[Federal Register Volume 64, Number 129 (Wednesday, July 7, 1999)]
[Proposed Rules]
[Pages 36609-36615]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-17113]


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DEPARTMENT OF AGRICULTURE

Rural Utilities Service

7 CFR Part 1710

RIN 0572-AB05


Load Forecasts

AGENCY: Rural Utilities Service, USDA.

ACTION: Proposed rule.

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SUMMARY: The Rural Utilities Service (RUS) is proposing to amend its 
regulations to revise requirements for borrower load forecasts and load 
forecast work plans (historically referred to as power requirements 
studies and power requirements study work plans). The proposed changes 
would reduce the level of detail required in load forecasts filed by 
small power supply borrowers and their members and by distribution 
borrowers unaffiliated with a large power supply borrower. The proposed 
changes also would give borrowers greater flexibility in preparation of 
load forecasts required to be submitted to RUS.

DATES: Written comments must be received by RUS or carry a postmark or 
equivalent by September 7, 1999.

ADDRESSES: Written comments should be addressed to Georg A. Shultz, 
Chief, Energy Forecasting Branch, Electric Staff Division, Rural 
Utilities Service, U. S. Department of Agriculture, 1400 Independence 
Ave., SW., Room 1246-SBldg., STOP 1569, Washington, DC 20250-1569. RUS 
requests a signed original and three copies of all comments (7 CFR 
1700.4). Comments will be available for public inspection during 
regular business hours (7 CFR 1.27(b)).

FOR FURTHER INFORMATION CONTACT: Georg A. Shultz, Chief, Energy 
Forecasting Branch, Electric Staff Division, Rural Utilities Service, 
U.S. Department of Agriculture, 1400 Independence Ave., SW., Room 1246-
SBldg., STOP 1569, Washington, DC 20250-1569, telephone number: (202) 
720-1920, fax: (202) 720-7491, E-mail: [email protected].

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This proposed rule has been determined to be not significant for 
purposes of Executive Order 12866 and, therefore, has not been reviewed 
by the Office of Management and Budget (OMB).

Executive Order 12988

    This proposed rule has been reviewed in accordance with Executive 
Order 12988, Civil Justice Reform. RUS has determined that this 
proposed rule meets the applicable standards provided in Section 3 of 
the Executive Order. In accordance with the Executive Order and the 
rule: (1) all state and local laws and regulations that are in conflict 
with this rule will be preempted; (2) no retroactive effect will be 
given to this rule and (3) in accordance with Sec. 212(e) of the 
Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 
Sec. 6912(e)) administrative appeal procedures, if any are required 
must be exhausted prior to initiating litigation against the Department 
or its agencies.

Regulatory Flexibility Act Certification

    The Administrator of RUS has determined that a rule relating to 
RUS' electric loan program is not a rule as defined in the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.) and, therefore, the Regulatory 
Flexibility Act does not apply to this rule. RUS borrowers, as a result 
of obtaining Federal financing, receive economic benefits that exceed 
any direct economic costs associated with complying with RUS 
regulations and requirements.

Information Collection and Recordkeeping Requirements

    The reporting and recordkeeping requirements contained in the 
proposed rule were approved by the Office of Management and Budget 
(OMB) pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35) under control number 0572-0032.
    Send questions or comments regarding this burden or any other 
aspect of this collection of information, including suggestions for 
reducing the burden to F. Lamont Heppe, Director, Program Development 
and Regulatory Analysis, Rural Utilities Service, 1400 Independence 
Ave., SW, Room 4034-SBldg., STOP 1522, Washington, DC 20250-1522.

Unfunded Mandates

    This proposed rule contains no Federal mandates (under the 
regulatory provision of Title II of the Unfunded Mandates Reform Act) 
for State, local, and tribal governments, or the private sector. Thus, 
this proposed rule is not subject to the requirements of section 202 
and 205 of the Unfunded Mandates Reform Act.

National Environmental Policy Act Certification

    The Administrator of RUS has determined that this proposed rule 
will not significantly affect the quality of the human environment as 
defined by the National Environmental Policy Act of 1969 (42 U.S.C. 
4321 et seq.). Therefore, this action does not require an environmental 
impact statement or assessment.

Catalog of Federal Domestic Assistance

    The program described by this proposed rule is listed in the 
Catalog of Federal Domestic Assistance Programs under number 10.850, 
Rural

[[Page 36610]]

Electrification Loans and Loan Guarantees. This catalog is available on 
a subscription basis from the Superintendent of Documents, U.S. 
Government Printing Office, Washington, DC 20402-9325, telephone number 
(202) 512-1800.

