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A monthly employee publication of the Bonneville Power Administration
January 1998
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A monthly employee publication of the Bonneville Power Administration
January 1998
What’s in BPA’s future? Jack Robertson, acting Administrator and Chief Executive Officer, is highly optimistic. What follows is a lightly edited excerpt from a talk Robertson recently made to a group of Columbia River policy makers.
What will our electricity system be like in the not-too-distant future?
Expect deregulation to be fully realized. Consumers will be able to choose their own electricity supplier. Consumers may also see choices for time-of-day pricing; for example, doing laundry in off hours to get cheaper electricity prices. It’s likely that power delivery will come in a package with other services — ranging from energy management programs to convenience packaging, such as one bill for your burglar alarm and power.
Customers also will be able to choose the source of their power. Green power may either be an environmentally benign source of power or power purchased from a supplier that invests a portion of its revenues in renewables and conservation. BPA will be both.
With global warming now moving to the accepted fact stage, nonpolluting sources of power will assume new values relative to other power sources. The Northwest hydropower system may become the envy of the nation. To give you an idea of what our system means in terms of the environment, consider the impact of replacing the 8,550 average megawatts of firm power the federal hydropower system produces with the cleanest, state-of-the-art coal plants. Such a move would pump 65 million metric tons of carbon dioxide into our air each year. That would be the equivalent impact of putting 13 million cars on the road driving 11,000 miles each year at 20 miles per gallon.
But not all forces for the future will promote environmental choices or even consumer benefits. For many companies, heated competition will mean a single-minded focus on price.
And, ironically, deregulation could ultimately lead to less, not more, competition, with fewer electricity providers. The risks of fluctuating electricity prices will be too great for many smaller providers. They’ll drop out of the market, and other utilities — just as Montana Power Company announced last month — will divest their generation facilities and focus only on transmission and distribution. Fortune magazine estimates that within five years, the number of investor-owned utilities in the U.S. will decline by half.
Many expect the survivors to be huge companies with national and international connections. Power deals will not be based on geography. For example, already all James River plants anywhere in the country buy from Enron, and all 30 Nordstrom stores in California have signed a deal to buy from Seattle City Light.
With open access, the number of transactions on transmission lines will explode, and the Federal Energy Regulatory Commission may have greater oversight of transmission to protect system reliability.
A fundamental concern for consumers will be whether the limited number of providers is abusing market power and leading to higher rates for consumers. In the Northwest, BPA cost-based rates will be the most important benchmark in holding market rates down.
Rural areas may find that they are asked to pay more for power than urban areas due to higher transmission and distribution costs. Low income areas may pay more for service than higher income areas. As retired Senator Mark Hatfield said at a regional restructuring forum just last year, “Competitive markets result in economic efficiency, not fairness or other social or environmental goals.” With its mandate to serve low income and rural customers, BPA’s historical role will take on renewed importance.
There will be a push for a public benefit fund based on retail meters charges to fund energy efficiency, renewables and other public interest objectives that the market alone will not pay for.
There will be more salmon in the Columbia than today because at least some of what we are doing will work. Scientific knowledge will increase by an order of magnitude, giving us a better understanding of what does and does not work. Already, thanks to PIT tag results, we are beginning to see new scientific information that in some important ways runs contrary to intuitive theories about the dams, flows and the causes of fish mortality. We also will know more about ocean conditions and are likely to find that they dwarf river conditions in terms of impacts.
The focus on science will unite disparate approaches and will become the foundation of a common regional plan. It will be an ecosystem approach based on natural boundaries, not political boundaries. But some species of salmon will still be endangered because our best estimates are that it will take decades to recover them.
BPA will continue to be by far the largest contributor to fish and wildlife recovery, but the BPA fish and wildlife budget will not be synonymous with the region’s fish and wildlife budget. There will have to be other sources of funding.
I have a personal vision for the future. I hope to see a Bonneville Environmental Trust to which BPA and others contribute and which would provide funding above BPA’s basic budget. As BPA sells more products and services, it would contribute to lower rates, faster Treasury payments and the environmental trust. Fish and wildlife as well as other public services would share the wealth.
BPA’s traditional customer base will have changed. In addition to preference customers, we will sell our power to new aggregators. Many of these will be nontraditional players in the power market: tribes, school systems, cities and other nonprofit groups. They will need a strong partner such as BPA to play in a market dominated by huge national and international power conglomerates.
