PPC Web Site Archives

Issues

 Archives: Power – BPA Rate Cases

2006

Filings in 2007-2009 Rate Case

Joint Party Briefs

Initial Brief of the Preference Customer Group on the Section 7(b)(2) Rate Ceiling
  
PPC Briefs

Initial Brief of PPC
  
Joint Party Testimony

Surrebuttal of BPA's Emergency NFB Surcharge Proposal
Rebuttal of CRITFC and SOS Direct Testimony
        Attachment
Direct Testimony on BPA's Overall Rate Level
        Attachment
Direct Testimony on BPA's NFB Adjustment; or "Fish CRAC"
Direct Testimony on BPA's CRAC Proposal and NORM
        Attachment A
        Attachment B
        Attachment C
        Attachment D
  
PPC Testimony

Rebuttal regarding BPA's Proposal of a Partial Resolution of Issues
Direct Testimony Regarding BPA's WP-07 Proposal

Preference Group Testimony

Direct Testimony Regarding 7(b)(2) Rate Test

All of the above materials, plus exhibits and the testimony of other parties to the rate case, are available at BPA's rate case web site. 

2005

Post-2006 Conservation Program Proposal:  PPC submitted comments April 29, 2004 to BPA on its proposal for a post-2006 conservation program.  [comments]

BPA releases Draft Prototype DSI Contract:  On November 28, 2005, BPA released the draft contract under which it plans to distribute to the DSIs the benefits it outlined in its June 30, 2005, Record of Decision.  These benefits may be in the form of power or cash, and are capped at $59 million per year.  In the accompanying letter, BPA asked for comments on whether the contracts are consistent with the June 30, 2005 ROD, and on whether the DSIs should be given more flexibility, and allowed to draw benefits above their maximum allocation from "future years" in which they may not be operating.  These contracts will be executed among BPA, each DSI, and the local utility from whom that DSI will be taking distribution service.  PPC staff are preparing comments for presentation at our January Executive Committee meeting.  For more information, see the contract, Paul Norman's letter, or contact Michelle Poyourow, PPC Junior Economist.

BPA's Final CRAC Levels for 2006:  

• Annual FB CRAC: 2.4%
• Annual SN CRAC: 1.8%
• Non-slice LB CRAC: 24.4% (first half-year), 28.5% (second half-year), i.e. 26.5% (full-year average)
• Total Annual Average CRAC'd non-Slice rate: 29.2 mills (a 3.1% reduction over FY05)

PPC Comments on 2006 SN CRAC Level:  On August 9, 2005, BPA communicated to its customers that for 2006 power rates the FB CRAC would be set at 5.1%, and that the SN CRAC might be set at 2.0%.  PPC submitted comments asking Administrator Steve Wright to use his discretion to set the SN CRAC to zero.  This alone would have resulted in an average reduction in BPA's non-Slice power rates of 2.5%.

BPA's Power Function Review (PFR):  BPA's Power Business Line's PFR meetings concluded with a May 2, 2005 draft closeout report and letters from Administrator Steven Wright and Vice President Paul Norman.  The PFR process was an opportunity to study, understand and comment on cost projections for the FY 2007 wholesale power rate case, which is expected to begin this autumn.  PPC has submitted comments on the draft report, asking BPA to reexamine its budget and budgeting process and commenting specifically on program level expenditures. 
PPC submitted comments May 20, 2005, in response to BPA's PFR draft closeout report.  In these comments, PPC asked that BPA reexamine its budget and budgetary process and addresses specific program spending levels. [PPC's PFR comments]

Market Rate Proposal -- Opposition/Concern:   The Northwest House Republicans sent a letter (signed by 50 members), March 4, 2005 to Jim Nussle (R-IA), chair of House Budget Committee, and Richard Pombo (R-CA), chair of House Committee on Resources, urging opposition to the Administration's PMA market rate proposal.  [House letter]

The Northwest IOUs sent a joint letter March 2, 2005 to President Bush raising concerns with the Administration's budget proposals to raise BPA's rates to market rates and to reclassify BPA's third party debt as federal debt.  [IOUs letter]

Sen. Conrad Burns (R-MT) issued this statement (2/11/05):
"The intentions by the administration to move BPA's power rates to a market-based structure rather than cost-based is a flat-out bad idea.  This would have a devastating effect on consumers in Montana and the Northwest.  Costs are already increasing to manufacturers and the public due to drought, and this plan would make the burden even worse on consumers.  I will not let it stand."

