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<br />" <br /> <br />, '. <br /> <br />01250 <br /> <br />November 19. 1993 <br /> <br />Middle-Envelope Smoothing of Annual Energy. <br /> <br />Issue <br /> <br />Western is examining some of the past practices and assumptions used to develop <br />long-range annua 1 power projections for the CRSP and SLCAIIP PRSs. One component <br />of interest includes Western's practice of "middle-envelope" smoothing of the <br />Colorado River Simulation Model (CRSM) annual energy projections. <br /> <br />Background <br /> <br />. The practice of applying a "smoothing". or moving average, technique to <br />the CRSM annual energy projections stems from prior years' repayment <br />studies in which 5-year indexing was used in Reclamation's CRSM modeling. <br />The smoothing was used to reduce the wide variations in energy projections <br />from year to year. <br /> <br />. Currently. I-year indexing is used in Reclamation's CRSM studies. which <br />has reduced the yearly variation between annual energy values. <br /> <br />. The "middle-envelope" moving average is calculated by taking (a) the two <br />previ ous yea rs' numbers, (b) the energy project i on for the yea r bei ng <br />studied. and (c) the estimates for the first two future years. The <br />average of the five years is the "middle-envelope" smoothed figure. <br /> <br />Sensitivities <br /> <br />The practice of smoothing the energy projections has been questioned in the past. <br />However. with the advent of I-year indexing in CRSM modeling. concern by <br />customers has been ameliorated. <br /> <br />Alternatives/Options <br /> <br />Option 1: <br /> <br />Maintain Smoothinq for Current PRS. No Additional Analysis. This <br />option would require Western to maintain the current method for the <br />initial PRS. Alternative methods for smoothing would not be <br />considered. One-year indexing would be maintained. <br /> <br />Maintain Smoothinq for Current PRS. Investiqate Alternative Methods <br />& Associated Rate Effects. Similar to Option 1. except that <br />alternative methods for smoothing would be considered, including <br />elimination of smoothing alltogether. and special what-if PRS's <br />which would be performed to assess the incremental rate impact, if <br />any. <br /> <br />Option 2: <br />