The Bonneville Power Administration (BPA) has surplus electrical capacity (peakload energy) that BPA projects will not be required to meet its existing obligations. Such obligations include those to meet the loads of firm power customers, pursuant to the Pacific Northwest Electric Power Planning and Conservation Act (Northwest Power Act), and previously committed capacity contracts.
BPA is authorized under the Northwest Power Act (§35(f)) to sell system capacity and/or energy that is surplus to its needs, with the obligation to offer any available surplus capacity/energy first to customers in the Pacific Northwest region.
See Chapter 8 for a list of acronyms, abbreviations, and definitions of terms as they are used in this Environmental Impact Statement (EIS).
BPA and PacifiCorp (formerly doing business as Pacific Power & Light Company, a.k.a. PP&L, a Pacific Northwest private utility) have negotiated a long-term contract for peaking capacity. The proposed long-term contract is for 1100 megawatts (MW) of contract demand limited to no more than 10 hours per day and 50 hours per week of maximum contract demand. The proposed contract would expire August 31, 2011. (See Chapter 2, section 2.1, for more details.)
In most cases, BPA could serve the long-term PacifiCorp capacity contract using capacity available from BPA resources that is surplus to other needs. However, as preference loads grow, capacity that is available on the Federal Columbia River Power System (FCRPS) now may be required to serve preference loads later. One of the primary issues addressed in this EIS is the future resource implications of the proposed 1100 megawatt (MW) long-term capacity contract with PacifiCorp.
PacifiCorp had a contract with BPA providing for PacifiCorp's purchase of 1127.3 MW of peaking capacity ending August 31, 1991. BPA and PacifiCorp have entered into short-term surplus firm capacity sale agreements under which BPA provides capacity service to PacifiCorp. BPA conducted a process to evaluate the rates to be charged for capacity sales under the new contract in accordance with section 7(i) of the Northwest Power Act. The rate was approved by the Federal Energy Regulatory Commission (FERC) and is available for use under the proposed contract.
BPA must respond to the need for power as represented by PacifiCorp's request for a continued supply of firm capacity.
The purposes of the proposed action are to:
1. Assist PacifiCorp in meeting its need for long-term firm peaking capacity.
2. Use surplus capacity available on the BPA system to raise revenue to enhance BPA's ability to repay its debt, and to help hold down electric power rates.
3. Take advantage of the complementary characteristics of the largely hydro-based BPA system and PacifiCorp's largely thermal-based system.
4. Protect BPA's ability to serve its existing contractual obligations and remain able to meet the needs of its customers in accord with the Northwest Power Act as existing contracts expire.
5. Meet BPA's obligations under the Northwest Power Act to protect, mitigate, and enhance fish and wildlife.
BPA, the U.S. Army Corps of Engineers, and the U.S. Bureau of Reclamation are jointly conducting the Columbia River System Operation Review (SOR). A Final Environmental Impact Statement (SOR EIS) is planned for 1994. The SOR is a comprehensive evaluation of the options for managing Federal projects on the Columbia River for many uses, including power generation, flood control, irrigation, navigation, recreation, and fish and wildlife. The SOR EIS will cover broad issues related to balanced use of Federal multipurpose hydro facilities in the Columbia River Basin. The SOR process could lead to decisions affecting regional hydropower capability and operating flexibility. A broad range of interests is involved in the SOR and will continue to be involved through preparation of the associated EIS.
The SOR EIS will allow the three Federal agencies to make decisions on:
1. adopting a System Operating Strategy (SOS);
2. renegotiating and renewing the Pacific Northwest Coordination Agreement (PNCA);
3. renewing or developing five new Canadian Entitlement Allocation Agreements; and
4. developing a means to periodically review and update the SOS.
The proposals studied in the PacifiCorp Capacity Sale EIS do not supplant the SOR decision process. BPA serves its contractual obligations with its mix of resources consistent with the operating constraints applicable to each resource.
This EIS will not analyze changes in hydropower operations, because the PacifiCorp contract is not a decision on particular hydropower operations. Instead, the contract is a system operational obligation to be met with all of the resources at BPA's disposal, including thermal resources and future acquisitions.
The PacifiCorp Capacity Sale EIS analyzes alternatives that could rely exclusively on thermal resources and/or acquisition of additional resources.
BPA's Resource Program establishes a long-term strategy and budget plan for development of conservation and other resources. BPA prepared the Resource Programs Final EIS (DOE/EIS-0162, February 1993), which is intended to provide information for use in future Resource Program processes. The Resource Programs EIS is a programmatic document that looks at the effects on resource operation and development of generalized resource acquisition strategies. Because the Resource Programs EIS identifies and analyzes implications of BPA and non-BPA Pacific Northwest resources, certain portions are incorporated by references within the text of this EIS. The analysis in this EIS is consistent with the assumptions used in the 1992 BPA Resource Program. Actual BPA resource acquisitions are subject to site-specific environmental processes.
BPA cooperated with the U.S. Army Corps of Engineers in conducting these studies, which looked at alternate annual hydro operating plans for periods prior to the completion of the SOR process. Biological assess-ments have been prepared addressing effects on potential endangered or threatened species pursuant to the Endangered Species Act.
BPA has prepared an EIS on proposals to provide non-Federal participation in BPA's share of the Pacific Northwest-Pacific Southwest Intertie (Intertie) and for BPA marketing and joint ventures with California. BPA marketing and joint ventures may involve use of available Federal Intertie capacity for sales or exchanges with California parties.
The Power Sales Contracts Final EIS (DOE/EIS-0131, January 1992) addressed potential amendments to power sales contracts as offered in 1981 under the Northwest Power Act.
The rate for the proposed PacifiCorp capacity contract has been approved by FERC. This rate, PPL-90, was developed in a proceeding pursuant to section 7(i) of the Northwest Power Act. No other rate or alternative rate is at issue for purposes of this EIS, and decisions involving the exercise of BPA ratemaking authority will not be analyzed in this EIS.
In 1992, BPA began preparing to negotiate new power sales contracts to replace its current requirements contracts with public and private utilities, direct service industries, and Federal agencies. Scoping discussions for the EIS led to expanding the subject matter of the process to include power system services, including wheeling, for service to Pacific Northwest firm loads, and rates for wholesale power transmission. More recently, the EIS has been expanded to address the decisions BPA will make in adopting its 1994 Business Plan. The current power sales contract with PacifiCorp is a mechanism through which PacifiCorp could, assuming certain notice provisions are met, secure a long-term source of capacity. However, the current power sales contract provisions for delivery of capacity do not provide the flexibility PacifiCorp desires. The new power sales contracts and services BPA will offer under the Business Plan may be sufficiently different from the existing contract terms to make it attractive for PacifiCorp to someday place capacity load on BPA through the power sales contract.
The amount and availability of interregional intertie transmission capacities, as well as policies and actions that define their use, can influence future decisions regarding power transactions and resource acquisitions by BPA, PacfiCorp, and other utilities in the region. Increases in intertie capacity and transmission availability to California and the Inland Southwest can lead to specific environmental effects due to potential increases in thermal resource development or changes in thermal resource operations. These changes in transmission availability and capacity could affect the manner in which PacifiCorp chooses to use the proposed capacity contract. The full implication of how these potential changes may impact the PacifiCorp capacity contract is remote and speculative. Issues relating to transmission availability and capacity are being addressed in the Non-Federal Participation EIS and the Southwest Intertie Project EIS. The former EIS has been prepared by BPA; the latter is being prepared by the Bureau of Land Management.