EP 1165-2-1
30 Jul 99
this type of agreement are the same as for provision of water supply
storage as part of original project construction. The cost for such
storage will normally be established as the higher of either benefits
or revenues foregone, replacement cost, or the cost of storage in the
Federal project. The interest rate used for discounting future
benefits, revenues or costs is the current rate used for project
evaluations--see paragraph 5-7.f(3). The cost of storage is
determined by computing costs, at the time of construction, by the use
of facilities cost allocation method, and then updating such costs to
present day price levels by use of a combination of the Engineering
News Record Construction Index and the Corps of Engineers Construction
Cost Index. Any specific costs of construction allocated to the new
water supply storage must be repaid during the period of construction.
The cost associated with the storage space may be repaid over a 30-
year period from the date the storage is available--which generally
will be the date the agreement is signed by ASA(CW). Interest on
unpaid balances shall be at the rate specified in Section 932 of WRDA
1986. Prior to recommending a reallocation of storage in a project,
the district commander shall provide an opportunity for public review
and comment. This shall be documented and included as part of any
request for reallocation approval.
d.
Surplus Water.
(1) Authority. Under Section 6 of the 1944 Flood Control Act
(Public Law 78-534), the Secretary of the Army is authorized to make
agreements for surplus water with states, municipalities, private
concerns, or individuals at such prices and on such terms as he or she
may deem reasonable. These agreements may be for domestic, municipal,
and industrial uses, but not for crop irrigation, from surplus water
that may be available at any reservoir under the control of the
Department of the Army.
(2) Surplus water is defined as either:
(a) Water stored in a Department of the Army reservoir that is
not required because the authorized use for the water never developed
or the need was reduced by changes that occurred since authorization
or construction; or
(b) Water that would be more beneficially used as municipal
and industrial water than for the authorized purpose and which, when
withdrawn, would not significantly affect authorized purposes over
some specified time period.
(3)
Requirements and Restrictions.
(a) Surplus water declarations will only be made when related
withdrawals will not significantly affect authorized purposes.
(b) Surplus water agreements shall be accompanied by a brief
letter report similar to reallocation reports (reference paragraph
4-32 d.(1)) and shall include how and why the storage is determined to
be surplus.
(c) Surplus water agreements will normally be for small
amounts of water and/or for temorary use as opposed to storage
reallocations and permanent right to that storage. Normally, surplus
water agreements will be limited to 5 year periods.
18-2
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