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(1) An application for a facility defined in 75-20-104 , MCA, must contain estimates and a description of total costs and expenses attributable to the engineering, construction, and startup of the proposed facility and associated facilities up to the time of commercial operation. Cost estimates may be based on preliminary engineering or if available, standardized engineering estimates.

(2) As used herein, engineering costs include all direct costs related to planning, design, permitting, quality control, and land acquisition. Construction costs include costs related to site or route preparation, erection and assembly, and commissioning costs. Cost estimates must be itemized into relevant categories as follows unless other categories are agreed to by the department:

(a) engineering and overhead costs;

(b) land acquisition costs, and site or right-of-way preparation costs;

(c) plant costs, itemized by major process area and by major equipment. For proprietary processes itemization by major process area is sufficient for the application;

(d) costs of transportation links;

(e) mitigation costs;

(f) front end royalty payments;

(g) initial inventories of coal, chemicals or materials;

(h) startup expenses and working capital; and

(i) any other costs necessary and incidental to the construction of the facility and preparation for initial operation.

(3) The application must contain an explanation of the methods, including rules of thumb, used to estimate costs required by (2) of this rule.

(4) An estimate must be presented of the accuracy of all cost estimates.

(5) Costs must be provided for all portions of the facility both in and outside Montana.

(6) All costs must be estimated by instantaneous total cost of construction escalated to the date of the projected start of construction. Escalated costs as of the projected start of construction must then be adjusted to the construction expenditure schedule based on percentages of total cost incurred in each period and escalated to the date of incurrence. Cost escalation must be based on the most appropriate Handy Whitman or other industry recognized and department approved construction cost index.

(7) The department may request additional detail on costs as necessary for comparison of alternatives.

History: 75-20-105, MCA; IMP, 75-20-215, MCA; NEW, 1984 MAR p. 1844, Eff. 12/28/84; TRANS, from DNRC, 1996 MAR p. 2863; AMD, 2001 MAR p. 2410, Eff. 12/7/01.

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