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<br />Title I Works and Capital Costs <br /> <br />fluctuations in power and chemical <br />requirements and in the amount of <br />untreated irrigation drainage blended with <br />product water and returned to the river for <br />delivery to Mexico. <br /> <br />.' <br /> <br />Power Source <br /> <br />Early Studies <br /> <br />Public Law 96-336 required an analysis of <br />alternative power sources (capacity and <br />energy) for Title I works, including a <br />possible agreement with the Republic of <br />Mexico to supply enough power to operate <br />the YOP and the PRPU and their associated <br />facilities. These works require a total of <br />27 megawatts of capacity: the YOP requires <br />22 megawatts of capacity in a full-load daily <br />operation, as currently constructed, and the' <br />PRPU requires a maximum of 5 megawatts <br />of capacity, <br /> <br />Reclamation contacted public and private <br />utilities in the Southwest to determine the <br />types of power resources available, Several <br />options were considered, including: <br /> <br />Unit Contingent Power - The United <br />States would purchase a specified <br />percentage of the output from a <br />specific generating station, <br /> <br />Firm Power Contracts - The utility <br />would serve the YDP and the PRPU <br />as a commercial wholesale load. <br /> <br />'0 <br /> <br />The United States also considered <br />purchasing power from the Comision <br />Federal de Electricidad in Mexico City. <br />However, at the time of the study, <br />Reclamation deteImined that the power <br />systems between Mexico and the United <br />States could not be synchronized to provide <br />reliable electric service, <br /> <br />current Power AlTBngement <br /> <br />These studies were completed in the late <br />1980's, Since then, Reclamation has <br /> <br />entered into two interagency agreements <br />with Western Area Power Administration <br />(Western). The term of these agreements <br />extends to September 30, 2021, unless <br />teIminated by Reclamation upon a 2-year <br />notice, <br /> <br />Under the first agreement, Pacific <br />Northwest-Southwest Intertie and the <br />Parker-Davis Transmission Systems <br />provide firm transmission capacity, Under <br />the second agreement, Western, at <br />Reclamation's request, purchases power and <br />energy at the least possible cost from the <br />spot market to operate the YOP and PRPU, <br />Currently, the composite average cost of <br />this power is 21 to 22 mils per kilowatt- <br />hour. Western makes most of these <br />purchases from the Western Systems Power <br />Pool,ofwhich Western is a member, <br /> <br />While these arrangements meet current <br />power needs at a reasonable cost, future <br />spot market costs could be higher than <br />other arrangementa, Western is currently <br />increasing firm transmission rates, which <br />will affect the cost of power for the YOP and <br />PRPU. The rate increase could be sub- <br />stantial and may be effective as early as <br />October 1992, Currently, each Federal <br />project has its own transmission rate, <br />Western is also considering integrating <br />these projects into a one-rate, joint-use <br />transmission system, <br /> <br />Ongoing Studies <br /> <br />Several new developments have occurred in <br />the power market since Reclamation <br />completed its studies in the late 1980's: <br /> <br />. Several utilities in the Southwest have <br />encountered financial problems and may <br />be more willing to negotiate long-term <br />contracts at a lower or more attractive <br />price, <br /> <br />. In the last 5 years, private utilities in the <br />Southwest have interconnected with the <br />Comision Federal de Electricidad to <br /> <br />11 <br />