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Slice of the System

July 23, 1998 Public Meeting

BPA Rates Hearing Room

A. Introduction

About 25 people attended the fifth public meeting on the Slice of the System Proposal. Angela Wykoff welcomed the participants and stated that the purpose of the meeting was to continue the background and education process for new participants, to continue to clarify the current Public Generating Pool (PGP) Slice proposal, and to elicit comments and concerns from participants. BPA also wants to start an analysis of specific features of the Slice proposal.

Wykoff announced two more meetings, August 7 (previously scheduled for August 5) and August 19. BPA plans to provide a response and Slice proposal alternatives by August 7. These alternatives will be discussed at the next Slice meeting. Wykoff acknowledged that some interim meetings may be necessary. BPA would like comments on the alternatives at the August 19 meeting. This information would be used to provide some input to the draft Subscription Record of Decision, which is scheduled to be available for a 30-day review period on August 26. The final Record of Decision is scheduled to be released October 5. [See Schedule for revised meeting dates and times.]

Wykoff introduced Kristi Wallis. She will facilitate the remaining Slice meetings. Wallis will act as an independent third party to work towards meeting the concerns of participants. She will meet with interested entities to further identify their concerns. She will see if there is a viable product to offer that is mutually agreeable to participants. Meetings with individuals and groups will remain confidential unless the parties release Wallis to share the information.

In response to a question, Wykoff stated that BPA would put forward a proposal that is bound by, and consistent with, statutes and Subscription, and as close to the PGP as possible.

Wykoff reviewed the list of handouts available at the meeting:

B. Mapping Requirements Rights to Slice Shares

Maureen Flynn referred the participants to Handout No. 2. Flynn developed this information as an illustration of what could happen to BPA's peak and energy obligation under a Slice proposal. Flynn acknowledged that the numbers in the example could be quite different post-2001. There is also uncertainty about how to appropriately measure peaking resources. This example is a starting point for mapping. It appears that mapping the Slice percentages to FELCC could give customers a greater right to take on peak without their payment changing. There may also be some unpredictability about a customer's peak rights. Lon Peters (PGP) thought that Case A included artifacts of expired contracts that probably would not be available in future BPA products. There was concern that no conclusions could be drawn from the example because so many conditions could be different and the example is drawn from one set of circumstances. Flynn said she could look at other numbers and would be interested in some specific conditions from participants, such as an appropriate range of numbers. Wykoff stated that BPA is open to other modifications to study.

There were a few concerns about why the example included a capacity component. Phil Mesa (BPA) stressed that the example is tied to the PGP proposal and that the proposal has a capacity component, so it needs to be included to get an idea of the uncertainty. Jonah Tsui expressed a concern about whether BPA would be able to serve the needs of other customers if Slice purchasers were able to take their full capacity percentage. He wants Slice to be equitable so that net revenues to BPA would not be impacted. He has done a study that shows the financial impacts would be different to different customers because customers are not a homogenous group. He suggested that Slice customers pay a higher rate so that they can market their share. He also suggested that a study be done with real numbers, using critical water assumptions, and that BPA only consider 20 percent of the system for Slice so that BPA does not oversell.

Merrill Schultz suggested that a limit on capability be modeled to see the impact. There was also a suggestion to model the Slice customer shaping their share differently than the federal system.

Flynn invited suggestions about how to expand the analysis to display the downside risk to customers and look at the sustained peaking capability also. Peters was unsure the downside risk is relevant. Dennis Parrish (Seattle) suggested establishing the relationship to firm rights to 5(b) power. Wallis suggested non-Slice customers want to know if preference is going to go to Slicers and if there will be unintended consequences. Parrish also suggested the risk for the cost of the Residential Exchange needs to be addressed. Barney Keep (BPA) said the competing uses of non-firm need to be discussed. Flynn's purpose for the analysis is to make sure BPA does not make sales with unquantifiable risks. Tsui stressed that BPA has statutory requirements, that adding new resources would be a marketing decision and he does not want that to happen. He asked that Flynn do a simulation of what the system can do, and then take part of the Slice away.

