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[Federal Register Volume 79, Number 183 (Monday, September 22, 2014)]
[Rules and Regulations]
[Pages 56477-56482]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-22367]

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Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents 
having general applicability and legal effect, most of which are keyed 
to and codified in the Code of Federal Regulations, which is published 
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents. 
Prices of new books are listed in the first FEDERAL REGISTER issue of each 
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Federal Register / Vol. 79, No. 183 / Monday, September 22, 2014 / 
Rules and Regulations

[[Page 56477]]

DEPARTMENT OF ENERGY

10 CFR Part 905

Revision to the Final Principles of Integrated Resource Planning 
for Use in Resource Acquisition and Transmission Planning

AGENCY: Western Area Power Administration, DOE.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: Western Area Power Administration (Western) published in the 
Federal Register two proposed changes to Western's Final Principles of 
Integrated Resource Planning (IRP) in the Federal Register on June 29, 
2011. The Final Principles of IRP were last published in the Federal 
Register on June 9, 1995. First, Western proposed that its current 
practice of developing project-by-project evaluation criteria to 
determine the quantity, length, and source of a long-term energy 
purchase be replaced with uniform, Western-wide evaluation criteria. 
Western will make no changes to its current practice of developing 
project-by-project evaluation criteria to evaluate long-term energy-
purchases. Second, Western proposed eliminating transmission planning 
principles that are unnecessary as a result of changes in the planning 
area made since 1995. Western will eliminate the transmission planning 
principles now accomplished by other means consistent with its 
proposal.

DATES: This final rule will become effective on October 22, 2014.

FOR FURTHER INFORMATION CONTACT: Dr. Anthony H. Montoya, Chief 
Operating Officer, Western Area Power Administration, P.O. Box 281213, 
Lakewood, CO 80228-8213, telephone (720) 962-7071.

SUPPLEMENTARY INFORMATION: The Final Principles of IRP were published 
in the Federal Register on June 9, 1995 (60 FR 30533). The Final 
Principles of IRP have served as the policy under which Western 
develops principles for acquiring project-specific, long-term resources 
and for public participation in transmission planning for some Western 
projects to increase transmission capability.
    Since completing the Final Principles of IRP for transmission 
planning in 1995, the transmission industry has undergone significant 
change. Several of the comments Western received during the 1995 public 
process to develop the Final Principles of IRP requested that Western 
avoid duplicating efforts related to transmission planning. At the time 
the Final Principles of IRP were adopted, Western did not believe the 
procedures for public participation in transmission planning were 
duplicative. In light of the current vigorous involvement of 
stakeholders in regional and sub-regional transmission planning 
entities and the detailed transmission planning process set forth in 
Western's Open Access Transmission Tariff (OATT), as described below, 
Western now believes that those comments have merit, and the 
transmission planning principles established under the Final Principles 
of IRP will now be eliminated.
    Specifically, Western is actively involved in several transmission 
planning efforts throughout its various regions. For example, Western 
is currently participating in the Transmission Expansion Planning 
Policy Committee under the Western Electricity Coordinating Council, 
Southwest Area Subregional Planning Transmission Group, Colorado 
Coordinated Planning Group, California Transmission Planning Group, 
Sierra Subregional Planning Group, WestConnect, and Mid-Continent Area 
Power Pool. These groups either did not exist or were in their 
infancies when the transmission planning principles set forth in the 
Final Principles of IRP were completed. In the ensuing 19 years, these 
planning entities have emerged to provide stakeholders the opportunity 
to become involved in regional integrated transmission planning 
including projects that would increase Western's transmission capacity.
    Moreover, as of December 2009, Western's OATT incorporated a 
detailed transmission planning process based upon three core 
objectives: (1) Maintaining reliable electric service; (2) improving 
the efficiency of electric system operations, including the provision 
of open and non-discriminatory access to its transmission facilities; 
and (3) identifying and promoting new investments in transmission 
infrastructure in a coordinated, open, transparent, and participatory 
manner. The transmission planning process that is now a part of 
Western's OATT aids timely, coordinated, and transparent information 
sharing that fosters the development of electric infrastructure, 
maintains reliability, and meets network load growth. The process 
includes open planning meetings that allow anyone including, but not 
limited to, network and point-to-point transmission customers; 
interconnected utilities; sponsors of transmission, generation and 
demand-side management developers; and other stakeholders to 
participate in all stages of development of Western's transmission 
plans.
    Lastly, Western engages in annual 10-year transmission planning 
activities and joint-planning activities with its customers. These 
efforts identify and prioritize long-term transmission system 
additions, betterments, and replacements to meet customers' needs and 
to ensure the reliability of the bulk electric system.
    As a result of the changes discussed above, and in consideration of 
the comments set forth in the following section, Western has determined 
to finalize its proposal, published in the Federal Register on June 29, 
2011 (76 FR 38146), to eliminate from Western's Final Principles of IRP 
duplicative transmission planning principles. For the reasons discussed 
in the SUMMARY section of this document, and in consideration of the 
comments set forth in the following section, Western has determined not 
to adopt its proposal of developing uniform, Western-wide evaluation 
criteria to determine the quantity, length and source of a long-term 
energy purchase. Instead, Western will continue to use its current 
practice of developing project-by-project evaluation criteria.

