Table of Contents:

Cost Review panel identifies further cost reductions

Journey Bear visits BPA

He’s big. He’s furry. He wears a backpack. He’s the Journey Bear.

Four third-grade students — from left to right in the photo below, Luther, Mike, Joey and Hilary — from Ardenwald Elementary School in Milwaukie, Ore., sent the bear to BPA in January. The backpack contained a notebook in which the students had written questions. Employees wrote answers to the questions as the bear journeyed from office to office. The answers help students learn about different jobs in business and — more importantly — how to communicate clearly through the written word.

On Jan. 27, the four students and their teacher, Jolene Davis, came to pick up the bear and his load of answers.

Joan McNamara, BPA’s education coordinator, organized the BPA participation. “It’s all part of our education outreach. We are doing our part to support schools and kids in the region. Employees like to make a contribution to their communities. BPA has the reputation of being a very ‘education friendly’ business.”

Transformer burns at Sacajawea Substation

Fire fighters pour water on a burning transformer at Sacajawea Substation in the photograph below.

The cause of the dramatic Dec. 15 fire is still unknown. Smoke and flames from the fire were visible for miles. While the transformer was destroyed, the rest of the substation suffered minimal damage. Service to one customer was interrupted when the substation was shut down to allow the fire fighters to put out the fire.

The transformer was the only one of its kind in the system. Replacement would cost $2.5 million. The Power Business Line is evaluating whether to replace the unit. With it out of service, power from Ice Harbor Dam is being re-routed, which has the potential to cause a problem in the event of high spring runoff.

Black History Month

In recognition of Black History Month, the African American Resource Group at BPA has planned several events for BPA employees.

Black History Month is commonly celebrated through the month of February in the United States by both African Americans and non-African Americans. Black History Month gives people from all ethnic backgrounds an opportunity to learn more about black history and culture. The AARG is excited to have the distinct privilege of providing a month of exciting activities that will focus on African American historians, prominent African Americans in the business community and the contributions of African Americans at BPA.

The national theme is “African Americans in Businesses: The Path To Empowerment.” At BPA the AARG has augmented the national theme by breaking it down into segments of time — the past, the present, the near future and beyond the year 2000. When we think of the contributions that African Americans have made at BPA in the past, we think of George Bell, who retired from the position of vice president of the Transmission Business Line in 1996. Another African American who recently retired from BPA after 48 years of federal service is William Jenkins. Bill, as everyone knew him, addressed the issues and concerns of African Americans at BPA through his involvement with committees and was very supportive of the “struggle.”

Presently, there are several African Americans here at BPA who are making significant strides and contributions within the agency and in the community. Here are some comments from BPA employees that address what Black History Month means to them.

“For me, Black History Month represents a time of rejuvenation and focused reflection. While African Americans’ contributions to society, such as the traffic signal and the refrigerator, have become necessities and should be daily reminders of our grand achievements, the month of February represents a specific period during which we can assess how far we have progressed in relation to where we want to be in the future.”

Kirsten Watts in Seattle, WA (left)

“Black History Month celebrates the rich culture and history of people that contributed and continue to contribute to America’s greatness. It’s an account of people that largely came to America against their will and survived despite the denial of freedom and opportunities. Recognizing the accomplishments of African Americans inspires me and makes me proud to be a part of that legacy.”

John Brank in Olympia, WA

“I was taught that there are bad people as well as good people from all races. Therefore, we must be deliberate in judging people on the content of their character and the merits of their actions based on ethical values. I was also taught never, never allow someone else’s negative perception of your mental and/or physical capabilities to become your reality!”

John Williams in Boise. ID (right)

“When I think of African Americans who have made significant contributions to BPA, Reginald Kaiser is one of the first that comes to mind. BPA’s first EEO Officer, was respected by all and was a pioneer in establishing the foundation of EEO at BPA. Reggie was also in the electrical trades craft as a substation operator, system protection craftsman and safety manager. He retired from BPA as Seattle area manager and left a legacy of providing an equal opportunity for all.”

Billy Ward in The Dalles, OR

Rate case returns

The 600-pound gorilla is back.

Its name is Rate Case.

The 1996 rate case established power and transmission rates for five years, fiscal years 1996 to 2001, so why is the Power Products, Pricing and Rates staff gearing up to stage another rate case as early as July?

Because, not only do most of BPA’s rates expire in the year 2001, but so do BPA’s power sales contracts. And customers already are out searching for power suppliers or getting offers from other suppliers. BPA is participating with others in the region in a little exercise called subscription to arrange BPA power sales to customers for the period after Oct. 1, 2001.

