11/25/2020 Portland Update

State of Oregon Files Notice of Intent to Sue Bureau and Corps on CRSO EIS

On Monday, the state of Oregon filed a sixty-day notice of intent (NOI) to sue the Bureau of Reclamation and the U.S. Army Corps of Engineers for violations of the Endangered Species Act regarding impacts of the Columbia river system on endangered species. In a call with acting BPA Administrator, John Hairston, Oregon’s Governor, Kate Brown, emphasized that this filing is an effort to preserve their legal options should conversations with the four-state process fall apart or if the ongoing conversations with the Action Agencies on a possible MOU or other such agreement prove fruitless. Oregon said they would like to continue a collaborative relationship outside the courtroom.

This action by Oregon casts a dark shadow over any collaborative talks, such as the four-state process, since the statute of limitations for filing against the Columbia River System Operations (CRSO) Record of Decision (ROD) extends six years from the date the ROD was signed. It’s also worth noting that the NOI was filed without any public notice and on a short week prior to the Thanksgiving holiday. This appears to be a distinct departure from the normal protocol of the Governor’s office.

When one considers Kate Brown’s previous statements strongly supporting dam breaching in conjunction with this latest action from Oregon, it’s extremely difficult to view the four-state process as an open minded and collaborative exercise. Especially considering Oregon is one of the co-conveners of the four-state process and presumably one of four parties with the final say in outcomes of the process. I find it ironic and particularly disappointing, that a collaborative process called for by the governors of the four northwest states has not even been given a chance for success before one of the conveners has resorted to the same litigation strategy that has historically failed to solve any problems.

Northwest RiverPartners publicly pointed out the inconsistency and concerns raised by Oregon’s NOI in a press release yesterday. The press release is attached to this update for your convenience.

NRU is working with other public power entities to evaluate legal options in response to potential litigation.

Update on Bonneville – Idaho Power Transfer Service Dispute at FERC

Last week, Bonneville and Idaho Power took an important step to settle their dispute before the Federal Energy Regulatory Commission (FERC) regarding Idaho Power’s attempt to unilaterally modify two Conditional Firm contracts that Bonneville uses to provide transfer service to NRU members and other Bonneville customers in the PACE balancing authority.

Idaho Power formally withdrew its filing of the disputed contracts at FERC. NRU sees this as a positive development, as it allows Bonneville and Idaho Power to negotiate details of a settlement on their own terms without FERC’s involvement. It appears that Bonneville is working towards a settlement that is beneficial to transfer customers, and NRU has continued to signal acceptance of such a settlement.

Still Seeking Feedback on Proposed $80M RDC for Transmission Services

As described in last week’s Portland Update, Transmission Services has met its upper threshold of financial reserves and the agency has met its upper threshold, meaning a Reserves Distribution Clause (RDC) of just under $80M has triggered for Transmission Services. The question now becomes which “high-value” use(s) should that $80M be used for. BPA has proposed applying the entire $79.7M towards debt reduction via early debt repayment. This would both save interest expense for Transmission and free up commensurate borrowing authority for the agency.

As a reminder, here is NRU staff’s proposed response to BPA:

NRU staff is proposing to submit brief comments stating that NRU finds debt repayment to be an acceptable use of the $80 million in transmission reserves available as a result of the RDC, provided that the agency can show that using the money in this way is consistent with Bonneville’s 2018 Financial Plan. The comments would note that, overall, the agency must take a comprehensive approach to financial planning and not make the RDC decision, rates decisions, or any other financial decisions, independently of one another. The comments would also observe the rising debt profile of Transmission, particularly compared to Power.

BPA has extended the deadline for comments by two days to Wednesday of next week. Thus, if you haven’t yet shared your thoughts with us, please do so by COB Tuesday, 12/1. We have heard from only a couple of members, all in support of staff’s proposal.

2020 Flexible Spill Results

Last week, Bonneville shared 2020 results of the 2018 Flexible Spill Agreement. This agreement allowed six Columbia River System projects to be operated at up to 125% of total dissolved gas standards with the option to reduce spill at seven of the eight fish passage projects for eight hours per day, and it allowed flexible spill levels sufficient to support surface passage structures post-August 15. The goal of the Flexible Spill Agreement was to allow spill flexibility while holding Bonneville financially neutral as compared to 2018 related costs. Overall, Bonneville did better than neutral; it saw a net benefit of $4.7 million in 2020. The benefit was mostly a result of very high power prices during the post-August 15 spill period. Although the high prices during this time were perhaps an anomaly, spill flexibility did allow BPA to capture some value.

Happy Thanksgiving from all of us at NRU!! We remain thankful for your trust in us as we work on your behalf and sincerely hope all in our circle have a fun and safe Thanksgiving holiday!!!

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