The Northwest House delegation sent a letter to OMB Director Josh Bolton, February 10, 2005 in opposition to the Administration's market rate proposal.  All 17 members of the Northwest House delegation signed the letter.  [letter]
Senators Maria Cantwell and Patty Murray sent President Bush a letter February 7, 2005 vowing to defeat the Bush Administration plan that could cause electricity rates in the Northwest to double.  The Bush FY 2006 budget proposes that BPA and the other Power Marketing Administrations increase power rates by 20% per year, until the rates equal market rates.  [PPC estimates that BPA's rates would increase by over $1 billion in three years].  [press release and text of February 7 letter]

Senators Gordon Smith (R-OR) and Greg Walden (R-OR) both released statements in opposition to the Administration's plan.  [Smith]  [Walden]

"Bush wants market rates for BPA" the February 8, 2005 Oregonian declares.  [Oregonian article]

LB CRAC Update:  BPA announced the LB CRAC for the April through September (2005) period ("LB CRAC8"), in addition to the true-up for the LB CRAC that was in place in April through September, 2004 ("LB CRAC6").  Because there was no opposition to the proposed rate increases, the preliminary numbers presented have been deemed final.  

The increase to the non-Slice base rate will be 25.77%, while the Slice rate increase will be 26.31% for an average increase of 26.79%.  These increases are slightly higher than those forecasted at the previous LB CRAC workshop in June (0.77 percentage points for the non-Slice rate and 0.31 percentage points for the Slice rate).  There are several reasons for this increase, the most significant being higher than expected spot market power purchase prices and unanticipated augmentation need.  

The true-up for LB CRAC6 consists of a refund to Slice customers of $541,876, while non-Slice customers owe BPA a total of $4,227,714.  Using just the 120-day rule both customer classes are owed a refund (due to lower than forecasted market purchase expenses), but because the non-Slice customers are also subject the 0-day rule (where BPA paid more than forecasted) their refund turned into an additional sum owed to BPA.  This true-up will begin showing up on Slice customers' January '05 bills for January service and on non-Slice customers' bills January bills for December '04 service.  

BPA also shared its forecasts for the remaining two LB CRAC periods (in FY06).  The LB CRAC9 for non-Slice customers is forecasted to be about 25%, and Slice customers about 27%, for an average of 25%.  This is up from the previous forecast of 23% (on average).  The LB CRAC10 for non-Slice customers is forecasted to be about 25%, and Slice customers about 26%, for an average of 27%.  This is up from the previous forecast of 26% (on average).  These forecasts were revised upwardly due to higher than previously forecasted market prices.  --Annick Chalier  12/13/04

• Comments on Safety-Net Cost Recovery Adjustment Clause (SN CRAC) for FY05 filed August 27, 2004.  PPC filed comments at BPA on behalf of PPC and other utilities and organizations -- encouraging the Administrator to lower the FY05 SN CRAC to zero.
• Letter to BPA reaffirming PPC's objection to any SN CRAC for FY 2005.  PPC's July 30, 2004 letter to Paul Norman at BPA, opines ". . . we oppose BPA charging rates higher than necessary next year in the interest of rate stability."
• Why BPA does not need an SN CRAC.  Kevin O'Meara and Annick Chalier put together the following analysis:  "Why BPA Does Not Need an SN CRAC" 
• Load-Based Cost Recovery Adjustment Clause (LB CRAC) will be lower than expected.  Due to the signed agreements with the IOUs removing BPA's obligation to pay the $200 million litigation penalty in this rate period, the LB CRAC charged to BPA's power rates in October through March 2005 will be lower from earlier forecasts of 32% to 22.34%.  Future LB CRACs are also now projected to be about nine percentage points lower than previously forecasted.  The resulting rate for FY05 will be lower than it would have been if all else held equal.

Read more about CRACs.  There are dozens of components that make up electricity costs, and to add to the complexity, not all of them are known at the time rates are set.  BPA is the major power provider for the region's publicly-owned utilities.  BPA periodically holds rate cases to determine its power and transmission rates -- setting its rates to allow the agency to recover its costs.  These rulemaking procedures and requirements are set out in the 1980 Pacific Northwest Electric Power Planning and Conservation Act.

The most recent power rate case set rates for a five-year period -- October 1, 2001, through October 1, 2006.  During the course of the settlement, there were many unexpected price spikes and great price volatility on the west coast, and the region was experiencing its second worst drought on record.  Prices on California's spot market were out of control, increasing as much as ten times during certain hours.  The chaos spread to many other spot markets.  Many utilities were facing double-digit rate increases -- higher than they had ever seen.  And because BPA makes sales and exchanges to utilities and agencies outside the region when power is available, BPA is subject to price volatility.  Amid this chaos, to assure that BPA could recover its costs, customer groups met with BPA and designed a series of cost recovery adjustment clauses (CRACs).

Under the plan, there are three CRACs:  
1.  Load-Based CRAC (LB CRAC); 
2.  Financial-Based CRAC (FB CRAC); and 
3.  Safety-Net CRAC (SN CRAC). 
 
