BPA and Public Power Talk Resource Adequacy
As you know, BPA is one of 20 participations in the Northwest Power Pool (NWPP) Resource Program development effort. The program is still in the design phase, but the intention is for the program to function as a bilateral, voluntary-to-join program with binding “compliance periods” in the summer and winter. The idea is to ensure each participating entity has sufficient resources to meet loads, but when the need arises for occurrences such as inaccurate forecasts or unexpected generation losses, have the ability to access others’ surplus.
The NWPP group is still working on design details and is awaiting modeling results from the Southwest Power Pool (SPP), the consultant retained to help design the program, to see how the proposed program could be structured to function effectively and efficiently. NWPP has indicated that modeling results from SPP should be available around May this year.
In the meantime, NRU staff has been working with BPA to understand and also shape its potential participation in the RA program. It is expected that the point of compliance of the RA program will be at the Load Serving Entity (LSE) level. This immediately creates complication given that individual BPA customers are the LSEs, but BPA would be the participant in the RA program. Further, BPA’s participation would be on behalf of only its Load Following customers, not its Slice/Block customers. Slice/Block customers would be able to choose to participate in the RA program directly themselves, as the LSE.
At first blush, it makes sense that BPA has the responsibility for meeting Load Following customers’ loads at any given moment, including resource planning to ensure sufficient capacity to meet peaks. Similarly, it makes sense that Slice customers have the responsibility for meeting their peak loads, as BPA is not obligated to do so. However, the Block product falls in a strange middle ground that no one seems to understand. We have spent hours discussing this with BPA staff, and have yet to arrive at an understanding; in fact, we hear contradictory statements from BPA within the same conversation. How these requirements do or do not apply to each BPA power product directly impacts allocation of costs, risks and benefits, which will ultimately impact Load Following customers. These will be important considerations for determining if and how BPA participates in this or any other regional RA program.
Another point of confusion is how BPA can join an RA program where the point of compliance is at the LSE level, given that BPA is not an LSE. BPA’s current thinking is that (if they choose to join), it will join on behalf of the Load Following customers. This quickly becomes convoluted because this means Load Following customers would have joined a voluntary program, without directly joining it. Layer on top of this BPA’s obligations (or not) to Slice and Block products, and your head should feel like it’s starting to explode right about now.
To be clear: NRU has not established a position on BPA’s potential participation in the RA program at this point. We have yet to see any sort of business case, expected costs and benefits, or forecasted ability of the federal system to meet the RA requirements. It is critical that we understand how the costs, benefits and risks flow through to different power products and ensure Load Following customers have a voice in BPA assuming additional requirements on their behalf before we take a position. There is a strong argument for a regional resource adequacy program, but the details will be important to determining NRU’s position on BPA joining.
BPA will have a public process, likely beginning later this summer, to discuss its potential participation in the RA program. In the meantime, we are having informal conversations with them to try to address some of these fundamental issues, even before we get to the business case. We will keep membership updated as these conversations progress.
Columbia River Treaty Power Group (CRTPG) Letter to the Northwest Delegation
Attached to this update is a letter that was sent by the chairs of the CRTPG to the US Entity, which is comprised of BPA and the U.S. Army Corps of Engineers and copied to the Northwest Delegation and the U.S. negotiator from the State Department. The letter gives a brief history of the CRTPG, its efforts, frustrations with progress of negotiations with Canada to date and the impact of delaying the decision to terminate the Treaty to force modernization.
The real intent of the letter is to strongly engage the Biden Administration on the treaty modernization effort and reinforce the importance of keeping carbon free, renewable and dispatchable power in the U.S. to support the climate and clean energy agenda of the current administration. The CRTPG has been successful in getting Senator Cantwell from Washington State to include treaty modernization on her list of items to be considered for inclusion in the administration’s first 100 days agenda.
The overall strategy of the CRTPG is to leverage the collective strength of the Northwest delegation with the Administration to advance termination. The change in Administration, strength of the Northwest delegation and rolling power outages in both California and Texas over the last several months have created an environment where the message related to the value of hydropower should get an attentive ear. The termination strategy may seem like a return to ground zero, but the dynamics have changed, and the simplified message of termination should help advance this cause. If you have any questions, please contact John directly at email@example.com.
California ISO Governance Review Committee Proposes a Bifurcation of Changes to the EIM Governance Structure
On Monday, Therese Hampton, as Chair of the CAISO Governance Review Committee (GRC), along with Bonneville staff, alerted NRU and other public power entities that the GRC is proposing to bifurcate the process and schedule for making changes to the California EIM governance structure. Under the proposal, the GRC would advance, on schedule, less controversial changes to the governance structure, including the creation of a Governing Body Market Expert and revisions to the Regional Issues Forum. However, the proposal would delay and create further process for consideration of the primary issue that the GRC has been working on for nearly two years: creation of a joint authority governance between the CAISO Board of Governors and the EIM Governing Body. The GRC sees further process on the joint authority question as necessary to further engage and consider the views of certain California parties on the issue.
Although we support advancing the less controversial changes to governance on schedule, NRU staff sees the delay on the joint authority question as an additional layer of unnecessary bureaucratic process that gives too much attention to California interests. In addition, the proposal to delay comes at a time when the Southwest Power Pool (SPP) has presented to the Northwest a viable alternative to the California EIM, and NRU staff believes that the GRC needs to be responsive to the SPP proposal in a way that keeps the California EIM a viable organized market option for Bonneville and the rest of the Northwest.
NRU staff is working with Public Power Council staff and others to present joint comments to the GRC at a public meeting on this issue scheduled for March 16. Our comments will state our concerns about the proposed delay and reiterate to both the GRC and Bonneville that the SPP proposal is creating a competitive alternative to the California EIM that Bonneville should take seriously. If you have any thoughts or questions about these comments that we plan to submit, please contact Zabyn at 503-351-0485 or firstname.lastname@example.org.