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<br />, <br /> <br />. <br /> <br />. <br /> <br />Between the 1977 and 1981 PRS, an average annual cost increase of about 25 <br />million dollars has occurred. The major portion of the increase is due to <br />higher O&M costs -- almost 53% of the increase. Power investments account <br />for 16%, aid to participating projects about 11%, 10% for interest, about 8% <br />for replacements, and another 2% for other miscellaneous costs, primarily <br />energy purchases. <br /> <br />The basis for the O&M cost projections was changed between the FY 1977 and <br />1981 studies. The 1977 study projected cost increases for 3 years only at <br />an average annual rate of 3.5%, while the 1981 study projected cost <br />increases for 5 years at an average annual rate of 9%. <br /> <br />The CRSP O&M costs actually increased an average of about 13% a year from <br />1977 through 1981. The projected average annual increase of 9% in the FY <br />1981 study from 1981 through 1986 anticipates a significantly lower rate of <br />increase than we have been experiencing. From an actual O&M cost of about <br />$15.7 million in 1981, we expect that these expenses wi1) increase to about <br />$24 million by 1986. <br /> <br />7 <br />