WSP05341

• File Number: 8278.100
• Description: Title I - Yuma Desalting Plant
• Basin: Colorado Mainstem
• Date: 12/23/1992
• Author: USDOI/BOR
• Title: Yuma Desalting Plant - Alternatives for the Interim Period
• Water Supply Pro - Doc Type: Publication

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Under the second agreement, Western (at Reclamation's request) purchases
power and energy at the least possible cost from the spot market to
operate the Desalting Plant and PRPU. Currently, the composite average
cost of this power is 21 to 22 mils per kilowatt-hour. Western makes
most of these purchases from the Western Systems Power Pool, of which
Western is a member.

While these arrangements meet current power needs at a reasonable cost,
future spot market costs could be higher than other arrangements.
Western is currently increasing firm transmission rates, which will
affect the cost of power for the Desalting Plant and PRPU. The rate
increase could be substantial and may be effective as early as
October 1992. Currently, each Federal project has its own transmission
rate. Western is also considering integrating these projects into a
one-rate, joint-use transmission system.

Several new developments have occurred in the power market since
Reclamation completed its studies in the late 1980's:

. Several utilities in the Southwest have encountered
financial problems and may be more willing to negotiate
long-term contracts at a lower, or more attractive, price.

. In the last 5 years, private utilities in the Southwest have
interconnected with the Comision Federal de Electricidad to
exchange power. While Mexican power resources are not
plentiful, new generation capability may be available in the
future that.could meet the needs of the Desalting Plant and
PRPU. Interconnected private utilities are pursuing
additional interconnections with Mexico to purchase, sell,
and exchange power.

. Utilities in the Southwest are forming consortiums to
construct or modify existing power generation and
transmission facilities to minimize environmental concerns,
increase power system reliability, control costs, and create
a more versatile power market.

Reclamation will study these new developments and reexamine some
previous studies for comparison with the current power arrangement with
Western. However, Reclamation believes the current arrangement is the
least-cost alternative for now and the near future. Reclamation will
periodically evaluate new technical and system developments and
reexamine past studies to ensure that the Desalting Plant and the PRPU
continue to receive the required power at the lowest possible cost. As
the cost of power represents about 16 percent of the annual operating
cost under full-scale capacity, minor fluctuations in the future cost of
power are not expected to significantly affect the comparison Qf
alternatives. In addition, the cost for power is generally proportional
to the capacity in operation.

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