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<br />:.. <br /> <br />I <br />I <br />I <br />I <br />.' <br />I <br />I <br />I, <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br /> <br />Mr. Uli Kappus <br />December 5, 1988 <br />Page 2 <br /> <br />The results of the study indicate that up to 450 MW of pumped storage <br />capacity may be economically attractive and may be added to Colorado <br />utility systems in the period from 2002 through 2007. This figure is based <br />on the medium load forecast which corresponds to compound annual <br />growth rate of 2 percent. Under a higher load growth scenario <br />(2.5 percent compounded annually), up to 825 MW of pumped storage <br />capacity additions could be economically attractive. <br /> <br />We appreciate this opportunity to assist the Authority and the participating <br />utilities and federal agencies in conducting this joint planning effort. <br />Valuable information has been provided regarding the economic <br />attractiveness of potential pumped storage facilities such as those <br />identified by the Authority in its earlier work. If there are potential pumped <br />storage projects that could meet the technical, economic, and scheduling <br />constraints identified in this study, additional joint planning efforts appear <br />warranted. If conducted, these efforts should utilize specific project data <br />and should include sensitivity analyses related to unit availability, <br />alternative fuel escalation rates, and short-term financial implications. <br />Given the sensitivity of load growth assumptions on the amount of pumped <br />storage that may be economically attractive, the utilities should again be <br />consulted regarding their latest load growth projections prior to initiating <br />any additional evaluations. <br /> <br />We would also like to thank Blaine Dwyer and the Technical Steering <br />Committee members for their valuable input to this study. Please call me <br />or Leslie Buttorff with any questions or comments. <br /> <br />Very truly yours, <br /> <br />~~~ <br /> <br />James W. Galambas <br />Vice President <br />