06/12/2020 Portland Update

Good Afternoon – you may want to grab a cup of coffee or your favorite beverage to enjoy while you read a lengthy update this week! As always, please ask any questions you may have and feedback is always appreciated.

NRU’s Post-2028 Working Group (WG) – Update & Thoughts to Share with AEs

The NRU Post-2028 Working Group (WG) is digging into and identifying the scenarios and assumptions that will be used in the 2020 General Resource Investigation (GRI) that is being developed jointly by NRU and NEMS. The GRI will explore various power supply options, with different combinations of amounts of BPA power and non-federal resources, and under different assumptions of load growth rates and market or resource prices. We will hold a webinar in July to educate members on the GRI, our modeling and the expected outcomes of this initiative.

The end product, expected to be delivered in November, will show the potential cost of different power supply mixes under different future conditions on a per-member basis. Qualitative considerations will also be discussed. This information will help us as we consider different post-2028 contract options and develop our negotiating positions.

Relatedly, we have heard that BPA Account Executives (AE) are resuming outreach with customers to hear your thoughts on the post-2028 world. We would encourage you to use the Post-2028 Principles (attached) that were adopted by the NRU Board in February to guide your conversation – feel free to share a copy with your AE! You can also let them know that NRU has a Working Group tasked specifically with exploring and analyzing possible post-2028 contract considerations and bringing recommendations to the NRU Board to support constructive engagement with BPA in the months to come.

NRU and PNGC to Submit Joint Comments on CETA Draft Rulemaking

The entire scope of the rulemaking is very broad and while all of the rules may impact our members at some point in time, we can only commit our limited staff time to BPA centric items. We are also collaborating with a wide spectrum of organizations to keep abreast of their efforts and lend our perspective and experience. These organizations include the statewide organizations for the PUD’s and cooperatives, the Public Generating Pool (PGP) and PNGC.

We have partnered with PNGC to address sections of the rules where our small and load following members should have a compliance and reporting path available to them that recognizes their BPA centric fuel mix and the inherent carbon footprint, or lack thereof, and also recognizes that utilities falling under the prior contract moniker of “Full requirements” typically have limited staff and rely on BPA for much of their technical analysis. The Revised Code of Washington (RCW) already allows for an alternate compliance path in the section directing utilities to complete integrated resource plans. RCW 19.280.30 states under subsection (1) “utilities with more than twenty-five thousand customers that are not full requirements must develop or update an integrated resource plan…” then goes on in subsection (5) to state “all other utilities may elect to develop a full integrated resource plan as set forth in subsection (1) of this section or, at a minimum, shall develop a resource plan that:…”. The resource plan referenced in subsection five is significantly less onerous than developing a full-blown integrated resource plan. Commerce even supplies a one-page cover sheet as a template for the resource plan option.

Staff from NRU and PNGC have developed a reporting and compliance framework that utilizes the resource plan cover sheet provided by Commerce as a starting point; CETA actually made changes to RCW 19.280.30 to integrate the requirements of the new statute. The framework proposes expanding the cover sheet provided by Commerce to include new sections for the 10-Year Action Plan and Clean Energy Implementation Plan as required under CETA. The new sections would be completed by utilities using data supplied primarily by BPA and augmented as needed by individual utilities. The general construct of the framework is to show that most Load Following utilities comply with the requirements of CETA by virtue of their BPA fuel mix and contracts for future delivery of BPA power. Where utilities do not fully comply or additional information is needed, utilities would provide a narrative or supplemental data as necessary. The narrative and/or supplemental data would commonly address how a utility plans to make carbon neutral that percentage of the BPA fuel mix that contains carbon.

We have presented this framework to Commerce on two separate occasions. The first was an introduction of the concept and the second was to present a more technical description of some of the processes BPA conducts for Load Following customers; primarily energy efficiency and the BPA Resource Program. Commerce appears to be on board with our concept and has said they will work on developing an expanded cover sheet, as we recommended.

