B O N N E V I L L E P O W E R A D M I N I S T R A T I O N

Predecisional. For Discussion Purposes Only Slide 1

City of Port Angeles

Above High Water Mark Loadand

DemandBonneville Power Administration

NWPPA Power Supply Planning Workshop

City of Port Angeles

June 7, 2011

B O N N E V I L L E P O W E R A D M I N I S T R A T I O N

Predecisional. For Discussion Purposes Only Slide 2

Discussion Points Customers have options for serving Above-RHWM Load

City of Port Angeles ~ Projected Load

Tier 2 Rate Elections

Port Angeles’ Non-Federal Resources

Annexing Load

Demand Charges

B O N N E V I L L E P O W E R A D M I N I S T R A T I O N

Predecisional. For Discussion Purposes Only Slide 3

Customers have options for servingAbove-RHWM Load

1) Load Shaping Rate if Above-RHWM load is less than 1 aMW.

2) Non-Federal Resource (Specified or Unspecified) if Above-RHWM load is less than or greater than 1 aMW.

3) BPA Flat Block Purchase at a Tier 2 Rate if Above-RHWM load is greater than 1 aMW.

4) Combination of a non-Federal Resource and Tier 2 if Above-RHWM load is greater than 1 aMW.

Avoid Above-RHWM load > 1 aMW with conservation projects!

B O N N E V I L L E P O W E R A D M I N I S T R A T I O N

Predecisional. For Discussion Purposes Only Slide 4

City of Port Angeles ~ Projected LoadBased on April 2011 forecast

Port Angeles may not see an Above-RHWM Load greater than 1 aMW until FY 23

10087 86.76 0.00

*Historical Load Values Do Not Include Meter Losses

60.0

65.0

70.0

75.0

80.0

85.0

90.0

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

aMW Actual aMW Forecast aMW Normal CP Actual Peak CP Forecast Peak aMW HWM

CI TY OF PORT ANGELES- Total Summary

Fiscal Year

aMW

(M

W P

eak)

B O N N E V I L L E P O W E R A D M I N I S T R A T I O N

Predecisional. For Discussion Purposes Only Slide 5Predecisional. For Discussion Purposes Only Slide 5

Tier 2 Rate Elections Tier 2 Rate Elections

November 2009, Port Angeles elected to serve its Above-RHWM Load (FY 2012-2014) with the Short-Term Rate: FY 2012-2013 Above-RHWM Load amounts were < 1 aMW,

therefore, the City did not take any Short-Term energy. FY 2014 amounts will be developed in summer of 2012 in the

RHWM Process.

The next election deadline is Sept 30, 2011. Above-RHWM Load amounts will be set during the corresponding rate cases.

Per a request from NRU, BPA is considering an optional extension in the notice deadline to June 30, 2012.

FY 2025 – FY 2028forSeptember 30, 2021

FY 2020 – FY 2024forSeptember 30, 2016

FY 2015 – FY 2019forSeptember 30, 2011

FY 2012 – FY 2014forNovember 1, 2009

Purchase PeriodNotice Deadline

FY 2025 – FY 2028forSeptember 30, 2021

FY 2020 – FY 2024forSeptember 30, 2016

FY 2015 – FY 2019forSeptember 30, 2011

FY 2012 – FY 2014forNovember 1, 2009

Purchase PeriodNotice Deadline

B O N N E V I L L E P O W E R A D M I N I S T R A T I O N

Predecisional. For Discussion Purposes Only Slide 6Predecisional. For Discussion Purposes Only Slide 6

Tier 2 Rate AlternativesTier 2 Rate Alternatives

Tier 2 Rates will be established in 7(i) processes.

Tier 2 Rate alternatives will be based on the cost of providing a flat annual block of power.

Pricing of power provided at a Tier 2 Rate is based on the cost of BPA purchases and resource acquisitions to serve this load.

Other cost components that may be included in Tier 2 Rates: – BPA Overhead Costs – associated Tier 2 Rates service– Resource Support Services (RSS) – for the cost of

converting a resource/purchase into a flat block of energy.– Additional costs including risk, transmission, within-hour

balancing, fuel adjustment adders, etc.

B O N N E V I L L E P O W E R A D M I N I S T R A T I O N

Predecisional. For Discussion Purposes Only Slide 7Predecisional. For Discussion Purposes Only Slide 7

Tier 2 Rate Alternatives ~ Load Growth RateTier 2 Rate Alternatives ~ Load Growth Rate

BPA commits to meet Load Following customers’ load growth for the term of the commitment/contract period.

Customers may fix amounts of Above-RHWM load to be served by non-Federal resources or other Tier 2 Rate alternatives for the contract term in conjunction with the Load Growth Rate.

Upcoming Election Opportunity: Sept. 30, 2011 for the period FY 2015 through FY 2028. This is the last opportunity to elect this rate.

