;

- - the applicable irrigation or M&I Restoration Payment dependent

upon the transferee’s actual water use; and

-- the $25 (October 1992 price levels) M&I Surcharge, if the water

is used for M&I purposes.

If the, transfer were to occur after the date of applicability of the

Pre-Reneval Charges, Pre-Reneval Charges will be applicable if Water

Contractor X meets the criteria discussed in Part C of these Interim

Guidelines. The Pre-Reneval Charges will be equal to 1.5 times the

calculated, applicable Restoration Payment.

d. Upon receipt of the appropriate water rate and applicable surcharges

and payments, how will Reclamation credit the monies received for

the transferred water?

Response:

CREDITING

Amount/AF Account

Full Cost M&I Rate

Cost of Service Component

Difference between Cost

of Service and Full Cost

Payments

Friant Surcharge

Restoration Payment

Pre -Renewal Charge

M&I Surcharge

1 The Pre-renewal Charge,

calculated Restoration Payment.

1~LQQ

$4 - 7

Project Repayment

Restoration Fund (Tiered

Water Rate or

Transfer Revenue)

Restoration Fund

Variable Restoration Fund

Variable1 Restoration Fund

$25.00 2 Restoration Fund

if any, is to be equal to 1.5 times the

2 The $25.00 M&I Surcharge reflects October 1992 price levels and is to

be adjusted consistent with the provisions of subsection ac. of Part H of the

interim Guidelines.

R~v~nu~

$15.00

39
2. It is Fiscal Year 1996, and Tehama-Colusa Water Contractor Y has

received approval from Reclamation to transfer a portion of its

entitlement to an entity which was not a CVP Water Contractor prior to

October 30, 1992, the date of passage of the Act. The transferee

proposes to use that water for agricultural purposes. Following

completion of all the required acreage limitation forms by the

transferees landholders as required by the RRA, it is determined that

the transferred water will be applied to full cost lands. Water

Contractor Y has reviewed its most recent monthly water delivery reports

from Reclamation and determined that the subject water at the time of

transfer will probably account for a portion of its entitlement in

excess of 80 percent but no more than 90 percent of Water Contractor Y’s

maximum contractual entitlement. The Water Contractor’s applicable

contractual rate is set at the Cost of Service rate. The Cost of

Service and Full Cost Rates for irrigation water are $17.00 and $35.00

per A, respectively.

What is the appropriate water rate to be paid by Water Contractor Y for

the subject water? What additional charges and payments will Water

Contractor Y be required to pay, and how will the various payments and

surchat~ges be credited?

Analysis and Response

:

Impacts of Tiered Water Rates - Tehama-Colusa Water Contractor Y’s

contract was renewed in 1995 and, therefore, is subject to the Tiered

Water Rate provisions as discussed in Part D (Tiered Water Rates) of

these Interim Guidelines. Accordingly, water used for irrigation

purposes in excess of 80 percent but no more than 90 percent of the

Water Contractor’s maximum combined contractual entitlement must be paid

for at a rate equal to the average of the Water Contractor’s contractual

water rate and the Water Contractor’s full cost irrigation water rate.

Because the contractual water rate is the Cost-of-Service, the average

rate is:

($17.00/AF + $35.00/AF) / 2 — $26.00/AF

Impacts of Transferred Water Rates - Under the Transferred Water Rate

provisions of these Interim Guidelines , water used for irrigation

purposes must be paid for at the Water Contractor’s full cost water rate•

of $35.00 per AF.

Impacts of Full Cost Provisions of RRA - Independent of these Interim

Guidelines, irrigation water which is applied to full cost lands must be

paid for at Water Contractor Y’s full cost water rate of $35.00 per AF.

Pa~ent of the Hiahest Rate - The Interim Guidelines require Water

Contractor Y to pay the highest of the Transferred, Tiered or Full Cost

water rates when all three are applicable. In this instance, the

Contractor is required to pay the irrigation Full Cost Rate of $35.00

per AF.

40
A~~licable Surcharges and Pa~ents and Crediting:

In addition to the payment of the full cost irrigation water rate, the

Water Contractor will be required to pay the irrigation Restoration

Payment. Because Water Contractor Y has renewed its water service

contract, Pre-Renewal Charges are not applicable.

