5. Determine the remaining joint costs = cost of the total facility minus the
separable costs.
The separable costs consist of the total of all specific and imputed separable
costs.
6. Distribute the remaining joint costs to the purposes served by the facility, prorata to the remaining justifiable costs calculated in step 4.
7. For each purpose provided by the facility, add the specific costs and distributed
remaining joint costs to obtain the total attributed costs.
19.6.4 The Use-of-Facilities (UoF) Method
The UoF method of cost distribution depends on the extent each user employs the
facilities for the required purpose. The level of use of facilities is based on proxies,
such as the volumes of water supplied, measured flows, and allocated storage space
or volume. This method is most often applied in cases such as:
• for the different purpose/functions served, the project benefits are unavailable or
are difficult or lengthy to determine.
• the cost distribution wishes to maintain the inherent stability under the water
rights judgements rather than reflect on how the water is actually employed.
The steps involved in this method are:
1. For each purpose provided, determine the level of use of joint project facilities.
Suitable proxies are: measured flow rates, volumes of water supplied, reservoir
capacity allotted to each purpose, power generation capacity, and energy
generated.
2. For each purpose served by the facility, calculate the separable costs.
3. Compute the remaining joint cost ¼ the total project cost minus all separable
costs.
4. Allocate, for each purpose/function, the remaining joint costs, pro-rata to the use
of-facilities parameters applied in step 1.
5. For each purpose served by the facility, add the separable and distributed
remaining joint costs to obtain the total allocated costs.
19.7 Examples
Three examples are discussed in the following pages:
Example 19.1 There are 3 users in a multipurpose project: user A, user B, and user
C. The total cost of the multipurpose project will amount to $130 million over
20 years. The economic analysis shows the benefits for each user as follows: $1310
million to user A, $500 million to user B, and $100 million to user C. If each user
19.7 Examples
553
separable costs.
The separable costs consist of the total of all specific and imputed separable
costs.
6. Distribute the remaining joint costs to the purposes served by the facility, prorata to the remaining justifiable costs calculated in step 4.
7. For each purpose provided by the facility, add the specific costs and distributed
remaining joint costs to obtain the total attributed costs.
19.6.4 The Use-of-Facilities (UoF) Method
The UoF method of cost distribution depends on the extent each user employs the
facilities for the required purpose. The level of use of facilities is based on proxies,
such as the volumes of water supplied, measured flows, and allocated storage space
or volume. This method is most often applied in cases such as:
• for the different purpose/functions served, the project benefits are unavailable or
are difficult or lengthy to determine.
• the cost distribution wishes to maintain the inherent stability under the water
rights judgements rather than reflect on how the water is actually employed.
The steps involved in this method are:
1. For each purpose provided, determine the level of use of joint project facilities.
Suitable proxies are: measured flow rates, volumes of water supplied, reservoir
capacity allotted to each purpose, power generation capacity, and energy
generated.
2. For each purpose served by the facility, calculate the separable costs.
3. Compute the remaining joint cost ¼ the total project cost minus all separable
costs.
4. Allocate, for each purpose/function, the remaining joint costs, pro-rata to the use
of-facilities parameters applied in step 1.
5. For each purpose served by the facility, add the separable and distributed
remaining joint costs to obtain the total allocated costs.
19.7 Examples
Three examples are discussed in the following pages:
Example 19.1 There are 3 users in a multipurpose project: user A, user B, and user
C. The total cost of the multipurpose project will amount to $130 million over
20 years. The economic analysis shows the benefits for each user as follows: $1310
million to user A, $500 million to user B, and $100 million to user C. If each user
19.7 Examples
553