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Show 608 the other hand, produces 2%% of only the unamortized portion of the construction investment.612 We have previously pointed out that the 1939 Act's provi- sion for allocation of repayable and returnable costs makes no mention of interest.613 And the Act has been administratively construed to permit the application of interest, collected as a component of power rates, to the return to the United States of irrigation costs to be borne by power.614 While such interest component may thus be applied toward repayment of the irriga- tion investment, the fact remains that interest is collected in power rates. Another aspect of Reclamation rate practice should be noted. Rates are fixed so as to return annual operation, maintenance, and replacement costs, plus amortization of the power invest- ment in not to exceed 50 years, with interest at the rate of 3% per annum on the unamortized balance of the power invest- ment-if this formula results in a rate equal to or higher than the minimum required by the statutory formula.615 (Tennessee Valley Authority Projects)-It is a declared policy of the TVA Act that:616 in order, as soon as practicable, to make the power proj- ects self-supporting and self-liquidating, the surplus power shall be sold at rates which, in the opinion of the Board, when applied to "the normal capacity of the Au- thority's power facilities, will produce gross revenues in excess of the cost of production of said power * * *. (Boulder Canyon Project)-The Boulder Canyon Project Act directed the Secretary of the Interior to make provision for revenues by contract adequate to insure payment of "all 612 See, e. g., Re Bonneville Project, Columbia River, Oregon-Washington, Allocation of Costs, Docket No. IT-5955, 4 F. P. C. 950, 977 (1945). '"See supra, p. 590. •" See supra, n. 220, p. 296. See also Average Rate and Repayment Studies fob Power Systems on Bureau of Reclamation Projects, Department of Interior, Bureau *of Reclamation, pp. 1-5 (January 1950). 615 See, e. g., Average Rate and Repayment Studies for Power Systems on Bureau of Reclamation Projects, Department of Interior, Bureau of Reclamation, pp. 1-5 (January 1950). 818 Act of August 31,1935, § 8, 49 Stat. 1075, 1077, see 16 U. S. C. 831m. |
