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Bonneville Releases Draft Proposal on Future Power Sales by CBB Staff Columbia Basin Bulletin - July 9, 2004

The Bonneville Power Administration released a draft plan in its Regional Dialogue process that would limit power sales to its customers to the amount of energy generated at federal Columbia River Basin dams and the Columbia Generating Station, owned and operated by Energy Northwest.

BPA had previously oversubscribed sales to customers by about 3,000 megawatts. That caused the agency during the power crisis of 2001-02 to seek high cost market power to fulfill its contracts, resulting in the agency increasing prices by nearly 50 percent (see BPA Lessons Learned).

The federal power marketing agency will hold six regional workshops in August and September, with the idea that the public input to its draft plan would provide the information it needs when adopting new rates in fiscal year 2007 though 2011.

"A key objective is to get early clarity about BPA's load obligations, and those of the region's utilities, to serve the region's power needs in 2007," said Steve Wright, BPA administrator. "It can take substantial time to line up the cost-effective power supply and acquire additional infrastructure. We want to avoid repeating the situation in 2001 when BPA had to cover a large regional deficit in a matter of months resulting in higher rates for everyone."

BPA said it expects enough energy will be generated by the federal power system to meet customer demand until 2011. That's when current subscription contracts expire. It hopes to reduce rates in the 2007 to 2011 timeframe.

BPA's draft proposal follows the principles recommended by governors of the four Northwest states and the Northwest Power and Conservation Council in 2003. Among those issues that BPA is asking for comment on are:

• The level of support for industrial customers.
• The level of commitment to conservation
• Whether it should help utilities acquire new renewable resources
• Whether it should offer the 11 customers whose contracts expire in 2006 an option to extend the term of their existing contracts through Sept. 30, 2011, at BPA's lowest rate.

Information about the regional dialogue process is available at www.bpa.gov/power/pl/RegionalDialogue/index.shtml.