Download the full text version of the March 14 meeting.
Download the full text version of the March 14 meeting.THE COMPREHENSIVE ENERGY REVIEW STEERING COMMITTEE heard reports from its three subgroups on templates for future industry structure and discussed how those results could translate into work group assignments. All committee members were present; the audience ranged from about 30-40 people.
Next Meeting: March 28 in Portland. Work groups will be organized and given their marching orders.
"It starts to get interesting now," remarked steering committee chair Chuck Collins, as he opened the meeting. Collins indicated that a meeting schedule for the rest of the year is available. He pointed out there would be a March 28 meeting, but no meetings in April while work groups are in session.
Collins said the day's agenda called for the subgroups to meet in the morning and to report on their deliberations in the afternoon. Then, he said, the committee will begin considering specific tasks for the work groups to perform. There will be 100 days for the work groups to carry out their tasks, he stated. Each work group will develop a list of feasible alternatives for solving the issues they are assigned, including the pros and cons of each alternative, and possibly a rank ordering of alternatives, Collins said. He noted that Al Alexanderson said that when we talk about alternatives, as a practical matter, we are likely to find there are really very few; I think that's probably true, Collins said.
After April, the committee will meet monthly to review the work groups' progress, Collins stated. On July 11, we'll have less than 60 days to come up with a draft proposal, he pointed out.
Rachel Shimshak presented a report prepared by the Renewable Northwest Project titled "A Summary of National and Regional Surveys Affirming Consistent Public Support for Conservation and Renewable Energy." It compiles information from over a dozen surveys and focus groups over the past two years. We decided to assemble the information and add it to what the governors' representatives have done in gathering public opinion, she said.
According to Shimshak, the report demonstrates that those surveyed, including public and private utilities and advocacy organizations, agree that the environment is important to customers, that the electricity system affects the environment, and that people value environmental preservation. She urged the committee to read the report and keep its results in mind during the review.
Today, we'll decide on how many work groups there will be and generally what their assignments should be, said Collins. Then staff will write up the specific tasks, which the committee will be asked to approve on March 28. By then, I hope that the work groups will be assembled and their chairs appointed, he added.
Collins noted that he has asked the PNUCC transmission group to make a report to the committee on what it has accomplished and also to describe "what made that working group work."
I want to emphasize that there's not much time, stated Collins. I hope that as the components of a new industry structure start to appear that members of the audience and committee members will "do what Brett did," said Collins -- take components and assemble them into proposals. By August, I hope there will be several proposals in circulation so the committee will experience a "collision of good ideas," he added.
Over the next few months, the work groups will work on the components, and others in the community will be developing proposals on how the components fit together, stated Collins. In August, the steering committee will have both the pros and cons on the components and proposals for fitting them together, he said.
Collins explained that in the afternoon, subgroups would report their results by posting colored papers under 12 template topics on the board. When we have agreed on what's on the board, Collins said, we'll see if there are four to five work groups that can take on these things, and we'll have what we need to write specific charges to the groups.
How will the specific charges be distilled at the end of today's meeting? asked K.C. Golden. On March 28, replied Collins, you'll have the right to approve or disapprove of what's been put together. We will try to write something specific out of today's decisions, Collins said. Besides himself, Collins indicated that Council staff members Terry Morlan, Ken Corum, and Wally Gibson, and consultants Al Wright, Jim Litchfield, and possibly Bill Marcus, will write up the work group charges.
I'm out of town next week, noted Collins, but will leave a number where I can be reached. There is a lot of consultation that should go on about who should be on the work groups and who their chairs should be, he added. Al Wright is recruiting people for the work groups now, Collins pointed out. The general feeling, he said, is that whoever wants to be on a work group can be on one. We do expect that the chairs will take steps to reduce "stacking," if it should occur, Collins said. And the chairs will have the right to tell people they need to show up at all the meetings, not just appear once in a while to "kick over the furniture," he added.
Ken Canon, chair of subgroup 1, kicked off the afternoon session by reporting on "separating generation and transmission." He said five group members agreed there should be more than just "administrative separation," while one person disagreed. He said they also agreed an independent single operator of transmission should not control generation dispatch. The group wanted several questions addressed, for example, does the separation of generation and transmission reduce the ability to fund some current responsibilities?
