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<br />i~. ,: <br />L:;:: <br /> <br />.~r,<;"...._ <br />~. . ~ ,~ <br />_.1., <br /> <br />ER 1105-'4-100 <br />28 Dee 90 <br /> <br />(a) Benefits Foregone. Benefits foregone are generally estimated using <br />standard Corps NED economic evaluation criteria in compliance with the P&G. For <br />hydropower storage, in the case of ,small reallocations, within the Chief of <br />Engineers discretionary authority, benefits foregone may be based on '.current <br />estimates of long-term power rates obtained from local' power procedures ''-or <br />calculated in accordance with P&G procedures where appropriate models are' readily <br />available. For large reallocations, estimates should be calculated in accordance <br />with P&G procedures for evaluation of hydropower benefits. <br /> <br />(b) Revenues Foregone. Revenues foregone to hydropower are the reduction <br />in revenues accruing to the Treasury as a result of the reduction in hydropower <br />outputs based on the' existing rates charged by the power marketing agency. <br />Revenues foregone from other proj ect purposes are the reduction in revenues <br />accruing to the Treasury based on any existing repayment agreements. <br /> <br />(c) Renlacement Costs. If the reallocated storage is being taken from the <br />flood eontrol pool, it may be appropriate to utilize the replacement cost of <br />equivalent protection where such adverse impacts warrant mitigation. This would <br />not be appropriate for reallocations within the Chief of Engineers discretionary <br />authority which by definition do not have severe impacts on authorized purposes <br />and therefore would not warrant mitigating measures for foregone flood control. <br />For reallocations from hydropower pools, the replacement cost of power should <br />normally be considered equal to the benefits foregone and caleulated in <br />accordance with P&G procedures for evaluating hydropower benefits. In some <br />instances, where'the power marketing agency has existing contracts with their <br />customers, the replacement cost of power may be determined 'by the estimated cost <br />to the power marketing agency to obtain power outputs from an alternative source <br />to fulfill the Federal Governments obligations for the duration of the contracts. <br />Qnee the contracts expire, the replacement cost of power should be equal to the <br />benefits foregone for the remainder of the period of analysis. Documentation of <br />such contracts and estimates of replacement costs of powe, , to fulfill the <br />contracts should be included in the reallocation report. <br /> <br />(d) Undated Cost of Storage. The costs to be reallocated to the water <br />supply storage are determined" by first computing the costs at the time' of <br />construction by using the "Use of Facilities" cost allocation procedure as <br />follows: <br /> <br />-. <br /> <br />(Total construction cost - S~ecific costs) <br />x Storage reallocated (ac-ft) <br />Total usable storage space (ac-ft) <br /> <br />In this cOlllpu~ation, usable storage does not include 'space set aside for sediment. <br />distribution or for hydropower head. The cost allocated to the storage on this <br />basis is then escalated to present, day 'price' levels by use of the Corps of <br />Engineers Civil Works 'Construction Cost Index System (CWCCIS). This :index 'i~ <br />maintained in EM 1110-2'-1304. "Because the ,CWCCISdoes' not' cover' all'-ii:ems, <br />however, the Engineering, News Record (ENR) Construction' Index will be used for <br />indexing the three cost categories of: relocations; buildings, grounds, and <br /> <br />4-55 <br /> <br />i <br />. <br />'. <br />