# Load Forecasts

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/fr%3A99-17113

## Record

- **Collection:** Federal Register
- **Document type:** Proposed Rule
- **Published:** July 7, 1999
- **Citation:** 64 FR 36609

## Text

DEPARTMENT OF AGRICULTURE

Rural Utilities Service

7 CFR Part 1710

RIN 0572-AB05

Load Forecasts

AGENCY: Rural Utilities Service, USDA.

ACTION: Proposed rule.

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

SUMMARY: The Rural Utilities Service (RUS) is proposing to amend its
regulations to revise requirements for borrower load forecasts and load
forecast work plans (historically referred to as power requirements
studies and power requirements study work plans). The proposed changes
would reduce the level of detail required in load forecasts filed by
small power supply borrowers and their members and by distribution
borrowers unaffiliated with a large power supply borrower. The proposed
changes also would give borrowers greater flexibility in preparation of
load forecasts required to be submitted to RUS.

DATES: Written comments must be received by RUS or carry a postmark or
equivalent by September 7, 1999.

ADDRESSES: Written comments should be addressed to Georg A. Shultz,
Chief, Energy Forecasting Branch, Electric Staff Division, Rural
Utilities Service, U. S. Department of Agriculture, 1400 Independence
Ave., SW., Room 1246-SBldg., STOP 1569, Washington, DC 20250-1569. RUS
requests a signed original and three copies of all comments (7 CFR
1700.4). Comments will be available for public inspection during
regular business hours (7 CFR 1.27(b)).

FOR FURTHER INFORMATION CONTACT: Georg A. Shultz, Chief, Energy
Forecasting Branch, Electric Staff Division, Rural Utilities Service,
U.S. Department of Agriculture, 1400 Independence Ave., SW., Room 1246-
SBldg., STOP 1569, Washington, DC 20250-1569, telephone number: (202)
720-1920, fax: (202) 720-7491, E-mail: [email protected].

SUPPLEMENTARY INFORMATION:

Executive Order 12866

This proposed rule has been determined to be not significant for
purposes of Executive Order 12866 and, therefore, has not been reviewed
by the Office of Management and Budget (OMB).

Executive Order 12988

This proposed rule has been reviewed in accordance with Executive
Order 12988, Civil Justice Reform. RUS has determined that this
proposed rule meets the applicable standards provided in Section 3 of
the Executive Order. In accordance with the Executive Order and the
rule: (1) all state and local laws and regulations that are in conflict
with this rule will be preempted; (2) no retroactive effect will be
given to this rule and (3) in accordance with Sec. 212(e) of the
Department of Agriculture Reorganization Act of 1994 (7 U.S.C.
Sec. 6912(e)) administrative appeal procedures, if any are required
must be exhausted prior to initiating litigation against the Department
or its agencies.

Regulatory Flexibility Act Certification

The Administrator of RUS has determined that a rule relating to
RUS' electric loan program is not a rule as defined in the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.) and, therefore, the Regulatory
Flexibility Act does not apply to this rule. RUS borrowers, as a result
of obtaining Federal financing, receive economic benefits that exceed
any direct economic costs associated with complying with RUS
regulations and requirements.

Information Collection and Recordkeeping Requirements

The reporting and recordkeeping requirements contained in the
proposed rule were approved by the Office of Management and Budget
(OMB) pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C.
Chapter 35) under control number 0572-0032.
Send questions or comments regarding this burden or any other
aspect of this collection of information, including suggestions for
reducing the burden to F. Lamont Heppe, Director, Program Development
and Regulatory Analysis, Rural Utilities Service, 1400 Independence
Ave., SW, Room 4034-SBldg., STOP 1522, Washington, DC 20250-1522.

Unfunded Mandates

This proposed rule contains no Federal mandates (under the
regulatory provision of Title II of the Unfunded Mandates Reform Act)
for State, local, and tribal governments, or the private sector. Thus,
this proposed rule is not subject to the requirements of section 202
and 205 of the Unfunded Mandates Reform Act.

National Environmental Policy Act Certification

The Administrator of RUS has determined that this proposed rule
will not significantly affect the quality of the human environment as
defined by the National Environmental Policy Act of 1969 (42 U.S.C.
4321 et seq.). Therefore, this action does not require an environmental
impact statement or assessment.

