2.5.5 Evaluation procedure: Identify system for 

 analysis. 



Because of the trend toward interconnection and 

 coordination among utilities and power systems, it 

 is most appropriate to evaluate NED benefits for 

 hydropower on a system basis, rattier than on the 

 needs of an individual utility or local area. The size 

 of the system would depend on the situation but 

 could consist of a power pool, a National Electnc 

 Reliability Council (NERC) regional area, the mar- 

 keting area of a Federal power marketing adminis- 

 tration, or other geographic region. 



In some cases, physical or institutional con- 

 straints may limit the analysis to a smaller area, but 

 care must be taken to ensure that benefits are not 

 misstated by such analysis. 



2.5.6 Evaluation procedure: Determine need 

 for future generation. 



(a) Estimate future demand for electric power 

 Forecast electric power loads in terms of the 

 annual peak demand period. When a high propor- 

 tion of the generation is from hydropower, a fore- 

 cast of annual energy demand should be made. 

 Also forecast weekly load shapes to represent a 

 minimum of three periods in the year (e.g., typical 

 summer, winter, and spring/fall days) to assist in 

 determining the type of load that a hydropower pro- 

 ject could carry. Load forecasts should reflect the 

 effects of all load management and conservation 

 measures that, on the basis of present and future 

 public and private programs, can reasonably be ex- 

 pected to be implemented duhng the forecast 

 period. Load forecasts should be made and ana- 

 lyzed by sectoral use (e.g., residential, commercial, 

 industnal). Estimate loads at increments of no more 

 than 10 years from the present to a time when the 

 proposed plant will be operating in a state repre- 

 sentative of the majonty of its project life. In the 

 case of staged hydropower development or where 

 generation system resource mixes may change 

 markedly, load forecasts may be appropriate for 20 

 years or more beyond the initial operation date. Ac- 

 count for system exports and reserve requirements. 



(b) Define base system generating resources. 

 Project future generating resources and imports at 

 various points in time without the proposed plan or 

 any alternative plan. Estimate resources for the 

 time periods stated in 2.5.6(a). Provide information 

 on peak capacity and on average annual energy 

 production where a high proportion of the systems 

 generation is hydropower. Data are readily available 

 on projected system resources for about 10 years. 

 Base projected resource additions beyond that time 

 on system studies. Account for retirement of older 



plants as well as the reduction of output of some 

 plants due to age or environmental constraints. 



(c) Evaluate load/resource difference. Compare 

 the loads identified under 2.5.6(a) with the re- 

 sources identified under 2.5.6(b) to determine: (1) 

 when generating resource deficits will occur, (2) the 

 magnitude of these deficits, and (3) what portion of 

 these deficits could be met by the hydropower pro- 

 ject. If nonstructural measures are components of 

 an alternative plan and these measures reduce 

 system loads, the amount of such reduction les- 

 sens system deficits. Hydropower sites can be de- 

 veloped to provide either a base load, mid-range, or 

 peaking service. Evaluate the system demand for 

 each class of hydropower generation. Simple tabu- 

 lation of annual peak and energy loads and re- 

 sources is generally adequate for preliminary stud- 

 ies. Use system load-resource models that account 

 for load characteristics and generating plant operat- 

 ing capabilities, if available, to evaluate accurately 

 the usability of specific projects. 



2.5.7 Evaluation procedure: Determine the 

 most likely non-federal alternative. 



(a) General. Select the one alternative most likely 

 to be implemented in the absence of the proposed 

 Federal project. Begin identification of the most 

 likely alternative to the plan being considered with 

 the least costly alternative. If an alternative with a 

 lesser cost is passed over for a more expensive 

 one, justifiy not selecting the lower cost plan. 



(b) Screen alternatives. The alternatives to a spe- 

 cific hydropower project must be viable in terms of 

 engineering, environmental quality, and other na- 

 tional policy considerations. Engineering viability 

 limits thermal alternatives to commercially available 

 electric powerplants. Environmental viability implies 

 that plant costs include all equipment required to 

 meet environmental quality criteria. National policy 

 considerations include factors such as legal limita- 

 tions on the use of oil, natural gas, and other 

 "scarce" fuels for electric power generation. Each 

 alternative need not in itself deliver service similar 

 in kind to the hydropower project, but the total 

 power system with the alternative must deliver 

 service similar in kind to the system with the hydro- 

 power project. If nonstructural measures or conser- 

 vation are components of an alternative plan and 

 these measures reduce the need for additional ca- 

 pacity or for additional power, the amount of such 

 reduction constitutes provision of service similar in 

 kind; this ensures that evaluation procedures will 

 not be biased against the selection of an alterna- 

 tive that utilizes nonstructural measures. 



(c) Identify the most likely alternative. (1) Com- 

 pare the system with the hydropower project under 



45 



