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years since the probable date of first commercial operation of the project is about 1998.

Question: Could the necessary transmission and related facilities be constructed without Federal/WAPA involvenent?

Answer: While it would be possible for another entity to construct the project transmission line between the Canadian border and the point of interconnection with the WAPA system, it would still be necessary to use the WAPA system to transmit power to many of the project participants. WAPA's expertise in transmission planning, design, construction, and operation would make WAPA a logical candidate for managing this effort. Also, there may be opportunities for additional power exchanges between WAPA and Manitoba Hydro based on hydraulic and load diversity.

Question: Specifically, who are the customers that have requested Western to negotiate with Manitoba?

Answer: On August 22, 1985, Western held a public information meeting in Sioux Falls, South Dakota, to inform customers about the current status and new developments of the Manitoba sales proposal. During the meeting, Western specifically requested customers to provide written statements as to whether or not they were still interested in the Manitoba sales proposal.

Fifteen customers provided written comments. Thirteen of the fifteen customers have expressed interest in the Manitoba Hydro resources. The total requested power is in the range of 800 to 1150 MW. A list of customers will be supplied for the record.

(The information follows:)

Potential customers

3.

1. Basin Electric Power Cooperative, Bismarck, North Dakota 2. City of Moorhead, Moorhead, Minnesota

Cooperative Power, Eden Prairie, Minnesota

Fremont, Department of Utilities, Fremont, Nebraska 5. Heartland Consumers Power District, Madison, South Dakota 6. Lincoln Electric System, Lincoln, Nebraska

Missouri Basin Municipal Power Agency, Sioux Falls,
South Dakota
Nebraska Municipal Power Pool/Municipal Energy Agency of
Nebraska, Lincoln, Nebraska

Nebraska Public Power District, Columbus, Nebraska
10. Northwestern Public Service Company, Huron, South Dakota
11. Omaha Public Power District, Omaha, Nebraska
12. Willmar Municipal Utilities, Willmar, Minnesota
13. Wyoming Municipal Agency, Lusk, Wyoming

Question: Why is this proposal being advanced given the power surpluses that exist in most of the West, including the Pacific Northwest region?

Answer: Since the cost of the power purchased from Manitoba will be based on a percentage of the cost of alternate thermal power plants proposed for future construction in the Upper Missouri River drainage area, the sale of power from Manitoba will be restricted to WAPA's customers in the Missouri River Basin drainage area, which includes the States of Colorado, Iowa, Kansas, Minnesota, Missouri, Montana, Nebraska, North Dakota, South Dakota, and Wyoming. Load/resource projections for the Mid-Continent Area Power Pool area indicate that there will be a need for significant generation additions or imports in the 1998-1999 time period. The proposed purchase from Manitoba could be utilized to satisfy a portion of that need with comparatively little transmission construction. Power transfers from the Western United States would require considerably more transmission construction in the United States. Additionally, it is likely that the surpluses of economical, base-load capacity that now exist in the West would largely be committed to load by the 1998-1999 time frame with only existing high-cost gas- or oil-fired generation remaining in surplus.

Question: Can the power needs, envisioned by the Manitoba project, be met by domestic sources?

Answer: Future electrical load growth in the project area could be met through the construction of conventional coal-fired or nuclear powerplants in the MAPP area. However, since the cost of the power purchase from Manitoba is to be tied to a negotiated percentage of these alternate costs, the Manitoba purchase, if consummated, would have to be a more economical and environmentally compatible source of power than these other alternatives.

Kansas Transmission Study

Question: Bring the Committee up to date on the Kansas Transmission Study.

Answer: In 1983, the Western Area Power Administration proposed Pick-Sloan Missouri Basin Program Post-1989 Marketing Plan included portions of Kansas in the marketing area. Western does not presently have any electrical facilities in Kansas, nor does it presently serve any customer load in Kansas.

In 1984, Western was approached by the Kansas congressional delegation to examine alternatives for the delivery of Federal power to load centers in Kansas, at the most economic cost. In January 1985, Western and the Southwestern Power Administration initiated a Kansas Transmission Study to determine transmission system modifications to accommodate Federal power deliveries and possible exchanges between the power marketing administrations, and at the same time, requested interested utilities to identify their projected transmission needs in the Kansas, Missouri,

Oklahoma, and Nebraska areas. Fifteen different entities chose to participate. Western recently completed the study. The results of the study indicate that the existing transmission system can accommodate these needs if some minor modifications are made in western Kansas.