Catalog of Federal Domestic Assistance

The program described by this proposed rule is listed in the
Catalog of Federal Domestic Assistance Programs under number 10.850,
Rural

[[Page 36610]]

Electrification Loans and Loan Guarantees. This catalog is available on
a subscription basis from the Superintendent of Documents, U.S.
Government Printing Office, Washington, DC 20402-9325, telephone number
(202) 512-1800.

Executive Order 12372

This proposed rule is excluded from the scope of Executive Order
12372, Intergovernmental Consultation which may require consultation
with state and local offices. A final rule related notice entitled
``Department Programs and Activities Excluded from Executive Order
12372,'' (50 FR 47034) determined that RUS loans and loan guarantees
were not covered by Executive Order 12372.

Background

The Rural Utilities Service (RUS) makes and guarantees loans to
furnish and improve electric service in rural areas pursuant to the
Rural Electrification Act of 1936, 7 U.S.C. 901 et seq. (RE Act). Under
the RE Act, RUS may make or guarantee a loan only if the Administrator
determines that the security for the loan is reasonably adequate and
that the loan will be repaid within the time agreed. Most borrowers
apply for a new loan to meet system needs every two to three years. The
security for these loans is generally a first lien on the borrower's
electric system, evidenced through the filing of a mortgage. In order
to determine the feasibility of a new loan and whether borrowers will
have sufficient revenues to repay existing loans, RUS requires most
borrowers to file load forecasts, historically called ``power
requirements studies'' by RUS, containing current and detailed
information and analyses on existing and expected future loads.
Detailed information from the load forecasts are used in RUS'
independent analysis and oversight of borrower systems.
RUS regulations on the preparation and approval of power
requirements studies and power requirements work plans, contained at 7
CFR part 1710, subpart E, were last revised in 1992, at 57 FR 1053 and
57 FR 4513. Since then, the business and regulatory environment in the
electric industry has undergone rapid change. State regulatory
agencies, power supply systems, power pools, and other entities are
modifying their power planning processes and requirements in the light
of competitive changes in the industry. Even greater transformations
lie ahead as many states move to adopt retail competition. In the years
since the existing regulations were adopted, both RUS and our borrowers
have gained greater familiarity with the development and use of load
forecasts, and supporting analyses and data and the experience and
sophistication of RUS financed systems have increased.
In response to changes in the industry and the Administration's
ongoing commitment to improving customer service, RUS has amended a
number of its regulations and practices involving its oversight of
borrower systems to update and streamline these requirements. This
proposed regulation is part of RUS' continuing effort to improve
customer service.
This proposed rule implements recommendations to modify load
forecast requirements which arose out of the RUS strategic planning
process. The proposed changes simplify the procedure and minimize the
detail of information RUS needs for loan feasibility determinations.
The proposed revisions to the existing rule balance RUS' continuing
need to maintain current up-to-date load forecast information for
electric borrowers with its goal of reducing regulatory requirements
and burdens on borrowers.
In the usual course of business, all prudent utilities engage in a
continuing planning process incorporating objective load forecasts in
order to provide reliable electric service for their existing and
future customers. Borrowers submit their load forecasts and load
forecast work plans to RUS in order to provide the necessary support
for RUS approval of loans and a basis for RUS to monitor future
borrower performance for loan security purposes. The proposed rule
would modify the existing requirements and reduce the number of
borrower systems required to maintain current load forecasts on file
with RUS. The proposed changes would allow borrowers greater
flexibility in preparation of the load forecasts and supporting
information submitted to RUS. The proposed changes will reduce burdens
on both borrowers and the RUS electric program.

Summary of Proposed Changes

Definitions

The proposed rule makes several conforming changes to the
definitions in 7 CFR part 1710, subpart A. The terms ``load forecast''
and ``load forecast work plan'' are added to conform with overall
electric industry usage of these terms. The terms ``power requirement
study'' and ``power requirement study work plan'' will continue to be
defined in 7 CFR part 1710, subpart A, since these terms continue to be
used in other subparts. The term ``load forecast'' has the same
definition as ``power requirements study'' and the term ``load forecast
work plan'' has the same definition as ``power requirement study work
plan.'' The terms ``approved load forecast'' and ``approved load
forecast work plan'' have been added to clarify those load forecasts
and load forecast work plans that RUS has determined are current for
RUS purposes and have been approved by RUS pursuant to 7 CFR part 1710,
subpart E.

