Download the full text version of the March 28 meeting.Next Meeting: June 6 in Portland. More work group work.
Bob Gannon, co-chair of the Federal Power Marketing Work Group, reported that the group, which met biweekly with "consistent attendance and good representation," had received nine papers or proposals. All meetings had candid and productive discussions, he said. We've also had two workshops on the WPPSS debt and have learned what a significant impact it may have, Gannon noted.
The group prepared a matrix summarizing the proposals and highlighting their similarities and differences, stated Gannon. We developed 14 evaluation criteria to help focus the discussion, he added. The group plans to screen the proposals down to a smaller number, Gannon said.
BPA will develop a base case scenario and provide it in the next few weeks, Gannon indicated. We want to flesh out the major alternatives and reach a consensus on a preferred approach by July 11, he added.
Co-chair John Saven commented, "it's been a learning experience" and also a "black hole." "There's no end to the time you could put in on this," he said.
The nine proposals were quite different in length, scope, and type of authors, Saven said. There's "a fair amount of mix and match" in them, he commented. I want to take my hat off to Wally Gibson and Al Wright who helped us put together the matrix of 38 "benchmarks or questions" to be asked about each specific proposal, Saven said. We've spent a fair amount of time working on this and feel good to submit it as a work product to the steering committee -- "it's a work in progress," he added.
Besides the proposals, we've worked on criteria for evaluating alternative models, Saven indicated. He referred to a handout showing the 14 criteria, noting that "we all agreed to them." The bad news, according to Saven, is that a number of these are subject to a broad range of interpretation. Some will be very useful in screening alternatives, and others may not be; but overall, we think this is a useful tool, he said.
Introducing another handout, "Draft Federal Power Marketing Alternatives - Generic Proposals," Saven said the group discussed the nine proposals to see if there is commonality in their features. He said, for example, no author suggested that we sell the resources of the Federal Base System, or diminish the productivity of the river system or make it less coordinated.
The handout identifies a base case -- the existing model BPA is describing, said Saven. It also includes: a "federal entity," but different than BPA; a customer-owned entity; an auction of marketing rights; and a Debtco. Maybe some of these can be consolidated, he added.
I don't know if we'll end up with one of the nine proposals as the best thing to do, said Saven. We'll probably end up tearing them apart and putting them back together again, he stated. But this paper represents at a basic level the major types of models we've seen, Saven said.
I have a financial background, and I'm in awe of the complexity of the issues associated with the WPPSS debt, commented Saven. It's a large amount of debt that has major implications for the alternatives we are considering, he added. Saven said the two workshops on WPPSS debt weren't to find solutions, but to help the group learn about the topic and reach agreement on what the situation is.
BPA has a third-party debt responsibility of $7.7 billion, of which $7.3 billion is WPPSS debt, said Saven. There are security and tax issues associated with the bonds, he noted. There would be a market difference of 1 to 2 1/2 percent to replace the tax-exempt bonds with new taxable debt issued by a different entity, Saven pointed out. The bonds have an annual interest payment of about $400 million, he said, with an average interest rate of 5.6 percent; it took nine to 10 years to issue all the bonds, he added. When we look at alternatives in light of these facts, "that's a lot of water you are treading," Saven said.
We've talked about defeasance, and the potential of going to Washington, D.C. and looking for a fix other than the normal marketing fix of reissuing the debt, Saven explained. The issue of the security of the bonds is very significant, and when you get into tax considerations, there are private-use tests and private-payment tests to be met. There is the potential for the outstanding bonds to become taxable and taxable retroactively to the date of original issue, he said. If you screw it up, that's a lot of money, Saven stated.
People are going to be conservative in what they have to say about this issue, he commented. "Which people?" Saven was asked. Bond trustees and bond counsels -- people we'll consult with on the security of the bonds and tax implications of the alternatives, he replied. If we could get Bill Gates or Paul Allen to come in and take this out, we would have a lot more flexibility, Saven quipped.
