PacifiCorp 2007 Integrated Resource Plan (May 30, 2007)

PacifiCorp – 2007 IRPChapter 1 – Executive Summaryment policy and regulatory initiatives that influence the environment in which PacifiCorp operates.One major issue within the power industry marketplace is capacity resource adequacy and associatedstandards for the Western Electricity Coordinating Council (WECC). The pace of newgeneration additions has begun to slow again in the west, raising the question of future resourceadequacy in certain areas. The Western Electricity Coordinating Council 2006 Power SupplyAssessment indicates that the Rocky Mountain sub-region will show a resource deficit by 2010.Another significant issue is the prospect for long-term natural gas commodity price escalationand continued high volatility. Following an unprecedented increase in natural gas commodityescalation and volatility, forecasters expect a medium-term, temporary drop in natural gas commodityprices due to liquefied natural gas (LNG) facility expansion. Price uncertainty will continuebecause greater LNG imports will strengthen the linkage to volatile global gas and energymarkets.One of the largest issues emerging from governmental policy and regulatory initiatives is how toplan given an eventual, but highly uncertain, climate change regulatory regime. Not only havethere been significant policy developments for currently-regulated pollutants, but there have alsobeen important state-level climate change regulatory initiatives. Other regulatory issues includestate renewable portfolio standards, hydropower relicensing, and major relevant provisions of theEnergy Policy Act of 2005.In conjunction with resource planning efforts, PacifiCorp has a greenhouse gas mitigation strategythat includes a public working group to consider emission reduction best practices, carbondioxide scenario analysis for the IRP and procurement programs, renewable generation and demand-sidemanagement resource acquisition plans, and emissions accounting.Transmission constraints, and the ability to address them in a timely manner, represent importantplanning considerations for ensuring that peak load obligations are met on a reliable basis. Variousregional transmission planning processes in the Western Interconnection have developedover the last several years to serve as the primary forums where major transmission projects aredeveloped and coordinated. PacifiCorp is engaged in a number of these planning initiatives.The Energy Policy Act of 2005, the first major energy law enacted in more than a decade, includesnumerous provisions impacting electric utilities. Key provisions include (1) the promotionof clean coal technology, renewable energy, and nuclear power, (2) the encouragement of morehydroelectric production through streamlined relicensing procedures and increased efficiency,(3) the use of time-based metering options, and (4) the provision of mandatory reliability standards.PacifiCorp’s recent resource procurement activities include requests for proposal for east-sidebase load resources and renewable resources. In addition, requests for proposals have been issuedfor demand-side resource programs.2