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03/05/2021 Portland Update

Post-2028 Conversations Take Off

NRU staff have had numerous conversations with others in the region following the adoption of NRU’s Post-2028 Policy Positions at the February Board meeting. So far, NRU staff have talked with staff from BPA, EWEB, PNGC, Snohomish and WPAG. Meetings are scheduled with Tacoma, PPC and the Slice customer group in the next couple of weeks.

The conversations have been positively received and productive. The other customers/customer groups have been very interested in seeing NRU’s positions and appreciate the thought that went into developing them. Perhaps best of all, we are finding much alignment with other customers/customer groups and have noticed that some of NRU’s positions and talking points are being reiterated by others. This not only means NRU is providing leadership in guiding the post-2028 conversations, but also underscores the positive working relationships we have within public power and the general desire to find points of consensus and collaboration.

Many of the themes we have heard from other customers/customer groups are reflective of what we have heard from NRU members, such as:

  • Preference for some sort of allocation of the federal system post-2028, with the desire to look at methodologies other than using 1937 critical water as the basis, such as a different water year or setting the system size at a fixed amount.

  • Many different opinions on how High Water Marks should set for post-2028.

  • The need for the BPA system to be an affordable and integral resource to meet future power supply requirements in an increasingly carbon-constrained world.

  • importance of being able to more easily integrate non-federal resources (including renewables, storage and demand response).

  • Need to make the new contract “future-proof,” particularly in light of the rapidly evolving regulatory environment.

  • Desire for more certainty around the carbon emissions of BPA’s system.

  • So far, it seems that most customers want to continue with their existing product (e.g., Slice/Block or Load Following), but with changes. For example, Slice customers have expressed the need for more peaking capacity, while Load Following customers have asked for easier integration of non-federal resources. However, there are some customers that are considering all Power product options from BPA (i.e., potentially switching products)..

  • Desire to know the post-2028 power supply structure to enable non-federal resource decisions on a timely basis.

BPA will begin its “semi-formal” post-2028 conversations with public power via the Public Power Council’s Rates and Contracts forum. The first meeting is scheduled for March 18th. NRU staff will actively participate, based on the direction provided by the NRU Board and Working Group, and will continue to iterate with the Board and Working Group to keep everyone informed and receive direction. Of course, NRU members are also welcomed to participate directly.

Post-2028 Working Group

The NRU Post-2028 Working Group (WG) met on Wednesday of this week. The WG spent considerable time discussing NRU staff interaction with other parties in public power as detailed in the section above. The WG also began looking into the definitions of Existing Resources and New Resources to kick off the discussions of Net Requirements and Allocation of Tier1 power as they are today and where improvements might be made in the next contract and how others might want to make changes and the implications of any changes. Following those topics, the WG closed with a deep dive on the capability of the federal system.

The discussion on the capability of the federal system led the WG to identify further analysis that will be important for determining the optimal system size for NRU members. NRU staff will analyze each of the 80 water years in the net secondary revenue model from BPA and compare the results in terms of Tier 1 power, firm surplus, secondary sales, balancing purchases, net secondary revenues, and Tier 1 rate impacts; impacts to the carbon content of the system will also be evaluated.

The WG has already scheduled future meetings to be held on March 30th, May 4th, and June 1st. Topics planned for discussion are learning more about the Slice/Block products to better understand the needs of those customer classes and impacts on Load Following from any proposed changes from those customers, beginning to look at the demand charge structure and the Residential Exchange. These topics may change as we continue to work with BPA and others within public power and will certainly be added to as other priorities surface.

If you have any questions regarding the work of the Post-2028 Working Group, please do not hesitate to contact us.

Integrated Program Review 2 (IPR2)

In the IPR2 workshop this week, BPA proposed to reduce the planned Transmission capital levels for BP-22 by $53M for the rate period ($26.5M average reduction per year). This is based on a closer evaluation of BPA’s historical execution, planned projects and expected ability to execute, while evaluating risks and criticality of proposed projects. BPA also proposed to provide more customer engagement in the Vancouver Control Center (VCC) being planned as a replacement for the Dittmer Control Center. BPA has said Dittmer is aging and would require major renovations to remain suitable in the future. BPA plans to share a business case this fall with customers, including updated cost estimates. No changes to the fish and wildlife budget were needed based on the final CRSO decisions. Comments on the IPR2 proposal are due March 24th so they can feed into the final BP-22 rate studies.

Call for Unused Energy Efficiency Incentive (EEI)?

