Common use of Evaluation of Positions Clause in Contracts

Evaluation of Positions. Amending the Settlement to allow additional entities to become parties is broadly supported both by parties to the Settlement and by entities that are not parties. No entity expressed opposition. With the issuance of this Record of Decision, all parties are now on notice of BPA’s position as to the legal viability of the Settlement. Through the exhaustive analysis provided in this ROD, BPA hopes parties will see the value that the Settlement provides to the region in general and, more importantly, the way the Settlement satisfies the requirements of the Northwest Power Act, particularly in the manner in which it protects the position of the COUs. As a party to the Settlement, BPA is in favor of allowing additional entities to sign the Settlement. BPA believes that an amendment to allow additional parties to the Settlement is reasonable, within BPA's contracting authority, and does not conflict with any applicable laws. Several parties indicated giving additional entities until approximately October 1, 2011, to execute the Settlement. BPA is concerned that this may not allow for sufficient time to craft the amendment with representatives of the parties, get the amendment to all parties and for parties to act on the amendment. BPA’s concern stems from the fact that there is a very substantial amount of work, including decisions by its COU customers in particular, between now and October 1, 2011 in order to implement service under the new Regional Dialogue contracts, implement the Settlement, and implement the new BPA power rates that are effective October 1. A number of COU utilities are also considering retail rate changes that may need to be implemented between now and the end of the calendar year. BPA believes parties should be given ample time to consider and approve the amendment given that all current parties to the Settlement must agree to such amendment. While the specifics of the amendment need to be negotiated among current parties, BPA believes giving current parties until the end of November to sign the amendment and giving entities not currently parties until December 31, 2011 to sign the amended Settlement may be appropriate. BPA believes it is highly unlikely a court will issue any opinion between now and the end of the calendar year that would provide entities that are not currently parties to the Settlement new information on the pros and cons of signing the Settlement. Obviously, the possibility of court action prior to any new signing deadline will be one factor representatives of current parties will need to discuss when they draft the amendment. BPA believes this amendment can be very simple and straightforward. As suggested by JP02, it appears sufficient to amend the definition of Party to substitute a new, later date for “June 3, 2011.” For example, “June 3, 2011,” could be replaced with “December 31, 2011.” Canby requests that BPA “establish a date certain”, then notes, correctly, that a new deadline will require an amendment to the existing Settlement and that existing signers must approve this language change. Canby Br. Ex., REP-12-R-CA-01, at 1. Other parties similarly infer or state that the Settlement must be amended in order to allow for new signers. BPA believes it should lead an effort with representatives of current parties to the Settlement to accomplish the widely shared goal of allowing for additional signers.

Evaluation of Positions. Amending Puget and Avista believe the Settlement to allow additional entities to become parties is broadly supported both by parties Agreement should explicitly state that no revision of the Wholesale Power Rate Schedule(s) or General Rate Schedule Provisions (“GRSPs”) during the term of the Agreement shall apply unless the customer gives written consent. Puget, IOURESEXC:018; Avista, IOURESEXC:001. Puget and Avista also proposed that the “GRSPs” for FY 2002-2006 should be those established in BPA’s 2002 power rate case and for FY 2007-2011 should be those that are adopted in another BPA power rate case and that are similar in scope to the Settlement FY 2002-2006 GRSPs, so that it is clear which GRSPs apply during which period. Id. BPA believes the wholesale power rate schedules and by entities GRSPs are rate provisions that are must be developed in a section 7(i) administrative rate hearing. These provisions cannot partiesbe made subject to written customer consent without depriving other customers of their right to comment on these issues in the section 7(i) proceeding. No entity expressed oppositionPuget and Avista believe the “Cost of In-Lieu-Power” is a key concept and should be defined in the Agreement. With Puget, IOURESEXC:018; Avista, IOURESEXC:001. Puget and Avista also proposed that BPA address issues regarding the issuance sources and cost of this Record of Decision, all parties are now on notice of BPA’s position as to the legal viability in lieu power purchases in an In Lieu Power Policy. Id. BPA has modified Section 7 of the Settlement. Through the exhaustive analysis provided in this ROD, BPA hopes parties will see the value Agreement to provide that the Settlement provides to the region expected costs of in general and, more importantly, the way the Settlement satisfies the requirements of the Northwest lieu power shall be developed in accordance with procedures developed in an In Lieu Power Act, particularly in the manner in which it protects the position of the COUs. As a party to the Settlement, BPA is in favor of allowing additional entities to sign the SettlementPolicy. BPA believes that an amendment to allow additional parties to the Settlement is reasonable, within BPA's contracting authority, and does not conflict with any applicable laws. Several parties indicated giving additional entities until approximately October 1, 2011, to