Subgroup 3 chair John Saven reported his group rejected simple administrative separation and favored the region exploring an independent grid operator (IGO) or Bonneville Transmission Administration (BTA). Bill Drummond, chair of subgroup 2, said his group considered functional separation to be the base case and identified issues associated with moving from functional to physical separation. Issues include finding the most efficient operation and expansion of the grid, and how other regions would be affected by what the Northwest decides to do.
Walt Pollock asked if the group was talking about going beyond administrative separation just for BPA or for everyone? You should realize, he said, if you are talking about BPA, you may create difficulties with Treasury repayment if there are two separate entities. Walt's issues need to be dealt with in the separation discussion, acknowledged Litchfield. No one seems comfortable with functional separation as a good place to stop, he observed; we've got to go to physical separation, and that raises issues like Walt expressed.
If you preclude looking at the functional separation option, in what direction do we ultimately end up? asked Gary Zarker. I'm not sure you can get there from here, he added; even if we'd like physical separation ultimately, you've got to look at improvement of functional separation first and how to move there. It will take time, he said. So you're suggesting we tell the work group we may want physical separation ultimately, but we need to sort through the issues of how to get there first, said Wright.
Does everyone agree that physical separation with a single operator is a goal? asked Drummond. Our group agreed administrative separation is not enough, replied Canon. What did you mean by "reject simple administrative separation"? Collins inquired of Saven. Administrative separation is not sufficient, and we wanted to go beyond it, Saven responded. There are lots of transition issues involved, he said, but we felt administrative separation didn't go far enough.
The question is, said Drummond, what issues come up if we move to physical separation? What issues are associated with BPA, the IOUs, and both? he asked. So you want to examine administrative or functional alternatives? asked Collins. Yes, replied Drummond, to the extent it gives information on issues like open access and pricing. Will functional separation get the system far enough? -- that's what I want to know, he added. The first task of the work group, commented Sharon Nelson, should be to brief us on the work PNUCC and the Regional Transmission Group have been doing.
So there is no consensus on looking just at physical separation, Collins observed, but there is consensus that we need more than just administrative separation. What I hear, said Litchfield, is that administrative separation is happening now, but that there needs to be some work to make it a valid base case. I hear a consensus on physical separation of transmission from power marketing in the long run, he added.
I don't agree we have to have that, said Zarker, but I am willing to have it as a work group agenda item. So we will ask the work group to look at a variety of functional and physical separations, said Collins.
The question, commented Alexanderson, is whether a single entity should decide merit order of generation or should multiple entities decide -- that's the money question, he added. Have we a consensus not to look at options where the transmission owner is not the IGO? asked Collins. Our group said the ISO should not control dispatch, replied Canon. It's not a conclusion, he added, it's a topic. We looked at the question of actual grid operations versus the structure of the transmission system, said Drummond. Expansion of the transmission system and acknowledging that what we do affects others' operations were among the issues that came up, he added.
Brett Wilcox commented that the discussion is basically an endorsement of where the PNUCC group is going. Let's just turn that group loose and let them go, he suggested. Do you endorse the PNUCC work group, if they come and talk to you about what they are doing? Wright asked the committee. The response was affirmative.
Saven reported his group rejected the mandatory pool approach and supported voluntary pools, bilateral contracts, and spot markets. Canon said subgroup 1 would like the work group to examine the advantages and disadvantages of alternative market structures and look at them within the context of the Northwest system. Drummond reported his group had several questions about power pools and price discovery. He noted that they didn't reject a mandatory pool out of hand.
Collins asked how strong subgroup 1's feelings were about rejecting the mandatory pool. Very strong, replied Wilcox; there was more interest in bilateral contracts and other approaches, he added. We don't know enough about pools yet, commented Mike Kreidler. It's too early to dismiss the idea, said Shimshak. Pollock offered "a caution" -- we've been watching the California experience, he said, and based on that, if we can dispose of this issue early on, it could help us, he said. Maybe we need some early scoping, suggested Collins. So the work group could look at a mandatory pool first and report back? asked Wright. The question is whether a pool is workable in a four-state region, said Nelson. It may not be practical to go further, she added.
