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<br />at facilities that are part of the Pick-Sloan Missouri Basin Program. Davies stated in <br /> <br />part: <br /> <br />A power repayment study is an annual assessment of the <br />financial status of the project to determine if existing rates <br />for power are sufficient to meet repayment criteria. The <br />repayment criteria requires that annual expenses must be <br />recovered each year and that project investment cost must <br />be repaid within specific time periods. The annual expenses <br />are comprised of operation and maintenance costs, purchased <br />energy (Ed. To meet contracts for firm power in the event <br />hydrologic conditions do not permit sufficient hydropower to <br />be produced), interest expense and required payments to <br />several smaller projects which have been integrated into the <br />Pick-Sloan Missouri Basin Program . . . for operational and <br />repayment purposes. Investments include the costs allocated <br />to power, as well as those costs associated with irrigation <br />projects beyond the irrigator's ability to repay. If revenues <br />are not sufficient to meet payout for a given repayment <br />study, the firm power rate is adjusted until payout is <br />obtained. <br /> <br />. . .. There is considerable irrigation yet to be developed <br />in the Pick-Sloan Missouri Basin Program to arrive at the <br />'ultimate development' level. Irrigation aid costs (Ed. Power <br />revenues needed to repay existing and future irrigation <br />development cost above the irrigator's ability to repay) <br />associated with the ultimate development of irrigation are <br />included in the repayment studies. However, because of the <br />60-year repayment period for irrigation projects (Ed. The <br />apparent contradiction between Mr. Davies' statement <br />regarding a 60-year repayment period and the 40-year plus <br />10-year maximum development period authorized in the <br />Reclamation Act of 1939 is not explained), the cost of those <br />projects which are scheduled after the 40th year of a study <br />do not impact the power rate (Ed. Since irrigation aid <br />payments are typically not made until close to the end of <br />the repayment period) (MBSA, 1983, pp. 47-48). <br /> <br />Davies graphically illustrated the power repayment study concept as shown in <br /> <br />Figure 1. <br /> <br />-4- <br />