Bonneville Power Administration: No Increase to Base Power Rates (Bonneville Power Administration)

Rates for power and transmission in fiscal years 2020-2021 reflect efforts to manage costs and strengthen financial health

(PORTLAND, OR) – The Bonneville Power Administration has established rates for its power and transmission services for the 2020-2021 rate period that reflect the agency’s significant efforts to manage program costs and strengthen financial health. BPA will not increase average wholesale base power rates, while the average transmission rate will increase by 3.6% for the two-year rate period beginning Oct. 1.

The flat base power rate keeps the average wholesale base power cost at $35.62 per megawatt-hour and reflects BPA’s strategic objective to keep program costs at or below the rate of inflation through 2028. The flattening of the base power rate is largely due to reductions in the final projected program costs for fiscal years 2020 and 2021 of $66 million per year.

“Through collaboration with our customers and partners throughout the region, we have worked hard to bend the cost curve and keep base power rates flat,” said BPA Administrator Elliot Mainzer. “It is also important to note, however, that there is an increasing likelihood of the Financial Reserves Policy surcharge being triggered in November. We want to signal this to our customers because it is consistent with our commitment to transparency and financial discipline.”

The Financial Reserves Policy surcharge was established to strengthen BPA’s financial health in keeping with the agency’s strategic and financial plans. It is designed to enable BPA to maintain at least 60 days cash on hand for both its Power and Transmission business lines.

Under the policy, the analysis to determine whether and by how much the surcharge will trigger will be completed in November of each year and can result in up to $30 million per year being recovered for Power Services’ reserves. If the surcharge is implemented, which at this time appears likely, the effective power rate increase would be up to 1.5% for the two-year rate period. This amount is below the rate of inflation and less than BPA’s initial proposal for power rates.

“We have worked on fiscal discipline across the agency and with the U.S. Army Corps of Engineers, the Bureau of Reclamation, U.S. Fish and Wildlife Service, Energy Northwest and other regional partners,” said Michelle Manary, BPA’s chief financial officer. “This has placed us on a trajectory to meet our strategic plan commitment to hold program costs at or below the rate of inflation through 2028.  Along with our disciplined approach to cost management, the ability of our trading floor to bring in additional revenues from forward market sales of surplus power has also been an important factor in helping to stabilize rates.”

The weighted average increase for transmission rates of 3.6% was set through a settlement of transmission and ancillary services rates as part of an effort by BPA to reach agreement with customers on terms and conditions of a new transmission tariff. In the absence of the settlement, the transmission rate increase was initially estimated to be 9.5%. The new tariff’s terms and conditions are foundational for the achievement of BPA’s strategic objective to operate a highly responsive and modernized transmission business.

“The base power rate, transmission tariff settlement and the Financial Reserves Policy surcharge are all important steps in positioning BPA for success in the rapidly changing energy industry,” said Mainzer. “BPA is actively responding to financial and operational challenges, creating new opportunities to leverage the clean and flexible attributes of the federal hydro system, and working with regional partners to further enhance BPA’s role as an engine of the Northwest’s economic prosperity and environmental sustainability.”

The rates will be sent to the Federal Energy Regulatory Commission for approval. The full approval process usually takes several months to a year, but BPA can apply the rates beginning Oct. 1, once it receives an interim approval order from FERC.

BPA is a federal power marketing administration that receives no congressional appropriations and must recover its costs through its rates. The new rates will affect local retail utilities differently depending on the amount of power and type of services they purchase from BPA. Local utilities ultimately determine the impact of BPA’s rates on individual businesses and residents.

Ohio’s New Law a Blow to Renewable Electricity Mandate Momentum (Washington Examiner, Josh Siegel, Daily on Energy)

(COLUMBUS, OH) -- Ohio’s controversial law approved this week to weaken, and eventually, kill a renewable electricity mandate program represents a departure from a recent trend of states increasing the ambition of their policies to combat climate change.

“Its adoption underscores some of the political challenges states face in transitioning toward more carbon-friendly electricity sources,” Barry Rabe, a professor of public policy at the University of Michigan, told me.

Senior Political Correspondent David Drucker on the expanded Washington Examiner magazine

Climate change mitigation advocates, researchers, and public policy experts tell me they don’t expect other states to follow Ohio’s lead, but any backtracking could hamper attempts to reach 100% clean electricity.

“It’s not necessarily that we will see a trend of RPS rollbacks,” said Leah Stokes, an assistant professor of environmental politics at the University of California at Santa Barbara, who is writing a book on state renewable portfolio standards. “But to have 100% clean electricity by 2050, we need to be growing renewables by percentage points each year. Repeals are the worst of all scenarios, but it’s just a manifestation of another trend, which is delay. We are behind.”