Requirements to File Load Forecasts and Load Forecast Work Plans

Load forecasts are one of four primary documents required to be
submitted in support of applications for RUS loans and loan guarantees
(Sec. 1710.152). Load forecasts aid in RUS analysis of feasibility for
loan approval and RUS review of loan security. RUS has required the
larger power supply borrowers and their member systems to maintain an
approved load forecast and approved load forecast work plan. As a
result, approved load forecasts for these borrower's systems are in
place and allow more expeditious review of requests for RUS assistance.
Under both the existing regulations and the proposed rule changes,
whether and when a borrower must maintain an approved load forecast or
approved load forecast work plan is generally determined by the value
of the borrower's assets or total utility plant and whether a borrower
is affiliated with a power supply borrower that is required to maintain
an approved load forecast and approved load forecast work plan.
Under existing regulations, power supply borrowers with total
assets over $300 million and distribution borrowers that own generation
and transmission plant valued at over $300 million are required to
maintain an approved load forecast and an approved load forecast work
plan. Other RUS borrowers with total assets over $300 million must
maintain an approved load forecast and submit it to support requests
for RUS financing, approval of long-term power contracts, and other
actions. Power supply borrowers with total assets over $300 million and
their member power supply and distribution borrowers must coordinate
their load forecasts in accord with an approved load forecast work
plan.
The proposed rule uses total utility plant instead of total assets
to determine these thresholds. Use of total utility plant instead of
total assets conforms with other RUS requirements and relates directly
to the borrowers utility plant which is used to service the loads. The
proposed rule would raise the

[[Page 36611]]

threshold from $300 million to $500 million for borrowers required to
maintain an approved load forecast and approved load forecast work plan
on an ongoing basis. All power supply borrowers with total utility
plant of less than $500 million (and their affiliated members that are
RUS borrowers) will no longer be required to maintain and update load
forecasts on a periodic basis. These borrowers will be required to have
an approved load forecast when they apply for new financing and under
certain other circumstances. This change is proposed to reduce the
number of borrowers required to submit load forecasts on a routine
basis and to closely monitor borrowers with large loans made or
guaranteed by RUS.
The existing regulations provide that power supply borrowers with
total assets of less than $300 million that are not members of any
other power supply borrower with total assets over $300 million are not
required to maintain an approved load forecast or approved load
forecast work plan on an ongoing basis. However, these power supply
borrowers must have an approved load forecast to support a request for
any loan or loan guarantee over $25 million or more than ten percent of
the borrower's total utility plant, whichever is smaller, and for RUS
approval of a long-term power contract. The proposed rule would raise
from $25 million to $50 million the loan value requiring an approved
load forecast by power supply borrowers not otherwise required to
maintain an approved load forecast.
The existing regulations provide that distribution borrowers with
total assets of less than $300 million that are not affiliated with a
power supply borrower are not required to maintain an approved load
forecast or approved load forecast work plan. On an ongoing basis,
these smaller unaffiliated distribution borrowers must have an approved
load forecast for loans of $3 million or 10 percent of utility plant,
whichever is smaller. Under the proposed rule, the minimum loan
application for distribution borrowers that would require an approved
load forecast would be $3 million or 5 percent of total utility plant,
whichever is greater. These changes are being proposed to reduce
burdens on small borrowers with minimal outstanding loans made or
guaranteed by RUS.

Requirements for Load Forecasts

The proposed rule revises requirements for the contents of load
forecasts and approval criteria to give borrowers and RUS greater
flexibility in compliance with RUS regulations. Changes in the electric
utility industry are likely to dramatically alter utility planning and
forecasting practices. RUS recognizes that, in addition to complying
with RUS requirements, borrowers need to prepare load forecast and
planning documents for a variety of other external reporting purposes
such as for state utility commissions, regional reliability planning,
or to comply with terms of power supply agreements. To reduce burdens
on borrowers, where practicable, RUS will accept load forecasts
prepared for those other purposes as long as the information and
analyses needed by RUS are included and are compatible with RUS
applications. As is the practice at present, RUS expects that borrowers
will continue to consult with RUS during the preparation and review of
their load forecasts to resolve any uncertainties.
Under the existing rules, all borrower load forecasts must meet the
same requirements for scope, content, and supporting analysis and
models, unless waived by RUS. Under the proposed rule, load forecasts
and supporting data submitted by small distribution borrowers that are
unaffiliated with large power supply borrowers would not have to meet
the same standards as forecasts submitted by large power supply
borrowers and their members.
RUS does not believe reducing the load forecasting filing
requirements will lead to any reduction in borrower's attention to the
importance of load forecasting in their overall financial and system
planning needed to assure reliable, affordable service for their
customers. Borrowers will continue to conduct load forecasting as part
of prudent utility practice in the ordinary course of business.

