Western irrigators owe $1.6B for past Reclamation projects -- GAO

E&E News
By Annie Snider
September 10, 2014

With many Western lawmakers clamoring for expanding reservoirs amid an entrenched drought, a government watchdog issued a report yesterday showing farmers and ranchers still owe on their tab for dams and reservoir projects done decades ago.

The Government Accountability Office report says irrigation districts still owe $1.6 billion, roughly a quarter of their tab for the 130 projects built for irrigation by the Bureau of Reclamation.

Irrigators have paid off construction costs in 54 of those projects, but they still owed payments on 76 projects as of the end of fiscal 2012. Many of those projects were built during the 1960s.

Many Reclamation projects serve multiple purposes, and construction costs are allocated among them. In addition to irrigation, reservoirs provide water for cities, industries and power generators.

Irrigation beneficiaries only have to pay back their share of the construction costs, while power generation and municipal and industrial users must pay back those costs with interest. In some cases, irrigators can prove they lack the ability to pay, in which case other users often subsidize irrigation assistance.

According to GAO, of $6.4 billion in construction costs that irrigators owed for projects they had a stake in, more than $3 billion was covered by financial assistance from other revenue sources.

The report comes as House Republicans are looking to grease the skids for new water storage projects. This afternoon, a House Natural Resources Committee subpanel is holding a hearing on a measure to accelerate environmental reviews of water storage projects (E&E Daily, Sept. 8).

Democratic lawmakers who requested the GAO report pointed to its findings as a reason to oppose the legislation.

"Irrigators haven't paid for projects that were built forty years ago and Congress isn't allocating money for projects already approved. Yet, House Republicans insist on a hearing that ignores these real issues," Reps. Peter DeFazio (D-Ore.), Grace Napolitano (D-Calif.) and Jared Huffman (D-Calif.) and Sen. Ed Markey (D-Mass.) said in a statement.

"At a time when the federal government could use $1.6 billion for all kinds of pressing needs, this committee should focus on serious fixes to our water problems, and stop wasting time with legislation that amounts to a giveaway of public money and will do nothing to solve this issue," they said.

The GAO also found that Reclamation isn't doing a good job of making repayment information available to the public. The bureau prepares repayment statements annually, but they are not posted on its website.

"With population, agricultural production, and development in the West projected to continue to increase, Reclamation may be called upon to modify or expand existing capacity for water storage or delivery," the report says. "In considering potential new work and affiliated funding arrangements, Congress, as well as water users and the public, may benefit from evaluating information on past water projects."