Despite previous reports to the contrary, a Congressional staffer told the Northwest Energy Review Transition Board that it is unlikely national restructuring legislation will pass this year. The board continued to shape its work plan for developing a "Northwest chapter" for such legislation, when and if it does start to move, and various groups explained their proposals for stranded costs and other topics. All board members were present. The audience was about 30.

Next Meeting: April 9 in Portland.

• WATSON EXPLAINS THE WORK PLAN -- Staffer Dick Watson said the Transition Board asked staff to prepare a work plan for developing a "Northwest chapter" for federal restructuring legislation that would have broad regional support and be ready for delivery by July 1, 1998. In April, the board will provide a "progress report" to Congress on efforts to date on subscription, transmission regulation, stranded cost recovery, BPA cost control, future fish and wildlife costs, and river governance, he stated.

The main part of the process for putting together a Northwest chapter will be the development of a "strawman" proposal by staff dealing with subscription, transmission regulation, and stranded costs, Watson explained. The proposal will be presented at the board’s April 23 meeting, and hearings and consultations on it will occur from mid-May to late June, he said. We aim to have final recommendations by June 25 and to deliver the legislative proposal to the governors by July 1, Watson stated. Consultant Al Wright advised the board to "carefully design the consultation process" and define before July "what you think consensus would be" for acceptance of a proposal.

• THIS JUST IN: THE CHANCES OF A BILL THIS YEAR ARE LOW -- Jeff Stier, staff for Congressman Peter DeFazio (D-Oregon), appeared via speakerphone to discuss draft legislation for a Northwest chapter put together by the House delegation staff. He reported members of the delegation had met that morning and while there is disagreement on whether to be part of a national restructuring bill or not, "everyone agrees there will be no law this year." There might be committee action, and possibly something could get to the floor, but "if I was handicapping any law passing this year, I’d say the chances are pretty low," said Stier.

There is "far from unanimous" support in the delegation for a stranded cost mechanism, with some members against a wires charge and some uneasy with dollar limits on stranded cost recovery, he reported. Stier said the delegation unanimously supports staff working with the board and others in the region to "move the ball forward." He asked the board to respond in writing to the staff draft.

• DIFFERENT STROKES FOR DIFFERENT FOLKS -- Rob Walton of the Public Power Council (PPC) said the PPC Executive Committee has adopted proposed Northwest chapter legislation that reflects a "centrist approach." The House staff draft has picked up on a lot of these measures, and we’re pleased with that, he stated. Walton said the PPC proposal would grant authority to the BPA Administrator to impose a uniform charge on all users of the federal transmission system, rather than have the decision "punted to FERC." It would also establish an additional level of FERC oversight over BPA’s transmission rates, he stated. Steve Weiss of the Northwest Energy Coalition (NWEC) and Jim Baker of the Sierra Club presented a joint NWEC-Save Our Wild Salmon Coalition proposal. We think BPA has a stranded cost recovery mechanism now -- the ability to move power costs onto the transmission system, and if we can’t agree on a new stranded cost mechanism, we should keep the old one, Weiss said. He outlined a proposed "emergency cost recovery mechanism" that would trigger when BPA reserves drop to a certain level. He also described a charge to be collected if a forecast indicates a major dam modification in the future would cause stranded costs. Baker said if you want us to buy into any regional consensus, we want to be assured of strong funding for strong salmon recovery in the Columbia River Basin. Michael Early presented a legislative package on behalf of six aluminum companies, saying BPA has no stranded costs and that at most, the problem that may need to be remedied is "the potential that BPA may experience short-term cost overruns and temporary cash flow problems." His proposal would give customers the option, through subscription, to choose cost-based rates or rely on markets, and calls for "contracts with mutually beneficial sharing of risks between BPA and customers." Jim Litchfield described an IOU proposal by harkening back to the recommendations of the Regional Review. FERC should be responsible for regulating BPA’s transmission with respect to rates, open access, and separation of transmission and power marketing functions, and exceptions should only address BPA’s "unique institutional characteristics and structure," Litchfield said. The Northwest chapter should authorize FERC to establish a transition cost recovery mechanism, he stated.

• ONCE MORE, WITH FEELING: THE UPDATES -- Wright reported the Subscription Work Group is working on pricing products and services, and contract arrangements. There are unresolved questions, and the answers may depend on whether you have oversubscription or undersubscription, he said. We are about to identify a new set of issues as we take the subscription concept into a 7(i) ratemaking process, Wright added. Transmission Work Group issues include: the decisionmaking process with respect to FERC oversight; ratesetting standards; legal approaches; and the question of a surcharge for non-transmission recovery of costs, he said. We have a consensus there needs to be a trigger mechanism for stranded costs, but opinions differ on the amount to be collected, Wright stated.

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 Northwest 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.