Executive Order 12372

    This proposed rule is excluded from the scope of Executive Order 
12372, Intergovernmental Consultation which may require consultation 
with state and local offices. A final rule related notice entitled 
``Department Programs and Activities Excluded from Executive Order 
12372,'' (50 FR 47034) determined that RUS loans and loan guarantees 
were not covered by Executive Order 12372.

Background

    The Rural Utilities Service (RUS) makes and guarantees loans to 
furnish and improve electric service in rural areas pursuant to the 
Rural Electrification Act of 1936, 7 U.S.C. 901 et seq. (RE Act). Under 
the RE Act, RUS may make or guarantee a loan only if the Administrator 
determines that the security for the loan is reasonably adequate and 
that the loan will be repaid within the time agreed. Most borrowers 
apply for a new loan to meet system needs every two to three years. The 
security for these loans is generally a first lien on the borrower's 
electric system, evidenced through the filing of a mortgage. In order 
to determine the feasibility of a new loan and whether borrowers will 
have sufficient revenues to repay existing loans, RUS requires most 
borrowers to file load forecasts, historically called ``power 
requirements studies'' by RUS, containing current and detailed 
information and analyses on existing and expected future loads. 
Detailed information from the load forecasts are used in RUS' 
independent analysis and oversight of borrower systems.
    RUS regulations on the preparation and approval of power 
requirements studies and power requirements work plans, contained at 7 
CFR part 1710, subpart E, were last revised in 1992, at 57 FR 1053 and 
57 FR 4513. Since then, the business and regulatory environment in the 
electric industry has undergone rapid change. State regulatory 
agencies, power supply systems, power pools, and other entities are 
modifying their power planning processes and requirements in the light 
of competitive changes in the industry. Even greater transformations 
lie ahead as many states move to adopt retail competition. In the years 
since the existing regulations were adopted, both RUS and our borrowers 
have gained greater familiarity with the development and use of load 
forecasts, and supporting analyses and data and the experience and 
sophistication of RUS financed systems have increased.
    In response to changes in the industry and the Administration's 
ongoing commitment to improving customer service, RUS has amended a 
number of its regulations and practices involving its oversight of 
borrower systems to update and streamline these requirements. This 
proposed regulation is part of RUS' continuing effort to improve 
customer service.
    This proposed rule implements recommendations to modify load 
forecast requirements which arose out of the RUS strategic planning 
process. The proposed changes simplify the procedure and minimize the 
detail of information RUS needs for loan feasibility determinations. 
The proposed revisions to the existing rule balance RUS' continuing 
need to maintain current up-to-date load forecast information for 
electric borrowers with its goal of reducing regulatory requirements 
and burdens on borrowers.
    In the usual course of business, all prudent utilities engage in a 
continuing planning process incorporating objective load forecasts in 
order to provide reliable electric service for their existing and 
future customers. Borrowers submit their load forecasts and load 
forecast work plans to RUS in order to provide the necessary support 
for RUS approval of loans and a basis for RUS to monitor future 
borrower performance for loan security purposes. The proposed rule 
would modify the existing requirements and reduce the number of 
borrower systems required to maintain current load forecasts on file 
with RUS. The proposed changes would allow borrowers greater 
flexibility in preparation of the load forecasts and supporting 
information submitted to RUS. The proposed changes will reduce burdens 
on both borrowers and the RUS electric program.

Summary of Proposed Changes

Definitions

    The proposed rule makes several conforming changes to the 
definitions in 7 CFR part 1710, subpart A. The terms ``load forecast'' 
and ``load forecast work plan'' are added to conform with overall 
electric industry usage of these terms. The terms ``power requirement 
study'' and ``power requirement study work plan'' will continue to be 
defined in 7 CFR part 1710, subpart A, since these terms continue to be 
used in other subparts. The term ``load forecast'' has the same 
definition as ``power requirements study'' and the term ``load forecast 
work plan'' has the same definition as ``power requirement study work 
plan.'' The terms ``approved load forecast'' and ``approved load 
forecast work plan'' have been added to clarify those load forecasts 
and load forecast work plans that RUS has determined are current for 
RUS purposes and have been approved by RUS pursuant to 7 CFR part 1710, 
subpart E.

