# Presentation: 711782

## BPA Perspective

- “West Coast Electric Transmission Issues:  A Policy Perspective Forum” Sponsored by NWPPA

- March 7-8 Portland, OR

## RTO RAGE

**“****Have you ever noticed that anybody driving slower than you is an idiot, and anyone going faster than you is a maniac?”**

**George Carlin**

**-OR-**

## Regional Cooperation

**“****beneath the diverse perspectives and interests, the Panel’s research has uncovered an impressive ability of different stakeholders to work with one another for the common good of the region.  There has been a tradition of collaborative efforts in the Northwest on power issues that often transcends disagreements among particular interests.”**

**National Academy of Public Administration**

## Good News!

**We have considerable regional agreement on problems and opportunities.**

## BPA Transmission Line Construction

**Notes:**
Of these projects, three are starting or nearing start of construction:
	-- Coulee-Bell (groundbreaking next month)
	-- Schultz-Hanford
	-- Kangley-Echo Lake (huge siting controversy)

New integration projects delayed per financing/IPP back-down
	-- McNary-John Day project
	-- SW Wash/NW Oregon reinforcement
	-- Starbuck. Wallula

## Regional Transmission IS Not Keeping Up With Needs

**(From NW Power Pool 10-Yr Forecast)**

| 
Winter Peak Load – MW
Transmission Circuit Miles | 2004
59,117

62,517 | 2014
66,065

64,349 | % Increase
12%

3% |
| --- | --- | --- | --- |

## BPA Constrained PathsInitial OASIS Posting 1997 - Pink

**BPA Constrained Paths****Initial OASIS Posting 1997 - Pink**

## BPA Constrained PathsAdditional OASIS Posting 2003 – 2004 - Yellow

## Potential Solutions are Converging

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |

- Change is too Risky

- TIG-lite

- TIG-Plus

- Grid West

- RTO West

- Full speed ahead to competition & markets

**Common Characteristics**

**Focused on transmission grid infrastructure, efficiency, and reliability, not competitive power markets**
**Bottoms-up regional solutions**
**Focused on regional control and accountability**
**Utilize existing control centers**
**Voluntary participation**
**Phased approach**

**Notes:**
(1)  The industry’s credit problem is critical, nationwide, right now.

(2)  Merchant plants can’t make it without LT sales contract.

## Major Goals

**Effective “one utility” planning with an adequate backstop so transmission INFRACTRUCTURE is built.**
**Improved RELIABILITY and EFFICIENCY of providing ancillary services through voluntary consolidation of control areas.**
**More EFFICIENT use of the grid through**
- 	-  **Effective congestion management**
**	****-  Common flow-based ATC methodology**
**	****-  One stop shopping/common OASIS**
**Effective MARKET MONITORING to detect abuses.**

**Notes:**
(1)  This graph shows very clearly the dry-year/wet-year problem for marketers and utilities alike. Under average water, the Northwest is surplus. 

(2)  This is a 2000 study.  Due to new generation and DSI load reductions, the region now has adequate supply until 2008-2009 timeframe.

## GRID WEST CHALLENGES

**The costs of GW must be significantly less than the costs of full-blown RTOs.  Benefits must outweigh the GW costs.**
**The ability of FERC to require changes that are not supported in the region remains a concern.**
**Key characteristics of existing contracts must be preserved.**
**All markets for GW operation must be voluntary.**
**The GW Transmission Agreement must be structured so that it does not violate the legal limitations on sub-delegation of federal responsibilities, including the need for a workable exit strategy.**

## TIG Challenges

**Creating an effective decision-making structure independent of market participants.**
**Developing a proposal that provides**
**adequate transmission backstop authority**
**reliability improvements through voluntary consolidation of control areas **
**a common flow-based ATC approach**
**effective congestion management**
**Engage a broader range of regional stakeholders**

**Notes:**
(1)  We’re having to drill more to keep producing the same amount of gas – prices will rise

(2)  Gas prices in the West rose substantially after a new natural gas pipeline opened between Alberta and Chicago.  What had been higher gas prices east of the Rockies and lower to the West reversed – dramatically.  The West’s advantage will not resume.

## The Region Must Decide

***Timelines for Developmental Board Seating***

***2005***

***Jan***

***Feb***

***Mar***

***Apr***

***May***

***Jun***

***Jul***

***Aug***

***Sep***

***Oct***

***Nov***

***Dec***

***Information Production = 170 days***

***Review Period = 100 days***

***Bylaws Req. = 50 - 75 days***

***Work Groups***

****Note:  Start and end dates for Pricing Work Group are tentative.  Final dates will be established by the work group after it is functioning.***

_**The Region Must Decide**_

_***Goal ***_***– Board Elected by Nov 23***
***but no later than Dec 15***

_***Aug 1***_

_***Sep 29***_

**Notes:**
(1)  BPA’s last major transmission addition was Colstrip across Montana in 1987.

(2)  We are building reliability projects now.  $700 M in borrowing authority included in this FY congressional budget. New-generation-integration projects are on hold for lack of financing from the IPPs who requested the projects.