WSP02437

• File Number: 8220.100.50
• Description: CRSP - Power Issues
• Basin: Colorado Mainstem
• Date: 1/1/1982
• Author: West. Sys. Coord. Co
• Title: Western Systems Coordinating Council Ten-Year Coordinated Plan Summary 1982 - 1991
• Water Supply Pro - Doc Type: Publication

Financial considerations (e.g. high interest rates for new
capital, difficulty in obtaining the desired rate of return on capital,
and dilution of existing stockholders' investment when it is necessary to
sell new stock at less than book value) have the potential to adversely
impact the construction plans of many utilities throughout the WSCC
region.

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presently installed capacity plus resources under construction (largely
coal and nuclear) appear sufficient to serve projected load growths
through the mid to late 1980's. Renewable and alternative resources,
including hydro, wind, geothermal, cogeneration and solar, comprise a
noteworthy portion of the resource additions planned during the latter
half of the decade, particularly in California.

Large inter-area transfers between California and the remainder
of the WSCC region are expected to continue as an important part of
California's adequacy of supply strategy in the next ten years. With the
generating resources presently in service Dr under construction in the
Northwest Power Pool Area, the Rocky Mountain Power Area, and the
Arizona-New Mexico Power Area, and based on current load growth
projections, it appears that resources will be available by the end of the
decade for import into California, provided that additional transmission
can be placed in service for this purpose. This situation may prove to be
an economically attractive alternative to the California utilities in
their need to develop additional resources through 1991, as well as their
desire to offset as much oil and gas generation as possible throughout the
decade.

There is some concern, however, that unforeseen load growth,
particularly in the Rocky Mountain Power Area, due to a recovering economy
and new energy technology development, coupled with generating unit
cancellations or deferrals due to financing, regulatory or environmental
problems, could change the present outlook and result in power supply
deficiencies in the next ten years.

Regulatory influence and intervention continues to have a
significant impact on the utilities' planning and operating functions.
State and local regulatory agencies are taking a very direct role in
ascertaining the need for resources, as well as the desirability of
developing resources for export outside of the pool or state boundaries.
They are also taking an increasingly active role in the operating arena.

The California utilities are particularly sensitive to
regulatory involvement, as adequate reserves through the mid-1980's are
dependent on the timely licensing and operation of about 5400 MW of
nuclear power from Diablo Canyon 1 and 2, San Onofre 2 and 3, and Palo
Verde 1, 2 and 3. Once these units are in service, adequacy of supply
appears assured through the mid-1980's and 55 million barrels of oil will
be offset by California utilities annually.

The successful siting of new coal and nuclear generating plants
will offer a challenge to the utility industry in maintaining