Requirements to File Load Forecasts and Load Forecast Work Plans

    Load forecasts are one of four primary documents required to be 
submitted in support of applications for RUS loans and loan guarantees 
(Sec. 1710.152). Load forecasts aid in RUS analysis of feasibility for 
loan approval and RUS review of loan security. RUS has required the 
larger power supply borrowers and their member systems to maintain an 
approved load forecast and approved load forecast work plan. As a 
result, approved load forecasts for these borrower's systems are in 
place and allow more expeditious review of requests for RUS assistance.
    Under both the existing regulations and the proposed rule changes, 
whether and when a borrower must maintain an approved load forecast or 
approved load forecast work plan is generally determined by the value 
of the borrower's assets or total utility plant and whether a borrower 
is affiliated with a power supply borrower that is required to maintain 
an approved load forecast and approved load forecast work plan.
    Under existing regulations, power supply borrowers with total 
assets over $300 million and distribution borrowers that own generation 
and transmission plant valued at over $300 million are required to 
maintain an approved load forecast and an approved load forecast work 
plan. Other RUS borrowers with total assets over $300 million must 
maintain an approved load forecast and submit it to support requests 
for RUS financing, approval of long-term power contracts, and other 
actions. Power supply borrowers with total assets over $300 million and 
their member power supply and distribution borrowers must coordinate 
their load forecasts in accord with an approved load forecast work 
plan.
    The proposed rule uses total utility plant instead of total assets 
to determine these thresholds. Use of total utility plant instead of 
total assets conforms with other RUS requirements and relates directly 
to the borrowers utility plant which is used to service the loads. The 
proposed rule would raise the

[[Page 36611]]

threshold from $300 million to $500 million for borrowers required to 
maintain an approved load forecast and approved load forecast work plan 
on an ongoing basis. All power supply borrowers with total utility 
plant of less than $500 million (and their affiliated members that are 
RUS borrowers) will no longer be required to maintain and update load 
forecasts on a periodic basis. These borrowers will be required to have 
an approved load forecast when they apply for new financing and under 
certain other circumstances. This change is proposed to reduce the 
number of borrowers required to submit load forecasts on a routine 
basis and to closely monitor borrowers with large loans made or 
guaranteed by RUS.
    The existing regulations provide that power supply borrowers with 
total assets of less than $300 million that are not members of any 
other power supply borrower with total assets over $300 million are not 
required to maintain an approved load forecast or approved load 
forecast work plan on an ongoing basis. However, these power supply 
borrowers must have an approved load forecast to support a request for 
any loan or loan guarantee over $25 million or more than ten percent of 
the borrower's total utility plant, whichever is smaller, and for RUS 
approval of a long-term power contract. The proposed rule would raise 
from $25 million to $50 million the loan value requiring an approved 
load forecast by power supply borrowers not otherwise required to 
maintain an approved load forecast.
    The existing regulations provide that distribution borrowers with 
total assets of less than $300 million that are not affiliated with a 
power supply borrower are not required to maintain an approved load 
forecast or approved load forecast work plan. On an ongoing basis, 
these smaller unaffiliated distribution borrowers must have an approved 
load forecast for loans of $3 million or 10 percent of utility plant, 
whichever is smaller. Under the proposed rule, the minimum loan 
application for distribution borrowers that would require an approved 
load forecast would be $3 million or 5 percent of total utility plant, 
whichever is greater. These changes are being proposed to reduce 
burdens on small borrowers with minimal outstanding loans made or 
guaranteed by RUS.

Requirements for Load Forecasts

    The proposed rule revises requirements for the contents of load 
forecasts and approval criteria to give borrowers and RUS greater 
flexibility in compliance with RUS regulations. Changes in the electric 
utility industry are likely to dramatically alter utility planning and 
forecasting practices. RUS recognizes that, in addition to complying 
with RUS requirements, borrowers need to prepare load forecast and 
planning documents for a variety of other external reporting purposes 
such as for state utility commissions, regional reliability planning, 
or to comply with terms of power supply agreements. To reduce burdens 
on borrowers, where practicable, RUS will accept load forecasts 
prepared for those other purposes as long as the information and 
analyses needed by RUS are included and are compatible with RUS 
applications. As is the practice at present, RUS expects that borrowers 
will continue to consult with RUS during the preparation and review of 
their load forecasts to resolve any uncertainties.
    Under the existing rules, all borrower load forecasts must meet the 
same requirements for scope, content, and supporting analysis and 
models, unless waived by RUS. Under the proposed rule, load forecasts 
and supporting data submitted by small distribution borrowers that are 
unaffiliated with large power supply borrowers would not have to meet 
the same standards as forecasts submitted by large power supply 
borrowers and their members.
    RUS does not believe reducing the load forecasting filing 
requirements will lead to any reduction in borrower's attention to the 
importance of load forecasting in their overall financial and system 
planning needed to assure reliable, affordable service for their 
customers. Borrowers will continue to conduct load forecasting as part 
of prudent utility practice in the ordinary course of business.

