manufacturing. LADWP awarded a similar $55.1 million contract. Both contracts are divided into two phases. Phase I of these contracts, covering system studies and preliminary design, has begun. The Phase I portion of each contract is limited to $2 million. BPA is conducting further analysis of the effects on hydroelectric operations from utilizing the increased capacity. If the analysis, including analysis on the potential for increased fish mortality, supports a Finding of No Significant Impacts (FONSI), then BPA will supplement the Environmental Assessment issued in February 1985. A FONSI could be in place by July or August 1986 with Phase II of the contract initiated soon thereafter. If a FONSI is not supported, then the start of Phase II would be dependent on the outcome of the analysis in the IDU EIS and subsequent decisions on expansions and any needed mitigation. Question: What is your view on the economic feasibility of the Third AC Expansion? Answer: The new Third AC Intertie would appear to be economically feasible to the extent firm contracts can be written for the sale of power and for capacity/energy exchanges which are beneficial to the Pacific Northwest and the Pacific Southwest. These benefits would accrue in addition to the enhanced marketing of economy energy as a result of the Third AC. Question: Will the Third AC line and the DC upgrade together result in Western Grid Reliability problems without a second DC Intertie to Nevada? Answer: No, the Third AC line and DC Upgrade (Expansion) together will not result in Western Grid Reliability problems without a second DC Intertie to Nevada. Western Grid reliability is expected to improve with addition of the Third AC line by eliminating a major control action presently required for an outage of the two line AC Intertie system. Design criteria for the DC Expansion Project provides for increased reliability of the DC terminals. Major upgrades to the existing Intertie stability controls will also be completed prior to operation of the DC Expansion Project and will help to insure reliable operation of the Western Grid for both projects. Question: What is your position on the need for the Second DC Intertie from the Pacific Northwest to the Southwest? What do the preliminary economic studies indicate as to the feasibility and timing of this line. Answer: The Second DC Intertie would not appear to be economically justified for additional economy energy sales from the Pacific Northwest beyond those of the existing system, plus the Terminal Expansion and Third AC. To the extent seasonal diversity between the Pacific Northwest and the Inland Southwest is feasible, the Second DC would be one alternative to achieve this. Additionally, if the Pacific Northwest or others build ahead of . need and can economically defer new generation in the Inland Southwest, then the Second DC again would be investigated. Both of these uses place timing for a Second DC in the late 1990s. Question: Do you have any concerns over the WAPA's plans for the Manitoba Hydro project, either separately or in conjunction with the DC Intertie, and it's potential impact on BPA revenues or operations? Answer: To the extent Manitoba power would reach the California Market, we would be concerned about potential impacts to BPA revenues and operations. In the longer time frame, we could be impacted in our ability to market or exchange power with the Inland Southwest. Therefore, we strive to stay abreast of and where possible provide input to programs such as this. We understand that power from the project would not be available for delivery in the United States until the late 1990's. Fish and Wildlife Question: For the record, provide estimated funding for the six major capital projects for FY 86, FY 87, and the out-years. Answer: The following is the estimated funding for the six major capital projects for FY 1986, FY 1987, and the out-years. These projects will be under construction in FY 1987. Enloe Dam Estimated Funding for Six Major Capital Projects FY 1986 FY 1987 FY 1988 FY 1989 FY 1990 FY 1991 Question: Provide an object class breakdown in FY 85, FY 86 and FY 87 for the fish and wildlife program. Answer: The following is a object class breakdown for FY 1985, FY 1986, and FY 1987 for the fish and wildlife program. Object Class Breakdown for FY 1985, FY 1986, and Question: How much is allocated for contracts in FY 85, FY 86 and FY 87? List in a table the contract areas and amounts allocated to each. Answer: The following table reflects the allocated amounts for contracts in FY 1985, FY 1986, and FY 1987. Contract Allocation for Fish and Wildlife Program Question: Explain the need for $2.8 million for new program measures. Answer: When BPA was developing its FY 1987 budget, the Northwest Power Planning Council was concluding amendments to the Columbia River Basin Fish and Wildlife Program. The $2.8 million for new measures in the FY 1987 budget included funding in anticipation of several projects which have since been amended into the program by the Council. (1) passage New capital projects being proposed in FY 1987 are: improvements at Umatilla River, Oregon, water diversions; and (2) Wildlife land acquisitions in Montana. It is anticipated the remaining funds will be used to evaluate the effectiveness of water budget flows, initiate new studies on fish health and fish hatchery effectiveness, and plan several new habitat enhancement projects. Question: What is the status of your major policy process on the BPA fish activities under section 4 of the Regional Act? Answer: BPA has completed and implemented one major fish and wildlife policy (Fish and Wildlife Consultation Policy). There are two policies currently under development and public review. These are a draft Fish and Wildlife