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<br /> <br />possible rates to consumers, cons~stent with sound business prin- <br /> <br />ciples. The Bureau's Upper Missouri Region, Billings, Montana, <br /> <br />prepares annual power repayment s~tidies to determine whether the <br /> <br />average yield from the System's power rates is high enough to meet <br /> <br />repayment requirements. <br /> <br />The financial structure of Pick-SVoan is based on well documented <br /> <br />accommodations to what. was, in the early 1960's, a serious financial <br /> <br />predicament. Specifically, inter~t rates on certain portions of <br /> <br />Pick-Sloan were reduced, costs which normally would be allocated to <br /> <br /> <br />interest bearing reimbursable proj'ect features were assigned to non- <br /> <br />interest bearing features, some o~ which would not be constructed for <br /> <br />many years, if at all, and. the overall repayment schedule was based on <br /> <br />an ultimate development concept which resulted in its present projec- <br /> <br />tion to the year 2137. All these ,actions were taken openly. They were <br /> <br />either sanctioned explicitly by l~gislative action or' were affirmed by <br /> <br />the Office of the Solicitor as be~g consistent with legislative intent. <br /> <br />Our principal concern is with conqinued use of the ultimate development <br /> <br />concept as the basis for assessin~ the financial position of Pick~Sloan <br /> <br />and as the basis for determining ~ower rates and M&I water rates. Soma <br /> <br /> <br />of the techniques utilized in the iultimate development concept are <br /> <br />unrealistic and at variance with current policies for water resource <br /> <br />planning. The ul~imate developme~t concept also differs substantially <br /> <br /> <br />with current Departmental financial policies for power marketing <br />i <br /> <br />(730 DM 4), which provides for ba~ing power revenue requirements on <br /> <br />" <br /> <br />current development concepts. <br /> <br />6 <br />