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BPA Seeks to Clear Misconceptions

by Katy Nesbitt
The Observer, April 4, 2020

Lower Monumental dam on the Lower Snake River in the remote Southeastern Washington State, is being considered for removal. PORTLAND -- With a public comment period on the operation of Bonneville Power Administration's 14 hydropower generating dams ending April 13, officials are working to dispel widely held misconceptions about the systems' management.

The draft Columbia River System Operations Draft Environmental Impact Statement was released Feb. 28 for a 45-day public comment period. Amy Echols, U.S. Army Corps of Engineers outreach coordinator for the fish and environment team, said six public meetings were scheduled to be held around the Northwest, but were moved online because of recent federal and state precautions around the COVID-19 virus.

Echols said the virtual public meetings in regards to the draft EIS, co-authored by BPA, Army Corps of Engineers and the Bureau of Reclamation had the same facilitation and presenters. She said the teleconference format worked well.

"One of the advantages of this format is that people from all over the region, and even outside the region, could attend without having to travel," she said. "It provided a glimmer of opportunity in the midst of change."

With 190 people signed into a four-hour call on March 31, Echols said 90 people were able to provide verbal comment.

Doug Johnson, senior spokesperson for BPA, said the three sponsoring agencies, along with a list of 30 other government stakeholders, began work on the Columbia River Systems Operations analysis in August 2016. The anticipated release of the final environmental impact statement is scheduled for July and the Record of Decision should be published by September.

Now with the comment period is drawing near, Johnson said he wanted to make sure some of the errancies that arose are clarified.

Dams provide more than 4% to BPAOne of the most confusing issues is the repeated statement the lower Snake River dams only contribute 4% to BPA's total.

What is crucial to note, Johnson said, is the electricity generated by the Snake River dams accounts for a little more than 10% of the electricity BPA sells to its 136 preference customers -- public utility districts, municipal electric utilities and rural cooperatives, including Oregon Trail Electric Cooperative based in Baker City.These districts and co-ops are considered preference customers because they get 100% of their power from BPA.

"The cost of replacing the power from the dams would hit them in a disproportionate manner," Johnson wrote in an email. "Removing the Snake River Dams and replacing them with natural gas generation would increase the rates of PUDs, municipal electric utilities and electric cooperatives by 8.2 to 9.6 percent. If those dams were replaced by a combination of renewables, battery storage and other non-carbon measures, which may be more likely given current state renewable portfolio standards and other carbon legislative proposals, it is projected to increase those rates by 9.5 to 19.3 percent."

Oregon Trail Electric serves 61,000 people in four counties. Chief Financial Officer Anthony Bailey said as a co-op, OTEC only receives power from BPA and is dependent on the decisions that affect Bonneville.

"Assuming dams went away the (preference customer) utilities would have to develop their own (power generating) resources or buy Tier-2 power through a contract," Bailey said. "It would force us into the market much quicker instead of BPA being able to manage for us."

Natural gas, others hit BPAAnother criticism that arose among the public comments is BPA sells power for less than it costs to produce. Johnson said 78% of the revenue BPA generates is from its preference customers.

The remaining 12% of revenue comes from what he called "surplus sales" or "secondary revenue."

"When we produce more power than our wholesale customers need then we go to the spot market and sell it at a rate oftentimes lower than our wholesale rate," Johnson said.

In recent years, BPA power is fetching less on the spot market than it did traditionally for a few reasons, Johnson said. He listed lower natural gas prices and the influx of wind and solar energy as contributing factors. BPA also takes a hit periodically during spring high flows or when a lot of wind power is produced.

"In rare circumstances, we provide energy on the spot market for less than it costs to produce", Johnson said. "It's the exception, not the rule."

Addressing claims that BPA is becoming financially insolvent, Johnson said a couple of years ago, BPA adopted a strategy to cut spending.

He blamed a lack of "cost discipline" and said by trimming $66 million of costs planned for the current two-year rate period, BPA was able to hold rates flat for the first time in more than a decade.

"Considering that between 2008 and 2018, BPA wholesale power rates increased on average about 3.6% per year, this clearly demonstrates the financial discipline to bend the cost curve and provide low-cost, carbon-free hydropower to our public power utility customers across the Northwest," he said.

Katy Nesbitt
BPA Seeks to Clear Misconceptions
The Observer, April 4, 2020

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