After several years of evaluation, the Bonneville Power Administration is wrapping up its effort to pursue safe harbor reciprocity status from the Federal Energy Regulatory Commission and reaching out to consult with its customers in setting a new direction.
BPA proposes to revise a passage in its open access transmission tariff that requires it to seek FERC approval for changes to the BPA tariff.
In the utility world, tariffs are sets of legal and contractual rules that govern the details of the business operation; in this case, the use of the high-voltage transmission system. BPA owns and operates about 15,000 circuit miles of these lines, or about three-fourths of the system across the Pacific Northwest, serving nearly 500 transmission customers.
In mid-December, BPA took the first steps to confer with stakeholders in creating a new public process for approving modifications to BPA’s open access transmission tariff.
“We think this proposal will help us gain flexibility to serve the region in the best way as we all navigate an industry landscape that is changing rapidly,” says Michelle Manary, BPA vice president of Transmission Marketing and Sales. “BPA recognizes the important role it plays in providing the transmission products and services that enable its customers to seize the opportunities and meet the challenges created by the evolving industry.”
BPA outlined its plans in a letter to customers Nov. 17 and invited stakeholders to the December meeting to start the discussion. The agency will lead public meetings and customer workshops to gather input on its options and recommendations for a new course. This process of collaboration and evaluation will inform a final decision, expected in the spring. The next meeting will be in early February.
“We are seeking customers’ input to design a process that gives them the certainty and predictability they need while retaining BPA’s ability to make needed changes to its tariff,” Manary explains. “We are committed to a process that provides customers the opportunity to review and comment on proposed tariff changes with appropriate procedural safeguards.”
Under any new proposal, customers will retain existing avenues for oversight, such as the option to seek independent review from FERC of any terms and conditions that raise concerns.
Why is BPA proposing a different approach to modifying its open-access tariff?
Since 1996, BPA has voluntarily filed its tariff with FERC to confirm that it “substantially conforms or is superior to” FERC’s national model. This action is called seeking reciprocity safe harbor status. Voluntarily filing its tariff with FERC was one way for BPA to demonstrate its strong commitment to open access, non-discriminatory transmission service.
However, attempting to conform to FERC’s national model has created difficulties in effectively managing BPA’s system. FERC has not granted BPA safe harbor status since 2007.
With its unique statutes and mission, BPA doesn’t easily fit the national mold. As a government utility, it’s not subject to the same FERC jurisdiction and standards applied to FERC’s jurisdictional “public utilities” under the Federal Power Act. (In this context, the term jurisdictional “public utilities” refers to investor-owned utilities, not to consumer-owned utilities such as PUDs.)
After eight years of effort and deliberation, BPA has come to the conclusion that making its tariff conform to FERC’s would require major investments without the promise of commensurate benefits to the agency or customers. One example: the requirement that BPA set up costly new systems so it could serve as the financial intermediary for transmission service resales. That would put the agency in the middle of financial transactions that are currently handled more efficiently between other parties.
So BPA is offering a new approach that will enable it to modify its tariff only after the change has been vetted with stakeholders in the new public process. This approach looks to the future and reflects BPA’s strategic focus on reliable, efficient and flexible operations.