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<br />IJ U J: " .~ <br /> <br />are called average rate and repayment studies (Ed. <br />Also frequently referred to as power repayment studies <br />-- PRS's). Basically, an average rate and repayment <br />study takes account of the reimbursable costs already <br />incurred and the costs estimated to be incurred to <br />complete the project, allocated as among the project <br />purposes. The study includes both the buildup of such <br />costs over the years and their payout periods. .... <br />The object of the study is to determine what the <br />average power rate will have to be over the life of <br />the project to accomplish payout (Ed. Total repayment <br />of project features reimbursable by power revenues). . <br />., Typically, the study covers a period of years <br />beginning with the year in which construction is <br />expected to commence (or has already commenced) <br />and ends with the year in which the last increment of <br />reimbursable costs are repaid. In any project other <br />than a single purpose project consisting of only one <br />feature, this overall repayment period is made up of a <br />series of overlapping periods for particular units or <br />features. <br /> <br />5. Average rate and repayment studies are made at <br />period intervals to test the adequacy of the forecasts <br />and rates and to take account of changes in <br />conditions. .... Estimates of costs change because <br />of inflation, or changes in plans or the availability of <br />appropriations, or because of unanticipated physical <br />conditions, or because units are added to a project, or <br />because Congress may deauthorize some work . . . or <br />for some other reason. <br /> <br />6. As an essential element of persuading Congress to <br />authorize a given project or program, not only does its <br />economic feasibi Ii ty have to be shown, but the actual <br />return of the dollars expected to be invested in <br />reimbursable functions has to be demonstrated under <br />the principles I have already described. .... <br />(Weinberg, 1983, pp. 5-8) <br /> <br />In a recent address in Des Moines, Iowa, Mr. Jim Davies, Area Manager of the <br /> <br />Billings, Montana, Area Office of the Western Area Power Administration (the PMA <br /> <br />for most of the western United States), further clarified the use of the "ultimate <br /> <br />development concept" in power repayment studies and rate-setting for power <br /> <br />generated at facilities that are part of the Pick-Sloan Missouri Basin Program. Mr. <br /> <br />Davies stated in part: <br /> <br />-3- <br />