NRU and PNGC have drafted comments in response to the draft rulemaking that restate what we have communicated to Commerce privately and also serve to put our simplified concept proposal on the record. Our comments also include strong language regarding retention of local control for our governing boards. It will come as no surprise to anyone in Washington that Commerce seems to be taking this opportunity to overstep their regulatory role in this rulemaking. The comments we will be submitting are attached to this update for your review. You will notice that we have included a marked-up version of the proposed Washington Administrative Code (WAC) that goes well beyond our role in this rulemaking. We are doing this to demonstrate unity with all of public power by showing support for their recommendations on other sections of the proposed WAC that are part of this first draft. Finally, NRU will also be signing on to a set of comments drafted in collaboration with all of the entities listed in the opening paragraph of this update. We will include those comments in the update next week.

Our initial overtures to Commerce have been well received and we will continue to advocate but it is important to remember that other interests will be putting equal pressure on Commerce for more expansive reporting and compliance rules. A positive outcome is not guaranteed.

BPA Hosts Network Operating Committee

Last week, BPA held a Network Operating Committee meeting to cover two topics—the Network Operating Agreement and BPA’s load and resource forecasting process. The Network Operating Agreement was adopted earlier this year by the Network Operating Committee and will be implemented with all NT customers. Apparently, it is taking BPA longer than expected to roll the new agreement out to customers, so it might be as late as this fall before your BPA Transmission Account Executive contacts you to execute a new Network Operating Agreement.

BPA also announced that it is delaying the kickoff of its 2020 load and resource forecast process until August. Typically, they commence this effort in June. In our opinion, this was a smart move by BPA—a June kickoff for load and resource forecast changes was very confusing with BPA’s Rate Period High Water Mark process underway at the same time, which relies on load forecasts from 2019. This delay will also allow for the conclusion of the RHWM process, which will lead to better informed resource forecasts for those customers using non-federal resources in FY 2022-23. So, you should anticipate hearing from your Transmission Account Executive in August on this matter.

BP-20E Rate Case

NRU submitted strong comments in support of an expedited, uncontested rate case to suspend the Financial Reserves Policy (FRP) Surcharge as soon as possible. Our final comments are attached, nearly similar to the draft version distributed earlier this week.

Thank you to all of our members who also submitted comments to BPA on this issue!

While no party submitted comments stating they would object to the uncontested rate case, a few indicated they had yet to decide. Formal interventions with parties’ final opportunity to submit objection are due June 24. If any party objects to the uncontested rate case, a 90-day expedited rate case will begin. NRU does plan to intervene in this rate case regardless of whether or not it is contested. This is standard protocol but please let us know if you have any objections or concerns.

Comments Submitted to NW Council Regarding Energy Efficiency Target Proposal

NRU and PPC jointly submitted comments (attached) to the NW Power and Conservation Council Power Committee members this week expressing strong concern over Council staff’s proposal to add granularity to the energy efficiency target and recommended budget levels in the forthcoming 8th Power Plan (aka 2021 Power Plan). We emphasized that BPA and utilities as EE implementers need to have the flexibility to modify EE programs and measures to respond to changing market conditions, new technology, codes and standards, etc. We also pointed out the sophistication of BPA’s Resource Program which selects which resources are lowest cost and lowest risk to meet BPA’s load obligations, including specific types of EE.

Integrated Program Review (IPR) Kicks Off on Monday

The IPR process to set expense and capital budgets for BP-22 begins on Monday, June 15. These are in-depth workshops where BPA presents their planned expenditures and opens up a public comment period. This is our chance to influence BPA’s expense and capital budgets – the formal rate case only allocates costs, using the budgets set in the IPR.

NRU staff will attend all the technical workshops and will summarize key takeaways and will prepare draft NRU comments for review in the coming weeks. However, you may want to attend the kick-off meeting scheduled for Monday afternoon at 1pm-4pm; the webinar information will be posted here and the materials will be posted here.

NRU Is Hiring!

NRU is looking to fill our General Counsel position that has been vacant since the end of January. The job is posted on NWPPA’s job listing website and also on the job site for the Oregon Bar Association. Links for both postings are included below:

Please forward to any qualified candidates that you may be aware of who are interested in joining the team!

Conservation Target Setting Principles P
• 159KB

PNGC NRU Joint Comments CETA Discussion
• 332KB

Post28 principles_final
PDF • 131KB

NRU_comments BP20E_final
PDF • 232KB

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