Transition Board August 14 Mtg Summary

*Northwest Energy Review Transition Board*	John Etchart, Montana
851 S.W. Sixth Avenue, Suite 1100 Portland, Oregon 97204-1348	Roy Hemmingway, Oregon
Phone 503-222-5161 or 1-800-452-5161 FAX 503-795-3370	Mike Kreidler, Washington
	Todd Maddock, Idaho

NORTHWEST ENERGY REVIEW TRANSITION BOARD MEETING SUMMARY
Thursday, August 14, 1997
NWPPC Conference Room, Portland, Oregon

The Northwest Energy Review Transition Board called on BPA customers and interest groups to discuss their efforts to develop a stranded cost proposal. The staff made presentations on how transition activities fit together and on the status of the BPA cost review. Consultant Al Wright reported that the Subscription and the Transmission Separation Work Groups are making good progress. All board members were present; the audience was about 25.

Next Meeting: September 9 in Portland.

• INTERESTS LINK UP TO TALK TRANSITION COSTS -- Council staffer Dick Watson reported the board had received letters from representatives of BPA customer groups, including the Direct Service Industries (DSIs), investor-owned utilities (IOUs), and Northwest Requirements Utilities, about recent meetings they have held on how to develop a stranded cost proposal. We wanted to let you know we are willing to work on the issue and how we plan to go forward, said DSI executive director Steve Waddington. Todd Maddock said he was pleased about the willingness of the customers to step up and participate in the process, and Mike Kreidler said timing of the effort needs discussion.

Steve Weiss of the Northwest Conservation Act Coalition said, we think this is a good course for coming up with a proposal, adding that the key is certainty to customers of their total cost exposure. Consultant Jim Litchfield outlined four stranded cost recovery principles developed by the IOUs. We’re willing to work with other customers to find a mechanism, he said. Maureen Carr of the Public Power Council stated that the group "is working constructively together." There are lots of "encouraging signs," observed Transition Board chair John Etchart. He said the board will get an update from the transition cost group September 9 and could consider what milestones or timelines are needed at that meeting.

• THE TRANSITION PUZZLE: DO THE PIECES FIT TOGETHER? -- Waddington elaborated on an August 8 letter that the Pacific Northwest Utilities Conference Committee (PNUCC) board sent to the Transition Board. The region has been working on the recommendations of the Comprehensive Review for six months, and it’s time for you to take a fresh look at the work plan to see how the pieces fit together, he stated. In doing so, there are two important points: be clear on what goals you are trying to accomplish, and the key is controlling BPA’s costs, he said. Watson walked the board through a table and timeline depicting how the "pieces of the puzzle" fit together. The table is the first step is re-examining the work plan, he said. The table addresses: cost control, the fish and wildlife Memorandum of Agreement (MOA), transition cost recovery, subscription, transmission separation, and river governance. Watson presented a timeline that shows how the dates and deadlines correspond.

Roy Hemmingway said he would like to hear from other interests about what pieces need to be in a legislative package and what the timing of the package should be. The region has been given indications it should be ready with something for this Congress, he stated. I’d like feedback on whether we are on the right path, Hemmingway said. Etchart indicated that the board would invite a panel to discuss legislative strategy at the next meeting.

• WORK GROUPS PROGRESSING -- Consultant Al Wright said the Transmission Separation Work Group is focused on defining what would be "true FERC equivalency" for regulating BPA’s transmission system. We don’t have complete closure on the definition, but we are making "great progress," he said. The group is leaving the issues of organizational form and governance aside for now, and will soon discuss what legislative requirements there will be for BPA to participate in an Independent Grid Operator, Wright reported. With regard to the Subscription Work Group, Wright said there has been good progress in defining BPA products and services, but not as much has been done in defining the business relationship. There is "an ongoing undercurrent of concern" about whether customers are giving up regional preference, he noted. A big question is whether a preference customer who leaves the BPA system can return at cost, and there is concern that there may be a need for legislation on this point, Wright stated.

• COST REVIEW KICKOFF SET FOR AUGUST 25 -- Watson noted that Council staff are engaged in "pre-meeting meetings" with cost review management committee members to go over basic information about BPA’s cost structure. Council staff and consultant Carol Opatrny developed a draft scope of work for the review, which will be the focus of the first meeting, he reported. We are aiming for recommendations in January, with a report to Congress in March, Watson said. There is a growing expectation there will be a follow-on to this review, he added. The first committee meeting is set for a full day August 25, and members of the public can attend as observers, Watson 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 Committee (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.