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<br />SENT BY:WEST. AREA POWER <br /> <br />7-10-97 2:41PM <br /> <br />801S24S017~ <br /> <br />303 866 Hn'" JI { <br /> <br />o <br />o <br />l.~ <br />~ <br />..... <br />...... <br /> <br />Iuly'llh.lom <br /> <br />repayment oflbe CRSP origjnlll cOlIJtructlon. inlerllsl. CRSP mainltem irrigation features, <br />additions and rcplu;cmellts. Foolll2012 to 20~7, payments to the Treasury will largely <br />consist of replacements of thi/l&S which lUl: eltpected to wear out and repayment of <br />participating irrigation projects, the most e"pensive of which is the Bonneville unit of the <br />Cenual Utah Project. On~~ this unit is fully replliu in 2057, !he revenue r/'.lluirement <br />actually filii. off. <br /> <br />The PRS i. completed every year and is subject to a numbc:r of IWlIIIIptlOns regarding the <br />scheduling of conslTUction of implion projects and their COSI~ (ulumptions about other <br />1blniS, or course, are also required). nerefore, if schedules or cost estimates chllllie, the <br />revenue requirements and subaequently tho tate, will change. <br /> <br />Relulb or the PR~ Study for th.. RIP Ad Ra~ COmmlHec <br /> <br />In June, W"tern undenoolc 8/1 anaIyais uJing the PRS to detenn.ino how power revenues could b~ <br />made availablc to the RlP for capital construction nn R reimbursable basis and yet, 3till aclUcve <br />"nIle neutrality". <br /> <br />In this analysis, Western MSUmcd that $6 million per year from 19YK to 2002 (a 530 million total) <br />were transferred to the RII' without Chlll&inll the amount of total revenue collected. The PRS <br />then went on a "hunt" to find where revenue requirements could be reduced in subsequent years <br />so that the "rato" remained unchanged. <br /> <br />The reoull was that future year Ql;pensca IwI to bc reuu.ed by S60 million. This is because, the <br />$JO million paid to the RIP needed an off~l. In additjol~ bC\;lWse S30 million wa.~ heing paid to <br />the RIP, $30 millioo WIU not usod to repay the principle on f""lWCI of the CRSP upon which <br />Interest llCCnle.s Thi. re.ulled in an addition obligation of $)0 lllilliull in mterest. <br /> <br />Where dld the $60 million in expense reduction come from? $1) million COJll~ from the repayment <br />rc:quircment oCthe Bonneville Unit ofthc CUP. The remaining $47 million ClIllle ffl.lffi the <br />apportionment requirement that goel along with the CUP's $1) million. In othcr words. under the <br />set ufllSSUnJptions currently used in the 1997 SLCAIIP PRS, if you reduced WeSlem's ubligation <br />to IDllke repayment on the ,-UP's Bonnevills Unit by $13 million and concomitant appurtionment. <br />you cuuld fund $30 million of the lOP in the next S years, without aft'octing the CRSP powc:r f1Ite. <br /> <br />2 <br />