11/5/97 Draft of Standard Power Product Descriptions (sub/background)

BPA Power Services

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Power Contracts

Standard Power Product Descriptions
November 5, 1997 Draft

The following standard power products can be used as the basis for negotiating products BPA is willing to offer: The features of these products can be modified during bilateral negotiations. These products are expected to meet most of the needs of BPA's current customers. Other needs, which don't fit well within these descriptions, can be addressed during bilateral discussions.

[Note: An MS Word version of this information (22 pages, 49 kb) is also available.]

(See also the "Glossary of Terms")

BPA - Power Business Line
Standard Power Product Descriptions
Draft - 11/5/97

	Product	Pricing Methodology
1	Full Service	Embedded-Cost Posted Rate
2	Firm Power Block	Embedded-Cost Posted Rate
3 a	Basic Declared Resources (Simple Partial)	Embedded Costs for firm energy; market costs for flexibility
3 b	Basic Declared Resources (Moderate Partial)	"
4	Variable Load Factor	"
5	Renewable Resource	"
6	Secondary - Commodity	Market or Opportunity Costs
7	Loss Compensation	Market or Opportunity Costs
8	Capacity	Market or Opportunity Costs
9	Block Flexibility	Market or Opportunity Costs
10	Storage	Market or Opportunity Costs
11	Load Factoring	Market or Opportunity Costs
12 a	Supplemental AGC	Market or Opportunity Costs
12 b	Operating Reserve	Market or Opportunity Costs
12 c	Forced Outage Reserve	Market or Opportunity Costs
13	Preschedule Change Rights	Market or Opportunity Costs
14	Displacement Rights	Market or Opportunity Costs
15 a	Retail Access - Curtailment	Market or Opportunity Costs
15 b	Retail Access - Remarketing	Market or Opportunity Costs
16	Scheduling Services	Market or Opportunity Costs

*Product*	*1. Full Service*
General	This product provides all the firm power the customer needs to meet actual loads. Customer is not active in the market.
Term	5-20 years, beginning October 1, 2001.
Transmission	Transmission and ancillary services are not included, but BPA can secure these services and package them with this product.
Amount & Shape	BPA will provide continuous power to meet all of the customer's retail load not met by customer's resource(s).
Load Growth	BPA will meet the entire load growth needs of the customer, except NLSL.
Load Variations	BPA takes on the risk of load variations.
Retail Access Load Loss	Customer takes on the risk of Retail access load loss, but BPA can offer a remarketing service and package it with this product.
Resources	Customer has no resources, other than small generating resources limited to xx MW each, yy MW total. Resource fluctuations are treated as load variations.
Linkages	None.
Basis for Payment	Payment is based on amount of power used.

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*Product*	*2. Firm Power Block*
General	Flat, take-or-pay block of power with no variations.
Term	5-20 years, beginning October 1, 2001.
Transmission	Transmission (and ancillary services) are not included, but BPA can secure these services and package them with this product.
Amount & Shape	Declared purchase of a flat block of power: 100% load factor for term of contract.
Load Growth	None: Amount is fixed.
Linkages	None.
Basis for Payment	Payment is based on monthly contract amounts.

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*Product*	*3a. Basic Declared Resources* *(Simple Partial)*
General	This product provides all the firm power the customer needs to meet actual loads in excess of declared resources (e.g., pre-determined acquisitions from another supplier). Customer is not making off-system sales except as necessary to mitigate retail access load loss.
Term	5-20 years, beginning October 1, 2001.
Transmission	Transmission and ancillary services are not included, but BPA can secure these services and package them with this product.
Amount & Shape	BPA provides hourly amounts of power needed to follow customer's load in excess of declared resources.
Load Growth	The extent to which BPA serves load growth (except new large single loads) may be limited based on variables such as the size of the customer's load, or the outcome of subscription discussions.
Load Variations	BPA takes on the risk of load variations, except and to the extent of retail access load loss.
Retail Access Load Loss	Customer takes on the risk of retail access load loss. Customer bears the market risk of remarketing.
Resources	Small generating resources are limited to xx MW each, yy MW total. Fluctuations in the output of these resources are treated as load variations. Customer declares larger resources to be used for load. Fluctuations in the output of these resources must be predictable, either through contract or through purchase of a support product.
Linkages	A resource back-up product is necessary to ensure the predictability of any variable resource greater than a "small generating resource" (described above). BPA can provide such a product.
Basis for Payment	Payment is based on "measured energy" + "amount of energy remarketed due to retail access load loss". (Measured energy means total metered load minus specified amount of contract purchases.)