execute the Settlement. BPA is concerned that this may not allow for sufficient time to craft the amendment with representatives of the parties, get the amendment to all parties and for parties to act on the amendment. BPA’s concern stems from the fact that there is a very substantial amount of work, including decisions by its COU customers in particular, between now and October 1, 2011 in order to implement service under the new Regional Dialogue contracts, implement the Settlement, and implement the new BPA power rates that are effective October 1. A number of COU utilities are has also considering retail rate changes that may need to be implemented between now and the end of the calendar year. BPA believes parties should be given ample time to consider and approve the amendment given that all current parties to the Settlement must agree to such amendment. While the specifics of the amendment need to be negotiated among current parties, BPA believes giving current parties until the end of November to sign the amendment and giving entities not currently parties until December 31, 2011 to sign the amended Settlement may be appropriate. BPA believes it is highly unlikely a court will issue any opinion between now and the end of the calendar year that would provide entities that are not currently parties to the Settlement new information on the pros and cons of signing the Settlement. Obviously, the possibility of court action prior to any new signing deadline will be one factor representatives of current parties will need to discuss when they draft the amendment. BPA believes this amendment can be very simple and straightforward. As suggested by JP02, it appears sufficient to amend modified the definition of Party In Lieu Power to substitute a new, later date establish the provisions for acquisition and delivery in an In Lieu Power Policy. Puget and Avista propose modifying the definition of “June 3, 2011.” For example, “June 3, 2011In-Lieu PF Power,” could requiring that such power be replaced with “December 31identical in shapes and delivery periods to Residential Load. Puget, 2011.” Canby requests that BPA “establish a date certain”IOURESEXC:018; Avista, then notes, correctly, that a new deadline IOURESEXC:001. Issues regarding in-lieu transactions are addressed in earlier sections in this ROD and in response to comments in Section 7 below and will require an amendment to be fleshed out further in the existing Settlement planned public process on in-lieu practice and that existing signers must approve this language changepolicy. Canby Br. Ex., REP-12-R-CA-01, at 1. Other parties similarly infer or state that the Settlement must be amended in order to allow for new signersNo further refinement through definitions is necessary. BPA believes it should lead an effort with representatives has similarly addressed the calculation of current parties to the Settlement to accomplish the widely shared goal of allowing for additional signersin-lieu transaction costs.

Evaluation of Positions. Amending Puget, and the Settlement other IOUs and Commissions, generally contend that the statute requires in-lieu acquisitions to allow additional entities to become parties is broadly supported both by parties to the Settlement and by entities be from new generating facilities. First, Xxxxx believes that are not parties. No entity expressed opposition. With the issuance of this Record of Decision, all parties are now on notice of BPA’s position proposal to use market purchases for in lieu transactions is unfair. In its comments, Puget made the following observation: BPA's proposal to include its new, erroneous and untested interpretation of in-lieu power acquisition sources in the draft RPSA stands in xxxxx contrast to BPA's treatment of a different disputed statutory interpretation that affects BPA's governmental and cooperative utilities, the meaning of "New Large Single Load" under the Northwest Power Act. In that case, BPA has agreed that it will conduct a separate process to interpret the meaning of that term, which allows those utilities to proceed with contracts and yet be fully free (and have a full opportunity) to dispute the appropriate interpretation of the statutory provisions regarding "New Large Single Load." PSE, IOURESEXC:018. In response to Xxxxx and other commentator’s comments, BPA has agreed to conduct a separate process to identify the sources of In Lieu PF Power. Such process will allow utilities to proceed with contracts and yet be fully free (and have full opportunity) to dispute the appropriate interpretation of the statutory provisions concerning the sources of in lieu resources. BPA will publish an In Lieu Power Policy that identifies the provisions for acquisition and delivery of in lieu power, including the source of power acquired by BPA in lieu of power offered by the utility under the RPSA, procedures for developing the expected costs of In Lieu Power, the minimum period of advance written notice that BPA will provide of its election to acquire In Lieu Power and the minimum period the utility will have to determine whether it will accepted deliveries of In-Lieu PF Power. Moreover, Puget views BPA’s proposal as bad policy in terms of providing the region with adequate, efficient power supplies. PSE, IOURESEXC:018. Puget notes that BPA has forecast a shortfall in regional power capacity, citing lack of new resources as the region’s number one issue. Id. At the same time, Xxxxx argues that BPA’s proposal to use market purchases for in-lieu transactions is inconsistent with the Plan and the legal viability of the Settlement. Through the exhaustive analysis provided in this ROD, BPA hopes parties will see the value that the Settlement provides to the region in general and, more importantly, the way the Settlement satisfies the requirements of the Northwest Power Act. Id. Puget maintains