BPA: Energy balancing rate settlement signals commitment to work on broader solutions

Settlement highlights include: 
• Removal of three proposed formula rates that created legal contention and cost uncertainty. The formula rates would have passed on the costs of procuring third-party resources to augment balancing reserves.  They were replaced with fixed rates and an established acquisition budget that alleviates the cost uncertainty.

• A $2 million annual budget to augment BPA balancing services when operational constraints cause BPA to lower the amount of balancing reserves it would otherwise provide;

• A BPA commitment to implement two 15-minute scheduling options as soon as feasible. Traditional power plants provide such steady output that utilities have long bought and sold electricity on an hourly basis. But wind and other variable resources are changing that because the energy they produce can vary sharply within mere minutes. More frequent scheduling can help lower costs by reducing reserve requirements.

• A mid-rate period election opportunity for customers to change to self-supply reserves, “dynamically” schedule a resource out of BPA’s system or switch to one of several options to more frequently schedule energy deliveries. This flexibility offers customers an additional opportunity to reduce integration costs.

• Billing for dispatchable energy resources using a 5-minute measurement, which should allow these resources to lower their integration costs when compared to the presently applied 1-minute billing interval.

BPA and party signatories had until May 6 to sign the agreement.  One party objected to the agreement.  Its stated objection to the settlement proposal identifying each issue it chose to preserve in the ongoing rate proceeding is available at the link.
All of the settlement rates applicable to variable energy resources are lower than the rates BPA originally proposed after accounting for the elimination of the formula rates. Three of the four variable energy rates are lower than today’s equivalent rates. Details are available in the Administrator’s Record of Decision.