HomeMy WebLinkAbout2005-051 Agmt - BPA No 05EO-40061
Department of Energy
Bonneville Power Administration
P.O. Box 3621
Portland, Oregon 97208-3621
POWER BUSINESS LINE
April 14, 2005
In reply refer to: PSW-6
Mr. Dick Wanderscheid
Director of Electric & Telecommunications
City of Ashland
90 North Mountain A venue
Ashland, OR 97520
Dear Dick:
In December 2004, the Bonneville Power Administration (BP A) offered its transfer 5.ervice
customers the Agreement Regarding Transfer Service (Agreement) that provides assurance for
adequate transmission service for the next 20 years. Almost eighty customers have signed and
on April 6, 2005, the BPA Administrator countersigned the Agreement.
Enclosed for your file is a fully executed original of Contract No. 05EO-40061 between the City
of Ashland (Ashland) and BP A. This Agreement establishes obligations and responsibilities
with respect to the delivery of federal power over non-federal transmission systems, commonly
referred to as transfer service.
As specified in the Agreement, several transfer service issues have been identified as. needing
further discussion (see Exhibits A and B). BP A plans to engage with customers to address these
issues, with the intent of finding acceptable solutions. We expect to announce a process and
forum for addressing these issues within the next several months.
A copy of the signed Record of Decision related to this Agreement is available on BPA's
external web page at: <http://www.bpa.gov/corporate/pubs/rods/2004/Corp/GT A04.pdf>.
If you have any questions or concerns, please contact me at (503) 230-3555.
Sincerely,
~'--~
Tina Ko
Account Executive
Enclosure
Contract No. 05EO-40061
AGREEMENT REGARDING
TRANSFER SERVICE
executed by the
BONNEVILLE POWER ADMINISTRATION
and
THE CITY OF ASHLAND, OREGON
Table of Contents
Section
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
Page
Term and Termination ................................................................................ 2
Definitions ..................................................................................................... 2
Arrangements for Transfer Service .......................................................... 4
Proposed Treatment of Transmission Component Costs .................... 4
Du tie s of Ashland ......................................................................................... 5
Strande d Costs ............................. ................................................................. 5
Trea tme n t of Other Issue s .......................................................................... 5
Principles for Treatment of Other Cost Categories .............................. 6
Losse s .............................................................................................................. 7
Standard Provisions .................................................................................... 7
Sign at u res .... .. ........................ .... ..... ........... .. ..................... ... ............... ........... 8
Exhibit A
Exhibit B
Other Issues as They Relate to Transfer Service
Other Issues as They Relate to Power Delivery
This AGREEMENT REGARDING TRANSFER SERVICE (Agreement) :is executed
by the UNITED STATES OF AMERICA, Department of Energy, acting by and through the
BONNEVILLE POWER ADMINISTRATION (BP A) and THE CITY OF ASHLA.ND,
OREGON (Ashland), a municipal corporation duly organized and operating under the laws
of the State of Oregon. BP A and Ashland hereinafter sometimes are referred to
individ ually as "Party" and collectively as "Parties".
RECITALS
WHEREAS, BP A sells electric power to public body and cooperative utihties in the
Pacific Northwest Region;
WHEREAS, BP A and Ashland have entered into Contract No. OOPB-12008 (Power
Sales Agreement), as such agreement may be amended or replaced providing electric power
for Ashland;
WHEREAS, BP A is authorized to build, operate and maintain electric transmission and
substation facilities when the Administrator determines such facilities are necessary and
appropriate;
WHEREAS, BP A did not construct transmission facilities to interconnect certain public
body and cooperative utilities to the Federal Columbia River Transmission System when,
among other reasons, it was demonstrated to be less expensive for BPA to acquire
transmission service over existing transmission facilities owned by other entities to deliver
Firm Power sold by BP A to such public body or cooperative utility;
WHEREAS, Firm Power purchased from BP A under the Power Sales Agreement is
delivered to Ashland through Transfer Service;
WHEREAS, Since January 2002, representatives of BPA and various public power
utilities and associations have engaged in lengthy discussions and negotiations regarding
issues pertaining to future arrangements for wholesale federal power deliveries over
transmission systems owned and operated by other utilities; and
WHEREAS, BP A customers receiving deliveries via Transfer Service have expressed
their desire for delivery of wholesale power to load at rates and on terms and conditions of
service equivalent to the rates and terms and conditions of service available to public power
utilities Directly Connected to BPA's main grid;
NOW, THEREFORE, the Parties agree as follows:
1. TERM AND TERMINATION
This Agreement shall become effective upon execution by BP A and
Ashland (Effective Date), and shall continue in effect until the earliest of:
(a) 2400 hours on September 30, 2024; or, (b) the date on which Ashland allows its
Power Sales Agreement to expire, or on which Ashland's Power Sales Agreement
terminates, without a replacement BPA firm power purchase. BPA's obligations
pursuant to this Agreement shall continue notwithstanding the termination of
similar obligations in Ashland's Power Sales Agreement, section 8(f).