Each of these CRACs has a particular type of trigger.  The LB CRAC triggers if the cost to augment the Federal Columbia River Power System exceeds the amount forecast in the original May 2000 rate case.  The FB CRAC triggers if the revenues attributed to BPA's Power Business Line fall below a pre-designated threshold.  The SN CRAC triggers only if the LB and FB CRACs have already triggered and the BPA Administrator determines either that BPA has a less than 50% probability of being able to make its Treasury payment or pay other creditors, or, regardless of Treasury payment, it is unable to pay any creditor.  

For more on Power Rates, go to http://www.bpa.gov/power/psp/rates/index.shtml 
or read about rates in PPC's Public Power Chronicle -- available at no charge on our home page.

Ninth Circuit Considering Publics’ Case Against IOU Settlement Agreements:  On November 14, 2005, the Ninth Circuit Court of Appeals heard oral arguments in litigation brought by a number of public utilities and utilities organizations, including PPC, which challenges the lawfulness of BPA’s Residential Exchange Program Settlement Agreements with regional Investor-Owned Utilities (IOUs).  Two days later, the Court also heard oral arguments in a related case, where public utilities challenge BPA’s treatment of the costs of those agreements in the WP-02 power rate case.  We are currently awaiting the Court’s opinions in the two cases, which will be issued at an undetermined future date. 
 
You can listen to the oral arguments in the cases by attorneys Terry Mundorf (of the Washington Public Agencies Group) and Michael Goldfarb (of Snohomish PUD) on behalf of public power.  For the Residential Exchange Program Settlement appeal, enter case number 01-70003.  For the appeal of the WP-02 Rate Case, enter case number 03-73426.  For more information, contact Mark Thompson, PPC Staff Attorney.

IOU/Publics’ Settlement Proposal: With failure in January 2004 by the IOUs and publics to settle a proposal that could have brought wholesale power rates down significantly, BPA continued to implement its existing power contracts and pursue cost-management measures.  The level of benefits going to IOU customers was the major focus of the proposed settlement of lawsuits, brought by public utilities.

In June 2004, though, BPA signed agreements with the IOUs. The agreements make BPA wholesale power rates for public utilities 6 percent lower than they would have been for FY2005 and 2006.  BPA considers the agreements with the IOUs a success, whereas the proposed litigation settlement earlier last year was not.

With these agreements signed, BPA's costs have been reduced by over $200 million for FY2005 and 2006, which has reduced the Load-Based CRAC that went into effect in October.  Additionally, the residential and small-farm customers of the IOUs now have greater certainty about rate benefits from the Federal Columbia River Power System after 2006. 

For more on this issue, go to http://www.bpa.gov/power/lp/settlement/
Background:  Background information regarding the IOU/Publics' Settlement Proposal can be found here.

Council Analysis on Third-Party Debt:
The Northwest Power and Conservation Council has released an analysis that addresses the effects of the Administration's budget proposal to include third-party debt under BPA's borrowing authority. [analysis]

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 Archives:  Power - Regional Dialogue

Read the latest Regional Dialogue Scorecard:  For a summary of PPC's and BPA's respective positions on Long Term Regional Dialogue issues like Allocation, Public Exchange, and Cost Control, and the status of discussions as of November, 2005, read the latest PPC Scorecard. For more information, contact Kevin O'Meara, PPC Deputy Director.

BPA releases Long-Term Regional Dialogue Concept Paper:  The Bonneville Power Administration on Monday, September 12, 2005, released its post-2011 Regional Dialogue Concept Paper, kicking-off three months of workshops on its future power supply and marketing role.  These workshops will inform the formal policy proposal BPA intends to make early in 2006.  All interested parties are welcome to participate, but certain key policy discussions will be held among senior customer representatives.

Read the 52-page Concept Paper, or see our Summary of its contents.  Also see BPA's May 11, 2005, Record of Decision, which names the issues to be addressed through the post-2011 Regional Dialogue process, and PPC's response to that ROD.  For background on the positions PPC has taken on some of the issues addressed by BPA in the Concept Paper, see our original Allocation Proposal, our Allocation Implementation paper, our DSI service comments, and our Conservation and Renewables comments.

