2011-16308. Revision to the Final Principles of Integrated Resource Planning for Use in Resource Acquisition and Transmission Planning

AGENCY:

Western Area Power Administration, DOE.

ACTION:

Notice; request for comment.

SUMMARY:

Western Area Power Administration (Western) published proposed Principles for Integrated Resource planning (IRP) for use in its acquisition of resources (supply-side and demand-side) and transmission planning in the Federal Register on December 6, 1994. After considering public comments on the proposed principles, Western adopted the Final Principles of IRP under which project-specific resource acquisition and transmission planning principles would be developed. The Final Principles of IRP were published in the Federal Register on June 9, 1995, and became effective on July 10, 1995.

Through this notice, Western is requesting comments on the proposed Western-wide evaluation criteria and procedures that Western will use for future resource acquisitions instead of the current principle, which calls for developing project-by-project criteria. Western is also requesting comments on its proposal to eliminate the transmission planning principles set forth in the Final Principles of IRP.

DATES:

Western must receive written comments on the proposed revision to the Final Principles of IRP at the address below by 4 p.m., MDT, on July 29, 2011. Western reserves the right not to consider any comments received after the prescribed date and time.

Western will hold a public meeting to solicit input on Western's revision to the Final Principles of IRP for Use in Resource Acquisition and Transmission Planning. The meeting will address the proposed evaluation criteria and procedures Western will use for long-term resource acquisition and the elimination of the transmission planning principles as set forth in the Final Principles of IRP. The public meeting will be held on: July 21, 2011, 8:30 a.m., MDT, in Lakewood, Colorado. The meeting will also be available by conference call and webcast during that time.

ADDRESSES:

Submit written comments regarding this proposed Revision to the Final Principles of IRP to Ms. Julia L. Kyriss, Colorado River Storage Project (CRSP) Manager, CRSP Management Center, 150 East Social Hall Avenue, Suite 300, Salt Lake City, Utah 84111-1580. Comments may also be e-mailed to [e-mail] or faxed to [phone].

The public meeting location will be the Western Area Power Administration, Corporate Services Office, 12155 West Alameda Parkway, Lakewood, Colorado.

FOR FURTHER INFORMATION CONTACT:

Ms. Paula Fronk, CRSP Management Center, Western Area Power Administration, 150 East Social Hall Avenue, Suite 300, Salt Lake City, Utah 84111-1580, telephone [phone], e-mail [e-mail].

SUPPLEMENTARY INFORMATION:

A public process to develop principles of IRP for Western resource acquisition and transmission planning began with publication of draft principles of IRP in the Federal Register on December 6, 1994 (59 FR 62724). A public information and comment forum was held in Denver, Colorado, on January 12, 1995, to explain the proposed principles and receive comments on the proposal. Written comments on the proposal were received through March 7, 1995. The Final Principles of IRP were published in the Federal Register on June 9, 1995 (60 FR 30533). The Final Principles of IRP have served as the policy under which Western develops principles for acquiring project-specific, long-term resources and for public participation in certain Western projects to increase transmission capability. Western's current Final Principles of IRP are available at: http://www.wapa.gov/​powerm/​pmirpwestern.htm.

Western believes it is necessary to define further the process for acquiring project-specific, long-term resources by establishing evaluation criteria to be used when considering the purchase of new generation resources and eliminating the principles set forth in the Final Principles of IRP associated with transmission planning.

Western's historic resource acquisitions have been primarily project-specific, short-term purchases of supplemental resources to firm variable hydropower generation. For long-term resource acquisition, Western believes developing evaluation criteria and procedures that will be used for future resource acquisition represents prudent planning. The ability to make long-term purchases expeditiously when the need arises, whether due to the unavailability of generation from Federal hydropower facilities or lost generation attributable to drought conditions, this provides Western greater flexibility in securing adequate and reliable power to meet obligations to its customers. The criteria Western is proposing are set forth in more detail later in this notice.

