About TIP's program components
The Transmission Infrastructure Program establishes the policies and practices to implement Western’s borrowing authority granted under Section 402 of the American Recovery and Reinvestment Act. The TIP consists of several major components:
The program establishes six project principles and four program principles to provide guidance in implementing the authority to borrow up to $3.25 billion from the U.S. Treasury to fund partnerships to develop transmission infrastructure that delivers renewable energy to market across the West.
Project principles ensure that each project approved for funding:
- is in the public interest
- will not adversely impact system reliability or operations, or other statutory obligations
- offers reasonable expectation that proceeds will be adequate to meet Western’s repayment obligations
- uses a public process to set transmission rates
- has the necessary capability to obtain and deliver generation-related ancillary services
- uses proceeds from the project to repay principal and interest of the loan from the Treasury
Program principles ensure the program:
- provides appropriate opportunities for participation by other entities
- uses revenue from the projects developed under this authority as the only source of revenue for repayment of the associated loan for the project and payment of expenses for ancillary services and operations and maintenance.
- ensures each project, for accounting and repayment purposes, is treated as a separate and distinct project
- ensures that project beneficiaries repay project costs
All projects selected for funding under this authority will meet all program and project principles. In addition:
- Western will use generally accepted accounting principles and practices to record and track all financial transactions for each project.
- Western will isolate financial accounting transactions for each project in its existing financial management system to ensure that each project is treated as a separate and distinct project for accounting and repayment purposes.
- Western will seek public-private partnerships to maximize the leveraging of funds.
- Western received $10 million non-reimbursable funds to establish personnel staffing levels and complete the activities under the authority granted by Section 402 of the Recovery Act of 2009.
Projects considered for funding under this authority will be evaluated against these minimum criteria.
- Facilitates delivery to market of power generated by renewable resources constructed or reasonably expected to be constructed
- Is in the public interest
- Will not adversely impact system reliability or operations, or other statutory obligations
- Reasonable expectation that the project will generate enough transmission service revenue to repay the principal investment; all operating costs, including overhead; and accrued interest
- Has at least one terminus within Western’s service territory
- Provides economic development benefits, including job creation
- Satisfies Western’s Open Access Transmission Tariff
- Technical merits and feasibility
- Financial stability and capability of potential project partners
- Project readiness
- Participation in region-wide or interconnection-wide planning groups or forums
Western will treat data submitted by project participants related to this authority as available to the public through the Freedom of Information Act. However, participants may request confidential treatment of all or part of submissions under FOIA’s “Confidential Business Information” exemption.
Project development and Operations and Maintenance
Western will consider projects under this authority separately from projects in its Open Access Transmission Tariff queue.
- Western will use appropriate project management methods for the life of each project funded.
- Available transfer capacity, in surplus to Western’s need, will be made available in a non-discriminatory manner consistent with Federal Energy Regulatory Commission open access transmission rules, Federal statute and Western policies.
- Western will comply with all other applicable Federal laws, regulations and policies.
Project rates and repayment
The repayment requirements and applicable transmission rates will be designed so that proceeds from each project meet the repayment obligation of that project.
- Before project development, Western will confirm the reasonable likelihood that the project will generate enough transmission service revenue to meet Western’s financial repayment obligations including:
- Principal investment
- Operating costs, including overhead
- Accrued interest
- Other appropriate costs
- Transmission rates for transmission capacity Western controls will be developed in a public process.