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<br />~ <br /> <br />" <br /> <br />0143.." <br /> <br />Western States Power <br /> <br />WSP is a recently formed company consisting of many (mostly large) CRSP preference <br />customers. WSP was created primarily to buy PMA assets should they become <br />available. Tri-State essentially funds (pays the dues for many small members) the <br />company and was instrumental is placing its candidate as Chairperson. The company <br />is made up of utilities from Utah, New Mexico and Colorado with Colorado's <br />membership primarily from Front Range utilities. Salt River Project, one of CRSP's <br />larger customers, located in Phoenix is not a member. <br /> <br />WSP interests are not analogous to Upper Basin water and power interests. WSP <br />membership interests are primarily power. A principle WSP concern is the cost of <br />power to its customers. Holding the line on power costs usually means reducing <br />overhead costs and/or reducing the cost of power from their power supplier or both. <br />WAPA falls into the supplier category for all WSP members. WAPA's and specifically <br />CRSP supplies the lowest cost power to WSP members. CRSP peaking power <br />supplied as a firm product is a very valuable resource to the Utility that has the long- <br />term contractual rights to the product. CRSP peaking power is presently priced at two <br />cents per kWh. That product in today's utility market would command five cents per <br />kWh or more. <br /> <br />Therefore, holding on to its CRSP power allocation is paramount to WSP members and <br />additionally, to hold power cost increases to a minimum or if possible reduce CRSP <br />overhead costs. It would also be in their interests to buy CRSP and other selected <br />Federal hydroelectric facilities thereby controlling the resource and its associated <br />operating costs. While this may be the most effective cost savings measure for most <br />Federal Reclamation Projects, the CRSP legislative mandate may not allow CRSP to <br />be placed in this category. <br /> <br />The corner stone of CRSP has always been funding water projects thru sales of CRSP <br />power and energy. Congress did not legislate other Reclamation Projects in this <br />manner. With the creation of WAPA in 1978 and the succeeding years of WAPA's <br />existence have seen an ever widening breach between the water and power interests. <br />Water development must now overcome another hurdle; WAPA's close partnership <br />with the power interests and power interest's vocal and political opposition to raising <br />CRSP power rates to fund an irrigation project in the Upper Basin that is outside its <br />service area. Furthermore, WAPA's recent transformation plan plays to the interests of <br />its power customers and WSP in particular. <br /> <br />IfWSP is successful with its PMA purchase objective, there exists a reality that WPA <br />will successfully block future requests to fund CRSP participating irrigation projects. <br /> <br />Problems with WAPA, Bureau of Reclamation functional separation <br />, <br /> <br />1 <br />