Why Ohio law is unique: Ohio’s law — approved by the state’s Republican-led legislature and signed by Republican Gov. Mike DeWine — is truly unprecedented, and had been years in the making, pushed by politically influential bankrupt utility FirstEnergy Solutions.

Its core purpose is to subsidize uneconomic nuclear and coal plants, but in addition to doing that, it takes away money from renewable electricity and efficiency mandates. It shrinks Ohio’s renewable portfolio standard goal of 12.5% to 8.5% and cancels the program after 2026.

Other states, such as Illinois, New York, and New Jersey, have also implemented programs to compensate nuclear plants to keep them running, but those Democratic-leaning states have done so for climate change reasons, given nuclear’s zero-carbon value. Those states have simultaneously increased renewable mandates as part of their nuclear aid.

More than half of the states, some of them Republican-led, have adopted clean electricity standards or more restrictive renewable portfolio standards.

“We consider Ohio an outlier of the broader trend in which states are strengthening renewable mandates,” said Timothy Fox, vice president at ClearView Energy Partners, a research group. “We don't expect this to meaningfully change national renewable deployment.”

Ohio’s place in decarbonization efforts: Ohio was already a clean energy laggard, with policies on the books hostile to building large wind farms. It adopted its renewable electricity standard in 2008, passing unanimously on Earth Day. But in 2014, Republican backlash prompted Ohio to become the first state to freeze its renewable program (which lasted 2 years). Republican-controlled states West Virginia and Kansas have also rolled back renewable standards, but the West Virginia program was voluntary, and Kansas is already generating plenty of electricity from wind.

Ohio is the second-worst state in the country for renewable electricity generation, at 2.5% in 2018, according to the Energy Information Administration.

Ohio is the third-largest coal consuming state in the country, although natural gas has increased its share of the state’s electricity lately. It is one of the nation’s top emitters of carbon dioxide from the power sector, a fact that stands to get worse from the new law subsidizing coal plants, and gutting the renewable mandate, which experts say would outweigh the emissions benefits of keeping the nuclear plants running.

“Ohio was never going to be leading the pack on renewable energy,” said J.R. Tolbert, vice president of state policy at Advanced Energy Economy. “But what matters about Ohio is that it one of the leading emissions states, and this legislation isn't going to help that.”

“Teal” Waters Return to Parts of Hood Canal (KELA Radio, Centralia, WA)

(HOODSPORT, WA) -- Summertime has brought teal waters back to parts of the Hood Canal again. Photos from satellite imagery show brightly-colored waters appearing to spread along the western side of Kitsap Peninsula, thanks to a huge bloom of microscopic phytoplankton. KOMO-TV reports the blooms have appeared each summer over the past few years, after taking a roughly 10-year hiatus. Teri King, a marine water quality specialist with the University of Washington, says likely causes of the bloom are “Hood Canal’s warm, stratified waters with limited nutrients. Water in Hood Canal does not always mix well, meaning the upper layer of water can have different temperature and salinity from deeper layers.

NuScale Status - Nuclear Regulatory Commission Makes Progress On Review Of Advanced Reactor Design (Washington Examiner, Daily on Energy)

(WASHINGTON, DC) -- NuScale Power announced Monday that the U.S. Nuclear Regulatory Commission has finished the second and third phases of review for the company’s small modular nuclear reactor design six weeks ahead of schedule.

NuScale, an Oregon-based nuclear technology firm, is hoping to be the first company in recent decades to obtain a license to operate a new reactor design in the U.S. for commercial use. The company said in a press release that the nuclear commission is on track to finish its review by September 2020.

“Completing Phases 2 and 3 of the NRC’s design review certification process is a critical milestone for our company and the advanced nuclear industry,” said NuScale Chairman and CEO John Hopkins.

Advanced reactors are seen as key to improving the fortunes of nuclear energy, which emits no carbon, giving it a level of bipartisan support for its potential to help combat climate change

The smaller advanced reactors, still in the development phase, are supposed to be cheaper to operate and safer because they produce less waste.

A group of utilities in six Western states, which would be the company’s first customer hopes to connect 12 of the NuScale reactors together for use in Idaho to create a 600-megawatt power plant slated for operation by the mid-2020s.

U.S. Energy Secretary: Easing Energy Efficiency Standards Is 'Common Sense' (Politico, Morning Energy)

(WASHINGTON, DC) – The U.S. Department of Energy will publish in the Federal Register today its approval of a petition from CEI to create a new class of shorter cycle, less efficient dishwashers — marking the latest in a series of rollbacks that aim to weaken rules on light bulbs, furnaces and other appliances, Pro's Eric Wolff reports.

