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Summary of Draft Methods Report

Aug. 8, 1994

Background

For more than a decade, Western Area Power Administration (Western) has actively participated with the Bureau of Reclamation (Reclamation) and others in the process to improve the environment downstream from Glen Canyon Dam. Since 1994, Western has been engaged in a public process to identify economically and technically feasible methods to replace the electrical resources that may be made unavailable due to long-term operational changes at the dam.

With the publication of a Federal Register notice on July 2, 1996, Western announced the release of the Draft Replacement Resources Methods Report, a requirement of the Grand Canyon Protection Act (GCP Act) of 1992. Section 1809 of the GCP Act specifies that the Secretary of Energy, acting through Western, will:

(1)". . .identify economically and technically feasible methods of replacing any power generation lost through adoption of long-term operational criteria for Glen Canyon Dam."

(2) ". . .present a report [to Congress] of the findings, and implementing draft legislation, if necessary, not later than two years after adoption of long-term operating criteria."

The GCP Act requires Western to consult with key publics, including the Department of the Interior, firm power customers of the Colorado River Storage Project (CRSP), environmental organizations, and the Colorado River basin states. Since the start of the Replacement Resources Process, Western's public consultation activities have included Federal Register notices, an information packet, periodic newsletters, and public meetings to provide information and gather comments.

Draft Methods Report

The Methods Report summarizes acceptable methods for replacing power and outlines preferred replacement power methods. However, it does not provide specific costs and recommendations for actual replacement options. Actual replacement resource acquisition decisions will be made in separate future actions, as defined by customer need.

The recommended replacement resources methods meet the intent of the requirements in the GCP Act, Section 1809, and are consistent with Western's Principles of Integrated Resource Planning and Purchase Power Policy. The methods also consider the outcomes identified in several related environmental impact statements, namely Reclamation's Glen Canyon Dam EIS (GCD-EIS), Western's Electric Power Marketing EIS (EPM-EIS), and Western's Energy Planning and Management Program EIS (EPAMP-EIS). Further, the proposed methods do not interfere with Western responsibilities as defined in the CRSP Act of 1956 and other relevant legal requirements. Western also researched integrated resource plans and Requests for Proposals issued by regional electric utilities in establishing and developing the methods presented in the Methods Report.

Western followed several policy guidelines in preparing the Methods Report, including:

  • Western would seek replacement resources in amounts and terms requested by customers. Consistent with future firm power contract provisions, customers could request any combination of short- to long-term resources to meet their individual load requirements up to the limits defined in the contract. Customers could also choose to replace lost generation on their own and have Western transmit it on the CRSP transmission system, subject to available transmission capacity.
  • Western would consider offers of all types of resources (conventional supply side, renewable resources, and energy efficiency) with a goal of ensuring a least-cost acquisition for customers consistent with other departmental initiatives. However, due to current conditions in the regional power market, short- to medium-term resource acquisitions are expected to be emphasized at the outset.
  • All types of resources would be treated equally in resource evaluations.
  • Resource acquisitions would be made primarily from mature resource technologies.
  • A qualitative consideration of environmental effects would be prepared for each potential resource.
  • For the present, Western will consider energy efficiency improvements only for loads under Western control.
  • Public involvement in resource acquisition would vary depending on the nature of the replacement, consistent with Western's Principles of IRP and Purchase Power Policy, and with the notification and decision process in the future firm power contract amendment.

Hoover Integration

As required by the GCP Act, Western considered the feasibility of adjusting operations at Hoover power plant to provide the needed resources. A review of studies done by the Reclamation suggested that operational integration of Hoover power plant with Glen Canyon could not provide the necessary capacity, so adjusting Hoover operations was deferred from further consideration at this time. However, Western will continue to follow Reclamation's efforts in this area.

Transmission Considerations

The GCP Act also states that transmission system restrictions need not be a factor in replacement decisions and that Western can propose additions or modifications to the CRSP transmission system to facilitate replacements. Western regularly studies transmission system constraints and possible upgrades as part of its normal planning work and seeks authority to participate in improvements when cost-effective projects are identified. Therefore, no special transmission system study was done as part of the Methods Report. After Western has initiated power replacement steps and received actual resource proposals, it will then identify any transmission constraints associated with delivery of that resource and study cost-effective upgrades.The GCP Act also states that transmission system restrictions need not be a factor in replacement decisions and that Western can propose additions or modifications to the CRSP transmission system to facilitate replacements. Western regularly studies transmission system constraints and possible upgrades as part of its normal planning work and seeks authority to participate in improvements when cost-effective projects are identified. Therefore, no special transmission system study was done as part of the Methods Report. After Western has initiated power replacement steps and received actual resource proposals, it will then identify any transmission constraints associated with delivery of that resource and study cost-effective upgrades.

NEPA Compliance

Western will comply with the National Environmental Policy Act of 1969. Western expects to prepare a Categorical Exclusion before completion of the Methods Report. Environmental compliance work for actual resource acquisitions will be consistent with applicable DOE orders.

Term of Contract

In the Methods Report, Western evaluates methods to replace lost power using seasonal (six months), mid-term (one to five years), and long-term (from five years to the end of the customer's contract) resource acquisitions. Western would consult with firm power customers periodically about the amount and term of resource acquisitions to be made on their behalf. Western would then acquire and deliver the resources to them. Greater public involvement, increased documentation, and more complex evaluation and acquisition procedures are proposed for longer-term acquisitions than for seasonal acquisitions, consistent with Western's Purchase Power policy.

Evaluation Methods

Several analytical tools were created to evaluate potentially diverse resource proposals. They include a spreadsheet-based screening tool that can be used as a stand-alone evaluation model for short-term acquisitions, or be used to screen proposals for more detailed analysis. A detailed evaluation tool was created for Western's CRSP hydro system and simulated interconnections using the MULTISYM production cost computer program. This program can analyze complex electric system effects on a defined system under a wide range of conditions for factors such as load, resource, and transmission system capabilities. Other evaluation tools applied include Reclamation's Colorado River Simulation System hydrological model and a variety of pre- and post-processing applications.

Resource Options

The Methods Report also details how these tools can be used to evaluate potential replacement resource acquisition options. A "proof-of-concept" analysis is included in the Methods Report that demonstrates the use of evaluation tools and procedures on five hypothetical replacement resource alternatives. The five alternatives were chosen to show the evaluation tool's capability of weighing different resources types with varying pricing and delivery conditions.

All hypothetical resource options were evaluated by simulating expected future CRSP operations during a five-year period. The detailed evaluation tool was also applied to identify and evaluate transmission system constraints that could then be studied for possible system modification or upgrade.

Conclusions

The Methods Report concludes that the acquisition methods and evaluation tools identified will provide an economically and technically feasible methodology, and will enable Western to evaluate replacement resources to offer to firm power customers in the future.

For more information on this process, please write to Mr. Jeffrey McCoy, Western Area Power Administration, P.O. Box 11606, Salt Lake City, UT 84147-0606, or call (801) 524-5399.

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