Response to Comments

    Western held a public meeting on July 21, 2011, in Lakewood, 
Colorado, to solicit input about Western's revision to the Final 
Principles of IRP for Use in Resource Acquisition and Transmission

[[Page 56478]]

Planning. The meeting addressed the proposed evaluation criteria and 
procedures Western would use for long-term resource acquisition and the 
elimination of the transmission planning principles as set forth in the 
Final Principles of IRP. Western received oral comments at its July 21, 
2011, public meeting and written comment letters. The comments received 
and Western's responses follow:

Transmission Planning

    Comment: Numerous comments supported the removal of transmission 
planning from the IRP process, although the existing coordination 
between transmission and resource planning efforts and processes 
provides significant value and should be maintained to the extent 
possible. One comment urged Western to retain transmission planning as 
part of the IRP process and for Western to commit to a robust, open, 
and transparent planning process.
    Response: Western appreciates the support for removing the 
transmission planning from its Final Principles of IRP. Western 
determined that a robust, open, and transparent transmission planning 
process is now provided by planning efforts of regional and sub-
regional planning entities and Western's OATT. Western agrees there is 
a nexus between transmission planning and resource planning efforts. 
This will remain a consideration for Western. Given developments in 
these areas of transmission planning since the original IRP process was 
completed, Western determined that including transmission planning in 
the IRP Principles is redundant.
    Comment: Generators are discouraged from locating in Western's 
service territories because Western does not participate in a regional 
transmission organization.
    Response: This comment is outside the scope of this process.

Resource Acquisition

    Comment: Several comments asked why a proposed change in Western's 
policy toward resource acquisitions is needed now since there is no 
legislative mandate or ongoing energy crisis and the current policy 
seemingly works well. Comments suggested Western delay its process 
until it can provide a more complete presentation of its proposal and 
engage in further discussions with its customers.
    Response: Western's primary goal in proposing modifications to the 
existing Principles of IRP was to provide Western the ability to make 
long-term purchases in a more expeditious and streamlined manner. 
Western determined, in consideration of the comments received on this 
issue, to leave the existing procedures in place. The existing 
Principles of IRP commit Western to performing a public process before 
each purchase of a long-term resource(s), which allows for a 
transparent process for long-term purchases and engagement of customers 
prior to making such purchases.
    Comment: Is there a real need for purchases longer than 5-years 
given that short-term contracts provide flexibility and reduce the risk 
of financially overextending Western's power customers?
    Response: Western will not change this acquisition principle. 
Although there could be several factors that may impact Western's 
decision to enter into a long-term purchase, such as a long-term 
generation reduction resulting from changes in hydrology, reservoir 
operations, or extended outages. Western has found that short-term 
contracts can effectively satisfy its firming needs, and the existing 
principles provide enough flexibility and allow Western's customers, on 
a region-specific basis, to consider long-term resource strategies.
    Comment: Several comments state that changing to a Western-wide 
policy for long-term purchases would not take into account operational 
characteristics and contractual provisions of each region, which can be 
strikingly different, and should be developed on a regional basis 
instead.
    Response: Each of Western's regional offices follows the same 
general criteria in evaluating whether or not to make a long-term 
purchase. Each region will continue to involve its region-specific 
customers in the decision-making process and take into account region-
specific impacts.
    Comment: Increasing the diversity of Western's portfolio should be 
included in the list of ``occurrences'' in Principle No. 1, in addition 
to the partial list provided that sets forth reasons for making such 
purchases, such as lost hydropower generation or drought.
    Response: Western markets power in a manner to encourage the most 
widespread use at the lowest possible rates consistent with sound 
business principles. Acquiring a renewable resource solely for the 
purpose of portfolio diversity, regardless of price, runs counter to 
Western's mission. However, diversity is one of the existing principles 
that Western will continue to use to evaluate long-term resource 
acquisitions.

