FERC Grants Interim Approval for Suspension of BPA’s Financial Reserves Policy Surcharge, Effective July 1, 2020
Yesterday, FERC granted interim approval in the BP-20E rate case which suspends implementation of the Financial Reserves Policy Surcharge, retroactive to July 1 and through the remainder of this rate period. This represents $39M staying in your local communities, a much-needed respite during this pandemic.
DRAFT Integrated Program Review (IPR) Comments for Review
Attached are draft comments on BPA’s proposed Integrated Program Review (IPR) spending levels for BP-22. These comments are consistent with the guidance received during the July 8th webinar with one modification related to the Northwest Power and Conservation Council’s (NWPCC).
NRU staff proposes to take a stronger stance on the NWPCC proposed budget, by echoing the comments we submitted to the NWPCC in 2018. We are encouraging the NWPCC to align its scope and budget with the intent of the Northwest Power Act which sets a base funding limit of 0.02 mills per kWh of BPA firm power sales. It does provide the BPA Administrator with the discretion to increase the funding limit to 0.10 mills upon annual request by the NWPCC. For years, the NWPCC spending level has been substantially in excess of the “base limit” and is, in fact, right about at the discretionary upper limit.
Please review the attached comments for tone and substance and send any suggestions or concerns to Megan (firstname.lastname@example.org) by Thursday, July 30. The comments are due on Friday, July 31.
RHWM Process: NRU Submits Comments Asking for More Info on Tier 1 Modeling
Attached are the comments NRU submitted this week asking for more clarification about the assumptions underlying the Tier 1 modeling to set the size of the Tier 1 system and RHWM for BP-22.
Approximately 100 aMW of the proposed decrease to Tier 1 is attributed to the implementation of changes in operations at Libby and Hungry Horse projects using a sliding scale based on local water volumes. Our letter asks for more explanation on:
How and when the decision was made to change operations at those projects
Whether using local water volume forecasts in the modeling of the operations of those projects for purposes of setting the Tier 1 system is consistent with the TRM and BPA’s practice of running the FCRPS as a single system.
The formal RHWM Process kickoff is August 4th, which will begin the formal 10 business day comment period per the TRM. We will share the latest at the NRU Board meeting on August 5th.
Columbia River Treaty Power Group Update
The Power Group met this week to discuss the tenth round of negotiations held between the United States and Canada on June 29th and 30th. As has been the case, details of the negotiations are difficult to obtain. We do know that Canada responded to the initial offer made by the U.S. in the ninth round to modernize the treaty and reduce the entitlement payments to Canada. While we don’t know the details of the original offer or the counteroffer, we have heard rumors that the Canadian reaction was not positive. These rumors seem substantiated by an increased level of conversation between BPA and the DOE following the negotiations. Unfortunately, many engaged in this process do not expect another round of negotiations to occur before the end of the year and certainly not before the November election. This will mark another year passing with no progress on this very costly issue.
On a slightly more positive note, the study to update the flow modeling for the river is moving forward. Please remember NRU participation in this study was included in the amended 2020 budget. The baseline data from BPA to validate the study is in the hands of those responsible for the study and they are working with the Northwest Power Pool to schedule sessions with the folks there who have extensive experience with the model.
Bonneville Striving to Renew Fish Accords
The signing of the Record of Decision (ROD) for the Columbia River System Operations (CRSO) Final Environmental Impact Statement (FEIS) in September will mark the end of the fish accords extensions that were signed in September 2018. Bonneville wants to proactively get new extensions in place to retain stability garnered by the accords. The goal is for the new extensions to be signed prior to the ROD and extend through 2022. The level of spending agreed to in the accords would be consistent with what is currently included in BPA’s fish and wildlife budgets. NRU has reminded BPA of the importance of adhering to the commitment BPA made in their strategic plan to hold mitigation costs flat.
BPA staff have also said that getting extensions in place now will facilitate broader discussions with current accord parties and parties who did not sign onto the original accords. The states of Oregon and Washington and the Nez Perce Tribe have been mentioned as significant parties in the planned broader conversation. The overarching goals for these broader discussions are to allow for strategic investment and long-term planning while delivering as much stability to the agency as possible. When pressed on whether the original accords and/or extensions were effective at accomplishing these goals, BPA staff assured us that future accords must include forbearance and sufficiency language along with better accountability for accord partners, enforcement of prudent business practices, transparency of programs and program audits. NRU will stay engaged in this effort with an eye towards ensuring BPA meets its stated goals.