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05/28/2021 Portland Update

Good Afternoon,

I hope the delivery of this update finds you excited for a long weekend that holds the promise of great weather across our region. I also hope you will join me in taking a moment to remember those who have given all to grant us the freedom to enjoy long weekends and the numerous other liberties we are blessed with. Each year on Memorial Day a national moment of remembrance takes place at 3:00 p.m. local time.

Sincerely,

John

NRU Concludes Listening Sessions

On Tuesday of this week, NRU held the second of our listening sessions. These sessions were held to ensure we are getting input directly from our members and that NRU is focusing our resources on issues that provide the most value to members. In total, 23 NRU members attended at least one of the listening sessions. Conversations ranged broadly but the key takeaway was the importance of getting the next BPA contract right. Defining “getting it right” is yet to be fully fleshed out and you will see the post-2028 contract negotiations continue as the top long term strategic initiative for NRU for the foreseeable future.

Members attending the listening sessions voiced some additional themes that will be important in our post-2028 effort and will also guide our advocacy on all matters related to BPA. Members universally stressed the importance of price certainty, protecting BPA as a resource, and ensuring BPA performed in an accountable and responsive way to customers.

Staff took copious notes during the sessions and we will share the input from members in more detail at our August meeting along with our interpretation of how that input translates into strategic direction for NRU as an organization.

Please remember we want to hear from any member at any time and on any topic that a member finds important or is concerned about. The more often we get guidance from our membership, the more effectively we can advocate on your behalf.


Post-2028 Discussions Continue

BPA and public power post-2028 discussions continued in earnest this week. Based on customer feedback, BPA will begin holding meetings twice per month. Key topics will be discussed, first with a meeting to share education/background then followed by discussions of possible alternatives four to six weeks later. The proposed schedule and list of key topics from BPA is shown in the graphic below. This week, BPA provided background on high water marks and the Tier 1 system size methodologies under Regional Dialogue. BPA’s presentation provides a lot of great background information and is attached.


NRU’s Post-2028 Working Group will have its regular, monthly meeting next week. We are diving deep into system size analysis and transfer service, as well as talking about broader strategies on how to advance post-2028 concepts in the region. We will share a thorough recap of the Working Group meeting in next week’s Portland Update.


Hearing Officer Supports Retaining Seller’s Choice in TC-22

Late last week, the Hearing Officer in TC-22 released his recommended decisions in the case to the BPA Administrator. Among the recommendations is that the agency retain the Seller’s Choice provision in its Open Access Transmission Tariff until October 1, 2023. Retaining Seller’s Choice has been a top priority for NRU in the TC-22 rate case; NRU was the only party to submit testimony in support of retaining Sellers’s Choice. The Hearing Officer’s recommendation represents a very positive development. Should the Administrator adopt the Hearing Officer’s recommendation , this would be a key victory for NRU in this rate case.

The Seller’s Choice provision removes the requirement to identify the source control area from which power will originate when designating a Network Resource at one of the Mid-C Market Hub points of receipt. NRU Members regularly rely on the use of Seller’s Choice today, and the provision could be even more valuable post-2028.

The Hearing Officer’s recommendation means that there is a strong possibility that the Administrator will ultimately retain Seller's Choice in the tariff through the next rate period. The recommendation is not legally binding on the Administrator, but the Federal Power Act requires the Administrator to have a reasoned basis for deviating from the recommendation. In other words, if the Administrator chooses to delete Seller's Choice despite the recommendation from the Hearing Officer, NRU will carefully consider its legal options, including a possible appeal at the Federal Energy Regulatory Commission or in court. Retaining the Seller’s Choice provision is important to NRU membership and we won’t accept a deviation from the recommendation without a strong response.

New Columbia River Fish Accords

On May 20, NRU staff met with BPA executives to discuss the agency’s interest in signing new accord agreements with certain states and tribes after the current agreements expire in 2022. The meeting revealed that, despite customer concerns, BPA is moving forward with new accords, and NRU will need to work with the agency to ensure that the new agreements accomplish purported goals and do not result in unjustified increases to BPA’s Fish and Wildlife Program budget.

BPA first entered into fish accords with states and tribal governments in 2008. The accords were an attempt to provide certainty in funding for fish and wildlife mitigation efforts, move towards compliance with court-imposed Endangered Species Act requirements, and limit further litigation against BPA and other federal agencies. Although BPA disputes that the original accords led to incremental increases in fish and wildlife spending, the ten-year period following the 2008 implementation of the accords saw massive increases in the budget each rate period. The Fish and Wildlife Program budget was $172 million in the BP-08 rate period and $277 million in the BP-18 rate period. Debate continues as to whether the accords accomplished BPA’s original goals.

As BPA moves towards signing new accords, the agency will be under enormous pressure to once again increase fish and wildlife spending and make promises that may not be in the interest of its customers. NRU will continue working with BPA to try to hold down Fish and Wildlife Program costs, both as a result of new accords and more generally. We will also keep up the pressure to see that new accords actually limit litigation risks and other agency exposures.

CAISO Governance Review Committee Reveals Another New Proposal for Joint Authority Governance

Over the last few weeks, the CAISO Governance Review Committee (GRC) has been discussing with stakeholders a revised framework for implementing a joint authority governance model between the ISO Board of Directors and the Western EIM Governing Body. NRU staff participated in the GRC public meeting on the issue and has met with GRC and BPA separately on the topic. This revised framework makes some changes to previous versions in an attempt to appease certain stakeholders and is overall a reasonable approach to making incremental improvements to EIM governance.

The CAISO has approved several minor changes to the EIM governing structure that the GRC has advanced but approving and implementing joint authority is taking more time – in our view, too much time. Under current schedules, joint authority will not be in place before BPA decides whether to join the EIM, and this creates increased risk for both the agency and its customers. Joint authority is not a perfect EIM governance solution, but it is does provide incremental improvement and can be implemented within the confines of existing California law.

Staff is proposing that NRU submit the attached comments in support of moving forward with the revised framework and finally implementing a joint authority governance model. Please contact Zabyn at ztowner@nru-nw.com or 503-351-0485 if you have any concerns or feedback about the attached draft comments.

DraftGRCComments5-2021
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BPA materials_Post 2028 - CHWM-RHWM pres
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