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Section 5(c) of the Northwest Power Act established the Residential Exchange Program (REP). Under the REP, BPA “purchases” power from each participating utility at that utility’s Average System Cost (ASC). The Administrator then offers, in exchange, to “sell” an equivalent amount of electric power to the utility at BPA’s PF Exchange rate. The amount of power purchased and sold is the qualifying residential and small farm load of each utility participating in the REP. Although styled as a power exchange, the REP in practice is implemented as a paper transaction, with BPA typically making payments to the exchanging utility for the net difference between the utility’s ASC and BPA’s PF Exchange rate. These benefits are passed on to the residential and small farm customers of the utility.
Under section 5(c)(7) of the Northwest Power Act, BPA must develop, in consultation with regional parties, a methodology for determining a utility’s ASC. This methodology, referred to as the Average System Cost Methodology (ASCM), establishes the rules and procedures for calculating a utility’s ASC. The current ASCM was developed in collaboration with interested parties in 2008. The 2008 ASCM reviewed and updated the previous Average System Cost Methodology, which had been developed in 1984.
Under the 2008 ASCM, a utility’s ASC is generally determined by dividing the utility’s allowed cost of resources (Contract System Cost) by the utility’s total system load (Contract System Load). The resulting quotient of this calculation is the utility’s ASC. These ASCs are determined in an ASC Review Process administered by BPA in the year prior to the commencement of BPA’s wholesale power rate proceeding. Utilities participating in the REP must submit ASC filings and all associated documentation in the ASC Review Processes in accordance with the filing procedures set forth in the 2008 ASCM.
On July 7, 2008, BPA submitted the 2008 ASCM to the Federal Energy Regulatory Commission (Commission) for its review and approval. The Commission granted final approval of the 2008 ASCM on September 4, 2009.
2008 ASC Methodology Consultation
See also: Archives
Contact Information
Tina Ko, Residential Exchange Program Manager
503-230-3555
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Finance & Rates
