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<br />Background <br /> <br />Section 2 <br /> <br />distinguish between the results of an IRP and application of the Principles. of IRP to a <br />specific group of resource options. <br /> <br />In general, the principles of the IRP process used in making resource acquisitions are least- <br />cost; consideration of all system impacts, risks, and environmental. effects; and public <br />participation. <br /> <br />2.5.1 ENERGY POLICY ACT <br /> <br />In addition to affecting transmission access as discussed above, the EP Act also addressed <br />requirements for integrated resource planning. Section 114 requires that Western's utility <br />customers prepare IRPs that meet certain minimum standards. Failure to prepare and <br />sublnit an IRP could result in the reduction in a customer's finn-power allocation or a <br />financial surcharge. Sections 201 and 204 of the EPAct further delineate the IRP <br />requirements for Western's customers, as follows: <br /> <br />March 1998 <br /> <br />Western Area Power Administration 2-17 <br /> <br /> <br />"SEC.201. DEFINIT10NS. <br />(1) * * * <br />(2) The term ~integrated resource planning' means a planning process <br />for new energy resources that evaluates the full range of alternatives... <br />in order to provide adequate and reliable service to its electric customers <br />at the lowest system cost. <br />(3) The term 'least cost option' means an option for providing reliable <br />electric services to electric customers which will, to the extent <br />practicable, minimize life-cycle system costs, including adverse <br />environmental effects, of providing such services... <br /> <br />SEC. 204. INTEGRATED RESOURCE PLANS. <br />(a) * * * <br />(b) CRITERIA FOR APPROVAL OF INTEGRATED RESOURCE PLANS.- The <br />Administrator shall approve an integrated resource plan... if... the <br />customer has: . <br />(1) Identified and accurately compared all practicable energy <br />efficiency and energy supply resource options available to the <br />customer. <br />(2) Included a 2-year action plan and a five-year action plan... <br />(3) Designated 'least-cost options'... and explained the reason <br />why such options were selected. <br />(4) To the extent practicable, minimized adverse environmental <br />effects of new resource acquisitions. <br />(5) ... [P]rovided for full public participation... <br />(6) Included load forecasting. <br />(7) Provided methods of validating predicted performance ..." <br /> <br />2.5.2 ENERGY PLANNING AND MANAGEMENT PROGRAM <br /> <br />In April 1991, as part of Western's planning for the many customer contracts due to expire <br />in the next several years, Western proposed a comprehensive Energy Planning and <br />Management Program (EPAMP). Western's EPAMP covers the entirety of Western's <br />