Our work on the WPPSS debt has not been brought into the matrix, Saven noted. These are significant issues, and we'll have to deal with them the best we can, he concluded. If by mid-July, we can have generic recommendations and a basic understanding of what might fly, that will be a significant accomplishment, Saven added.
Steering committee chair Chuck Collins asked Bill Drummond if the debt issue came up in the Transmission Work Group. The work group asked the PNUCC legal committee if the WPPSS debt eliminated the any of the transmission alternatives -- we wanted to know if there were any "deal-killers," Drummond replied. The answer was no; the debt was a hurdle, but not a deal-killer, he stated.
Once you separate generation and transmission, you may run into taxation issues associated with the bonds, "so it's coming your way as well as ours, Bill," said Saven. "I know," Drummond replied. The transmission component in the security of the WPPSS bonds needs to be addressed, added Walt Pollock.
Having laid out the alternatives, the power marketing group is trying to focus on where there's a clear difference of opinion, said Roy Hemmingway. We want to look into those differences, and when we do, "one might predict that the fur is going to start to fly," he said. Among the issues he expects to discuss are: the role of the federal entity, the risk of Treasury default, whether to have a one-time allocation of federal power or multiple allocations over time, and how much "fish risk" purchasers of power will take.
How much discussion of governance have you had? asked K.C. Golden. We've had only limited discussions, but we'll need to get into it, Saven responded. Do you anticipate a need for your group to coordinate with the 180-day Review? asked Golden. It's desirable, but we've only got two months, replied Saven. Coordinating with the other steering committee work groups is our first item of business, and if we can link up with others, then we will, he said.
Gannon underscored the need for linkage with other work groups. It will have to be done, he said. Are governance issues arising in all the groups? asked Collins. Not ours, replied Jim Davis and Rachel Shimshak.
Having objective criteria may give us a way to get into some of these issues, Gannon stated. There's more on our plate than we're going to resolve, but I think the governance issue needs to be dealt with, Golden said.
The Northwest Power Planning Council is finalizing its report to Congress on the 180-day Review, John Etchart pointed out. We were asked how to enhance regional influence over fish and wildlife decisions, and our report will recommend a modest change to the status quo, he said. We will recommend that the requirement that BPA act consistently with the Council's Fish and Wildlife Plan apply to other federal agencies, including the Corps, the Bureau of Reclamation, U.S. Fish and Wildlife Service, and National Marine Fisheries Service, Etchart stated. That's as far as we're going to go -- our report doesn't have major governance ramifications in the way we are talking about here, he added.
Hemmingway described three levels of governance:
Clearly, we've got something that cuts across all the work groups, but I don't have a solution on how to pull this together yet, Hemmingway said. Let's let the substance drive it for a while longer, Collins suggested. A presentation on the 180-day Review would be helpful to me, said Gary Zarker. Etchart said he would arrange it.
I'd like to give credit to the PNUCC folks who got this thing started well before the Comprehensive Review, Bill Drummond, co-chair of the Transmission Group, stated. We've tried to add to PNUCC's work, to ask additional questions and bring in additional information, he explained. I'm optimistic we'll get a long way down the path to accomplishing the tasks before us and have a pretty good product by July 11, Drummond added.
On "defining the transmission system," Drummond said the group believes geographic scope is as important as the size of the transmission lines. A definition should also encompass facilities, including generation and access to generation, he added. The definition is also a function of pricing, Drummond said.
We're in a data-gathering mode, Drummond reported. PNUCC will be sending data requests to utilities, he added. How does pricing determine system definition? asked Shimshak. The pricing mechanism has an impact on "how far down you go" -- on what facilities you would include in the definition, Drummond replied.
As for "defining alternatives for organization and management of the transmission system," Drummond said that the group is focusing on the Independent Grid Operator (IGO) concept. Administrative separation was not considered feasible because it doesn't have any advantage over what you have to do to comply with FERC anyway, and developing common tariffs for a Transmission Coordination Agreement appeared to the group to be extremely difficult. At the other end of the spectrum, Drummond said that the Transco concept has "fallen by the wayside" because changing ownership would also be very difficult to accomplish.
