PROPOSED

WESTERN INTERSTATE ENERGY BOARD

FY 2003-04 WORK PLAN

Western Interstate Energy Board

WORK PLAN 2003 - 2004

The work plan directs staff to undertake programs and projects addressing issues of Board concern. The work plan is also designed to reflect the priorities of the Western Governors’ Association (WGA) and to contribute to the implementation of the WGA work plan.

The Board will review this work plan at its annual meeting on April 22.

MISSION

The Western Interstate Nuclear Compact, the legal basis of the Board, states that the purpose of the Board is to provide the instruments and framework for cooperative efforts to “enhance the economy of the West and contribute to the individual and community well-being of the region’s people.” The Board seeks to achieve this purpose through cooperative efforts among member states/provinces and through cooperative efforts between the West and the federal government in the field of energy. The Board also supports the efforts of the Western Governors’ Association through technical study and policy analysis.

WIEB has the following objectives:

< Provide a forum for identifying, evaluating, and resolving regional energy-related issues;

< Build the capacity of states/provinces to effectively address issues related to the production, distribution and consumption of energy and its byproducts;

< Promote cooperative efforts between the U.S. federal government and western states/provinces which foster the well-being of the region’s people;

< Provide for the timely analysis and sharing of information among western states/provinces on energy-related issues; and

< Provide policy and technical support to the Western Governors’ Association.

PROGRAMS

Programs in the proposed WIEB work plan can be grouped into four categories.

I. Efficient Energy Markets

A. Improve efficiency in the operation and expansion of the western electricity system by promoting

1. Pro-active regional transmission planning

2. Effective monitoring of regional electricity markets

3. Quality analysis of future loads and resources

4. Effective and efficient electric reliability standards

5. Improved demand responsiveness to electricity prices

6. Seamless and efficient generation interconnection procedures

7. Efficient systems of governance of regional electricity decisions

B. Identify and promote common cross-border energy trade opportunities

II. Efficient Management of Energy-Related Programs

A. Improve efficiency in the management of the western electricity system

B. Improve the implementation of the Surface Mining Control and Reclamation Act

C. Improve the timeliness of decisions on the siting of new energy infrastructure through the sharing of information among states/provinces and foster collaboration among states/provinces on interstate projects

III. Energy Byproducts

A. Promote safety in high-level radioactive waste transportation shipments under the Nuclear Waste Policy Act

B. Foster successful active coal mine reclamation and abandoned mine clean-up

C. Foster economically-efficient regulation of air pollution resulting from energy use

D. Enable western fossil fuel resources to compete in a potential carbon-constrained environment

E. Promote natural gas pipeline safety

IV. Information Exchange

A. Expand the quality and timeliness of interstate sharing of information and experience

B. Analyze and report energy developments

I. Efficient Energy Markets

I. A. Improve efficiency in the operation and expansion of the western electricity system by promoting

1. Pro-active regional transmission planning

2. Effective monitoring of regional electricity markets

3. Quality analysis of future loads and resources

4. Effective and efficient electric reliability standards

5. Improved demand responsiveness to electricity prices

6. Seamless and efficient generation interconnection procedures

7. Efficient systems of governance of regional electricity decisions

GOAL Promote actions that contribute to an economically-efficient and reliable western electricity system.

BENEFITS Improved operation of the western electric power system can provide significant economic and environmental benefits to the West. Businesses and citizens of the West spend more than $50 billion annually on electric power (or nearly $700 per capita). Given the interconnected nature of the western electric power system and the diversity of governmental entities (e.g., state PUCs, state siting agencies, FERC, Canadian provinces) exercising regulatory authority over parts of the system, it is essential that there be close communication and cooperation among states and provinces, and with the industry participants in order to foster economic efficiency and achieve other regional objectives, such as stable prices and minimizing environmental impacts.

OBJECTIVES AND STRATEGIES

1. Facilitate implementation of the electricity provisions of the governors’ directives in WGA resolutions 00-09 and 03-03, and report to WGA on the progress being made. The focus will be on:

i. Encouraging the implementation of pro-active regional transmission planning by the Seams Steering Group-Western Interconnection

ii. Exploring ways to improve the quality of the analysis of future Western electricity loads and resources

iii. Supporting legislative efforts of Western governors to enact federal electric reliability legislation and oppose federal intrusion into state retail electricity decisions and transmission siting decisions

iv. Exploring methods of implementing effective monitoring of regional electricity markets

v. Promoting state/provincial policies that will improve demand responsiveness to electricity prices

vi. Promoting policies that provide additional electricity generation options for the region

vii. Exploring, and reporting to governors, options for more effective governance of regional electricity decisions

2. Maintain a forum for discussions: (1) among all governmental entities with jurisdiction over the western grid, including state PUCs, governors’ energy agencies, state facility siting agencies, Canadian provinces, the Federal Energy Regulatory Commission, and the U.S. Department of Energy; and (2) with the western electric power industry. The purpose of the forum is to exchange information and coordinate actions. This effort will: foster regional resolution of issues affecting the western grid (and avoid expensive and sometimes unresponsive resolution through litigation before FERC or the courts); monitor and evaluate the regional implications of industry restructuring initiatives; evaluate the regional implications of developments affecting the western grid, such as proposed FERC rules, federal legislation, new technologies, etc.