that acquisitions of in-lieu power by BPA are subject to certain requirements under the Northwest Power Act. Id. For example, particularly Puget notes that Section 5(c) of the Northwest Power Act provides that any in-lieu acquisitions are subject to the provisions of sections 4 and 6 of the Northwest Power Act. Id. Under Northwest Power Act section 6(b), BPA's acquisition of resources must be consistent with the Regional Plan; if acquisitions are not consistent with the Regional Plan (or there is no Regional Plan), then acquisitions must be consistent with the criteria of section 4(e)(1) of the Northwest Power Act and the considerations of section 4(e)(2) of the Northwest Power Act. Id. Moreover, Puget asserts that the Regional Plan must give priority to resources which the Council determines to be cost-effective and also establishes a priority among resources: first priority to conservation, second, to renewable resources, third, to certain cogeneration and high-efficiency resources, and fourth, to other resources. Northwest Power Act, section 4(e)(1). Id. Puget concludes that “to the extent that BPA does not acquire resources identified in the manner Regional Plan, BPA must give a priority to conservation, renewables and certain cogeneration resources before acquiring resources from other sources.” Id. Therefore, Xxxxx recommends that the draft RPSA be revised to reflect a priority for conservation and renewables in which it protects the position acquisition of in-lieu power. PSE, IOURESEXC:018. See also, PacifiCorp, IOURESEXC:011. PGE notes that “[w]holesale market purchases do not provide either stability or low cost because the competitive market is still in its infancy and can be extremely volatile.” PSE, IOURESEXC:018. PGE also asserts that the Residential Exchange was created to provide a way for Bonneville to acquire power - either from the investor-owned utilities or through the in lieu provision - to serve the residential loads of investor owned utilities at the cost-based rate of the COUsfederal system. As a party Id. Thus, PGE concludes that, if BPA has sufficient surplus available to conduct an in-lieu transaction, then it should just sell the power to the Settlementinvestor-owned utilities for the net requirements of their residential consumers. Id. Finally, BPA PGE argues that BPA’s proposal is in favor inconsistent with the purpose of allowing additional entities the Residential Exchange to sign provide residential power consumers with stable prices that provided a share of the Settlementlow-cost benefits of the federal system. Id. BPA believes that an amendment to allow additional parties to the Settlement is reasonable, within BPA's contracting authority, IOUs and does not conflict with any applicable laws. Several parties indicated giving additional entities until approximately October 1, 2011, to execute the Settlement. BPA is concerned that this may not allow for sufficient time to craft the amendment with representatives their regulators take a far more constricted view of the partiesNorthwest Power Act than was intended by Congress, get as can be seen by the amendment to all parties and for parties to act on plain meaning of the amendmentstatutory provisions. BPA’s concern stems from the fact that there is a very substantial amount of workSection 5(c)(5) states that, including decisions by its COU customers in particular, between now and October 1, 2011 in order to implement service under effect an in lieu transaction, the new Regional Dialogue contracts, implement the Settlement, and implement the new BPA Administrator "may acquire an equivalent amount of electric power rates that are effective October 1. A number of COU utilities are also considering retail rate changes that may need from other sources to be implemented between now and the end of the calendar year. BPA believes parties should be given ample time to consider and approve the amendment given that all current parties to the Settlement must agree replace power sold to such amendmentutility as part of an exchange sale.” Notably, Congress used the term “electric power.” That term is defined simply as “electric peaking capacity, or electric energy, or both.” 16 U.S.C. §839a(9). While the specifics of the amendment need to be negotiated among current parties, BPA believes giving current parties until the end of November to sign the amendment and giving entities It is not currently parties until December 31, 2011 to sign the amended Settlement may be appropriatelimited in any other way. BPA believes it is highly unlikely a court will issue any opinion between now and the end of the calendar year that would provide entities that are not currently parties to the Settlement new information on the pros and cons of signing the Settlement. ObviouslyMoreover, the possibility of court action prior to statute states that the Administrator may obtain this power from any new signing deadline will be one factor representatives of current parties will need to discuss when they draft the amendment. BPA believes this amendment can be very simple and straightforward. As suggested by JP02, it appears sufficient to amend the definition of Party to substitute a new, later date for “June 3, 2011.” For example, “June 3, 2011source,” could be replaced with “December 31, 2011not from the acquisition of a generating resource.” Canby requests that BPA “establish a date certain”, then notes, correctly, that a new deadline will require an amendment to the existing Settlement and that existing signers must approve this language change. Canby Br. Ex., REP-12-R-CA-01, at 1. Other parties similarly infer or state that the Settlement must be amended in order to allow for new signers. BPA believes it should lead an effort with representatives of current parties to the Settlement to accomplish the widely shared goal of allowing for additional signers.