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*Product*	*3b. Basic Declared Resources* *(Moderate Partial)*
General	As a result of comments from the participants at the 8/6/97 WorkGroup meeting, it is likely that customers who are interested in the flexibilities listed below, would choose something like the variable load factor product as the basis for their service, complementing it with other products from the list. BPA will do further work to clarify the package(s) that can be made available for customers with a substantial self-owned resource base such as current computed requirements customers.
Term
Transmission
Amount & Shape
Load Growth
Load Variations
Retail Access Load Loss
Resources
Linkages
Basis for Payment

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*Product*	*4. Variable Load Factor*
General	This product provides the purchaser with a specified amount of capacity and the right to take energy within a specified load factor range.
Term	5-20 years, beginning October 1, 2001.
Transmission	Transmission and ancillary services are not included, but BPA can secure these services and package them with this product.
Amount & Shape	Up to a negotiated monthly capacity amount. Customer can specify a monthly load factor from 70% to 100%, which will be reflected in the pricing. Capacity and load factor may be revised annually.
Load Growth	None: Amount is fixed.
Load Variations	BPA takes on the risk of load variations within the limits of the specified capacity and load factor.
Resource Fluctuations	No special provision is made for differences between load variations and resource fluctuations. BPA takes on the risk of such variations within the limits of the specified capacity and load factor.
Linkages	None.
Basis for Payment	Payment is based on contract demand and amount of energy used (but not less than take-or-pay amount).

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*Product*	*5. Renewable Resource*
Term	5-20 years, beginning October 1, 2001.
General	BPA will provide renewable resources which meet one or more of the following standards: Small hydropower facilities with nameplate output rating of 30 MW or less; Hydropower facilities sited in locations that do not block anadromous fish passage; Operations of resources that result in atmospheric emissions at rates lower than the pacific northwest regional averages; Operations of new or existing facilities driven by wind, solar, geothermal, biomass or landfill gas; Operation of any facility endorsed by a third party certifying agency; Operations of hydropower facilities due to seasonal flows mandated by the Endangered Species Act or other required flow management directive; Operations of hydropower facilities during off peak hours during the months of April, May, June, or July of any year.
Scheduling	BPA will schedule this power on an hourly basis.
Transmission	Transmission and ancillary services are not included, but BPA can secure these services and package them with this product.
Amount & Shape	Flat annual blocks of power: 100% monthly load factor for each year.
Load Variations	None: Amount is fixed.
Disclosure	BPA will provide the renewable resource purchaser with annual calendar year reports documenting the project source and power delivery schedules associated with this sale.
Backup	BPA will back up the output of this resource with system power.
Linkages	None.
Basis for Payment	Take-or-Pay: Payment is based on monthly contract amounts.

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*Product*	*6. Secondary - Commodity*
General	Secondary energy is a commodity product normally sold from BPA's Trading Floor.
Term	Monthly amounts from 1-18 months, or annual blocks of power.
Transmission	Transmission and ancillary services are not included, but BPA can secure these services and package them with this product.
Amount & Shape	As negotiated, but this product is commonly sold as monthly flat blocks of power: 100%-load factor on LLH only, on HLH only, or on all hours.
Interruption Rights	Rights to interrupt schedules may be negotiated.
Basis for Payment	Payment is based on amount of power scheduled.

Alternate Product Description

A sub-group of the Subscription WorkGroup redefined the product of interest as a potential option connected to forecast hydro conditions. Activity in this subgroup is on-going.

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*Product*	*7. Loss Compensation*
General	This product provides for the losses associated with the transmission of a BPA purchase across the FCRTS. Customers requesting service to meet a variable portion of their load can include their wheeling loss obligation as part of their system load. Customers declaring the amount of power they wish to purchase may purchase loss compensation as a separate product.
Term	Up to the same number of years as the power product to which this loss compensation product is linked.
Transmission	Transmission and ancillary services are not included, but BPA can secure these services and package them with this product.
Amount & Shape	The amount and shape are fixed based on a percentage of the power purchase.
Linkages	This standard product would be purchased in conjunction with a power purchase from BPA.
Basis for Payment	Payment is based on amount of power delivered.