BUDGET $160,000

$12,000 from the Western Conference of Public Service Commissioners to support CREPC activities

$6,000 from a grant from DOE on demand response

$46,000 from a grant from DOE on wind issues (which is also reflected under III.C.1.)

$96,000 from unrestricted funds.

Not reflected in the budget are funds from any special assessments on PUCs for support of CREPC activities or potential funds from WGA’s grant applications to DOE on multi-state entities and a regional energy information/analysis/planning system.

I. B. Identify and promote common cross-border energy trade opportunities

GOAL: Expand mutually-beneficial cross border energy trade between Western states, Western

Canadian Provinces and Mexico

BENEFITS: Lower costs for consumers and reduced environmental impacts from energy production,

transportation and use

OBJECTIVES AND STRATEGIES:

1. Support WGA cross-border energy discussions, including assistance in exploring the implementation of a North American Energy Summit

2. Where the activities are beneficial to Western states, provide staff support to WGA’s border energy project

3. Continue Board discussions on energy issues of mutual interest to Western Canadian provinces and Western states (also see IV Information Exchange)

BUDGET $9,000

$9,000 from the WGA border energy project

Not reflected in the budget are potential funds from a WGA grant proposal to DOE to hold a North American Energy Summit in November 2003

II. Efficient Management of Energy-Related Programs

II. A. Improve efficiency in the management of the western electricity system

GOAL To implement efficient decision-making in the operation of the western electric grid

BENEFITS More efficient decision-making can: improve utilization of the western electric transmission and generation system resulting in lowers costs to consumers; resolve issues within the Western Interconnection rather than at FERC or the courts and thereby reduce delay and promote decisions that better reflect the needs of the West; and, provide greater assurance that grid management decisions reflect the public interest.

OBJECTIVES AND STRATEGIES

1. Support state participation in the Western Electricity Coordinating Council and the Seams Steering Group-Western Interconnection

2. Explore the formation of a western regional advisory body, if authorized by pending federal energy legislation

3. Explore the formation of a Western Interconnection regional electricity decision-making mechanism

BUDGET See I.A.

II. B. Improve the implementation of the Surface Mining Control and Reclamation Act

GOAL Improve efficiency in the implementation of SMCRA in the West by promoting state flexibility to allow innovation to meet local conditions, continuing to refocus federal oversight on outcomes not process issues, promoting federal policies that build the technical capacity of state programs, and working to ensure that the federal government lives up to its commitments on sharing the cost of state coal mine regulatory programs.

BENEFITS More efficient administration of SMCRA will lower the costs of implementing the Act for the private sector and government, and improve environmental performance.

OBJECTIVES AND STRATEGIES

1. Review and provide OSM and Congress with advice on the efficient allocation of federal resources, including the funding of state regulatory grants,
federal technical assistance and training for states, and shared computer-based analytic programs.

2. Convene meetings of western states and OSM to resolve outstanding issues.

BUDGET Included in budget for task III.B. below.

II. C. Improve the timeliness of decisions on the siting of new energy infrastructure through sharing of information among states/provinces
and fostering cooperation among states/provinces on interstate projects.

GOAL Assist in the implementation of the WGA Transmission Permitting Protocol in the review of proposed interstate transmission projects.

BENEFITS Improved and timely facility siting decisions will reduce the cost of energy infrastructure, thereby reducing costs to consumers while protecting important environmental and community values.

OBJECTIVES AND STRATEGIES

Share information among states/provinces on facility siting decisions.

BUDGET $10,000 in unrestricted funds.

III. Energy Byproducts

III. A. High-level radioactive waste transportation

GOAL To ensure adequate preparations are made to support the safe and uneventful transportation of spent nuclear fuel and high-level radioactive waste in the West and to provide technical support to WGA on nuclear waste issues.

BENEFITS Protect citizenry from unnecessary risks from the transportation of spent fuel and HLW and ensure that the costs of preparations for shipments are borne by the beneficiaries of such shipments.

OBJECTIVES AND STRATEGIES

1. To evaluate and provide a regional perspective on high-level radioactive waste transportation issues being conducted by the Department of Energy’s Office of Civilian Radioactive Waste Management with the intent of:

< Facilitating communications between western states and the Department of Energy; and

< Identifying and resolving regional transportation concerns to permit the safe and uneventful transportation of spent fuel and HLW in the West.

2. To provide technical expertise in support of WGA nuclear waste programs and policies (WGA resolutions 02-05, 01-03, 00-31)

3. To respond to western state information needs and maintain a rapid information sharing system on the Internet.

BUDGET $10,000 from unrestricted funds

The work plan does not anticipate funds from DOE. (At the end of 1998, funding under a five-year cooperative agreement between the DOE Office of Civilian Radioactive Waste Management and WIEB was eliminated by DOE. Since then, activity within this program has continued at a reduced level using unrestricted funds.)