CREDITING

P .~ Amni,nt /AF Credit Account

Full cost Irritation Rate

Cost of Service 17.00

Difference between Cost of

Service and Full Cost Rates

Project Repayment

Reclamation Fund

Pa~ents

Restoration Payment Variable Restoration Fund

$35.00

41
APPENDIX B

CHM~GES FOR DELINOUENCY PkYMENTS

APPLICABLE TO EXCHANGE CONTRACTORS

a. The Exchange Contractor shall be subject to interest, administrative and

penalty charges on delinquent payments. When a payment is not received

by the due date, the Exchange Contractor shall pay an interest charge

for each day the payment is delinquent beyond the due date. When a

payment becomes 60 days delinquent, the Exchange Contractor shall pay an

administrative charge to cover additional costs of billing and

processing the delinquent payment. When a payment is delinquent 90 days

or more, the Exchange Contractor shall pay an additional penalty charge

of 6 percent per year for each day the payment is delinquent beyond the

due date. Further, the Exchange Contractor shall pay any fees incurred

for debt collection services associated with a delinquent payment.

b. The interest charge rate shall be greater of the rate prescribed

quarterly in the Federal Register by the Department of the Treasury for

application to overdue payments, or the interest charge rate of 0.5

percent per month prescribed by Section 6 of the Reclamation Project Act

of 1939. The interest charge rate shall be determined as of the due

date and remain fixed for the duration of the delinquency period.

c. When a partial payment on a delinquent account is received, the amount

received shall be applied, first to the penalty, second to the

administrative charges, third to the accrued interest, and finally to

the overdue payment.

42
APPENDIX C

RESTORATION PAYHENTS: A 10-YEAR EXAMPLE

Reclamation has analyzed the allocation of Restoration Payments and

Restoration Funds for a hvoothetical 10 year period, herein labeled the period

fiscal year 1994 through fiscal year 2003, relative to the Three Functions --

M&I Water supply, Irrigation Water supply and Power. The example calculation

is dependent upon various critical assumptions, including, except for one

year, the most recent available Central Valley Project hydrology, a period of

unprecedented drought. The analysis is not intended to represent any

particular forthcoming period - - it is intended to represent an analysis of

one possible scenario.

The principal assumptions are as follows:

1. Projected Hvdrolo~v and Water Deliveries

:

Year

Total Projected

• Project Deliveries

M&I

3,126,000

3,486,000

2,702,000

3,153,000

2,532,000

2,576,000

2,590,000

2,008,000

1,239,000

1,012,000

365,000

400,000

400,000

400,000

400,000

400,000

400,000

400,000

300,000

300,000

Projected 1994 Deliveries

Total 1984 Deliveries Less

Total 1985 Deliveries Less

Total 1986 Deliveries Less

Total 1987 Deliveries Less

Total 1988 Deliveries Less

Total 1989 Deliveries Less

Total 1990 Deliveries Less

Total 1991 Deliveries Less

Total 1992 Deliveries Less

Reclamation is unable at this time to project the total actual reductions in

Delivered Project Water to be expected in above-normal, normal or drought

years as a result of the requirements of the Act and the Endangered Species

~ The Project deliveries have been reduced due to an assumed,

persistent, long-term drought.

1994

1995

1996

1997

1998

1999

2000

2001 ~

2002 ~

2003 ~

900,000

900,000

900,000

900,000

900,000

900,000

700,000

700,000

700,000

AF

AF

AF

AF

AF

AF

AF

AF

AF

43
Act (ESA). The above reductions have been assumed for the purposes of the

example calculation and are not intended to indicate actual or projected

reductions in yields as a result of the requirements of this Act or the ESA.

2. Cost-indexing. All dollar amounts have been adjusted over time based

upon an assumed cost index.

3. Friant Surchar~es. The annual projected revenues from Friant Surcharges

during the period fiscal year 1994 through 2003 are assumed to be reflective

of the annual historic average Class 1 and Class 2 water supplies, that is, an

annual average delivery of 1.5 million acre-feet. Approximately 5.3 percent

of the Friant Surcharge revenues were credited as originating from M&I Water

deliveries. The remaining portion is assumed to originate from Irrigation

Water deliveries.

4. Prolected Revenues Other Than Restoration Pa~ents and Friant Surchar2es

.

