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<br />. <br /> <br />. <br /> <br />1-10 <br /> <br />If it is determined that it is necessary to show financial payout of <br /> <br />all authorized future projects should they eventually be built, an alternative <br /> <br />assumption to that used by Western is to incorporate a series of stepped rate <br /> <br />increases in the power repayment studies. <br /> <br />We have prepared such a study, <br /> <br />described in detail in Section III, which has the following stepped rate in- <br /> <br />creases: <br /> <br />Year <br /> <br />Composite Rate* <br /> <br />1983 <br />1990 <br />2000 <br />2010 <br /> <br />7.75 mills/kWh <br />9.66 mills/kWh <br />11.50 mills/kWh <br />13.25 mills/kWh <br /> <br />*Rate at 58.2% Load Factor <br /> <br />These rate increase intervals were arbitrarily placed at 10 year inter- <br /> <br />vals to illustrate the use of stepped rates. A reasonable approach would be to <br /> <br />place the stepped increases at intervals to coincide with the year major future <br /> <br />projects are initially in service, however, it may also be appropriate to show <br /> <br />stepped increases at appropriate intervals not related to future projects. The <br /> <br />stepped rate increase approach assigns the costs of future projects to the per- <br /> <br />iod when the benefits from the projects will be recognized and avoids increas- <br /> <br />ing present rates to pay for future projects, some of which are in preliminary <br /> <br />stages and may not be completed. <br /> <br />Implementation of stepped rate increases would have the following bene- <br /> <br />fits: <br />