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*Product*	*8. Capacity*
General	Capacity is a customer's right to purchase and a supplier's obligation to stand-ready to provide. The term "capacity without energy" (e.g., "naked capacity") has been used to describe a common power product in which a supplier stands ready to supply a specified MW/hr level of power, generally in specified HLH only, and the receiver returns the energy -- often called "peaking replacement energy" -- in other hours. The need addressed in the past by capacity-without-energy can be at least partly met by buys and sells from the commodity market rather than with a special capacity product. Additional product features might include cash-out in lieu of energy replacement, ability to defer acceptance of replacement energy, and flexibilities around notice or pre-schedule terms.
Term	Any term up to 20 years.
Transmission	Transmission and ancillary services are not included, but BPA can secure these services and package them with this product.
Amount & Shape	The customer can specify the amount and shape including: Maximum number of hours per period during which the customer is able to schedule the capacity Maximum MW/hr to be scheduled, and Hours of the day or week the service is required.
Energy Returns	Peaking replacement energy must be returned during a specified time period (as negotiated): Commonly within either 24 hours or 168 hours. Hourly maximum rate of return will be negotiated: a standard return rate could be 100% of the capacity amount.
Linkages	None.
Basis for Payment	Payment is based on the amount of capacity specified in the contract.

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*Product*	*9. Block Flexibility*
General	This product will meet variations in customer's purchase(s) from BPA, regardless of the reason for the variations. The reasons will be identified at the time of negotiation and will be factored into the price of the product. This product is associated with a separate take-or-pay power purchase(s).
Term	The term will be the same as the term of the underlying power purchase(s).
Transmission	Transmission and ancillary services are not included, but BPA can secure these services and package them with this product.
Amount & Shape	Customer will specify the hourly amount of flexibility above the take-or-pay amount. Customer will specify the hourly amount of flexibility below, but not to exceed, the take-or-pay amount. The amounts above and below do not have to be symmetrical around the take-or-pay amount.
Load Variations	All variations in load (e.g., load growth, economic or retail access load loss) can be covered in this product, up to the variance limits.
Resource Fluctuations	All fluctuations in resources(e.g., purchases or generating resource output) can be covered in this product, up to the variance limits.
Linkages	This product is offered in conjunction with a take-or-pay purchase from BPA.
Basis for Payment	Payment is based on amount of variance. For net energy deliveries, within the specified variance, in excess of the underlying power purchase(s), the basis for payment will be the same as for the underlying power sale; there will be no charge for energy not taken, within the specified variance.

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*Product*	*10. Storage*
General	Storage generally has been used to refer to actual use of hydro reservoir space and therefore was constrained by reservoir specifics. It sometimes was attached literally to the water stored but more commonly was measured in energy equivalents. This product generally involves the delivery and return of equal amounts of energy in specified time periods. It is designed for customers that want to deliver energy to BPA at a certain time and have it returned at another time. The product can be designed to include (1) energy accepted from the customer in LLH and delivered to the customer in HLH, (2) energy accepted from the customer in the spring and returned to the customer in the winter, or (3) energy delivered to the customer in advance of energy being provided to BPA.
Term	The term of this product is negotiable.
Transmission	Transmission and Ancillary services are not included, but BPA can secure these services and package them with this product.
Amount & Shape	Amounts of storage capability vary daily. BPA will assess system conditions and will store as much as possible within system limitations. Amounts and timing of storage may be negotiated on a preschedule basis.
Notification	Storage deliveries and returns will be conducted on a preschedule basis.
Spill Guarantee	This standard product is not guaranteed against spill.
Limitations	BPA retains the right to limit return of storage over a specified number of peak hours each day.
Reservoirs	This storage is considered system storage and is not tied to a specific reservoir.
Accounting	BPA's normal storage accounting practices will be used.
Linkages	None.
Basis for Payment	Payment is based on amounts and periods when energy is stored and returned.

Price adjustments:

Price will vary based on factors such as time energy is delivered, time energy is returned, guarantee against spill, etc.

