BPA is seeking public comment period on a proposed settlement with Spokane-based utility Avista over an unresolved matter from the former Residential Exchange Program. BPA is proposing to settle a disputed balancing account between Avista and BPA – known as a “deemer account” – in order to allow the utility and BPA to begin providing Avista’s consumers with a share of the benefits of the federal power system.  The proposed settlement would also avoid a potentially costly and time consuming legal battle between BPA and Avista.

In  the proposed settlement, BPA and Avista have agreed to substitute a revised Oct. 1, 2001, deemer account balance for the balance BPA assumed in the WP-07 Supplemental Wholesale Power Rate Case Record of Decision and Final Studies. This revised deemer account balance would eliminate uncertainty regarding the account balance and would allow the efficient administration of the utility’s participation in the Residential Exchange Program and the repayment of its Lookback obligation. In consideration of BPA agreeing to the lower deemer account balance, Avista would not pursue legal challenges of deemer treatment in the WP-07 Supplemental Lookback calculations and would not challenge the Balancing Account (deemer) provisions in the new “Bridge” and Regional Dialogue Residential Purchase and Sale Agreements (RPSA). 

When BPA released information about its proposed settlement with Avista, the agency stated the deemer balance was adjusted using the Consumer Price Index (CPI) as the inflation index. BPA staff actually used a different inflation index--the Gross Domestic Product (GDP) price deflator--for this purpose. BPA staff will explain and discuss this difference at the Feb. 11 public meeting, 1 to 4 p.m., in the Rates Hearing Room.

The RPSA contracts state that the amount of Exchange Load a consumer-owned utility can use to calculate REP benefits will be determined in a public process or 7(i) process.  BPA is beginning a process in January to give consumer-owned utilities eligible for the exchange more certainty on this issue.  This process will be conducted jointly with the Exchange Clarification for Consumer-Owned Utilities. Please see Contract Public Process #2 at the Website below.

Because of the timing difference between the TRM, the new Residential Purchase and Sales Agreement (RPSA), and the new Average System Cost Methodology (ASCM), BPA committed to re-examine the three documents for consistency and clarity regarding the Residential Exchange Program (REP) as it applies to consumer-owned utilities. Since these three processes are now complete, BPA will propose and seek comment on clarifying language to the CHWM contract and RPSA contracts to provide further certainty to those consumer-owned utilities that expect to participate in the REP. This review will begin in early January 2009. Please see Contract Public Process #1 at the Website below.

In the 2010 BPA rate case, BPA will set power and transmission rates for the FY 2010 - 2011 rate period. BPA published a Federal Register Notice (FRN) on Feb. 10, 2009, announcing the beginning of the proceeding and summarizing BPA's initial rates proposal. The proposed schedule for the rate case is included in the FRN.  Ex parte communications are prohibited as of this date until the end of the proceeding. This means that no BPA employee can listen to or engage in discussions of the merits of any issue in the rate proceeding with anyone without prior written notice and at an open meeting.

The rate proceeding will be conducted under two subdockets – transmission rates will be determined in the TR-10 subdocket, while power rates will be set in the WP-10 subdocket. The proceedings will, however, be administered by the same hearing officer and conducted under the same schedule.  The resulting power and transmission rates will apply in FY 2010 and FY 2011.