I wouldn't want to spend a lot of time and money on it if we have finite resources, commented Saven. Is there skepticism about the workability of a mandatory pool? asked Collins. Who disagrees? he pressed. No one spoke up, but Golden noted, I'm also skeptical about bilateral contracts. So the work group should take a "fatal flaw" look at the mandatory pool idea first, suggested Collins, and then examine alternatives to pools like bilateral contracts.
Under the topic "Bonneville Power Marketing," Canon reported four issues of concern: market vs. cost-based pricing; ownership vs. preference issues; should BPA have the right and/or obligation to acquire new resources; and should BPA or some other "large sovereign" (with many resources and market dominance) be able to compete in wholesale and/or retail markets?
Saven said his group thought BPA should not acquire new resources or be responsible for net requirements. Topics for work group study include allocation of power, BPA's flexibility to compete, and structural changes to BPA, he said. There were a lot of differences of opinion on power allocations and BPA's flexibility in being able to compete, he reported. Most of the group thought BPA would compete, Saven said, but there were different opinions on how aggressive BPA would be. Canon commented that we've talked about BPA a lot, but there's a distinction -- the FBS could exist without BPA, he said. If you were writing a contract, you would say BPA's "successors or assigns," commented Collins.
Drummond said his group framed the question in terms of risks and rewards. The question for the work group is who bears the costs and risks versus the benefits and losses? The work group should assess, he continued, different models on the risk/reward question. The risks include nuclear plants, fish, market risks, and meeting existing obligations to tribes and to Canada, he said. The models the group suggested were: Competitive, Allocation of Market Rights, Sell Assets, Minimize Risk by Stranded Cost Charge, and Muddle Through.
You can't take away BPA's purchasing authority without taking away the obligation to serve, commented Kreidler. It's repealing the core of the Regional Act, observed Wilcox.
Do we agree that BPA should not be obligated to acquire new resources and generation for net requirements? asked Collins. That assumes a change in the law, Pollock pointed out. It changes BPA's role as a regional provider of resources, he continued. I'm willing to have it as a point for the work group to start from, but we need to think about it more -- it could cause us to be unable to expand our markets beyond existing available resources, Pollock said. So the work group could start by considering BPA is not obligated to acquire new resources and generation for net requirements, Collins suggested. But leave in preference and allocation of the FBS, added Wright. BPA would not be serving net requirements and would have no purchase authority, said Wilcox, adding, we didn't reach a consensus on a structure for BPA.
In our group, said Chuck Hedemark, we asked "what's the meaning of preference?" We could ask the work group to discuss these questions in terms of risks and rewards, suggested Collins. How much risk there is from failed nuclear plants is a central issue -- it should be in there, stated Kreidler. Are we asking the work group to look generally at these things, or to go specifically into matters like the fish cap, WPPSS debt, etc.? asked Wright. It should look at the allocation of risks and costs because any structural alternative requires it, replied Golden. When we talk about allocation issues, said Wilcox, it may not be megawatt-hours, it could be a market allocation. It could be seeing what people are willing to pay or bid for an allocation, he added.
"I've Got A Problem With That," Said Pollock
I think the "first bullet" [on the board] overstates on BPA acquisition, said Pollock. I didn't think we were deciding something as specific as that now; if BPA cannot buy resources, sell their output, and take risks, it "pre-decides" the competition question, he stated. "If that's what we're doing, I've got a real problem with that," said Pollock.
Don't pre-decide that BPA cannot, for example, act like PacifiCorp, and take some risks, and maybe even lose money sometimes, Pollock continued. You may get to that, but don't decide that now, he urged. It does pre-decide the issue, said Collins. Then I can't agree with it, responded Pollock.
I can see a circumstance where BPA is better situated to do a deal, for example, with Canada, where everyone ends up better off, said Drummond. But the idea of risks and rewards continues to come back to me, he added. Why as a BPA ratepayer am I forced into a reward or loss without a say in how that decision was made? Drummond asked. That's the ownership issue, said Wilcox. It's the question of whether risks fall back to customers, to the federal government, or if BPA is a private business, to its shareholders, he added.