2. DEFINITIONS
The following terms, when used in this Agreement with initial capitalization,
whether singular or plural, shall have the meanings specified.
(a) "Directly Connected" means a utility customer whose delivery of Firm Power
is not dependent upon Transfer Service.
(b) "Firm Power" means electric power (capacity and energy) that BP A makes
available on a continuous basis to meet the firm power requirements of
Ashland's load as defined in section 5(b)(1) of the Northwest Power Act.
Firm Power does not include power sold as surplus power, including, but not
limited to, surplus power under the Block and Slice Power Sales Agreements.
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05EO-40061, Ashland
2
(c) "Initial Rate Proposal" means BP A's proposal, as published in the Federal
Register from time to time, to initiate a hearing to establish or revise wholesale
power or transmission rates pursuant to section 7(i) of the Northwest Power Act.
(d) "Integrated Network Segment" means those facilities of the Federal Columbia
River Transmission System that are required for the delivery of bulk power
supplies, the costs for which are recovered through generally applicable
transmission rates, and that are identified as Integrated Network Segment, or its
successor, in the BP A segmentation study for the applicable transmission rate
period as determined in a hearing establishing or revising BP A's transmission
rates pursuant to section 7(i) of the Northwest Power Act.
(e) "Northwest Power Act" means the Pacific Northwest Electric Power Planning
and Conservation Act of 1980, Public Law 96-501.
(f) "Rolled In"
(1) For BP A power rates, Rolled In means that the Transfer Service costs
included in BPA's power revenue requirement are not directly
assigned or allocated to a subgroup of firm power load of preference
customers under section 5(b)(1) of the Northwest Power Act; or,
(2) For BP A transmission rates, Rolled In means the Transfer Service
costs are included in the Integrated Network Segment, are spread over
all Integrated Network Segment load, and are not directly assigned or
allocated to any subgroup of Integrated Network Segment load.
(g) "Third Party Transmission Provider" means a transmission provider other
than BP A or a regional transmission organization that delivers Firm Power
to Ashland.
(h) "Transfer Service" means the service provided by a Third Party
Transmission Provider to deliver Firm Power sold by BP A pursuant to a
Power Sales Agreement, to Ashland. Transfer Service does not include
service to loads in territory annexed by Ashland except as provided for in
such Power Sales Agreement.
(i) "Transmission Component Costs" means the costs of Transfer Service to
deliver Firm Power to Ashland over non-federally owned facilities that have
characteristics comparable to the characteristics used to define BPA's
Integrated Network Segment. Transmission Component Costs do not
include losses, which are treated in section 9 of this Agreement.
Transmission Component Costs do not include Ancillary Services, except as
may be agreed upon by the Parties pursuant to section 7 of this Agreement.
05EO-40061, Ashland
3
3. ARRANGEMENTS FOR TRANSFER SERVICE
BP A shall arrange for Transfer Service to Ashland for the duration of this
Agreement; provided, however, that BP A and Ashland may agree to make other
arrangements for Transfer Service.
4. PROPOSED TREATMENT OF TRANSMISSION COMPONENT COSTS
(a) BP A shall be financially responsible for payment of Transmission
Component Costs.
(b) Except as provided in sections 4(d) and 4(e) below, BPA shall have a continuing
obligation to propose Rolled In treatment of Transmission Component Costs into
either the wholesale power or the transmission service Initial Rate Proposal, or
partly into one and the rest into the other proposal, for rates that are effective
during the term of this Agreement. BP A shall include testimony supporting
Rolled In treatment of Transmission Component Costs in its Initial Rate
Proposal, and, in its judgment, make good faith, best efforts to defend its
proposal.
(c) Nothing in this Agreement shall limit the Administrator's discretion and
authority or predetermine the Administrator's final decision in establishing or
revising rates.