Confidentiality of Load Forecasts and Supporting Information

    Restructuring of the electric power industry will likely increase 
the potential competitive harm to a borrower from the disclosure of 
commercially sensitive and confidential business information in the 
load forecast. RUS understands that borrowers may consider the 
information contained in the load forecasts and supporting data as 
commercially valuable, proprietary and confidential business 
information. RUS will not release information contained in the load 
forecast except as provided by law pursuant to 7 CFR part 1, The 
Freedom of Information Act (5 U.S.C. 552). When, in the course of 
responding to a Freedom of Information Act request, RUS cannot readily 
determine whether the information obtained from the borrower is 
privileged or confidential business information, RUS will obtain and 
consider the views of the borrower concerning the information and 
provide the borrower an opportunity to object to any decision to 
disclose the information. Borrowers should be aware that in order for 
RUS to withhold release of information it must be determined that such 
release will result in substantial harm to the borrower.

List of Subjects in 7 CFR Part 1710

    Electric power, Electric utilities, Loan programs--energy, 
Reporting and recordkeeping requirements, Rural areas.
    For the reasons set out in the preamble, RUS proposes to amend 7 
CFR chapter XVII as follows:

PART 1710--GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO 
INSURED AND GUARANTEED ELECTRIC LOANS

    1. The authority citation for part 1710 is revised to read as 
follows:

    Authority: 7 U.S.C. et seq., 1921 et seq., and 6941 et seq.

    2. Section 1710.2(a) is amended by revising and adding the 
following definitions in alphabetical order:


Sec. 1710.2  Definitions and rules of construction.

* * * * *
    Approved load forecast means a load forecast that RUS has 
determined is current for RUS purposes and has been approved by RUS' 
pursuant to 7 CFR part 1710, subpart E.
    Approved load forecast work plan means a load forecast work plan 
that RUS has determined is current for RUS' purposes and has been 
approved pursuant to 7 CFR part 1710, subpart E.
* * * * *
    Load forecast means the thorough study of a borrower's electric 
loads and the factors that affect those loads in order to determine, as 
accurately as practicable, the borrower's future requirements for 
energy and capacity.
    Load forecast work plan means the plan that contains the resources, 
methods, schedules, and milestones to be used in the preparation and 
maintenance of a load forecast.
* * * * *
    Power requirements study (PRS) has the same meaning as load 
forecast.
* * * * *
    PRS work plan has the same meaning as load forecast work plan.
* * * * *
    3. Revise paragraph 1710.152(a) to read as follows:

[[Page 36612]]

Sec. 1710.152   Primary support documents.

* * * * *
    (a) Load forecast. The load forecast provides the borrower and RUS 
with an understanding of the borrower's future system loads, the 
factors influencing those loads, and estimates of future loads. The 
load forecast provides a basis for projecting annual electricity (kWh) 
sales and revenues, and for engineering estimates of plant additions 
required to provide reliable service to meet the forecasted loads. 
Subpart E of this part contains the information to be included in a 
load forecast and when an approved load forecast is required.
* * * * *
    4. Revise subpart E of part 1710 to read as follows:

Subpart E--Load Forecasts

Sec.
1710.200  Purpose.
1710.201  General.
1710.202  Requirement to prepare a load forecast-power supply 
borrowers.
1710.203  Requirement to prepare a load forecast-distribution 
borrowers.
1710.204  Filing requirements for borrowers that must maintain a 
current RUS approved load forecast on an ongoing basis.
1710.205  Minimum requirements for all borrower load forecasts.
1710.206  Requirements for load forecasts prepared pursuant to RUS 
approved load forecast work plans.
1710.207  RUS approval criteria for approval of load forecasts by 
distribution borrowers not required to maintain a current load 
forecast on an ongoing basis.
1710.208  RUS approval criteria for load forecasts submitted by all 
power supply borrowers and by distribution borrowers required to 
maintain a current load forecast on an ongoing basis.
1710.209  Requirements for load forecast work plans.
1710.210  Waiver of requirements or approval criteria.
1710.211--1710.249--[Reserved]

Subpart E--Load Forecasts


Sec. 1710.200   Purpose.

