EP 1165-2-1
30 Jul 99
16-3. Cost Sharing. In multiple-purpose reservoirs under the
jurisdiction of the Corps, the Chief of Engineers is responsible for
determining the costs allocated to the hydroelectric power function,
except where otherwise required by law. It is Corps policy that all
purposes in a multiple-purpose project should share equitably in the
benefits of multiple-purpose development and that no purpose should be
subsidized by other project purposes to enable sale of services at
lower rates. By the interagency agreement of 12 March 1954, the
Federal agencies, Departments of the Interior, Army, and Federal
Power Commission (now Federal Energy Regulatory Commission (FERC))
have accepted the Separable Costs-Remaining Benefits (SCRB) method of
cost allocation, as a preferred method of distributing project costs.
This method permits equitable allocations of project costs to power
for use as a basis for establishing power rates.
a. When development of the power function is funded out of
project appropriations, the cost (including OMRR&R) allocated to power
is fully repaid to the U.S. Treasury by revenues collected by the
marketing agency. This is in accord with existing law (see paragraph
16-5) as referenced in subsection 103(c)(1) of WRDA 1986.
b. When development of the power function is funded up-front
by a non-Federal sponsor (the preferred option), the allocated
investment cost will be recovered by the sponsor under a tri-party
agreement between the sponsor, the Corps and the appropriate Federal
marketing agency, either through receipt of the developed power or (if
specifically authorized by Congress) by repayment from revenues
collected by the marketing agency through sale of the power. The
allocated share of Corps project OMRR&R costs funded from project
appropriations will be repaid to the U.S. Treasury accordingly, either
by assessments to the sponsor as costs are incurred or out of the
power revenues collected by the marketing agency.
c. A non-Federal sponsor will be required to contribute 50
percent of preauthorization feasibility study costs, during the course
of studies.
16-4.
Coordination with Other Agencies.
a. The FERC. The FERC, in carrying out its functions under
the Federal Power Act, is concerned with all the elements involved in
determining power values. The Corps collaborates with the FERC in
evaluating power benefits on the basis of unit power values developed
by that agency. The Corps Hydroelectric Design Center in the North
Pacific Division works closely with FERC on development of power
values and can provide assistance, upon request, to Corps FOAs.
b. Others. Federal, state and local agencies which would have
an interest in the power function or the possible effect of the
contemplated plan, are consulted. Views of interested and affected
agencies are considered and covered in Corps reports. Representatives
of the marketing agency are consulted.
c. Project Rewind and Uprating. Consultation with other
agencies is required for rewind and uprating of hydroelectric
generators carried out in the maintenance, rehabilitation, and
modernization of existing generating facilities at water resources
projects. The Secretary of the Army shall provide affected state,
tribal, and Federal agencies with a copy of the proposed
determinations that the proposed actions are economically justified
and financially feasible; will not result in significant adverse
16-2
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