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<br />. <br /> <br />. <br /> <br />activity ,"2 J <br /> <br />, shall govern the procedures for estimating <br /> <br />investment requirements, <br /> <br />project Benefits <br /> <br />Estimates of the benefits accruing from hydropower <br />generation, from development of new water supplies from the <br />la poudre River for municipal and indus~rial use, and from <br /> <br />2' <br />Cache 0' <br /> <br />improved management of waters already developed and used for <br />irrigated agriculture shall be made, Flood control benefits <br />shall not be estimated, Benefits shall be estimated separately <br /> <br /> 1 for each purpose. The separable costs of including each purpose 2 <br />/j shall be estimated and an incremental evaluation of each- purpose (J <br />. <br /> prepared, Allocation of joint costs will not be required. <br /> <br />Hydropower Benefits <br /> <br />The alternative cost approach to estimating hydropower <br />benefits was used in Phase I. Since this is the least reliable <br /> <br />method of estimating benefits, it should be used only if a test_ <br /> <br />for effective demand is conducted. Tudor's informal canvass of <br /> <br />utility load projections is helpful, but does not constitute a <br />credible test of effective demand, It appears that the growth of <br />energy demand in the region which would be served by a Cache la <br />poudre project is likely to be sufficient to ensure demand for <br />all project power, However, there is reasonable doubt whether <br />the demand for peaking capacity will be sufficient to ensure <br /> <br />that the project would be used solely for that purpose, <br /> <br />-4- <br />