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Resource Evaluation The resource evaluation methodol- ogy designed to acquire the replacement resources examines the costs of resource replacement aJterna- tives on both a stand-alone basis and an integrated basis. The stand-alone analy- sis, which consists of a Icvclized-cost screening tool, uses the costs in the supplier's proposal to determine net costs. in the context of Western's resource cvaluatiofl5, the stand-alone analysis using resource screening serves m'o purposes. First, it provides a straightforward calcula- tion of the financial cost of each proposal 10 Western, through use of a Jevellzed cost analysis. Second. in the case of longer- term acquisitions, it limits the number of proposals to be c\'aluated in detail to a manageable number. Integrated analysis examines the mtegration of the replacement resource into the interconnected power system. By including the interaction of the major regional utility systems, Western \vill be able to accurately simulate operation of the replacement resource as it would actually be used. This approach SImulates the true operation of the mterconnected power system. and may result m spot market energy purchases displacmg replacement resource energy at cenain times, and replacement resource energy being sold on the spot market at other times, which can slgmficantly affect the uue cost of a replacemem resource Western will also use transmission power flow analysis ill cases where replacement resource alternatives are identified as significantly affecting key transmission paths. In general. shorHcrm seasonal acquisitions may require only a stand- alone screening evaluatton, whIle the fuJl screcnmg plus an detailed integrated analysis and evaluation would likely be used for long-term replacement resource evaluations. The integrated analysis \\ill yield the most accurate and reliable results. This will be increasingly important to evaluate longer-tenn purchases. In some cases, proposals may differ significantly m qualitat.J.ve (non-cost- related) characteristics. Such differences can, in some cases, be equalized by converting them to qualifications for proposals (e,g., performance bond or acceptable financial guarantee to cover liquidated damages), or the differences will be described and used to distinguish among comp,-1ing proposals that have a sinular levelized, per-unit cost. Costs within some tolerance (e.g., 5 percent) of the lowest cost proposal may be deter- mined to be equivalent for analytical purposes. Financial risks \\ill be assumed by those customers purchasing replacement power, as \Vestern cannot guarantee the availability of replacement power or its price. Although the customers purchasing replacement power \\ill assume the fmancial risks, \\'estern is In the best position to describe the relative risks associated with each potentJal replace- ment resource as it prepares its evalua- tions. Pnoof-of-Concept Analysis The methods for identifying, c\'a]uat- ing, and acquiring power resources to replace the useable generating capability lost at Glen Canyon Dam needed to be tested under circumstances similar to those Western may actually encounter ~ Ingeneral,shat.wm seasonal acquisitions may require onIya stand-olone screening evaluation, while lt1efull weening ~us a detailed integrated analysis and ev~uation woold lik~y be used for long.wmre~acernent resoun:e evaluations. Ii