(d)
(1)
If the Federal Energy Regulatory Commission (FERC) does not
approve and confirm Rolled In treatment of Transmission Component
Costs included in BPA's final rate proposal for its wholesale power
rates, or if FERC approves and confirms BPA's final rate proposal
which includes Rolled In treatment of Transmission Component Costs
for wholesale power rates and such Rolled In treatment is
subsequently overturned by a court with jurisdiction, then BP A shall
have no obligation to propose Rolled In treatment of Transmission
Component Costs in any subsequent Initial Rate Proposal for setting
such wholesale power rates, and BPA shall propose Rolled In
treatment of Transmission Component Costs in transmission rates.
(2) If FERC does not approve and confirm Rolled In treatment of
Transmission Component Costs included in BP A's final rate proposal
for its transmission rates, or if FERC approves and confirms BP A's
final rate proposal which includes Rolled In treatment of
Transmission Component Costs for transmission rates and such
Rolled In treatment is subsequently overturned by a court with
jurisdiction, then BP A shall have no obligation to propose Rolled In
treatment of Transmission Component Costs in any subsequent
Initial Rate Proposal for setting transmission rates, and BP A shall
propose Rolled In treatment of Transmission Component Costs in
wholesale power rates.
05EO-40061, Ashland 4
(e) If BPA has proposed Rolled In treatment of Transmission Component Costs
in both wholesale power rates and transmission rates and FERC does not
approve and confirm the Rolled In treatment, or FERC does approve and
confirm Rolled In treatment and such Rolled In treatment is subsequently
overturned by a court with jurisdiction, then BP A will no longer be obligated
to propose Rolled In treatment for Transmission Component Costs.
5. DUTIES OF ASHLAND
Ashland shall:
(a) Cooperate with BPA in assessing actions that may be undertaken to
minimize costs incurred by BP A in meeting its obligations pursuant to this
Agreement, consistent with the Power Sales Agreement;
(b) Provide, or cause to be provided, timely planning information to BPA,
including, but not limited to information pertaining to Ashland's long-term
annual peak and energy load forecasts and system expansion and upgrade;
(c) Provide, or cause to be provided, timely notice to BP A of events, including,
but not limited to, load loss or load addition on its system that may have a
material impact on Transmission Component Costs; and,
(d) Provide, or cause to be provided, support for the Rolled In treatInent of
Transmission Component costs in BPA's Initial Rate Proposal described in
section 4(b) of this Agreement.
6. STRANDED COSTS
(a) If Ashland takes action to reduce the amount of Transfer Service it requires, and
BPA continues to be liable for Transmission Component Costs of such unused
Transfer Service, then BP A may require Ashland to reimburse BP A for such
costs which BPA incurred in reliance on Ashland's continued use of Transfer
Service.
(b) BPA shall give notice to Ashland and the parties shall consult before BPA
executes any new contract for Transfer Service or incurs additional obligations
under existing contracts which may expose Ashland to stranded costs as used in
this section 6; provided, however, BP A shall retain the right to decide whether to
incur such costs, after considering such consultation.
7. TREATMENT OF OTHER ISSUES
(a) In separate discussions, unless prohibited by ex parte rules, the Parties shall
endeavor to find acceptable solutions or approaches for solving other issues
related to Transfer Service that are not included in this Agreement. Such
solutions or approaches or their implementation may require separate public
processes. Such other issues are described in Exhibit A. Exclud~mg treatment of
these issues under this Agreernent is not intended to prejudice the outcome of
05EO-40061, Ashland
5
the discussion of such issues in the separate process(es). In undertaking the
obligations of this section 7(a) for the issues described in Exhibit A, unless
otherwise stated, it is BPA's intent to provide Ashland with transmission
service and Ancillary Services that are comparable to the service that BP A
provides to its customers that are Directly Connected to the Federal Columbia
River Transmission System.
(b) In separate discussions, unless prohibited by ex parte rules, the Parties shall
endeavor to find acceptable solutions or approaches for solving other issues
related to power deliveries. Such other issues are described in Exhibit B. The
issues listed for discussion in Exhibit B may be addressed in more than one
public process.
(c) BP A shall initially identify the process or processes that will address the issues
referenced in section 7(a) and (b), above, no later than 180 days after the
effective date of this Agreement.
(d) Nothing in this section 7 shall limit the Administrator's discretion and authority
or predetermine the Administrator's final decision in establishing or revising
policies or proposals regarding the issues to be discussed pursuant to this
section 7.