Due to the lack of historic observations, Reclamation is unable at this time

to make informed and accurate projections of future Restoration Fund revenues

resulting from application of Tiered Water Rates, Transferred Water Rates, M&I

Surcharges and Pre-Renewal Charges. Accordingly the assumed amounts of Tiered

Water Revenues, M&I Surcharges, Transferred Revenues and Pre-Reneval Charges

as used and credited to the Irrigation and M&I Water supply functions in the

example calculation represent speculative amounts. These amounts are shown

below:

Pre-Renewal Charges: Analysis assumes 200,000 AF subject to Pre-Renewal

Charges in fiscal years 1998 through 2003. The applicable Pre-Renewal

Charge in a particular year is to equal 1.5 times the then Restoration

Payment. For example purposes, all of the Pre-Reneval Charges are

shown as applicable to Irrigation.

Tiered Water Revenues

:

1994 $ 0 1999 $ 300,000

1995 0 2000 300,000

1996 0 2001 0

1997 0 2002 0

1998 100,000 2003 0

44
Trinqfpvrpd tJ~t~r Oii~ntwfti~i~ jmnd A.~..iMpd PAr A~rA-Prbnt ~ — . .. flOOt~L~ L%.C VCULaC

0 AF

50,000 AF x $30.00/AF

50,000 AF x $31.20/AF

10,000 AF x $40.00/AF

50,000 AF x $32.45/AF

25,000 AF x $41.60/AF

50,000 AF x $33.75/AF

50,000 AF x $43.26/AF

1999

2000

2001

2002

2003

50,000 AF x $35.10/AF ~

50,000 AF x $45.00/AF ~

75,000 AF x $36.50/AF

50,000 AF x $46.9714/AF

75,000 AF x $37.96/AF

75,000 AF x $48.67/AF

100,000 AF x $39.48/AF

75,000 AF x $50.61/AF

100,000 AF x $41.06/AF

100,000 AF x $52.64/AF

M~T ~t1rt~ht~roA tJnl-Ar flii~nHHp~ and A~n,’int~A p~r AF R~venue:

0 AF

50,000 AF x

50,000 AF x

50,000 AF x

50,000 AF x

$26. 68/AF

$27.53/AF

$28.40/AF

$29.30/AF

1999

2000

2001

2002

2003

50,000

75,000

75,000

100,000

100,000

AF x $29.96/AF6

AF x $30.95/AF

AF x $31.97/AF

AF x $33.02/AF

AF x $34.11/AF

5. Implementation of the Maximum Restoration Pa~ent Policy. Consistent

with the Interim Guidelines, all H&I and Irrigation Water Contractors are to

be charged each and every fiscal year the maximum Restoration Payment per AF

~‘ The first quantity shown in each year following fiscal year 1994 is

predicated upon Project M&I Water transfers from Exchange Contractors to an

entity that was not a Central Valley Project Contractor on October 30, 1992.

The Transferred Water Rate is at the Exchange Contractors’ computed Cost of

Service M&I Rate, estimated at $30 per acre-foot. The $30 rate is escalated

at 4 percent per year thereafter.

~ The ~econd quantity shown for each year following fiscal year 2994 is

predicated upon Project Irrigation Water transfers from an Exchange Contractor

to an entity that was not a Central Valley Project Contractor on October 30,

1992. The Transferred Water Rate is at the Irrigation Full Cost Rate for the

Exchange Contractors, which is estimated at $40 per acre-foot for 1995. The

$40 rate has been escalated by 4 percent per year thereafter.

6 The $25.00 M&I Surcharge (October 1992 price levels) associated with

the assumed M&I Water transfers has been escalated by 4 percent per year

thereafter.

1994

1995

1996

1997

1998

1994

1995

1996

1997

1998

45
[that is, $6.00 (October 1992 price levels) and $12.00 (October 1992 price

levels) of Project IrrLgation and H&I Water, respectively.I The remaining

portion of the Total Restoration Payment Obligation has been assigned to

Power. The analysis presumes that the Maximum Restoration Payment Policy

remains in full force and effect unless and until the record of historic

actual revenues demonstrates that the percentage allocations to either or both

of the Irrigation and M&I Water supply functions will exceed their allocable

shares relative to the Target Allocation.

6. Target Allocation. The Target Allocation reflects the Central Valley

Project plant-in-service cost allocation percentages for fiscal year 1991.

