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Show APPENDIX VI VI-19 14 COLORADO RIVER STORAGE PROJECT enced during the filling period. Assuming a cost of replacement energy of 5 mills per kilowatt-hour, a total of about $1,750,000 would be required to make the allowance under average flow conditions. This is a relatively insignificant amount. Nevertheless, because of the possibility of less than average flows, its concern is understandable and we are therefore making provision in principle 5 for reimbursement to the upper basin fund by the Hoover power allottees for whatever moneys are used from the fund for this purpose. The word "reimbursed" as used in principle 5 applies only to the mone}Ts expended from the fund. If nonfirm or other energy from the storage project powerplants is used to make the allowance, this is not to be considered a cost to be reimbursed. Notification of the intent to secure reimbursement would be accomplished through an additional regulation for generation and sale of power in accordance with the Boulder Canyon Project Adjustment Act. The additional regulation, as well as being issued formally, is also an attachment to, and a part of, the general principles and criteria. Consideration was given to including interest in the reimbursement to the upper basin fund. Pursuing this objective would logically call for changes in the method of determining the deficiency for which the allowance is to be made. Taking all factors into account, and in the interst of a practical approach, it is concluded that the reimbursement should consist of a dollar-for-dollar return without interest. Although the Congress has reserved to itself the right to say how the revenues in the separate fund will be expended within the Colorado River Basin, the responsibility for setting rates, which is the source of revenues in the fund, is in the Secretary. Consequently, the additional regulation is a notification that the rates to charged for electrical energy after 1987 will, among other things, include a component to assure revenues in the fund to accomplish reimbursement. This is as far as the Secretary can go at this time without additional legislation. Suggestions have been made that the present Colorado River development fund be used either to make necessary replacement energy purchases or to reimburse the upper Basin fund of a current basis. Section 2(d) of the Boulder Canyon Project Adjustment Act provides for the sum of $500,000 annually from Hoover revenues to be available for investigation and construction of projects in the basin. The suggestion then is to use this money for energy replacement purposes rather than for project investigation or construction. To do so would require legislation. Regardless of what source of funds, if any, may finally be utilized in accomplishing the allowance it is our intent to make minimum use of dollars but maximum use of energy from Federal projects for any required replacement. It is not intended to use firm energy from the storage project powerplants if such energy could otherwise be sold at firm power rates. If the allowance is made bjT delivering energy it will be delivered in a monthly pattern designed to fit those months when water otherwise would have been released at Hoover. Stated another way, it is not our intent to force replacement energy on the contractors in those months when downstream releases are generating all, or close to all, of the energy which they might otherwise have expected to receive. We have also considered a proposal that the Hoover power contracts and regulations might provide a means of securing revenues to pur- |