Customers can limit the amount of power they purchase at the Load Growth Rate by providing notice October 31of rate case year (11 months before the rate period). Liquidated damages may apply.

B O N N E V I L L E P O W E R A D M I N I S T R A T I O N

Predecisional. For Discussion Purposes Only Slide 8Predecisional. For Discussion Purposes Only Slide 8

Tier 2 Rate Alternatives ~ Short-Term RateTier 2 Rate Alternatives ~ Short-Term Rate

Shorter commitment with terms of 3 (2012-2014), 5 (2015-2019), 5 (2020-2024), & 4 (2025-2028) years.

Pricing based on market opportunities.

BPA will determine amounts charged at the Short-Term Rate in each rate case for the subsequent rate period.

Within a purchase period, service at this rate may be converted to service at a Vintage Rate.

Customer may reduce purchase amounts with notice by October 31 of a rate case year. Liquidated damages may apply.

B O N N E V I L L E P O W E R A D M I N I S T R A T I O N

Predecisional. For Discussion Purposes Only Slide 9Predecisional. For Discussion Purposes Only Slide 9

Tier 2 Rate Alternatives ~ Vintage RateTier 2 Rate Alternatives ~ Vintage Rate

Term of commitment depends on term of intended BPA resource acquisition or power purchase.

A Vintage Rate Statement of Intent (SOI) may be available any time based on customers’ need and

interest and BPA’s need to acquire a resource(s). Customers must give BPA a binding commitment (with SOI) to take Vintage Rate service that recovers costs

before BPA will finalize commitment for a resource purchase. BPA will work with customers to understand their needs and

interests for Vintage Rate alternatives. A market purchase-sourced Vintage Rate SOI is currently under

negotiation with customers.

B O N N E V I L L E P O W E R A D M I N I S T R A T I O N

Predecisional. For Discussion Purposes Only Slide 10April 13, 2010 - 2012 BPA Rate Case Workshop Predecisional. For Discussion Purposes Only Slide 10

Summary of Tier 2 AlternativesSummary of Tier 2 Alternatives

Tier 2 Alternative

(Customer commitment)

Potential Resources Allocated to Tier 2 Rate Pool

(Will evolve over time as we get more information about available resources and

customer needs and interests)

RECs Provided?

Load Growth

(14 or 17 yrs)

A mix of short & long term purchases (in no particular order, examples could include, Renewables, CCCT, Waste Energy Gen, Market Purchases). Resource selection primarily driven by lowest life cycle cost

Potential that some level of RECs could be provided over the course of the contract.

Short-Term

(3-5 yrs)

Short-Term market purchases (5 years or less in duration). Purchases driven by lowest cost market opportunities

Unlikely

Vintage

(up to 17 yrs)

Based on customer interest. (In no particular order: Wind, Geothermal, Solar, Waste Energy Generation, CCCT, market purchase) Resource selection driven by targeted resource & lowest life cycle cost

Yes, for most renewable-based Vintage rate Alternatives.

B O N N E V I L L E P O W E R A D M I N I S T R A T I O N

Predecisional. For Discussion Purposes Only Slide 11

Non-Federal Resources

Morse Creek is in the City’s contract as a non-dispatchable, small resource. It is the only non-Federal resource

currently listed and has not affected the City’s CHWM or Tier 2 purchases. Currently, the City has not elected to use a non-Federal resource

to serve Above-RHWM Loads. Port Angeles can elect to serve Above-RHWM Loads with a non-

Federal resource during the next purchase period. Specified Resource: generating resource or contract resource

with max hourly purchase > 200 kW Unspecified Resource: not attributed to a Specified Resource

Port Angeles can avoid Above-RHWM Loads with aggressive conservation. Estimated total FY12&13 Energy Efficiency Incentive ~$1.5M

B O N N E V I L L E P O W E R A D M I N I S T R A T I O N

Predecisional. For Discussion Purposes Only Slide 12

Annexing Load

CHWM have been established and will remain the same throughout the term of the contract. Port Angeles CHWM = 86.755 aMW

Port Angeles may add to its CHWM if it annexes a load that has a CHWM. Contract defines how additions are derived.

Port Angeles may add to its monthly CDQs if it annexes a load that has monthly CDQs. Contract defines how additions are derived.

B O N N E V I L L E P O W E R A D M I N I S T R A T I O N

Predecisional. For Discussion Purposes Only Slide 13

Demand Response Port Angeles is involved in 3 demand response efforts with BPA

Residential Pilot Commercial/Industrial Pilot Nippon Paper to help balance wind generation

Port Angeles Demand Response Pilot Projects Professionally and technically well-received within the

Region. Innovative and accommodating partner.

Demand Response complements Port Angeles’ AMI project and enhances the regional Smart Grid effort.