<br />
<br />COLORADO RIVER STORAGE! PROJECT
<br />
<br />9
<br />
<br />in what has been termed imputed interest on the non~interest~bearing' irrigation
<br />ltllooation. If the utilities built the lines, they would pity Federal income..taxes
<br />on those lines. On the other hand the costs of power to the preference eustomers
<br />'would be higher. In;.reco&.nition of these factors, computations have been made
<br />comparing costs and ,savings under the utility proposal.
<br />Thifl comparison, on the basis of present worth of annual savings and costs,' is
<br />shown in table 2 hereof. Included in savings are the savings in construct.ion costs
<br />to the United States, savings in operation, maintena,nce, and replaoements', reduc-
<br />tion in imputed interest on the irrigation allocation of the storage units, and .Federal
<br />income txxes. forgone~ Imputed interest costs are generally not considered
<br />by the Bureau but are 'included herein because of views expressed by the utiliti~.s.
<br />Table 2 shows that the present worth of the increased costs under the utility
<br />proposal exceeds the pziesent worth of savings to the United States py $36,756,000
<br />in the case where the rate for firm energy is 6.57 mills per kilowatt-hour under
<br />the utility proposal and {) mills per kilowatt~hour under the yardstick system.
<br />With a rate of 6 mills ,per kilowatt~hour for firm energy under both the utility
<br />proposal and the yardstick system the present worth of the increased costs
<br />exceeds the savings by $45,463,000 under the utility proposal.
<br />
<br />TABLE 2.-Bureau's coinputaJ:t'ons of present worth of savings and increased costs
<br />under the utility proposal t
<br />
<br />Item
<br />
<br />SavIngs
<br />
<br />Increased
<br />co'"
<br />
<br />6.67.m:lll rate for utility proposa.tand fJ-.rnilJ rate for yardstick system:
<br />Tmnsmlssfon investment 2_ _c. _ _n_.._._w._._.._._h._h.___w_w_._....w.. $109,847. 000 ._._n~.~_.w_~
<br />Operation and maintenance and rep18cement.~~.w._~._w~..~w~_.w_w..____ 86,641, 000 _w._.w_w~..__.
<br />Federal ta.xes forgone 3.___..:._.__w_. _.___h_..___'_._._~__._.._._._"h_ 80,000,000 'h_.UW.W.'__
<br />Imputed jntā¬'rest on Jrrlge.tlo~_......w.._w...._._.~.~_._~_w~._.~w_.___h_ 4,631,000 w_____w_w_._..
<br />Wheeling costs_. ...._._W_hW~W...u._...~hh._d._.W..~__..~.._~_._.h_ ~___.'_~_hW__ $217,775, 00l'
<br />Total._..w......_.._.~..__.~W_W.W.h.W.W._._._Wh~_W._d._.w...__..__.~ 181,019,000 217,775,000
<br />Dlfferen()(l_w__w..._..n.._._w~~.w_wn..__w___'w_w..~..w_w.w..W.W.W.WWhW. ~h._W__..w.u 86,756,000
<br />6-m1l1 rate for both utJUty propOsal and yardstick system:
<br />'l'rfl,lJ,~mlss1on Iuvestment,). _. ._n._.....~__~.~._._whh_.~w._~u.~...._~. 109,847,000 .._nww.ww..n
<br />Operation and maintenance and reple.cemeut..w.w__.w~.~__w.w.w._~uw_~. 86,541,000 _h_.......w__
<br />Federal taKes r(lrg(lne3__.n_n~..._.._w.w._n...W...W.h.d_W~W~n_w.__.w 30,1)00,000 W"h_"~_h'~~_
<br />Imputed interest on irrl.gat1on~..U____Wh~..._.~...W..h_..W~_~~_w_w____w '.~.WW'_...~._ 4,076,000
<br />Wheeling l.!Osts_.~.w._~...._w_.._...W.hW..__.w~._.w.w._._..nwuw_h..._ ___w.._w.w.wn 217,775,000
<br />TotaL....W~._hw.w.._n._w...;.W._.Uh._._.W._Wh___.W...w_..._..~.._.. 176,~ 221,851,000
<br />Df1ference..W.Wh.hW~._w.w..~~ww.....WW_...Wh~W...._w.w_._.._h_.....w_. .w..n.ww...... 45,463,000
<br />
<br />t For perIod, 11164 through 2049, '
<br />) Includes il'lterest dUring construotlon.
<br />, Although termed "sav/ngs" tho item of taxes forgono ill aotually income not received.
<br />
<br />Two other analyses using wheeling costs Were made but using a somewhat
<br />different approaoh in arriving at average firm power rates. The results of these
<br />studies show average rates of the same relative magnitude as those repor*ed in
<br />1re.ble 2 and hence, are not discussed herein. They may be found on pages 43
<br />and 45 of the regional director's report.
<br />
<br />
<br />ANALYSIS UNDE& CONGRESSIONAL COMMITTEE COMMENTS
<br />
<br />House Document No. 1087, 84th Congress> contains the following:
<br />"Their (the utilities') proposal provides essentially that the Secretary
<br />construct the backbone ,transmission lines connecting major powerplants of
<br />the project and that use be made of the existing systems of the companies
<br />and additions thereto to market the power.
<br />"The proposal is consistent with the policy expressed by the Congress for'
<br />ma.ny years in appropriation aots and elsewhere whereby the Federal Gov-
<br />ernment. builds the basic.' backbone transmission system and distribution is
<br />made through. existing systems where satisfactory arrangements can be
<br />wOl'ked out.
<br />IITherefore, the committee expects the proposal by the private power
<br />companies for cooperation; in the development to be carefuIly oonsidered by
<br />the DePt!-rtment of the Interior and the electrio power and energy of the
<br />project to be marketed, so 'far as possible, through the facilities of the electriC'
<br />
<br />
|