BPA itself will be smaller, more streamlined and quicker to respond in the marketplace. The old paternal relationship that BPA had with its customers in the past will be replaced with a partnership approach.
To survive, BPA will have to carve out a very important regional role that fills a unique need. To use an airline industry analogy, BPA won’t be one of the biggest — it won’t be a United or an American. But it can be an Alaska, a uniquely specialized, regionally-focused agency that provides its own geographic area with a level of service that the industry giants cannot replicate.
BPA power will become increasingly competitive in the next few years and will be uniquely poised to offer the best deal in low-cost power for a very long term. That’s because the approximately $550 million per year in Washington Public Power Supply System debt begins to decline in 2013 and drops off in 2018. Subsequently, federal debt also will be significantly retired. In short, BPA will be managing a generation system that is powered by water – the cheapest fuel in the world.
Federal power has an important place in the future I have just described.
So long as we seek to retain the value of the system through cost-based rates and focus on residential customers and on those who are not served as well by the market, there will be a distinguishing role for federal power in our future.
So long as we use transmission to provide affordable service to rural areas, there will be a distinguishing role for federal transmission in our future.
So long as we steward the assets of the federal power system to provide environmental investments and other public benefits to the region that for-profit utilities will not provide, there will be a distinguishing role for a federal power marketing agency in our future.
I am confident we will achieve all of these goals. Already we have met the challenges of deregulation and competition, and we have come away with lower costs, higher net revenues and greater reserves.
For these reasons, I am indeed confident about BPA’s future.
Santa and his elves weren’t the only ones making a list and checking it twice in December. Marilyn Berti and her crew checked their way through the employee list to find 560 employees and managers to evaluate manager performance at BPA.
Berti and her team had employees evaluate managers and had managers evaluate both peers and managers who report to them. The point was to create a snapshot, a baseline, of how skilled BPA managers are in fifteen tightly defined areas that fit under the label of key leadership competencies. While the managers and employees filling out the measurement forms rated the skills of individual managers, those managers cannot be identified. The lowest level of analysis is by business line and Corporate Group.
This was no idle exercise. “These leadership skills are essential to BPA’s success,” says Berti, “Now their continuous improvement is an agency target. Skillful managers help employees meet all the other targets.”
Results of the baseline will be reported to Corporate Planning and the agency in late January. Another survey in the fourth quarter will measure how much improvement managers have made during the 1998 fiscal year.
The surveys cover all 15 skills listed in the graph to the right. The Executive Committee confirmed the list after it emerged through agency organization assessment work conducted over the last six months. These are the skills BPA managers must have to lead the agency in successful business activities. “Four — building effective teams, motivating others, customer focus and process management — have been chosen for emphasis this year,” says Berti, “because they are the most essential, and it would be ineffective to take on improvement in all 15 at once.”
Success on the continuous improvement target is based on “significant improvement” in at least three of four emphasized competencies. What counts as significant improvement can vary. If the baseline results show that managers as a group score as very unskilled in an area, the group will need a fifty percent improvement for it to be considered significant. If, however, the baseline score reflects that managers are already skilled, a slight increase counts as significant.
Human Resources is not planning a required development course for all managers. In fact, very little in the way of formal training is in the offing because studies show that only about 10 percent of skill development comes from coursework or books.
Internal Consulting and Development is working with management teams to identify the actions that would have the highest impact in increasing effectiveness in the focus skill areas. Development plan guides are also available on each of the four competencies.
Managers working on specific skills are much more likely to be applying new information and practicing new behaviors as part of their regular work than attending a formal class. Learning partners and peer coaches will provide feedback and support. Managers’ circles will offer managers working on a common development issue the opportunity to work on it together, share their learning and reinforce behavior changes. Training courses will provide information, skill practice exercises with feedback and follow-up assignments for managers to use in the work environment.
Many managers are going beyond the general BPA-wide assessment by requesting individual feedback through 360 assessments. The results of that assessment go only to the individual and are used to identify individual gaps that become the focus of individual development actions.
While the list Berti and her elves checked was not exactly a gift list, all hope that the process it starts will bring the agency great benefits in the new year.