Planning and Coordination

    Comment: Several comments note there are existing processes and 
regular planning meetings to discuss potential resource acquisitions 
developed by Western and customers that address drought, resource, and 
financial interests. These processes have been developed over a period 
of years following extensive collaboration between Western and its 
customers and should not be undermined by a new policy. Comments 
expressed concern about how Western's new proposal would work with the 
existing processes and if those current processes would be continued in 
the future.
    Response: Western does not plan to change any ongoing processes or 
regular planning meetings with its customers. Western will continue to 
coordinate closely with its customers about long-term purchase 
requirements.
    Comment: Fundamental principles should be developed in consultation 
with project-specific customers and all interested parties with respect 
to hydrology, capacity/energy purchased, and customer needs and 
willingness to pay for purchases and/or opt out of payment for such 
purchases. Notification and planning of such purchases should be made 
to the customers and other interested parties prior to any long-term 
transaction.
    Response: Western does not plan to change any ongoing processes or 
regular planning meetings to discuss resource acquisitions with its 
customers. Western will continue to coordinate closely with its 
customers to develop criteria for long-term purchase requirements.

Implementation

    Comment: If Western is considering requests for resource proposals 
(short or long-term), notices and invitations for bids should be posted 
on Western's Web site with sufficient notice to the public.
    Response: Western is not changing its acquisition principles. 
Western does provide notice to potential suppliers and interested 
stakeholders when soliciting requests for power depending upon the term 
sought. Typically, short-term purchases do not require as involved a 
process as long-term purchases; however, both processes involve 
appropriate notification and involvement following the specific 
processes used by each of Western's regional offices.
    Comment: Does Western plan to send out proposed revisions after the 
comment period is over?
    Response: Western carefully considered the comments received and 
any potential revisions. Western

[[Page 56479]]

decided to retain the existing acquisition principles and remove only 
the transmission planning principles, which are now being performed 
under Western's OATT. Given the comments provided, the vast majority of 
which supported removal of the transmission planning principles, 
Western has determined that an additional comment period is not 
necessary.
    Comment: The proposal in the June 29, 2011, Federal Register notice 
(76 FR 38146) has changes to sections 1, 4, 5, and 6 of Western's Final 
Principles of IRP. Will the 1995 Principles be superseded in their 
entirety?
    Response: Western is maintaining its existing IRP policy and has 
eliminated only the duplicative Transmission Planning Principles. 
Therefore, the 1995 resource acquisition principles will remain in 
place.
    Comment: Would it be possible to see all proposed revisions in one 
place to eliminate confusion? Also, why are comments due 8 days after 
the public meeting?
    Response: Western posted a redline/strikeout version of the 
Proposed Revised Final Principles of IRP Related to Resource 
Acquisition on its Web site and also provided this information at the 
July 21, 2011, public meeting. Western also provided 30 days for the 
submission of comments. The Federal Register notice was published on 
June 29, 2011, and comments were due to Western on July 29, 2011. Due 
to logistics, Western's public meeting was scheduled late in that 
period. All parties had 30 days from initial publication to comment.
    Comment: Western should include in its work plan and in the IRP 
Principles a proposal to aggregate demand from a number of smaller 
utilities and loads so these customers can benefit from the economies 
of scale of investing in a larger resource.
    Response: Although small customers may benefit from pooled resource 
acquisition, coordinating such purchases is considered beyond the scope 
of the proposal.
    Comment: Western should seek to coordinate its Request for 
Proposals (RFP) with those of other regional entities so all parties 
may capture any economic and environmental benefits of larger-scale 
resource acquisitions.
    Response: Western would consider coordination of RFPs among its 
regional offices to achieve economies of scale, and the load diversity 
created by Western's extensive geographic service territory may make 
certain purchases more economically viable. Western could also consider 
a combined RFP with others for long-term resource acquisitions. The 
feasibility of such a combined RFP would depend on the complexity of 
coordination and the various acquisition requirements.
    Comment: Western should create a ``standard offer,'' similar to one 
offered by the Tennessee Valley Authority (TVA), for small- to mid-
sized renewables that would offer set prices and long-term contracts 
under simplified application and contracting processes.
    Response: Western and TVA have very different authorities and 
authorizations. TVA has a much broader authority for providing 
resources for load growth within its region. Western's resources are 
limited to generation provided at certain facilities. Western's 
authorizing legislation requires it to deliver this power at the lowest 
cost possible consistent with sound business practices. To accomplish 
this goal, Western is committed to having an open process available for 
all resource providers under its existing procedures.
    Comment: Western has a great opportunity to facilitate renewable 
resource development through the use of its hydro resources to provide 
firming and shaping products for variable resources like wind.
    Response: Western already uses the long-term, load-following 
capability of the Federal hydroelectric facilities to support the 
obligations of its firm electric service contracts. Western will 
continue to consider resource diversity in evaluating long-term 
resource acquisitions.

