western issues update 9 04 2001 questions comments report please contact g britt whitman ex 54014 kristin walsh ex 39510 executive summary northwest smelters jockey favorable rates bc hydro rate freeze lingers bpa rates expected rise california refunds doubtful aluminum smelters dsi 1 october 2001 long term relationship dsi bpa preferred rates end bonneville power administration new rate case takes effect 2001 dsi become discretionary customers bonneville power administration dsi playing game slowly migrating load local utilities 9 9 mw annual increments avoid subject bonneville new large single load nlsl designation losing preferred rate status beginning slip quietly back onto bpa federal system officials bonneville willing partners attempting circumvent nlsl regulations established 1980 effort secure existing dsi relationships bpa undertaking review nlsl regulation provide exemption companies bpa opposed public power council representative public utilities pacific northwest focuses bpa rate making sent letter assistant secretary energy express objections bpa proposed actions ppc instrumental raising public awareness earlier year favored status dsi large industrial customers moving aggressively block bpa giving aluminum smelters additional favored treatment ability bpa exempt dsi nlsl regulation shape direction negotiations aluminum smelters power producers region remains seen whether public power council initiate legal battle stop dsi obtaining special treatment moving maintain positive relationships dsi bpa enthusiastic giving power back smelters think need water spare fish bpa concerns supplies tight fall early winter really benefit much even normal better precipitation melt starts next april bpa wants buy back power smelters least year probably would entertain overtures smelters possibility smelters go back line would use money getting bpa subsidize power purchases spot market however would lot risk bpa people think market prices would enable profitable even bpa money helping april 1 three smelters come back line nw aluminum goldendale aluminum longville aluminum alcoa aluminum much news happening negotiating end alcoa bc hydro right information still fairly tight lipped however employees alcoa idled intalco smelter shifted capital projects facility prepare plant eventual restart may indicate direction negotiations kaiser aluminum odd man kaiser little say northwestern energy developments company obviously benefit bonneville able fight public utilities weak bargaining position right might restart operations get revenues moving though direct evidence support view time british columbia politics bc government latest news british columbia bc liberal government quite nicely implementing conservative strategy public opinion remains quite high virtually completed campaign promises first 90 day period even former ndp legislators surprised efficiency government proceeding political strategists watching anwr vote us carefully major impact natural gas oil pipeline going northern bc also illustrating environment vs labor fallout recent election green party british columbia performed surprisingly well garnering around 12 vote typical race contributing directly downfall ndp premier gordon campbell core review bc government due october appears process primarily cost cutting measure moving reduce expenditures bc hydro sake include community outreach student scholarship feel good programs currently undertaken hydro real long term policy planning however expected take place january campbell team brenda eaton deputy premiere doug allen premiere consultant jack ebbels deputy energy minister works conjunction neufeld construct bc long term energy plan bc hydro bc hydro formally signed participant rto west regional transmission organization filing utility rto west currently overseen western governor association developed allowed ferc rto west oversight entity western states canada manage electricity transmission issues also expecting alberta come board rto west shortly regard potential rate hearing bc hydro recently put freeze rates province last 2003 word move allow chairman bell generate political cover begins shave parts business transmission information technology focusing bc hydro core operations additional generation exports trading delivery public concern privatization cause rates skyrocket similar happened california bell moved head concerns rate freeze function increasing bc hydro generation capacity looking carefully building two sites site c hydroelectric dam burrard thermal bpa financial status expected quiet period rates matters bpa dropped bombshell announcing considering triggering fb crac 1 october would increase rates 46 lb crac rate increase announced earlier despite forecasts increase would unnecessary essentially allow bpa bypass initial rate case increase 46 utilizing stop gap measure federal regulations bpa cited number reasons considering imposing fb crac including losses trading power summer changes accounting treatment dsi buyouts uncertainty whether california iso px pay monies owed bpa bpa note however also one hundred million additional dollars bond refinancing money accounted fb crac calculation fb crac triggers amount bpa would option truing calculation fb crac march could change rates bpa actual financial condition 30 september differs estimated bpa changes accounting assumptions bpa representatives suggest strongly good chance rate increase would announced early also indicated specific number would much less earlier load based crac increase 46 much less 20 probably much much less 20 public power council staff written met steve wright bpa acting administrator effort convince bpa fc crac unnecessary know bpa decision 31 august ferc refunds time bpa seek refunds ongoing ferc proceedings submit process purposes others seeking refunds bpa following reasons 1 bpa believes ferc lacks jurisdiction bpa 2 proceedings convoluted transactions complicated bpa asserts realistic hope unwinding transactions necessary equitably order refunds insofar parties collecting bpa cases bpa remarketing agent acting behest example aluminum smelters ferc would proceed third parties often money already spent 3 respect claims calif dwr 71 million similar claim separate california ferc proceeding disallowed 14 june would incongruous allow claim claim ferc denied dwr access refunds situations willing buyer willing seller 4 assorted politics involved first bpa believes political costs pursuing refunds outweigh eventual benefit might received bpa calculates potential exposure refund proceedings circa 400 million believes potential claims could amount 500 million thus potential 100 million net gain reasons cited however believe highly unlikely seek refunds second respect others seeking refunds bpa five nw senators sit senate energy committee would upset ferc allowed california parties collect bpa ferc extent likely responsive sentiment bpa confident legal position matter estimating less 10 chance forced submit ferc matter course forced submit ferc jurisdiction would cross claim parties seek refunds even bpa received refunds believe would affect ability aluminum smelters come back line anticipate 1 april 2002 three smelters amounting 300 500 mw come back line northwest aluminum goldendale aluminum 230 mw longville aluminum 100 mw spill related issues fish returns year especially high ocean stays productive next years think might region could enormous opportunity rebuild salmon steelhead runs make huge strides towards success area behind scenes work continues implementation plan biological opinion hydro system region states tribes trying play stronger role designing columbia river strategy ppc northwest irrigation utilities admitted national wildlife federation et al v nmfs lawsuit defendant interveners court making plans try mediation parties