Laserfiche WebLink
<br />., <br /> <br />3 <br /> <br />Certain principles and pragmatic considerations underlie the selected <br /> <br />allocation procedures. These are: <br /> <br />1. The effect on other project purposes of adding the small powerplant <br /> <br />would be insignificant. <br />2. Separable costs are the minimum allocation to power. <br /> <br />3. The maximum costs allocated to power should not exceed current <br /> <br />benefits capitalized at the current plan formulation interest rate. <br /> <br />4. Power should bear a reasonable amount of joint project costs within <br /> <br />these two extremes (items 2 and 3 above). <br /> <br />5. If the allocation procedure is applied to other projects with <br /> <br />small add-on powerplants, it should.be simple enough as not to require a <br /> <br />completely new SeRB cost allocation, with updated estimates of benefits <br /> <br />and single-purpose alternative costs for all other project functions. <br /> <br />6. In dealing with small hydropower additions to our existing projects, <br /> <br />the conceptual basis for cost allocations and/or cost sharing should be <br /> <br />essentially the same irrespective of whether development is undertaken by <br /> <br />Federal or non-Federal interests. <br /> <br />In regard to item 6 above, new policy has recently been established <br /> <br />by approval of the Secretary, December 19, 1980, for determination and <br /> <br />assessment of a "power privilege charge" to non-Federal developers of small <br /> <br />hydropower additions on our existing Water and Power projects. The annual <br /> <br />charge will be 50 percent of net revenues determined on the basis of the <br /> <br />wholesale market value of power produced, and the costs as defined in the <br /> <br />policy report. No cost allocation is necessary except the direct assign- <br /> <br />ment of Federal costs for specific power facilities that may exist or be <br /> <br />added to accommodate the~dropower addition. <br />