Interior West Clean Energy Study April 24, 2002 Scope of Work The Hewlett Foundation has granted $200,000 to the Land and Water Fund of the Rockies (LAW Fund) in Boulder, CO to assess a long-term Clean Energy Plan for the Interior West. The study will analyze the costs, benefits, and environmental implications of significantly increasing investments in energy efficiency, renewable energy, and distributed generation resources to help meet future electric demand in the western interconnected grid. A Renewable Energy Atlas is under development by the LAW Fund and NWSEED that will provide study inputs. The Atlas will display renewable resources—wind, solar, biomass, geothermal—in a GIS format. From the Atlas, power production potential will be built up for specific areas, based on the renewable resources. Efficiency potential estimates will be developed taking into account several recent studies (WRAP, SWEEP, Utah, Colorado, NWEC, California). Distributed generation's role in meeting future demand will also be assessed. An Advisory Committee is being recruited to help guide and inform the study. Synapse Energy Economics and Tellus Institute have been contracted to model both business-as-usual and the Clean Energy Plan. The PROSYM model will be used to analyze and compare the two plans. Results will be presented for 26 PROSYM "TransAreas," discrete electric system control areas, as well as at the state and regional levels. Results will be reported for 2008 (five years), 2013 (ten years), and 2020 (17 years). While the study's focus is the Interior West, the region, California and the Northwest will be modeled to show study results for the interconnected western power grid. The BAU plan will rely mostly on fossil fuel (natural gas) to meet loads, while the Clean Energy Plan will be developed to include an aggressive, but feasible set of clean power options, balancing goals of increasing clean power development and reasonable electricity costs. For both the BAU plan and the Clean Energy Plan transmission between the TransAreas will be modeled to assess needs for upgrades to transmission constraints. The costs of the BAU plan will be compared to the costs of the Clean Energy Plan and annual S02, NOX, and C02 emissions for the two plans will be identified. In addition, risk analysis will focus on fossil fuel prices and increased environmental regulation, such as policies to reduce carbon emissions, including several scenarios with varied assumptions about fuel price and carbon reduction policies . Policy recommendations to achieve the Clean Energy Plan will be included in the study. The U.S. DOE is funding an analysis of the potential benefits of renewable resources and distributed generation to alleviate transmission constraints. This component will investigate different configurations of the resources that make up the clean energy plan to determine if there are certain configurations that best address transmission constraints and regional electric system reliability. The study will be completed and reported to regional stakeholders at the end of 2002. For more information contact John Nietsen 303 444-1 188 x 232, jnielsen@lawfund.org or Ron Lehr 303 504 0940, rllehr(Smsn.corn.