    This subpart contains RUS policies for the preparation, review, 
approval and use of load forecasts and load forecast work plans. A load 
forecast is a thorough study of a borrower's electric loads and the 
factors that affect those loads in order to estimate, as accurately as 
practicable, the borrower's future requirements for energy and 
capacity. The load forecast of a power supply borrower includes and 
integrates the load forecasts of its member systems. An approved load 
forecast, if required by this subpart, is one of the primary documents 
that a borrower is required to submit to support a loan application.


Sec. 1710.201   General.

    (a) The policies, procedures and requirements in this subpart are 
intended to implement provisions of the loan documents between RUS and 
the electric borrowers and are also necessary to support approval by 
RUS of requests for financial assistance.
    (b) Notwithstanding any other provisions of this subpart, RUS may 
require any power supply or distribution borrower to prepare a new or 
updated load forecast for RUS approval or to maintain an approved load 
forecast on an ongoing basis, if such documentation is necessary for 
RUS to determine loan feasibility, or to ensure compliance under the 
loan documents.


Sec. 1710.202   Requirement to prepare a load forecast--power supply 
borrowers.

    (a) A power supply borrower with a total utility plant of $500 
million or more must maintain an approved load forecast that meets the 
requirements of this subpart on an ongoing basis and provide an 
approved load forecast in support of any request for RUS financial 
assistance. The borrower must also maintain an approved load forecast 
work plan. The borrower's approved load forecast must be prepared 
pursuant to the approved load forecast work plan.
    (b) A power supply borrower that is a member of another power 
supply borrower that has a total utility plant of $500 million or more 
must maintain an approved load forecast that meets the requirements of 
this subpart on an ongoing basis and provide an approved load forecast 
in support of any request for RUS financial assistance. The member 
power supply borrower may comply with this requirement by participation 
in and inclusion of its load forecasting information in the approved 
load forecast of its power supply borrower. The approved load forecasts 
must be prepared pursuant to the RUS approved load forecast work plan.
    (c) A power supply borrower that has total utility plant of less 
than $500 million and that is not a member of another power supply 
borrower with a total utility plant of $500 million or more must 
provide an approved load forecast that meets the requirements of this 
subpart in support of an application for any RUS loan or loan guarantee 
which exceeds $50 million. The borrower is not required to maintain on 
an ongoing basis either an approved load forecast or an approved load 
forecast work plan.


Sec. 1710.203   Requirement to prepare a load forecast--distribution 
borrowers.

    (a) A distribution borrower that is a member of a power supply 
borrower with a total utility plant of $500 million or more must 
maintain an approved load forecast that meets the requirements of this 
subpart on an ongoing basis and provide an approved load forecast in 
support of any request for RUS financial assistance. The distribution 
borrower may comply with this requirement by participation in and 
inclusion of its load forecasting information in the approved load 
forecast of its power supply borrower. The distribution borrower's load 
forecast must be prepared pursuant to the approved load forecast work 
plan of its power supply borrower.
    (b) A distribution borrower that is a member of a power supply 
borrower which is itself a member of another power supply borrower that 
has a total utility plant of $500 million or more must maintain an 
approved load forecast that meets the requirements of this subpart on 
an ongoing basis and provide an approved load forecast in support of 
any request for RUS financial assistance. The distribution borrower may 
comply with this requirement by participation in and inclusion of its 
load forecasting information in the approved load forecast of its power 
supply borrower. The distribution borrower's approved load forecast 
must be prepared pursuant to the approved load forecast work plan of 
the power supply borrower with total utility plant in excess of $500 
million.
    (c) A distribution borrower that is a member of a power supply 
borrower with a total utility plant of less than $500 million must 
provide an approved load forecast that meets the requirements of this 
subpart in support of an application for any RUS loan or loan guarantee 
that exceeds $3 million or 5 percent of total utility plant, whichever 
is greater. The distribution borrower may comply with this requirement 
by participation in and inclusion of its load forecasting information 
in the approved load forecast of its power supply borrower. The 
borrower is not required to maintain on an ongoing basis either an 
approved load forecast or an approved load forecast work plan.
    (d) A distribution borrower with a total utility plant of less than 
$500 million and that is unaffiliated with a power supply borrower must 
provide an approved load forecast that meets the requirements of this 
subpart in support of an application for any RUS loan or loan guarantee 
which exceeds $3 million or 5 percent of total utility

[[Page 36613]]

plant, whichever is greater. The borrower is not required to maintain 
on an ongoing basis either an approved load forecast or an approved 
load forecast work plan.
    (e) A distribution borrower with a total utility plant of $500 
million or more must maintain an approved load forecast that meets the 
requirements of this subpart on an ongoing basis and provide an 
approved load forecast in support of any request for RUS financing 
assistance. The borrower must also maintain an approved load forecast 
work plan. The distribution borrower may comply with this requirement 
by participation in and inclusion of its load forecasting information 
in the approved load forecast of its power supply borrower.


