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002D31 The following material is reproduced verbatim from the draft study report: "The economic analyses show that, with a 7t percent interest rate, the single reservoir conservation storage alternatives as presently scoped and evaluated result in benefit-cost ratios less than unity. Indications are that Alternative 8 with Elkhorn Reser- voir is economically superior to Alternative 1 with Grey Mountain Reservoir. When a second reservoir and peaking power facilities~_ are added to form multiple reservoir peaking power alternatives, - the peaking power additions of Alternatives 2 and 7, are compar- able, but because of the lower cost conservation storage, Alterna- tive 7 is relatively more economically attractive than Alternative 2. The breakeven cost of peaking power compares favorably with the peaking power benefits developed during Phase I. A sensitivity analysis of interest rates shows, that with five percent, the benefit-cost ratio of Alternative 8 with Elkhorn' Reservoir is greater than unity' but for Alternative 1 with Grey Mountain Reservoir falls slightly below. At 10 percent, both fall far short of unity. At 5 percent the breakeven value for peaking appears to be very attractive; at 10 percent the break- even value is somewhat in excess of the peaking power benefits developed during Phase I. The financial. analyses show that Alternative 8 with Elkhorn Reservoir would require the lowest level of funding. Under the State funding approach with a five percent cost of money over 40 years, it appears that the cost of peaking power would be competitive in the marketplace. Under the revenue bonding approach, with 12 percent cost of money over 30 years, it appears doubtful that the output could be marketed. There appear to be prospects for improved economic justification and financial feasibility of any of the alternatives from possi- hle cost reduction resulting from optimization of facilities designs and from a better evaluation of the monetary effects of improved system management and possible higher value use of the yield of new water. The analysis of non-monetary, physical impacts from inundation show that the alternatives which include Elkhorn Reservoir, Alter- natives 8 and 7, would result in inundation of less river, high- way and developed properties and may include possibilities of improved fishery and recreation. They would, however, cause some impact on designated wilderness areas. The results of this study could be affected by a comprehensive basin study which would include the broader South Platte River 8asin. Environmental and social impacts, not included in this study, need to be identified for evaluation along with economic and financial aspects of any alternative project. Effects on fishery and recreation, whether positive or adverse, should be evaluated, as should the effects of flood control." Additional discussion of the Tudor/State study report is found in Chapter III. 6