Energy Planning and Management Program; Integrated Resource Planning Approval Criteria

DEPARTMENT OF ENERGY

Western Area Power Administration

10 CFR Part 905

RIN 1901-AA84

Energy Planning and Management Program; Integrated Resource

Planning Approval Criteria

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of proposed rulemaking and public forum.

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SUMMARY: The Western Area Power Administration (Western) is seeking

public comment on its proposed revisions to current regulations that

require customers to prepare integrated resource plans. Western is

proposing revisions to allow customers more alternatives in meeting the

integrated resource planning requirements, thereby enhancing customer

competitiveness through increased flexibility and reduced burdens in

complying with this rule.

DATES: Written comments, in hard copy or via email, must be received no

later than 5 p.m. Mountain Standard Time on December 30, 1999. A joint

public information and public comment forum will be held starting at 1

p.m. Mountain Standard Time on November 30, 1999.

ADDRESSES: Written comments should be sent to Mr. Simmons Buntin, Power

Marketing Support Office, Western Area Power Administration, P.O. Box

281213, Lakewood, CO 80228-8213. Prior to November 30, 1999, comments

can be sent by fax to (303) 275-1616; after November 30, 1999, the fax

number is (720) 962-7427. Comments also can be sent by electronic mail

to [email protected]. The public forum will be held at the Radisson Hotel

Denver, 3333 Quebec Street, Denver, Colorado 80207.

FOR FURTHER INFORMATION CONTACT: Mr. Simmons Buntin, prior to November

30, 1999, telephone number is (303) 275-1739; after November 30, his

number is (720) 962-7419. Mr. Buntin's electronic mail address is

[email protected].

SUPPLEMENTARY INFORMATION:

I. Introduction and Background

II. Section by Section Discussion of Changes

III. Public Information/Comment Forum Procedures

IV. Procedural Requirements

A. Executive Order 12866

B. Review Under the Regulatory Flexibility Act

C. Review Under the Paperwork Reduction Act

D. Review Under the National Environmental Policy Act

E. Review Under Executive Order 13132

F. Review Under the Unfunded Mandates Reform Act of 1995

G. Review Under Executive Order 12988

H. Treasury and General Government Appropriations Act, 1999

I. Review Under Executive Order 13084

I. Introduction and Background

Section 114 of the Energy Policy Act of 1992 (EPAct), Public Law

102-486, requires integrated resource planning by Western's customers.

Western implemented EPAct through completion of the Energy Planning and

Management Program (Program) in October 1995. The Program was published

in the Code of Federal Regulations at 10 CFR part 905.

Western's Administrator is required by EPAct to initiate a public

process to review Western's integrated resource planning (IRP)

regulations within 1 year of January 1, 2000. The Administrator is

authorized at that time to revise Western's criteria for approving

integrated resource plans ``to reflect changes, if any, in technology,

needs, or other developments.''

Both the wholesale and retail aspects of the electric utility

industry are changing, and change is expected to continue. The 15

States within which Western markets power have taken very different

approaches to deregulation with diverse schedules for implementing any

changes to the status quo. Additionally, the timing and scope of any

Federal restructuring legislation is uncertain. Given the increasingly

competitive and deregulated electricity marketplace, Western's

integrated resource planning regulations, which were adopted under the

traditional utility planning framework, warrant review.

Western is proposing an approach that features customer choice and

flexibility, and reflects the transition of the electric utility

industry. Customers can choose to continue preparing IRPs, or can adopt

approaches that are emerging in lieu of IRP requirements. These new

approaches include compliance with a defined level of investment in

energy efficiency and/or renewables, compliance with an established

public benefits program, or compliance with mandated energy efficiency

and/or renewable energy reporting requirements.

Only subparts A and B of the existing regulations are proposed for

revision.

II. Section by Section Discussion of Changes

Many wording and format changes contained in the proposed rule have

been drafted to comply with the President's initiative to use plain

language in government writing.

The purpose statement in Sec. 905.1 would be updated to describe

acceptable customer activities, in light of the changes taking place in

the electric utility industry, that meet the objectives of section 114

of EPAct.

In Sec. 905.2, we have proposed removing the definition for

applicable IRP and adding new terms (energy efficiency and/or renewable

energy report, minimum investment report and public benefits charge) in

order to clearly describe the new alternatives for customer compliance.

We propose shortening the definition of integrated resource planning,

modifying the definition of small customer to include end-use

customers, and removing the definition of least-cost option since a

customer is free to pursue renewables and energy efficiency even if

other resources appear to be less costly. Additionally, definitions

would be added for Region, IRP cooperative, and renewable energy.

Changes to Sec. 905.10 would be consistent with the broader array

of compliance options available to customers under this proposed

regulation. The exception for State-regulated, investor-owned utilities

that exists today would be deleted, in order to assure equitable

compliance by all of Western's long-term firm customers.

Section 905.11, which deals with the contents of an integrated

resource plan, would be streamlined and simplified. The number of IRP

criteria would be reduced from seven to six, eliminating least-cost

designation as a separate criteria while combining its relevant parts

with the identification of resource

[[Page 62605]]

options criteria. One prominent theme in this area is confidentiality

of information. To ensure that proprietary information is not made

available to competitors, customers would not have to submit sensitive

information to Western. Summaries of customer activities would be

adequate, as long as Western can obtain more detailed supporting

information upon request. This proposal also intends to lessen the

paperwork burden on customers. In recognition of the fast-paced change

in the industry, Western proposes to allow customers to define their

own action planning horizons to carry out IRP.

Several regulatory provisions would be renumbered to improve

organization and flow. Proposed Secs. 905.12 and 905.13 would

reorganize the current provisions of Sec. 905.12 for clarity, but

Western proposes no substantive change to IRP submittal requirements. A

more detailed discussion of the cooperative IRP submittal process would

be added in Sec. 905.13. Proposed Sec. 905.14 contains the provisions

of currently effective Sec. 905.13. Proposed Sec. 905.15, which deals

with annual IRP progress reports, contains the substance of existing

Sec. 905.16.

Sections 905.15 and 905.16 would be modified to include statements

that annual progress reports and update letters can be submitted

outside of the 30-day anniversary date window if previously approved by

Western.

Section 905.16 describes the proposed requirements of the small

customer plan alternative for eligible customers. Changes to the

existing rule would include expansion of the small customer plan method

of compliance to include all end-use customers regardless of size.

