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<br />0034~5 <br /> <br />CHAPTER 1: INTRODUCTION <br /> <br />The purpose of this study is to determine the value .of electric power in <br /> <br />Colorado and to assess the effects on the production of small-scale (less <br /> <br />than 80 megawatts) hydroelectric power in Colorado of possible increases in <br /> <br />streamflow resulting from cloud seeding. Although cloud seeding could <br /> <br />produce increases in streamflow beneficial to large-scale hydroelectric <br /> <br />production as well, this study concentrates on small-scale production for <br /> <br /> <br />several reasons: <br /> <br />o Colorado's many mountain and Western Slope streams provide <br />suitable small-scale sites <br /> <br />o the U.S. Congress recently passed legislation that provides <br />economic incentives to producers of small-scale hydroelectric <br />power <br /> <br />o developers of large sites (mainly the Bureau of Reclamation) have <br />the resources required to analyze their sites, while small <br />developers do .not. <br /> <br />The study begins with a discussion of the economic value of electric power <br />in Colorado. Since the market for electric power is regulated (mainly by <br />the Colorado Public Utilities Commission), the value of power is not <br />determined by the usual market forces. The market also is rather complex, <br />and the value of power is determined by the different conditions under which <br />it is purchased. These conditions will be shown to be important to <br />small-scale hydropower producers. <br /> <br />The study also <br />distinguishing <br />installat ions. <br /> <br />examines hydroelectric power production in the state, <br />small power facilities from large, more conventional <br />A method for evaluating the economic value of power produced <br /> <br />1 <br />