For more information, visit BPA's Regional Dialogue website.
BPA's Regional Dialogue Policy & ROD issued:  BPA released its Regional Dialogue Policy and Record of Decision February 4, 2005. This portion of the Regional Dialogue is a clearer look at BPA's load-serving obligation and amount of power BPA will sell at its lowest cost-based rate.  Long-term issues were addressed in a May 11, 2005 letter by Paul Norman, to which PPC has responded with comments.  [Paul Norman's letter] [PPC's comments]  

The Regional Dialogue began in June 2002 when it was announced that BPA and the Northwest Power and Conservation Council would sponsor a joint public input process to discuss how BPA should market the power from the Federal Columbia River Power System after 2006. [timeline] [BPA's Regional Dialogue webpage]
PPC's Comments on DSIs:  PPC submitted comments to BPA March 11, 2005 that address the Direct Service Industries on behalf of public power.  [comments] 
BPA's Post-2006 Conservation Program:  PPC submitted comments April 29. 2005 to BPA on its formal proposal for a post-2006 conservation program.  Also see PPC's earlier letter of January 10, 2005 which addresses BPA's budget for post-2006 conservation, PPC's letter of January 20, 2005 which addresses conservation investment and the renewables discount, and PPC's March 9, 2005 letter, which addresses load decrementing.  [January 10 letter]  [January 20 letter] [March 9 letter]

PPC comments on Council's Draft Fifth Power Plan:  PPC submitted comments November 24, 2004 to the Northwest Power and Conservation Council regarding its draft Fifth Power Plan.  PPC's comments focus on our top priority issues of the draft:  allocation of the federal system, a regional conservation target, BPA's role, the Council's role, and transmission. 

Murray/Cantwell letter to BPA:
Patty Murray's and Maria Cantwell's letter of November 12, 2004 to BPA expresses their concern about the region's direct service industry -- the aluminum workers in particular. It said in part, "We would prefer not to have to secure TAA benefits for more Washington state aluminum workers--as we believe their jobs can be saved with a little 'forward thinking' and regional consensus-building regarding BPA's role in Northwest power supply in the post-2006 time period."  PPC is hosting a public power only forum on this issue February 2, 2005.

PPC sends letters to BPA regarding conservation and the DSIs:  On November 5, 2004 PPC sent a letter to Administrator Steve Wright that conveys PPC's concerns about the policy direction the agency is proposing for post-2006 utility conservation programs.  Additional comments were expressed in this letter to BPA on service to the DSIs. The letter says "The DSIs should be allowed to seek service from their local utility on a basis similar to that of other (non-DSI) industrial customers." 

Of Interest:

• Read a summary of the Council's draft Fifth Power Plan by PPC's Annick Chalier.
• Read PPC's June 18, 2004 letter to BPA regarding allocation of the Federal Base System here.
• PPC's comments of June 16, 2004 to BPA regarding BPA's Conservation & Renewables Discount (C&RD) Program can be found here.
• DRAFT:  BPA's proposed new business arrangement with the IOUs.  Written by PPC staff member Annick Chalier, this document discusses components of BPA's proposal that will affect rates in the near term and in the FY07-11 period.
• On April 28, 2004, PPC and Oregon public power associations filed Reply Comments with OPUC in UM 926 -- Recommendation for continuing deferral of the reduction of risk discount under BPA/PacifiCorp's financial settlement agreement.  Read the Errata and the Errata-Attachment B.
• PPC and Oregon public power associations file Comments with Oregon Public Utility Commission (OPUC): A joint effort of PPC, Oregon Municipal Electric Utilities, Oregon People's Utility District Association and the Oregon Rural Electric Cooperative Association -- the comments were filed April 20.  They address the investigation regarding the purchase of Subscription Power from Bonneville Power Administration.
• PPC sends comments to Northwest Power and Conservation Council on Future Role of BPA in Power Supply.  PPC's comments of April 26 focus on two areas of importance to PPC -- DSI credit support and tiered rates.
• Customers comment on Council's draft recommendations regarding BPA's future role.  BPA customers submitted comments to the Council on April 23, in response to the draft recommendations the Council released on April 8. The work the Council is doing is to successfully implement a long-term change to the manner in which BPA fulfills its regional power supply obligations.

BPA's future role as power supplier:   Last summer, BPA issued a draft policy proposal addressing its power supply role FY07-11; it was then published in the Federal Register on July 20.  The proposal focused on unresolved policy issues that will be a part of the next rate case, not longer-term policy questions that, once resolved, will shape new 20-year contracts.  BPA has been addressing these issues in a Regional Dialogue process just concluded; a draft policy proposal is expected July 2005.  

The "broom closet" group continues its work on allocation; discussions continue with BPA.
___________________________

There is a great interest on the part of the governors in Washington, Oregon, Idaho, Montana, and the Northwest Power and Conservation Council (the Council), BPA and BPA’s customers to define BPA’s future role as the major power supplier for the region.  For more, go to http://www.bpa.gov/power/pl/regionaldialogue/
What is at issue?

• How best to share the benefits of the FCRPS?
• Can there be long-term contracts with BPA?
• How can we improve BPA governance?
• Who should provide for resource acquisition?
• How can we improve BPA cost control?
• How best to calculate the IOU benefits?
• Is new legislation needed, and if so, how extensive should it be?
• How can we re-establish comparatively inexpensive, cost-based rates for BPA power?