Small utilities could take advantage of the small customer provision,

even if they belong to member-based associations or joint-action

agencies.

Section 905.17 is a new section that would allow customers to

comply with the regulation by adopting a minimum level of financial or

resource investment in energy efficiency initiatives and/or renewable

energy activities required by State, Tribal, or Federal law. In order

to avoid duplication and conflicting mandates, Western is proposing to

accept these customer efforts as satisfying the provisions of the

EPAct. Such a minimum investment standard has already been adopted in

the State of Iowa.

Section 905.18 is another new section that would allow customers to

comply with the regulation by participating in a public benefits

program required by State, Tribal, or Federal law, under which a

defined minimum percentage of a customer's gross revenues is devoted to

public purposes. In order to avoid duplication and conflicting

mandates, Western proposes to accept these customer efforts as

satisfying the provisions of EPAct. Such a public benefits mandate has

already been adopted in the States of California, Montana, and New

Mexico.

State and Federal end-use customers often must comply with

standards and reporting requirements that document efforts in IRP,

energy efficiency, and renewable energy. An example of this compliance

is Executive Order 13123, which requires Federal agencies to

aggressively reduce energy consumption and to expand the use of

renewable energy. Section 905.19 would accept these compliance efforts

if they meet the objectives of EPAct.

Former Secs. 905.15-905.21 would be renumbered as Secs. 905.20-

905.25 and would be modified to enhance understanding and clarity.

A redline-strikeout version comparing the proposed revisions with

the current subparts A and B is available on Western's Website at

www.wapa.gov.

III. Public Information/Comment Forum Procedures

Interested parties may submit comments on Western's proposed

revisions to subparts A and B of the regulations in two ways: either

(a) directly to the project manager via mail, e-mail, fax, or hand

delivery no later than 5 p.m. Mountain Standard Time on December 30,

1999; or (b) in person or through a representative at the joint public

information and public comment forum to be held beginning at 1 p.m.

Mountain Standard Time on November 30, 1999, at the Radisson Hotel

Denver. Addresses for comments and the forum are provided earlier in

the preamble.

The joint public information and public comment forum will feature

a presentation by Western staff summarizing proposed revisions to

subparts A and B of the regulations, the reasons for revisions, and

anticipated benefits arising from revisions. After the formal

presentation of 30 minutes or less, attendees will have the opportunity

to ask Western staff questions related to proposed revisions. Once all

questions are asked and individually responded to by Western, the

public comment forum will begin and interested parties will have the

opportunity to comment on Western's proposed revisions. A court

reporter will record the proceedings, and a transcript will be

prepared. The public will be able to review the transcript at Western's

offices, or may order a personal copy from the court reporter.

Comments from the public comment forum will be considered along

with all other comments received prior to 5 p.m. Mountain Standard Time

on December 30, 1999. Comments will be incorporated into the final rule

as appropriate, and all comments will be addressed upon publication of

the final rule in the Federal Register.

IV. Procedural Requirements

A. Executive Order 12866

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 (OMB) is required.

B. Review Under the Regulatory Flexibility Act

The Regulatory Flexibility Act of 1980, 5 U.S.C. 601, et seq.,

requires Federal agencies to perform a regulatory flexibility analysis

if a proposed regulation is likely to have a significant economic

impact on a substantial number of small entities. Western's

Administrator certifies that this proposed rule will have no

significant adverse impact on a substantial number of small entities

because the proposed revisions to these regulations reduce paperwork

and financial and other burdens, as well as reporting redundancies for

small entities.

C. Review Under the Paperwork Reduction Act

In accordance with the Paperwork Reduction Act of 1980, 44 U.S.C.

3501-3520, Western has received approval from OMB for the collection of

customer information in this rule, under control number 1910-1200.

D. Review Under the National Environmental Policy Act

Western prepared an environmental impact statement and record of

decision pursuant to the National Environmental Policy Act of 1969

(NEPA) for the Energy Planning and Management Program, which

established the existing IRP requirements for Western power customers.

This met the requirements of NEPA, 42 U.S.C. 4321, et seq., the Council

on Environmental Quality Regulations for implementing NEPA (40 CFR

parts 1500-1508), and the DOE NEPA Implementing Procedures and

Guidelines (10 CFR part 1021). Since the proposed revisions would

modify those IRP requirements, Western is conducting a review to

determine if a supplemental environmental analysis is required.

[[Page 62606]]

E. Review Under Executive Order 13132

Executive Order 13132 (64 FR 43255, August 4, 1999) imposes certain

requirements on agencies formulating and implementing policies or

regulations that preempt State law or that have federalism

implications. Agencies are required to examine the constitutional and

statutory authority supporting any action that would limit the

policymaking discretion of the States and carefully assess the need for

such actions. Western has examined this rule and determined that it

does not preempt State law and does not have a substantial direct

effect on the States, on the relationship between the national

government and the States, or on the distribution of power and

responsibilities among the various levels of government. No further

action is required by Executive Order 13132.

F. Review Under the Unfunded Mandates Reform Act of 1995

Title II of the Unfunded Mandates Reform Act of 1995 requires each

agency to assess the effects of Federal regulatory action on State,

local, and Tribal governments and the private sector. Western has

determined that this proposed regulatory action does not impose an

additional Federal mandate on State, local, or Tribal governments or on

the private sector.

G. Review Under Executive Order 12988

With respect to the review of existing regulations and the

promulgation of new regulations, section 3(a) of Executive Order 12988,

``Civil Justice Reform'' (61 FR 4729, February 7, 1996), imposed on

Executive agencies the general duty to adhere to the following

requirements: (1) Eliminate drafting errors and ambiguity; (2) write

regulations to minimize litigation; and (3) provide a clear legal

standard for affected conduct rather than a general standard and

promote simplification and burden reduction. With regard to the review

required by section 3(a), section 3(b) of Executive Order 12988

specifically requires that Executive agencies make every reasonable

effort to ensure that the regulation: (1) Clearly specifies the

preemptive effect, if any; (2) clearly specifies any effect on existing

Federal law or regulation; (3) provides a clear legal standard for

affected conduct while promoting simplification and burden reduction;

(4) specifies the retroactive effect, if any; (5) adequately defines

key terms; and (6) addresses other important issues affecting clarity

and general draftsmanship under any guidelines issued by the Attorney

General. Section 3(c) of Executive Order 12988 requires Executive

agencies to review regulations in light of applicable standards in

section 3(a) and 3(b) to determine whether they are met or if it is

unreasonable to meet one or more of them. Western has completed the

required review and determined that, to the extent permitted by law,

the proposed regulations meet the relevant standards of Executive Order

12988.