Evaluation Criteria

    Comment: Western's existing hydropower resources should be 
considered as a renewable resource under the IRP policy, and Western 
should ensure that any renewable purchases do not operationally affect 
hydropower generation. Conversely, another comment suggested that 
Western should not consider large-scale hydropower as a renewable 
resource.
    Response: Western supports consideration of large-scale hydropower 
as a clean, renewable, power resource and will work with its customers, 
where appropriate, to promote hydropower as a recognized renewable 
resource. Western determined the existing evaluation principles, as a 
whole, provide ample opportunity to assess the potential impacts any 
resource may have on operation of hydropower resources.
    Comment: The proposed evaluation criteria are not clear. Further, 
defining the process for using the evaluation criteria is needed before 
an assessment of the criteria's value can take place.
    Response: Western has decided not to adopt the proposed evaluation 
criteria. Western's existing acquisition principles are sufficient and 
broad enough to give Western the needed flexibility to make future, 
long-term purchases. There are many aspects to long-term power 
purchases, and the existing guidelines are sufficient to provide 
guidance to Western in how resource acquisitions should be considered. 
Additional consideration of a resource will be provided by each of 
Western's regions at the time a long-term purchase is considered.
    Comment: The diversity criterion is broad enough to contain an 
adequate consideration of renewable energy resources; therefore, a 
separate criterion for renewable resources is not needed.
    Response: Under its existing acquisition principles, Western will 
continue to give consideration to the environmental attributes of 
different generation sources as part of any long-term purchase.
    Comment: Western should remove references to demand-side management 
from Criterion 5 (e)--``Environmental Impact.''
    Response: Although Western is not adopting new principles, under 
its existing acquisition principles the criteria will continue to 
address environmental impacts, as well as other relevant 
considerations, when evaluating possible long-term resource options, 
which include demand-side management.
    Comment: The proposed process language is silent about how the 
evaluation criteria would be used for any specific resource procurement 
need; each criterion could have different weightings with such 
weightings being contingent on the specifics of the procurement need. 
The comment proposes revising the Section 5 introductory statement to 
read: ``5. When evaluating potential resource acquisitions under the 
Final Principles of Integrated Resource Plan, the following criteria 
will be considered, and given weightings based upon the specific 
resource acquisition being considered.''
    Response: Western is not changing its acquisition principles. Under 
Western's existing principles, there may be a need to weight the 
evaluation contingent upon the type of purchase that needs to be made, 
which can be accomplished as part of a specific resource purchase.
    Comment: Why did Western include Criterion 5 (e)--``Environmental 
Impact?'' What does Western intend by this criterion? Is Western 
required by law to have this criterion in resource evaluations? If not, 
it could be deleted

