Laserfiche WebLink
<br />Section 2 <br /> <br />Background <br /> <br />Having many entities able to transmit power from a, large number of resources to the <br />SLCNIP will ensure competition, so that the acquisition of replacement power (as opposed <br />to Western's direct participation in a generating facility) will be cost-effective. In addition, <br />it will allow more flexibility in the timing and length of acquisition commitments. <br /> <br />In the past, with limited transmission access, purchases were often made for a longer term <br />than was desirable from a cost and flexibility standpoint in order to lock-up transmission <br />access when it was made available. The strategy of "IQCking-up" transmission will be less <br />important due to the assurance that providing transmission service based on ATC will be <br />mandatory, not voluntary, on every system. If one path becomes fully committed, there will <br />likely be several other available transmission options... Increased transmission access will <br />allow for shorter-term acquisitions, which will better match the need for replacement <br />power without substantially increasing the risk that transmission limitations will drive up <br />the effective cost by severely restricting the available resource alternatives, as often <br />occurred in the past. . <br /> <br />2.5. INTEGRATED RESOURCE PLANNING <br /> <br /> <br />Integrated resource planning (IRP) is a comprehensive planning approach that expands <br />traditional resource planning, which is typically limited to matching lnads and supply-side <br />resources, to considering the overall effect a. resource has on the total power system, <br />including the environment, reliability, dispatchability,: and fuel diversity. Demand-side <br />management is another part of the integrated approach to resource planning. <br /> <br />The IRP process typically includes projecting future loads and resource needs, identifying <br />resource alternatives, screening or ranking the alternatives, developing and evaluating <br />resource plans, and risk or sensitivity analyses, resulting in the selection of a preferred <br />resource . plan based on least-cost principles. 'Developing specific planning goals or <br />guidelines to use in the development of alternative resource plans is a critical first step in <br />. . <br />the IRP process. Once identified, these goals can then be used to guide the development of <br />evaluation criteria, the selection of resource options, an~ the overall process. <br /> <br />In preparing an IRP, assumptions are necessarily relied on to represent various resources, <br />including the amount and timing of their availability, anq their cost, location, and associated <br />environmental impacts. Assumptions are also made as to transmission availability, fuel <br />pricing and reliability, and many other factors affecting power system cost and reliability. <br /> <br />In a resource acquisition process, the planning asswnptions are transformed to factual <br />information. For example, in response to a Request for Proposals (RFP), pricing terms <br />may be stated in the proposal, with either absolute figures or a base price escalated with <br />reference to a specific index. The typical result is thlit the resource options offered by a <br />potential supplier in response to an RFP may only vaguely resemble the assumed resources <br />and their characteristics used in an IRP by a potential buyer. Accordingly, it is important to <br /> <br />March 1998 <br /> <br />2-16 Western Area Power Administration <br />