H. Treasury and General Government Appropriations Act, 1999

Section 654 of the Treasury and General Government Appropriations

Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family

Policymaking Assessment for any proposed rule that may affect family

well-being. Today's proposal would not have any impact on the autonomy

or integrity of the family as an institution. Accordingly, Western has

concluded that it is not necessary to prepare a Family Policymaking

Assessment.

I. Review Under Executive Order 13084

Under Executive Order 13084 (Consultation and Coordination with

Indian Tribal Governments), Western may not issue a discretionary rule

that significantly or uniquely affects Indian tribal governments and

imposes substantial direct compliance costs. The incremental amendments

involved in this proposed rulemaking would not have such effects.

Accordingly, Executive Order 13084 does not apply to this rulemaking.

List of Subjects in 10 CFR part 905

Electric power, Electric utilities, Energy, Energy conservation,

Hydroelectric power, Reporting and recordkeeping requirements.

Issued in Washington, D.C. on November 3, 1999.

Michael S. Hacskaylo,

Administrator.

For the reasons set forth in the preamble, 10 CFR part 905 is

proposed to be amended as set forth below.

PART 905--ENERGY PLANNING AND MANAGEMENT PROGRAM

1. The authority citation continues to read as follows:

Authority: 42 U.S.C. 7152 and 7191; 32 Stat. 388, as amended;

and 42 U.S.C. 7275-7276c.

2. Subparts A and B are revised to read as follows:

Subpart A--General Provisions

Sec.

905.1 What are the purposes of this part?

905.2 What are the key definitions of this part?

Subpart B--Integrated Resource Planning

905.10 Who must comply with this part?

905.11 What must an IRP include?

905.12 How must IRPs be submitted?

905.13 When must IRPs be submitted?

905.14 What are the criteria for Western's approval of IRPs?

905.15 What are annual IRP progress reports?

905.16 What are the requirements for the small customer plan

alternative?

905.17 What are the requirements for the minimum investment report

alternative?

905.18 What are the requirements for the public benefits report

alternative?

905.19 What are the requirements for the energy efficiency and/or

renewable energy report (EE/RE report) alternative?

905.20 How are plans and reports processed?

905.21 When are customers in noncompliance with this rule, and how

does Western ensure compliance?

905.22 What is the administrative appeal process?

905.23 How does Western periodically review plans and reports?

905.24 What are the opportunities for using the Freedom of

Information Act to request data?

905.25 How often is this program reviewed?

Subpart A--General Provisions

Sec. 905.1 What are the purposes of this part?

The purposes of this part are to meet the objectives of section 114

of the Energy Policy Act of 1992 (EPAct) and to extend the long-term

firm power resource commitments while supporting customer integrated

resource planning (IRP), energy efficiency and conservation, and the

use of renewable energy. Subpart B allows customers of the Western Area

Power Administration (Western) to meet the objectives of section 114 of

EPAct through integrated resource planning or by other means, such as

attaining a minimum level of investment in energy efficiency and/or

renewable energy, collecting a charge to support defined public

benefits, or complying with a mandated energy efficiency and/or

renewable energy reporting requirement.

Sec. 905.2 What are the key definitions of this part?

Administrator means the Administrator of Western.

Customer means any entity that purchases firm capacity, with or

without energy, from Western under a long-term firm power contract. The

term also includes a member-based association (MBA) and its

distribution

[[Page 62607]]

or user members that receive direct benefit from Western's power,

regardless of which holds the contract with Western.

Energy efficiency and/or renewable energy (EE/RE) report means the

report resulting from a mandate to conduct energy efficiency and/or

renewable energy activities imposed by a State, Tribal, or the Federal

Government upon a State, Tribal, or Federal end-use customer within its

jurisdiction.

Integrated resource planning means a planning process for new

energy resources that evaluates the full range of alternatives,

including new generating capacity, power purchases, energy conservation

and efficiency, cogeneration and district heating and cooling

applications, and renewable energy resources, in order to provide

adequate and reliable service to a customer's electric consumers.

Integrated resource planning cooperative (IRP cooperative) means a

group of Western's customers and/or their distribution or user members

that Western has approved for IRP cooperative status.

Member-based association (MBA) means:

(1) An entity composed of utilities or user members, or

(2) An entity that acts as an agent for, or subcontracts with, but

does not assume power supply responsibility for its principals or

subcontractors, who are its members.

Minimum investment report means the report resulting from a

mandatory minimum level of financial or resource investment in energy

efficiency initiatives and/or renewable energy activities, such as

investment of a set minimum percentage of the utility's gross revenues

in renewable resources, which is imposed by State, Tribal, or Federal

law upon a utility or other entity under its jurisdiction.

Public benefits charge means a mandatory financial charge imposed

by State, Tribal, or Federal law upon a utility under its jurisdiction

to support one or more of the following: energy efficiency,

conservation, or demand-side management; renewable energy; efficiency

or alternative energy-related research and development; low-income

energy assistance; and/or other programs defined by applicable State,

Tribal, or Federal law. This term is also known as a public goods or

system benefit charge in the utility industry.

Region means a regional office or management center of Western: the

Desert Southwest Customer Service Region, the Rocky Mountain Customer

Service Region, the Sierra Nevada Customer Service Region, the Upper

Great Plains Customer Service Region, or the Colorado River Storage

Project Management Center.

Renewable energy means any source of electricity that is self-

renewing, including plant-based biomass, waste-based biomass,

geothermal, hydropower, ocean thermal, solar (active and passive), and

wind. This term is also known as renewable resources in the utility

industry.

Small customer means a utility customer with total annual sales and

usage of 25 gigawatthours (GWh) or less, as averaged over the previous

5 years; or any end-use customer.

Western means the Western Area Power Administration.

Subpart B--Integrated Resource Planning

Sec. 905.10 Who must comply with this part?