[[Page 56480]]

in favor of those identified in Criterion 5 (g)--``Renewable Energy 
Resource.''
    Response: As part of a long-term resource acquisition, Western must 
perform a National Environmental Policy Act (NEPA) analysis. Although 
Western is not changing its acquisition principles, the level of NEPA 
analysis will continue to be decided as a part of the specific 
acquisition process.
    Comment: Western would have greater flexibility if Criterion 5 
(g)--``Renewable Energy Resource,'' were instead titled 
``Environmental/Green Attributes (Including Renewables),'' which would 
enable Western to make purchases, such as large-scale hydropower, that 
are sometimes not considered as renewable-energy resources under 
legislative mandates. This change would allow Western to address the 
question: ``Does the replacement resource being procured have 
comparable environmental attributes to what is required?''
    Response: Western agrees with the concept, and the existing 
principles already allow the consideration of renewable resource 
options. The language is broad enough to allow Western to consider both 
existing and emerging technologies providing potential environmental/
green attributes.
    Comment: Criterion 5 (i)--``Transmission Availability'' might be 
more appropriately titled ``Deliverability.'' Deliverability 
encompasses transmission availability, but in addition covers any other 
delivery-related issues. This would give more flexibility to Western in 
long-term resource procurement decisions.
    Response: The existing principles require that Western consider 
dependability and dispatchability to capture delivery-related concerns.
    Comment: Agree with Criterion 5 (h)--``Risk.'' Any risk analysis 
should include fuel price and energy-policy risks.
    Response: Western appreciates the comment and will continue to 
consider all relevant factors when evaluating purchase decisions using 
its existing principles including, but not limited to, fuel price and 
energy-policy risks.
    Comment: Contractual obligations should be adjusted based on 
generation facility type. ``Dependability'' should be redefined for 
renewables compared to traditional generation, and ``Dispatchability'' 
and ``Transmission Availability'' criteria should not be so rigid as to 
discriminate against variable-energy resources.
    Response: Although Western is not changing its acquisition 
principles, dependable and dispatchable resources continue to be 
required for Western's operations. Having available transmission to 
receive and make deliveries of power is critical. Western is supportive 
of industry efforts to better integrate renewable resources and will 
consider the availability and dependability of all potential resources 
when evaluating a potential long-term purchase. Western will not 
automatically rule out renewable resources in considering energy 
purchases and will continue to take into account all of the existing 
principles when evaluating a potential long-term purchase.
    Comment: Western, under Criterion 5 (g)--``Renewable Energy 
Resource,'' should clearly state that it will give priority to 
renewable resources and that these types of resources will receive 
additional weighting when Western evaluates all proposed resources 
against its IRP criteria.
    Response: When evaluating resources for a particular purchase, 
Western will evaluate all resource types following the guidelines in 
the existing Final Principles of IRP. Each resource acquisition will be 
evaluated on its own merits and not in a way that immediately excludes 
or promotes certain resource options.
    Comment: Will Western provide more detail on the criteria used to 
define risk?
    Response: Western's existing principles contain risk as a criterion 
as understood as part of good utility practice. For example, 
creditworthiness of energy suppliers is a legitimate concern of all 
utilities; having a resource unavailable due to the financial 
insolvency of a supplier is not in Western's interest. With regard to 
market uncertainties, Western will continue to evaluate carefully all 
potential power resources, including the consideration of externalities 
affecting the viability of a resource.
    Comment: Western should consider long-term, life-cycle cost, 
including environmental costs, over a 20- to 25-year contract period, 
so the full value of renewable energy is demonstrated. Western should 
also take into account that solar resources are fueled for free and 
avoid the uncertainty of volatile fossil fuel commodity markets. 
Another comment suggested that some evaluation criteria may not reflect 
impending changes in energy markets. A comment suggested language 
stating that Western, when assessing whether to enter a long-term 
contract, consider near-future changes in a resource's cost, 
dependability, dispatchability, risk, and transmission availability.
    Response: Western's existing principles are flexible and broad 
enough to accommodate the inevitable nuances that exist among various 
potential, long-term, purchase power options. In conjunction with 
Western's customers and in an open and transparent process, these 
principles will be used to examine and properly consider each potential 
resource on a case-by-case basis.
    Comment: Western should compare the full cost of each proposal over 
the life of a contract and choose the proposal that will be the most 
cost effective. Another noted that the cost of coal will be increasing 
in the future, and this should be considered in Western's long-term 
planning.
    Response: In response to several comments urging additional 
criteria, Western determined the existing principles are flexible and 
broad enough to accommodate the different circumstances that exist 
among various potential long-term, purchase power options. In 
conjunction with Western's customers and in an open and transparent 
process, these principles will be used to examine and properly consider 
each potential resource acquisition.
    Comment: Western, as a government entity, needs to ensure that 
power purchases minimize adverse impacts to the environment and should 
ensure 25 percent of its energy purchase comes from renewable energy 
resource by 2025.
    Response: Western intends to consider renewable resources for 
future, long-term, resource acquisitions; however, a pre-commitment to 
purchase power from any specific resource type, regardless of price, 
runs counter to Western's authority. Western is required to conduct its 
business in accordance with applicable law. Specifically, Western 
markets Federal hydroelectric power in a manner to encourage the most 
widespread use at the lowest possible rates to consumers consistent 
with sound business principles.
    Comment: Western should include evaluation of externalities such as 
health costs, costs of environmental damage, and climate change for its 
purchases.
    Response: The evaluation of these types of items is included in 
Western's existing principles.
    Comment: When Western purchases power resources, it should take all 
reasonable steps to minimize adverse environmental impacts by 
purchasing clean, renewable energy such as solar.
    Response: Western will continue to consider potential resources, 
including clean, renewable energy, for long-term purchases under its 
existing principles.
    Comment: Concerning Criterion 5 (i)--``Transmission,'' does Western