8. PRINCIPLES FOR TREATMENT OF OTHER COST CATEGORIES
(a) To the extent that BPA undertakes responsibility for costs related to
Transfer Service that are not addressed pursuant to section 7(a) of this
Agreement, or agrees to be responsible for costs that are required to provide
Transfer Service to Ashland but that are not identified or incurred by BP A
as of the effective date of this Agreement, including but not limited to
congestion costs, it is BPA's intent to propose to allocate such costs to
Ashland in a manner comparable to the allocation BP A applies to recover
similar costs from its customers that are Directly Connected to the Federal
Columbia River Transmission System.
(b) To the extent that BP A incurs costs associated with facilities expansions
and upgrades to provide Transfer Service to Ashland, it is BPA's intent to
allocate such costs in a manner that is comparable to the allocation BPA
proposes for similar costs for customers Directly Connected to the Federal
Columbia River Transmission System.
(c) Nothing in this section 8 shall limit the Administrator's discretion and
authority or predetermine the Administrator's final decision in establishing
or revising rates.
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05EO-4006L Ashland
6
9. LOSSES
BPA shall propose to treat real power losses and their costs that are incurred
through use of a Third-Party Transmission Provider's transmission system to
provide Transfer Service pursuant to this Agreement in a manner comparable to
BPA's treatment of losses and costs for a similarly situated customer that is
Directly Connected to BPA's transmission system. For purposes of determining
comparability, BP A shall view the facilities used to provide Transfer Service
pursuant to this Agreement as if they were part of BPA's transmission system.
10. STANDARD PROVISIONS
(a) Amendments
No amendment, rescission, waiver, modification or other change of this
Agreement shall be of any force or effect unless set forth in a written
instrument signed by authorized representatives of each Party.
(b) No Third-Party Beneficiaries
This Agreement is made and entered into for the sole protection and legal
benefit of the Parties, and no other person shall be a direct or indirect legal
beneficiary of, or have any direct or indirect cause of action or claim in
connection with this Agreement.
(c) Waivers
Any waiver at any time by either Party to this Agreement of its rights with
respect to any default or any other matter arising in connection with this
Agreement shall not be considered a waiver with respect to any subsequent
default or matter.
(d) Expression of Intent
No expression of intent herein shall be legally binding against a Party,
except if and to the extent such expression of intent has been incorporated
hereafter into an enforceable agreement between the parties that has been
lawfully executed and delivered.
(e) Incorporation of Exhibits
Exhibits A and B are hereby incorporated and made part of this Agreement.
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05EO-40061, Ashland
7
11. SIGNATURES
Each Party represents that it has the authority to execute this Agreement and that
it has been duly authorized to enter into this Agreement.
THE CITY OF ASHLAND, OREGON
By
Name GR.I ",,-~M,:
UNITED STATES OF AMERICA
Department of Energy
Bonneville Power Administration
By
~/~
Stephen J. "'Tright
(Print/Type)
Name
Title Cc{, 4fM./U.tf{.AA.~il
Date I (;;.c-jdf
Title
Administrator
Date
APR 0 7 200~i
05EO-40061, Ashland
8
Exhibit A
OTHER ISSUES AS THEY RELATE TO TRANSFER SERVICE
1. Development of Direct Assignment Guidelines for Transfer Service customers,
including:
(a) Treatment of costs and allocation of responsibilities associated with facilities
not included in the definition of Transmission Component Costs (e.g., low
voltage service).
(b) Treatment of costs and allocation of responsibilities associated with upgrades
on facilities not included in the definition of Transmission Component Costs:
(1) Expansion of facilities and upgrades to existing facilities.
(2) New facilities (e.g., new substations).
2. Quality of service.
3. Respective roles of customers and BP A in management of General Transfer
Agreements (GTA), including whether to do periodic evaluations of the eosts or
benefits of replacing GTA with Open Access Transmission Tariff service.
4. Treatment of costs of, and allocation of responsibility for, ancillary services.
05EO-40061, Ashland
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Exhibit B
OTHER ISSUES AS THEY RELATE TO POWER DELIVERY
1. Non-Federal Power Deliveries
The treatment of costs associated with transmission service provided by Third Party
Transmission Providers, other than BP A or a regional transmission organization, for
delivery of non-federal power to Ashland.
2. Transfer Service for Annexed Load
Service to load in annexed territories, as defined in Ashland's Power Sales Agreement.
3. Transfer Service for Block and Slice Power Sales Agreements
Issues as they relate to Block and Slice Power Sales Agreements, including:
(a) Delivery of surplus energy under Block and Slice Power Sales Agreements to
GT A customer load; and,
(b) Service to customers for hourly generation in excess of hourly load under
Block and Slice Power Sales Agreements.
05EO-40061, Ashland
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