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Rule Title: TRANSPARENCY AND DOCUMENTATION
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Department: PUBLIC SERVICE REGULATION
Chapter: UTILITY DIVISION
Subchapter: Default Electric Supplier Procurement Guidelines
 
Latest version of the adopted rule presented in Administrative Rules of Montana (ARM):

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38.5.8220    TRANSPARENCY AND DOCUMENTATION

(1) A utility should thoroughly document the exercise of its judgment in implementing all aspects of the guidelines, including any deviations from the framework set forth in these guidelines.

(2) A utility must procure and manage a portfolio of electricity supply resources to serve the full load requirements of its customers. The commission must allow a utility to recover all costs it prudently incurs to perform this function. Whether the costs a utility incurs are prudent is, in part, directly related to whether its resource procurement process was conducted prudently. It is vital that a utility document its portfolio planning, management and electricity supply resource procurement activities to justify the prudence of its resource procurement decisions. The better a utility documents the steps involved in its resource procurement process and explains how and why decisions were made during procurement and in developing management strategies, the easier it is to satisfy its burden of proof. When a utility requests cost recovery related to the procurement of electricity supply resources it should, as applicable:

(a) document and explain all due diligence regarding the qualification of bidders and resource offers, including why selected bidders were sufficiently qualified financially and technically to warrant further evaluation of the offer based on the resource needs assessment;

(b) provide and explain the calculation of all cost estimates for all resource alternatives considered;

(c) list and describe all resource attributes considered in evaluating resource alternatives and how the attributes are relevant to the evaluation of potential resources based on the resource needs assessment;

(d) explain how the identified resource attributes were weighted as part of the resource evaluation and discuss the trade-offs between alternative resources that have different attributes and various weights;

(e) document and explain the use of the ranking methodology and decision criteria used to evaluate resource alternatives;

(f) document and explain computer modeling and analysis designed to assess how various potential resources fit with existing resources and contribute to optimizing the overall portfolio;

(g) document relevant industry practices, instruments, and actions to procure resources and manage risk observed in other utilities in the Western Electricity Coordinating Council regarding portfolio design, to the extent such practices form the basis for a utility's decisions;

(h) document and explain how and when management injected its judgment onto analyses of resource alternatives, final selection, and contract negotiations, and the impact of management judgment; and

(i) document the discussion and recommendations of the utility's advisory committee.

History: 69-8-403, MCA; IMP, 69-8-403, MCA; NEW, 2003 MAR p. 654, Eff. 4/11/03; AMD, 2008 MAR p. 575, Eff. 3/28/08.


 

 
MAR Notices Effective From Effective To History Notes
38-2-201 3/28/2008 Current History: 69-8-403, MCA; IMP, 69-8-403, MCA; NEW, 2003 MAR p. 654, Eff. 4/11/03; AMD, 2008 MAR p. 575, Eff. 3/28/08.
4/11/2003 3/28/2008 History: 69-8-403, MCA; IMP, 69-8-403, MCA; NEW, 2003 MAR p. 654, Eff. 4/11/03.
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