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CONSTRUCTION AND REHABILITATION

The total fy 1987 construction and rehabilitation program

requirement is $84 million, including $77.7 million of new budget

authority and application of prior year balances of $6.3 million,

Improvements to facilities

During FY 1985, work was completed on 16 substation additions, 23 miles of transmission line, the 200 MW Miles City AC-DC-AC Converter Station, and I communications system addition. In the current fiscal year, we plan to complete work on 18 substation additions, 5 communication system additions, and 3 operation and maintenance (O&M) service building additions. Also, over 370 miles of transmission line will be reconductored, rebuilt, or constructed in FY 1986.

of the FY 1987 total program activity requirement of $84 million, $30.5 million or 36 percent is needed to complete work on 10 substation additions, 3 O&M service center additions, and 1 communication system addition. Also, approximately 400 miles of transmission line will be reconductored, rebuilt, or constructed in FY 1987. Work will continue on the Western Colorado 345-kV additions and other transmission line improvements and substation equipment additions.

The planned installation of phase-shifting transformers

(PSTs) on the Long Hollow-San Juan 345-kV Transmission Line

is coincidental with the Western Colorado 345-kV additions.

Inadvertent (loop) flow has been a problem on the major

transmission lines in the Western United States for years.

These unscheduled flows reduce the effective capacity of transmission lines. They are a significant problem because utilities are unable to make full use of their transmission

system.

With discontinuance of the Western Systems Coordinating Council Loop Flow Administrative Procedures, transmission systems must now accommodate 100 percent loop flow and have had actual

flow exceed transfer capability before requesting assistance from member systems. Extensive studies have indicated that Psts on

the new Long Hollow-San Juan 345-kV Transmission Line and on the existing Lost Canyon-Shiprock 230-kV Transmission Line can

alleviate some of the problems with inadvertent flows.

Discussions are underway with neighboring utilities to advise

them of the effects of these installations and to explore the use

of PSTs in other locations.

Approximately $41.1 million or 49 percent of the total requirement of $84 million is for new contract awards for 5 transmission line additions and improvements in 4 states, 7 substation additions, and 3 O&M service center additions.

About $12.4 million or 15 percent of the total requirement of $84 million will be used to continue studies for future facilities. Highlights of significant studies follow.

Studies for Future Facilities

The California-Oregon Transmission Project

Since the Congress approved the California-Oregon Transmission Project (Project) plan in the FY 1985 Supplemental Appropriations Act (Public Law 99-88), the Project Participants

have approved a Project Development Agreement (PDA) that provides

for up to $27.1 million in non-Federal funds for continuation of

environmental studies, power system studies, land services,

engineering analysis, and design activities. Western is a party

to the PDA and is providing services on a reimbursable basis for the Project. Those services include environmental work required by the National Environmental policy Act and engineering work

associated with the upgrade of the Federal CVP facilities.

Western completed transmission tower tests in December 1985

confirming the ability to convert the existing 230-kV towers to

500-kV in the 200-mile uprate section of the 330-mile project.

Since the upgraded facilities will still remain an important

integral part of the CVP, Western plans to use appropriated funds

to proceed with negotiations for perfection of its existing easements along the existing 230-kv right-of-way upon completion of the environmental process. The project has not adopted an official schedule for an inservice date, but the latest estimate is for mid-1991. With the recent determination that additional facilities would be needed in the south-central part of California in order to fulfill various commitments in the Project agreements, some delays in the Project may occur. Also, an indepth study of Project alternatives other than those described in the Project agreements has been suggested by one of the Participants which could result in Project delays. Western plans to begin the construction phase of the Project in FY 1988 on those elements of the Project for which we have construction responsibility, including substations at Redding and Tracy and the line upgrade. The portion of the Project for which Western is the construction manager is estimated at about $170 million, and will be totally funded with up-front financing by the other participants. We will keep the Subcommittee informed of our

progress and the major developments.

The Pacific Northwest-Pacific Southwest Intertie

Mead-Phoenix DC Intertie (Phase 1): Western, Salt River

Project, the Southern California Public Power Authority, and the Modesto-Santa Clara-Redding Public Power Agency are the Project participants. Developmental work for the Mead-Phoenix DC Intertie is nearly completed and a commitment to construct is

scheduled for the late 1986 to mid-1987 time period, with a scheduled inservice date of 1991 or 1992. Except for Western's planning expenses, the Project will be financed by non-Federal participants.

Mead-Adelanto DC Intertie (Phase II): The Mead-Phoenix

Project participants are also planning possible reinforcement to the transmission system between southern Nevada and southern California. If built, this project will be interconnected

with Phase I at Western's Mead Substation,

Mead-Northwest DC Intertie (Phase III): Western and

interested entities have conducted extensive feasibility studies in both regions. In concert with 39 identified utility entities,

Western will continue planning work in 1986, including

preliminary technical studies, environmental review and contract

negotiations.

The Manitoba Hydro Project

At the request of our customers, Western has been involved

in discussions and negotiations with the Provincial Government of Manitoba (Manitoba) for a possible long-term power supply arrangement from a proposed Canadian hydroelectric powerplant on the Nelson River. Based on our customers' letters of interest in such an arrangement, Western and Manitoba have signed a letter of intent which outlines the basic sales principles. These

principles state that Manitoba will build and sell the entire output of a proposed 1,275-MW hydroelectric powerplant for

35 years at a negotiated percentage of the average cost of the

next two coal-fired thermal powerplants to be built in the

Missouri River area. The proposed powerplant in Manitoba is

scheduled to be placed in service between 1995 and 1998. Before

the final contractual arrangements can be executed, Manitoba

and Western's customers must agree upon the detailed costs and

purchase percentage of the proposed thermal alternative

Studies to identify the costs and needed transmission facilities south of the Canadian border are currently underway. Any needed facilities would be financed by Western's customers.

Kansas Transmission Study

Western is involved in planning and power marketing activities to provide service from existing resources to eligible preference power customers in Kansas. In cooperation with the Southwestern Power Administration (SWPA) and other interested utilities, the planning study has been expanded to investigate a resource integration program between Western and SWPA to take advantage of hydrodiversity between the different river basins.

System Resource Integration Study

Western is currently engaged in hydrological and transmission system studies to determine additional opportunities for marketing and operating the Federal hydropower resources. Using the combined hydrology of all of the river basins in Western's control area, Western is examining the potential for additional firm power, sharing capacity reserves among operating areas to assure adequate generating capacity when adverse water conditions occur in one of the basins, and identifying transmission bottlenecks. This study work is scheduled for completion in

early FY 1987.

SYSTEM OPERATION AND MAINTENANCE

The total fy 1987 O&M program activity requirement is $86.2 million, including $85.9 million of budget authority and application of prior year balances of $0.3 million. Our

FY 1987 appropriation request for system operation and mainte

nance of $85.9 million includes $3.5 million of permanent appropriation authority for the Boulder Canyon Project. The increase of $11.7 million in total program activity require

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