WSP09943

• File Number: 8442.900
• Description: Missouri Basin - Pick Sloan Project - Project Funding
• State: CO
• Basin: South Platte
• Water Division: 1
• Date: 7/1/1978
• Title: Review of Repayment Status of Pick-Sloan Missouri Basin Program and Individually Authorized Projects Bureau of Reclamation
• Water Supply Pro - Doc Type: Report/Study

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be sold at rates s~gnificantly higher than contemplated 15 years ago.
This is supported by the fact that current rates are substantially

below the cost of wholesale thermal power produced by many Pick-Sloan

customers, Therefore, the Department should know realistically what

the project repayment requirements are in order to know how much it
must charge for power.

We are recommending reanalysis of Pick-Sloan, and related power revenue

requirements utilizing (1) realistic concepts of current development,

or alternatives to ultimate development (a nonending concept) repre-

senting reasonable time frames and assumptions, and (2) cost alloca-

tions related to current use of facil~ties. This analysis should

reflect an updating of costs to current indices, and current hydrology

to replace the 20-year old data now used. Furthermore, we believe

that appropriate action should be taken to adjust power revenue requ~re-

ments to that analysis.

The changes we see as necessary in the PRS actually do not go far

enough to establish the PRS as the best method for determining the

amount of required revenue from power operat~ons or for demonstrat~ng

in a convincing manner to customers and other interested part~es the

results of proposed rate increases. It lacks the built-in d~sc~pline

and timeliness necessary for these purposes. We are suggesting shorter

range forecasting, generally for about a 5-year period using projected

income and expenses (including depreciat~on of power facilities and

amortization of irrigation assistance), and other data necessary for

reasonable forecasting of financial requirements and results.