Said allocation represents the actual historic and projected future project

accomplishments.

Findings: Consistent with the above assumptions, the completed analysis

shows that approximately 26 percent of the Restoration Fund revenues will be

assigned to and collected from Power over the 10-year study period (see

Summary Tab1~ C-l herein.) Despite the employment of the Maximum Restoration

Payment Policy throughout the subject study period, the total amount of

Restoration Payments assigned to Power is significantly in excess of the

Target Allocation percentage for Power, that is 18 percent of the Restoration

Fund revenues. This result is principally due to the impact of the drought

years upon Restoration Payment collections from Irrigation Water

beneficiaries. Prior to the reduction of Project Water supply due to

persistent, long-term drought, assignment to and collection from Power

approximated some 19 percent of the total Restoration Fund payments.

The resulting Restoration Payment obligations calculated on a year by year

basis are shown in Tables C-lA through C-1J herein.

46
0000

00 0000101

0 00 00 0000 01 03 O0U)U)U)0C~0N0jU)j 0 ~ ON ~ C~ ro I~-NI~1 0 ~ 0 0 0 0 03 U) —

U)0N~ 0.N0 U)0

~ U) U) U)00 (0 ‘9— U) U) U) 00 ~ U) U) U)

.000003030i

I-NW 0 00 00

0 000 01 03 000000 U) U) 00101 00.U)U)0U)C.(NU)U)J0J 0 N U) — N U) 00 03 .-IOI

(0.

U) 000 03 03——N U)

• I-— —03

0 00000 000 0101

~

00UNU~ 00 U)

NN0 U)N 0000 U)IO1

U)N~0003,-N•

9F.1

U U) U) U) U) U) U)0U

a

000 000 000 0104 0 00 00 0000 0101 00U)U)OU)~CflNU)U)J0J N N U 000 U) ‘0 U)I0I U U) U) 0 U) 0 —00 NIOU NrN(~)U)1O0~0jJ a C) U) U) U) U) U) U) N 00

U)~N— U) U) U)0 U)0

U) U) U) 03U)03,-0N0

N00U)0003N00 N 0 U) 0 U) U) U) U)

~ U)

0000000000101

00N 0000 03 WOINI

C’~0r0ONJC~g

03NN U)U U) 03~ U) U)I .1 U) 03 U N N 0 N U) 00]~

ONNON.00 N N U) 0 03

0~ —000

U) NN NN U) U)U) NW 0) a

000000000 00 N 0000

U U)0

N~NUO0.00NN

—00 U) 03003rU0 U) 0—000) N 03 N N N U)

U) U)0 U)NOU)U)0U)0

03NN—N 003003

rN—

a

0000000000101

00000000 00103 0 0 0 00 U) ON N U)JU)J 0 N N N U NON 00101

U) 00NNN U)— U) NJ~ CflOO.N0000

U)U)00—r~U)0N03 a

0.U)U)03rU)NN03 NC.~U)U)000U)0 0 00 000 00

0 0101

000 ‘UU 000N UIU)I

00U)00.-.-NJc~ N 03 U) U 0 U) 0 N ‘-0101

03 NON U)0 U)UN 03IU)I

NU 03N——N0 U)

0U)0.00•030~ a ————

N

...

N

4U)0030—NU)~ ~~8gs rNNC.J3.J~

U. I I

IllI

HU

0

rU)S

030

ON

S

‘03 em I@

N

—— N.-

a. a2 I 0~

(~ I~

wZ( -iou

I-s U. 0

-I0w

-l I

eel

I- El

ND.’

00~ —I 0

I.’

~uI

C, •

;~~ a 0

—I

C

.20

C,

‘U I C

I

.2• —I AC, Ua 0 C

.2.1 o

C,

C

.2N00

a.

