At the Feb. 14 quarterly business review, BPA shared its first quarter financial results.

BPA is in a healthy position from a financial reserves perspective.

BPA Administrator and CEO John Hairston
BPA expects to end fiscal year 2023 in a strong financial position despite the impacts of dry conditions and high market prices. The first quarter forecast for above-target net revenues is largely driven by Transmission sales.

“BPA is in a healthy position from a financial reserves perspective,” said BPA Administrator and CEO John Hairston. “While we are facing the impacts of higher costs in some parts of the business, we have strong cost-management discipline and will remain focused on managing these expenses as we go through the year.”

BPA’s current net revenues forecast is negative $215 million, which is $80 million above the performance target. This year’s negative net revenues target accounts for the Reserves Distribution Clause rate reduction to customers, which reduced revenues relative to the rate case. It also reflects expense increases for budget carry-over from the prior year and inflationary pressure from personnel costs. 

Power Services expects to end the year with negative net revenues of $288 million, which is $4 million below the performance target. This is mainly due to higher power purchase expenses as well as personnel costs and enterprise service costs. Transmission Services expects to end the year with net revenues of $73 million. This is $84 million above projections and attributed primarily to higher point-to-point long-term sales.

BPA forecasts controllable end-of-year expenses will be $10 million above target due to higher-than-expected maintenance expenses, software licensing and fleet costs. 

The first quarter forecast for end-of-year reserves for risk shows Power Services at $733 million, Transmission Services at $286 million and the agency at $1.01 billion.  Both business lines are forecast to be above the upper threshold for the Reserves Distribution Clause; however, with three quarters of the year remaining and significant volatility in play, BPA is taking a cautious approach when viewing the end-of-year point estimates.

BPA’s full first quarterly business review is available at the link.

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