WSP01070

• File Number: 8220.114.J
• Description: Dolores Participating Project
• State: CO
• Basin: San Juan/Dolores
• Water Division: 7
• Date: 1/1/1982
• Title: Discussion Paper - Allocation of Joint Costs to Add-On Power Plants
• Water Supply Pro - Doc Type: Report/Study

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grand fathered by Sec. 80 of P.L. 93-251) and current interest rates which

are reflected in the federal alternative costs (currently at 7-5/8 percent)

as well as in the power benefit determination. The SCRB allocation method

was not conceptionalized or designed to deal with a disparity situation

of this nature.

This situation is generally unique with the purpose of power since

the capitalized annual cost of a federally financed alternative is used

as the justifiable expenditure. Witb other project purposes such as M&I,

irrigation, and Fish and Wildlife the present worth of the single purpose

alternative is the sum of the construction cost, IDC and the capitalized

value of the OM&R. When these costs are compared to the capitalized

value of the annual benefits, the justifiable expenditure for allocation

will be constrained to the cost of the single purpose alternative or the

benefits whichever is the lessor. If, however, the federally financed

alternative happens to be OM&R intensive plan then the same situation could

occur as with the power, resulting in overcapitalized value of the single

purpose alternative. Under these circumstances another method of allocation

or modification of the SCRB method may have to be used.

Solution to the Problem

After reviewing several alternative methods for allocating joint project

costs to small hydropower additions on existing projects, or on those under

construction, economists from the Washington office and the E&R Center

concluded that the procedures outlined below would be the most appropriate

of those considered to deal with the circumstances that have evolved in the

Dolores and Dallas Creek project situations.