TABLE 3.4 Maximum Allowed Discount Rate as a Function of Inflation Revenues Set Equal to Fuel Costs of Oil Generators The maximum allowable discount rates in Table 3.4 indicate that under most economic conditions, it would be possible to set the price of SPS energy in the proposed manner (for oil) and the corporation would still make a profit. However, it is unlikely that oil will be used to meet the base load in the years frmm 2004 to 2024 and these particular numbers should be used with great caution. Cash Flow It has been shown that if there is significant inflation over the years, the price of SPS energy can be set at the fuel cost of alternative generators, and the corporation would still make a profit. However, the number of years that must pass before the corporation would begin to pay back the incurred debt can be large. This year
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