Proposed Principles of Integrated Resource Planning for Use in Resource Acquisition and Transmission Planning

DEPARTMENT OF ENERGY

Western Area Power Administration

Proposed Principles of Integrated Resource Planning for Use in

Resource Acquisition and Transmission Planning

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of proposed principles and request for public comments.

-----------------------------------------------------------------------

SUMMARY: Western Area Power Administration (Western) proposes to use

principles of integrated resource planning (IRP) in its acquisition of

resources (supply-side and demand-side) and in its transmission

planning program. Western has developed the proposal contained in this

notice for public consideration. After considering public comment on

this proposal, Western will adopt final principles of IRP as the policy

under which project-specific resource acquisition and transmission

planning procedures will be developed. These project-specific

procedures will be developed through separate public processes.

DATES: Western seeks comments on the proposed principles outlined in

this notice. To be considered, comments need to be received by March 7,

1995.

In addition to publication in the Federal Register, Western is

mailing this notice to parties it has identified as likely to be

interested, including those who have expressed an interest in the

public involvement processes for Western's power marketing and

transmission planning programs. Western will also send information on

these principles to those who request it.

At this time, Western plans to hold one public information and

comment meeting to provide information about and to accept public

comment on these proposed principles. This public meeting will be held

in Denver, Colorado, at 1 p.m., January 12, 1995, at the Stapleton

Plaza Hotel, 3333 Quebec Street. Additional public meetings at other

locations will be considered. Written comments will also be accepted. A

summary of comments received and Western's responses will be provided

in a subsequent Federal Register notice and to parties indicating they

wish to continue receiving information about this process.

FURTHER INFORMATION: To receive information on these principles, and/or

to make requests to receive subsequent mailings on this process,

contact: Mr. Michael S. Cowan, Director, Division of Power Operations

and Resources, Western Area Power Administration, P.O. Box 3402,

Golden, CO 80401-0098, (303) 275-1630.

Background

On August 9, 1994, Western provided notice of its proposed Energy

Planning and Management Program (Program), 59 FR 40543, concerning

requirements for Western's customers to undertake integrated resource

planning consistent with the statutory requirements of the Energy

Policy Act of 1992. In that notice, Western committed to develop and

use principles of IRP in its resource acquisition and transmission

planning programs. The separate public process to develop IRP

principles for Western's programs begins with publication of these

draft principles.

The draft principles outlined in this notice differ from those

proposed for Western's customers. Western's resource aquisitions are

primarily short-term purchases of supplemental resources to firm

variable hydropower generation, not aquisition's of resources to meet

long-term load growth through the principles set forth in section 114

of the Energy Policy Act of 1992. The principles have also been

modified so that they can be applied to Western's transmission planning

process, which does not deal with new generation resources, only new or

upgraded transmission facilities.

Western is currently involved in other public processes that can

have an impact on future purchase power requirements. These processes

are the Replacement Resources Process, pursuant to the Grand Canyon

Protection Act of 1992 (Public Law 102-575); the Central Valley Project

2004 Power Marketing Environmental Impact Statement (EIS); and the Salt

Lake City Area Integrated Projects Power Marketing EIS. The principles

being developed under this public process will be applied when

acquiring resources related to the decisions from these other public

processes. These principles will serve as the policy under which

specific procedures are developed as each project identifies the need

to acquire resources or increase Western's transmission capability.

Scope

The proposed formal principles of IRP would apply specifically to:

1. Resource acquisitions involving a commitment to purchase a

resource continuously or a commitment to make recurring purchases.

Normally, formal principles would not be applied to unpredictable

seasonal purchases, day-to-day economy energy purchases, and other

short-term transactions.

2. New or upgraded transmission system construction with a 1995

total cost estimate in excess of $5 million for an individual project.

This 1995 cost level would be adjusted each year using the construction

cost index.

Where practicable, principles of IRP will also be applied

informally to other Western transmission projects and/or resource

acquisitions.

Proposed Principles of Integrated Resource Planning

I. Resource Acquisition Principles: Western's resource acquisition

activities would be determined by project-specific power marketing

plans, hydropower production capability, and the application of the

following proposed principles of IRP:

1. Western will consider a full range of resource options, both

supply-side and demand-side, as well as renewable resource options.