Confidentiality of Load Forecasts and Supporting Information

Restructuring of the electric power industry will likely increase
the potential competitive harm to a borrower from the disclosure of
commercially sensitive and confidential business information in the
load forecast. RUS understands that borrowers may consider the
information contained in the load forecasts and supporting data as
commercially valuable, proprietary and confidential business
information. RUS will not release information contained in the load
forecast except as provided by law pursuant to 7 CFR part 1, The
Freedom of Information Act (5 U.S.C. 552). When, in the course of
responding to a Freedom of Information Act request, RUS cannot readily
determine whether the information obtained from the borrower is
privileged or confidential business information, RUS will obtain and
consider the views of the borrower concerning the information and
provide the borrower an opportunity to object to any decision to
disclose the information. Borrowers should be aware that in order for
RUS to withhold release of information it must be determined that such
release will result in substantial harm to the borrower.

List of Subjects in 7 CFR Part 1710

Electric power, Electric utilities, Loan programs--energy,
Reporting and recordkeeping requirements, Rural areas.
For the reasons set out in the preamble, RUS proposes to amend 7
CFR chapter XVII as follows:

PART 1710--GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO
INSURED AND GUARANTEED ELECTRIC LOANS

1. The authority citation for part 1710 is revised to read as
follows:

Authority: 7 U.S.C. et seq., 1921 et seq., and 6941 et seq.

2. Section 1710.2(a) is amended by revising and adding the
following definitions in alphabetical order:

Sec. 1710.2 Definitions and rules of construction.

* * * * *
Approved load forecast means a load forecast that RUS has
determined is current for RUS purposes and has been approved by RUS'
pursuant to 7 CFR part 1710, subpart E.
Approved load forecast work plan means a load forecast work plan
that RUS has determined is current for RUS' purposes and has been
approved pursuant to 7 CFR part 1710, subpart E.
* * * * *
Load forecast means the thorough study of a borrower's electric
loads and the factors that affect those loads in order to determine, as
accurately as practicable, the borrower's future requirements for
energy and capacity.
Load forecast work plan means the plan that contains the resources,
methods, schedules, and milestones to be used in the preparation and
maintenance of a load forecast.
* * * * *
Power requirements study (PRS) has the same meaning as load
forecast.
* * * * *
PRS work plan has the same meaning as load forecast work plan.
* * * * *
3. Revise paragraph 1710.152(a) to read as follows:

[[Page 36612]]

Sec. 1710.152 Primary support documents.

* * * * *
(a) Load forecast. The load forecast provides the borrower and RUS
with an understanding of the borrower's future system loads, the
factors influencing those loads, and estimates of future loads. The
load forecast provides a basis for projecting annual electricity (kWh)
sales and revenues, and for engineering estimates of plant additions
required to provide reliable service to meet the forecasted loads.
Subpart E of this part contains the information to be included in a
load forecast and when an approved load forecast is required.
* * * * *
4. Revise subpart E of part 1710 to read as follows:

Subpart E--Load Forecasts

Sec.
1710.200 Purpose.
1710.201 General.
1710.202 Requirement to prepare a load forecast-power supply
borrowers.
1710.203 Requirement to prepare a load forecast-distribution
borrowers.
1710.204 Filing requirements for borrowers that must maintain a
current RUS approved load forecast on an ongoing basis.
1710.205 Minimum requirements for all borrower load forecasts.
1710.206 Requirements for load forecasts prepared pursuant to RUS
approved load forecast work plans.
1710.207 RUS approval criteria for approval of load forecasts by
distribution borrowers not required to maintain a current load
forecast on an ongoing basis.
1710.208 RUS approval criteria for load forecasts submitted by all
power supply borrowers and by distribution borrowers required to
maintain a current load forecast on an ongoing basis.
1710.209 Requirements for load forecast work plans.
1710.210 Waiver of requirements or approval criteria.
1710.211--1710.249--[Reserved]

Subpart E--Load Forecasts

Sec. 1710.200 Purpose.

