WSP02492

• File Number: 8220.100.50
• Description: CRSP
• Basin: Colorado Mainstem
• Date: 3/1/1988
• Author: WAPA
• Title: Replacement Resources Processes - Final Methods Report - Executive Summary
• Water Supply Pro - Doc Type: Publication

i
Once model implementation wa$
complete, five representative resource
alternatives were identified. Then, the
screening tool was demonstrated using the
selected resource alternatives. Finallr, a
detailed integrated analysis of each I
alternative resource was demonstrat~d,
which simulated operational integrati~n of
the resource into the interconnected :
power grid.

Proof-of-Concept Results

Five hypothetical replacement :
resource alternatives were identified ito
demonstrate the methods, tools, and I
techniques for resource evaluation ~d
acquisition. These resource alternatives
illustrated the varying characteristics of
replacement power arrangements' that
Western may encounter in the acqui~ition
phase of its Replacement Resource i
Process, including alternative pricin~
structures, alternative capacity co~it-
ments (seasonal, monthly, unit purchase),
and differing points of delivery to
Western's system.

The replacement resources w~re
first analyzed using a levelized-cost :
screening tool to demonstrate the s~reen-
ing process which Western will use ~o
reduce the number of alternatives sdected
for the integrated analysis. For the proof-
of-concept analysis, the detailed int~grated
system analysis was next prepared for all
of the replacement alternatives. A jbase
case model was prepared, representing
the interconnected system with no te-
,
placement power resource,

III

Then, integrated analysis cas~s were
prepared for each of the five repla~ement
resource alternatives, assuming all i
Western's customers took a proportional
share of the replacement resource. I The
,
results of the integrated analysis ill~strated
the evaluation process, demonstraWd the

use ofthe modeling tools, and confirmed
that the recommended analysis produces
reasonable results.

Results of the proof-of-concept
analyses were presented in several
formats to aid in evaluation, and to demon-
strate the range of criteria that can be
used to measure the alternatives, The
ability of the modeling tools to accommo-
date the varying needs of Western and its
diverse customer base were also demon-
strated.

The economic impact of the replace-
ment resource on Western's customers
was determined first. This information
was then used to develop an adjusted
levelized-cost analysis, which was pre-
sented in both tabular form and graphi-
cally. A sample electric rate analysis was
also provided to illustrate the methodology
for calculating the rate impact for custom-
ers purchasing replacement power.

Finally, a methodology was described
to address risks through sensitivity analy-
sis, and the results of the overall proof-of-
concept analysis. were interpreted and
summarized as a list of "fmdings."

Findings

The proof-of-concept analysis
demonstrated feasible methods, techniques
and tools for Western to use in evaluating
and acquiring replacement resources.
While the methods identified were demon-
strated primarily with power purchases,
these same methods and modeling tools
will be applicable for analyzing alternatives
such as resource lease or build options for
longer-term future replacements.

Additional findings include:

, Given the complexities of purchase and
sale transactions in the power market, a