Net requirements and new resources are a different issue from the 9,000 or so MW BPA markets in the region, commented Collins. We started with the proposition that BPA cannot acquire new resources and that it has to allocate existing resources, said Wilcox, but we didn't agree on the allocation. You don't have sufficient predictability to allocate all the power, he continued, so the question is, what do you do with the residual power? You sell it to the highest bidder, Wilcox suggested, adding, we're all comfortable with spot market sales and short-term sales, but there is no consensus on retail wheeling. That gets us to the structural issue, said Wilcox -- the "residual power sale entity" has to be something. If it is a federal agency, some think it shouldn't compete at retail, he added.
I think once you remove the obligation to serve, you've answered 99 percent of the question, stated Kreidler. The point is, said Collins, there is no consensus on the residual power seller. It's too big really to use the word "residual," he noted. But the question, said Collins, is: should it compete? That's a starting point, isn't it, Walt? he asked. Okay, replied Pollock.
It's not too vague to leave it at this point -- it needs some work, suggested Nelson. It's definitely an issue to look at in regard to ancillary services, not kilowatt-hours, Wilcox commented. We might be able to get an expert on this, for example, from the Department of Justice, to come talk to us, Alexanderson suggested.
What would we ask a work group to do on this? inquired Collins. To describe existing efforts and help us frame the issue, replied Canon. I'm not sure what the Justice Department would help us do, commented Saven, and I'm reluctant to launch this if there are scarce resources. Wright suggested Council staff round up some people to talk to the committee about it and that the issue not be assigned to a work group now. The issue will come up in the context of BPA restructuring in the future, said Litchfield. Collins said staff will collect literature on the issue, particularly the legal aspects.
Saven reported his group thought as much choice as possible at the wholesale level is very desirable, but "at the retail level, it got more complicated." Everyone supported retail choice, he said, but there were questions about equity and other issues.
Jason Eisdorfer said the work group should look at alternatives to retail wheeling and at transition issues. I didn't support retail wheeling, he noted, adding, I want to consider different possibilities under the competitive scenario short of retail wheeling. I read your comments as: examine alternatives to retail wheeling -- is that right? asked Collins. Yes, that's what I wanted to make clear, Eisdorfer replied.
Drummond said his group thought the work group should look at partial and full retail wheeling, and the use of the BPA transmission system in the absence of state-sanctioned retail wheeling. What is "wholesale" in this context? asked Kreidler. We need a new definition, said Collins. And also of what constitutes retail versus wholesale, suggested Drummond. Wholesale has implications for other customers, and for liability and stranded costs, Canon noted. We all agree we are going to look at what "wholesale" is, the pros and cons of retail wheeling and alternatives to it, and the impacts on customers and utilities, summed up Collins.
Canon said his group thought "separating generation and distribution" might not be ripe enough to be a stand-alone issue. It's a low priority now -- a "maybe," he said. It's not an issue for BPA or public power, Saven stated, and it may not be an issue for IOUs due to their regulation, but there was not a consensus on that, and there is some interest in the issue with respect to IOUs, he added. Drummond said the issue involves all utilities.
Bob Gannon said distribution separation is not an issue at Montana Power because generation is fully competitive. The company's transmission will be separate, he added, and there will be full customer choice. Supply decisions will be made by customers, he said, and all their activities will be fully regulated. It doesn't seem to be much of an issue, Gannon concluded.
I generally agree, said Alexanderson, adding the divestiture question has come up in market power discussions. Pulling transmission out takes care of competitive issues, he said, but it leaves stranded cost issues.
The role of the distribution utility and the separation of generation and distribution involve many actors and questions -- we've learned that from experience with the gas industry, said Nelson. Should utilities allow access to their wires to others? What's their role in conservation? These are major questions, she stated. Is this the right forum to explore them? asked Collins.
There are efforts at the state level to examine the role of the distribution utility, Nelson replied. It's a second order issue for this group, she suggested. I agree, said Hedemark, but why isn't generation and distribution separation being considered for public utilities? If customers are comfortable with a utility owning generation, why should it be an issue? Drummond responded.
