by Leah Shapiro
The Rocky Mountain region is in the process of extending its Post-1989 Loveland Area Projects Marketing Plan through what is called the 2025 Loveland Area Projects Power Marketing Initiative.
Loveland Area Projects, or LAP, serves Rocky Mountain customers under firm electric service contracts that expire Oct. 1, 2024. Ten years may seem far away, but in the utility industry, it’s really not. Preference customers need power contracts years in advance to ensure they will be able to continue meeting their consumers’ needs. Rocky Mountain Civil Engineer John Gierard explained, “Customers want reliable power for decades to come. It takes a long time to plan and build infrastructure, so they need to know they’re covered. Specifically, they want to know what allocations they’re going to get from the federal government.”
In anticipation of the current contracts’ expiration, RM published a Federal Register notice in October 2011 to initiate the public process associated with the power marketing initiative, or PMI. The final decisional FRN was published Dec. 30, 2013, and became effective Jan. 29.
Adjusting current plan vs. Remarketing
When marketing plans are up for renewal, Western has the option of doing a full-blown remarketing effort [see news feature about Boulder Canyon Remarketing]. Rocky Mountain chose a PMI instead, which, as Contracts and Energy Services Manager Melanie Reed explained, “Takes the initial plan and extends it into the future with some modifications, but ones that aren’t significant enough to warrant a full-blown remarketing effort. We didn’t change any of the basic premises of the LAP plan—we didn’t market at a different risk level or make any major changes.”
The PMI specifies terms and conditions for the sale of bundled energy and transmission and will have a 30-year term from Oct. 1, 2024, to Sept. 30, 2054. Reed added, “In addition to offering existing customers a contract for another 30 years, the PMI will establish three resource pools of 1 percent each. Through each resource pool, we will allow new, potential customers to apply for an allocation.”
RM Power Marketing Manager Dave Neumayer shared, “Throughout the process, Rocky Mountain’s Power Marketing team did an exceptional job developing the principles, building consensus with preference customers and consulting with our Native American tribes.”
With the marketing plan published, RM will begin developing the associated firm electric service contracts. Reed shared, “Though we won’t sign them until this fall at the earliest, we are currently developing contracts for customer review, as well as negotiating terms within the parameters of the PMI.”
Upper Great Plains completed a similar public process in November 2011 for the adjacent Pick-Sloan Missouri River Basin Program—Eastern Division and is in the process of executing those contracts. Power Marketing staff in RM and UGP coordinated their respective PMI projects throughout the process, which was appropriate because Pick-Sloan—Western Division, part of LAP, is financially integrated with Pick-Sloan—Eastern Division in UGP.
Neumayer added, “This PMI effort is an example of how regions can work seamlessly together even though we operate and are organized and managed separately. Although our marketing plans are completely separate and distinct, we coordinated key principles and now have similar marketing plans for decades to come.”