Mesa asked how the maximum take of Slice might be defined. He said that the percentage needs to be determined to do an analysis. Peters suggested it would be a percentage of the system, not a percentage of the load. Parrish suggested that they are moving towards a natural flow regime and how that affects the pattern of receiving energy. He suggested considering requirements loads and declared resources and the difference between the two would equal the annual firm; use that for determining the percentage. Peters said that they would have to know what the obligations are. Mesa said that BPA would use critical water and that mapping would determine risk sharing. Wykoff acknowledged that BPA is trying to develop good studies of the proposal and that participants could offer suggestions to help that process.

Shelly Richardson (PPC) asked that BPA's alternatives be run through these studies. Wykoff said that there may not be time to run all alternatives through the studies and that she would try to set up time for a technical meeting to discuss this.

C. Shaping Capability

Phil Mesa presented information about how BPA determines the federal capability for these discussions on the Slice proposal. He uses a 50-year study of the load/resource comparison and looks at the shaping capability month-to-month within a year. He also incorporates changes that may impact drafting vs. storage to determine the envelope for federal capability. The studies are constrained to 1 year and incorporate as many non-power requirements as possible. The storage boundaries span 50 different water conditions. The most flexibility to store is from September-March. The shift from Light Load Hours to Heavy Load Hours is difficult to evaluate within a day. To determine the maximum-minimum generation, he includes limiting factors such as ramp rates. How much a Slice customer could shift is a function of how the Slice customer would manage its slice of the system.

D. Transmission Issues

Dennis Metcalf (BPA) represented the Transmission Business Line. All transmission-related issues for the Slice would go to the TBL. The TBL would need a firm request for service from the Slice customer before there would be discussion about how it would be accomplished. Peters stated that customers would have to know what they are buying before making a request for transmission services. Flynn mentioned that TBL has a first right to FCRPS for reliability. The Slice product may be secondary to this right. Peters would like to know more about this agreement between the business lines. Metcalf said post-2001 conditions are not worked out yet.

E. Comments on the PGP Proposal

BPA revised the Slice proposal worksheet (Handout No. 1) based on discussion at the July 1 meeting. There was no discussion of those revisions. Discussion proceeded on new topics in the handout. A summary of the discussion under each section follows.

Forecast and Data Needs

The information in this section will be replaced with Handout No. 2 from the July 1 meeting. Mesa described what BPA could provide. BPA could provide the characteristics of any constraints to Slice customers. Characteristics would include information such as reservoir elevation requirements, outflow requirements, etc. by project. If non-power constraints arise, BPA would communicate those constraints to the Slice customers. Each Slice customer, however, would do its own forecast. Schultz raised a concern about information from the Corps of Engineers and the Bureau of Reclamation being restrained by BPA marketers. He would like a good faith effort be made by BPA that the information would be made available including future non-power constraints, operations plans, and non-power operations plans.

BPA is concerned about an error in the forecast leading to a dispute with a customer and it does not want to make that information available. Peters suggested that this could be defined in the contract so that there would be no consequences for certain types of errors. Mesa said the forecast of generation is also market sensitive. PGP would like to have as much information as possible. Wallis suggested that further discussion of data needs may be unnecessary. BPA will propose what it will provide and the potential purchaser will decide if they want the product.

Operations/Management Influence

The information in this section does not need to be changed.

Dispute Resolution

The PGP suggested that the language in this section be replaced with some original language already submitted. Richardson suggested that the language is inconsistent with existing business relationships, and the issues involved, and who decides the issues needs to be clarified. Schultz and Richardson will draft suggested language for this section.

F. Next Steps

The next public meeting is scheduled for August 7, from 8:30-12:00 p.m. in the Portland Airport Conference Center.


Archive of content originally posted or last updated on:  August 14, 1998.
Content originally provided by:  Angela Wykoff, BPA Power Business Line.
Content provided by:  Timothy Roberts, Slice Product Manager, 503-230-5450, tcroberts@bpa.gov.
Admin Assistant, Kimberly Brown, 503-230-3639, kabrown@bpa.gov.
Page maintained by:  BPA Web Team.
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