We are finally at the end of 2020 and this is the last Update of the year! I had several comments in my mind to write about 2020 (most probably should never be in print 😊) and what a challenging year it has been but I would rather focus on how NRU and all of our members persevered in 2020. I know for certain that 2021 will bring new and unexpected obstacles and I am completely confident that we will overcome those obstacles in unison with our members. Our common bond of serving our members/customers is what fuels our efforts and makes public power special.
I hope everyone has time with family and friends on this New Years Eve and all of us at NRU look forward to serving you in 2021!
NRU Welcomes Whatcom PUD as a New Member!
Whatcom PUD has communicated its intention to join NRU and will be taking advantage of both our BPA Advocacy and Power Services. Whatcom will be represented on the boards of directors by Assistant General Manager Brian Walters.
Whatcom is excited to begin directly receiving benefit from NRU’s work in the BP-22 and TC-22 rate cases, our extensive Post-2028 efforts and support for serving their growing loads.
Please join me in welcoming Whatcom PUD and Brian to the NRU family!
NRU Staff Profile #2 – Zabyn Towner, General Counsel
We started our series of staff profiles last week with the longest tenured NRU staff member so this week we are moving to our newest team member, Zabyn Towner.
Zabyn is new to the NRU team but brings more than a decade of Northwest energy industry legal experience. His expertise includes administrative law, complex appellate litigation, and contract negotiation and drafting, all with a Bonneville-specific focus.
Zabyn grew up in Northwest Montana, performed his undergraduate studies at Whitman College in Walla Walla and obtained his law degree from Lewis and Clark Law School right here in Portland.
Please do not hesitate to contact Zabyn with any questions via his email firstname.lastname@example.org or by phone at (503) 351-0485.
NRU Comments in Response to BPA’s “Provider of Choice Customer Engagement” Summary
Working with the Post-2028 Working Group and the NRU Board, NRU staff submitted comments to Kim Thompson, BPA Vice President of Northwest Requirements Marketing and the lead for BPA’s Post-2028 efforts, in response to BPA’s summary document of what they heard from customers this year as part of their post-2028 outreach. BPA is calling the post-2028 era “Provider of Choice”. Our final comments are attached (very similar to the draft shared last week, with some improvements suggested by members – thank you for your feedback). In short, NRU generally agreed with most of the themes in the summary document but added a few of our own. We also used this opportunity to emphasize the need for BPA to truly engage with customers on issues like BPA’s financial health, asset management and provision of affordable and reliable power and transmission.
Kim has indicated to NRU that BPA will start conversations with customers around March of 2021 and will likely be sharing staff leanings on Post-2028 provisions during these conversations. It will be important for NRU to begin sharing our interests for Post-2028 negotiations during and before these conversations so that we can take a proactive stance with BPA. We will be discussing this with the Working Group and full NRU Board at upcoming meetings.
NRU Is Working with BPA To Understand Potential Implications to Load Following Customers under the NWPP Resource Adequacy Program
Megan has set up a small group meeting with key BPA staff and lawyers (along with PPC staff) to begin digging into details about how BPA’s potential participation in the Northwest Power Pool Resource Adequacy (NWPP RA) program could impact Load Following (LF) customers. This meeting will be held in January. Below are the questions she has teed up for conversation:
Where in the contracts and/or statute is BPA’s contractual obligation to meet the RA requirements for LF customers?
If this obligation is specific only for LF customers, one could assume that all costs and benefits associated with BPA’s participation in the RA program would flow directly to the LF customers. How would this happen under the existing rate design, since there is no rate or cost pool specifically for LF customers only? (eg, the “Non-Slice rate” includes both LF and Block products)
What would be the decision process for BPA joining the RA program on behalf of its LF customers, assuming that the point of compliance is at the Load Serving Entity (LSE) level, which would be the LF customers, not BPA? Would the individual LF customers need to be participants in the RA program themselves? Would an additional contractual arrangement need to be made between the LF customers and BPA?
Assuming there are potential costs and benefits to BPA participating in the RA program, in what rate case will the allocation of those be considered?
If BPA is supplying the generation (ie, FCRPS) and the LF customers are supplying the load (ie, LSEs as the point of compliance), this creates a highly unique partnership between BPA and LF customers wherein each of the other’s involvement is solely contingent on the others. In other words, BPA probably couldn’t participate if the point of compliance is at the LSE level, since BPA itself is not an LSE. At the same time, it would be challenging for LF customers to participate since they purchase their gen (load following services) from BPA.
Given this unique and highly interdependent relationship between BPA and LF customers, how can we ensure that LF customers are involved in the NWPP RA program design and governance (now and in the future)? For example, it will be important that the rate design and pricing structure to sell surplus capacity to other participants adequately compensates BPA given that would flow directly through to the LF customers.
How will BPA determine how much surplus capacity they have? Will all of that be attributed to the LF product, or will some of that be attributed to the Block product? (presumably, the Slice product directly receives its share of any surplus capacity)
If the NWPP RA program ultimately does not work to the advantage of BPA and LF customers, how will that determination be made?
While I hesitate to add another layer of complexity, I do think it’s necessary to at least get the question out there --- How will this impact and interact with the post-2028 contract negotiations?
Megan has identified fundamental questions regarding how the costs and benefits of a potential RA program will be allocated among BPA’s customers. BPA’s answers to these questions will be important not only in the context of current contracts but also how the capacity value of the FCRPS is treated in future contracts, as some customers have indicated interest in a capacity product offering when responding to BPA’s Provider of Choice engagement in 2020.