We are looking at two IGO concepts, he reported: "IGO-lite," in which the IGO would not own facilities and simply be a manager, and an IGO that could own facilities. The group is considering a wide variety of IGO governance structures, including a BPA corporation, a for-profit, a non-profit, a co-op structure, and a mixed government/private ownership structure along the lines of Amtrak, the Uranium Enrichment Corporation, or the U.S. Postal Service.
The BPA Transmission Administration fell by the wayside, according to Drummond, because transmission owners had no interest in turning their facilities over to an administratively separated BPA. There is also no interest in a multistate compact because as you add more states to the equation, the problem of trying to get consistent regulations across all of them expands, he said. We are dealing with issues related to regulation and incentives, Drummond indicated; for example, do you want the IGO subject to NEPA, and what are the incentives for an IGO to deal with congestion issues or to do expansion and planning?
I'm not done kicking the tires on the ends of the spectrum, reported co-chair K.C. Golden. At the low end, we've got some relatively simple things we can change, and there won't be much gain in efficiency. At the high end, there are big obstacles to implementation, but there are big gains in efficiency to be achieved. The question, said Golden, is how much implementation pain can you bear to get efficiency? I think this is still a live point of view, as is the view that half a loaf may be worse than none, he added. It may be worth the pain on the front end to get a new and better system, suggested Golden. While most of the effort in our group has been going to the IGO models, I'm still open to other ideas, he emphasized.
As for the governance question, it's early enough in the discussion that I'd encourage anyone who understands the state compact model to come forward and tell us how it would work, said Golden, adding, I want to leave the door open. Governance questions are front and center, continued Golden. In the universe of issues the work group could deal with, governance is where we can offer something the PNUCC group hasn't, he said. This is an issue where I hope the work group will spend a lot of time and energy, Golden added.
We asked the PNUCC group why they discarded the pool structure, Golden said, and discussed how the prejudice against pools formed. I hope we will get a response from those who are at least agnostics about pools before discarding them, he added.
There is a herculean effort on pricing under way, said Golden. We're not adding a lot of value at this point. We are trying to understand and set forth in English the conceptual alternatives for transmission pricing. "This is a big, black box for us," he added. The Northwest Regional Transmission Association is "doing most of the heavy lifting on pricing," Golden said.
On the subject of pricing, I'll quote from former Oregon PUC commissioner Mike Katz, who said, "just get the price right and all else will follow," commented Sharon Nelson. She suggested the complexity of setting up a state compact in light of the fact PacifiCorp operates in six or seven states and Washington Water Power has a pending merger with a Nevada company. With a compact, would we be talking four states, or seven, or more? she asked. In this process, I feel like I'm swimming in concentric circles of uncertainty -- the system is complex and highly interlinked, Nelson observed.
As someone who has wallowed in transmission pricing for five to 10 years, said Pollock, I want to mention two issues. The first is that using the system more efficiently to find more economic benefits is the first order of business. The second is, there are lots of theories on pricing improvements, for things like congestion pricing and zonal pricing -- it's a big, complex area. We could go for trying to get the system to operate like it's designed and eliminate the pancaking of jurisdictions, and those could be enough to try, Pollock suggested. All the groups could get caught up in the minutiae of pricing, stated Golden. "This is one that could eat us up," he added.
This discussion is enlightening to Rachel and me, commented Davis. It underscores the problem our group has had dealing with rates. I'm concerned about the level of expectation your group might have for our group, he said. There's not much expectation, it's zero, responded Golden. Good, that's what you'll get, quipped Davis.
The question is, Golden said, if you separate generation and transmission, do you compromise the ability of the system to meet legal and financial obligations and accomplish public purposes? It's a broader question than for only our group, and it will come back to the steering committee, he predicted.
The narrower question, according to Golden, is how different pricing structures would accommodate dealing with stranded benefits and costs. There's a controversy over how deep the analysis should go, he reported. We're trying to come up with some numbers and will need to coordinate with the public purposes group on this, he added. "What's a stranded benefit?" asked Saven. Demand-side management, renewables, and low-income services, replied Golden.
