BPA releases final Provider of Choice policies, decisions and contract templates

The documents released Aug. 14 are the POC Contract Record of Decision, Contract High Water Mark Implementation Policy and accompanying ROD, and the New Resource Rate Block Policy. BPA also posted final versions of the Provider of Choice CHWM Contract templates.  

The Provider of Choice process is BPA's regional effort to replace current long-term power sales contracts, also known as Regional Dialogue contracts, that expire in 2028. Under Section 5(b) of the Northwest Power Act, BPA is statutorily obligated to offer contracts to supply power to regional customers for up to 20 years.

“While this multi-year effort will not be complete until signed contracts are in hand, the contracts, policies and records of decision released this summer are a significant culmination of work," said Kim Thompson, vice president for Northwest Requirements Marketing. “Thanks to the significant time, thought, leadership and attention to detail from power, legal, and other supporting staff, BPA will have policies and contracts that serve BPA and its customers for decades to come."

Provider of Choice Contract ROD
BPA's POC Policy, published in March 2024, provided the framework for new long-term power contracts for regional bodies, cooperatives and federal agencies – also referred to as Priority Firm customers. The release of the POC Policy kicked off a year-long policy implementation and contract development phase, which included dozens of workshops and two formal comment periods. The POC Contract ROD addresses the comments received during the formal comment periods. 

“Over the last three years, staff, prospective customers and interested parties have committed hundreds of workshop hours to negotiate the terms of the policy and, ultimately, these new long-term contracts," said Kelly Olive, contract lead for Provider of Choice. “The final contracts reflect compromise, which in turn resulted in a better product. That would not have been possible without the commitment and engagement of our external participants."

New Resource Block Policy
In addition to serving Priority Firm customers, Section 5(b) of the Northwest Power Act directs BPA to offer contracts to meet the firm power load of investor-owned utilities, when requested. IOUs are eligible to purchase power from BPA at a New Resource rate. No IOUs have requested a contract. Therefore, rather than developing contract language, BPA developed the NR Block Policy, which outlines the process to establish such contracts and core features of the product that would be offered.

CHWM Implementation Policy and ROD
A key feature of the Provider of Choice contracts for public customers is the Contract High Water Mark, which determines how much power a customer is eligible to purchase from BPA at the Priority Firm Tier 1 rate. BPA will establish CHWMs for individual customers in a one-time fiscal year 2026 CHWM calculation.

The CHWM Implementation Policy and ROD address how BPA will conduct the one-time calculation and how it will run the Above-CHWM Load Process. Unlike BPA's Regional Dialogue contracts, which recalculated high water marks each rate period, the POC CHWMs are a fixed for the duration of the contract. By fixing the total amount of power available at the PF Tier 1 rate at the outset of the Provider of Choice contracts, BPA will reduce the Tier 1 load service uncertainty for customers.

BPA will undertake a process prior to each rate period to determine the amount of power above each customer's CHWM that the customer will serve with nonfederal resources, BPA power priced at the PF Tier 2 rate or a combination of those options.

“CHWMs were a significant focus during the policy development and remain a focal point of customers," said Sarah Burczak, policy lead for Provider of Choice. “CHWMs set customer-specific limits for buying power at what is typically BPA's lowest rate. The CHWM Implementation Policy addresses specific eligibility, calculation, process and adjustment details. The policy establishes clear expectations for how CHWMs will be established and provides assurances for how BPA will conduct ongoing related processes.

What comes next?
BPA expects to offer all contracts by Sept. 30. Customers have until Dec. 5 to return their signed contracts, in time for BPA to execute them by Dec. 31.

After contracts are executed, BPA will spend the next three years on implementation, preparing for power deliveries under the new contracts to begin Oct. 1, 2028. 

More information about Provider of Choice can be found at Provider of Choice - Bonneville Power Administration.