Real Property Policy and a draft Fish Passage Spill Policy. There are two policies contempleted for public review later this year. They are the Fish and Wildlife Compensation Policy and a policy development process to determine the extent of the Administrator's obligation to protect, mitigate, and enhance fish and wildlife in the Columbia River Basin. Load Forecasting Question: Why is there a need for an increase in funding for load forecasting in FY 87 as compared to FY 86? Answer: The increase in funding for load forecasting from FY 1986 to FY 1987 allows BPA to continue the evolution of its load forecasting activities that began in 1980. In that year, BPA began development of an independent long-term energy-forecasting capability. In response to subsequent changes in the region's energy environment, we began developing short-term forecasting capability to support our rate and marketing analyses. We also began developing an "hourly" forecasting capability to support our system planning and operation, marketing, and conservation analyses. These forecasts will continue to provide BPA with information critical to maintenance of its competitive position in a changing energy marketplace. Over the period FY 1982 to FY 1986, there has been a continuing shift in emphasis from the long-term forecasting to the short- and midterm forecasting related to BPA's marketing activities. The proposed funding levels allow for a continuation of BPA's efforts to perform necessary short- and midterm analyses. Only a small portion of the forecasting budget is designed to monitor and incorporate changes in procedures for the traditional long-term energy forecast. Most of the contract budget is focused on the areas of hourly load analyses necessary to the shaping of shortand long-term capacity and energy sales now being discussed both in and out of the region. Other major activities include work with our DSI's and data collection called for in the Planning Council's action plan. Question: How are your efforts coordinated with those of the Planning Council? Answer: BPA's forecasting efforts have been closely coordinated with those of the Planning Council in areas of mutual interest. For example, both the BPA and the Planning Council share data and research results provided by staff and consultants; BPA forecasting staff sit on the Planning Council's advisory committees for economics and load forecasts; Council staff sit on BPA's technical advisory committees; and both technical staffs meet on a regular basis to share information. While there is a great deal of coordination, primarily on long-term forecasting issues, the forecasting efforts are not identical. indicated, earlier BPA's forecasting efforts have undergone significant changes since 1980 in response to a changing environment. Our short-term forecasts, hourly load shape analyses As and small area forecast support have been shared with the Planning Council. The Planning Council has no equivalent activity to coordinate, since it is concerned with long-term forecasts for resource planning only. These differences stem largely ftom BPA's needs to address the many operational, marketing, rate development, customer service facility planning, and transmission planning activities unique to our agency. Question: Under current forecasts, with medium load conditions, you indicate that the region will have a substantial surplus until the mid to late 1990's. What are the major assumptions which lead to this forecast and how have these assumptions changed from FY 85? What is the trend in growth in your forecasts over the last 5 years? Answer: BPA's most recent load forecast was completed in FY 1985 (July 1985), and showed a medium case growth of 1.5 percent per year from 1985 to 2005. High and low ranges were also prepared, with growth rates of 2.9 percent and 0.3 percent, respectively. The medium case assumed continued recovery of both the regional and national economies from the recent recession, with real GNP growing at 2.9 percent from 1985 to 1995 and 2.6 percent from 1995 to 2005. Regional nonagricultural employment was projected to grow at 1.8 percent annually and population at 1.2 percent annually. In addition, real electricity rates to the region's ratepayers were projected to be stable throughout the forecast period. On the resource side, in FY 1985, WNP-1 and WNP-3 were assumed to be available for commercial operation in March 1992, and September 1993, respectively. Currently, they are considered to be secured options and are not a part of surplus estimates. The 1986 annual long-term load-forecasting cycle has just begun, with expected completion in July of this year. At this time, we do not expect to see major changes in the outlook for the regional economy or loads. This forecast will include the recently adopted Oregon and Washington building codes and the effects of our recently completed 1986 Resource Strategy (WNP-1 and WNP-3 are in a state of suspended construction and were removed from the load resource balance). In regards to our forecasts over the last five years, the early 1980's saw some rather dramatic reductions in load forecasts as both the real world and forecast methodologies changed. The past two BPA forecasts, prepared in FY 1984 and FY 1985, have shown significant stabilization which we expect to continue this year. Our expectation, at this time, is the new load forecast will continue to recent pattern of load growth stability. Hydro Options Question: What is the status of the hydro options program? Answer: The hydro options test program is approaching option contract negotiations with four small hydro developers from the region. After extensive project evaluation, these four developers were selected as option candidates out of the 16 who responded to a |