Council’s Position:

• Major points proposed in the JCP are still valid--some tweaking is necessary
• Long-term 20-year contracts are desirable
• Need to limit contractually BPA’s role in resource acquisition
• More openness regarding BPA costs is necessary
• Slice should be a big product
• Benefits to the IOUs should be calculated in an equitable manner for all parties
• DSI service must be addressed
• Cost-effective conservation must continue to be pursued and cost-effective renewable energy sources must continue to be developed

BPA’s Position:

• Tiered rates are not necessary in the immediate future.
• BPA doesn’t want to convert current contracts to new scenario and then have new 20-year contracts in place because not everyone is likely to agree to conversion from existing contracts.  BPA wants to wait until 2011, for any big contractual changes.
• BPA doesn’t like the idea of changing its governance structure and it doesn’t like the idea of pursuing legislative changes.
• BPA believes there is a limit on how much Slice it should offer—Slicing the whole system is not an optimal option.  But BPA agrees that its role in resource acquisition should be limited.

Thus far, agreement has been reached on the following points 

1)  We need to proceed down the path where we allocate out the system to the publics – provide cash to the IOUs; 

2) We need to figure out how to do the allocation now (or at least the methodology now); 

3) We need to take steps to implement the allocation now (otherwise, any consensus that we have developed will just dissipate by 2011).  This means developing new contracts (and/or contract amendments), and allowing people to sign new contracts now.  People are allowed to keep their current contracts until 2011, and should then be allowed to sign contracts that will put them on the same footing post-2011 as people who signed contracts earlier.  We'll aim for having new contracts by the end of the current rate period; and

) All this discussion of allocation should not distract from the centrality of BPA cost-control.  Without better mechanisms for controlling BPA costs, allocation of BPA power may become valueless, i.e. cost-control provisions need to be part of the contract.

 Archives - Transmission

2005

 PPC Comments on Grid West and TIG:  On September 6, 2005, PPC submitted comments encouraging BPA to continue developing the Transmission Issues Group and noting its concerns about Grid West. Read all the relevant materials here.

Transmission Improvements Group:  Several utilities and agencies in the region that support near-term improvements in the transmission system have joined together as the Transmission Improvements Group (TIG).  TIG has authored a proposal of practical, cost-effective, and incremental changes that the region can implement in the next two to three years instead of creating the RTO-like GridWest.   
As described in its March 2005 issue off Keeping Current, BPA will decide at the end of September whether to follow the approach outlined by TIG's proposal or that of the GridWest proposal.
TIG Letter to BPA:  PPC sent a letter to BPA April 11, 2005 welcoming the agency's participation in the Transmission Issues Group in developing proposals to improve the Northwest transmission system.  [TIG letter]

Settlement of TBL's 2006 Transmission Rate Case:  The region's customers and BPA worked hard to craft the settlement which offers an overall 12.5 percent increase for the FY 2006-2007 rate period.  BPA signed the settlement January 11, 2005.  The settlement should help move the rate case along and eliminate the need for a formal rate case process, making it easier for BPA 's TBL to adopt rates in a less structured manner.  Depending on the type of transmission service purchased from TBL, customer rates will vary.  [more]

PPC comments to FERC on Day One RTO Costs:   PPC submitted comments to FERC, November 11, 2004 in response to the agency's "Staff Report on Cost Ranges for the Development and Operation of a Day One Regional Transmission Organization."  (The comments are 31 pages) 

The Alliance of State Leaders Protecting Electricity Consumers issued a press release November 22, 2004 that states in part "Since 2000, RTO Costs have soared 143%."  It also wrote a commentary on the "FERC Staff Report on Day-1 RTO Cost."         

Letters to FERC:

1.  American Municipal Power-Ohio's (AMP-Ohio's) letters express RTO concerns; and read FERC's response.  AMP-Ohio sent a letter to FERC's Pat Wood September 9, 2004 -- a follow-up to a September 3 letter to Pat Wood by Marc Gerken, President and CEO of AMP-Ohio.  Both letters address concerns about RTO costs and procedures. You can read both letters here. Pat Wood responded to Gerken in this October 14, 2004 letter.

2.  U.S. Representatives' Letter to FERC.  An October 1, 2004 letter to FERC's Pat Wood voices Congressional concerns about FERC's continued pursuit of restructuring the nation's electric industry. . .More than 75 representatives signed the letter.

3.  Burr / Norwood urge FERC to give up on RTOs.  Congressmen Richard Burr and Charlie Norwood sent a letter to FERC September 14, 2004 urging it to abandon the "misguided policy" and to "allow competitive wholesale markets to continue to evolve. . ."  It is critical of FERC's efforts to advance SMDs and RTOs through various proposed rules.

