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COMMENTS OF CENTRAL NEBRASKA PUBLIC POWER AND <br />IRRIGATION DISTRICT <br />CEN -18 economic value of Project No. 1417 would be reduced by <br />(coot.) I <br />$12.6 million to a total of $27.2 million.t6' <br />CEN -19 Avoided Costs. There is also a very significant error <br />in how FERC Staff determined avoided costs. These costs are <br />subtracted from net power replacement costs to yield the <br />"net economic value. "E' FERC Staff treated the debt <br />service on Kingsley and North Platte Hydros as an <br />unavoidable cost to NPPD, while treating debt service on the <br />canal hydros as avoidable since it is held by Central. This <br />approach is inappropriate.L' <br />Because the Districts are not voluntarily surrendering <br />their licenses and there are no competitors seeking these <br />licenses, the only possible "no Projects" scenario is <br />A <br />00 Federal takeover followed by shutdown and decommissioning. <br />In such a situation under section 14 of the FPA,L9' the <br />affected licensees are entitled to compensation for net <br />investment plus reasonable severance damages. The cost of <br />debt service would thus be avoided. This correction <br />primarily affects the Kingsley Hydro, but the change is <br />substantial, increasing the sum of avoided costs by $67.55 <br />million in 1994 dollars. As a result, the net economic <br />L6' Dr. Axelrod suggests other refinements which may also <br />be performed, but these two corrections alone are extremely <br />important. Axelrod, Economic Analysis at 9 -11. <br />L" RDEIS at 2 -43 to 2 -46. <br />at Axelrod, Economic Analysis at 11. <br />L91 16 U.S.C. § 807. <br />- 46 - <br />RESPONSES TO CENTRAL NEBRASKA PUBLIC POWER AND <br />IRRIGATION DISTRICT <br />CEN -19 See response to CEN -18. <br />