2. ''Leasing" of the SPS Output by the Utilities • The cost of purchasing energy could be recouped by many utilities via fuel adjustment rates. • At present, the reduction of the utility capital requirements caused by "leasing" energy from the SPS would have a beneficial effect on the utilities' financial ratings. It is not clear that this situation will prevail over the next fifty years, nor is it clear if the utilities would accept this arrangement over such a long term. • Since the utilities make no profit on purchased energy, the effect of the SPS on the total cost of electrical energy would be the same for both ownership plans (assuming that the discount rate is the same for both the utility and the private corporation). 3. SPS Energy Sold at the Incremental Cost of Base-Load Alternatives • If the inflation rate continues at roughly the same as present rates, it would be possible to price energy from an SPS (capital cost = $7.6 billion) at the incremental cost of alternative fossil fueled generation and eventually make a profit. The size of the profit depends on the inflation rates. • If the capital cost of the SPS is significantly higher than $7.6 billion, the inflation rates necessary to eventually make a profit using this pricing alternative, would be significantly greater than the present inflation rates.
RkJQdWJsaXNoZXIy MTU5NjU0Mg==