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<br />. <br /> <br />. <br /> <br />Scenario A - Peaking power production <br /> <br />Average Annual Project Benefits - <br />Average Annual project Costs - <br /> <br />$41,050,000 <br />$33,800,000 <br /> <br />Benefit/Cost Ratio - <br /> <br />1. 21 <br /> <br />$acl;~~ ? <br /> <br />Scenario B - peaking power <br /> <br />Production 2 <br />o <br /> <br />1 <br />, <br /> <br />Average Annual project Benefits - <br /> <br />$18,615,000 <br /> <br />(229 GWH @ 65 millS/kwh) <br /> <br />Average Annual project Costs - <br />Benefit/Cost Ratio <br /> <br />$33,800,000 <br />0.55 <br /> <br />P [Scenario Al ~ 0.88 for EV(B/C ratio) ~ 1,0 <br />EV (Benefits) = $33,800,000 = P ($41,050,000) + <br />(1-P)($18,615,000) <br /> <br />!nterpretation - The odds in favor of the existence <br />of adequate pea~ing power demand must be nearly <br />9 to 1 in order for the expected value of the <br />benefit/cost ratio to equal or exceed unity. <br />Alternatively, ~he project is not economically <br />justified if th~re is more than one chance in <br /> <br />ten that adequa~e peaking power demand will not <br /> <br />exist, <br /> <br />Yet. another <br /> <br />source. of <br /> <br />'7 <br />/w . <br />ul'\certainty.~ the estimation of <br /> <br />future hydroelectric power bel)ef~ts by the alternative cost <br />method lies in the assumption~ about future fuel costs. This was <br /> <br />handled in the Interim Report through sensitivity analyses <br />showing the values of the evaluation criteria if substantial fuel <br /> <br />-8- <br /> <br />