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*Product*	*11. Load Factoring*
General	This product generally involves the delivery and return of equal amounts of energy in specified time periods. It is designed for customers that want to deliver energy to BPA at a certain time and have it returned at another time. It can be used for within-day shaping of a resource. The product can be designed to include (1) energy accepted from the customer in LLH and delivered to the customer in HLH, (2) energy accepted from the customer in the spring and returned to the customer in the winter, or (3) energy delivered to the customer in advance of energy being provided to BPA
Term	The term of this product is negotiable.
Transmission	Transmission and Ancillary services are not included, but BPA can secure these services and package them with this product.
Amount & Shape	BPA will negotiate with the customer on a case-by case basis for providing the services necessary to meet the customer's needs.
Firmness	This service may be firm or non-firm based on price and system conditions.
Limitations	BPA will retain the right to limit delivery of load factoring over a specified number of peak hours each day.
Linkages	None.
Basis for Payment	Payment is based on the number of MW required to support the service and/or MWh accepted and/or returned.

Price adjustments:

Price will vary based on factors such as category of firmness, level of service, time of delivery, time of return, guarantee against spill, within-day shaping of a resource, etc.

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*Product*	*12a. Supplemental AGC*
General	This product makes capacity available to either deliver or receive energy as needed on an instantaneous basis to cover a utility's load and resource variations.
Term	Up to 5 years, beginning October 1, 2001.
Transmission	Transmission and ancillary services are not included, but BPA can secure these services and package them with this product.
Amount & Shape	Hourly capacity shape as specified by the customer; Energy provided up to a specified percent of the capacity.
Firmness	This product is sold on a nonfirm basis.
Direction	Standard product is uni-directional: Customer can choose to supplement AGC in either a positive or a negative direction.
Accounting	Amounts of energy will be integrated on an hourly basis.
Ramp Rate	The ramp rate is fixed at 50 MW/minute.
Equipment	Customer is responsible for acquiring and purchasing the telemetry and communications channel that are required between the customer's control center and the BPA control center.
Linkages	None.
Basis for Payment	Payment is based on amount of capacity available on an instantaneous basis and amount of hourly or monthly net energy delivered or received.

Price adjustments:

Price will be lower if customer chooses to reduce the specified percent of capacity, chooses a bi-directional product, or chooses a lower ramp rate.
Price will be higher if customer chooses spill protection, needs provisions for exceeding the capacity, or wishes a firm product.

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*Product*	*12b. Operating Reserves*
General	This product can be used to meet the customer's NWPP, WSCC, NERC or other reserve obligations within an hour. We offer Spinning and Non-spinning reserves that can be called upon in the event of a resource failure. Spinning reserves are provided from on-line generation that is instantaneously responsive to changes in system frequency and are available within 10 minutes upon notification of a resource failure. Non-spinning reserves are provided from generation that can be on-line within 10 minutes or load that can be interrupted within 10 minutes. This product could also be negotiated to meet a customer's import loss obligations.
Term	Up to 5 years, beginning October 1, 2001.
Transmission	Transmission and ancillary services are not included, but BPA can secure these services and package them with this product.
Amount & Shape	Up to the contracted amount within 10 minutes of notification. The shape would be specified by the customer in the contract.
Energy Delivery	BPA will provide energy for up to 60 minutes.
Ramp Rate	50 MW/minute.
Linkages	None.
Basis for Payment	Payment is based on amount of operating reserve provided by BPA and amount of energy delivered.

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*Product*	*12c. Forced Outage Reserves*
General	This product provides capacity and energy upon request to replace power due to a forced outage of a resource. The product also could be designed to back up a transmission line outage.
Term	Up to 5 years, beginning October 1, 2001.
Transmission	Transmission and ancillary services are not included, but BPA can secure these services and package them with this product.
Amount	Size of resource, specified by customer, to be backed for the duration specified
Resource being supported	Back-up provided for forced outages on specific resources identified by the customer.
Duration of Energy Delivery	BPA will provide energy for the duration specified by the customer, normally up to 48 consecutive hours per occurrence and up to 6 occurrences in a year.
Linkages	None.
Basis for Payment	Payment is based on amount of forced outage reserves held by BPA and amount of energy provided.

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*Product*	*13. Preschedule Change Rights*
General	This product provides the customer with the right to make changes to scheduled amounts previously set in the preschedule process, i.e., the workday prior to the day of delivery. It is assumed to be attached to an umbrella agreement or power sales contract specifying the limitations on preschedule change rights.
Term	Up to the term of the underlying agreement.
Transmission	Transmission and ancillary services are not included, but BPA can secure these services and package them with this product.
Amount & Frequency	The maximum MW/hr magnitude of the schedule change and the number of changes per hour will be specified in the underlying agreement.
Deadline	Changes from preschedules for the "Hour Ahead" would be accepted until a specified time prior to the beginning of that clock hour.
Linkages	This product is offered in conjunction with an underlying BPA purchase agreement.
Basis for Payment	Payment is based on amount of rights and frequency of use.