Is it a low priority, with no work group assignment needed? asked Collins. That's okay, replied Eisdorfer, if customer choice looks at some of these issues. For end users, transmission issues are the most important because they fear "they will get left holding the bag," commented Nelson.
I thought this topic wasn't important, but some people are linking these issues to retail choice, said Alexanderson. You may pre-decide we are not equipped to look at retail choice, but if you don't decide now to look at it, you may decide by default because time will run out, he added. Should we group all the retail issues under customer choice? And do you want to look at all the retail issues? Collins inquired.
That complicates it to such a degree that we won't get this resolved, commented Zarker. This is a really big one -- I agree it should be put on the table, he added. But if we try to go the whole hog, we may not be able to get there, and the product won't be of much use, but will have taken lots of discussion, Zarker speculated.
It's the central issue -- we are here because retail choice has already started, Alexanderson said. The "we shouldn't deal with it" argument won't work, he added. Gary is right, remarked Collins, it's a torturous road. I don't see why we don't "let the big trucks out," Collins added. Once that's done, then Jason will have the opportunity to raise his concerns. We have no choice but to start it, he added.
The question is whether to take it on now, responded Zarker. And can you confine it to the "big trucks," an analogy I don't like, he added. The steering committee could help the states think about what to do in a coordinated way -- help them establish direction, suggested Litchfield. I don't know how influential we could be, Zarker said.
It is going to evolve in various jurisdictions, said Golden, and we may be able to give a nudge. But on the BPA issues, he pointed out, people are really looking for our recommendations. We could spend lots of time on something we may not have too much power over, he added.
The legislatures next year "are going to be hit between the eyes" on retail wheeling, observed Kreidler. This is an issue for which we may want to provide some framework for what they wind up doing, but not so it bogs us down in our other efforts, he said. Our experience as a utility that provides gas too, said Gannon, shows it's not fair for one set of customers to take all the benefits. Once the door is open, everyone should have those opportunities. If one set of customers is going to have the advantages of the competitive market, then all should, he said.
BPA needs to know what loads we're going to have to wheel for, Pollock pointed out. Are they all wholesale loads? asked Collins. No, replied Pollock, noting a recent FERC ruling that encourages broader access for retail customers. We need a mechanism to recover money so it doesn't disturb the market, said Pollock.
So we're going to look at a redefinition of "wholesale," said Collins, and also at, in an informative way, the pros and cons of other customer choice and utility structure issues. We won't come to a conclusion as we will on some of the other issues, like separating generation and transmission, he added. We will be looking "in a research/public policy way" and then turn over our work to the legislatures, "as an appendix," he suggested.
Don't rule out suggesting mandatory mechanisms, beyond just providing an appendix, said Alexanderson. Nothing precludes us from anticipating a future when all customers have choice and building in positive mechanisms for how you get there, he said. Are you comfortable with that? Collins asked the group. Not at this point, replied Zarker. Let's see if the appendix warrants going further, he recommended.
Let's not just write a piece of advice and rule out providing mechanisms that give incentives for states, commissions, and utilities to go in that direction, Alexanderson reiterated. How many agree? asked Collins. Several hands went up. How many do not? Collins inquired. Zarker, Saven, and Jim Davis voted no.
As for renewables, Canon's group wanted the level of support and funding mechanisms identified that could assure long-term values are preserved. Drummond said commercialization is the same issue for conservation and renewables, but the R&D issue is different. Saven reported a difference of opinion on renewables, with some believing the market needs financing mechanisms and some thinking it does not. Collins asked about the need to define market and non-market mechanisms for conservation and renewables. Shimshak observed that her group talked about objectives, how to overcome market barriers, and implementing social goals.
Hedemark pointed out that IOUs have integrated resource plans which are reviewed for societal benefits, and customer and company benefits. In light of that, does this issue belong in or outside this process? he asked. The utility commissions have no jurisdiction over public entities, Hedemark added. Our group talked about what is cost-justified -- that's what utility commissions look at. It's proper to discuss that here, Hedemark said, adding that in the gas industry, regulation is FERC-driven for pipelines and state-driven for IOUs.