(a) Integrated resource plans (IRP). Each customer of Western must

address its power resource needs in an IRP prepared and submitted to

Western as described in this part.

(b) Alternatives to IRP. Alternatively, customers of Western may

submit a small customer plan, minimum investment report, public

benefits report, or EE/RE report as described in Secs. 905.16 through

905.19 of this subpart.

(c) Rural Utility Service and state utility commission reports. For

customers subject to IRP filings or other electrical resource-use

reports from the Rural Utilities Service or a state utility commission,

there is nothing in this part that would require a customer to take any

action inconsistent with those requirements.

Sec. 905.11 What must an IRP include?

(a) General. An integrated resource plan supports customer-

developed goals and schedules. The plan must take into account

necessary features for system operation, such as diversity,

reliability, dispatchability, and other factors of risk; must take into

account the ability to verify energy savings achieved through energy

efficiency and the projected durability of such savings measured over

time; and must treat demand and supply resources on a consistent and

integrated basis.

(b) IRP criteria. IRPs must consider electrical energy resource

needs and may consider, at the customer's option, water, natural gas,

and other energy resources. Each IRP submitted to Western must include:

(1) Identification of resource options. Identification and

comparison of all practicable energy efficiency and energy supply

resource options. This is an assessment and comparison of existing and

future supply- and demand-side resource options available to a customer

based upon its size, type, resource needs, geographic area, and

competitive situation. Resource options evaluated by the specific

customer must be identified. The options evaluated should relate to the

resource situation unique to each Western customer as determined by

profile data (such as service area, geographical characteristics,

customer mix, historical loads, projected growth, existing system data,

rates, and financial information) and load forecasts. Specific details

of the customer's resource comparison need not be provided in the IRP

itself. They must, however, be made available to Western upon request.

(i) Supply-side options include, but are not limited to, purchased

power contracts and conventional and renewable generation options.

(ii) Demand-side options alter the customer's use pattern in a

manner that provides for an improved combination of energy services to

the customer and the ultimate consumer.

(iii) Considerations that may be used to develop the potential

options include cost, market potential, consumer preferences,

environmental impacts, demand or energy impacts, implementation issues,

revenue impacts, and commercial availability.

(iv) The IRP discussion of resource options must describe the

options chosen by the customer. The IRP may strike a reasonable balance

among the applicable resource evaluation factors. It should clearly

demonstrate that decisions were based on a reasonable analysis of

resource options and environmental effects, were based on public input,

and/or were required by State, Tribal, or Federal mandates.

(2) Action plan. An IRP must include an action plan describing

specific actions the customer will take to implement its IRP.

(i) The IRP must state the time period that the action plan covers,

and the action plan must be updated and resubmitted to Western when

this time period expires. The customer may submit a revised action plan

with the annual IRP progress report discussed in Sec. 905.15.

(ii) For those customers not experiencing or anticipating load

growth, the action plan requirement for the IRP may be satisfied by a

discussion of current actions and procedures in place to periodically

reevaluate the possible future need for new resources. The action plan

must include a summary of:

[[Page 62608]]

(A) Actions the customer expects to take in accomplishing the goals

identified in the IRP;

(B) Milestones to evaluate accomplishment of those actions during

implementation; and

(C) Estimated energy and capacity benefits for each action planned.

(3) Environmental effects. The customer must minimize adverse

environmental effects of new resource acquisitions and document these

efforts in the IRP. Customers are neither precluded from nor required

to include a quantitative analysis of environmental externalities as

part of the IRP process. IRPs must include a qualitative analysis of

environmental effects in summary format.

(4) Public participation. The customer must provide for full public

participation in the preparation and development of an IRP (or any

revision or amendment of an IRP). The IRP must include a brief

description of public involvement activities, including how the

customer gathered information from the public, identified public

concerns, shared information with the public, and responded to public

comments. Customers must make additional documentation identifying or

supporting the full public process available to Western upon request.

(i) As part of the public participation process, the governing body

of an MBA and each MBA member (such as a board of directors or city

council) must approve the IRP, confirming that all requirements have

been met. To indicate approval, a responsible official must sign the

IRP submitted to Western or the customer must document passage of an

approval resolution by the appropriate governing body included or

referred to in the IRP.

(ii) For Western customers that do not purchase electricity for

resale, such as some State, Tribal, and Federal agencies, the customer

can satisfy public participation if there is review and concurrence by

a top management official with resource acquisition responsibility. The

customer must note this concurrence in the IRP.

(5) Load forecasting. An IRP must include a statement that load

forecasting was conducted. Load forecasting should include data that

reflects the size, type, resource conditions, and demographic nature of

the customer using an accepted load forecasting methodology, including

but not limited to the time series, end-use, and econometric methods.

The customer must make the load forecasting data available to Western

upon request.

(6) Measurement strategies. The IRP must include a brief

description of measurement strategies for options identified in the IRP

in order to determine whether objectives in the IRP are being met.

These validation methods must include identification of the baseline

from which a customer will measure the benefits of its IRP

implementation. A reasonable balance may be struck between the cost of

data collection and the benefits resulting from obtaining exact

information. Customers must make performance validation and evaluation

data available to Western upon request.

Sec. 905.12 How must IRPs be submitted?

(a) Number of IRPs submitted. Only one IRP is required per

customer, regardless of the number of long-term firm power contracts

between the customer and Western.

(b) Method of submitting IRPs. Customers must submit IRPs to

Western under one of the following options:

(1) Customers may submit IRPs individually.

(2) MBAs may submit individual IRPs for each of their members or

submit one IRP on behalf of all or some of their members. An IRP

submitted by an MBA must specify the responsibilities and participation

levels of individual members and the MBA. Any member of an MBA may

submit an individual IRP to Western instead of inclusion in an MBA IRP.

(3) Customers may submit IRPs as IRP cooperatives when previously

approved by Western.

(c) Alternatives to submitting individual IRPs. Customers that

Western approves for submittal of small customer plans, minimum

investment reports, public benefits reports, or EE/RE reports may

substitute the applicable plan or report instead of an IRP. Each

customer that intends to seek approval for IRP cooperative, small

customer, minimum investment report, public benefits report, or EE/RE

report status must provide written notification to Western. A new

customer must provide this notification to the Western Regional Manager

of the Region in which the customer is located within 30 days from the

time it becomes a customer. Any customer may resubmit an IRP or notify

Western of its plan to change its compliance method at any time so long

as there is no period of noncompliance between this part and Western's

IRP regulations in effect before [effective date of the final rule]

(and contained in the 10 CFR, part 500 to end, edition revised as of

January 1, 1999).