Syd Berwager, Power Business Line senior customer account executive, explains the situation from the customer’s perspective. “Customers will move on different schedules in determining whom to buy power from in the period after the current contracts expire,” he says. “Almost no customer will sign a contract without knowing what prices are going to be for the first few years. We’ve got to be ready to do business with all of them. We’ve got to have firm prices. Which, for many of our products, means we’ve got to have a rate case.” The first of two subscription phases started in March and is continuing through pre-rate-case workshops currently scheduled for May. The contracts will be negotiated in the second phase. The pre-rate-case workshops will center on the technicalities of pricing products developed earlier in subscription. BPA will seek customer input and agreement with its methods and proposals. The hope is that “the rate case formal process will go very quickly and very smoothly,” says Barney Keep, public utilities specialist in Power Products, Pricing and Rates. Diane Cherry, acting manager of Power Products, Pricing and Rates, hopes Keep is right because time is of the essence. “We have business reasons why we need to do it so soon,” she says. “Setting rates is an important part of how we implement our marketing strategies.”

For Headquarters

“This is going to be a real challenge to get staff and resources in place to get the process done. It’s sooner than we anticipated a year ago,” says Cherry of the 1998 rate case.

The Power Business Line re-engineering of the rates function moved several major tasks and people into the area service hubs. After the 1996 rate case, the remaining core rates staff completed its own re-engineering process. It designed systems and information flows that will permit a formal rate hearing process to be completed in 90 days.

“We’ve had to build new systems,” Cherry adds. “We’ve been working on the dry run to get those systems in place, and we’re re-evaluating the process so we can do the rates process as re-engineered. We don’t have a big rates staff, so we’re relying on people elsewhere in the agency.”

“I hope we get through the formal process promptly,” Berwager says, “because, the longer we’re in it, the longer we have to do stopgap deals and because there are some customers who don’t want to sign contracts until the rate case is concluded. We’re getting to the point we have to make some hard decisions. It’s going to be a real test of our organization.”

Besides having to develop and use new systems, the people setting rates have to make assumptions about conditions far into the future. For example, as deregulation kicks in, retail consumers will have the opportunity to choose their suppliers. What should be the 1998 rate case assumption about the timing and amount of the load that BPA customers could lose to other suppliers? Should BPA offer products that mitigate some of the risk of its customers’ retail load loss? Another big set of issues surrounds the question of when the next transmission rate case will be.

Retirements

Industry deregulation delayed in California

Hurry up and wait. California’s experiment with deregulation was planned to begin on Jan. 1, 1998. But the start up of this massive undertaking will be delayed until April 1 because of development hurdles with its brand-new computer and communications systems.

“There’s a great deal that has to come together for California to open its market, much of which hasn’t been done before, and it’s got to be reliable,” says Lauren Nichols, public utilities specialist and head of the California Integration Project work process team.

BPA has been preparing to do business in this deregulated market for months and now must wait a few months longer. The delay has benefits. The up side is that the agency has more time to get ready, and the delay isn’t costing BPA any revenue. “We continue to market to our traditional customers as we have in the past,” says Peggy Olds, public utilities specialist and lead of the California Integration Project team.

California’s goal for deregulation is to reduce electricity prices for consumers by opening its electricity markets to competition. This means that electricity prices and part of the cost of transmission service will be set by the market rather than by regulators. In addition, end-use consumers from all classes, including residential, will be able to choose their power suppliers.

In order to do business in California, BPA needs to learn the new rules of the game and become even lighter on its feet. For example, prescheduling will occur seven days a week, including holidays, whereas it now takes place during the five weekdays. “We have to increase staff to implement the seven-day prescheduling function,” says Olds. “Ultimately, you’ll see real-time trading that will happen 24 hours a day in the California market. This will have an impact on how power is purchased, sold and scheduled in all the other markets on the West Coast.”

The entities responsible for managing this newly deregulated market are the Independent System Operator, or ISO, and the California Power Exchange, or PX. California state law AB 1890 mandated certain utilities’ participation in the ISO and PX. Participating utilities are Southern California Edison, San Diego Gas & Electric and Pacific Gas & Electric. Other utilities and marketers may join voluntarily.

The ISO will manage the operation and use of transmission facilities to transmit power to loads. Transmission services in the California market will need to be scheduled through the ISO-controlled grid an hour or a day ahead, Olds explains. “That’s a radical change from what we do now,” she says. “You cannot purchase a weekly, monthly or yearly block of transmission service from the ISO.” Long-term transmission availability is expected to come by Jan. 1, 1999.