Sec. 1710.204   Filing requirements for borrowers that must maintain an 
approved load forecast on an ongoing basis.

    (a) Filing of load forecasts and updates. A power supply or 
distribution borrower required to maintain an approved load forecast on 
an ongoing basis under Sec. 1710.202 or Sec. 1710.203 may elect either 
of the following two methods of compliance:
    (1) Submitting a new load forecast to RUS for review and approval 
at least every 36 months, and then submitting updates to the load 
forecast to RUS for review and approval in each intervening year; or
    (2) Submitting a new load forecast to RUS for review and approval 
not less frequently than every 24 months.
    (b) Extensions. RUS may extend any time period required under this 
section for up to 3 months at the written request of the borrower's 
general manager. A request to extend a time period beyond 3 months must 
be accompanied by a written request from the borrower's general 
manager, an amendment to the borrower's approved load forecast work 
plan incorporating the extension, a board resolution approving the 
extension request and any amendment to the approved load forecast work 
plan, and any other relevant supporting information. RUS may extend the 
time periods contained in this section for up to 24 months.


Sec. 1710.205   Minimum approval requirements for all load forecasts.

    (a) Documents required for RUS approval of a borrower's load 
forecast. The borrower must provide the following documents to obtain 
RUS approval for a load forecast:
    (1) The load forecast and supporting documentation;
    (2) A memorandum from the borrower's general manager to the board 
of directors recommending that the board approve the load forecast and 
its uses; and
    (3) A board resolution from the borrower's board of directors 
approving the load forecast and its uses.
    (b) Contents of load forecast. All load forecasts submitted by 
borrowers for approval must include:
    (1) A narrative describing the borrower's system, service 
territory, and consumers;
    (2) A narrative description of the borrower's load forecast 
including future load projections, forecast assumptions, and the 
methods and procedures used to develop the forecast;
    (3) Projections of usage by consumer class, number of consumers by 
class, annual system peak demand, and season of peak demand for the 
number of years agreed upon by RUS and the borrower;
    (4) A summary of the year-by-year results of the load forecast in a 
format that allows efficient transfer of the information to other 
borrower planning or loan support documents;
    (5) The load impacts of a borrower's demand side management 
activities, if applicable;
    (6) Graphic representations of the variables specifically 
identified by management as influencing a borrower's loads; and
    (7) A database that tracks all relevant variables that might 
influence a borrower's loads.
    (c) Formats. RUS does not require a specific format for the 
narrative, documentation, data, and other information in the load 
forecast, provided that all required information is included and 
available. All data must be in a tabular form that can be transferred 
electronically to RUS computer software applications. RUS will evaluate 
borrower load forecasts for readability, understanding, filing, and 
electronic access. If a borrower's load forecast is submitted in a 
format that is not readily usable by RUS or is incomplete, RUS will 
require the borrower to submit the load forecast in a format acceptable 
to RUS.
    (d) Document retention. The borrower must retain its latest 
approved load forecasts, and supporting documentation until RUS 
approval of its next load forecast. Any approved load forecast work 
plan must be retained as part of the approved load forecast.
    (e) Consultation with RUS. The borrower must designate and make 
appropriate staff and consultants available for consultation with RUS 
to facilitate RUS review of the load forecast work plan and the load 
forecast when requested by RUS.
    (f) Correlation and consistency with other RUS loan support 
documents. If a borrower relies on an approved load forecast or an 
update of an approved load forecast as loan support, the borrower must 
demonstrate that the approved load forecast and the other primary 
support documentation for the loan were reconciled. For example, both 
the load forecast and the financial forecast require input assumptions 
for wholesale power costs, distribution costs, other systems costs, 
average revenue per kWh, and inflation. Also, a borrower's engineering 
planning documents, such as the construction work plan, incorporate 
consumer and usage per consumer projections from the load forecast to 
develop system design criteria. The assumptions and data common to all 
the documents must be consistent.
    (g) Coordination. Power supply borrowers and their members that are 
subject to the requirement to maintain an approved load forecast on an 
ongoing basis are required to coordinate preparation of their 
respective load forecasts, updates of load forecasts, and approved load 
forecast work plan. A load forecast of a power supply borrower must 
consider the load forecasts of all its member systems.


Sec. 1710.206   Approval requirements for load forecasts prepared 
pursuant to approved load forecast work plans.

