WSP05409

• File Number: 8220.101.17
• Description: Glen Canyon Dam/Lake Powell
• State: AZ
• Basin: Colorado Mainstem
• Date: 3/1/1998
• Author: Loftin/et al.
• Title: Replacement Resources Process - Final Methods Report - Executive Summary
• Water Supply Pro - Doc Type: Report/Study

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Fiveh}'lXllheli:al
re~ateme/11 resource
alrematives were
identifiedlodemoostrate
the melhod~ tools, and
techn~uesfor resour~
I evaluation and acquisitioo.

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Once model implementation was
complete, five representative resource
alternatives \....ere identified. Then, the
screening tool was demonstrated usmg the
selected resource alternatives. Finally, a
delalled Integrated anaJysis of each
alternative resource was demonstrated.
which s1Il1ulated operational integration of
the resource into the mtercolUlectcd
power grid.

Proof-of-Concept ResuJIs

~

Five hypothetical replacement
resource alternatives were identified to
demonstrate the methods, tools, and
techniques for resource evaluation and
acquisition. These resource alternatives
Illustrated the varying characteristics of
replacement power arrangements that
\Vestcm may encounter in the acquisition
phase of ils Replacement Resource
Process, includmg altematn'e pricing
structures, alternative capacity commit-
ments (seasonal, monthly, umt purchase),
and diffenng pOInts of delivery to
\Vestern's system.

The replacement resources were
first analyzed usmg a levelized-cost
screenmg tool to demonstrate the screen-
ing process which Western will use to
reduce the number of a1tcrnatives selected
for the integrated analysis. For the proof-
of -concept analysis, the detailed mtegrated
system analysis was next prepared for all
of the replacement alternatives. A base
case model was prepared, representing
the mterconnected system With no re-
placement power resource.

Then, integrated analysIs cases were
prepared for each of thc five replacement
resource alternatl\'es, assunung all
Western's Customers took a proportional
share of the replacement resource. The
results of the integrated analysIs illustrated
the e\'a1uauon process, dt..'TIIonstrated the

use of the modeling tools, and confirmed
that the recommended analysis produces
reasonable results

Results of thc proof..of-concept
analyses were prescnted ill several
formats to aid in cvaluation, and to demon-
strate the range of criteria that can be
used to measure the alternatives. The
ability of the modeling tools to accommo-
date the varying needs of \Vestem and its
diverse customer basc were also demon-
strated.

The economic impact of the replace-
ment resource on \Vestem's customers
\\'as determined first. This information
was then used to develop an adjusted
levelized-cost analysis, which was pre-
sented in both tabular form and graphi-
cally. A sample electric rate analysis was
also provided to illustrate the methodology
for calculating the rate Impact for custom-
ers purchasing replacement power.

Finally, a methodology was described
to address risks through sensitivity anal\'-
sis, and the results of the overall proof-of-
concept analysis were interpreted and
summarized as a list ofo'frndings."

Findings

The proof-of-conccpt analYSIS
dt:monstrated feasible mt..'1hods. techniques
and tools for Western to use III evaluating
and acquiring replacement resourccs.
While the methods identified were demon.
strated primarily \\ith power purchases,
these same methods and modeling tools
will be apphcable for ana.lyzmg alternativcs
such as resource lease or build options for
longer-ternl future replacements.

Additional findings include:

Given the complexities of purchase and
sale transactions in the power market, a