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<br />01373 <br /> <br />Section 5(e) allows mainstern assistance to occur anytime within the <br />full 50-year repayment period of a project, but at no time can the <br />assistance payments extend beyond the 50-year repayment period of a <br />particular project. <br /> <br />An example of the financial link between the mainstem and the <br />participating projects through Section 5(e) is demonstrated for the <br />Lyman Project, in Wyoming, in Exhibits 1 and 2. Exhibit 1 shows the <br />current cost allocation and repayment status as of the end of fiscal <br />year 1993 for the Lyman Project. The total cost allocated to <br />irrigation for the project is $26,084,043, of which the irrigators' <br />will repay $2,271,556. Revenues from the mainstem units will assist <br />in repaying allocated costs above the ability of the irrigators to <br />repay, or the difference of $23,812,487. Exhibit 2 illustrates the <br />estimated timing of assistance payments over the repayment period of <br />the project. <br /> <br />Estimates of the timing and amount of apportioned revenue payments are <br />updated annually. Certain variables, such as the amount of energy <br />produced and marketed, operation and maintenance expenses, replacement <br />costs, and unforseen extraordinary expenditures can influence the <br />amount and timing of revenues available for apportionment. These <br />annual changes in the timing of payments allow for a great degree of <br />flexibility in coping with the unpredictability of such significantly <br />impacting variables as long-term fluctuations in weather patterns. <br />The flexibility gained from annual adjustments in the apportioned <br />revenue payments within the 50 years of each project repayment period <br />contribute toward a more stable power market by minimizing the <br />necessity of constantly adjusting the power rate. <br /> <br />Timing for the repayment of irrigation investment in the participating <br />projects can be as important in determining the power rate as the <br />investment itself. In 1981, the Federal Energy Regulatory Commission <br />held that the Bureau of Reclamation (Reclamation) should not include <br />future CRSP participating project costs in the power rate unless <br />Reclamation, "made a good faith showing of a reasonable expectation <br />that a project or a separable feature thereof would be constructed". <br />Subsequently, Reclamation and Western Area Power Administration <br />(Western) signed an agreement in 1983 to schedule the assistance <br />requirements of the indefinitely deferred projects beyond the rate <br />setting years of the power rate study. An example of those projects <br />allowed and excluded in Western's 1993 Power Repayment Study is shown <br />in Exhibit 3. Note that those projects with repayment periods <br />extending to the year 2090 and beyond are not included in the rate <br />base, however, all authorized projects are included in the power <br />repayment study. <br /> <br />Apoortionment Effects on Power Rate <br /> <br />Although flexibility exists in the timing of mains tern assistance <br />within the 50-year repayment periods of the participating projects, <br /> <br />2 <br />