For transmission planning, Western believes that existing stakeholder involvement in its planning efforts used by regional and sub-regional planning entities and its Open Access Transmission Tariff (OATT) render the requirement set forth in the Final Principles of IRP redundant and unnecessary. The Final Principles of IRP applicable to Western's transmission planning principles do not deal with new generation resources, but apply only to new or upgraded transmission facilities over a defined threshold. Through the planning efforts outlined below, Western will meet the intent of the Final Principles of IRP and its other planning obligations.

Since finalizing the Final Principles of IRP for transmission planning in 1995, the transmission industry has undergone significant change. Several of the original comments Western received during the public process to develop the Final Principles of IRP requested that Western avoid the duplication of efforts related to transmission planning. At the time the Final Principles of IRP were adopted, however, Western did not believe the procedures for public participation in transmission planning were duplicative. In light of the current vigorous involvement of stakeholders in regional and sub-regional transmission planning entities and the detailed transmission planning process set forth in Western's OATT, as described below, Western now believes that those original comments have merit, and the transmission planning principles established under the Final Principles of IRP can be eliminated.

Specifically, Western is actively involved in several transmission planning efforts throughout its various regions. For example, Western is currently participating in WestConnect, Southwest Area Subregional Planning Transmission Group, Colorado Long-Range Transmission Planning Group, California Transmission Planning Group, Sierra Subregional Planning Group, and Mid-Continent Area Power Pool. These groups either did not exist or were in their infancies when the transmission planning principles, set forth in the Final Principles of IRP, were completed. In the ensuing 15 years, these planning entities have emerged to provide stakeholders the opportunity to become involved in regional integrated transmission planning, including projects that would result in increasing Western's transmission capacity.

Moreover, as of December 2009, Western's OATT incorporated a detailed transmission planning process based upon three core objectives: (1) Maintaining reliable electric service, (2) improving the efficiency of electric system operations, including the provision of open and non-discriminatory access to its transmission facilities, and (3) identifying and promoting new investments in transmission infrastructure in a coordinated, open and transparent, and participatory manner. The transmission planning process that is now a part of Western's OATT aids timely, coordinated, and transparent information sharing that fosters the development of electric infrastructure, maintains reliability, and meets network load growth. The process includes open planning meetings that allow anyone, including but not limited to, network and point-to-point transmission customers, interconnected neighbors, sponsors of transmission, generation and demand-side management developers, and other stakeholders to participate in all stages of development of Western's transmission plan.

Lastly, Western engages in annual 5- or 10-year transmission planning activities and, in some regions, joint planning activities with its customers. These efforts are meant to identify and prioritize long-term transmission system additions, betterments, and replacements to meet customers' needs and to ensure the reliability of the bulk electric system.

Scope: The proposed revised Final Principles of IRP will apply specifically to resource acquisitions involving a commitment to make recurring purchases over a period longer than 5 years. Final Principles of IRP do not apply to purchases made for 5 years or less and the Lease of Power Privilege under Reclamation Law (Town Sites and Power Development Act of 1906 (43 U.S.C. 522) and Reclamation Project Act of 1939 (43 U.S.C. 485h(c)). Western does not propose to change these approaches through this proposal. Western is proposing to define further the criteria and procedures used in acquiring resources for terms of longer than 5 years under the Final Principles of IRP as outlined in Resource Acquisition Principles 2 and 3. Western is not proposing any changes to Resource Acquisition Principles 1, 4, 5, and 6. Western is also proposing to eliminate the transmission planning principles set forth in the Final Principles of IRP.

Request for Public Comment

(A.) Western Is Requesting Public Comment on the Following Proposed Procedures and Evaluation Criteria for Long-Term Resource Acquisition Which, if Adopted, Would Be Included in a Revision to the Existing Final Principles of IRP

1. The Western office responsible for marketing power from a specific project will identify the need for a long-term resource acquisition. The need could be due to occurrences such as, but not limited to, the unavailability of generation from Federal hydropower facilities initially included in an existing marketing plan, generation lost due to drought conditions impacting water availability, and modifications in normal reservoir operations.

