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<br />3tNI tlY:WEST. AREA POWER <br /> <br />7-10-97 2:42PM: <br /> <br />801.j~~."UI/~ <br /> <br />,JU,J 000 ....,....... "..' . <br /> <br />o <br />o <br /><:"":) <br />,~ <br />~ <br />en <br /> <br />July 9th, 1m <br /> <br />The "who '0 nav" Y1Iriauoos' The 5Iale(s) either P'YS tho mone)' to We.tern, or illlllO <br />signGd a rcpaymc:nt contriCI with Reclamation where lhe entire loan lllIlount i. due in 50 <br />years. <br /> <br />The ".1"1n"" fUnd" variation.: The Slate(s) either cnmp.s up with Ihe money SO yean after <br />construction costs are in~ or il can estabHsh a "sinking fund" that arows to $13 <br />million over time. <br /> <br />.. Thl!! UPay 0.,.,. Tlma" OptlaD <br /> <br />The 8I&te(S) sign. a repayment conlnl:t wilh Ree\amation to poy back $13 million of constructjon <br />funding. The term (lflhe contract could be SO year. or Ie.., and could rC4/uire a payment evetY <br />year or a balloon payment allhe end of the lerm. <br /> <br />s. The "Pay tbr. DIIl'nllnr.d PrMPn' Valul!!" Option <br /> <br />The statc(s) ~ \0 repay the Treuny lhe discounted present value of'the $13 minion. Fur <br />ClC8II\ple, Ihe at a 7% di8l'Ounl lale, S13 million in the year 2057 is wonh npproximatdy $257,000 <br />in 1999. <br /> <br />The "Dank or Colorado" Variation <br /> <br />The Stale of Colorado (spcciflcaDy, the Colonsdu Water Conservation Hoard) will be the BOurce <br />for a larse portion orlhe non-Federal share orRIP wnstluctlon. After construction, the state will <br />be repaid by W Bltern, usins power rcvenuea. Thu.. Colorado serves u "hanker" for a portion of <br />the non-Federal share of the RIP. <br /> <br />The "BanI< of Colorado" variation eontinucs the use of power revenues U a ml\ior source of the <br />non-Federal Ahare ofthe RIP construction. The ditrcrene<: is that illldaYll the time in which flower <br />revenues are used to psy fur RlP eonatruction ClCpcnsCS. Why is this useful? If the time in which <br />Western's power revenues are used for the RIP.can be delayed until after We~tem has completed <br />pdyment of lhose CRSJl features on which interest i. calcul.kd. a musller reduction In the revenue <br />rl:ljuiremcol would be needed as an offset for th. $30 million fuMeled to the RIP. For example. if <br />WC.l~IJl'. pawa- revenue. wilen! not used for the RIP until 2012, according to the current PRS. <br />thc an,ow'l ufrevenue-requlrernent offset (taken from the CUP) would be more in the <br />neighborhood of $6 million. <br /> <br />One of the fundins options described above (Options 1 - 5) would still be required under the; <br />"Bank ofColorar:lo" variation. <br /> <br />4 <br />