The plate is really full, said Golden, and we've started to determine where to focus. The important things, he added, are market structure and pool issues, and public purposes as they relate to the transmission system and pricing. We hope to add value on governance, policy judgment on pricing and regulatory schemes, and to determine where we fall on the spectrum of "big, early pain" in exchange for efficiency gains, and of trading off hypothetical efficiencies for real efficiencies, he said.
Unlike K.C., said Drummond, I'm looking at the public purposes task from two perspectives. The first is, we need to examine the impacts of a system benefits charge on transactions on the transmission system and see what changes would occur in the number of economy transactions or in siting. The second is, we need to get an idea of the magnitude of dollars we are talking about.
There's an idea that the system benefits charge is a panacea -- a "cash cow" to solve all ills, said Drummond. I predict the amount of money to be generated by this approach will be disappointing, he said. So don't jettison alternatives other than the transmission system to get those benefits, Drummond counseled.
Are you factoring in FERC's megaNOPR? asked Gannon. FERC has indicated a disposition for regionally tailored solutions that depart from national norms, responded Golden. It appears regional solutions will be looked on favorably if they enjoy a consensus, he added.
"The skating pond we're on has turned out to be more slippery than we thought," observed Collins. What has to happen as a minimum? he asked the group. BPA has to be separated administratively; is there anything beyond that which legally or functionally has to happen? he inquired.
The PNUCC group has what they call the "cascade" alternative, which means, let whatever will happen, happen, observed Drummond. We want to try to get benefits that we wouldn't get if we took the cascade approach, he stated. FERC will inflict "the death of 1,000 regulatory paper cuts," said Golden, if things don't happen that they want to see happen.
We want to be sure transmission is not an impediment to getting the benefits of a more competitive bulk market -- that's FERC's agenda, and we have to meet that test, said Pollock. I urge we figure out how to increase the efficiency of the system; if we do nothing, we'll miss that opportunity, he added.
Some are saying the system is pretty efficient as it is, commented Collins. You're not in that camp? he asked Pollock. There are things to be done, how far we don't know yet, Pollock replied.
Is administrative separation for BPA going to be adequate? asked Todd Maddock. Administrative separation has been a minimum, replied Drummond. It hasn't garnered as much support because it doesn't provide relief from FERC requirements. We have a dynamic system, but the question is, are we better off shaping it ourselves or letting FERC do it, explained Drummond.
Is the Bonneville Transmission Administration off the table? asked Maddock. Under what circumstances would BPA be in a position to become the IGO? he inquired. Could an administratively separated BPA be the IGO, or does BPA have to be something else like a government corporation to be the IGO? The option is still open, responded Drummond. If BPA were a government corporation, it could be the IGO. That option is still very much on the table, he added.
What are BPA's top 10 recommendations for efficiency opportunities, and are they before this group? asked Zarker. I think they are in the PNUCC work and in my group, replied Pollock, but we'll make them more explicit.
Dick Adams, executive director of PNUCC, said that PNUCC has BPA's conceptual recommendations on efficiency, but does not have any numbers. For pricing, he said, we need a sense of the order of magnitude of benefits -- is it 5 percent or 10 percent?
It would be good to identify the big-ticket efficiency gains that are possible, said Golden, and to be able to see, as you move down the spectrum, what you give up if you decide to opt for less change. The Transmission Coordination Agreement doesn't meet the minimal definition? asked Davis. The TCA didn't meet FERC pricing requirements, to put us in a position to avoid being governed by FERC, replied Drummond. Consultant Jim Litchfield mentioned possible disadvantages of a TCA. "I'm withholding judgment on that," said Golden. "I am too," said Davis.
Ken Canon, co-chair of the Competition and Customer Choice Work Group, reported that 30-50 people attended each of their five half-day meetings. There was good participation and diversity, he said. He noted how fast the landscape is changing -- when we began, he said, we didn't know Washington Water Power would file a test retail wheeling proposal, or that PacifiCorp would announce it will push for legislation on retail competition at the state and national level.