This subpart contains RUS policies for the preparation, review,
approval and use of load forecasts and load forecast work plans. A load
forecast is a thorough study of a borrower's electric loads and the
factors that affect those loads in order to estimate, as accurately as
practicable, the borrower's future requirements for energy and
capacity. The load forecast of a power supply borrower includes and
integrates the load forecasts of its member systems. An approved load
forecast, if required by this subpart, is one of the primary documents
that a borrower is required to submit to support a loan application.

Sec. 1710.201 General.

(a) The policies, procedures and requirements in this subpart are
intended to implement provisions of the loan documents between RUS and
the electric borrowers and are also necessary to support approval by
RUS of requests for financial assistance.
(b) Notwithstanding any other provisions of this subpart, RUS may
require any power supply or distribution borrower to prepare a new or
updated load forecast for RUS approval or to maintain an approved load
forecast on an ongoing basis, if such documentation is necessary for
RUS to determine loan feasibility, or to ensure compliance under the
loan documents.

Sec. 1710.202 Requirement to prepare a load forecast--power supply
borrowers.

(a) A power supply borrower with a total utility plant of $500
million or more must maintain an approved load forecast that meets the
requirements of this subpart on an ongoing basis and provide an
approved load forecast in support of any request for RUS financial
assistance. The borrower must also maintain an approved load forecast
work plan. The borrower's approved load forecast must be prepared
pursuant to the approved load forecast work plan.
(b) A power supply borrower that is a member of another power
supply borrower that has a total utility plant of $500 million or more
must maintain an approved load forecast that meets the requirements of
this subpart on an ongoing basis and provide an approved load forecast
in support of any request for RUS financial assistance. The member
power supply borrower may comply with this requirement by participation
in and inclusion of its load forecasting information in the approved
load forecast of its power supply borrower. The approved load forecasts
must be prepared pursuant to the RUS approved load forecast work plan.
(c) A power supply borrower that has total utility plant of less
than $500 million and that is not a member of another power supply
borrower with a total utility plant of $500 million or more must
provide an approved load forecast that meets the requirements of this
subpart in support of an application for any RUS loan or loan guarantee
which exceeds $50 million. The borrower is not required to maintain on
an ongoing basis either an approved load forecast or an approved load
forecast work plan.

Sec. 1710.203 Requirement to prepare a load forecast--distribution
borrowers.

(a) A distribution borrower that is a member of a power supply
borrower with a total utility plant of $500 million or more must
maintain an approved load forecast that meets the requirements of this
subpart on an ongoing basis and provide an approved load forecast in
support of any request for RUS financial assistance. The distribution
borrower may comply with this requirement by participation in and
inclusion of its load forecasting information in the approved load
forecast of its power supply borrower. The distribution borrower's load
forecast must be prepared pursuant to the approved load forecast work
plan of its power supply borrower.
(b) A distribution borrower that is a member of a power supply
borrower which is itself a member of another power supply borrower that
has a total utility plant of $500 million or more must maintain an
approved load forecast that meets the requirements of this subpart on
an ongoing basis and provide an approved load forecast in support of
any request for RUS financial assistance. The distribution borrower may
comply with this requirement by participation in and inclusion of its
load forecasting information in the approved load forecast of its power
supply borrower. The distribution borrower's approved load forecast
must be prepared pursuant to the approved load forecast work plan of
the power supply borrower with total utility plant in excess of $500
million.
(c) A distribution borrower that is a member of a power supply
borrower with a total utility plant of less than $500 million must
provide an approved load forecast that meets the requirements of this
subpart in support of an application for any RUS loan or loan guarantee
that exceeds $3 million or 5 percent of total utility plant, whichever
is greater. The distribution borrower may comply with this requirement
by participation in and inclusion of its load forecasting information
in the approved load forecast of its power supply borrower. The
borrower is not required to maintain on an ongoing basis either an
approved load forecast or an approved load forecast work plan.
(d) A distribution borrower with a total utility plant of less than
$500 million and that is unaffiliated with a power supply borrower must
provide an approved load forecast that meets the requirements of this
subpart in support of an application for any RUS loan or loan guarantee
which exceeds $3 million or 5 percent of total utility

[[Page 36613]]

plant, whichever is greater. The borrower is not required to maintain
on an ongoing basis either an approved load forecast or an approved
load forecast work plan.
(e) A distribution borrower with a total utility plant of $500
million or more must maintain an approved load forecast that meets the
requirements of this subpart on an ongoing basis and provide an
approved load forecast in support of any request for RUS financing
assistance. The borrower must also maintain an approved load forecast
work plan. The distribution borrower may comply with this requirement
by participation in and inclusion of its load forecasting information
in the approved load forecast of its power supply borrower.

