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BPA Proposes Major Transmission Investment by Staff BPA Journal, February 2009

BPA is proposing five new transmission projects as a result of studies concluded following a Network Open Season. The agency will consider stakeholder feedback and make a final decision on whether to pursue these projects by mid-February.

The proposal includes the West of McNary reinforcement (McNary-John Day and Big Eddy- Substation Z), I-5 corridor reinforcement, Little Goose Area reinforcement, and a remedial action scheme for West of Garrison. These projects would cost an estimated $800 million and create upward rate pressure of 2.4 percent over a 20-year period.

"If we decide to pursue these projects," said Vickie VanZandt, senior vice president of Transmission Services, "they will enhance the Federal Columbia River transmission system, create jobs and infuse significant capital into the Northwest."

BPA conducted the nation's first Network Open Season last year to ensure the region will have sufficient transmission infrastructure available to deliver the next generation of power resources to loads. Customers that requested service on BPA's transmission network were offered the opportunity to secure long-term firm capacity by signing precedent agreements.

Network Open Season received a robust response, resulting in signed agreements from customers totaling 6,410 megawatts of transmission, 74 percent of which was for wind project interconnections. After evaluating all the requests together (in clusters) and studying what would need to be done to accommodate the requests, BPA arrived at its proposal.

BPA determined that three potential transmission projects resulting from the cluster study could not be undertaken at embedded rates. The agency is working with customers whose transmission requests would be served by those projects to determine the next steps.

After reviewing comments on the proposal, which were accepted until Jan. 29, BPA will issue a decision by Feb. 16. If the agency decides to pursue these projects, they will be subject to environmental review and an extensive public involvement process.

Partial Transmission Rate Case Settlement Reached

BPA's transmission services and parties to the 2010 BPA Rate Case have reached a partial transmission rate case settlement agreement. This agreement extends existing transmission rate levels through the fiscal years 2010-2011 rate period. This means no rate increase for transmission services and two required ancillary services.

The remaining ancillary and control area service rates, including the wind integration within-hour balancing rate, are not included in the partial settlement and will remain as active issues in rate case. This approach allows parties to focus on the outstanding ancillary and control area services.

BPA will issue an initial proposal that includes the terms of the partial settlement agreement and an initial rate proposal for the remaining ancillary and control area services. The formal rate proceeding will begin with the publication of of the initial proposal on or around Feb. 9 in the Federal Register. This also marks the beginning of ex parte. Once ex parte begins, BPA cannot discuss rate case issues with any party, except in noticed public meetings. A prehearing conference will be held Feb. 18, and the remainder of the 2010

BPA Rate Case schedule will follow. For more information, go to www.bpa.gov/corporate/