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<br />17 <br /> <br /> <br />In the absence of analyses comparing results under ultimate and <br /> <br />current development conditions, and revised cost allocations of <br /> <br />(1) so-called "assigned costs" of existing facil'ities to future <br /> <br />development, and (2) suballocations of power investment to irrigation, <br /> <br />we cannot estimate with any degree of certainty what the indicated <br /> <br />power' revenue requirements would be by implementing the Department's <br /> <br />current development repayment policy. Upper Missouri Region officials <br /> <br />have said that elimination of the Oahe irrigation unit alone would <br /> <br />require an increase in power rates, because of the need to reallocate <br /> <br />irrigation costs back to power and other purposes; but we did not <br /> <br />verify that. As shown above, the Oahe unit is a small part of the <br /> <br />total future irrigation development foreseen in the Bureau's repayment <br /> <br />analyses. It should be noted that Bureau power rates in Pick-Sloan <br /> <br />are substantially below the cost of wholesale thermal power produced <br /> <br />by many Pick-Sloan customers. <br /> <br />At the time of our review there were no plans to change from the <br /> <br />ultimate development method in preparing the Pick-Sloan 1977 repayment <br /> <br />study. We are recommending that simulations, using the current devel- <br /> <br />opment concepts specified in 730 DM 4, or reasonable alternatives to <br /> <br />ultimate development, be prepared to prOvide more realistic information <br /> <br />on the financial status of Pick-Sloan. <br /> <br />Bureau's 1963 Garrison Study and <br />subsequent changes in Pick-Sloan <br /> <br />Because it is very basic to an understanding of the history leading to <br /> <br />existing Bureau policies in Pick-Sloan, we have included the 1963 study <br /> <br />in its entirety as appendix I. <br />