Sec. 1710.204 Filing requirements for borrowers that must maintain an
approved load forecast on an ongoing basis.

(a) Filing of load forecasts and updates. A power supply or
distribution borrower required to maintain an approved load forecast on
an ongoing basis under Sec. 1710.202 or Sec. 1710.203 may elect either
of the following two methods of compliance:
(1) Submitting a new load forecast to RUS for review and approval
at least every 36 months, and then submitting updates to the load
forecast to RUS for review and approval in each intervening year; or
(2) Submitting a new load forecast to RUS for review and approval
not less frequently than every 24 months.
(b) Extensions. RUS may extend any time period required under this
section for up to 3 months at the written request of the borrower's
general manager. A request to extend a time period beyond 3 months must
be accompanied by a written request from the borrower's general
manager, an amendment to the borrower's approved load forecast work
plan incorporating the extension, a board resolution approving the
extension request and any amendment to the approved load forecast work
plan, and any other relevant supporting information. RUS may extend the
time periods contained in this section for up to 24 months.

Sec. 1710.205 Minimum approval requirements for all load forecasts.

(a) Documents required for RUS approval of a borrower's load
forecast. The borrower must provide the following documents to obtain
RUS approval for a load forecast:
(1) The load forecast and supporting documentation;
(2) A memorandum from the borrower's general manager to the board
of directors recommending that the board approve the load forecast and
its uses; and
(3) A board resolution from the borrower's board of directors
approving the load forecast and its uses.
(b) Contents of load forecast. All load forecasts submitted by
borrowers for approval must include:
(1) A narrative describing the borrower's system, service
territory, and consumers;
(2) A narrative description of the borrower's load forecast
including future load projections, forecast assumptions, and the
methods and procedures used to develop the forecast;
(3) Projections of usage by consumer class, number of consumers by
class, annual system peak demand, and season of peak demand for the
number of years agreed upon by RUS and the borrower;
(4) A summary of the year-by-year results of the load forecast in a
format that allows efficient transfer of the information to other
borrower planning or loan support documents;
(5) The load impacts of a borrower's demand side management
activities, if applicable;
(6) Graphic representations of the variables specifically
identified by management as influencing a borrower's loads; and
(7) A database that tracks all relevant variables that might
influence a borrower's loads.
(c) Formats. RUS does not require a specific format for the
narrative, documentation, data, and other information in the load
forecast, provided that all required information is included and
available. All data must be in a tabular form that can be transferred
electronically to RUS computer software applications. RUS will evaluate
borrower load forecasts for readability, understanding, filing, and
electronic access. If a borrower's load forecast is submitted in a
format that is not readily usable by RUS or is incomplete, RUS will
require the borrower to submit the load forecast in a format acceptable
to RUS.
(d) Document retention. The borrower must retain its latest
approved load forecasts, and supporting documentation until RUS
approval of its next load forecast. Any approved load forecast work
plan must be retained as part of the approved load forecast.
(e) Consultation with RUS. The borrower must designate and make
appropriate staff and consultants available for consultation with RUS
to facilitate RUS review of the load forecast work plan and the load
forecast when requested by RUS.
(f) Correlation and consistency with other RUS loan support
documents. If a borrower relies on an approved load forecast or an
update of an approved load forecast as loan support, the borrower must
demonstrate that the approved load forecast and the other primary
support documentation for the loan were reconciled. For example, both
the load forecast and the financial forecast require input assumptions
for wholesale power costs, distribution costs, other systems costs,
average revenue per kWh, and inflation. Also, a borrower's engineering
planning documents, such as the construction work plan, incorporate
consumer and usage per consumer projections from the load forecast to
develop system design criteria. The assumptions and data common to all
the documents must be consistent.
(g) Coordination. Power supply borrowers and their members that are
subject to the requirement to maintain an approved load forecast on an
ongoing basis are required to coordinate preparation of their
respective load forecasts, updates of load forecasts, and approved load
forecast work plan. A load forecast of a power supply borrower must
consider the load forecasts of all its member systems.

