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<br />. <br /> <br />. <br /> <br />The results of the FY 1981 PRS using the current interim rate of 7.89 <br />mills/kWh at a 58.2% seasonal load factor tell us that the current rates do <br />not provide enough revenue to meet our repayment requirements. All the space <br />under the straight diagonal line that runs from a little under $28 to $78 <br />represents the cumulative total power revenues from FY 2000 to 2090, while <br />the very top irregular line shows what revenues are needed to cover all the <br />cumulative costs in the study. The difference between those lines is the <br />deficit. The major cost categories that absorb the available revenues are <br />shown on the graph. The interest cost is shown at the top of the plot so <br />that it doesn't camouflage the smaller costs such as replacements and the <br />storage units irrigation principal payments. Available revenues, however, , <br />are actually applied toward the interest costs as soon as the annual expenses <br />are paid and before other payments are made. The inadequacy of the current <br />rate becomes evident in FY 2020, which means that the investments made 50 or <br />more years previously, that is in 1970 or earlier, cannot be repaid within <br />the time permitted while paying all the other expenses incurred. <br /> <br />The average annual cost increases that have occurred between the 1977 and <br />1981 PRS affect all the major cost categories. The averaged costs for each <br />study covers the period from FY 1978 through the rate setting point. <br /> <br />6 <br />