River Resource Management in the Grand Canyon (1996) / Chapter Skim
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9 POWER ECONOMICS
9 POWER ECONOMICS
Pages 165-185
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From page 165... ...
As a result, power economics and water flows are closely related. Traditionally, Glen Canyon Dam has operated with relatively few constraints so as to maximize the value of its electrical output (Chapter 4~.
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From page 166... ...
Power resources have been the subject of decades of analysis. The utilities potentially affected by changes in operations at Glen Canyon Dam are commonly viewed as having sufficient data and expertise to estimate the adverse effects on their interests.
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From page 167... ...
agreed not to use this increased capacity pending completion of a comprehensive study of the effects of historic and current dam operations on environmental resources. Thus, Glen Canyon Dam has generally been limited to a capacity of 1,300 MW (at 31,500 cfs of flow)
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From page 168... ...
Thus, hydro plants are especially well suited for providing peaking power. With the large turbine capacity at Glen Canyon Dam, traditional operations provided great flexibility to schedule electrical production at times when it would be most valuable.
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From page 169... ...
In part, the distribution of costs associated with altered flows is determined by the contractual arrangements for sale of Glen Canyon Dam electricity. Under existing contracts, WAPA's costs will increase, because it is obligated to supply fixed quantities of peaking power, which it may have to purchase at higher costs from other utilities.
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From page 170... ...
Under the terms of the Colorado River Storage Project Act, revenue from Glen Canyon Dam is intended to support reclamation irrigation projects.
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From page 171... ...
These cost estimates were based solely on a WAPA financial perspective. Moreover, the modeling of Glen Canyon Dam operations did not provide a realistic estimate of the time pattern of power production under the
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From page 172... ...
The modeling of Glen Canyon Dam operations was an improvement over previous work but still did not provide a realistic estimate of the time pattern of power production under the constraints of each flow regime (NRC, 1991~. EDF used ELFIN to evaluate the interim flow regimes proposed by various parties, including WAPA (EDF, 1991~.
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From page 173... ...
. The operation of Glen Canyon Dam also had to be simulated to estimate the time pattern of power production under each flow regime.
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From page 174... ...
SOURCE: Adapted from Power Resources Committee (1994, Fig.
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From page 175... ...
The focus on individual utilities and financial effects also necessitated detailed modeling of WAPA's marketing practices. The data on Glen Canyon Dam's power production had to be combined with estimates of the output from other hydra projects marketed by WAPA to determine the amount of power and energy that would be contracted for sale to preferred customers.
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From page 176... ...
Table 9.1 summarizes the most important numerical results from the power resources studies. In the interest of brevity, data are presented for only three flow regimes.
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From page 177... ...
(-62.1 %) Increase in Economic Costs (relative to No Action)
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From page 178... ...
For the preferred alternative, WAPA's wholesale rates are estimated to increase by about 0.5¢/per kilowatt-hour, but Glen Canyon Dam power would still be highly competitive with alternative sources. Most regional electricitycustomerswould experiencelittle, if any, change intheir retail rates.
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From page 179... ...
For any altered flow regime, some small utility customers may bear a disproportionate share of the costs; however, they also received a disproportionate share of the benefits of low-cost Glen Canyon Dam electricity in previous years. The costs of altered flows may be less than estimated, especially for the
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From page 180... ...
Lower oil and gas prices would reduce the costs of operating the peaking plants used to replace lost capacity at Glen Canyon Dam. The power resources studies also did not explicitly consider the relationship between electricity prices and the amount of energy consumed (price elasticity)
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From page 181... ...
The process was dominated by the entities that historically have controlled and benefited from Glen Canyon Dam power resources, notably BOR, WAPA, and CPtEDA. These entities have a clear incentive to deter implementation of altered flows, which would reduce the value of the dam's electrical output.
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From page 182... ...
In part, the problems with the GOES power resources studies stem from the lack of a continuous open planning process that is accessible to the public. By contrast a very different set of procedures is in place for addressing electric power issues in the Pacific Northwest concerning the Columbia River system.
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From page 183... ...
This process may be delayed, however, by consideration of proposals to privatize WAPA. As mandated by the Grand Canyon Protection Act, WAPA has initiated a Replacement Resources Process to study and report on methods to make up for any reductions in Glen Canyon Dam output.
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From page 184... ...
1995. Operation of Glen Canyon Dam, Colorado River Storage Project, Final Environmental Impact Statement.
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From page 185... ...
Lewis, Chair, NRC Committee to Review Glen Canyon Environmental Studies, Subject: Power System Impact of Potential Changes in Glen Canyon Environmental Studies, April 29, from Michael J Roluti, Chair, Power Resources Committee, Bureau of Reclamation, Upper Colorado Regional Office.
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