The October issue of The Circuit carried a story describing Generation Scheduling’s move to the 5th floor of BPA’s headquarters building in Portland. Although 45 people were involved in the move, only managers were interviewed for the story. Nevertheless, the story conveyed the impression that the scheduling staff as a group was “enthusiastic about the new operation.”
In fact, many, and perhaps most, of the employees were not happy about the move. For many, the move meant substantial inconveniences and disruptions related to the commute. Tax status also was affected by the Oregon relocation. Aside from personal issues, some employees also questioned the validity of the move, which was designed as part of BPA’s administrative separation of its business lines.
The scheduling employee responses to us were in general polite, reasonable and well presented. They did not attack their managers’ positions, but pointed out that managers do not represent all employees’ views. They felt nonmanagers should have been interviewed as well before we made a conclusion about how employees felt. They were correct.
We in Communications wish to apologize to the employees in Generation Scheduling for misrepresenting their views and to thank them for doing the responsible thing, calling this to our attention so we can do a better job. — Dulcy Mahar, Communications Manager
The power outage that began in Idaho and cascaded down the Pacific Northwest-Pacific Southwest Intertie on July 9, 1996, was simply the most dramatic piece of chaos afflicting the industry in late June and early July that year.
Even before the outages, as Kristy Humphrey, a pre-scheduler in the Power Business Line, remembers it, “We were working 12 to 16 hours a day trying to resolve conflicts among utilities and marketers over how much energy was being sent and how much received. We couldn’t agree.”
The root of the problem seemed to be the increasing number of marketers entering the deregulated electric industry. Utility preschedulers lacked experience in dealing with the way marketers trade and schedule energy while the marketers were just as inexperienced in that they didn’t know what information utilities needed to correctly preschedule the energy.
In the old days, BPA sold power to customer utilities and the power’s physical and financial paths were straightforward: BPA had a contract with, say, Snohomish Public Utility District, and sent the energy over its own lines. Snohomish knew where the energy came from; BPA knew where it went; and everything was clear. With the advent of trading, the physical path remains fairly straightforward in that BPA sends power over, say, the intertie to Southern California Edison, but the financial path can go through a dozen marketers. BPA sells power to marketer A and Southern California Edison buys it from marketer Z; but system reliability demands that BPA knows where the energy it sold is used and that Southern California Edison knows where the energy it buys was generated.
The outage that darkened parts of California in early July created a sense of urgency to come up with a solution.
BPA, several big California utilities and several marketers got together for a brainstorming session in mid-July 1996 to come up with a solution to their mutual problem.
The solution the group devised is a system of faxes based on chains of transactions. If BPA sells a block of 100 megawatts of power to marketer A and marketer A divides it into 10 blocks of 10 MW, then each of those ten transactions is the base of tracking. Each marketer in the “daisy chain,” beginning with the one who makes the sale to the receiving utility, reports back up the chain. The marketer who made the original purchase, sends a fax to the generating utility that shows the entire daisy chain for each transaction. The last marketer in the daisy chain sends the receiving utility a similar fax. The faxes allow the sending and receiving utilities to balance their accounts.
By the end of July 1996, the basic procedures were in place and prescheduling was accomplished more efficiently.
But, not all problems were solved by the fax system. Real-time schedulers were particularly concerned about system reliability because they were unable to quickly identify paths of energy transaction when schedules needed to be changed.
In mid-August, the usual BPA, California utility and marketing suspects met again. The idea that surfaced was assigning a unique identifier to each financial path that would track each transaction from prescheduling through after-the-fact accounting. “When it came time for someone to volunteer to put the system together,” says Humphrey, “No hands went up, so I raised mine.”
Humphrey and Melissa Thai, another prescheduler in the Power Business Line, sat down one night to work out what Humphrey calls the off-line coding system. In the one night, they worked out the system so that each financial path had a unique identifier assigned by the selling utility.
It was an overnight success. A duty scheduler wrote in the log notes: “Poof! Like magic, control area to control area could speak the same language for the first time in weeks.”
The problems BPA and the California utilities faced were not unique to the West Coast. Utilities all over North America were experiencing the same problems.
