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<br />projects and transmission facilities, the Secretary of Interior issued 5.0. 2929. <br /> <br />Guidelines for the implementation of 5.0. 2929 pertained to replacements and <br /> <br />additions, are as follows: <br /> <br />"Replacements and additions. The interest rates for all new investment in <br />replacements and additions, as shown in the capital plant accounts of the <br />constructing agency, in reservoir projects or units, or separable power <br />features thereof, or in system transmission facilities shall be determined in <br />accordance with these uidelines reoardless of when construction of the <br />original project or facility was started." Underscoring supplied. <br /> <br />Notwithstanding the above, the Commissioner of Reclamation issued a directive <br /> <br />stating that CRSP was exempt from the requirements of 5.0. 2929. Accordingly, <br /> <br />the region computes interest on replacements and additions on CRSP, based on <br /> <br />authorized project rates rather than on the rate formula set forth by 5.0. 2929. In <br /> <br />discussing this issue with regional officials, we were advised that the Com mis- <br /> <br />sioner's directive has not been reviewed by the Departmental Office of the <br /> <br />Solicitor. <br /> <br />In view of the objective of 5.0. 2929 to more closely reflect current interest rates <br /> <br />and the significant dollar impact involved, it is our opinion that the Commissioner's <br /> <br />directive should be subjected to the Solicitor's review to ensure conformity with <br /> <br />5.0. 2929. <br /> <br />Our analysis of the PRS also disclosed that approximately $185 million of reimburs- <br /> <br />able participating project costs were not included in the base used to establish the <br /> <br />proposed power rates. Reimbursable participating project costs used in the PRS <br /> <br /> <br />were those published in the 21st annual report on CRSP covering the period ending <br /> <br />September 30, 1977. Updated data containing the increased $185 million for the <br /> <br />year ending September 30, 1978, was available in January 1979, which was still <br /> <br />several months before the power rate increase brochure was released for customer <br /> <br />comment. <br /> <br />23 <br />