Sec. 905.13 When must IRPs be submitted?

(a) Submitting the initial IRP. Except as provided in paragraph (d)

of this section, customers that have not previously submitted IRPs must

submit their initial IRP to the appropriate Regional Manager no later

than 1 year after [the effective date of the final rule], or after

becoming a customer, whichever is later. Customers already complying

with Western's IRP regulations in effect before [effective date of the

final rule] (and contained in the 10 CFR, part 500 to end, edition

revised as of January 1, 1999) must maintain their current submission

and resubmission schedules.

(b) Western's review of IRPs. If an IRP submittal is insufficient,

Western will provide a notice of deficiencies to the entity that

submitted the IRP. Western, working together with the entity, will

determine the time allowable for resubmitting the IRP. However, the

time allowed for resubmittal will not be greater than 9 months after

the date of the disapproval, unless otherwise provided by contract

language in effect as of [the effective date of the final rule].

(c) Updates and amendments to IRPs. Customers must submit updated

IRPs to the appropriate Regional Manager every 5 years after Western's

approval of the initial IRP. Customers may submit amendments and

revisions to IRPs at any time.

(d) IRP cooperatives. Customers that have geographic, resource

supply, and other similarities may join together and request, in

writing, Western's approval to become an IRP cooperative. Western will

respond to IRP cooperative status requests within 30 days of receipt of

the request. If Western disapproves a request for IRP cooperative

status, the requesting participants must maintain their currently

applicable integrated resource or small customer plans, or submit their

initial IRPs no later than 1 year after the date of the letter of

disapproval. Western's approval of IRP cooperative status will not be

based on any potential participant's contractual status with Western.

Each IRP cooperative must submit an IRP for its participants within 18

months after Western's approval of IRP cooperative status.

Sec. 905.14 What are the criteria for Western's approval of IRPs?

(a) Approval criteria. Western will approve plans and reports based

upon:

(1) Whether the plan or report satisfactorily addresses the

criteria in this part; and

(2) The reasonableness of the plan or report given the size, type,

resource needs, geographic area, and competitive situation of the

customer.

(b) Review of resource choices. Western will review resource

choices in

[[Page 62609]]

accordance with section 114 of EPAct and this subpart. Western will

disapprove IRPs if resource choices do not meet the reasonableness test

in paragraph (a)(2) of this section and the provisions of section 114

of EPAct.

(c) Accepting IRPs under other initiatives. If a customer or group

of customers implements integrated resource planning under a program

responding to other Federal, Tribal, or State initiatives, Western will

accept and approve the plan as long as it substantially complies with

the requirements of this subpart.

(d) Water-based plans and reports. In evaluating a plan or report,

Western will consider water planning, efficiency improvements, and

conservation in the same manner it considers energy planning and

efficiencies. Customers that provide water utility services and

customers that service irrigation load as part of their overall load

may include water conservation activities in the plan or report. To the

extent practicable, customers should convert their water savings to

energy values.

Sec. 905.15 What are annual IRP progress reports?

Customers must submit IRP progress reports each year within 30 days

of the anniversary date of the approval of the currently applicable

IRP. The reports must describe the customer's accomplishments achieved

under the action plan, including projected goals and implementation

schedules, and energy and capacity benefits and renewable energy

developments achieved as compared to those anticipated. Western prefers

measured values, but will accept reasonable estimates if measurement is

infeasible or not cost-effective. Instead of a separate progress

report, the customer may use any other annual report that the customer

submits to Western or another entity, at the customer's discretion, if

that report contains all required data for the previous full year and

is submitted within 30 days of the approval anniversary date of the

currently applicable IRP. With Western's approval, customers may submit

reports outside of the 30-day anniversary date window.

Sec. 905.16 What are the requirements for the small customer plan

alternative?

(a) Requesting small customer status. Small customers may submit a

request to prepare a small customer plan instead of an IRP. Requests

for small customer status from electric utilities must include data on

total annual energy sales and usage for the 5 years prior to the

request. Western will average this data to determine overall annual

energy sales and usage so that uncontrollable events, such as extreme

weather, do not distort levelized energy sales and usage. Requests from

end-use customers must only document that the customer does not

purchase electricity for resale. Western will respond to small customer

status requests within 30 days of receipt of the request. If Western

disapproves a request, the customer must maintain its currently

applicable IRP, or submit its initial IRP no later than 1 year after

the date of the letter of disapproval. Alternatively, the customer may

submit a request for minimum investment report, public benefits report,

or EE/RE report status, as appropriate.

(b) Small customer plan contents. Small customer plans must:

(1) Consider all reasonable opportunities to meet future energy

service requirements using demand-side management techniques, new

renewable resources, and other programs that provide retail consumers

with electricity at reasonable cost;

(2) Minimize, to the extent practicable, adverse environmental

effects; and

(3) Present in summary form the following information:

(i) Customer name, address, phone number, e-mail and Website if

applicable, and contact person;

(ii) Type of customer;

(iii) Current energy and demand profiles and data on total annual

energy sales and usage for the previous 5 years for utility customers,

or current energy and demand use for end-use customers;

(iv) Future energy services projections;

(v) How paragraphs (b)(1) and (b)(2) of this section were

considered; and

(vi) Actions to be implemented over the customer's planning

timeframe.

(c) When to submit small customer plans. Small customers must

submit the first small customer plan to the appropriate Western

Regional Manager within 1 year after Western's approval of the request

for small customer status. Small customers must submit in writing a

small customer plan every 5 years.

(d) Maintaining small customer status.

(1) Every year on the anniversary of Western's approval of the

plan, small customers must submit a letter to Western verifying that

either their annual energy sales and usage is 25 GWh or less averaged

over the previous 5 years, or they continue to be end-use customers.

The letter must also identify their achievements against their targeted

action plans, as well as the revised summary of actions if the previous

summary of actions has expired.

(2) Western will use the letter for overall program evaluation and

comparison with the customer's plan, and for verification of continued

small customer status. Customers may submit annual update letters

outside of the anniversary date if previously agreed to by Western so

long as the letter contains all required data for the previous full

year.

