Which laws does Western operate under?
In marketing electricity, Western must follow many laws, regulations and policies. These include the Reclamation Project Act of 1939, the single most important piece of legislation governing Western’s power marketing activities. It establishes 40-year terms for Western's power sales contracts, and project-specific laws governing how Western can sell the output of particular powerplants. It also identifies certain types of prospective customers who must be given preference in Federal power sales—such as cities, towns and rural electric cooperatives—over other types of prospective customers, such as investor-owned utilities. In addition, under section 9(c), the law outlines the costs recoverable from power rates, in particular operation and maintenance costs, construction costs and interest on the investment. It specifies the repayment responsibility of power users, saying that any sale of electric power must produce enough revenue to cover power users’ share of annual operation and maintenance project costs, plus interest, on their share of the construction investment.
Another important law affecting Western is the Energy Policy Act of 1992, which requires Western customers to evaluate the full range of alternatives in providing reliable electric service to consumers by preparing integrated resource plans. The Energy Planning and Management Program also requires customers to prepare and submit IRPs.
What authority does Western have to regulate local utilities?
None. State public utility commissions regulate investor-owned utilities. Co-op boards and city governments regulate utilities under their control. The Federal Energy Regulatory Commission principally regulates interstate power and transmission sales by investor-owned utilities. FERC also has the authority to confirm, approve or send Western’s proposed rates back to the agency for further study or to disapprove such rates.
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