Common use of Basic Elements Clause in Contracts

Basic Elements. ‌ The 2012 REP Settlement5, if adopted by BPA, would end the uncertainty and risk arising from the seemingly endless litigation over the REP by providing closure to BPA’s past payments of refunds to the COUs and REP benefits to the IOUs while also resolving, for a term of 27 years, challenges over BPA’s implementation of the REP. The Settlement achieves these ends by presenting an alternative to BPA’s prior attempts at resolving the issues pertaining to the Court’s decisions in PGE and Golden NW. This alternative, embodied in the terms of the Settlement, would replace BPA’s decisions in the WP-07 Supplemental ROD and WP-10 ROD, which have been hotly contested by all parties, with the agreed-upon value established by the Settlement and signed by all of the region’s IOUs, three public utility commissions, and 88 percent of BPA’s COU customers (by load). In presenting this alternative approach, the Settlement is not intended to answer all of the knotty legal and factual questions regarding the section 7(b)(2) rate test and BPA’s Lookback construct that have plagued BPA’s rate proceedings. The REP litigation involves all manner of claims, from alleged violations of statutory provisions (such as sections 7(b)(2) and 5(c) of the Northwest Power Act), to breaches of contract (such as the “Invalidity Clause” in the 2000 REP Settlements). In view of the diverse nature of these numerous claims, the settling COUs, IOUs, state commissions, and others have crafted the Settlement such that its focus is on reaching a reasonable resolution of the myriad conflicts in an equitable and timely manner without addressing individual claims, while also retaining the essential elements of the REP to ensure that the Settlement follows the key statutory requirements set forth in the Northwest Power Act. The Settlement spans 104 pages and includes many complicated formulas and terms. However, at its core, the Settlement is comprised of five essential parts: (1) a schedule of REP benefits to be paid to the IOUs as a class over the term of the Settlement (17 years), which will be allocated among the IOUs every two years in accordance with section 5(c) of the Northwest Power Act;