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BPA Announces Process to Finance New Columbia Power Line by CBB Staff Columbia Basin Bulletin - July 9, 2004

The Bonneville Power Administration this week announced it is hosting an "open season" for developers and interested parties to help finance a new transmission line between McNary and John Day dams on the lower Columbia River. The line is estimated to cost $167 million.

The proposed 500-kilovolt transmission line would be about 79 miles long and would add about 1,250 megawatts of transfer capacity along the Columbia River from the Tri-Cities area in Washington to the Rufus-John Day area in Oregon. It would also help integrate new gas and wind energy generated in the area. The line would carry enough energy to serve a city the size of Seattle.

"This line will be needed if developers elect to move forward with planned power plants and wind construction in the area," said Brian Silverstein, BPA vice president of network planning. "If a sufficient number of customers sign up, they would collectively finance construction and subsequently receive a credit against their transmission bills to recoup their investment."

Silverstein stressed the McNary - John Day project was proposed in response to market demand, and not reliability concerns. The area along the Columbia River between The Dalles and McNary dams has attracted several large gas-fired generating projects in recent years due to the availability of both natural gas pipelines and high-voltage electrical transmission lines. It is also an area that has attracted a significant amount of wind generation development.

To protect existing customers from costs associated with a line needed primarily for new generation, BPA has called for interested parties to step up to commit to pre-pay for long-term transmission service to cover costs to construct the project.

"If enough transmission requests are received to fund the project, in August we'll send out financial agreements to each interested party to identify and pay a pro-rata share of the project cost. The open season is designed to attract the greatest level of customer participation possible, thereby minimizing the financing obligation of any particular customer," said Chuck Meyer, BPA vice president for Marketing and Sales.

The open season begins July 1 and lasts through July 30. During that period, BPA will suspend the required application deposit for a new transmission service request to encourage broad participation from parties with potential demand for this project. The normal deposit is equivalent to one month of the transmission service requested by the customer. This will allow generators and other interested parties to make transmission requests during the open season without a financial commitment at this initial stage. Following the review of all the requests, customers will be required to make the deposit if they wish to participate in the project. They may also decide to withdraw their application.

For more information, please see the BPA Web site at: www.transmission.bpa.gov/newsev/view.cfm?ID=211&type=notice.