    (a) Contents of load forecasts prepared under an approved load 
forecast work plan. In addition to the minimum requirements for load 
forecasts under Sec. 1710.205, load forecasts developed and submitted 
by borrowers required to have an approved load forecast work plan shall 
include the following:
    (1) Scope of the load forecast. The narrative shall address the 
overall approach, time periods, and expected internal and external uses 
of the forecast. Examples of internal uses include providing 
information for developing or monitoring demand side management 
programs, supply resource planning, load flow studies, wholesale power 
marketing, retail marketing, cost of service studies, rate policy and 
development, financial planning, and evaluating the potential effects 
on electric revenues caused by competition from alternative energy 
sources or other electric suppliers. Examples of external uses include 
meeting state and Federal regulatory requirements, obtaining financial 
ratings, and participation in reliability council, power pool, regional 
transmission group, power supplier or member system forecasting and 
planning activities.

[[Page 36614]]

    (2) Resources used to develop the load forecast. The discussion 
shall identify and discuss the borrower personnel, consultants, data 
processing, methods and other resources used in the preparation of the 
load forecast. The borrower shall identify the borrower's member and, 
as applicable, member personnel that will serve as project leaders or 
liaisons with the authority to make decisions and commit resources 
within the scope of the current and future work plans.
    (3) A comprehensive description of the database used in the study. 
The narrative shall describe the procedures used to collect, develop, 
verify, validate, update, and maintain the data. A data dictionary 
thoroughly defining the database shall be included. The borrower shall 
make all or parts of the database available or otherwise accessible to 
RUS in electronic format, if requested.
    (4) A narrative for each new load forecast or update of a load 
forecast discussing the methods and procedures used in the analysis and 
modeling of the borrower's electric system loads as provided for in the 
load forecast work plan.
    (5) A narrative discussing the borrower's past, existing, and 
forecast of future electric system loads. The narrative must identify 
and explain substantive assumptions and other pertinent information 
used to support the estimates presented in the load forecast.
    (6) A narrative discussing load forecast uncertainty or alternative 
futures that may determine the borrower's actual loads. Examples of 
economic scenarios, weather conditions, and other uncertainties that 
borrowers may decide to address in their analysis include:
    (i) Most-probable assumptions, with normal weather;
    (ii) Pessimistic assumptions, with normal weather;
    (iii) Optimistic assumptions, with normal weather;
    (iv) Most-probable assumptions, with severe weather;
    (v) Most-probable assumptions, with mild weather;
    (vi) Impacts of wholesale or retail competition; or
    (vii) New environmental requirements.
    (7) A summary of the forecast's results on an annual basis. Include 
alternative futures, as applicable. This summary shall be designed to 
accommodate the transfer of load forecast information to a borrower's 
other planning or loan support documents. Computer-generated forms or 
electronic submissions of data are acceptable. Graphs, tables, 
spreadsheets or other exhibits shall be included throughout the 
forecast as appropriate.
    (8) A narrative discussing the coordination activities conducted 
between a power supply borrower and its members, as applicable, and 
between the borrower and RUS.
    (b) Compliance with an approved load forecast work plan. A borrower 
required to maintain an approved load forecast work plan must also be 
able to demonstrate that both it and its RUS borrower members are in 
compliance with its approved load forecast work plan for the next load 
forecast or update of a load forecast.


Sec. 1710.207   RUS criteria for approval of load forecasts by 
distribution borrowers not required to maintain an approved load 
forecast on an ongoing basis.

    Load forecasts submitted by distribution borrowers that are 
unaffiliated with a power supply borrower, or by distribution borrowers 
that are members of a power supply borrower that has a total utility 
plant less than $500 million and that is not itself a member of another 
power supply borrower with a total utility plant of $500 million or 
more must satisfy the following minimum criteria:
    (a) The borrower considered all known relevant factors that 
influence the consumption of electricity and the known number of 
consumers served at the time the study was developed;
    (b) The borrower considered and identified all loads on its system 
of RE Act beneficiaries and non-RE Act beneficiaries;
    (c) The borrower developed an adequate supporting data base and 
considered a range of relevant assumptions; and (d) The borrower 
provided RUS with adequate documentation and assistance to allow for a 
thorough and independent review.


Sec. 1710.208   RUS criteria for approval of all load forecasts by 
power supply borrowers and by distribution borrowers required to 
maintain an approved load forecast on an ongoing basis.

