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<br />Policy ssues and Assumptions <br /> <br />. '.. Section 3 <br /> <br /> <br />3.2.1 RELATIONSHIP TO OTHER STRATEGIC GOALS <br /> <br />The primary purpose of the Replacement Resources PrOcess and the Methods Report is to <br />I <br />comply with the. Grand Canyon Protection Act. Many other goals could be developed <br />consistent with objectives within Western, other F edera\ agencies, or national energy policy <br />(for example, promoting fuel diversification, promoting renewable energy, promoting <br />energy efficiency, reducing emissions, etc.). However, the primary goal of Western and its <br />customers at this time is to establish methods to acquire replacement resources at a cost. <br />that is competitive in the market. Western's Principles of IRP also dictate that resources be <br />evaluated in a fair and equitable manner. ' <br /> <br />In examining the methods for acquiring replacement:power, this report will maintain a <br />focus on the following strategic goals: <br /> <br />. compliance with the GCP Act; <br /> <br />. compliance with the CRSP Act and related legal mandates; <br /> <br />. adherence to Western's Principles ofIRP; lI\ld <br /> <br />. obtaining least-cost replacement power for Western's customers.. <br /> <br />It is possible that additional strategic goals or guidelines for replacement resource <br />acquisition will be added in the future based on other agency or departmental policy <br />mandates consistent with the GCP Act and CRSP legislation. <br />. , <br />; <br /> <br />3.2.2 RESOURCE EVALUATION CRITERIA! <br /> <br />Renewable energy, energy efficiency. or specific nonttraditional generating technologies <br />could be promoted through evaluation criteria that gi~e added "weight" or preference to <br />certain initiatives such as reducing environmental effects or increasing fuel diversity. <br />Further, the evaluation criteria could target certain technologies by providing capacity set- <br />asides that could only be filled by these technologies, or by special credits in the <br />quantitative evaluation. Such evaluation criteria would general1y result in resource <br />selections that are less cost-competitive for the SLC~ customers. However, the results <br />might better support certain of Western's other strate$ic goals for resource development <br />consistent with the GCP Act and CRSP legislation. <br /> <br />Consistent with the primary goal to acquire least-cost replacement power, no preference or <br />weighting of any particular technology or fuel source will be pursued in these methods. All <br />resources will compete on an equal basis, and the evaluation criteria and process wil1 be <br />consistent with Western's Principles ofIRP. <br /> <br />3.2.3 EXTERNAL COSTS <br /> <br />External costs, or "externalities," are the environnjental or social costs of resource <br />production and operation that are apart from the market system and are not reflected by the <br /> <br />3-2 <br /> <br />Western Area Power Administration <br /> <br />March 1998 <br /> <br />~ <br />