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<br />01355 1 <br /> <br />OR Afl <br /> <br />participating projects by failing to include full depletion projections for <br /> <br />some Federal projects that satisfy the Agreement's criteria for inclusion in <br /> <br />the rate. <br /> <br />The 1983 Agreement was negotiated by Western and Reclamation prior to the <br /> <br />1983 rate-setting process. In fact, that rate-setting process was the impetus <br /> <br />and motivation for the 1983 Agreement. After the 1983 Agreement was signed, <br /> <br />its requirements were put in place in determining the 1983 rate. This <br /> <br />contemporaneous interpretation'and application of the Agreement reveals the <br /> <br />true intent of the Federal agency negotiators and must be binding on them in <br /> <br />future rate-setting processes. <br /> <br />Significantly, the 1983 energy and capacity studies provided to Western <br /> <br />by Reclamation incorporated depletion data that were not objected to by the <br /> <br />Upper Division States, were not capped at the year 2010 level and reflected an <br /> <br />ulaltered ultimate full development schedule of the States' compact-appor- <br /> <br />tioned waters. Western used the studies as they were provided by Reclamation, <br /> <br />without applying Western's own "expertise" to artificially suppress the data <br /> <br />that result in a lower rate. This process was not opposed by Western's power <br /> <br />customers. <br /> <br />After initiating the 1990 rate process, Western (no doubt at the urging <br /> <br />of the power customers and their paid consultants) apparently realized that <br /> <br />there were other methods available to lower the Integrated Projects power <br /> <br />rates. If the 1983 Agreement were applied not only to push the financial and <br /> <br />depletion impacts of authorized CRSP projects that do not meet the tests of <br /> <br />the 1983 Agreement beyond the rate-controlling date but also to push the <br /> <br />depletions for State and private projects beyond that date, more water could <br /> <br />be assumed available to generate more electricity, so the rates could be <br /> <br />6 <br />