4.  Senator Boxer letter to FERC's Pat Wood.  In response to The Ninth Circuit Court of Appeals' recent ruling that FERC use its authority to order retroactive refunds, California's Boxer sent a terse letter to Wood on September 20, 2004. She is demanding that retroactive refunds be paid to California for price gouging.  We all know as part of the western energy crisis, energy companies created false shortages and drove up prices in a scheme that began four years ago, ending over three years ago.  

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 Archives - Restructuring

2005

PPC Executive Director debates pro-competition lobbyist on E&E TV:
As part of a week-long Capitol Hill tour, PPC Executive Director Marilyn Showalter appeared with Bill Massey, former FERC chairman and now lobbyist for the Compete Coalition ("Electricity Competition IS the Public Interest"), on E&ETV's morning interview show "OnPoint" on September 14, 2005.  You can watch the interview at the OnPoint website, or read the transcript of their debate here.

Filing Utilities decide NOT to go along with BPA's "Convergence":  The Grid West Interim Board voted on Tuesday, November 1, 2005, to reorganize Grid West without BPA rather than go forward with the "Convergence" plan BPA proposed. This decision (known as "Decision Point 2") comes after a month-long effort by BPA to integrate two very different proposals for regional transmission improvements - Grid West and TIG - in order to create regional consensus on what has thus far been a polarizing issue.  Those Filing Utilities who are now planning to continue developing Grid West without BPA insist that BPA's transmission lines, which make up 75% of the region's transmission system, are not necessary for Grid West to function.  That assertion will be tested in the coming months as the new Grid West proposal is designed. For more information, please contact Nancy Baker, PPC Senior Policy Analyst.
 
This turn of events may be an opportunity for some fresh thinking on transmission issues, and for the development of new ideas that are not constrained by existing proposals.  BPA has announced its intention to continue working on the "Convergence" proposal, though it expresses more willingness now than before to consider new ideas.  PPC will soon begin exploring constructive approaches to improving the region's transmission facilities and services.  

Grid West (formerly RTO West):  To comply with Order 2000, many electric transmission utilities in the Northwest are working to form a Northwest RTO or "Grid West".  They are Avista, BPA, Idaho Power Company, Montana Power Company (now Northwestern Energy), Nevada Power Company, PacifiCorp, Portland General Electric Company, Puget Sound Energy, and Sierra Pacific Power Company and British Columbia Hydro and Power Authority.  Together, these companies are called the Filing Utilities (FUs).  For general background information on the Grid West public process, and initial development plan, click here.

The Grid West development process has progressed through three stages since early 2000.  [Note:  Grid West and RTO West will be used interchangeably in the information following].

Stage 1  &  Stage 2:  Throughout the first two stages, RTO West work groups (including a broad range of representative from interests across the region) developed a proposal that tried to strike a compromise between a workable proposal for the region and the FERC requirements for an RTO.  After making some changes, the filing utilities submitted this proposal to FERC. 

After a close examination of the proposal and the accompanying cost benefit analysis,  PPC protested the the Stage 2 proposal 1) on the grounds that it creates risk and costs that are far outweighed by the proposals benefits; 2) does not protect the rights of existing contract holders; 3)  fails to include all of the transmission facilities thereby creating a second class of transmission customers; 4) excludes existing contract holders from arbitration unless they convert their contracts to financial transmission rights; 5) fails to assign risk and liability adequately; 6) includes a lopsided and potentially harmful pricing scheme; and 7) failed to honor the RRG process (significant changes were made by the FUs after the work groups turned in the proposal).  In an attempt to address some of these issues, public power representatives and BPA staff spent over six months trying to negotiate replacement contracts for existing contract holders in a process called "Contract Lock". 

A full list of the protests and comments submitted to FERC regarding the Stage 2 filing can be found at http://www.rtowest.com/Stage2FERCFilingCmts&Protests.htm. 
During the Stage 2 process, FERC issued a series of documents introducing the idea of a single standardized market design (SMD) to be implemented across the country.   This idea was met with opposition from the Northwest and Southeast regions of the country.  PPC, along with several other public power trade organizations, vociferously opposed SMD from the beginning.  Below is a list of the major SMD documents issued by FERC and PPC/joint public power responses.  

• December 17, 2001: FERC Staff Concept Discussion Paper for an Electric Industry Transmission and Market Rule  
• Joint Public Power Comments/Protest  
• March 15, 2002: FERC Working Paper on Standardized Transmission Service and Wholesale Electric Market Design (March 15, 2002)
• PPC comments/protest  
• April 10, 2002: FERC "Options Paper"  
• PPC comments/protest
• July 30th, 2003: FERC Notice of Proposed Rulemaking for Standard Market Design 
• Joint Public Power comments/protests
• April 28, 2003: FERC "White Paper"
• PGP and Joint Public Power comments/protests

PPC joined with several groups including the Public Power Works Campaign,  Washington Utility and Transportation Commission (WUTC), and Southeast regulators and utilities to oppose the rigid, prescriptive market rules laid out in FERC's SMD notice of proposed rulemaking (NOPR).  Although FERC has not formally withdrawn its NOPR, the White Paper signifies a step away from the rigid and prescriptive standardized rules laid out in the NOPR.  

