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<br />01230 <br /> <br />D . R . A . F . T <br /> <br />P:\User\Thomas\95Rate\FundRoav <br />November 19, 1993 <br /> <br />in the Basin fund are monies available. for use in lieu of rece1V1ng <br />appropriations. Therefore, whether monies are appropriated for these <br />nonreimbursable expense or they are funded from the Basin Fund. the result <br />is the same. Any such funding of non-operating expenses (nonreimbursable <br />expenses are non-operating expenses) do not reduce the money available for <br />repayment of investment as shown in the financial statements. As long as <br />there are adequate funds avai lable. the fi rm power rate should not be <br />affected. This is the same methodology previously used. <br /> <br />2. Add to the Rate: Nonreimbursable expenses should be added to the PRS as <br />an expense which would result in a higher rate, thus providing additional <br />revenues as provi ded for inSect ion 1807 of the GCPA of 1992. These <br />expenses (nonreimbursable) funded from the additional revenues coming into <br />the Basin Fund due to the increased rate to provide such revenues would <br />a 1 so be credi ted toward repayment of capita 1 i zed power- re 1 ated <br />ob 1 igati ons. <br /> <br />3. Combination of Numbers 1 and 2. Provide funding from the Basin Fund (in <br />lieu of receiving appropriations) as lopg as adequate funds are available. <br />When adequate funds are not available in the Basin Fund any additional <br />amounts needed would have to be obtained by and increase to the firm power <br />rate sufficient to provide the additional revenues needed. The minimum <br />amount needed in the Basin Fund shall be established as outlined in the <br />issue paper on Basin Fund Management. <br /> <br />Recommendation <br /> <br />. The third option is recommended. <br /> <br />Mechanics of Applying Credit in the PRS <br /> <br />The method of handl i ng the credi ts wi 11 be the same for a 11 of the options 1 i sted <br />above. Two methods have been proposed: <br /> <br />1. Under the present PRS methodology: <br /> <br />a. All revenues received from the sale of power and power-related <br />service from government owned facilities would be included in the <br />PRS as power revenues received, including additional amounts paid to <br />fund nonreimbursable expenses should they be included in the rate. <br /> <br />b. Only costs that power has an obligation to pay would be recorded in <br />the PRS as an expense or as an investment to be repaid. <br /> <br />c. A 11 revenues recorded in the PRS would then automat i ca 11 y be <br />credited in accordance with the priority of repayments as required <br /> <br />3 <br />