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<br />,',- <br /> <br />.J <br /> <br />. <br /> <br />Operating Costs <br />These costs include operation, maintenance, replacement, power-wheeling, <br />purchases of energy, and miscellaneous expenses incurred in connection with <br />operating the storage project. They have first claim against storage <br />project revenue and are payable as incurred. Estimates used in the 1973 <br />Power System Average Rate and Repayment Study, CRSP, show the cost averaging <br />approximately $11.8 million per year over the 96-year study period. The <br />96 year period included ten past years of operation for which the actual <br />costs are known, and 86 years ,for which projections were required. <br /> <br />COST ALLOCATION <br /> <br /> <br />All preliminary allocations of the costs of the storage units made prior <br /> <br /> <br />to 1968, including those on which the first and current stora5e project <br /> <br /> <br />power selling rate and the first and current municipal and industrial water <br /> <br /> <br />selling rate are based, were made using the combined costs of the four <br /> <br /> <br />storage units plus the Transmission Division and using the separable costs- <br /> <br /> <br />remaining benefits method of allocation. The purposes to which costs were <br /> <br /> <br />allocated were consistently power, irrigation and other consumptive uses, <br /> <br /> <br />reservoir fishery enhancement and flood cOntrol. <br /> <br />The separable cost-remaining benefits method of allocation involves the <br /> <br /> <br />determination and use of justifiable investments, and separable and <br /> <br /> <br />remaining joint costs. A justifiable investment is determined for each <br /> <br /> <br />project purpose. It sets an upper limit to the cost that may be allocated <br /> <br /> <br />to that purpose and is, itself, the lesser of the capitalized value of <br /> <br /> <br />the benefits of that purpose over 100 years and the cost of the most eco- <br /> <br /> <br />nomical single-purpose alternative project, or way, of providing equivalent <br /> <br /> <br />service. From the justifiable expenditure of each project purpose the <br /> <br /> <br />separable cost of that purpose is subtracted. The separable cost of a <br /> <br /> <br />project purpose is the cost traceable solely to the inclusion of that <br /> <br /> <br />purpose in a project. It is derived by estimating the cost of the project <br /> <br /> <br />without the particular purpose included and subtracting that amount from <br /> <br /> <br />the total project cost. The separable cost of each purpose is allocated <br /> <br /> <br />to that purpose and the sum of all separables is subtracted from the total <br /> <br />6 <br />