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<br />01239 <br /> <br />took the position that since all of the Federally approved construction and <br />all of the state construction with definite plans would be completed before <br />2010 that keeping depletions at the 2010 level thereafter would minimize the <br />impact on the firm power rate and would in no way restrict the the states <br />development. This position recognized that the full allocations of the states <br />were not included in the depletion schedule by 2010. but that those additional <br />depletions related to unspecified plans which the states had for the use of <br />the water. These positions have gone through the public process and have been <br />approved by the Federal Energy Regulatory Commission. <br /> <br />It is well understood by Western and Reclamation that the use of the water. in <br />the Colorado River has been allocated to the Upper Basin States by the <br />Colorado River Compact of 1922. It should be emphasized that there is no <br />intent to change those rights. Even though some of the federally approved <br />participating projects are not now considered economically feasible to build. <br />the states can still develop other uses for that water up to the extent of <br />their legal allocations. When such plans are set forth in a DPR, Western will <br />make appropriate adjustments to the depletion schedules. used in the PRS. <br /> <br />It is also well understood that the PRS is a record of repayment of power <br />investment and that the depletion schedule used in the PRS is merely a tool <br />for forcasting available generation in setting rates and actually has no <br />impact on the use of the water by the states. It does. however affect the <br />rate that will be set and the revenue obtained. The present method (keeping <br />the depletion schedule level after 2010) provides sufficient revenues to repay <br />all of the federally approved projects shown in the 1988 DPR within the <br />required repayment periods. <br /> <br />Recommendation <br /> <br />. Alternative 3 is recommended. <br />