So you've got to consider "how much?" said Collins, and the answer is driven by questions of cost-effectiveness and public values. Depending on the answer to those questions, he said, then you look at market mechanisms. If they don't provide what you want, then you look at non-market mechanisms. Is that the assignment for the work group? he asked. I'm reluctant to frame it as "how much," replied Golden. I don't want the work group to rebuild the supply curves; there are other good questions to deal with, like "who's responsible for what," he added.
Canon said his group looked at rural service as a power system obligation. The group would like study of this issue, as well as rural, irrigation, and other subsidies; the residential exchange; and ways to capture the benefits of improved coordination of the west coast system, he stated.
Saven reported his group wanted transmission customers in remote areas to get the benefits of a competitive market and raised the issue of postage stamp rates and zonal transmission pricing. We also discussed the low-density discount and the exchange, and there was a difference of opinion of these topics, he noted. As for other issues, Saven cited environmental and fish cost questions, and he said natural gas "needs to be on the plate somewhere." There was not a consensus in the group on whether low-income assistance was a utility responsibility, Saven said.
Davis commented that at the second committee meeting, he had raised the question about our regional gas "blind spot." He noted that energy service providers are springing from the gas industry, that the MCS should be fuel-blind, and that there is an increasing regional reliance on gas for electricity generation. We need to decide, in light of these things, at what point do we bring gas into this review, said Davis.
Bill Marcus asked us, would we be going through this process if gas prices were double what they are? Davis noted. It's a good question, he said. We have to look at all the fuels being used in our homes and businesses, he added. Davis gave four reasons to examine gas in the review:
I take exception to the idea that gas is driving deregulation in the Northwest, responded Hedemark. It's a national situation, and there is no linkage, he added. As for the pricing of gas, it is the result of deregulation; we don't control the price -- it is established by state regulation, he said. We are regulated by the states and the pipelines by FERC, Hedemark noted. While it is okay to look at a system benefits charge, it is "terribly unfair" to examine the gas industry in light of the electricity industry, and it is not appropriate for the purposes of this review, he stated.
Davis noted that there is a prohibition in Washington against PUDs being purveyors of gas. I agree with Chuck on the system benefits charge, and if adopted, it should be on all fuels, said Gannon. He noted that Montana has integrated resource planning.
We are not going to restructure the gas industry, but Jim's right that there are some "critical interactions" we can address, said Golden. But we shouldn't take on gas generically -- we need to be specific, he added. The system benefits charge is a structural issue, while the environment is a non-structural issue, observed Roy Hemmingway. We haven't had a regional planning body for gas, he said. I'll never have an opinion on whether PUDs should distribute gas, Hemmingway declared. It's up to the states; this review won't ever inform me to be competent on that, he added.
Hedemark said the important pieces are: how does gas interact with the electricity industry? What are the issues with respect to generation, fuel switching, and the environment? States regulate environmental questions, he said, adding, I recommend gas be dropped as an issue except as it interacts with the electric utility industry.
Resuming the group reports, Drummond said his group recommends that all subsidies and nonpower public benefits be examined for continued support. Other issues they identified included: preventing and/or mitigating undesirable environmental consequences from restructuring, and if there are any environmental gains, finding out how to capture them. He said Nelson raised the issue of taxation, specifically that utilities are tax collectors as well as taxpayers, but "marketers make profits by evading state taxes."
Saven said his group agreed that public purposes such as irrigation, flood control, recreation, and navigation need to be addressed in the review. We can't put them to the side, he said. As for "regional oversight," all three groups agreed it is too early to address this topic, and that it would be contingent on other decisions made during the review.
Surveying all the papers posted on the boards, Collins asked, "is this a believable scope of work for 100 days?" It's a menu, replied Rick Applegate; while it spans a lot of issues, we don't want to lose the level of detail shown on the board, he added. We have to winnow it down, commented Drummond. Let's write this up and not make assignments until next time, he suggested; after we get the write-up, we can narrow it to something more workable.
There were discussions of different ways to combine some of the topics into work group titles, and what each work group would encompass. Pollock reiterated that the look at power marketing and market power should not be confined only to BPA. It's an important nuance, he said.