The PX will also operate as a day-ahead and hour-ahead market; no one will be able to buy weekly, monthly or yearly blocks of power from the PX. Buyers and sellers will provide the PX with bids for each hour, including the amount of power they want to buy or sell, and the offered price. The PX will rank all the bids by price and submit a least-cost dispatch schedule to the ISO. The ISO will arrange for transmission between the purchasers and sellers and is responsible for the settlement process of each sale.

Because all this is happening for each hour of every day, the recordkeeping chores will be daunting for both the ISO and the PX, and for those companies like BPA who will do business in this new environment. Some experts predict the number of transactions to increase by a factor of 500.

California’s investor-owned utilities are required to buy and sell through the PX for four years (until 2002). Other power producers, such as BPA, have the option of buying from or selling electricity through the PX or through bilateral contracts with other companies.

“There’s a benefit to the delay in implementation in that it gives us a little bit of breathing room to perfect our infrastructure,” says Olds. That infrastructure includes developing new scheduling applications and refining contract administration, after-the-fact accounting and billing functions. “The invoices the ISO will be doing need to be validated, and we need to record the revenue coming in,” says Nichols. “Depending on the amount of business that we do, it could be a substantial workload.”

BPA was ready for California to deregulate its market on Jan. 1, and the agency will be ready on April 1. “We’ve been participating in market simulations on almost a daily basis,” says Nichols. “We’re working with them pretty intensively.”

The reason? “This gives us a new market niche and is most likely the industry’s future,” says Olds. “BPA is preparing to meet the future to keep our customers’ rates low.”

Dick Perlas chairs historical exhibit

Since retiring in March 1997, Dick Perlas has been using his remarkable organizational skills on behalf of the Oregon Chapter of the Filipino American National Historical Society.

The result is “Filipino Americans — Pioneers to the Present,” an exhibit continuing through March 1 at the Oregon History Center in Portland.

Perlas didn’t join the Filipino historical society until late 1994, the year his father died. Perlas’ father had been very active in the Filipino American community in Portland, and, with his passing says Perlas, “I became more interested in my roots.”

The Filipino American National Historical Society reached agreement with the Oregon Historical Society in late 1995 to create a exhibit depicting the history of the Filipino immigration to North America, the West Coast and Oregon.

Someone must have recognized Perlas’ organizational ability; he was made exhibit chairman. Even while heading up the BPA re-engineering effort, Perlas was helping organize the exhibit, which was scheduled to open in June 1997. “They needed someone to make delicate decisions on what to include and what not to include, and I had no problem with that,” says Perlas. After his retirement, Perlas worked what amounted to full time preparing the exhibit. It opened on schedule at the Oregon History Center, 1200 SW Park Avenue in Portland on June 5. The display covers nearly 1,600 square feet of gallery space. It is modular and portable so it can be used in its entirety or in part at cultural fairs and community events after its run at the history center.

Dick Perlas, left, poses with Chet Orloff, executive director of the Oregon Historical SOciety, at the entrance to the FIlipino American National Historical Society exhibit.

“The timing of the project was perfect,” says Perlas, “providing a period of transition between work at BPA and no work at all. Achieving results is always very satisfying. After we breakdown the exhibit in March, our energies will concentrate on our national convention in Portland in July.”

Volunteer efforts energize Kaptur

It’s all in a day’s work. But that day gets awfully long for many employees who leave BPA at the end of a work day, eat dinner and then dash off to volunteer their services in the community.

What’s the motivation for putting in volunteer time after a hard day’s work?

Paul Kaptur, a rates analyst in the Power Business Line, feels good about what he can do for the Portland public schools, but he also believes that his volunteer efforts enhance his work at BPA.

“When my daughter started school four years ago, I decided to get involved with her school,” says Kaptur. “As a parent, this is the best place for me to get involved in growing education.” He began by joining the Parents Activist Coalition for School Funding and being appointed chairperson of the Local School Advisory Committee. He continues to serve on the advisory committee in addition to working on the Business Income Tax Committee, a parent organization that looks at school funding in Multnomah County. He was recently appointed to the Citizen Budget Review Committee, which is a legislatively mandated committee that reviews the Portland school district’s budget and makes funding recommendations to the school board.

