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<br />0,,\ ~.,. !, <br />Uv~_~ <br /> <br />III. THE POTENTIAL IMPACTS OF THE ULTIMATE DEVELOPMENT CONCEPT <br />ISSUE <br /> <br />Opposite views hold that for the reasons previously cited, the ultimate <br /> <br />development concept, as used in power repayment studies and rate-setting by PMA's, <br /> <br />should either be retained or eliminated. Opponents of the concept stated it is poor <br /> <br />business and accounting practice that is resulting in underpayment of the reimbursable <br /> <br />costs of multi-purpose water projects to the U.S. Treasury. They also stated it could <br /> <br />ultimately lead to "spikes" or large increases in PMA power rates when in later years <br /> <br />a large debt might remain to be retired over a short period (the remaining portion of <br /> <br />the repayment period). <br /> <br />Proponents of the concept stated it is firmly rooted in reclamation law and to <br /> <br />alter its use would be contrary to law and congressional intent. They say it is a <br /> <br />valid fiscal concept, since multi-purpose water projects were conceived as a whole <br /> <br />and were designed to "payout" or return their reimbursable costs. Altering the <br /> <br />concept, they said, may render these projects insolvent or at the least forestall their <br /> <br />yet unrealized elements or features. <br /> <br />Proponents also stated that elimination of the ultimate development concept <br /> <br /> <br />would cause significant increases in power rates charged by PMA's, negating <br /> <br />congressional intent that project power be made available at the lowest possible cost <br /> <br />to stimulate economic development in project areas. <br /> <br />Opponents and proponents alike have attempted at times to quantify the impacts <br /> <br />-15- <br />