0320

030C0

CI

S

0. 000

CI, 00

•000
TABLE C—lA

Restoration Fund Payments — FY 1994

Power

Repayment Factors (Target

Albcation Factors)

Projected Revenues:

Non—Discretionary Revenues:

Pre—Renewal Charges

Tiered Water Revenues

Transfer Revenues

Friant Surcharges — FY93

Friant Surcharges — FY94

M&l Surcharges

$

Total Non—Discretionary

Max Restoration Payment 1/

Subtotal

Allocated RP Share

RP Revenues in Excess of

Allocated Share

RP Adjustment forOver(Under)

0

0

8,100,000

0

19,381,200

32,639,200

27,900,000

4,739,200

—1,007,200

4,526,000

5,268,000

9,000,000

—3,732,000

0 0

23,907,200

$ ~9~00

$ 45,000,000 2/

1,007,200

—1,007,200

$ ~ $ ~00 $ ~§~Q00 $ ~QQQ000

%Allocation after Adjustment

RP = Restoration Payment

1/ Maximum Restoration Payment:

~94Est. Paid Water Deliveries (AF)

Maximum Rate perAF

Maximum Amount

Irrigation

3,126,000

$ 6.20

$ i~j~200

M&l

365,000

$ 12.40

$ j~00

Total

3,491,000

$ ~Z200

2/ Maximum Discretionary Revenues

Projected Non—Discretionary Revenues

$ 31,000,000

14,000,000

$ ~QQ~fl00

18%

Irrigation

62%

M&l Total

20% 100%

0 $ $

0

0

0

0

0

0

0

0

0

7,576,000

5,682,000

0

13,258,000

0 $

0

0

424,000

318,000

0

742,000

0

0

0

8,000,000

6,000,000

0

14,000,000

TOTAL

15.76% 72.53% 11.71% 100.00%

Total
TABLE C—lB

Restoration Fund Payments — FY 1995

Power

Repayment Factors (Target

Allocation Factors)

Projected Revenues:

Non—Discretionary Revenues:

P re—Renewal Charges

Tiered Water Revenues

Transfer Revenues

Friant Surcharges

M&l Surcharges

Total Non—Discretionary

Max Restoration Payment

Subtotal

Allocated RP Share

RP Revenues in Excess of

Allocated Share

RP Adjustment forOver(Under)

TOTAL

18%

$

1/

0

0

0

0

0

0

0

0

7,351,920

0

—2,772,320

$ j~~00

$

Irrigation

62%

0

0

0

5,682,000

0

5,682,000

22,310,400

27,99Z400

25,323,280

2,669,120

0

$ ~A00

M&l Total

20%

$ 0

0

1,500,000

318,000

1,334,000

3,152,000

5,120,000

8,272,000

8,168,800

103,200

0

$ ~Q00

100%

$ 0

0

1,500,000

6,000,000

1,334,000

8,834,000

27,430,400

$ ~j~§j~fl0

$ 40,844,000 2/

2,772,320

—2,772,320

$ ~j~~000

% Allocation after Adjustment

RP = Restoration Payment

1/ Maximum Restoration Payment:

‘95 Est. Paid Water Deliveries (AF)

Maximum Rate perAF

Maximum Amount

Irrigation

3,486,000

$ 6.40

$ ~00

M&I

400,000

$ 12.80

$

Total

3,886,000

$ ~Q~00

2/ Maximum Discretionary Revenues

Projected Non—Discretionary Revenues

Total

$ 32,010,000

8,834,000

$ ~Q1~000

U11.21% 68.54% 20.25% 100.00%
TABLE C-iC

Restoration Fund Payments — FY 1996

Repayment Factors (Target

Allocation Factors)

Projected Revenues:

Non—Discretionary Revenues:

Pre—Renewal Charges

Tiered Water Revenues

Transfer Revenues

Friant Surcharges

M&I Surcharges

Total Non—Discretionary

Max Restoration Payment 1/

Subtotal

Allocated RP Share

RP Revenues in Excess of

Allocated Share

RP Adjustment for Over(Under)

$ 0

0

0

0

0

$

0

0

0

7,625,970

0

0

0

400,000

5,682,000

0

$

6,082,000

17,860,220

23,942,220

26,267,230

—2,325,010

2,259,810

0

0

1,560,000

318,000

1,376,500

3,254,500

5,284,000

8,538,500

8,473,300

65,200

0 0

$ 0

0

1,960,000

6,000,000

1,376,500

9,336,500

23,144,220

$ ~Q~Q

$ 42,366,500 2/

—2,259,810

2,259,810

$ ~ $ ~~220 $ ~00 $ ~§~~00’

% Allocation after Adjustment

RP = Restoration Payment

1/ Maximum Restoration Payment:

‘96 Est. Paid Water Deliveries (AF)