The first thing the group did was prepare a work plan, Canon reported. The second and third meetings were spent gathering information, scoping the subject, and getting a common framework to work from. At the fourth and fifth meetings, we asked people to develop workable models for increased competition and customer choice, he said. We've received four to five models and expect more will come in, Canon added.
We have had models from the Citizens Utility Board of Oregon, the DSIs, the IOUs, an independent power producer, and the Industrial Customers of Northwest Utilities, reported Canon. While some concerns linger about even getting into this subject, there is general agreement it is beneficial to help everyone understand the issue and the concerns of other parties, Canon said. Since it is an issue that cuts across state, regional, and national lines, it is helpful to have a common conceptual framework, he added.
Canon listed six areas of general, but not unanimous, agreement for the work group:
There was a lack of agreement on conservation and renewables, Canon said, with some favoring a system benefits charge and some wanting to give the market a chance to work. The group is building a matrix, which will be circulated, he noted.
We encourage further models, Canon said, pointing out the group hasn't heard from the publics yet. We want to build on the areas of general agreement and try to develop basic principles for retail competition and customer choice, and for the transition, he added.
Canon said he and co-chair Al Alexanderson prepared a list of questions that probe some of the tough issues. We need to get into those issues so we can understand the institutional framework for resolving disputes, he said. We also encourage proponents of the status quo to bring forth their ideas to achieve the same goals of competition and choice, Canon stated. We want to test whatever models we settle on for each of the five customer groups. And we need to identify overlaps with other work groups, Canon said.
Drummond asked about the thinking on local utilities' obligation to serve. There would be an obligation to serve customers who don't choose to take some kind of optional service, replied Canon. For customers who choose other service, the obligation to serve becomes an obligation to connect; we had considerable discussion of this, he noted.
Did you talk about the implications of a customer changing from one supplier to another? asked Drummond. Some customers are not interested in competition, responded Alexanderson, pointing out that the obligation to serve is not the same as the obligation to stand by. Even that could be available, he said, but it would need to be properly priced. He said the group used the example of the Strategic Petroleum Reserve in talking about this.
I'm hoping your group will tell us the extent to which BPA should provide retail wheeling, stated Pollock. We have the authority to do it, but have discretion whether to do it -- will we hear about this? he asked. The question is on the table, replied Alexanderson. The rules by which the transmission entity -- whatever it is or however many there are -- makes decisions in a competitive market -- that is the issue at the heart of the controversy, he said. If we don't make policy on it, things will be done on an ad hoc basis, he added.
The question is, said Alexanderson, should the transmission entity be blind to the nature of transactions? Or should it "look through" them to see who's asking and why, and who would lose revenues, and then sometimes say no. We have no position on this now, he added.
BPA is required to provide wheeling to entities that are not retail, observed Pollock. We can provide it to retail loads, and we'll be faced with that question with the proposed Washington Water Power tariff, he said. Some policy guidance would be helpful, Pollock suggested.
The role of the regional actors in the retail market is a central question in the Comprehensive Review, commented Nelson. Even identifying the pros and cons of some of this would be useful, she added. State legislatures will have to examine the obligation to serve versus the obligation to connect, Nelson said. Are you thinking of this group providing a template to the legislatures as was done for model conservation standards? she asked. We'll try to get to a common conceptual framework, Canon responded.
Have you defined stranded costs? asked Hemmingway. It's been raised, and we'll do that in the next level of detail, replied Canon. Have you considered whether federal assets should be in stranded costs? Hemmingway inquired. We may be able to get somewhere on who should decide this, replied Alexanderson.
I'd like to put in a plea to the groups to start taking some things off the table, said Brett Wilcox. I think we've all been struck by the commonality in these reports, said Collins. "Clearly the mail doesn't sort easily," he observed. What you suggest will start happening, he told Wilcox, but "that's good counsel," he added.
