
BPA made real progress in fiscal year 2019 delivering on its 2018-2023 Strategic Plan in the face of some challenging circumstances.
In the FY 2019 annual report, the agency outlines its sound financial condition, backed by investment-grade credit ratings from the three major ratings agencies. The report shows the agency is maintaining competitiveness in the changing energy market landscape through a more sustainable rate trajectory and by continuing to reduce costs.
The annual report includes the results of BPA’s key performance indicators, a set of annual targets that track safety and reliability – two areas where BPA excelled in 2019 – as well as yearly financial results. BPA’s fourth quarter financial performance shows that while the agency ended the fiscal year with positive net revenues, it missed its financial targets for total revenues and expenses by the narrowest of margins.
The agency’s total revenues came in just $3 million shy of the more than $3.6 billion target – a difference of 0.01%. On the expense side, the agency missed its target by less than 1%, coming in at about $3.41 billion compared to the target of about $3.38 billion.
Factors such as low streamflow, lower than forecast price spreads, and customer service deferrals contributed to reduced revenues. Increased expenses were due to unplanned, significant power purchase costs during the winter cold snap when market prices were extremely volatile. That event highlighted the importance of taking strategic cost-management actions, which helped to offset the increased expenses. It also demonstrated the need for BPA’s continued focus on financial resiliency, a key objective of our strategic and financial plans. This objective is designed to help BPA withstand the yearly ups and downs of market conditions or other disruptive events that can affect the agency’s bottom line.
Also in FY 2019, BPA advanced its grid modernization initiative by more than doubling the number of projects that are being implemented or have already been integrated into standard business operations. However, BPA missed its ambitious FY 2019 target for the number of projects implemented due to lag time in project staffing and mobilization. BPA will maintain its steady pace and expects that most of the projects started in or before FY 2019 will be ready to execute their defined work and actively deliver business value by the end of the second quarter of FY 2020.
BPA Administrator Elliot Mainzer and Chief Financial Officer Michelle Manary will provide an overview of BPA’s FY 2019 performance at the Nov. 15 Quarterly Business Review. A recording of the webcast will be available online soon.