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:g OOWiRADO R~VElR STORAGj;) PIliOJElC'l1 ;ANALYSIS' OF UTILITY l'ROPOSAL , . . , .. The utilities were advised by letter of January 19, t960, that tlleiroffer would be analyzed in aOQQrdanpe with the following: ' A. The usual Bureij,u potioles and procedurf9s. B. Comments mad~ by congressional committees. Co' Five stated baB~Q priuoip1es; . . . 1. Lines muet be of sufficient. capacity to as~ure, delivery.of available powe~. . 2. There. rO.w~t. be no interference with the ability of the Burea,\l. to serve)preferenoe customers to the extent they WQuld be served by federally constructed lines. : : 3. Baokbohe lines must provide suitable integration among Federal projept power facihties. at the time required to meet projeot objectives, and project use must at all times be the overriding consideration. 4. Charges 'made for delivery of power must. not adversely affect projl.}ot feasibility and payout, and particularly must be such as .u$t. to reduce quantity or timing of irl'igation assistance. 5. If utili~ies construct the backbone high-voltage transmission lines, they! must accept, also the responsibility of providing trans- mission for delivery at {ower' voltages toload centers of prefer.. enc~. customers to the same. extent as _ would prevail: under a fedei~ally constructed sy~tem. A~ALYSIS UNDER PRU{ClPLES 1, 2, 3, AND 5 Discussions with liepresentativea of the five utilities indicate tha.t 'physical compliance with the~ requirements, of .prlnciples 1; 2, 3, and' 5, would. be met. Any contract entered into under the utility proposal would require that ,the co~ditions of these ptinciples be met. ANALYSIS UNDEB PRINCIPLE 4 The ke,Y pointe td, be used in comparing the utility propos.l with aU-Federal constructIon are shown in table 1. . Column 2. of .tabl~ 1 shows comparable d, ata under the utility. p,raposal using the same rates as \lnder the' yardstick system. A comparison of" the data in column 1 with that }ll oolumn 2 shows that if .the 'utility proposal is acoepted and the firm power sold) at an avera~e rate of 6 mills per kilowatt~hour-, the .payout period far both the !power and irrigatian allooation .of the storage unjts would be longer. The amou~t of irrigatioIl assistance available fer distribution to the States would be legs, N.o irrigation assistance would be available in year 2015 and consequently tlle utility preposal with the same, rates f\s}mder the yardstick system -would not n).eet the requirement of either principle 4 or of tne Praject Act. '. In order to provide the same total irrig~tion assistance ($952,234,000) to the States by fiscal yep.r 2049 as under the yardstiok system and main~aining the level .of 2.5 mills per kUowatt-.hour for nonfirm .energy and $15 per kilowatt 'per year fer peaking Qapacity, an averal!e rate .of ,6.57 :ruills per kilewa~t-hour fer firm energy woulq be required under the utility proposa!. COfi\parable data fer the key points are ahewn in column 3 o(table 1. Comparison with cohi.mn 1 data sp.ews. th~t apceptance of the proposal and Bale of firm power at 6.57 mills per kilowatt-h~ur;.vl oulq pay aut both the power and irrigation allocations earlier and the ameunts or irrigation assistance,wa"\lld.be more in all y_ears 1.1'p ta.'a:p.d including fisoal y~ar .2049' than wauld 1::>e the. c'ase under an all-Federal system, Column 4 of ta.ble. l shQwe the data for. the '~.ey points of comparison with a rate for firm energy of 6.57 mills per kilowatt-hour under the yardstick ~ystem. This condition wj>uld payout the power a11d irrigation allocation earlier than under the utility.propo.sal with the aa:r;ne' :rates a;nd would provide more irrigation assistance earlier.j ~ -' ANA*Y5n~ .UNDER USUAL BUREAU POLI~Y AND PROCEDUttE Acceptanoe of ~he utIlity offer would have. the' advantage of saving the Federal Government some $118,475,000 in investment costs. It would also reduce annual operatio~ and maintenance costs.,to be borne by the Federal Government. Beoause of the n;eed to charge a higher rate for power under the utility. propo8al~ the irrigation allocation is repaid soaner and hence there is a theoretiCal savings