BPA Rates Hearing Room
May 13, 1998 Public Meeting
About 50 people attended the first public meeting on the Slice of the System Proposal. Angela Wykoff and Paul Norman welcomed the participants and stated that the purpose of the meeting was to offer an opportunity to clarify the current Public Generating Pool (PGP) Slice proposal and hear comments on the proposal. BPA had made an earlier conclusion to say no to the original proposal, but after receiving comments from the PGP and others, BPA decided to have more discussion on the proposal and do so in a public process.
Lon Peters (PGP) provided a summary view of the proposal, that is, the Slice would be a right for a customer to receive a percentage share of FCRPS capability, including actual energy generation (firm and secondary) and storage.
Angela Wykoff walked the group through BPA's interpretation of the PGP's Proposal (see Handout No. 1) and invited questions and comments about each section. A summary of the discussion under each section follows. Most comments in this summary were clarifications from those representing the PGP proposal. By the conclusion of the meeting the group had discussed less than half of the sections of the interpretation handout.
This section describes the general concept of the proposal as stated above.
The suggested term is 5-20 years. PGP suggested this term because it thought that BPA would need some certainty as the customer would, with 5 years as a minimum sign-up period. The PGP used 20 years as an upward limit because it is the statutory limit on power sales contracts. Peters stressed that the greater certainty on fish and wildlife costs, the better for customers; that this affects the proposed 5-20 year term suggested and other factors of the proposal, but this is not unique to the Slice. A longer term is more desirable to customers.
Under "No off-ramps for fish costs for the term of the contract," the PGP thought "notice and termination rights" or "risk sharing" would be more appropriate than "off-ramps"; that this principle should apply to other products also. The PGP stated that the intent is not to walk away from fish costs that others would bear. A key issue is the "appropriateness" of costs and the "shared responsibility" of risks, and how costs and risks are defined. All principles that apply to all contracts should apply to Slice; there was a concern raised that if this is so, it is not a new approach to contracts.
Eligibility to Purchase
Any subscriber would be subject to existing priorities and preferences. PGP's proposal was intended to allow a purchase based on a customer's net load, and to meet all statutory requirements, not to provide open eligibility. Eligibility and the reasonableness of a purchase must be tested, according to PGP, to avoid allowing a customer to "overpurchase" beyond net load. Others wanted more discussion on eligibility and more refined definitions of eligibility. It was not clear how the Regional Review would be incorporated into the proposal and how that would affect eligibility.
The Slice as conceived by the PGP would be a proportionate share of the capability of the FCRPS, including both primary and secondary energy. The purchaser would have the right to schedule or send a signal to BPA for delivery of the energy in real time, allowing the use of the Slice for automatic generation control or reserves. This would allow some who cannot do this now to have the capability. Control areas could use the Slice for control, backup, reserve, shaping, etc. BPA would have a running computation of constraints that would be applied to limit the take of the purchaser; it would be applied to the customer's signal. The PGP encourages using signals to communicate customer needs rather than scheduling. Signals would provide benefits to all parties and to the physical operation of resources.
A Slice customer would be responsible for its own purchasing and marketing and would not need BPA for these functions.
There would be a daily check of the Slice take and the percentage difference would be posted to a storage account with some limits, such as a certain amount of time to bring the account within bounds. The storage would be proportioned to FCRPS storage. The account would be zeroed out when the system approaches its physical limit. There would be less flexibility on the upper side when reservoirs are full than on the lower side. When the "paper pond" reaches its limit, it either would be taken or spilled. The physical side would be translated to a single monthly account. Only the storage account would be tracked from day to day. If the system reaches flood control, then the Slicer would just lose their portion.
It is not clear if BPA would still have an obligation to stand ready to serve load after a Slice purchase, or if the Slice customer would take that obligation away through some mechanism. The Residential Exchange is considered by PGP as a financial transaction, not part of resources.
The Slice would not be available if a customer purchases Full Service. It potentially could be done as a Declared Resource Product, but it would be a complicated transaction.
Peters handed out a list of Costs for the Slice Revenue Requirement (see Handout No. 2) that draws from line items in BPA's budget. GTA was left out, and the residential exchange is not part of the chart, but it is expected to be included. Rate test protection as a credit would be given to Slice customers if others received it in a rate case. There was a concern about the transfer of costs to others. There was not time to discuss the list, but participants were asked to review the list, add anything to it that is missing, and be prepared to discuss it in a separate meeting.
C. Next Steps
Subsequent meetings will be scheduled to specifically discuss the Costs to Purchasers, and other aspects of the PGP proposal. Meetings may be tied to other meetings for the Subscription process if possible.
Archive of content originally posted or last updated on: May 28, 1998.
Content originally provided by: Angela Wykoff, BPA Power Business Line.
Content provided by: Timothy Roberts, Slice Product Manager, 503-230-5450, email@example.com.
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