(e) Losing eligibility for small customer status.

(1) A customer ceases to be a small customer if it:

(i) Is a utility and exceeds total annual energy sales and usage of

25 GWh, as averaged over the previous 5 years; or

(ii) Is no longer an end-use customer.

(2) Western will work with a customer who loses small customer

status to develop an appropriate schedule for submittal of an IRP or

other report required under this subpart.

Sec. 905.17 What are the requirements for the minimum investment

report alternative?

(a) Request to submit the minimum investment report. Customers may

submit a request to prepare a minimum investment report instead of an

IRP. Requests to submit minimum investment reports must include data

on:

(1) The source of the minimum investment requirement (number,

title, date, and jurisdiction of law);

(2) The initial, annual, and other reporting requirement(s) of the

mandate, if any; and

(3) The mandated minimum level of investment for energy efficiency

and/or renewable energy.

(b) Minimum investment requirement. The minimum investment must be

a mandatory set percentage of customer gross revenues or other specific

minimum investment in energy efficiency and/or renewable energy

mandated by a State, Tribal, or Federal Government with jurisdictional

authority.

(c) Western's response to minimum investment report requests.

Western will respond to requests to accept minimum investment reports

within 30 days of receipt of the request. If Western disapproves a

request to allow use of the minimum investment report, the customer

must maintain its currently applicable IRP or small customer plan, or

submit its initial IRP no later than 1 year after the date of the

letter of disapproval. Alternatively, the customer may submit a request

for small customer plan, public benefits report, or EE/RE report

status, as appropriate.

(d) Minimum investment report contents. Reports documenting

compliance with a minimum level of

[[Page 62610]]

investment in energy efficiency and/or renewable energy must include:

(1) Customer name, address, phone number, email and Website if

applicable, and contact person;

(2) Authority or requirement to undertake a minimum investment,

including the source of the minimum investment requirement (number,

title, date, and jurisdiction of law); and

(3) A description of the minimum investment, including:

(i) Minimum percentage or other minimum requirement for energy

efficiency and/or renewable energy;

(ii) Actual or estimated energy and/or capacity savings resulting

from minimum investments in energy efficiency, if known;

(iii) Actual or estimated energy and/or capacity resulting from

minimum investments in renewable energy, if known; and

(iv) A description of the energy efficiency and/or renewable energy

activities to be undertaken over the next 2 years as a result of the

requirement for minimum investment in energy efficiency and/or

renewable energy, if known.

(e) Minimum investment report approval. Western will approve the

minimum investment report when it meets the requirements in paragraph

(d) of this section.

(f) When to submit the minimum investment report. The customer must

submit the first minimum investment report to the appropriate Western

Regional Manager within 1 year after Western's approval of the request

to accept the minimum investment report. Customers choosing this option

must maintain IRP or small customer plan compliance with Western's IRP

regulations in effect before [effective date of the final rule] (and

contained in the 10 CFR, part 500 to end, edition revised as of January

1, 1999) including annual progress reports or update letters, until

submitting the first minimum investment report to ensure there is no

gap in compliance with section 114 of EPAct.

(g) Maintaining minimum investment reports. (1) Every year on the

anniversary of Western's approval of the first minimum investment

report, customers choosing this option must submit a letter to Western

verifying that they remain in compliance with the minimum investment

requirement. The letter must also contain summary information

identifying energy and capacity savings associated with minimum

investments in energy efficiency, if known, and energy and capacity

associated with minimum investments in renewable energy, if known.

(2) Western will use the letter for overall program evaluation and

to ensure customers remain in compliance. Customers may submit letters

outside of the anniversary date if previously agreed to by Western if

the letter contains all required data for the previous full year.

Instead of a separate letter, a customer choosing this option may

submit the State, Tribal, or Federal required annual report documenting

the minimum investment and associated energy efficiency and/or

renewable energy savings and/or use, if known.

(h) Loss of eligibility to submit the minimum investment report.

(1) A customer ceases to be eligible to submit a minimum investment

report if:

(i) A State, Tribal, or Federal mandate no longer applies to the

customer, or

(ii) The customer does not comply with the minimum level of

investment in applicable State, Tribal, or Federal law.

(2) Western will work with a customer that is no longer eligible to

submit a minimum investment report to develop an appropriate schedule

for submittal of an IRP or other report required under this subpart.

Sec. 905.18 What are the requirements for the public benefits report

alternative?

(a) Requests to submit a public benefits report. Customers may

submit a request to prepare a public benefits report instead of an IRP.

Requests to submit public benefits reports must include data on:

(1) The source of the public benefits requirement (number, title,

date, and jurisdiction of law);

(2) The initial, annual, and other reporting requirement(s) of the

program, if any; and

(3) The required public benefits charge, including charges to be

collected for and spent on energy efficiency, conservation, or demand-

side management; renewable energy; efficiency and alternative energy-

related research and development; low-income energy assistance; and any

other applicable public benefits category.

(b) Public benefits requirement. Participation in a public benefits

program requires either a mandatory set percentage of customer gross

revenues or other specific charges to be applied toward the programs as

determined by the applicable State, Tribal, or Federal authority. The

revenues from the public benefits charge may be expended directly by

the customer, or by another entity on behalf of the customer as

determined by the applicable State, Tribal, or Federal authority.

(c) Western's response to public benefits report requests. Western

will respond to requests to accept a public benefits report within 30

days of receipt of the request. If Western disapproves a request to

allow use of the public benefits report, the requesting customer must

maintain its currently applicable IRP or small customer plan, or submit

its initial IRP no later than 1 year after the date of the letter of

disapproval. Alternatively, the customer may submit a request for small

customer plan, minimum investment report, or EE/RE report status, as

appropriate.

(d) Public benefits report contents. Reports documenting

participation in a public benefits program must include:

(1) Customer name, address, phone number, email and Website if

applicable, and contact person;

(2) Authority or requirement to participate in a public benefits

program, including the source of the public benefits requirement

(number, title, date, and jurisdiction of law); and

(3) A description of the public benefits program, including:

(i) Overall public benefits charge, whether minimum investment or

other set charge, including charges to be collected for and spent on

energy efficiency, conservation, or demand-side management; renewable

energy; efficiency or alternative energy-related research and

development; low-income energy assistance; and any other applicable

public benefits categories;

(ii) Actual or estimated energy and/or capacity savings associated

with energy efficiency and resulting from participation in the public

benefits program, if known;

(iii) Actual or estimated energy and/or capacity associated with

renewable energy and resulting from participation in the public

benefits program, if known;

(iv) A description of the energy efficiency and renewable energy

activities to be undertaken by the customer over the next 2 years as a

result of participation in the public benefits program, if known.