The moves are sure to be challenged in court by advocacy groups, which argue DOE is violating is obligations under the Energy Policy and Conservation Act. But Energy Secretary Rick Perry told reporters it comes down to common sense, not just statute.

"From time to time a statute gets written with a really good intention but reality does not follow that intention," he said last week. "That's why we're looking at these rules and regulations from a common-sense approach, we're looking to get the best result we can."

Perry's philosophy can be seen in a series of DOE rulemakings. The agency last week also proposed a rule in response to a petition from natural gas suppliers and utilities to allow a class of less efficient natural gas furnaces. In February the agency proposed to withdraw an Obama-era rule that would ease efficiency rules on half the light bulb market.

But the moves face criticism on the Hill, where Rep. Bobby Rush (D-Ill.), who chairs the E&C Energy Subcommittee, told POLITICO: "To me, there is a real divergence between his definition of common sense and my definition of common sense."

Northwest Requirements Utilities Names New Chief Executive Officer (Northwest Requirements Utilities, Portland, OR)

(PORTLAND, OR) -- The Northwest Requirements Utilities (NRU) Board of Directors announced today that John Francisco has been selected as the next NRU Chief Executive Officer, effective September 1st.

“John comes to NRU with 25 years’ experience in Northwest public power leadership roles and is ideally positioned to take over the helm at NRU at this most critical time for our membership,” said Roger Kline, President of the Board. “John brings great passion, energy, and expertise to our organization. We are excited to have him as our CEO.”

Francisco has most recently served as Regional Vice President for National Rural Utilities Cooperative Financial Corporation (NRUCFC). Before NRUCFC, Francisco worked at Inland Power and Light for 23 years in several managerial roles, including Chief of Energy Resources from 2013 to 2018 and Energy Services Manager from 2010 to 2013. John has a BA in Business Administration from Eastern Washington University and is a licensed CPA.

NRU is a non-profit trade association, founded in 2002, and represents the interests of 53 load following utility customers of the Bonneville Power Administration.

Clark Public Utilities Ranked Highest by J.D. Power for 12th Year (Northwest Public Power Association)

(VANCOUVER, WA) -- For the 12th consecutive year, J.D. Power recognized Clark Public Utilities for ranking highest in customer satisfaction among midsize electricity providers in the Western United States.

The J.D. Power study measures customer satisfaction with electric utilities by examining six key factors: power quality and reliability; price; billing and payment; corporate citizenship; communications; and customer service. In all of these categories, customers gave Clark Public Utilities the highest score in the West midsize segment.

“The J.D. Power survey has become a valuable annual benchmark for our board to see how customers view all areas of utility operation year to year,” said Nancy Barnes, president of the Clark Public Utilities Board of Commissioners. “Clark Public Utilities became eligible for the study 12 years ago and we’ve ranked highest in our segment ever since, which I view as a testament to the consistency of our excellent staff and a true commitment to exceeding customer expectations.”

J.D. Power designs and finances the study, a standardized measure of satisfaction available for the electric residential utility industry. More than 103,000 residential electric utility customers throughout the U.S. responded online to the study. Based on these responses, the study compared 142 electric utility brands, collectively serving over 101 million households.

“Having spent my career managing utility research, I’ve seen the way customer satisfaction studies can affirm the right approaches and redirect work in areas where there’s room for improvement,” said Lena Wittler, CEO and general manager of Clark Public Utilities. “What we learn from the J.D. Power survey, which is conducted with incredible rigor and precision, helps us identify opportunities to meet our customers’ needs in ways that are cost-effective and meaningful. We’re always working to do better.”

The West region covers Arizona, California, Colorado, Idaho, Montana, Nevada, New Mexico, North Dakota, Oregon, South Dakota, Texas, Utah, Washington, and Wyoming. Midsize utilities in the report serve between 100,000 and 499,999 residential customers.

Randle Residents Voice Opposition to Proposed Crystal Geyser Water Plant (KELA Radio, Centralia, WA)

(RANDLE, WA) -- Many Randle residents were at Monday’s Lewis County Commissioners meeting to voice their opposition to the proposed Crystal Geyser water bottling plant on Peters Road in Randle. One was Craig Jasmer, who said Crystal Geyser has not yet submitted any applications with Lewis County, but they have submitted a water rights permit application with the Washington Department of Ecology. He said Ecology says approval of that permit is contingent upon Lewis County’s approval. Those speaking to the Commissioners urged them to recommend denial of the water rights permit to the Department of Ecology.