Applegate said public purposes, legal obligations, and subsidies fall under the "governance issue," and we need to be sure all three are addressed and not lost in the discussion of the future of BPA. Wilcox commented that most of the issues involve BPA, and that the review has an obligation to make sure it connects with the work going on in the 180-day fish and wildlife review. With respect to the subsidy issue, Saven said, I don't agree navigation, for example, is a subsidy, and it may be a public purpose; he urged the committee to raise these issues at a general level, not to deal with their "nuts and bolts."
Canon suggested focusing on conservation/renewables and rural services because they were issues the governors mentioned at the start of the review. What we are doing, suggested Golden, is allocating the economic surplus created by the hydro system, adding, we can't take these things off the table. BPA absorbs liability; it doesn't pass liability, observed Collins. There's a whole lot of uncertainty associated with questions of BPA's structure and financing, he said. If we pull out the irrigation subsidy and relate it to BPA, "we're on a fool's mission," Collins stated, adding, it could take four years to do this.
I don't want those issues off the table, Applegate responded. We need to look at them because we are concerned about the long-term financial viability of the power system and improving the system's ability to meet its obligations. Let's keep them on the table, he suggested, and agree "we are not going to spend four years on them, but we're not going to spend zero, either." If we ignore these issues, we'll have a substantial political problem and will have missed doing an important part of our job, Applegate said.
There are issues of subsidy, but if we get into detailed discussions of the Bureau of Reclamation, navigation and "get into internecine wars," it will be over my objection, declared Saven. "I think that's stupid," he added. We'll see what we're going to do once we get them on the table and take a look at them, responded Applegate. We're "trying to size the issue," commented Hemmingway. It depends on the magnitude -- let's see how big it is and then decide if we want to deal with it, he added. Pollock noted that he had mailed a paper on the topic to committee members.
It's very clear that BPA or its successors will have to bear a whole lot of liabilities, such as the WPPSS cleanup, and we need an entity strong enough to handle that, observed Collins. Where does the WPPSS debt get dealt with? asked Zarker. It's in the BPA issue, replied Hemmingway, adding, the market structure issue ought to be in customer choice, not a more technical category.
Collins noted that the PNUCC transmission group will be asked to make a presentation on March 28. For the next meeting, I'll talk to each of you and ask what work groups you want to serve on, he added. We'll discuss if you want to be a chair, and also who should be the chairs of the groups, he added. My inclination is to name co-chairs to the groups, Collins said. Call me if you have names for the work groups, Wright told the committee. I think we're on the ground, and "we're still walking," said Collins.
Glen Swift noted that some of the issues discussed are being studied by states. I'd like to see you begin a parallel process that "starts from the other end, looking at values," he suggested.
Al Canada of Grants Pass suggested there's a large source of new energy (2000 aMW) that could be available from solar voltaic generation that "could make all the problems go away." He suggested the committee read his paper, "The Canada Treatise."
Steve Weiss of the Northwest Conservation Act Coalition noted that if BPA sells into today's market, it is responding to fuel costs, not fully allocated costs. When you get into issues of BPA's survival, he said, you may be forced into the separation of BPA's generation and distribution.
Steering Committee Members:Chair Chuck Collins, Colsper West Corporation; Al Alexanderson, Portland General Electric; Rick Applegate, Trout Unlimited; Ken Canon, Industrial Customers of Northwest Utilities; Jim Davis, Douglas County (WA) PUD; Bill Drummond, Western Montana Electric Generation and Transmission Cooperative; Jason Eisdorfer, Citizen's Utility Board of Oregon; John Etchart, Montana Governor's Representative; Bob Gannon, Montana Power; K.C. Golden, energy consultant; Charles Hedemark, Intermountain Gas; Roy Hemmingway, Oregon Governor's Representative; Mike Kreidler, Washington Governor's Representative; Todd Maddock, Idaho Governor's Representative; Sharon Nelson, Washington Utilities & Transportation Commission; Walt Pollock, Bonneville Power Administration; John Saven, Northwest Requirements Utilities; Rachel Shimshak, Renewable Northwest Project; Brett Wilcox, Northwest Aluminum Company; Gary Zarker, Seattle City Light.
Last modified: March 19, 1996
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