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Question 8: Please explain the different impacts of these two plans on BPA rates. 



Answer; BPA prepared a preliminary estimate of the rate impacts of the drawdown of the 



four lower Snake River dams (i.e., the "Idaho Plan") shortly after release of the 

 Army Corps of Engineers cost estimates for 2 drawdown options We estimated 

 that BPA's Priority Firm (PF) rates would increase by about 4 to 5 percent (from 

 rates without drawdown) in FY 2009 for the Spillway Crest alternative once the 

 modifications are completed after a 14-year construction period. The analysis 

 assumed a $900 million (1992 dollars) capital investment amortized over 

 50 years and an $85 million (1992 dollars) annual power cost. We also 

 estimated a PF rate increase of about 1 1 to 12 percent (from rates without 

 drawdown) in FY 2012 for the Natural Riverbed alternative once the 

 modifications are completed after a 17-year construction period The Natural 

 Riverbed analysis assumed a $3 2 billion capital investment (1992 dollars) 

 amortized over 50 years and a $200 million (1992 dollars) annual power cost. 

 We also estimate that the Northwest Power Planning Council's flow 

 augmentation plan could increase BPA's PF rate by about 4 to 8 percent in the 

 FY 1994 to 1997 time period. The ranges were developed using a variety of 

 different alternative power cost estimates intended to incorporate uncertainties 

 related to both an operational approach which rely on power purchases and 

 storage, and a firm planning approach which rely on firm resource acquisition. 

 Much of the information used to develop these rate impacts are based on 

 judgment or preliminary estimates. 