Stage 3
The SMD White Paper gave our region a new opportunity to move away from some of FERC's prescriptive expectations and look for regional specific solutions to transmission issues.  The FUs took this opportunity to re-start the Grid West public process with a new goal in mind -- develop a proposal that specifically addresses the transmission problems our region currently faces.  

The RRG began by developing a list of the NW's current transmission problems.  This is in no way a consensus document -- some of the "problems" on this list are highly contentious.  The stage 2 filing was temporarily tabled in light of  the region's variety of divergent positions. Three groups developed alternative RTO proposals (descriptions).    A fourth group combined aspects of these three alternatives into the "Platform Proposal".  This proposal reincorporated elements from the Stage 2 proposal.  The "Platform Proposal" is staged so that the RTO will evolve across time.  A staging matrix describes this progression.  Updates of recent RTO West activities are available on our main transmission page, and in our weekly RTO Car Talk reports. 

There are two PR pieces entitled "The Region's Transmission Solution" and "A Regional Consensus Transmission Proposal".  These documents outline the latest RTO West proposal and asserts that the region has come together in agreement on this proposal.

2004

Contract Lock Process: At the end of 2002, BPA launched a process to identify and contractually commit itself to provide (i.e., "lock") the essential terms and conditions of Network Integration Transmission Service (NT) and Point-to-Point Transmission Service (PTP).  BPA plans to offer its customers replacement service agreements that will contain new language aimed to "lock down" existing rights.  BPA and its customers haven't been able to agree on the level of protection that should be included in the new replacement contracts. The agency wants only a handful of provisions, while public power is pushing for broader protections for both NT and PTP services. The public utilities are working to achieve a unified position on what the agreements should contain.  For more information on contract lock, click here. 

BPA's voluntary compliance tariff filings at FERC:  Although BPA as a non-jurisdictional utility is not required to file an open-access transmission tariff with FERC, BPA voluntarily submitted just such a tariff to FERC in December, 1996.  BPA is currently in the process of revising the tariff to FERC's satisfaction, which may involve the creation of a third type of transmission service (in addition to NT and PTP called Network Contract Demand. By December 18, 1998, BPA was required to file a revised tariff with FERC. BPA also voluntarily filed Standards of Conduct with FERC, which specify how BPA will keep its generation and transmission functions separate on a day-to-day basis.

PPC Comments on Grid West and TIG:  On September 6, 2005, PPC submitted comments encouraging BPA to continue developing the Transmission Issues Group and noting its concerns about Grid West. Read all the relevant materials here.

Transmission Improvements Group:  Several utilities and agencies in the region that support near-term improvements in the transmission system have joined together as the Transmission Improvements Group (TIG).  TIG has authored a proposal of practical, cost-effective, and incremental changes that the region can implement in the next two to three years instead of creating the RTO-like GridWest.  As described in its March 2005 issue off Keeping Current, BPA will decide at the end of September whether to follow the approach outlined by TIG's proposal or that of the GridWest proposal.

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 Archives - Fish and Wildlife

2005

Federal Agencies Explain Dry Year Strategy:  BPA, the Corps of Engineers and the Bureau of Reclamation released a press release April 13, 2005 that addresses "their plan for running the Federal Columbia River Power system to assist salmon migration during yet another dry year."  The agencies also released a fact sheet on this issue. [press release] [fact sheet]

Coalition for Smart Salmon Recovery Professes Optimism about Future of Northwest Salmon:  The Coalition released a press release April 4, 2005 expounding optimism for the salmon -- despite the region's drought.  It also released a paper entitled "The 2004 Biological Opinion:  In Context."  [press release]  [Bi-Op]
So Where Are the Fish? We know the spring run of Columbia River chinook salmon is behind schedule.  However, this is NOT an artifact of the poor outmigration characteristics observed in 2001.  The fish returning this year are predominantly from juvenile fish that outmigrated the Columbia basin in 2002 and 2003.  The return of jacks last year indicated that we should have expected a near record run of spring chinook.  There are several mitigating factors that may be contributing to the low returns:  the water in the Columbia River is colder than normal this year; river’s flows are much lower than the 10-year average; and there's an unusually high number of sea lions at Bonneville Dam -- their presence in the fish ladders has likely affected migration. 