Co-chair Jim Davis reported there's been a large amount of interest and participation wherever the group has met. The group has had six full-day meetings, and three subgroup meetings, he noted. "We're putting our shoulder into this thing," said Davis.
We have had nine proposals laid on the table, Davis stated. All are quite different, and we expect to get more, he said. At the first meeting, we did brainstorming, Davis reported. We wrote goals on the board and tried to characterize objectives that would flow from the goals. The list was quite extensive, he noted, with 35 or 36 goals for conservation and 51 goals for renewables. "Everyone got to play," he said.
We asked a subgroup to winnow down the goals and objectives, he said. These were brought back to the full group and revised, resulting in the set of values and list of conservation goals and objectives handed out today. This is no small accomplishment, said Davis. We plan to do the same thing for renewables, he added.
There have been some clashes within the group, but no bruises, Davis pointed out. People have gotten exercised, but the group is still very focused, he said.
Co-chair Rachel Shimshak explained that the handout is a set of values for public purposes and also presents goals for conservation. She reported the group invited different constituencies to make presentations and had heard from the DSIs, Pacific Northwest Generating Company, CARES (Conservation and Renewable Energy System), the Northwest Conservation Act Coalition, the City of Portland, IOUs, and the Oregon Department of Energy. She said the group anticipates hearing from the Washington PUD Association and the Public Power Council.
There's a wide spectrum of opinion, Shimshak reported. It includes those who think the market will do it all, and those who think the market will do some -- will get the "low-hanging fruit" -- the easy-to-do conservation measures. There's also "higher-hanging fruit," which some say will need market transformation to get, she said. And there are those, including some utilities, who are doing conservation regardless of what the market does. There are also people who believe we need funding from a mechanism like a system benefits charge to ensure we secure all cost-effective conservation, Shimshak said.
With renewables, there's the same sort of spectrum, Shimshak pointed out. There's a passive group, which says wait for the market, and a middle group, which wants follow-through on projects in progress, doesn't want tax incentives for renewables undone, and approves of utility customers being given the opportunity to get "green power." Then there are those who think the region should actively build certainty into the renewables portfolio and stabilize the market now so it can grow later. They advocate a system benefits charge and/or a renewables requirement in the regional energy portfolio, she said.
The group will go through the goals and objectives exercise for low-income service issues on May 22-23, Shimshak said. Davis noted that the group is laying out a rationale to characterize the costs and benefits of other public purposes. We've had presentations, including the "River of Red Ink" from Save Our Wild Salmon, and from the Pacific Northwest Waterways Association, and the Northwest Project Group. We are "a work in progress" on characterizing the costs of public purposes, he said.
Maddock complimented the co-chairs on doing well on a difficult task; "they've been troupers," he said. He also credited Marc Sullivan of Seattle City Light for bringing diverse viewpoints together in developing the conservation goals and objectives. We've taken bookends that were way far apart at the beginning and moved them toward the center, stated Maddock. Whether they ever will close, I don't know, but there has been progress, he said.
Is your group trying to determine where the money will come from for conservation? asked Pollock. We'll try to extract features of a system to determine what the market isn't going to do, what mechanism would be appropriate, and "where you are going to hang it," replied Shimshak.
Collins wrapped up the group reports by saying "it's a good job by all of you." Observers' comments on your performance have been very high, he said. Uniformly, people are surprised at how hard the groups are working; most people are "surprisingly encouraged," Collins stated. "We owe you a debt of gratitude," he concluded.
Collins pointed out that July 11 is the concluding meeting for the work groups and that the next day, July 12, will be "a transitional event," the Comprehensive Energy Review Forum, to be held in Seattle. At that event, he said, we will go from a report on work group results to the public in the morning to the presentation of several comprehensive proposals to the steering committee in the afternoon. None of the proposals in front of us "has reached across the full waterfront," observed Collins. There's precious little time to get done what we need in order to send a comprehensive proposal to the public in September, he added.