Grays Harbor PUD has reached out to NRU staff to see if any NRU members expect to have unused Energy Efficiency Incentive (EEI) funds and would like to participate in a bilateral transfer to Grays Harbor PUD. If you plan to have unused EEI and are interested in transferring to Grays Harbor, please contact Melinda James-Saffron at mjames@ghpud.org.

Columbia River System Operations Litigation Update

As public power considers Representative Simpson’s recent proposal and other potential means to address salmon recovery and end the indefinite legal fights, NRU staff believes it is appropriate to take a comprehensive look at the ongoing Columbia River System Operations litigation to better understand the current situation and better analyze next steps, both within the litigation framework and beyond.

To these ends, here is a summary of the primary lawsuits challenging the 2020 Columbia River System Operations Environmental Impact Statement (CRSO EIS) and associated federal actions.

  • In January, Earthjustice, on behalf of several conversation and fishing groups, filed an amended complaint in the Federal District Court of Oregon challenging the 2020 CRSO EIS and associated documents that dictate fish operations at the Federal dams in the Columbia River Basin. The amended complaint continues the lawsuit that began in 2001 and alleges ongoing violations of the Federal Endangered Species Act, Administrative Procedures Act, and National Environmental Policy Act and portrays the 2020 CRSO documents as outdated Trump administration policies. The state of Oregon is aligned with the plaintiffs in this case and just this week filed a separate complaint that closely resembles that of Earthjustice.

  • Earthjustice, on behalf of several conservation and fishing groups, has filed a petition in the Ninth Circuit Court of Appeals alleging statutory violations by Bonneville similar to those it has alleged in Oregon District Court against the other federal agencies. Earthjustice has filed this case primarily to preserve the plaintiffs’ litigation rights against Bonneville but has asked that this case be paused due to the ongoing activity in the district court.

  • In December, the Spokane Tribe of Indians filed suit in the Ninth Circuit against Bonneville, alleging many of the same statutory violations that the other plaintiffs have alleged and, in a new development, alleging that Bonneville’s CRSO actions violate the Northwest Power Act. The Northwest Power and Conservation Council has intervened in this case due to the Northwest Power Act allegations. Utilizing the Northwest Power Act is a new approach by plaintiffs and should be watched closely.

Although several public power entities are intervenors in these cases, there is currently no public power lead actively participating and representing our interests. In the past, RiverPartners has played that role, but in 2019 it redefined its mission to take a step back from litigation. NRU member utilities have intervenor status in the CRSO litigation that began in 2001, but we have not actively participated in the case for many years. Further, NRU staff is concerned about the Biden’s administration’s positioning and interest in defending the CRSO EIS and related federal actions.

We plan to discuss the ongoing litigation and NRU’s role, if any, with NRU Members at the May NRU Board of Directors meeting. Please feel free to contact Zabyn at 503-351-0485 or ztowner@nru-nw.com if you have any questions or would like to share your thoughts about salmon litigation.

Southwest Power Pool Proposes a “Market+” Alternative to the Region

On Wednesday, the Southwest Power Pool (“SPP”) used the Public Power Council Member Forum to propose to the region an alternative means of creating an organized power market in the Northwest. SPP is proposing something it calls “Markets+.” According to SPP, Markets+ would create organized day-ahead and a real time markets while continuing existing regional functional and operational control. SPP would seek an equitable regional governance structure.

Markets+ has the potential to be a competitive alternative to the California ISO’s Western Energy Imbalance Market and day ahead market. Bonneville executives listened to the presentation, and several voices in public power urged Bonneville to carefully consider the SPP proposal. NRU will be tracking SPP’s efforts and the region’s response in the coming months.

NRU Teams Up With Clearing Up!

We are constantly on the lookout for ways to deliver incremental value to NRU members and have worked with the folks over at Clearing Up to bring a special offer to those NRU members who don’t currently subscribe to this very informative weekly periodical. Please take a moment to read the information below from Mark Ohrenschall, Clearing Up’s Publisher and Editor-in-Chief.

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In addition to the weekly newsletter, other services for subscribers include podcasts, in-depth special reports, digital archives of past issues, breaking news alerts and webinars/conferences with subscriber discounts. To take advantage of this special offer for NRU members, and to learn more about subscription options, please contact Mark Ohrenschall, NewsData/Clearing Up Publisher/Editor-in-Chief: marko@newsdata.com; 206-351-3717.

Thanks for your consideration!

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