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Conservation Adjustment to the Contract High Water Mark (CHWM)

The Conservation Adjustment to the CHWM is made to minimize the disincentive for individual customers to undertake conservation measures during FY2007 through FY2010. Conservation may reduce a customer’s FY2010 load and consequently its CHWM; therefore, BPA will adjust the initial CHWM determination to account for the amount of eligible conservation each customer has achieved.

For BPA to credit conservation toward the Conservation Adjustment, the conservation must be cost-effective, verified, and achieved from FY 2007 through FY 2010 and have reduced the customer’s load in FY 2010. For calculation purposes, each utility’s preliminary CHWM will be credited 100 percent (1 aMW for each 1 aMW) of customer self-funded conservation savings and 75 percent (0.75 aMW for each 1 aMW) of BPA-funded savings (i.e., through the Conservation Rate Credit, bilateral contracts, and so forth). The CHWMs, after any Conservation Adjustments, then will be adjusted proportionately so that the sum of the CHWMs is equal to the same forecast firm critical output of Tier 1 System Resources used to derive the preliminary CHWM. The Conservation Adjustment redistributes the CHWM amounts among customers and does not change the total CHWM amount. The result of the Conservation Adjustment is each customer’s final CHWM. See also Attachment D of BPA’s Tiered Rate Methodology.

For more specific information on the CHWM please refer the Long-Term Regional Dialogue Policy or the Tiered Rates Methodology. For an overview of the Conservation Adjustment, review the Conservation Adjustment Overview.

In order to help utilities estimate their CHWM, a tool has been developed to allow simple scenarios to be tested. This is a tool intended to demonstrate the Contract High Water Mark determination process and is not intended to provide an actual HWM determination and should not be relied upon for planning purposes by any utility. Public feedback is invited regarding this initial design and the functionality of this spreadsheet. Please direct comments to your BPA Account Executive or to Larry Stene, BPA Policy Development at (503) 230-4704.

The savings that are attributable to each utility's conservation adjustment will be released on an annual basis. Currently, the FY 2007 - FY 2009 numbers are available.

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