Draft Chapter 12 Bonneville Obligations Power Committee and

Draft Chapter 12: Bonneville Obligations Power Committee and Council Meetings June 9 -11, 2009 Northwest Power and Conservation Council

Outline of Chapter • What the Act provides • Bonneville’s evolving role • The administrator’s requirements – Principles for acquisition • Consistency with the Council’s Power Plan 2 Northwest Power and Conservation Council

Bonneville Actions to Implement Regional Recommendations • 20 -year power sales contracts • Tiered Rates Methodology • Revised residential exchange agreements following 9 th Circuit rebuff • Review of post-2011 conservation • Note: Legal challenges put these decisions at risk, especially the Residential Exchange Program 3 Northwest Power and Conservation Council

Bonneville Resource Acquisition • Bonneville’s resource acquisitions must be consistent with the plan • Bonneville may need to acquire resources for Tier 1 supplementation, DSI service, Tier 2 loads put on Bonneville, flexibility for wind balancing – Energy, capacity or flexibility – or some combination • Plan identifies principles and recommendations to guide Bonneville’s acquisitions 4 Northwest Power and Conservation Council

Resource Acquisition Issues • Magnitude of the various needs not known now – Bonneville Preliminary Needs Assessment identifies only maximum potential need – Will not be known by adoption of Sixth Plan – Dependent on later actions by Bonneville customers • Availability of solutions not well known now – Many solutions to balancing needs depend on actions now under development – Capacity and energy solutions depend on Bonneville choices 5 Northwest Power and Conservation Council

Resource Acquisition Issues – 2 • Interactions between energy, capacity and flexibility attributes in particular resources – Some resources provide two, some all three – Some provide one at the expense of another • Council’s analysis does not break out utilityspecific capacity and energy needs – Looks at resources that utilities may exclude • Council’s analysis of flexibility not as rigorous as analysis of other Plan issues 6 Northwest Power and Conservation Council

Principles for Bonneville Acquisition Actions • Aggressively pursue Plan’s conservation goals • Aggressively pursue use of existing system resources and institutional solutions for balancing needs before turning to new generation – Many now being discussed, described in Chapter 11 • Take a broad look at cost-effectiveness and reliability of sources of new capacity and flexibility, if needed to meet obligations – Look at synergies between capacity and flexibility 7 Northwest Power and Conservation Council