Sec. 1710.206 Approval requirements for load forecasts prepared
pursuant to approved load forecast work plans.

(a) Contents of load forecasts prepared under an approved load
forecast work plan. In addition to the minimum requirements for load
forecasts under Sec. 1710.205, load forecasts developed and submitted
by borrowers required to have an approved load forecast work plan shall
include the following:
(1) Scope of the load forecast. The narrative shall address the
overall approach, time periods, and expected internal and external uses
of the forecast. Examples of internal uses include providing
information for developing or monitoring demand side management
programs, supply resource planning, load flow studies, wholesale power
marketing, retail marketing, cost of service studies, rate policy and
development, financial planning, and evaluating the potential effects
on electric revenues caused by competition from alternative energy
sources or other electric suppliers. Examples of external uses include
meeting state and Federal regulatory requirements, obtaining financial
ratings, and participation in reliability council, power pool, regional
transmission group, power supplier or member system forecasting and
planning activities.

[[Page 36614]]

(2) Resources used to develop the load forecast. The discussion
shall identify and discuss the borrower personnel, consultants, data
processing, methods and other resources used in the preparation of the
load forecast. The borrower shall identify the borrower's member and,
as applicable, member personnel that will serve as project leaders or
liaisons with the authority to make decisions and commit resources
within the scope of the current and future work plans.
(3) A comprehensive description of the database used in the study.
The narrative shall describe the procedures used to collect, develop,
verify, validate, update, and maintain the data. A data dictionary
thoroughly defining the database shall be included. The borrower shall
make all or parts of the database available or otherwise accessible to
RUS in electronic format, if requested.
(4) A narrative for each new load forecast or update of a load
forecast discussing the methods and procedures used in the analysis and
modeling of the borrower's electric system loads as provided for in the
load forecast work plan.
(5) A narrative discussing the borrower's past, existing, and
forecast of future electric system loads. The narrative must identify
and explain substantive assumptions and other pertinent information
used to support the estimates presented in the load forecast.
(6) A narrative discussing load forecast uncertainty or alternative
futures that may determine the borrower's actual loads. Examples of
economic scenarios, weather conditions, and other uncertainties that
borrowers may decide to address in their analysis include:
(i) Most-probable assumptions, with normal weather;
(ii) Pessimistic assumptions, with normal weather;
(iii) Optimistic assumptions, with normal weather;
(iv) Most-probable assumptions, with severe weather;
(v) Most-probable assumptions, with mild weather;
(vi) Impacts of wholesale or retail competition; or
(vii) New environmental requirements.
(7) A summary of the forecast's results on an annual basis. Include
alternative futures, as applicable. This summary shall be designed to
accommodate the transfer of load forecast information to a borrower's
other planning or loan support documents. Computer-generated forms or
electronic submissions of data are acceptable. Graphs, tables,
spreadsheets or other exhibits shall be included throughout the
forecast as appropriate.
(8) A narrative discussing the coordination activities conducted
between a power supply borrower and its members, as applicable, and
between the borrower and RUS.
(b) Compliance with an approved load forecast work plan. A borrower
required to maintain an approved load forecast work plan must also be
able to demonstrate that both it and its RUS borrower members are in
compliance with its approved load forecast work plan for the next load
forecast or update of a load forecast.

Sec. 1710.207 RUS criteria for approval of load forecasts by
distribution borrowers not required to maintain an approved load
forecast on an ongoing basis.

Load forecasts submitted by distribution borrowers that are
unaffiliated with a power supply borrower, or by distribution borrowers
that are members of a power supply borrower that has a total utility
plant less than $500 million and that is not itself a member of another
power supply borrower with a total utility plant of $500 million or
more must satisfy the following minimum criteria:
(a) The borrower considered all known relevant factors that
influence the consumption of electricity and the known number of
consumers served at the time the study was developed;
(b) The borrower considered and identified all loads on its system
of RE Act beneficiaries and non-RE Act beneficiaries;
(c) The borrower developed an adequate supporting data base and
considered a range of relevant assumptions; and (d) The borrower
provided RUS with adequate documentation and assistance to allow for a
thorough and independent review.

Sec. 1710.208 RUS criteria for approval of all load forecasts by
power supply borrowers and by distribution borrowers required to
maintain an approved load forecast on an ongoing basis.

