BPA’s 2002 Wholesale Power Rate Case Sample Clauses

BPA’s 2002 Wholesale Power Rate Case. On August 13, 1999, BPA published a notice of BPA’s 2002 Proposed Wholesale Power Rate Adjustment, Public Hearing, and Opportunities for Public Review and Comment. Escalating and more volatile market prices had two related effects. First, the xxxxxxx of higher prices and continued unpredictability caused customers to place as much load as possible on BPA. Second, to meet this increased load obligation, BPA would need to make substantially greater power purchases at substantially higher and more uncertain prices than anticipated in the May Proposal. BPA concluded that the May Proposal, as filed with the FERC, was not adequate to deal with the added costs and financial risks that the high and volatile market prices created for BPA. During the initial phase of the rate case, BPA’s load forecast exceeded BPA’s forecast of generation resources by 1,732 average megawatts (aMW). Due to escalating and volatile market prices, BPA estimated that expected loads would exceed the original rate case forecast by an additional 1,518 aMW. Inasmuch as the generating capability of FCRPS was already inadequate to meet the earlier load forecast, BPA would have to purchase to further augment its inventory to serve these additional loads. The cost of power to serve these unanticipated loads was not included in revenue requirements. The combination of an unanticipated increase in loads and purchase requirements, with higher and more uncertain market prices, greatly diminished the probability that rates proposed in the May Proposal would fully recover generation function costs. Absent a change to the May Proposal, Treasury Payment Probability (TPP) would be reduced to below 70 percent, a level that would fall well short of specific goals and targets. In its judgment, BPA had a serious cost recovery problem that it was obliged to address by reason of statute and Administration policy. BPA’s Amended Proposal rate case was a continuation of the WP-02 rate proceeding. It was being conducted for the discrete purpose of resolving a cost recovery problem brought about by market price trends and load placement changes occurring since the record was closed in the first phase of the proceeding. During the consideration of the Amended Proposal, however, BPA concluded that it was necessary to make additional changes to ensure BPA’s cost recovery. BPA then filed a Supplemental Proposal. There were three reasons BPA filed a Supplemental Proposal. First, BPA’s forecast for starting rate period r...