2. Once the resource need is identified and the initial amount(s) are determined, the project-specific customers involved will be notified and offered an opportunity to discuss this planned acquisition. Western will pursue widespread publication for the resource acquisition solicitation, which may include posting on Web sites, publishing in the Federal Register or in newsletters, or using other media to reach potential suppliers.

3. The solicitation will request potential suppliers to submit proposals that address the evaluation criteria described below, to the extent such criteria apply.

4. To the extent applicable, Western will screen the proposals received that best meet the criteria set forth below.

5. When evaluating potential resource acquisitions under the Final Principles of IRP, the following evaluation criteria will be considered:

a. Cost—the amount paid to acquire resources, such as purchased power, fuel, plant and equipment, or labor services.

b. Dependability—a supplier's ability to provide power as specified in a purchase power solicitation. A supplier is considered dependable when it delivers to the contracted location, in the contracted amount, at the contracted time, and in the contracted manner.

c. Dispatchability—the ability of a utility to schedule and control, directly or indirectly, manually or automatically, the resources under consideration.

d. Diversity—an acceptable level of both the mix of generation resources in the region's overall blend of power provided to a customer and the mix of generation sources of the supplier.

e. Environmental impact—the degree to which the resource has an impact on the human environment. Impacts vary according to: (1) The type of resource purchased (supply-side, demand-side, or renewable), (2) the length of the purchase, (3) the geographical area from which the power is purchased, and (4) the transmission path(s) used to get to the contracted location.

f. Indian Preference—Under section 2602(d) of the Energy Policy Act of 1992 (as amended by the Energy Policy Act of 2005), in purchasing any energy product or by-product, a Federal agency or department may give preference to an energy and resource production enterprise, partnership, consortium, corporation, or other type of business organization the majority of the interest in which is owned and controlled by one or more Indian Tribes. In carrying out this subsection, a Federal agency or department will not pay more than the prevailing market price for an energy product or by-product or obtain less than prevailing market terms and conditions.

g. Renewable Energy Resource—the electric energy that is generated from solar, wind, biomass, land-fill gas, ocean (including tidal, wave, current, and thermal), geothermal, municipal solid waste, or new hydroelectric generation capacity achieved from increased efficiency or additions of new capacity at an existing hydroelectric project and is physically delivered to the grid.

h. Risk—the potential impact of market uncertainties, including a supplier's financial condition and creditworthiness. A supplier shall be required to demonstrate adequate financial and physical resources to provide capacity and energy to meet Western's requirements during the term of the contract.

i. Transmission Availability—the ability to move or transfer electric energy over an interconnected group of lines between points of supply and points of delivery to Western's system.

j. Transmission Losses—the reduction in available electricity after being transmitted over transmission lines and/or facilities from the generation source to the contracted delivery location.

(B.) Western Is Requesting Public Comment on Its Proposal To Eliminate the Transmission Planning Principles From the Existing Final Principles of IRP

Western is proposing to eliminate the existing transmission planning principles contained in the Final Principles of IRP published in the Federal Register on June 9, 1995 (60 FR 30533). Western will accomplish the original objectives of the transmission planning principles through use of existing planning groups and its OATT as discussed in more detail above.

PROCEDURES REQUIREMENTS

Environmental Evaluation

Western's proposal to better define evaluation criteria and procedures for resource acquisition is an administrative action covered by an existing NEPA categorical exclusion. A categorical exclusion has been prepared and executed for this process. Once project-specific actions are identified under the Final Principles of IRP and the final evaluation criteria developed through the process defined, those actions would be individually subject to the appropriate level of NEPA review. Factors affecting the level of NEPA review include whether the project-specific action would integrate a new generation resource, precipitate changes to the transmission system, or change the normal operating limits of existing generation resources.

Determination under 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 is required.

Dated: June 22, 2011.

Timothy J. Meeks,

Administrator.