But the committee meetings are not the most challenging part of his volunteer effort. “I took a one-day course in parent lobbying at the beginning of the 1997 legislative session, and pretty soon the phone started ringing.” Those phone calls led Kaptur to Salem where he used his business background to work with other parents to lobby state legislators on education funding. On one occasion, Kaptur explains, “I had to literally run from a meeting with House Speaker Lynn Lundquist to make it to a hearings room in time to offer testimony to a Joint House Ways and Means committee hearing on education.” As a result of the coalition’s lobbying efforts, school funding was higher than expected. But, says Kaptur, “We are still not making education a real priority.”

The parent coalition is working to find long-term solutions to funding school education, which will lead to another round of lobbying in the 1999 legislative session. Before joining BPA, Kaptur worked for Pacific Power, PacificCorp and Portland General Electric. His experience in regulatory rates, corporate planning, and mergers and acquisitions led him to BPA in 1991. He is now working on the 1998 rate case.

Paul Kaptur lobbies on behalf of Portland schools and students.

Kaptur sees many similarities between the legislative and political processes in Salem and rate case process. “Working with legislators and their issues allows me to bring a different perspective into the work that I do at BPA,” he says. “Coalitions, whether they are formed in task groups or routine meetings, are most effective when they arrive at a no-nonsense process to get the job done.” Kaptur thinks the education system is a great training ground for politics in action: “It’s a fascinating world that energizes me.”

Juggling community involvement with work and family does take its toll. Kaptur spends anywhere from one to three nights a week in meetings, not to mention day trips to Salem. “You can easily burn out in this field because it is so time consuming with changes coming in very small increments,” says Kaptur. “But if it wasn’t fun, I wouldn’t do it.”

Green power is hot, but what is it?

Green gets complicated. Green can, just for starters, be kelly, forest, British racing and maybe even chartreuse.

Green gets even more complicated when it describes power. Clearly, different power providers, purchasers, consumers and environmental groups see different shades of green. Still, there’s a market out there for “green” power products, and BPA is in the forefront of designing products to meet that market.

Green power is generally understood to be environmentally friendly. But, how is that determined? Is it power that is generated with few hydrocarbon emissions? No hydrocarbon emissions? Is it hydro generated in a way that doesn’t harm fish and wildlife?

Hoping to avoid some of the confusion, BPA refers to its green power products as “environmentally superior.” BPA has compiled a list of its environmentally superior power products to give potential purchasers a choice, and the agency is now working with regional environmental interests to obtain their endorsements. Each product description includes an explanation of the environmental effects of the resources that supply the energy for the product. This is known in the power industry as environmental disclosure.

“There’s not a clear case that any energy supply comes with zero impacts,” says Al Ingram, renewable products manager in Power Products, Pricing and Rates. “We have a variety of products, some of them based on the hydro system and some based on new renewables.” And, Ingram says, “We are actually making some sales.”

BPA already has acquired a 37-percent share of the 41-megawatt output of the Wyoming Wind Project on the Foote Creek Rim near Arlington, Wyoming. Salem Electric Cooperative has committed to buying 6.5 average megawatts of the output of that wind project from BPA. And the agency is looking at acquiring more wind and some geothermal power for its list of green products. The list also includes various products based on hydropower, such as generation that explicitly helps fish migration in the spring and summer, power from facilities outside of anadromous fish ranges and power from small hydro projects (classified as renewables in California). Other power products, produced by large hydro plants, are labeled simply “carbon free” and “nuclear free.” The price for BPA’s environmentally superior power products will include a negotiated premium above BPA’s usual rate. Customers are willing to pay more for such products, says Don Wolfe of the Power Business Line’s Business Strategy and Assessment staff. “They value something about it beyond the usefulness of the energy, so they’re willing to pay more than the market price,” he says. Ingram explains that customers in the Northwest are used to purchasing hydro power and thus consider wind, solar and small hydro to be environmentally superior. Customers in other places such as Colorado, who purchase power from coal and other thermal resources, on the other hand, consider hydro power to be environmentally superior.

For the Ross Complex

California has qualifying standards for renewable resources. To qualify, hydro resources must be under 30 megawatts nameplate rating. BPA also intends to apply for qualification under the standards of independent agencies that certify renewable resources.

“We think disclosure is a good thing, telling the customer what they’re getting for their buck,” says Ingram. “In an open-access world, we need that information out there so people can make informed choices.”

Offering environmentally superior power products fits right in with BPA’s business objective to invest in environmental results to sustain competitiveness and deliver on its public responsibilities.

