We develop a power marketing plan either when additions to generation capability occur or when existing power sales contracts expire. We determine when to start developing a marketing plan by estimating the time needed to complete the process. We also consider how much advance notice potential customers need regarding the amount of their future Federal resources. This allows Western Area Power Administration's customers to pursue other cost-effective ways to meet their consumers' remaining electrical needs.
We often discuss marketing plan concepts with customers and other interested parties prior to beginning a formal process. We use input from these informal meetings when developing a formal plan. The development process begins when a notice is published in the Federal Register and copies of the notice are mailed to WAPA customers and other interested stakeholders.
The notice explains the need for the plan and usually presents WAPA's initial proposal or options. It also announces the dates and times of public information meetings and comment forums, a period for accepting written comments and the names of persons to contact for further information. After forums are held and comments received, we may issue a final decision concerning the plan or issue a revised proposal. In some cases, we may repeat these steps so we can consider additional comments before issuing a final decision.
During development, we examine the proposal to determine the appropriate level of documentation needed to comply with the National Environmental Policy Act of 1969. In recent years, the Department of Energy has revised its implementing guidelines to include only documentation for plans that call for adding major new generation resources, adding service to major new loads, or making major changes in the operating parameters of power generating resources. If plans do not call for these things, they can be categorically excluded from lengthy environmental review.
The final plan is published in the Federal Register, along with our responses to the major comments received. Normally, the final plan is effective 30 days after it is published in the Federal Register. The final plan typically includes allocations of firm power to individual customers, or describes how the allocations will be determined. An allocation of firm power under the marketing plan is the distribution of available resources among competing applicants. An allocation is the opportunity to contract for an assigned amount of power–it is not a right to receive power. WAPA normally requires the potential customer to enter into a contract within six months to a year. Once an electric service contract is signed, the allocation becomes a contract commitment or contract rate of delivery that is binding upon the parties.
After the plan is complete, or while it is being finalized, we draft contracts. These contracts incorporate essential portions of the final plan. We add other standard contract provisions to comply with existing laws, policies and practices. Each contract has its provisions tailored to the individual customer, such as the amount of long-term firm capacity and energy the customer may receive; conditions for scheduling electricity deliveries; delivery points and points of use; and, when necessary, conditions concerning transmission by third parties.
The process is complete when WAPA and the customer sign the contract and we begin delivering electric service under the contract. The entire process could take anywhere from several months to several years.