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PacifiCorp

Prioritization of Capital Spending for Hydro Generation Upgrade
PacifiCorp

Portland, Oregon

PacifiCorp core hydro facilities comprise 22 plants in Washington, Oregon, Idaho, Utah, and Montana. BIS staff developed a process for analyzing key assets to prioritize capital spending among the plants. This process uses a risk-based approach to develop an optimized upgrade strategy for each plant. The costs and benefits of these programs are fully quantified, including the benefit from avoided risk, which allows PacifiCorp to compare the plant programs and prioritize based on expected return on investment.

As expected, the analysis showed that many plants required near-term rehabilitation and replacement programs. To identify the highest priority plants, the process includes projections of increasing cost for each plant as the rehabilitation program is delayed. The rate of increase enables PacifiCorp target resources toward the most urgent upgrades. Plants whose costs increase slowly can be delayed with minimal impact.

PacifiCorp is now in the process of implementing the upgrade and life extension programs identified as highest priority by this process. The results of this analysis are being imported into PacifiCorp’s existing economic justification and financial models as part of their overall justification program for capital expenditures.

Date Completed 2004, Ongoing

Services
Process for planning and prioritizing upgrade programs. Coordination with existing economic and financial models.
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