[[Page 56481]]

envision this was intended only to assess whether existing transmission 
would be available to deliver a resource or a broader assessment that 
would include the difficulty/cost of constructing new transmission to 
facilitate delivery of the resource in a timely manner?
    Response: Transmission delivery capability is a necessary component 
of any energy purchase, and consideration of that aspect is critical. 
Western has always considered this aspect, which would include 
evaluating the potential of new transmission, when acquiring resources.
    Comment: Improvements to Western's IRP Principles should apply not 
only to long-term purchases (5-years or more), but to short-term 
purchases as well.
    Response: Western is not changing its acquisition principles for 
acquisition of resources for more than 5 years. Applying these same 
criteria to short-term purchases is not practical due to the quick 
turnaround necessary for daily and monthly purchases. The existing 
Final Principles of IRP require significant evaluation and analysis and 
are not conducive to a short-term resource acquisition process. In its 
June 9, 1995, Federal Register notice (60 FR 30533), Western responded 
to a similar comment and stated that ``Western believes that it is 
important to maintain flexibility within these principles.''
    Comment: Western should insert the following language to Principle 
No. 1: ``In determining the sources of power Western will deliver to 
its customers under all existing and new contracts [to make up for 
shortfalls in Federal hydropower generation][sic], Western will 
evaluate energy savings programs, customer demand response programs, 
and renewable energy generation alongside fossil resources, using 
consistent and transparent criteria that treat these resources 
objectively.''
    Response: Western is not changing its acquisition principles for 
acquisition of resources. The existing principles include renewable 
resource options, which will be considered in relation to the needs of 
each respective region.
    Comment: Western should affirmatively commit to meet a significant 
part of its long-term, power-purchase needs from solar and other 
renewable resources within a year. Western should conduct a public 
process to identify the quantity and type of renewable power each 
Western regional project office should purchase through competitive 
processes. This effort should culminate with the execution of long-
term, purchase-power contracts for both central station and distributed 
renewable power resources. Western should, within a year, set a 
specific renewable target to meet (e.g., 25 percent by 2025).
    Response: Western will evaluate the resource used to meet any long-
term, power-purchase needs using the existing principles, including 
renewable power, within the respective region with a long-term resource 
need.
    Comment: We support Western's proposed changes to its IRP Policy 
and with Western's definition of Criterion 5 (b)--``Dependability;'' 
Criterion 5 (d)--``Diversity;'' Criterion 5 (f)--``Indian Preference;'' 
and Criterion 5 (i)--``Transmission Availability,'' and support 
minimized transmission losses.
    Response: Western appreciates the comment, but has determined not 
to revise the existing principles.
    Comment: Technological changes have made wind and photovoltaic 
energy more dependable and dispatchable. Renewables offer more long-
term reliability in terms of risk and are a good replacement for fossil 
fuels. Long-term contracts promote the certainty needed for capital 
investments.
    Response: Western appreciates the comment and understands the 
benefits of renewable energy.
    Comment: Leaving the resource evaluation criteria more general will 
provide the maximum flexibility for any specific long-term resource 
procurement.
    Response: Western determined the existing acquisition principles 
strike the appropriate balance between allowing regional flexibility 
and providing general guidance and has determined not to revise the 
acquisition principles.

