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<br />. <br /> <br />. <br /> <br />II-I0 <br /> <br />We have undertaken a study as outlined above which is based upon the <br /> <br />FY 1981 PRS included by Western in the Rate Brochure. Such study is described <br /> <br />in detail in Section III of this report. Following is a summary of the re- <br /> <br />suits: <br /> <br />Year <br /> <br />Compos ite <br />Rate* <br /> <br />Increase <br /> <br />1981 <br />1983 <br />1990 <br />2000 <br />2010 <br /> <br />7.89 Mills/kWh <br />7.75 Mills/kWh <br />9.66 Mills/kWh <br />11.50 Mills /kWh <br />13.25 Mills/kWh <br /> <br />(Present Rate) <br />- 1. 77% <br />24.65% <br />19.05% <br />15.22% <br /> <br />*Rate at 58.2% Load Factor <br /> <br />As the above table shows. no increase in power rates is currently <br /> <br />required; however increases in future years would be required to accomplish <br /> <br />repayment as future projects are completed and require initiation of repayment. <br /> <br />We believe that the ratemaking approach just described is sound and <br /> <br />consistent with established ratemaking principals. Rates should be established <br /> <br />to accomplish a proper matching of revenues and costs. Rates should also be <br /> <br />based upon a set of cost data which is reasonably determinable and not subject <br /> <br />to speculation. We believe that establishing current rates based upon cost <br /> <br />data from within a five year cost evaluation period and future rates based upon <br /> <br />future costs accomplishes both goals. Basing current rates on costs and events <br /> <br />beyond the five year cost evaluation period is not consistent with established <br /> <br />ratemaking principals. <br /> <br />Repayment of Storage Unit Irrigation Investment Costs <br /> <br />Public Law 84-485 provides that power revenues must repay all storage <br /> <br />unit irrigation investment costs in 50 years (without interest) except those <br />