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12/04/2020 Portland Update

NIU and NRU 2021 Annual Assessment Invoicing

A reminder that invoices will go out next week for the NRU and NIU 2021 Member assessments per the Budgets and Dues Allocation adopted at the November annual meetings. We are sending invoices only via e-mail and only to the Board representative identified by the member utility and will not be sending a hard copy invoice in the regular mail. If there is someone else at your utility that should receive the electronic invoice, please let us know by sending the request to egroves@nru-nw.com.

If you have any questions at all please contact Ellyn Groves directly at egroves@nru-nw.com.

NRU Comments on Proposed Use of Transmission $80M Surplus Reserves

Attached are the comments NRU submitted to BPA this week, consistent with feedback received from members. We supported BPA’s proposed use of Transmission’s surplus reserves of $79.7M (i.e., the Reserves Distribution Clause (RDC)) for early debt repayment, provided such use is consistent with BPA’s Financial Plan. Additionally, we used this opportunity to: (a) remind BPA and the region of the actions Power customers have already undertaken to support the agency’s financial health, (b) emphasize the need for Transmission customers to take similar actions, (c) encourage BPA to follow its existing guidance per its 2018 Financial Plan, and (d) to hold a comprehensive review process to evaluate progress and whether additional objectives and metrics are needed.

Preliminary BP-22 Rates Observations

With the publishing of the Federal Register Notice (FRN) this week, the BP-22 and TC-22 proceedings have officially started. This means ex parte is in effect, limiting communication between BPA and customers on the merits of these issues to only publicly noticed meetings and official rate case filings. On Thursday, NRU and NIU filed their formal petitions to become parties in the rate cases.

Recall, BP-22 will set the rates for Power and Transmission for the BP-22 rate period (FY 2022-2023; October 1, 2021 to September 30, 2023). TC-22 will update BPA’s Transmission Tariff, also effective October 1, 2021.

In addition to the FRN, BPA published the Initial Proposal General Rate Schedule Provisions (GRSPs) which include the proposed rates for Power and Transmission. The underlying testimony and rates models will not be posted until Monday, December 7th, so we do not yet have the explanation and justification for the proposed rates.

Nonetheless, we want to share PRELIMINARY observations based solely on the rates published in the GRSPs. We are lacking the context that will be provided in the testimony and rates models posted next week, so forgive us for not being able to immediately answer questions like “why?” or “what does this mean for my utility?” Each week via the Portland Update, we will share additional analysis and observations as we dig into the Initial Proposal – so stay tuned!

Composite Charge and Non-Slice Charge (which is really a credit)

The Composite Charge is proposed to increase about 4% compared to BP-20. We are guessing this is driven by proposed revenue financing of up to $95M per year.

The Non-Slice rate is proposed to improve by a whopping 85% compared to BP-20. This is largely driven by a significant increase in secondary revenues due to increased forecast market prices.

HOWEVER – be aware that there can be noticeable changes between the Initial Proposal and Final rates for both the Composite Charge and the Non-Slice rate, as shown in the graphs below.



The Load Shaping rates also increased substantially, as shown by the charts below. This is consistent with increased market prices forecasted by AURORA, as we saw in our own General Resource Investigation.



NRU and PNGC Submit Joint Comments on CETA Rulemaking

NRU and PNGC once again submitted comments to the Washington State Department of Commerce (Commerce) regarding the ongoing rulemaking efforts to implement the Clean Energy Transformation Act (CETA) passed by the Washington State Legislature in 2019. A copy of our joint comments is attached to this update.

From the start, our collaborative focus has been to identify a streamlined compliance path for small and/or full requirements utilities of BPA. We have endeavored to educate Commerce on how regional efforts undertaken by BPA and paid for by the utilities, should satisfy much of the planning and compliance requirements of CETA, specifically BPA Energy Efficiency programs, the BPA Resource Program and BPA’s participation in the emerging Northwest Power Pool resource adequacy program. We have also worked very hard at helping Commerce understand how the governance structure and rate setting mechanisms of public power inherently provide equity to customers of public power entities.

We feel like we have been largely successful in the technical areas listed above as Commerce has explicitly allowed for small utilities to utilize a simplified Clean Energy Implementation Plan form that will be provided by Commerce. The language supporting this can be found in WAC 194-40-200(10). Additionally, at our urging, Commerce excluded small utilities from the more detailed elements of the resource adequacy requirements found in WAC 194-40-210. Commerce also allowed in WAC 194-40-330 for utilities to use regional studies prepared by BPA – The BPA Resource Program - to inform energy efficiency planning and targets. Unfortunately, Commerce has interpreted CETA to require all utilities, even small utilities, to include the social cost of carbon in energy efficiency targets and BPA uses a different market price adder to account for carbon in the Resource Program. We have worked with Commerce extensively to reconcile this discrepancy and have yet to identify a compromise.

We will monitor the remaining rulemaking, but that work is mostly focused on electricity markets and we don’t anticipate Commerce will make substantive changes to rules that directly impact NRU members. If you have questions or comments, please contact John directly at jfrancisco@nru-nw.com.

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