| Thursday, May 15, 1997 | NORTHWEST ENERGY REVIEW |
Crescent Court Ballroom, |
The Northwest Energy Review Transition Board took comments on its draft letter responding to Northwest members of Congress about recommendations for federal legislation. All members were present. The audience was about 45.
Next Meeting: June 2 in Portland.
• WHAT’S IN THE DRAFT LETTER?--Staffer Dick Watson went over the Transition Board’s preliminary draft response letter to the Northwest delegation in the House of Representatives. The members of Congress had asked the governors to direct the board to identify which recommendations of the Regional Review would require legislation to implement. Watson said the letter suggests "permissive legislation" to allow BPA to participate in an Independent Grid Operator (IGO). In addition, the letter tells Congress that BPA believes it can achieve the Review’s federal power recommendations without legislation; that the Transmission Work Group will have recommendations on stranded costs by early fall; and that a river governance discussion is under way. The Transition Board plans to approve a final version of the letter June 2.
• WHAT’S WRONG WITH THE DRAFT LETTER?--Don Guenther of Pend Oreille Newsprint said the letter lacks "a thumbnail sketch of where you want us to go as a region" and is "pretty soft" in dealing with BPA. Maureen Carr of the Public Power Council (PPC) said a successful federal power subscription process will require certainty on fish and wildlife costs and increased BPA cost-cutting. PPC wants the letter to support BPA’s traditional power marketing role, she said. Steve Waddington of the Direct Service Industries said the region should be open to modifying the specifics of the Review’s recommendations during implementation.
Bill Drummond of Western Montana G&T Co-op suggested the letter call for eliminating the residential exchange and giving residential and small farm customers of investor-owned utilities (IOUs) access to federal power as spelled out in the Review. The letter should also support limiting BPA’s resource acquisition authority and its sales to retail customers, as well as providing for FERC oversight of BPA’s transmission access decisions. Consultant Merrill Schultz said the letter should not be so sanguine about the region’s ability to achieve changes in BPA’s makeup without legislation. It might be possible, but it is inadvisable, he said.
John Saven of Northwest Requirements Utilities said the letter should tell the delegation there may be differing views on the regional IGO. Saven suggested dropping the term "stranded costs" from the letter and framing that issue in the broader category of BPA’s cost-recovery mechanisms.
Administrator Randy Hardy said a number of issues with regard to BPA’s participation in an IGO need to be addressed, including the agency’s cost-recovery responsibilities, postage stamp rates, and transmission pricing. We need to address all of these issues simultaneously, he urged. The question is how you reconcile BPA’s public responsibilities and cost-recovery responsibilities with nondiscriminatory access and a regionally operated transmission system, Hardy said.
• TRANSMISSION WORK GROUP: TACKLING THE BIG ONE--Consultant Al Wright reported the Transmission Work Group has singled out several issues to work on, including form and governance of the power and transmission business lines of a separated BPA; financial issues; allocation of BPA’s costs between power and transmission businesses; BPA’s existing statutory responsibilities; and the fit between legislatively separating BPA and the agency’s participation in an IGO. He said the cost allocation issue is the most controversial item and called the group "brave" to launch into it now.
• FEDERAL POWER WORK GROUP: MOVING RIGHT ALONG--Staffer Wally Gibson said a list of business interests is on the table, and the group is getting to the question of what specific contracts will make the subscription process work. There has been quite a bit of progress in the work group, and we’re ahead of schedule, he said.
• MONTANA FIRST OUT OF THE CHUTE IN RESTRUCTURING ROUNDUP--Todd Maddock said Idaho has "taken it slowly" with restructuring legislation, and a special committee will develop recommendations for the next legislative session. Two legislative committees are consulting on the issues in Washington and will hold public workshops, Mike Kreidler reported. In Oregon, the legislative debate continues, and what may come out in a restructuring bill is "anybody’s guess," according to Roy Hemmingway. John Etchart described the comprehensive restructuring bill that passed this session in Montana. The legislation addresses separation of IOU transmission and generation; a universal systems benefits charge for public purposes; and bond financing to recover some transition costs, he said.
• RIVER GOVERNANCE: THE JOURNEY BEGINS--Watson noted that a river governance workshop, facilitated by Jim Waldo, would begin that afternoon and extend into the next day. The workshop attendees include representatives from federal agencies, tribes, state government, environmental groups, utilities, and industries, he said.
Please Note: This summary is based on detailed reports of the meetings of the Northwest Energy Review Transition Board. The reports are prepared by Resource Writers Inc. and distributed by the Northwest Power Planning Council. The Pacific Northwest Utilities Conference Committeee (PNUCC) contributes financial support for these reports. To request a copy, please call the Council at 1-800-452-5161 and ask for Public Affairs.