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<br />and replacement costs allocated to power; (2) pay all operation,. main- <br />tenance, and replacement costs of storage units allocated to irrigation, <br />except for the portion paid by M&I revenues; (3) repay with interest within <br />50 years the capital investments allocated to power; (4) repay without <br />interest within 50 years the irrigation investment of the storage units, <br />except for the portion repaid by M&I revenues; and (5) repay without <br />interest within 50 years plus development periods all irrigation invest- <br />ments of the participating projects beyond the ability of the water users <br />to repay and which are not repaid by M&I revenues. Also, in accordance <br />with Public Law 93-320, power revenues must be sufficient to pay the <br />salinity control construction, OM&R costs which are allocated to the Upper <br />Colorado River Basin. <br /> <br />In making repayment studies, it has been assumed that, after <br />paying annual expenses, the remaining power revenues would be applied <br />first to repayment of the highest interest bearing investment, <br />followed by the next highest interest bearing investment, etc. <br /> <br />B. Repayment Study Results. <br /> <br />1. Repayment Study Using Existing Power Rate. Figure <br />4 is a chart showing the cumulative results of a repayment study using <br />the existing power rate. It shows that the power revenues during the <br />project repayment period (1963-2052) will be sufficient to pay the <br />annual expenses and replacements, but will be insufficient to repay <br />investment costs within the allowable time frames. The repayment of <br />power investment costs will be short by about $75 million in the <br />critical year of 2038; the repayment of the storage unit irrigation <br />costs will be short by about $59 million in the critical year of 2015, <br />and the repayment of the participating projects' irrigation costs will <br />be short by about $1593 million in the critical year of 2052. <br /> <br />2. Repayment Study Using Proposed Power Rate. Figure 5 <br />shows the cumulative results of a repayment study using the proposed <br />power rate. It shows that the power revenues during the project repay- <br />ment period will be sufficient to pay annual expenses, replacements, <br />and interest and to repay all power investment costs and irrigation <br />costs required by law to be repaid from power revenues. Actually, <br />because of rounding the proposed capacity charge to the nearest one- <br />half cent per kW month, there will be a surplus in power revenues of <br />about $5 million in 2052. It is not possible to see this on Figure 5 <br />because of the small magnitude of the surplus relative to the magnitude <br />of cumulative revenues shown on the figure. <br /> <br />Figure 6 is based on the same repayment study as is Figure 5 <br />(proposed rate), but shows year-by-year data instead of cumulative <br />data. In addition, it shows a breakdown of annual expenses into O&M <br />and salinity costs, wheeling costs, and energy purchases. On Figure <br />6, it is possible to show the aforementioned surplus of about $5 <br />million in 2052. Table 1 is the repayment study itself and contains <br /> <br />12 <br /> <br />