An economic analysis was then conducted to determine the costs and benefits associated with the two projects. Western briefed the Kansas Corporation Commission on March 5, 1986, to inform them of the results of the economic analysis. Western will make a presentation to the Kansas congressional delegation in April 1986.

Question: Is this something that is needed from an operational standpoint?

Answer: No, it is not something that is necessary to operate Western's current system. However, it is necessary to accommodate delivery of power into Kansas. Benefits to the delivery of preference power into Kansas include reduced costs to proposed Kansas allottees due to the delivery of Federal power, deferred fossil fuel plant construction and reduced oil use as result of the PMA exchanges, and improved operational flexibility and system reliability as a result of the improved and interconnected transmission systems.

Question: What is the estimated cost to the Federal Government of this proposal?

Answer: The annual transmission cost of delivering preference power into Kansas would range from $3.0 to $7.1 million per year depending on the method of acquisition. The Post-1989 Pick-Sloan Missouri Basin Program Marketing Plan provides several options for acquiring transmission beyond the existing Pick-Sloan system. The options range from the customer paying all costs to Western constructing additional facilities.

Annual transmission and purchased capacity costs associated with the Western/Southwestern resource exchanges that were determined to be economically justifiable would range from $5.3 to $11.7 million per year depending on the method of acquiring a transmission path.

By simultaneously providing for delivery of preference power and PMA exchanges the annual cost savings would be $1.5 to $2 million per year over implementing the programs independently.

The method of financing has not been determined. However, the cost is expected to be borne by the rate payers. Therefore, any funding by the Federal Government would ultimately be repaid by the rate payers.

Question: What additional facilities would be needed to provide this service?

Answer: Several capacitor banks must be added and approximately 80 miles of 115-kV transmission line must be reconductored in western Kansas in order to accommodate both the delivery of power to preference customers in Kansas and the integration of resources between Western and Southwestern Power Administrations. The total annual cost of improvements is estimated to be $0.4 million per year.

Mead-Northwest DC Intertie

Question: How much is included in the 1987 budget request for activities related to the Mead-Northwest DC Intertie?

Answer: Western has included $769,000 in its FY 1987 budget request for planning studies for the Mead-Northwest DC Intertie.

Construction and Rehabilitation

Question: Your statement indicates that of the $84 million requested for Construction and Rehabilitation, $41.1 million, almost 50 percent, is to begin new transmission line additions, substation additions, and service center additions. Why, given tight budget times, is such a large portion of your funding request for initiation of new facilities?

Answer: The Conrad-Shelby 230-kV transmission line is the only significant new facility included in the funding request. Most of the work proposed involves upgrading or rehabilitating existing facilities. Without these facility improvements, Western would not be able to ensure the power system's continued reliability. To ensure reliable operation of its transmission system, Western must rehabilitate, upgrade, or replace transmission facilities which have reached the end of their useful service, have became overloaded, or have sustained damage.

Question: What adverse operational problems are currently being experienced?

Answer: Some of the adverse operational conditions now being experienced are: limited transmission capacity and deteriorated condition of lines in Arizona, Colorado, Montana, and Wyoming; high energy and power losses and reduced reliability in the Cut bank/Shelby area of Montana; reduced reliability and stability in the Colorado River-Phoenix area; reduced reliability because of deteriorated transmission structures and transmission line susceptibility to lightning strikes; reduced reliability due to increasing loads and aging equipment in the Morris, Dawson County, and Sioux City Substations.

Question: What is the total estimated cost of the 15 new projects being initiated in the 1987 budget?

Answer: The total estimated cost is approximately $61 million which includes $10.7 million for the new ConradShelby 230-kv transmission line and approximately $50.3 million for upgrade and rehabilitation of existing facilities.

Question: Please provide for the record a table listing each of these projects in priority order including the total estimated cost and budget request for each.

Answer: I will provide a listing in priority order of the 15 facilities.

(The information follows:)

PY 1987 Facilities
Transmission Lines & Terminal Facilities Total Estimated cost FY 1987

(In thousands of dollars)

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Question: What was the WAPA request to OMB for new contract awards?

Answer: Western's budget request to the Office of Management and Budget for contract awards was approximately $40 million. This amount is essentially equivalent to our congressional budget request.

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