Revised Principles of Integrated Resource Planning Related for Use in 
Resource Acquisition and Transmission Planning

    Accordingly, the Western Area Power Administration amends its Final 
Principles of IRP by eliminating entirely the requirements in the 
section titled: ``II. Transmission Planning Principles:'' No changes 
will be made to the section titled: ``I. Resource Acquisition 
Principles:''

Procedure Requirements

Environmental Evaluation

    Western's notice to revise the Final Principles of IRP is an 
administrative action covered by an existing NEPA categorical 
exclusion. A categorical exclusion has been prepared and executed for 
this process. Once project-specific actions are identified under the 
Revised Final Principles of IRP and the project-specific evaluation 
developed through the existing process, those actions would be 
individually subject to the appropriate level of NEPA review. Factors 
affecting the level of NEPA review include whether the project-specific 
action would integrate a new generation resource, precipitate changes 
to the transmission system, or change the normal operating limits of 
existing generation resources.

Determination Under Executive Order 12866

    Western has an exemption from centralized regulatory review under 
Executive Order 12866; accordingly, no clearance of this document by 
the Office of Management and Budget is required.

List of Subjects in 10 CFR Part 905

    Electric power, Electric utilities, Energy conservation, Reporting 
and recordkeeping requirements.

    Dated: September 11, 2014.
Mark A. Gabriel,
Administrator.
    For the reasons set forth in the preamble, the Department of Energy 
amends Part 905 of title 10 of the Code of Federal Regulations as set 
forth below.

PART 905--ENERGY PLANNING AND MANAGEMENT PROGRAM

0
1. The authority citation for part 905 continues to read as follows:

    Authority:  42 U.S.C. 7152, 7191; 42 U.S.C. 7275-7276c.

0
2. Add subpart E to read as follows:
Subpart E--Final Principles of Integrated Resource Planning for Western 
Resource Acquisition
Sec.
905.50 Resource acquisition principles.
905.51 Transmission planning principles.

Subpart E--Final Principles of Integrated Resource Planning for 
Western Resource Acquisition

Sec.  905.50  Resource acquisition principles.

    Western's resource acquisition activities will be determined by 
project-specific power marketing plans, hydropower production 
capability, and the application of the following principles of IRP:
    (a) Western will consider a full range of resource options, both 
supply-side and demand-side, as well as renewable resource options.
    (b) On a project-by-project basis, Western, through a public 
process involving interested stakeholders will develop criteria to be 
used in evaluating power resource alternatives.
    (c) Evaluation criteria will address cost, environmental impact,

[[Page 56482]]

dependability, dispatchability, risk, diversity, and the ability to 
verify demand-side alternatives. Evaluation criteria will be reviewed 
as the need for resources changes or when long-term commitments to 
purchase power expire.
    (d) Evaluation criteria will be consistent with Western's power 
marketing policy, which states that Federal power is to be marketed in 
such a manner as to encourage the most widespread use thereof at the 
lowest possible rates to consumers consistent with sound business 
principles. The policy, found in Delegation Order No. 00-037.00A, is 
derived from statutes authorizing the sale of power from both 
Department of the Army and Department of the Interior hydroelectric 
projects. These statutes include section 5 of the Flood Control Act of 
1944, 16 U.S.C. 825(s) and section 9(c) of the Reclamation Project Act 
of 1939.
    (e) Resource acquisition planning will be consistent with power 
marketing plans and associated contractual obligations.
    (f) Resource acquisition decisions will be documented and made 
available to Western's power customers and the public.

Sec.  905.51  Transmission planning principles.

    Western's transmission planning is conducted to assess the 
capability of the Federal transmission system to provide adequate and 
reliable electric service to its customers and the interconnected power 
grid. These planning efforts occur as part of its participation in 
regional and sub-regional planning entities as well as Western's Open 
Access Transmission Tariff.

[FR Doc. 2014-22367 Filed 9-19-14; 8:45 am]
BILLING CODE 6450-01-P
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