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<br />0.0"" '"3. <br />. V_. ". <br /> <br />III. THE POTENTIAL IMPACTS OF THE ULTIMATE DEVELOPMENT CONCEPT <br /> <br />ISSUE <br /> <br />o pposi te views hold that for the reasons previously cited, the ultimate <br /> <br />development concept, as used in power repayment studies and rate setting by PM A's, <br /> <br />should either be retained or eliminated. Opponents of the concept stated it is a 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 would remain to be retired over a short period (the remaining portion of <br /> <br />the repayment period). <br /> <br />Proponents of the concept stated that it is firmly rooted in reclamation law and <br /> <br />that to alter its use would be contrary to law and congressional intent. They say <br /> <br />that it is a valid fiscal concept, since multi-purpose water projects were conceived as <br /> <br />a whole and were proven to "payout" or return their reimbursable costs. Altering the <br /> <br />concept, they say, can render these projects insolvent or at the least forestall their <br /> <br />yet unrealized elements or features. <br /> <br />Proponents also say that elimination of the ultimate development concept would <br /> <br />cause significant increases in power rates charged by PMA's, negating congressional <br /> <br />intent that project power be made available at the lowest possible cost to stimulate <br /> <br />economic development in project areas. <br /> <br />Opponents and proponents alike have attempted at times to quantify the impacts <br /> <br />-15- <br />