(e) Public benefits report approval. Western will approve the

public benefits report when it meets the requirements in paragraph (d)

of this section.

(f) When to submit the public benefits report. The customer must

submit the first public benefits report to the appropriate Western

Regional Manager within 1 year after Western's approval of the request

to prepare the public benefits report. Customers choosing this option

must maintain IRP or small customer plan compliance with Western's IRP

regulations in effect

[[Page 62611]]

before [effective date of the final rule] (and contained in the 10 CFR,

part 500 to end, edition revised as of January 1, 1999), including

annual progress reports or update letters, until submitting the first

public benefits report to ensure there is no gap in compliance with

section 114 of EPAct.

(g) Maintaining the public benefits report. (1) Every year on the

anniversary of Western's approval of the first public benefits report,

customers choosing this option must submit a letter to Western:

(i) Verifying that they remain in compliance with the public

benefits program; and

(ii) Identifying energy and capacity savings associated with energy

efficiency, and energy and capacity associated with renewable energy,

for the customer's public benefits contribution, if known.

(2) Western will use the letter for overall program evaluation and

to ensure customers remain in compliance. Customers may submit letters

outside of the anniversary date if previously agreed to by Western if

the letter contains all required data for the previous full year.

Instead of a separate letter, a customer choosing this option may

submit the State, Tribal, or Federal required annual report documenting

the public benefits charge and associated customer energy efficiency

and/or renewable energy savings and/or use, if known.

(h) Loss of eligibility to submit the public benefits report. (1) A

customer ceases to be eligible to submit a public benefits report if:

(i) A State, Tribal, or Federal mandate no longer applies to the

customer, or

(ii) The customer does not comply with the public benefits

requirement in applicable State, Tribal, or Federal law.

(2) Western will work with a customer that is no longer eligible to

submit a public benefits report to develop an appropriate schedule for

submittal of an IRP or other report required by this subpart.

Sec. 905.19 What are the requirements for the energy efficiency and/or

renewable energy report (EE/RE report) alternative?

(a) Requests to submit an EE/RE report. Customers may submit a

request to prepare an EE/RE report instead of an IRP. Requests to

submit EE/RE reports must include data on:

(1) The source of the EE/RE reporting requirement (number, title,

date, and jurisdiction of law);

(2) The initial, annual, and other reporting requirement(s) of the

report; and

(3) A summary outline of the EE/RE report's required data or

components, including any requirements for documenting customer energy

efficiency and renewable energy activities.

(b) EE/RE report requirement. The EE/RE report may include only

electrical resource use and subsequent energy efficiency and/or

renewable energy activities, or may additionally include other utility

resource information, such as water and natural gas data. At a minimum,

the EE/RE report must annually document energy efficiency and/or

renewable energy activities undertaken by the customer.

(c) Western's response to EE/RE report requests. Western will

respond to requests to accept EE/RE reports within 30 days of receipt

of the request. If Western disapproves a request to allow use of the

EE/RE report, the customer must maintain its currently applicable IRP

or small customer plan, or submit its initial IRP no later than 1 year

after the date of the letter of disapproval. Alternatively, the

customer may submit a request for small customer plan, minimum

investment report, or public benefits report status, as appropriate,

within 30 days after the date of the letter of disapproval.

(d) EE/RE report contents. EE/RE reports must include:

(1) Customer name, address, phone number, email and Website if

applicable, and contact person;

(2) Authority or requirement to complete the EE/RE report,

including the source of the requirement (number, title, date, and

jurisdiction of law); and

(3) A description of the customer's required energy efficiency and/

or renewable energy activities, including:

(i) Level of investment or expenditure in energy efficiency and/or

renewable energy, and quantifiable energy savings or use goals, if

defined by the EE/RE reporting requirement;

(ii) Actual or estimated energy and/or capacity savings, if any,

associated with energy efficiency and resulting from the EE/RE

reporting requirement;

(iii) Actual or estimated energy and/or capacity, if any,

associated with renewable energy and resulting from the EE/RE reporting

requirement;

(iv) A description of the energy efficiency and/or renewable energy

activities to be undertaken over the next 2 years as a result of the

EE/RE reporting requirement.

(e) EE/RE report approval. Western will approve the EE/RE report

when the report meets the requirements in paragraph (d) of this

section.

(f) When to submit the EE/RE report. The customer must submit the

first EE/RE report to the appropriate Western Regional Manager within 1

year after Western's approval of the request to accept the EE/RE

report. Customers choosing this option must maintain IRP or small

customer plan compliance with Western's IRP regulations in effect

before [effective date of the final rule] (and contained in the 10 CFR,

part 500 to end, edition revised as of January 1, 1999), including

annual progress reports or update letters, until submitting the first

EE/RE report to ensure there is no gap in compliance with section 114

of EPAct.

(g) Maintaining EE/RE reports.

(1) Every year on the anniversary of Western's approval of the

first EE/RE report, customers choosing this option must submit an

annual EE/RE report to Western. The report must contain summary

information identifying customer energy and capacity savings associated

with energy efficiency, if any, and customer energy and capacity

associated with renewable energy, if any. If this information is not

contained in the EE/RE report, the customer must submit this

information with the report as a separate letter. The letter must also

verify that the customer remains in compliance with the EE/RE reporting

requirement.

(2) Customers may submit annual EE/RE reports outside of the

anniversary date if previously agreed to by Western if the report

contains all required data for the previous full year.

(h) Loss of eligibility to submit the EE/RE report. (1) A customer

ceases to be eligible to submit a EE/RE report if:

(i) The EE/RE reporting requirement no longer applies to the

customer, or

(ii) The customer does not comply with the EE/RE reporting

requirements in applicable State, Tribal, or Federal law.

(2) Western will work with a customer that is no longer eligible to

submit an EE/RE report to develop an appropriate schedule for submittal

of an IRP or other report required under this subpart.

Sec. 905.20 How are plans and reports processed?