III. B. Coal mine reclamation

GOAL To clean up abandoned coal (and other) mines under the Surface Mining Control and Reclamation Act and improve state active coal mine regulatory programs.

BENEFITS Cleaning up abandoned mines will improve the environment and reduce public health and safety risks. Improved administration of state coal mine regulatory programs will lessen environmental impacts from coal mining and lower reclamation costs.

OBJECTIVES AND STRATEGIES

1. Pursuant to WGA Resolution 03-02, work with WGA to ensure that any reauthorization of the abandoned mine land fee on coal that expires in 2004 meets the needs of the West, including:

a. Automatic return of the state share of any future collections;

b. Return of the states’ share of the unappropriated balance in the Abandoned Mine Land Fund.

2. Maintain a rapid information sharing system on the Internet.

BUDGET $25,000 from unrestricted funds.

III. C. Foster economically efficient regulation of air pollution resulting from energy use

GOAL Contribute to WGA’s air quality initiatives (Western Regional Air Partnership and AQI) by evaluating the energy implications of the initiatives. The effort will focus on: providing any continuing support to the WRAP’s work to implement its renewable energy and energy efficiency recommendations; and supporting WGA’s investigation of economically-efficient regulation of air pollution through the institution of market trading systems and appropriate pollution pricing signals.

BENEFITS Combustion of fossil fuels is the major contributor to western air quality problems. New approaches to protecting air quality will likely have significant energy implications (e.g., changes in electricity generation technologies, changes in the mix of generation and energy efficiency, potential changes in fuel requirements for motor vehicles). Economically-efficient regulation of emissions from fossil fuel combustion would help to lower the costs of energy services (assuming the same level of overall emissions) and send consumers more accurate price signals on the costs of their energy choices. Energy efficiency and lower emission technologies can be effective in meeting energy and air quality objectives at the lowest cost to western consumers.

OBJECTIVES AND STRATEGIES

1. Provide staff support to the WRAP to help monitor implementation of its renewable energy and energy efficiency recommendations.

2. Provide assistance in implementing Western governors’ renewable energy certificate recommendations (WGA Resolution 03-03) and related
generation tracking programs.

3. Review and provide input on appropriate documents generated by the WGA air quality initiatives.

4. Provide a link between Board members and the WGA air quality initiatives.

BUDGET $14,000

$6,000 from DOE wind grant

$8,000 from unrestricted funds

III. D. Enable western fossil fuel resources to compete in a potential carbon-constrained environment

GOAL Explore opportunities to sequester carbon dioxide in Western terrestrial and geologic systems, thereby enabling western fossil fuel resources to be used in a carbon constrained future.

BENEFITS Continued economic benefits from production of western fossil fuel resources, lower energy costs for consumers, and reduce carbon dioxide in the atmosphere.

OBJECTIVES AND STRATEGIES

Assist WGA in providing an umbrella function for any Western carbon sequestration partnerships that are funded by DOE. This includes fostering common GIS systems, collaboration on technical issues, and assisting on public outreach activities.

BUDGET $63,000 from a DOE grant to WGA

III. E. Promote natural gas pipeline safety

GOAL Promote safety in the operation of Western natural gas pipelines

BENEFITS Prevent injuries, deaths and property damage from failure of natural gas pipelines.

OBJECTIVES AND STRATEGIES

On behalf of WGA, coordinate state participation in the pipeline safety project of the National Association of State Fire Marshalls. Maintain a page on the WIEB web site for pipeline safety issues.

BUDGET $1,000 from unrestricted fund

IV. Information Exchange

IV. A. Expand the quality and timeliness of interstate sharing of information and experiences

GOAL To improve the quality of state/provincial decisionmaking and to coordinate interstate actions affecting regional energy-related interests through the timely sharing of quality information.

BENEFITS Rapid sharing of information among states/provinces: (1) enables coordinated action; (2) avoids unnecessary conflicts resulting from misunderstandings; and (3) reduces costs to individual states and provinces by allowing one state/province to benefit from the experience and analyses of another.

OBJECTIVES AND STRATEGIES

1. Hold meetings to share information and experience on specific topics of common interest

2. Promote an understanding of the objectives of each state/province to allow increased reliance by one state/province on another state/province for
information and analysis

3. Speed the sharing of information through electronic means, particularly the expansion of the WIEB Home Page and e-mail

BUDGET $75,000 from unrestricted funds

IV. B. Analysis and reporting of energy developments

GOAL Provide states/provinces and WGA with timely information and analysis on events affecting their energy-related interests. Issue an annual report that provides a synopsis of Board activities and fulfills the statutory requirements of the Western Interstate Nuclear Compact, the Board’s legal basis.

BENEFITS Analysis and dissemination of information on energy-related developments affecting the West can be done at lower cost by a central staff than by each individual state/province. Capturing these economies of scale lowers costs to individual states/provinces and improves understanding of developments outside of one’s borders.

OBJECTIVES AND STRATEGIES

1. Conduct special analyses at the request of states and provinces and WGA

2. Prepare and post the Board’s annual report on the WIEB Home Page

BUDGET $47,500 from unrestricted funds

The following graph shows the proposed budget by program area.