    All load forecasts submitted by power supply borrowers and by 
distribution borrowers required to maintain an approved load forecast 
must satisfy the following criteria:
    (a) The borrower objectively analyzed all known relevant factors 
that influence the consumption of electricity and the known number of 
customers served at the time the study was developed;
    (b) The borrower considered and identified all loads on its system 
of RE Act beneficiaries and non-RE Act beneficiaries;
    (c) The borrower developed an adequate supporting database and 
analyzed a reasonable range of relevant assumptions and alternative 
futures;
    (d) The borrower adopted methods and procedures in general use by 
the electric utility industry to develop its load forecast;
    (e) The borrower used valid and verifiable analytical techniques 
and models;
    (f) The borrower provided RUS with adequate documentation and 
assistance to allow for a thorough and independent review; and
    (g) In the case of a power supply borrower required to maintain an 
approved load forecast on an ongoing basis, the borrower adequately 
coordinated the preparation of the load forecast work plan and load 
forecast with its member systems.


Sec. 1710.209  Approval requirements for load forecast work plans.

    (a) In addition to the approved load forecast required under 
Secs. 1710.202 and 1710.203, any power supply borrower with a total 
utility plant of $500 million or more and any distribution borrower 
with a total utility plant of $500 million or more must maintain an 
approved load forecast work plan. RUS borrowers that are members of a 
power supply borrower with a total utility plant of $500 million or 
more must cooperate in the preparation of and submittal of the load 
forecast work plan of their power supply borrower.
    (b) An approved load forecast work plan establishes the process for 
the preparation and maintenance of a comprehensive database for the 
development of the borrower's load forecast, and load forecast updates. 
The approved load forecast work plan is intended to develop and 
maintain a process that will result in load forecasts that will meet 
the borrowers' own needs and the requirements of this subpart. An 
approved work plan represents a commitment by a power supply borrower 
and its members, or by a large unaffiliated distribution borrower, that 
all parties concerned will prepare their load forecasts in a timely 
manner pursuant to the approved load forecast work plan and they will 
modify the approved load forecast work plan as needed with RUS approval 
to address changing circumstances or enhance the usefulness of the 
approved load forecast work plan.
    (c) An approved load forecast work plan for a power supply borrower 
and its members must cover all member systems, including those that are 
not borrowers. However, only members that are borrowers, including the 
power

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supply borrower, are required to follow the approved load forecast work 
plan in preparing their respective load forecasts. Each borrower is 
individually responsible for forecasting all its RE Act beneficiary and 
non-RE Act beneficiary loads.
    (d) An approved load forecast work plan must outline the 
coordination and preparation requirements for both the power supply 
borrower and its members.
    (e) An approved load forecast work plan must cover a period of 2 or 
3 years depending on the applicable compliance filing schedule elected 
under Sec. 1710.204.
    (f) An approved load forecast work plan must describe the 
borrower's process and methods to be used in producing the load 
forecast and maintaining current load forecasts on an ongoing basis.
    (g) Approved load forecast work plans for borrowers with 
residential demand of 50 percent or more of total kWh must provide for 
a residential consumer survey at least every 5 years to obtain data on 
appliance and equipment saturation and electricity demand. Any such 
borrower that is experiencing or anticipates changes in usage patterns 
shall consider surveys on a more frequent schedule. Power supply 
borrowers shall coordinate such surveys with their members. Residential 
consumer surveys may be based on the aggregation of member-based 
samples or on a system-wide sample, provided that the latter provides 
for relevant regional breakdowns as appropriate.
    (h) Approved load forecast work plans must provide for RUS review 
of the load forecasts as the load forecast is being developed.
    (i) A power supply borrower's work plan must have the concurrence 
of the majority of the members that are borrowers.
    (j) The borrower's board of directors must approve the load 
forecast work plan.
    (k) A borrower may amend its approved load forecast work plan 
subject to RUS approval. If RUS concludes that the existing approved 
load forecast work plan will not result in a satisfactory load 
forecast, RUS may require a new or revised load forecast work plan.


Sec. 1710.210  Waiver of requirements or approval criteria.

    For good cause shown by the borrower, the Administrator may waive 
any of the requirements applicable to borrowers in this subpart if the 
Administrator determines that waiving the requirement will not 
significantly affect accomplishment of RUS' objectives and if the 
requirement imposes a substantial burden on the borrower. The 
borrower's general manager must request the waiver in writing.


Secs. 1710.211-1710.249  [Reserved]

    Dated: June 29, 1999.
Jill Long Thompson,
Under Secretary, Rural Development.
[FR Doc. 99-17113 Filed 7-6-99; 8:45 am]
BILLING CODE 3410-15-P