Author: C. P. Knievel

Publisher:

Published: 1983

Total Pages: 21

ISBN-13:

As a rule, raising the discount rate under which a project alternative is analyzed has an advance effect on the feasibility of the alternative, i.e. an alternative viable at a low rate may not be viable at a high rate. The primary reason for this is that benefits are essentially fixed while annual costs increase because of higher interest during construction and/or amortization of the project costs. Hydropower projects are an exception to this rule because of the way project benefits are determined. This can be demonstrated using the economic analysis of the Gregory County Pumped Storage Facility which is proposed by the Omaha District. The proposed site is located on the left bank of the Missouri River in Gregory County, South Dakota. The forebay of the project would be on the plateau about 600 feet above the surface of the afterbay, Lake Francis Case. Peaking power from the project would be supplied to the Midcontinent Area Power Pool (MAPP). Total capacity would be 2360 MW. The project would be built in two stages of 1,180 MW each. This was done to reduce interest during construction and better match the forecast need for peaking power in MAPP. The total cost of the project in 1982 dollars would be $1,842,891,000.