(1) A DSU should thoroughly document the exercise of its judgment in implementing all aspects of the guidelines, including any deviations from the framework set forth in these guidelines.

(2) A DSU must procure and manage a portfolio of power purchase contracts and demand-side resources to serve the full load requirements of its default supply customers. The commission must allow a DSU to recover through default supply rates all costs it prudently incurs to perform this function. Whether the costs a DSU incurs are prudent is, in part, directly related to whether its resource procurement process was conducted prudently. It is vital that a DSU document its default supply portfolio planning, management and procurement activities to justify the prudence of its resource procurement decisions. The better a DSU documents the steps involved in its resource procurement process and explains how and why decisions were made during procurement and in developing management strategies, the easier it is to satisfy its burden of proof. When a DSU requests cost recovery related to the procurement of new power purchase contracts it should:

(a) document and explain all due diligence regarding the qualification of bidders and resource offers, including why selected bidders were sufficiently qualified financially and technically to warrant further evaluation of the offer based on the resource needs assessment;

(b) list and describe all resource attributes considered in evaluating resource alternatives and how the attributes are relevant to the evaluation of potential resources based on the resource needs assessment;

(c) explain how the identified resource attributes were weighted as part of the resource evaluation and discuss the trade-offs between alternative resources that have different attributes and various weights;

(d) document and explain the use of the ranking methodology and decision criteria used to evaluate resource alternatives;

(e) document and explain computer modeling and analysis designed to assess how various potential resources fit with existing resources and contribute to optimizing the overall portfolio;

(f) document relevant industry practices, instruments and actions to procure resources and manage risk observed in other utilities in the Western Electricity Coordinating Council regarding portfolio design, to the extent such practices form the basis for a DSU's decisions;

(g) document and explain how and when management injected its judgment onto analyses of resource alternatives, final selection and contract negotiations, and the impact of management judgment; and

(h) document the discussion and recommendations of the DSU's advisory committee.