Bill Drummond and I have had some discussions about what we mean by "comprehensive proposal" in preparation for July 12, Collins indicated. What would be helpful to me, said Drummond, would be a mechanism for comparing alternative proposals. I suggested a series of questions that would elicit information on all the elements being addressed by all the work groups. I'm hesitant to use the "M-word," matrix, Drummond said, since matrices have gotten a bad reputation. It's not as bad as the "T-word," template, Collins said. So I volunteered to work with staff to put together a straw man on this, Drummond said.
Does this process impede trying to get to a consensus in the work groups on deciding on a preferred option or rank ordering of options? asked Saven. My idea, said Drummond, was to develop a mechanism to compare and contrast alternatives presented to us on the 12th. The question is not resolved, he said, whether allowing people to present an alternative to us on the 12th impugns the work of the work groups.
I wouldn't have a problem with someone saying, I'll take this element from the Competition Work Group and put it in my comprehensive proposal, said Canon. When people start dealing with other people's problems, I think we'll find that the bookends are fairly close together, said Collins. For example, on the question of how to pay for public purposes, if we find that no one wants to go to the transmission system for this, then that's a discussion we don't need to have, he said. My hope is, this will help the consensus building in the work groups; if we find out the opposite, "we'll have to turn the train," Collins added.
Are you asking for a single constituency to put together proposals in the four areas for the 12th, or for them to join together with diverse groups and make a proposal? asked Shimshak. Both, replied Collins. I've told BPA it would be helpful if it made a proposal, he said. We'll take any high-quality proposals independent of who the constituency is. For example, Brett put in a proposal early, and in general, it helped to define what we're talking about with respect to BPA, Collins stated.
I think most of you will reach consensus in your groups, but the hard part will be putting the results together and making tradeoffs, said Collins. The "fitting together" will be the tough part, he stated. All we are trying to do is to get some people working on those "fit" issues, Collins added.
My concern is timing -- is July 12 the time for people to bring up their comprehensive solutions? asked Zarker. The City of Seattle won't have a position then. It would be easier to postpone the deadline for comprehensive solutions until after we've heard from the work groups on whether they've reached a consensus, Zarker said.
Hemmingway noted that the IOUs, because there are just a few of them, may find it easier to reach consensus than the publics. I don't know if Brett's proposal was the DSI consensus or not, he said. It's unrealistic to expect to get a consensus public power position by July 12, he added.
The proposals that came in to our group, said Alexanderson, were closer together than we expected. Some of this "bookending" did naturally occur, he stated.
Who will make presentations on the 12th? asked Drummond. I hope BPA will, replied Collins. NCAC came to me, he said, and "plopped down a paper that was just about what you'd expect." It didn't answer the tough issues like how things would be paid for, Collins said. It's easy for each constituency to "come in and do its core dump" and walk away, he added. I keep getting people's positions, and they're predictable, but the question to answer is, how does yours fit in with the others? Collins stated.
When BPA presents its proposal, is it something Secretary O'Leary has checked? asked Drummond. As Gary said, any proposal he makes has to be checked by elected officials and that hardens it and makes it difficult to back away from or change later, continued Drummond. BPA will advance something that has a chance of working, and you can be assured DOE approves of it, responded Pollock.
I think it would be useful to have a matrix prepared of what it takes to qualify as a comprehensive proposal, to help structure this decisionmaking, said Zarker.
Do we know we will have enough to have an event on the 12th? asked Canon. "If I have to play the banjo, we'll have an event," said Collins. The question is whether having comprehensive proposals on the 12th is premature because you won't have the benefit of final work group reports, said Drummond.
It's harder to deal with the publics than other groups, commented Saven. It would be heroic for public power representatives to step forward on the 12th and say, this is our vision. It implies you've pounded it through many utilities, he added. That's a lot different than bringing something forward from your work group and saying this is what we've come up with by consensus, Saven said.
The work groups are there to flush out consensus as best we can, commented Chuck Hedemark. On the 11th and 12th, we'll bring the groups back together to begin to build a comprehensive process. If the forum is to share what we've come up with before we try to build a consensus on the products of the work groups, we may end up with minority positions within this group, he said.
