WSP02609

• File Number: 8507
• Description: Rio Grande Project
• State: UT
• Basin: Rio Grande
• Date: 10/1/1981
• Title: Rio Grande Project - Proposed Power Rate Adjustment
• Water Supply Pro - Doc Type: Report/Study

Energy Obligation:

The maximum kilowatt hour obligation of the United States as
established under the power sales contract.

The composite rates for SW-F2R are:

11.01 mills/kWh for April 1978 through March 1979.
13.4 mills/kWh for April 1979 through March 1980.
16.03 mills/kWh for April 1980 and thereafter.

V. PROPOSED POWER RATE

Power rates for the RGP are based on two criteria:

1. The need to pay operating expenses and to repay all costs
assigned to the power function within the required periods.

2. The power must be marketabl e at the proposed rate.

The second criterion was the control 1 ing factor in the past two
rate adjustments, but the first criterion is the controlling factor in
the proposed rate adjustment,

Several power repayment studies for Fiscal Year 1980 have been made
and three options have been selected based on possible modes of future
operation and marketing. Following is a description of the three options
and the power rate needed for each option in order to pay future operat-
ing expenses and to repay all costs assigned to be repaid by power
revenues. Common to all options is the assumption that, after fiscal
year 1989, all RGP generated energy will be sold as firm energy and there
will be no firming energy purchases or surplus energy sales,

Option A is based on the continuation of existing operating proced-
ures and marketing policy, i.e., the sale of 24 MW summer season finn
capacity and accompanying energy, the purchase of summer season finning
capacity and energy from the CRSP, 'no sale of winter season capacity, and
the sale of RGP wi nter season energy generat i on as surp 1 us energy. A
repayment study of Option A indicates the need for a new composite rate
of 26.28 mills per kWh at 58.2 percent load factor. For the purpose of
minimizing discr.imination among power users, equal costs at 58.2 percent
load factor have been assigned to the capacity and energy components,
resulting in a rate of $5.585 per kW-month and 13.14 mills per kWh.

Option B is based on the sale of 24 MW summer season finn capacity
and accompanying energy, the purchase of summer season finning capacity
from the CRSP, and system operat ions whereby RGP energy generat i on is
integrated with the CRSP on an annual basis through an energy interchange
or "banking" arrangement. Any annual RGP energy generation in excess of
RGP summer season obl igations would be sold as surplus, and any annual
def ic i ency in RGP energy generat ion wou 1 d be made up by purch ases from
the CRSP at tne average annual price paid by CRSP for such energy. The
est imated future annua 1 RGP energy gener at i on used in the repayment

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