The Regional Dialogue Looks Forwardby Staff
BPA Journal - August 2004
A key issue for 2007 and beyond is how BPA’s low-cost federal base power will be allocated and at what price. The venue that is helping BPA determine that, as well as other issues, is the current “Regional Dialogue.”
The Regional Dialogue is a public process aimed at resolving issues that will influence new rates that would take effect in fiscal year 2007, and new long-term contracts as early as fiscal year 2008. BPA launched the next step in mid-July when it began taking public comment on a draft policy.
The heart of the process is a proposed policy that would limit future power sales at the lowest cost-based rate to about the capacity of the existing federal system. Priority one is addressing issues that are critical to the period from 2007 to 2011, and those issues are the main focus of the proposal.
“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 Administrator Steve Wright. “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 we had to cover a large regional deficit in a matter of months resulting in higher rates for everyone.” In 2001, requests from BPA’s customers exceeded BPA’s energy supply by over 3,000 megawatts. BPA’s efforts to meet the additional demand at a time of skyrocketing market power prices caused rates to rise steeply.
Under the proposal, BPA expects to use contractual and rate mechanisms to limit the loads it serves from its lowcost resources, Wright said. Then utilities will have an option of purchasing any additional power they need at higher rates from BPA or seeking supplies elsewhere. The idea is to increase certainty for the marketplace, thereby encouraging investment in infrastructure.
“This draft decision is built around creating an environment in the region that encourages investment in generating and transmission facilities,” Wright said. “Developing needed infrastructure is key to a successful, stable energy future for the region.”
BPA expects to have enough energy from the federal power system to meet projected demand until 2011 when current subscription contracts expire. The agency has set a goal of reducing rates from current levels. A schedule for developing new long-term contracts is also included in the proposal.
BPA will accept public comments through Sept. 22. The Regional Dialogue Web site has all the details at www.bpa.gov/power/pl/RegionalDialogue/index.shtml. The BPA comment Web site is at www.bpa.gov/comment.
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