In late August, we have to start drafting how the pieces fit together and what the pieces are, said Collins. The draft document will come out on September 19, said Collins, and the steering committee will approve or amend it at that meeting. So how do we allocate the 40 days between July 11 and August 22? he asked.
I'm trying to figure out when the strategic moment arrives, when people know to start trying to make deals, said Golden. Some work group decisions will depend on what other work groups do, he added. When do we knock heads to put together a comprehensive package that we want to put out? Golden asked. It's more important to have diverse proposals than single constituencies reiterating their views, said Shimshak.
Groups like this do better when they can react, observed Collins. We need to think about what will help us with the decisionmaking we have to do around the third week in August. If the steering committee has to fight out every issue, we aren't going to make it, he added. If PNUCC, for example, can work out some issues between the DSIs, IOUs, and publics, that'll help us, Collins said.
We should schedule "a serious chunk of time" in the third week of August, said Golden. Like the third week of August, said Collins.
It's important that BPA make a proposal, commented Wilcox. All these issues "rub around BPA," and their ideas will likely change people's ideas of the status quo, he said. "It's time for BPA to turn over a card in this game," Wilcox stated.
I'd like to hear from all the constituencies, said Shimshak. If we had more time, we could go through a goals and objectives process like we did in our work group, she added.
So BPA will give us a proposal July 12, as will any other volunteers that want to, said Nelson. And two weeks later will be the final chance for groups to present, she said. There shouldn't be an assumption the IOUs are going to be monolithic, she cautioned. I hope August 22 is firm; a deadline is important, commented Zarker.
I believe our work groups are an educational process, a peer review, said Jason Eisdorfer. My assumption is that whatever comprehensive proposal comes out in July will have learned from the work groups -- that's when you'll know where the bookends are, he said. I'm concerned about having a bunch of "new" groups come in, Eisdorfer said.
Why can't BPA make its proposal on June 6? asked Saven. I don't want to go through this wear and tear, and then hear from BPA, he said. We'll dedicate our energy between now and July 11 to trying to get to a consensus in the power marketing work group, and if there's a consensus, that will be our proposal, said Pollock. We're participating in all the work groups, he added.
How much different would your proposal be from the "base case" thoughts you are putting together? asked Gannon. In the power marketing group, replied Pollock, it's looking like the alternatives can be sorted to a smaller subset, and there are good elements to be combined into a proposal. We can get it as far as we can, and maybe come to a consensus in the small group, he said.
The notion that we have to have our principals sign off before we can stand up and talk about something is troubling, commented Hemmingway. He said he thought the environmentalists, DSIs, and IOUs could come up with something on the 12th, while BPA and public power may have problems doing so. Is there someone in public power who can lay out a proposal without binding public power as a whole? Hemmingway wondered.
It's one thing to represent my boss in the work groups, responded Zarker, but it's an entirely different thing to put a proposal forward without discussing it with elected officials -- that's the nature of public government, he said. There'll never be a comprehensive proposal from public power, Zarker predicted. We need more time; we should wait until after the work groups report, he added. But you're right, I do think the bookends are closer together than they were, Zarker said. The earlier BPA can put its proposal in front of people, the better, and then keep your willingness to negotiate, he suggested.
On July 11, it would be helpful to hear each work group report and be able to ask questions on how they ended up as they did, said Drummond. I want to gain knowledge about what the other groups did. I'm not sure of the purpose of the 12th, he added. That's the right thing to do on the 11th, agreed Collins. The 12th grew out of the public involvement effort, Golden pointed out.
On the 12th, if you're not going to have any opportunity for the public to address us, you'd better pick another town, observed Zarker. We should offer the opportunity for groups to address us to continue the public involvement process, he added.
If we are going to do a marathon in August, can we do it the week of the 22nd? inquired Pollock. The committee discussed holding at least August 20-22 open.
We need good ideas on how to get the work groups to identify overlaps and work through them, noted Shimshak. She suggested a conference or conference call of work group co-chairs. Golden agreed to take the lead in organizing this.
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: May 14, 1996
rr8.html