All load forecasts submitted by power supply borrowers and by
distribution borrowers required to maintain an approved load forecast
must satisfy the following criteria:
(a) The borrower objectively analyzed all known relevant factors
that influence the consumption of electricity and the known number of
customers served at the time the study was developed;
(b) The borrower considered and identified all loads on its system
of RE Act beneficiaries and non-RE Act beneficiaries;
(c) The borrower developed an adequate supporting database and
analyzed a reasonable range of relevant assumptions and alternative
futures;
(d) The borrower adopted methods and procedures in general use by
the electric utility industry to develop its load forecast;
(e) The borrower used valid and verifiable analytical techniques
and models;
(f) The borrower provided RUS with adequate documentation and
assistance to allow for a thorough and independent review; and
(g) In the case of a power supply borrower required to maintain an
approved load forecast on an ongoing basis, the borrower adequately
coordinated the preparation of the load forecast work plan and load
forecast with its member systems.

Sec. 1710.209 Approval requirements for load forecast work plans.

(a) In addition to the approved load forecast required under
Secs. 1710.202 and 1710.203, any power supply borrower with a total
utility plant of $500 million or more and any distribution borrower
with a total utility plant of $500 million or more must maintain an
approved load forecast work plan. RUS borrowers that are members of a
power supply borrower with a total utility plant of $500 million or
more must cooperate in the preparation of and submittal of the load
forecast work plan of their power supply borrower.
(b) An approved load forecast work plan establishes the process for
the preparation and maintenance of a comprehensive database for the
development of the borrower's load forecast, and load forecast updates.
The approved load forecast work plan is intended to develop and
maintain a process that will result in load forecasts that will meet
the borrowers' own needs and the requirements of this subpart. An
approved work plan represents a commitment by a power supply borrower
and its members, or by a large unaffiliated distribution borrower, that
all parties concerned will prepare their load forecasts in a timely
manner pursuant to the approved load forecast work plan and they will
modify the approved load forecast work plan as needed with RUS approval
to address changing circumstances or enhance the usefulness of the
approved load forecast work plan.
(c) An approved load forecast work plan for a power supply borrower
and its members must cover all member systems, including those that are
not borrowers. However, only members that are borrowers, including the
power

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supply borrower, are required to follow the approved load forecast work
plan in preparing their respective load forecasts. Each borrower is
individually responsible for forecasting all its RE Act beneficiary and
non-RE Act beneficiary loads.
(d) An approved load forecast work plan must outline the
coordination and preparation requirements for both the power supply
borrower and its members.
(e) An approved load forecast work plan must cover a period of 2 or
3 years depending on the applicable compliance filing schedule elected
under Sec. 1710.204.
(f) An approved load forecast work plan must describe the
borrower's process and methods to be used in producing the load
forecast and maintaining current load forecasts on an ongoing basis.
(g) Approved load forecast work plans for borrowers with
residential demand of 50 percent or more of total kWh must provide for
a residential consumer survey at least every 5 years to obtain data on
appliance and equipment saturation and electricity demand. Any such
borrower that is experiencing or anticipates changes in usage patterns
shall consider surveys on a more frequent schedule. Power supply
borrowers shall coordinate such surveys with their members. Residential
consumer surveys may be based on the aggregation of member-based
samples or on a system-wide sample, provided that the latter provides
for relevant regional breakdowns as appropriate.
(h) Approved load forecast work plans must provide for RUS review
of the load forecasts as the load forecast is being developed.
(i) A power supply borrower's work plan must have the concurrence
of the majority of the members that are borrowers.
(j) The borrower's board of directors must approve the load
forecast work plan.
(k) A borrower may amend its approved load forecast work plan
subject to RUS approval. If RUS concludes that the existing approved
load forecast work plan will not result in a satisfactory load
forecast, RUS may require a new or revised load forecast work plan.

Sec. 1710.210 Waiver of requirements or approval criteria.

For good cause shown by the borrower, the Administrator may waive
any of the requirements applicable to borrowers in this subpart if the
Administrator determines that waiving the requirement will not
significantly affect accomplishment of RUS' objectives and if the
requirement imposes a substantial burden on the borrower. The
borrower's general manager must request the waiver in writing.

Secs. 1710.211-1710.249 [Reserved]

Dated: June 29, 1999.
Jill Long Thompson,
Under Secretary, Rural Development.
[FR Doc. 99-17113 Filed 7-6-99; 8:45 am]
BILLING CODE 3410-15-P

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A99-17113. Public record. Not legal advice.