The Bonneville Power Administration recently released its final Provider of Choice Policy, a document that details BPA’s position on the policies, products and services it will offer its utility customers in new long-term wholesale electric power contracts beginning in 2028.
BPA on March 21 said that the release of the final Provider of Choice Policy is the result of five-plus years of collaboration with customers and constituents.
“This policy lays the foundation for low-cost, reliable, carbon-free electric power from the Federal Columbia River Power System to continue to flow to communities served by BPA’s public power customers,” said BPA Administrator and CEO John Hairston in a statement.
“We’ve seen so much change in our region and in our industry since our current wholesale power contracts were put in place in 2011. This policy sets a course for two more decades of clean energy consumption and economic prosperity for communities served by consumer-owned utilities in the region,” he said.
At the core of the policy is the continuation of a tiered rate construct. Under tiered rates, BPA’s utility customers are eligible to purchase a certain amount of wholesale electric power at BPA’s Priority Firm Tier 1 rate, which is its lowest-cost rate.
If a utility has additional power needs, they can choose to be served by BPA at a PF Tier 2 rate, by nonfederal resources that they secure on their own, or a combination of the two.
The tiered rate construct is designed to preserve the value of the federal system -- including the region’s 31 federal dams and one nuclear plant -- and insulate customers from unbound power resource acquisition costs, BPA said.
“I deeply appreciate the level of involvement and feedback we received from our customers and other stakeholders throughout this multi-year process as we strived to deliver a prudent and balanced policy direction,” said Hairston. “This decision demonstrates our commitment to responding to our customers’ evolving needs while working within the framework of the federal statutes. As an example, we are providing new opportunities for customers to integrate non-federal resources while staying true to the central tenets of tiered rates. The work we’ve done together led us to significantly modify the initial concepts we released in summer 2022 and hammer out a policy that BPA and its customers navigate a constantly evolving energy landscape.”
The policy “creates a durable framework that provides certainty about the load service customers can expect from BPA while enabling them to navigate the changes the region will face,” BPA said.
For example, BPA noted that the policy shifts how BPA conveys emissions attributes to better align with utility reporting requirements, which was in direct response to customer requests.
The release of the policy signifies an important milestone in the Provider of Choice process, it said.
The next phase kicks off in April with a series of policy implementation and contract development workshops that will go into more depth about the products and services outlined in the policy.
BPA has set a goal of executing the new long-term contracts by December 2025.
These new contracts will replace BPA’s current 20-year Regional Dialogue contracts.