Maximum Rate perAF

Maximum Amount

Irrigation

2,702,000

$ 6.61

$ i7~2~20

M&l

400,000

$ 13.21

$ ~j~00

Total

3,102,000

$ ~j~20

2/ Maximum Discretionary Revenues

Projected Non—Discretionary Revenues

$ 33,030,000

9,336,500

$ ~00

Power

18%

Irricjation

62%

M&I

20%

Total

100%

TOTAL

23.33% 56.52% 20.15% 100.00%

Total
TABLE C—iD

Restoration Fund Payments — FY 1997

Power

Repayment Factors (Target

Allocation Factors)

18%

Projected Revenues:

Non—Discretionary Revenues:

Pre—Renewal Charges

Tiered Water Revenues

Transfer Revenues

Friant Surcharges

M&l Surcharges

$

Total Non—Discretionary

Max Restoration Payment 1/

Subtotal

Allocated RP Share

RP Revenues in Excess of

Allocated Share

RP Adjustment forOver(Under)

0

0

7,949,250

0

21,503,460

28,225,460

27,380,750

844,710

—824,710

5,452,000

8,812,500

8,832,500

—20,000

0 0

26,955,460

$ Q~1~60

$ 44,162,500 2/

824,710

—824,710

$ ~j~j~Q $ ~A60 $ ~jZ~00 $ ~ii§~00

%Allocation after Adjustment

RP = Restoration Payment

1/ Maximum Restoration Payment:

‘97 Est. Paid Water Deliveries (AF)

Maximum Rate perAF

Maximum Amount

Irrigation

3,153,000

$ 6.82

$ ~j~Q~60

M&l

400,000

$ 13.63

$ ~A~&00

Total

3,553,000

$ ~fi~~60

2/ Maximum Discretionary Revenues

Projected Non—Discretionary Revenues

$ 34,080,000

10,082,500

$ ~jj§~00

IrriQation

62%

M&l Total

20%

0 $

100%

0 $

0

0

0

0

0

0 $

0

1,040,000

5,682,000

0

6,722,000

0

0

1,622,500

318,000

1,420,000

3,360,500

0

2,662,500

6,000,000

1,420,000

10,082,500

TOTAL

16.13% 63.91% 19.95% 100.00%

Total
TABLE C—1E

Restoration Fund Payments — FY 1998

Power Irrigation

Repayment Factors (Target

Allocation Factors)

Projected Revenues:

Non—Discretionary Revenues:

Pre—Renewal Charges

Tiered Water Revenues

Transfer Revenues

Friant Surcharges

M&I Surcharges

Total Non— Discretionary

Max Restoration Payment

Subtotal

Allocated RP Share

RP Revenues in Excess of

Allocated Share

RP Adjustment for Over(Under)

TOTAL

18%

$

1/

0

0

0

0

0

0

0

0

9,033,210

0

2,702,830

$ fl~40

62%

$ 2,109,000

100,000

2,163,000

7,102,500

0

11,474,500

17,799,960

29,274,460

31,114,390

—1,839,930

0

$ ~~60

$

20%

0

0

1,687,500

397,500

1,465,000

3,550,000

5,624,000

9,174,000

10,036,900

—862,900

0

100%

$ 2,109,000

100,000

3,850,500

7,500,000

1,465,000

15,024,500

23,423,960

$ ~A60

$ 50,184,500 2/

—2,702,830

2,702,830

$ ~2i200 $ ~Q~j~j~00

% Allocation after Adjustment

RP = Restoration Payment

1/ Maximum Restoration Payment:

‘98 Est. Paid Water Deliveries (AF)

Maximum Rate perAF

Maximum Amount

Irrigation

2,532,000

$ 7.03

$ 2~~60

M&I

400,000

$ 14.06

$

Total

2,932,000

$ ~A~1~60

2/ MaxImum Discretionary Revenues

Projected Non—Discretionary Revenues

$ 35,160,000

15,024,500

$ ~500

M&l Total

23.39% 58.33% 18.28% 100.00%

Total
TABLE C—iF

Restoration Fund Payments — FY 1999

Power Irrigation

Repayment Factors (Target

Allocation Factors)

Projected Revenues:

Non—Discretionary Revenues:

Pre—Renewal Charges

Tiered Water Revenues

Transfer Revenues

Friant Surcharges

M&l Surcharges

Total Non—Discretionary

Max Restoration Payment

Subtotal

Allocated RP Share

RP Revenues in Excess of

Allocated Share

RP Adjustment for Over(Under)

TOTAL

18%

$

1/

0

0

0

0

0

0

0

0

9,317,340

0

2,487,660

$ L~000

62%

$ 2,175,000

300,000

2,250,000

7,102,500

0

11,827,500

18,676,000

30,503,500

32,093,060

—1,589,560

0

$ ~Q~Q~00

20%

$ 0

0

1,755,000

397,500

1,498,000

3,650,500

5,804,000

9,454,500

10,352,600

—898,100

0

100%

$ 2,175,000

300,000

4,005,000

7,500,000

1,498,000

15,478,000

24,480,000

$ ~900

$ 51,763,000 2/

—2,487,660

2,487,660

$ $ ~fi~00

% Allocation after Adjustment

RP = Restoration Payment

1/ Maximum Restoration Payment:

‘99 Est. Paid Water Deliveries (AF)

Maximum Rate perAF

Maximum Amount

Irrigation

2,576,000

$ 7.25

$ 2§~§Z§1200

M&l

400,000

$ 14.51

$

Total

2,976,000

$ ~Q~00

2/ Maximum Discretionary Revenues

Projected Non—Discretionary Revenues

Total

$ 36,285,000

15,478,000

$ ~j2§~00

M&l Total

22.81% 58.93% 18.26% 100.00%
TABLE C—1G

Restoration Fund Payments — FY 2000

Repayment Factors (Target

Allocation Factors)

Projected Revenues:

Non—Discretionary Revenues:

Pre—RenewalCharges

Tiered Water Revenues

TransferRevenues

Friant Surcharges

M&l Surcharges

$

Total Non—Discretionary

Max Restoration Payment 1/

Subtotal

Allocated RP Share

RP Revenues in Excess of

Allocated Share

0

0

0

0

0

0

0

0

10,420,425

0

$ 2,247,000

300,000

2,339,500

9,943,500

0

14,830,000

19,399,100

34,229,100

35,892,575

—1,663,475

$ 0

0

2,737,500

556,500

2,321,250

5,615,250

5,988,000

11,603,250

11,578,250

25,000

$ 2,247,000

300,000

5,077,000

10,500,000

2,321,250

20,445,250

25,387,100

$ 45.832.350

$ 57,891,250 2/

—1,638,475

RP Adjustment for Over(Under)

$ ~Q~00 $ ~j~~00 $ ~j~50 $ ~j250

% Allocation after Adjustment

RP = Restoration Payment

1/ Maximum Restoration Payment:

~00Est. Paid Water Deliveries (AF)

Maximum Rate perAF

Maximum Amount

Irrigation

2,590,000

$ 7.49

$ ~d00

M&l

400,000

$ 14.97

$ ~200

Total

2,990,000

$ 2~~d00

2/ Maximum Discretionary Revenues

Projected Non—Discretionary Revenues

$ 37,446,000

20,445,250

$ §L~it 250

Power

18%

Irrigation

62%

M&I

20%

Total

100%

TOTAL

1,638,475 0 0

20.83%

1,638,475

59.13% 20.04% 100.00%

Total
TABLE C—1H

Restoration Fund Payments — FY 2001

Power Irrigation

Repayment Factors (Target

Allocation Factof~)

Projected Revenues:

Non—Discretionary Revenues:

Pre—Renewal Charges

Tiered Water Revenues

Transfer Revenues

Friant Surcharges

M&l Surcharges

Total Non—Discretionary

Max Restoration Payment

Subtotal

Allocated RP Share

RP Revenues In Excess of

Allocated Share

RP Adjustment for OverCUnder)

18%

$

1/

TOTAL

0

0

0

0

0

0

0

0

10,864,440

0

6,077,720

$ j~60

62%

$ 2,319,000

0

3,650,250

9,943,500

0

15,912,750

15,521,840

31,434,590

37,421,960

—5,987,370

0

$ ~±590

20%

$ 0

0

2,847,000

556,500

2,397,750

5,801,250

6,180,000

11,981,250

12,071,600

—90,350

0

100%

$ 2,319,000

0

6,497,250

10,500,000

2,397,750

21,714,000

21,701,840

$ ~

$ 60,358,000 2/

—6,077,720

6,077,720

$ jj1Q~j250 $ §Q~~~g00

% Allocation after Adjustment

RP = Restoration Payment

1/ Maximum Restoration Payment:

‘01 Est. Paid Water Deliveries (AF)

Maximum Rate perAF

Maximum Amount

irrigation

2,008,000

$ 7.73

$ ~840

M&I

400,000

$ 15.45

$ §~200

Total

2,408,000

$ ~Qj840

2/ Maximum Discretionary Revenues

Projected Non—Discretionary Revenues

Total

$ 38,644,000

21,714,000

$ ~000

M&l Total

28.07% 52.08% 19.85% 100.00%
TABLE C-il

Restoration Fund Payments — FY 2002

Power Irrigation

Repayment Factors (Target

Allocation Factors)

Projected Revenues:

Non—DiscretionaryRevenues:

Pre—Renewal Charges

Tiered Water Revenues

Transfer Revenues

Friant Surcharges

M&l Surcharges

Total Non—Discretionary

Max Restoration Payment

18%

$

1/

Subtotal

Allocated RP Share

RP Revenues in Excess of

Allocated Share

RP Adjustment for Over(Under)

TOTAL

0

0

0

0

0

0

0

0

11,487,195

0

13,733,975

$ ~170

62%

$ 2,391,000

0

3,795,750

9,943,500

0

16,130,250

9,874,830

26,005,080

39,567,005

—13,561 ,9~

0

$ ~080

$

$

20%

0

0

3,948,000

556,500

3,302,000

7,806,500

4,785,000

12,591,500

12,763,550

—172,050

0

~~jj500

100%

$ 2,391,000

0

7,743,750

10,500,000

3,302,000

23,936,750

14,659,830

$ ~~j~80

$ 63,817,750 2/

—13,733,975

13,733,975

$ §~Qj~50 -~

% Allocation after Adjustment

RP = Restoration Payment

1/Maximum Restoration Payment:

~02Est. Paid Water Deliveries (AF)

Maximum Rate perAF

Maximum Amount

Irrigation

1,239,000

$ 7.97

$ ~j~30

M&l

300,000

$ 15.95

$ j~900

Total

1,539,000

$ ~~~§30

2/ Maximum Discretionary Revenues

Projected Non—Discretionary Revenues

Total

$ 39,881,000

23,936,750

$ §~2~Z50

M&l Total

39.52% 40.75% 19.73% 100.00%
TABLE C—1J

Restoration Fund Payments — FY2003

Power

Repayment Factors (Target

Allocation Factors)

18%

Projected Revenues:

Non—Discretionary Revenues:

Pre—Renewal Charges

Tiered Water Revenues

Transfer Revenues

FriantSurcharges

M&I Surcharges

Total Non—Discretionary

$ 0

0

0

0

0

0

$ 2,469,000

0

5,264,000

9,943,500

0

$

17,676,500

0

0

4,106,000

556,500

3,411,000

8,073,500

$ 2,469,000

0

9,370,000

10,500,000

3,411,000

25,750,000

Max Restoration Payment 1/ 0

Subtotal 0

8,328,760

26,005,260

4,938,000

13,011,500

13,266,760

$ ~~Qi§,Z60

Allocated RP Share

RP Revenues in Excess of

Allocated Share

12,043,260 41,482,340

0 —15,477,080

13,381,400 $ 66,907,000 2/

—369,900 —15,846,980

RP Adjustment forOver(Under)

$ ~Q~40 $ ~j~~60 $ j~,Qjj~500 $ §Q~Q~00

%Allocation after Adjustment 41.69%

RP = Restoration Payment

1/ Maximum Restoration Payment:

‘03 Est. Paid Water Deliveries (AF)

Maximum Rate perAF $

Maximum Amount $ ~fi2~ $ j~00 $ ~~fi§1Z60

2/ Maximum Discretionary Revenues

Projected Non—Discretionary Revenues

$ 41,157,000

25,750,000

$ §j~~Q00

Irrigation

62%

M&l Total

20% 100%

TOTAL

15,846,980 0 0 15,846,980

38.86%

Irrigation

1,012,000

8.23

19.45%

M&l

100.00%

Total

1,312,000

$

300,000

16.46

Total