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<br />The second major factor in determining the value of a <br />site is the cost incurred to develop and operate it. <br />Thus, some sites will be more attractive than others <br />based solely on these cost consideration. <br /> <br />Sites with lower initial construction costs will have a <br />higher value to a developer. A site with an existing <br />powerhouse and penstock will be worth more than a <br />site requiring installation of new facilities. On the <br />other hand costs for repairs to the dam, dredging and <br />repairing the tailrace or headrace and the cost of <br />installation of new transmission facilities to tie in to <br />the power grid or other end users, might devalue the <br />site. <br /> <br />Ultimately, the developer will compare the cost of <br />construction and repairs to the overall cost per dollar <br />of installed kilowatts. The two factors which deter- <br />mine the kilowatt capacity of a site are the stream <br />flow and the head. The head is probably the most <br />critical variable in determining the value of a site. <br />The cost per kilowatt falls significantly as the head <br />increases, because the amount of steel and other civil <br />work needed to generate a given number of kilowatts <br />drops. <br /> <br />A second major component is the stream flow as <br />measured in cubic feet per second. A site with <br />inadequate stream flow to produce sufficient kilowatts <br />is less attractive to a developer. When combined with <br />the head, the stream flow must be sufficient to yield <br />an installed capacity large enough to produce suf- <br />ficient revenues to cover the fixed cost of develop- <br />ment. <br /> <br />Each hydro site has certain fixed costs regardless of <br />size. These include the Federal Energy Regulatory <br />Commission and other government licensing processes, <br />the cost for preparing feasibility studies, design and <br /> <br />11 <br />