Fish and Power Rates:  Since the conclusion of BPA’s last power rate case, FCRPS operational costs associated with fish measures cost BPA over $1 billion and contributed significantly to BPA’s financial troubles. This underscores the need for PPC to continue to urge BPA, the Corps of Engineers, Bureau of Reclamation and NOAA-Fisheries to implement more cost-effective fish and wildlife strategies across the board.  With the improved ocean survival of Columbia River salmon and steelhead and continuing pressure to raise BPA rates, PPC’s top priority in this arena is to strive to change operations of the federal system to generate more power and be more cost-effective.  Now and during 2004, PPC's focus has been on the Council’s Mainstem Rulemaking and federal implementation of the Biological Opinion.  This is an unprecedented opportunity to implement changes in system operations and to assist BPA in improving its financial situation.  For more information, contact Shane Scott at shanescott@ppcpdx.org.

Talking Points
New Biological Opinion for the FCRPS (a backgrounder)
Northwest Fish and Wildlife Issues
Hastings and McMorris letter to BPA, Corps and Bureau regarding Columbia and Snake Rivers:  This February 25, 2005 letter from Doc Hastings and Cathy McMorris expresses concern about the Oregon Governor's proposed strategy for managing the Columbia and Snake Rivers.  The letter says "If implemented, even in part, this proposal would have serious implications for the communities and constituents that we represent whose livelihoods are dependent upon the rivers."  [Hastings/McMorris lette

Senators Express to President Bush Deep Concern about Salmon Recovery Policies:  Senators Cantwell, Murray, Wyden, Feinstein and Boxer sent President Bush a letter February 16, 2005 expressing their concern "... that these actions could jeopardize recovery of these irreplaceable and economically valuable fish and unnecessarily plunge our region into a crippling period of legal and socio-economic uncertainty."  [Senator letter]

Fish & Wildlife funding levels being developed in MOA:  BPA and the Northwest Power and Conservation Council (Council) are working on a Memorandum of Agreement to set fish and wildlife funding levels for the next rate case.  The Council’s current budget is $139 million annually.  However, BPA has spent more that that over the last few years.  The new budget being proposed by the fish and wildlife managers is over $300 million annually.  The fish and wildlife managers are proposing BPA be responsible for funding new projects identified in 62 subbasins through the Council’s subbasin planning process. 

BPA has just concluded its Power Function Review process, which will establish fish and wildlife funding levels for the next rate case. [PPC's comments on PFR]

NOAA Fisheries 2004 Biological Opinion (BiOp):  The new BiOp for the Federal Columbia River Power System was issued by NOAA-Fisheries (NOAA-F) to the Action Agencies (BPA, Corps of Engineers and Bureau of Reclamation) November 30, 2004.  It contains the same mitigation requirements as identified in the 2000 BiOp, with the increased spring spill, construction of seven additional RSWs and more defined offsite mitigation requirements.  Action Agency representatives state the price tag for the new BiOp will amount to $600 million annually -- similar to the price tag of the 2000 BiOp.  However, with additional mitigation measures, we estimate the cost will be much higher. The Coalition for Smart Salmon Recovery issued a press release November 30, 2004 endorsing the new salmon plan.  [Coalition press release] 

The plaintiffs have submitted their Second Amended Complaint against NOAA-F over the 2004 BiOp.  They charge NOAA-F was “arbitrary and capricious” in issuing a “no jeopardy” biological opinion for operation of the federal hydrosystem.  The plaintiffs ask for injunctive relief in the form of control of the river “from time to time as may be necessary to protect the environment and ESA-listed species”.   

A group of BPA customers have joined PPC as Intervenor for the Defendant (NOAA-F).  This BPA Customer Group has retained an attorney and is preparing responses to the plaintiff’s arguments.  A hearing on this complaint will be held mid-April in Oregon District Court.

To go to the Federal Caucus' homepage, click on this link.

Salmon and Steelhead Runs In the Columbia River:  Adult runs of salmon and steelhead returning to the Columbia River basin were near record levels in 2004.  The following table illustrates the adult passage to date in 2005 at Bonneville Dam for each species, the 10-year average and the actual observed return for 2004.  Passage at Bonneville Dam is the predicted return to river mouth, minus commercial and sport harvest below the dam.  Chinook salmon races (i.e., spring, summer, and fall) are defined by date of passage. The other species return over a range of dates as identified in the table.
 

Document Links:

• NW Congressional Members Praise Efforts to Help Salmon:  This October 7, 2004 letter to the President expresses "support for your Administration's efforts to restore Endangered Species Act-listed salmon and steelhead in the Pacific Northwest. . ."  The Coalition for Smart Salmon Recovery responded with an October 14, 2004 press release that noted appreciation for the hard work the Administration has done in drafting a plan that will be good for salmon and the region.
• For BPA's Salmon Recovery pages

Endangered Species Act (ESA) - 101:  We've written a one-page introduction to the ESA for informational purposes.  Click here to learn the basics of the ESA.

Want to learn more about Spring-Summer Columbia River System Operations?
Click here for our primer on this issue.

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