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<br /> <br />Impact of allocations <br />and tepaymentrequirements <br /> <br />The allocations and suballocation of costs based on ulti~te rather <br /> <br />than current development result i~. (1) allocating a portion of the cost <br /> <br />of existing facilities to purposes] that they do not ~ serve (and ~y <br /> <br />not even exist) such as irrigation rather than power and (2) decreasing <br /> <br /> <br />the amount of interest and O&M costs that would otherwise be payable <br /> <br />from power revenues on a current basis. The benefits of this are <br /> <br />derived by the current power users' in theforlll of power rates that do <br /> <br />not reflect a fair share of the capital and O&M costs proportionate to <br /> <br />the current use of the facilities" This is explained in the re~inder <br /> <br />of this portion of the report. <br /> <br />The Federal investment in multipu~ose Pick-Sloan facilities, such as <br /> <br /> <br />dams and reservoirs, is allocated :among purposes._'(power, irrigation, etc.} <br /> <br />on the basis of the expected ultim'atadevelopment of Pick-Sloan; Then, <br /> <br />because irrigation facilities yet ,to be built will 'use some power to <br /> <br />pump irrigation water, part of th~ power investment (16.8 percent in <br /> <br />the 1974 study) is further suballo~ated to irrigation pumping power to <br /> <br />serve the expected ulti~te irriga~ion development. The formula for <br /> <br />suballocations between commercial and project pumping power makes use <br /> <br />of the relationship between instal~ed system generating capacity and <br /> <br />, <br />estimated total peak-load requira.m~nts at the generator for pumping <br />! <br />purposes, This suballocation of P9Wer costs to irrigation affects not <br /> <br />only repayment of capital costs with interest but the allocation (and <br /> <br />recovery) of O~~ expenses each year. Actually, pumping power use to <br /> <br />I <br />1~ <br />