2020 TPA. Natural Gas Provisions 56 6 The 2020 TPA Maintains Key Features of the 2003 TPA and Eliminates the Inherent Transfer Price Risk 57
2020 TPA. Key Electricity Provisions and How it Works Like the 2003 TPA, the 2020 TPA allows for the recording of the price of energy transfers associated with BC Hydro’s energy surplus or deficit as well as the Residual System Capability while ensuring that Powerex’s net income represented value added from Powerex’s trading activities. As summarized in section 2.5.7 above, the 2020 TPA achieves this while also removing the transfer price risk associated with the one day at a time allocation and transfer pricing approach in the 2003 TPA because it does not require transactions to be allocated between BC Hydro and Powerex. Rather, it establishes a transfer price that, with the limited exception of transactions requested by BC Hydro at specific times,53 is independent of whether imports or exports are driven by the need to manage BC Hydro’s energy surpluses or deficits or by Powerex’s trade activity using the Residual System Capability; and it replaces the Trade Account with a Transfer Volume Account that includes not only the volume and value of Powerex’s trade activity using the Residual System Capability but also the volume and value of BC Hydro’s actual Annual Flexible Surplus/Deficit. A copy of the 2020 TPA is provided as Appendix A and an annotated version is provided as Appendix B. 53 These are referred to as either Non-Flexible Imports or Non-Flexible Exports which are explained throughout the remainder of this section.
2020 TPA. Natural Gas Provisions The natural gas provisions in the 2020 TPA have been revised to reflect current circumstances, including applicable gas prices, and the practices for requesting and scheduling natural gas deliveries to BC Hydro. With respect to the generation of electricity, BC Hydro will run its Thermal Generation Plants for Domestic Requirements. The BC Hydro purchase of gas and resulting energy output would serve load and that energy would also then be added to the actual Annual Flexible Surplus/Deficit. To better align the gas generation decision as generally a reliability or capacity based decision, Powerex can purchase the gas at its cost and receive the electricity as an import into the Transfer Volume Account and not have it impact the actual Annual Flexible Surplus/Deficit. This provision allows the plants to be operated for capacity or reliability reasons without altering the overall system energy balance.
