Public Utilities Reports

PUR Guide 2012 Fully Updated Version

Available NOW!
PUR Guide

This comprehensive self-study certification course is designed to teach the novice or pro everything they need to understand and succeed in every phase of the public utilities business.

Order Now

BPA, TVA, Salt River: Playing Fair in Power Markets?

Fortnightly Magazine - July 1 1998

that the PX said could occur in applying the ISO default usage charge to PX market-clearing prices. See 82 FERC ¶ 61,328, March 30, 1998.

Spokesman Ball notes that BPA has eyed other power pools with mixed results. According to Ball, BPA joined the Alberta, Canada, power pool in March 1997, but isn't active because it's too expensive.

And recently BPA's expected participation in the Northwest project, IndeGo, was cut short due to the entire project falling through. "'IndeGo' is 'IndeGone,' as we say here,"according to Dulcy Mahar, another BPA spokeswoman. "It died because of what it would cost versus the benefits." She added that the Northwest is looking at a smaller version of an ISO. In 1997, the four Northwest states' governors asked the Northwest Power Planning Council to set up a committee to review the Bonneville Power Administration and its financial situation. The 11-person Bonneville Cost Review Management Committee included representatives from NPPC and BPA, and five corporate financial experts. According to committee chairman Todd Maddock of Idaho, who also serves on the NPPC, there were some challenging recommendations made, such as reducing personnel and improving coordination with other federal agencies that operate the Columbia hydro-system. Other issues include addressing Washington public power system debt and the operation of nuclear plants there.

In March, the committee submitted its recommendation summary to BPA's administrator and the four northwest states' governors. (See sidebar, "Saving BPA.")

According to Mahar, the BPA was planning to allow a month for comments on recommendations. The BPA's new director, Judi Johanson, will oversee decisions on implementing recommendations.

"But not all recommendations can be implemented without legislation," Mahar stresses. The BPA has several upcoming rate cases on power supply contracts, which means some cost recommendation issues must be addressed by the fall.

TVA: A Hole in the Fence?

Meanwhile, in the Southeast, the DOE received in April the Tennessee Valley Electric System Advisory Committee's final report on TVA's future role in the competitive electric industry.

Unlike the Bonneville Cost Review Committee, which was teamed with financial experts, the TVA advisory committee was made up of TVA representatives, TVA competitors and consumer groups who generally pose adversarial positions toward TVA.

According Barbara Martocci, TVA spokeswoman, issues addressed include: transmission and wholesale rate jurisdiction; antitrust and labor status; tax status; retail regulation; TVA's mission; the fence and anti-cherry-picking provisions; wholesale power contracts; the retail/wholesale position of TVA; and stranded costs. What makes the task more complicated, is that TVA's prime mission remains flood control and navigation on the Tennessee River, with power production as a third priority.

"Basically we don't believe that the fence that limits TVA sales ought to come down unless and until TVA is on a competitive equal footing with everybody else in the region," says Bruce Edelston, resource policy and planning director for Georgia Power. "That means several things: First of all is their tax-exempt status. Second is the implicit backing of the federal government of all of their debt.

"Third is their preference for federal hydropower. And fourth is the fact that they have long-term