2. On a project-by-project basis, Western, in concert with

interested stakeholders, will develop (1) methods and procedures to

determine the need for resource acquisition and (2) criteria to be used

in evaluating power resource alternatives.

3. Evaluation criteria will address cost, environmental impact,

dependability, dispatchability, risk, diversity, and the ability to

verify demand-side alternatives. Evaluation criteria will be reviewed

as the need for resources changes or when long-term commitments to

purchase power expire.

4. Evaluation criteria will be consistent with Western's power

marketing policy, which states that Federal power is to be marketed in

such a manner as to encourage the most widespread use thereof at the

lowest possible rates to consumers consistent with sound business

principles. The policy, found in Delegation Order No. 0204-108 (58 FR

59716, November 10, 1993), is derived from section 5 of the Flood

Control Act of 1944, 16 U.S.C. 825s.

5. Resource acquisition planning will be consistent with power

marketing plans and associated contractual obligations.

6. Resource acquisition decisions will be documented and made

available to Western's power customers and the public.

II. Transmission Planning Principles: Western's transmission

planning is conducted to assess the capability of the Federal

transmission system to provide adequate and reliable electric service

to its customers and the interconnected power grid. The principles of

IRP that will apply to Western's transmission planning are as follows:

1. Western will conduct early and wide public involvement to

confirm the purpose and need of a proposed transmission project.

Western proposes that a public meeting be held early in the planning

process once the need for system modifications has been identified and

prior to start of the National Environmental Policy Act (NEPA) process.

2. At the public meeting, Western will describe the need to be met

and seek comments on alternative ways to address the need, including

demand-side management, new construction, or upgrade of existing

facilities.

3. Western will notify interested parties, including power

customers, residents of the area, environmental groups, various

resource suppliers including renewable generation entities, and other

transmission utilities in the area, as well as other participants in

the project if it is a joint project.

4. Alternatives that are feasible will be evaluated for cost,

general environmental impacts, and system reliability concerns in

coordination with interested parties.

5. The results of this evaluation will be made available to

Western's power customers and the public.

Transmission facilities needed for reliability will be based on

mitigating problems related to power system operations or replacing

unsafe, aged, worn out, or inefficient equipment.

Western is committed to join the Western Regional Transmission

Association and has joined the Southwest Regional Transmission

Association (SWRTA). Both groups will promote coordinated planning and

efficient use of transmission capacity and will provide another means

for involvement by Western's customers. As appropriate, Western can

invite other interested parties to attend SWRTA meetings as guests of

Western. It is anticipated that some form of regional transmission

group will be established in the Mid-continent Area Power Pool. This

will also facilitate public involvement in considering Western's future

transmission needs.

Public Process

The public process to determine the principles of integrated

resource planning that Western will incorporate into its resource

acquisition and transmission planning processes begins with publication

of this notice.

Comments on these proposed principles are being sought during a 90-

day comment period. Following this comment period, the principles to be

adopted will be published in the Federal Register. This public process

ends with publication of final principles in the Federal Register.

Final principles will be effective 30 days after publication.

Environmental Evaluation

Western is seeking comment on the IRP principles outlined in this

notice through a public process. Methods, procedures, and criteria for

implementing these principles have yet to be developed and will be

project-specific. Western is committed to initiating an appropriate

public process under NEPA and its implementing regulations for these

project-specific actions at the earliest possible time. The potential

environmental effects of the methods, procedures, and criteria will be

evaluated in addition to analyzing the effects of the acquisition of

resources in these subsequent processes.

Determination Under Executive Order 12866

DOE has determined this is not a significant regulatory action

because it does not meet the criteria of Executive Order 12866, 58 FR

51735. Western has an exemption from centralized regulatory review

under Executive Order 12866; accordingly, no clearance of this notice

by the Office of Management and Budget is required.

Issued at Golden, Colorado, November 10, 1994.

J.M. Shafer,

Administrator.

[FR Doc. 94-29706 Filed 12-5-94; 8:45 am]

BILLING CODE 6450-01-P