Final Environmental Impact Statement Volume II Appendix K, Part 1

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7C A. COMMENTS OF CENTRAL NEBRASKA PUBLIC POWER AND IRRIGATION DISTRICT cash.M' In the RDEIS, "net economic value" was derived by comparing "with Projects" and "without Projects" scenarios to determine the difference in power production costs. These scenarios were developed by NPPD at the Staff's request, as alternative generation expansion plans assuming either that the plants continued operating as they do at present, or that they would not be used to make power.R1 Avoidable hydro costs were then subtracted from the difference in costs between the plans.Z'I CEN -17 I i. The value of Proiecr No 1417 Should be Examined from C ntral's Perspective The most fundamental problem with FERC Staff's approach is that it values Central's Project No. 1417 only from NPPD's perspective. The Project's value as a power production facility is far different to its owner than it is to a potential power purchaser such as NPPD. All costs associated with the Project No. 1417 canal hydros can 76/ 1994 Technical Conference, Tr. at 144 -145. The "net economic value" FERC Staff calculated for each plant was also used to allocate costs of environmental licensing conditions between the Projects on a approximately 80/20 percentage split. Although Central shows here that the net economic value approach used is fatally flawed, it does not object to using an 80/20 split to share costs between the Projects; such a division is entirely consistent with an energy related percentage split (80/20) or with a capacity related split (77/23). LW J_ at 147. n RDEIS at 2 -43, 2 -47. - 42 - RESPONSES TO CENTRAL NEBRASKA PUBLIC POWER AND IRRIGATION DISTRICT CEN -17 The staff believes that the most appropriate way to estimate the value of the hydroelectric facilities is to determine the cost of generating the same energy output by alternative means. We have done so using regional power values.