Handout #1 at 5/13/98 Slice Meeting

May 12, 1998

BPA's Interpretation of the
Public Generating Pool Slice Proposal

*General*
Right to receive a percentage share of FCRPS capability, including actual energy generation (firm and secondary) and storage Right to modify the rate at which such energy is produced within hour, day, week, month, year, within the bounds of operational and non-power requirements Obligation to pay a corresponding percentage share of BPA costs, i.e., revenue requirement
Notes:

*Term*
5-20 years. No off-ramps for fish costs for term of contract Possible off-ramps for acts of Congress such as repayment reform or other public purposes that would significantly increase the cost of power?
Notes:

*Eligibility to Purchase*
Any Subscriber
Notes:

*Product Received*
Proportionate share of the capability of the FCRPS, including both primary and secondary energy Right to schedule or to send a signal to BPA for delivery of the energy in real time (allowing use of Slice for automatic generation control or reserves) Proportionate share of the storage and shaping rights generally available to BPA, such as the ability to vary energy delivered during a day, or between days, weeks, or months within operating constraints Hour-ahead changes in amount taken and within-hour ability to adjust signal No purchasing or marketing services No protection against required spill
Notes:

*Linkages*
Cannot be purchased in combination with Full Service or Declared Resource Products
Notes:

*Costs to Purchasers*
Percent share of FCRPS generation costs including: generation integration unforeseen fish and wildlife costs unforeseen maintenance costs Treasury and WPPSS bonds residential/small farm exchange costs environmental investments (some conservation and renewable resource costs?) other public purposes? Budget, investment, cost allocations, marketing decisions as normally done by BPA Costs excluded transmission costs (purchase at the bus-bar) General Transfer Agreement costs short term and long term marketing, trading floor certain PBL overheads (ratemaking?, billing?, contract administration?) new long-term purchases (for load growth, load variations, or resource replacement?) short-term power purchases Service and Exchange agreements financial reserves? spill caused by lack of market others?
Notes:

*Basis for Payment*
Based on a percentage share of a contractually determined embedded cost revenue requirement Cost of product may over time vary based on factors determined in advance of contract execution No credits from BPA's marketing revenues Annual true-ups for cost underruns or extraordinary costs of generating units ("acts of God") Could include annual "true-ups" based on actual costs incurred by BPA Possible cost adjustments to non-requirement purchases, because of statutory rate directives
Notes:

*Resources Included/Excluded*
Includes hydro and thermal committed prior to 1/97 (less Canadian Entitlement obligations) Includes long-term power purchases committed prior to 1/97 Excludes resources sold under another agreement Excludes short or long-term purchases committed after 12/96
Notes:

*Transmission*
Not included; purchaser obtains own
Notes:

*Reserves and Backup*
Customer responsible for generation reserves to meet reliability standards
Notes:

*Scheduling and Accounting*
Use of flexibility rights accounted for daily in a "storage account" Scheduling and accounting provisions established by contract BPA may adjust the rate of power deliveries to reflect actual operating constraints on the FCRPS
Notes:

*Forecast and Data Needs*
Corps and Bureau system conditions, flood controls, boundaries BPA's annual, seasonal, monthly, weekly, daily forecasts of HLH maximum hourly generation LLH minimum hourly generation must-run non-hydro generation maximum permissible deviations of storage BPAs "telescoping" forecasts of the capability of the FCRPS, including both total generation and storage capabilities, and resulting limits to purchasers BPA forecasted Energy Content Curve BPA plans for operating within constraints BPA agreements or plans to operate for some environmental purpose Anticipated non-power operations Non-hydro outages Advance notice of limits on deliveries to and from storage account consistent with BPA's own limitations
Notes: (This topic will be covered under a separate Agenda item)

*Operations/Management Influence*
Federal agencies make decisions on non-power requirements and operations of the FCRPS Purchaser would have no authority in river management, investment, or other management decisions
Notes:

*Dispute Resolution*
Capabilities, constraints, production quantities subject to after-the-fact dispute resolution and other remedies (a high hurdle for requiring dispute resolution) Remedies for false application of a constraint chronic manipulation of forecast data withholding information bad faith actions causing substantial damage Remedies would be power replacement or monetary, not changes in river operations
Notes:

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