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*Product*	*14. Displacement*
General	This product is designed to allow the customer to purchase less power from BPA, for any reason, than their commitment to purchase. Customer can use this product in addition to the Block Flexibility product to supplement the ability to reduce BPA purchases. This product enables the customer to exercise economic choice in large amounts for limited periods.
Term	One-year increments, not to exceed the term of the underlying agreement, with one-month notice to displace.
Transmission	Transmission and ancillary services are not included, but BPA can secure these services and package them with this product.
Amount & Shape	The product provides for displacement up to 100% of the BPA purchase.
Linkages	This product is offered in conjunction with a BPA sale to the customer.
Basis for Payment	Payment is based on amount of displacement right and amount of use.

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*Product*	*15a. Retail Access - Curtailment*
General	This product allows the customer to reduce its purchases from BPA if load is lost because retail customers gain access to other suppliers of electricity. It relieves the customer of the market risk associated with BPA remarketing customer's take-or-pay power associated with retail access load loss.
Term	5 years, beginning October 1, 2001.
Transmission	Transmission and ancillary services are not included, but BPA can secure these services and package them with this product.
Amount & Shape	BPA will assume up to a specified amount of the customer's load lost to retail wheeling in a shape consistent with the type of load lost.
Retail Access Load Loss	For loads lost by the customer due to retail access, BPA will reduce deliveries.
Linkages	This product is offered in conjunction with a BPA sale to the customer. It would not protect the customer from load loss beyond the amount being purchased from BPA.
Basis for Payment	Payment is based on amount of load lost.

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*Product*	*15b. Remarketing*
General		This product is designed to provide relief from PF, NR, or IP purchases that are take or pay. This product serves to remarket a customer's excess power resulting from of retail load(s) lost by the customer due to retail competition or de-regulation.
Term		Limited to the term(s) of the underlying purchase agreement(s).
Transmission		Transmission and ancillary services are not included, but BPA can secure these services and package them with this product.
Amount & Shape		The amount and minimum duration of excess firm energy to be remarketed will be identified at least three weeks in advance. The amount of power to be remarketed during a single period will be limited to the customer's load loss. The shape of the power to be returned to BPA for remarketing will match the shape of the lost load.
Limitations		Under certain market or system conditions, BPA may have a limited ability to remarket.
Load Variations		None: Amount is fixed. BPA and customer can agree on the amount to be remarketed.
Linkages		This product is offered in conjunction with a BPA sale to the customer. It would not protect the customer from load loss beyond the amount being purchased from BPA.
Basis for Crediting		The customer's power bill will be credited to reflect the price of the power sold.
Basis for Payment		Take or Pay: Payment is based on the monthly contract amount. A reservation fee and service fee will be charged to off-set the cost of providing this service.

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*Product*	*16. Scheduling Services*
General	BPA can provide scheduling services for customers that purchase non-Federal power. (Scheduling fees will not be charged for power purchased by the customer from BPA.)
Term	Up to the term of the purchase.
Types of Scheduling Services	Scheduling services are customized, tailored to the type of agreement or resource, and to the specifications of individual customers. BPA can provide the following Scheduling services, if requested: Daily prescheduling: Daily prescheduling of transactions between utilities within the Western Systems Power Pool (WSPP). Real-Time Activities: Verification and coordination of the necessary interchange schedules with all parties involved, and coordination of all real-time changes in preschedules with all affected parties. After-the-Fact Activities: After-the-fact verification and reconciliation of transactions. Bonneville will provide records of hourly schedules each day and cumulative total schedules at the end of each calendar month.
Conditions	Customer will submit preschedule information (including hourly schedules, transmission arrangements, control area contacts) by a specified time, each preschedule day. Customer will provide the name of the utility providing load regulation and reserves, for each schedule. BPA is not responsible for reserves or mitigating losses if no reasonable alternatives are provided.
Linkages	This product is tied to a non-Federal purchase.
Basis for Payment	Payment is based on fee for services and actual number of preschedules and real-time changes.

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Archive of content originally posted or last updated on: November 5, 1997.
Content originally provided by: Carolyn Whitney, BPA Power Business Line.
Content currently provided by: PBL Requirements Marketing - PS.
Page maintained by: BPA Web Team.

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