The Northwest Energy Review Transition Board had a conversation with Will Stelle, Regional Administrator of the National Marine Fisheries Service (NMFS), about how the region’s transition activities fit with NMFS’s pending system configuration decision. Paul Norman of BPA gave an update on post-2001 power sales, reporting that BPA has sold about 160 MW of the 500 MW the Transition Board authorized. The Subscription Work Group is discussing pricing and implementation, and the Transmission Work Group has suspended its meetings to consider transition costs. All board members were present; the audience was about 30.

Next Meeting: November 20 in Spokane.

• BPA IS WELL UNDER ITS POST-2001 SALES CEILING -- Paul Norman of BPA reported on the status of post-2001 sales, noting that the Transition Board had decided earlier this year that the agency could make post-2001 sales of up to 500 MW in-region and 800 MW out-of-region. He listed the contracts BPA has signed or is about to sign. If you count the unsigned deals, we’ve sold a little over 500 MW, but only 160 MW falls under the pre-subscription ceiling, Norman said. "We’re aren’t bumping up against the ceiling," he added. As for out-of-region sales, there have been lots of discussions, but everyone is waiting to see the California Power Exchange prices in January before they decide on pursuing a purchase, Norman said. All of the deals are helping BPA meet its "2 cents in 2000" target, he stated.

• STELLE TOSSES SYSTEM CONFIG DECISION INTO TRANSITION STEW -- NMFS Regional Administrator Will Stelle said he wanted to probe the issues related to federal power subscription, particularly with regard to timing of the process and the fish and wildlife (F&W) budget agreement. "I want to get the Transition Board’s views about how these pieces of the puzzle fit together," he said. The Biological Opinion framework contemplated interim system operations through 1999, along with research on salmon survival and mortality, and in 1999, there would be a decision on longer-term system configuration actions to contribute to restoration of the endangered species of Snake River salmon, Stelle explained.

I anticipate negotiations will begin soon on a new F&W budget agreement, Stelle said. I want a better understanding with you of what is intended by extending the agreement and its relationship with these other transition activities, he stated. We haven’t had a discussion about what F&W budget arrangements need to be made, but we believe BPA must offer a fixed price it can live with so customers can sign contracts, said Roy Hemmingway. BPA and the customers need to know where BPA’s F&W costs will land in 2001-2006, staffer Dick Watson told Stelle. Hemmingway pointed out that the transition activity is moving along on six separate tracks, with the fish budget being the furthest behind. Our goal is to have most pieces coming to us by the end of the year to see if there is consensus on a package to take to Congress, he said.

Stelle said the F&W budget and a cost-recovery mechanism are essential to the Memorandum of Agreement (MOA). It might not be possible to cover the cost of the long-term decisions out of the power system alone, he stated. We may have to build in options, Stelle said. He also indicated that NMFS will work with the governors, the states, and tribes in making its 1999 system configuration decisions.

• THE WORK GROUP REPORT: FITS AND STARTS -- Consultant Al Wright reported the Subscription Work Group has spent its time describing what potential subscribers would be interested in purchasing, and BPA has responded with a design for products and services. BPA has moved into pricing products and services, and the group is taking up the issues of implementation, he said. The group is still on schedule to have a process designed by the first of the year, with pricing completed by the middle of next year, Wright stated.

The Transmission Work Group has spent a great deal of time on what Federal Energy Regulatory Commission equivalency is, Wright said. There are many different opinions, and the upshot is a 31-page matrix, he added. On September 30, the public power participants requested suspension of the group’s meetings until the issue of BPA cost recovery is resolved, Wright reported. The group canceled its October meeting to allow customers to work on the transition cost issues, he said. Terry Mundorf of the Western Public Agencies Group said those who pushed for the suspension want to see the stranded cost issue "catch up." Angus Duncan of the Columbia/Pacific Policy Institute encouraged public interest, tribal, and customer groups to open lines of communication about the issue, or he warned, there could be "a confrontation" in November.

• BOARD REQUESTS WORKSHOP ON TRANSITION COSTS -- Mundorf offered a work plan and schedule for the customer process to formulate a BPA transition cost mechanism. We want to come up with options that are broad-based and have them sufficiently defined for the board’s November 20 meeting, he stated. Duncan said he is concerned about a mechanism that would trigger only with the threat of default to the Treasury and could not deal with recurring costs the region may face. Steve Weiss of the Northwest Conservation Act Coalition (NCAC) presented a paper that deals with "the trigger" for a stranded cost mechanism, as opposed to the allocation of costs. John Etchart suggested staff and some board members get together with the customers in a workshop to see what’s involved in reconciling the differences on the issue. On November 20, the board does not want to see "two diametrically opposed views," he said.

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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.