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38.5.8213    MODELING AND ANALYSIS

(1) A DSU's default supply portfolio planning, resource procurement and decision-making processes should incorporate proven, cost-effective computer modeling and rigorous analyses. A DSU should use modeling and analyses to:

(a) evaluate and quantify probable default supply load characteristics, including trends in load shapes, load growth, load migration to choice and price elasticity of demand;

(b) evaluate the potential effect of various rate designs and demand-side management methods on future loads and resource needs;

(c) evaluate and quantify projected portfolio resource requirements over the planning horizon;

(d) develop competitive resource solicitations, including associated bid evaluation and selection criteria;

(e) develop methods for weighting resource attributes and ranking bid offers. Resource attributes may include, but are not necessarily limited to:

(i) underlying fuel source and associated price volatility and risk, including risks related to future regulatory constraints on environmental impacts such as emissions of carbon dioxide, sulfur dioxide, nitrogen oxides and mercury;

(ii) contributions to achieving the lowest, long-term portfolio cost;

(iii) total life cycle resource costs;

(iv) contributions to achieving optimal resource diversity;

(v) external costs related to environmental emissions and intrusions;

(vi) direct or indirect transmission costs and/or benefits;

(vii) project feasibility, including engineering, development and financing;

(viii) resource availability, reliability and dispatchability;

(ix) supplier/developer creditworthiness; and

(x) supplier/developer experience;

(f) evaluate the performance of alternative resources under various loads and resource combinations through:

(i) scenario analyses;

(ii) portfolio analyses;

(iii) sensitivity analyses; and

(iv) risk analyses;

(g) help the DSU, with input from an advisory committee, inject prudent and informed judgments into the portfolio planning and resource acquisition process;

(h) optimize the mix of portfolio resources in the context of the goals and objectives of these guidelines; and

(i) meet the DSU's burden of proof in prudence and cost recovery filings before the commission.

History: 69-8-403, MCA; IMP, 69-8-403, MCA; NEW, 2003 MAR p. 654, Eff. 4/11/03.

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