Of these three arrangements, only the purchase of the SPS by an independent entity (corporate or governmental) and "lease" of the output by several utilities has the promise of overcoming the present institutional barriers to the base load utilization of the SPS. While all of the calculations performed in this analysis assumed that the capital cost of the SPS was $7.6 billion, the general conclusions reached using this cost can be used to infer the effect of using the more recent, significantly higher estimate of $12.2 billion. The basic conclusion reached in this study, i.e. that the 'leasing" arrangement is the most promising of the three arrangements considered, would be true if the higher cost had been assumed. The results of this investigation are as follows: 1. Utility Ownership of the SPS • When the ($7.6 billion) SPS first becomes operational, a very small increase in the total cost of meeting the demand for electrical energy will probably be seen. • If the capital cost of the SPS is $12.2 billion, the inclusion of the SPS related costs in the utility rate structure would require an increase in the total cost of electrical energy to the consumer. • Utilities which use a semi-automatic fuel adjustment rate to recoup the cost of fuel will have to request a sizable increase in their base rates to cover their increased plant equity when the SPS comes on-line. Fuel rate reductions can occur within a month; base rate increases can take as long as a year to obtain. The higher the capital cost of the SPS, the greater will be the financial stress caused by regulatory delays.
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