The PBL response plan lists several targets and critical success indicators for fiscal year 1998 that are tied to the agency goal of developing renewable resources. One target is to advance at least one additional renewable energy project during the year. BPA committed to spend up to $15 million per year for 10 years to support new renewable resources. Any premium BPA can charge for renewables will replenish the seed money account to develop even more renewables.

Darr receives Clean Energy Award

The Renewable Northwest Project recently recognized BPA’s long-standing commitment to renewable projects with a special award.

On Dec. 17, 1997, George Darr, a civil engineer in the Power Business Line, was presented the Clean Energy Award. “George went above and beyond the call of duty to persevere and help BPA follow through with its commitment on renewables,” says Rachel Shimshak, who is director of The Renewable Northwest Project. “He made the first new wind project to serve the Northwest happen.”

Darr is the first recipient of the award, which was given for his outstanding service in furthering a clean energy future for the Northwest. “This is BPA’s award,” says Darr. “No one in this industry has supported renewable projects as much as we have.” Darr is a project manager of non-federal renewable resource power projects such as the Wyoming Wind Plant Project and the Solar Radiation Monitoring Project. He also has been BPA’s geothermal project manager since 1988.

A meander runs through it

Recent floods in the Pacific Northwest have land managers asking the question, “How can we slow down a river so that seasonal flooding doesn’t seriously erode streambanks and floodplains?”

At the same time, fish biologists are asking, “Can we use the velocity of a river to actually create improvements to fish habitat?”

Fortunately, scientists involved with the Northwest Power Planning Council’s Regional Fish and Wildlife Program are working on answers to these questions. While no one presumes to be able to control a river at floodstage — a realization dramatically reinforced by last year’s floods — scientists, intent on improving fish habitat in the tributaries to the Columbia River, are working on some approaches that just might help.

One approach being funded by BPA has been to construct meanders, S-shaped curves, in rivers where none exist. In nature, the winding shape of a meander serves to slow a river’s flow by creating drag when the water bounces from bank to bank. When meanders are coupled with streambank stabilization techniques, the severe erosion of a fast-moving stream or river can be lessened. Last winter, two streams in southeast Washington, the Tucannon River and Asotin Creek, severely eroded their streambanks and destroyed acres of valuable pastureland. Such erosion not only carries away valuable topsoil, but it deposits the soil as silt that degrades fish habitat. Habitat restoration work completed this summer is intended to prevent a recurrence of last winter’s damage. To minimize any adverse effects of construction, all these activities were completed when streamflows were low and fish were absent from the construction area.

Above: Rootwad revetments installed along the Tucannon River to create fish habitat and protect the streambank from erosion. Below: Clarkston high School science students install a vegetative "mattress" along Asotin Creek to stabilize the streambank.

Illustrated here is a typical meander construction. It contains two frequently used habitat enhancement techniques — rootwad revetments and vortex rock weirs. These features work together to improve fish habitat. The rootwad revetments are usually about 18-foot-long tree trunks with the roots still attached. The trunk is anchored into the bank with heavy boulders so the root ball protrudes into the stream. The rootwad protects the streambank from erosion by deflecting and slowing the river’s velocity, and it uses the action of the river to scour out deep pools in the riverbed. Biologists value deep pools because they provide critical rearing and resting habitat for fish. Brad Johnson, Asotin Model Watershed Coordinator, says that, “by installing rootwad revetments, we are actually creating fish condominiums.” Vortex rock weirs, which are V-shaped structures placed in the middle of the stream, also use the force of the river flowing over them to scour out deep pools.

Installation of another protective measure, called streambank “mattressing,” made good use of volunteer labor from Clarkston High School’s environmental science class. Working along an eroding bank of the Asotin River, students pounded metal fence posts into the riverbank. Then they interwove tree branches to form a mat that was attached to the posts with wire. Not only does the flexible mat deflect and defuse the force of floodwater, but the branches provide spaces for sediment to filter out. This sediment helps build up the riverbank and provides a home for trees and shrubs that further stabilize the bank.

While this work is funded by BPA as part of the Council’s Model Watershed Program, it is being carried out through county conservation districts. That’s because the conservation districts enjoy an established and effective working relationship with private landowners, and it’s the private landowners who own a lot of the riparian habitat. The voluntary participation of these landowners is critical to this program of habitat restoration in the tributaries. The Watershed Program is centrally funded, locally administered and voluntary. And it is working. — Tony Morrell, environmental coordinator in Environment, Fish and Wildlife

This diagram shows change in a stream's flow with the installation of a meander.