Western will review all plans and reports submitted under this

subpart and notify the submitting entity of the plan's or report's

acceptability within 120 days after receipt.

Sec. 905.21 When are customers in noncompliance with this part, and

how does Western ensure compliance?

(a) Penalties for noncompliance. Western will impose a penalty on

the long-term firm power customer for failure to submit or resubmit an

IRP and action plan, small customer plan, minimum investment report,

public benefits report, or EE/RE report as required by this subpart.

Western will

[[Page 62612]]

also impose a penalty when the customer's activities are not consistent

with the applicable plan or report unless Western finds that a good

faith effort has been made to comply with the approved plan or report.

(b) Good faith effort to comply. If it appears that a customer's

activities may be inconsistent with the applicable plan or report,

Western will notify the customer and offer the customer 30 days to

provide evidence of its good faith effort to comply. If the customer

does not correct the specified deficiency or submit such evidence, or

if Western finds, after receipt of information from the customer, that

a good faith effort has not been made, Western will impose a penalty.

(c) Written notification of penalty. Western must provide written

notice of the imposition of a penalty to the customer, and to the MBA

or IRP cooperative when applicable. The notice will specify the reasons

for imposition of the penalty.

(d) Imposition of penalty. (1) Beginning with the first full

billing period following the notice specified in paragraph (c) of this

section, Western will impose a surcharge of 10 percent of the monthly

power charges until the deficiency specified in the notice is cured, or

until 12 months pass. However, Western will not immediately impose a

penalty if the customer or its MBA or IRP cooperative requests

reconsideration by filing a written appeal under Sec. 905.22.

(2) The surcharge increases to 20 percent for the second 12 months

and to 30 percent per year thereafter until the deficiency is cured.

(3) After the first 12 months of imposition of the surcharge and

instead of imposing any further surcharge, Western may impose a penalty

that would reduce the resource delivered under a customer's long-term

firm power contract(s) by 10 percent. Western may impose this resource

reduction either:

(i) When it appears to be more effective to ensure customer

compliance, or

(ii) When such reduction may be more cost-effective for Western.

(4) The penalty provisions in existing contracts will continue to

be in effect and administered and enforced according to applicable

contract provisions.

(e) Assessing and ceasing penalties. Western will assess the

surcharge on the total charges for all power obtained by a customer

from Western and will not be limited to surcharges on only firm power

sales. When a customer resolves the deficiencies, Western will cease

imposing the penalty, beginning with the first full billing period

after compliance is achieved.

(f) Penalties on MBAs and IRP cooperatives. In situations involving

an IRP submitted by an MBA on behalf of its members where a single

member does not comply, Western will impose a penalty upon the MBA on a

pro rata basis in proportion to that member's share of the total MBA's

power received from Western. In situations involving noncompliance by a

participant of an IRP cooperative, Western will impose any applicable

penalty directly upon that participant if it has a firm power contract

with Western. If the IRP cooperative participant does not have a firm

power contract with Western, then Western will impose a penalty upon

the participant's MBA on a pro rata basis in proportion to that

participant's share of the total MBA's power received from Western.

Sec. 905.22 What is the administrative appeal process?

(a) Filing written appeals with Western. If a customer disagrees

with Western's determination of the acceptability of its IRP, small

customer plan, minimum investment report, public benefits report, or

EE/RE report submittal, its compliance with an approved plan or report,

or any other compliance issue, the customer may request reconsideration

by filing a written appeal with the appropriate Regional Manager.

Customers may submit appeals any time such disagreements occur and

should be specific as to the nature of the issue, the reasons for the

disagreement, and any other pertinent facts the customer believes

should be brought to Western's attention. The Regional Manager will

respond within 45 days of receipt of the appeal. If resolution is not

achieved at the Regional Office level, the customer may appeal to the

Administrator, who will respond within 30 days of receipt.

(b) Alternative dispute resolution. Upon request, Western will

agree to use mutually agreeable alternative dispute resolution

procedures, to the extent allowed by law, to resolve issues or disputes

relating to compliance with this part.

(c) Imposition of penalty during appeal. Western will not impose a

penalty while an appeal process is pending. However, if the appeal is

unsuccessful for the customer, Western will impose the penalty

retroactively from the date the penalty would have been assessed if an

appeal had not been filed.

(d) Meeting other requirements during appeal process. A written

appeal or use of alternative dispute resolution procedures does not

suspend other reporting and compliance requirements under this part.

Sec. 905.23 How does Western periodically review plans and reports?

(a) Periodic review of customer actions. Western will periodically

review customer actions to determine whether they are consistent with

the approved IRP, minimum investment report, or public benefits report.

Small customer plans and EE/RE reports are not subject to this periodic

review.

(b) Reviewing representative samples of plans and reports. Western

will periodically review a representative sample of IRPs, minimum

investment reports, and public benefits reports, and the customer's

implementation of the applicable plan or report from each of its

marketing areas. The samples will reflect the diverse characteristics

and circumstances of the customers that purchase power from Western.

These reviews will be in addition to, and separate and apart from, the

review of initial and updated IRPs, minimum investment reports, and

public benefits reports to ensure compliance with this subpart.

(c) Scope of periodic reviews. Periodic reviews may consist of any

combination of review of the customer's annual IRP progress reports,

minimum investment letters, or public benefits letters, telephone

interviews, or on-site visits. Western will document these periodic

reviews and may report on the results of the reviews in Western's

annual report.

Sec. 905.24 What are the opportunities for using the Freedom of

Information Act to request data?

IRPs, small customer plans, minimum investment reports, public

benefits reports, and EE/RE reports and associated data submitted to

Western are subject to the Freedom of Information Act (FOIA) and may be

made available to the public upon request. Customers may request

confidential treatment of all or part of a submitted document under

FOIA's exemption for confidential business information found in 10 CFR

1004.11. Western will make its own determination whether particular

information is exempt from public access and, if so, Western will treat

this information as confidential and not disclose it to the public.

Sec. 905.25 How often is this program reviewed?

At appropriate intervals, Western may initiate a public process to

review the regulations in this part to determine whether they should be

revised to

[[Page 62613]]

reflect changes in technology, needs, or other developments.

[FR Doc. 99-29675 Filed 11-16-99; 8:45 am]

BILLING CODE 6450-01-P