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Question 2: In your answer to my written questions, you estimated that the irrigation 



discount will cost BPA $27 million in lost revenues in FY 1994 and FY 1995. 

 Does the BPA's estimate of the costs of the irrigation discount include the cost 

 of lost power generation due to water withdrawals'' If not, would you estimate 

 for me the cost attributable to lost power generation due to water withdrawals'' 



Answer BPA's estimate of the 2-year amount of the irrigation discount does not include 



"the cost of lost power generation due to water withdrawals. At this time, we do 

 not have a methodology for calculating the impact of water withdrawals. Such 

 estimates are complicated by a variety of factors including water returned to the 

 river, price elasticity in the irrigation sector, and varying amounts of annual 

 precipitation 



BPA will reconsider the need for the irrigation discount in the context of 

 developing tiered rates over the next two years, as a part of the 1995 rate case. 

 Utilities thai currently qualify for the irrigation discount are also those that have 

 slow grouih Thus, they may benefit from a tiered rate structure in the form of 

 iouer rates, offsetting the need for the irrigation discount. 