In response to these problems, the Western System Coordinating Council (WSCC) Operating Committee used the format that BPA and the California utilities had implemented as the foundation for an expanded system that meets the needs of utilities and marketers in the WSCC region. The “WSCC Energy Transaction Tagging Procedure and Standardized Format” became a requirement in March 1997.
It didn’t end there. The North America Electric Reliability Council developed what is known as the NERC tag. Using the same principles as the WSCC tag, NERC developed an electronic system that will soon be implemented nationwide to support the reliability of interconnected power systems and facilitate energy scheduling.
A methodology worked out in the recesses of the Dittmer building has spread across the country. The world of scheduling may be specialized, but in that world BPA’s leadership in finding innovative solutions to complex technical problems is widely recognized.
The grinch that stole Christmas was working on his act at the Ross Complex during December.
In the photo above left, Vancouver fire fighters survey the scene while others put out a fire at the High Voltage Laboratory on Dec. 12. The BPA Safety Office believes that insulating oil being warmed in a water heater sprayed from a pressure valve onto an electrical connection that arced and the oil caught fire.
No one was hurt in the fire, but the lab and adjoining offices suffered smoke damage. Repairs are estimated at less than $100,000.
Not even the ground was reliable at the complex. The photo above right shows work being done on a sinkhole that developed Nov. 29 when a 42-inch concrete culvert carrying Cold Creek along the northern boundary gave out. The creek then began eroding the fill over the culvert.
The creek washed out about 2,000 cubic yards of material. Another 4,000 had to be removed to reach the culvert to make repairs. At its largest, the excavation was 120 feet long, 100 feet wide and 50 feet deep. Backfilling was complete Dec. 15 at a cost of about $200,000.
There are books on paper, books on tape and, now, books online.
Leading the way on BPA’s internal Web site, the Intranet, are the BPA Manual and the Records Manual.
Response has been very positive. Information online is more current than the printed versions because changes and additions to the manuals are posted as soon as they are approved.
And information is more easily located online than on paper. The Web pages allow employees to search by subject matter, chapter or general category. Searchers can see the documents as they were prepared in Word, and read, print or copy them.
“The counter that measures ‘hits’ on the site shows that it is being accessed at a high rate, even though it has been online only a short time,” says Diane Johnson, who manages the BPA Manual. The online version is so successful that many employees have opted to discontinue receiving hardcopy manuals. “In the four months since the BPA Manual has been online,” says Johnson, “hardcopy distribution has decreased by about 30 percent and is continuing to fall.”
“Paper copies of the BPA Manual and the Records Manual are still available for those who choose to remain on the mailing list,” says Records Officer Jim Assuras. “But use of the Intranet is strongly encouraged. Decreasing reliance on hard copies of the manual reduces paper costs, copying, filing and mail handling. User efficiency increases because the most current information is available.”
The BPA Manual has been revised over the last two years and now contains current information on topics ranging from security to delegations of authority. The manual was designed to include all internal BPA policies on every topic of interest to employees. Records Management has yet to find subject matter that is not included.
The pages were designed for use with Microsoft Internet Explorer but should work with other browsers.
Both of the manuals were available on ZyIndex, but they suffered from formatting and access problems. So, when the “Quick Hit” team in Information Resources offered assistance to convert the BPA Manual to a Web page, Directives Manager Diane Johnson enthusiastically accepted. Stacey Glennon, computer specialist in Information Resources, put the BPA Manual online in a form easy to access even for users with no Internet experience. Tom Sluder, UNISYS contractor in Information Resources, worked on the Records Manual this fall, using the same basic format Glennon used on the BPA Manual.
Since the Records Manual is highly acclaimed by records management organizations across the United States, the Records Management group recently posted it to the external Web site, the Internet, so users from other agencies can benefit from BPA’s expertise.
The BPA Manual Intranet address is:
http://webip1/corporate/CGI/CGIR/BPAM/BPAM.htm
The Records Manual Intranet address is:
http://webip1/Corporate/cgi/cgir/RECMAN/recman.htm
The Records Manual Internet address is:
http://www.bpa.gov/corporate/cgi/cgir/recman/recman.htm
To offer comments about either Web site or to make suggestions of additional information that would be helpful, call Diane Johnson, 503-230-3401, for the BPA Manual, or Mary Rose Kerg, 503-230-5456, for the Records Manual. — Mary Rose Kerg, management analyst in Records Management