Response to KWAPA Questions

June 26, 2014

The Klamath Water and Power Authority (KWAPA) requested that PacifiCorp provide a list of customer requirements necessary to participate in the federal power program described in the Klamath Hydroelectric Settlement Agreement (KHSA).  KWAPA has also asked some specific questions listed below. 

This paper is focused on Oregon implementation since it is more fully developed than the California proposal with WAPA. For eligible irrigators opting into the federal power program, the Bonneville Power Administration (BPA) would make available and sell federal preference power to the Bureau of Reclamation (Reclamation).  BPA would purchase transmission service from PacifiCorp and deliver the power to a PacifiCorp substation in the Klamath Basin.  PacifiCorp would then deliver the power to the individual meters pursuant to a distribution tariff approved by the Oregon Public Utility Commission (OPUC).  Reclamation would be PacifiCorp’s end-use customer of record and PacifiCorp would bill Reclamation accordingly. It would be up to Reclamation as to how they would recover the costs from the irrigation districts.

This summary highlights the key requirements, and also includes other relevant information KWAPA and its membership should consider in evaluating the decision to transition to federal power.

Notice Requirements: PacifiCorp, Reclamation and KWAPA will need to develop a process to notify PacifiCorp of the irrigators who have decided to participate.  To facilitate an orderly process, PacifiCorp suggest the following:

·       Development of a standardized form that each customer could fill out, sign and return to KWAPA.  The form would authorize PacifiCorp to change the account holder name to Reclamation and acknowledge that the customer understands that this is a permanent selection, unless BPA power was for some reason no longer available.

·       KWAPA would compile these forms and provide a summary list that includes key information such as customer name and account number.

·       PacifiCorp would then do a change-over of all the accounts at one time.

·       KWAPA and PacifiCorp would then establish an annual cycle to add new additional eligible accounts.

Metering: Although the metering obligations do not rest directly with the irrigators, it is worth summarizing some of the key metering conditions.

·       Reclamation and/or KWAPA must provide and install the meters required for federal service.

·       Meters must be installed on the customer side of PacifiCorp’s meter.

·       Reclamation and/or KWAPA need to follow all applicable codes and regulations and obtain local inspections.

·       Metering requirements to be revisited after BPA makes its request for transmission service.

Billing: Irrigators that elect to transition to federal power will no longer be PacifiCorp customers for the irrigation load. 

·       Reclamation will be PacifiCorp’s customer for all participating accounts.

·       PacifiCorp will bill Reclamation under a new federal power tariff schedule for the power distribution service.  The charges will be the same as other Oregon irrigators for distribution service and subject to change in general rate cases, etc.

·       Reclamation or KWAPA will bill the individual irrigators according to their own processes. How this is done will be important so that neither organization triggers laws that define a public utility.

Solar Programs: Irrigators that transition to federal power will not be eligible for the Oregon Solar Incentive Program or net metering options.

·       Participating irrigators may, at their own cost, reconfigure their solar systems to connect to their residential meters.

·       Issues would need to be addressed on a case-by-case basis to determine feasibility and eligibility.  

Conservation Programs: Legal questions remain about whether Reclamation would be able to participate in Energy Trust of Oregon programs and whether the surcharge would apply.  Energy Trust of Oregon programs are designed to conserve the use of PacifiCorp energy not BPA energy.

Customer Relationship: For irrigators transitioning to federal power, several customer service relationships will change.

·       Irrigators will not have access to account information.

·       Reclamation could authorize KWAPA to have access to customer information, thus permitting KWAPA to interface with PacifiCorp.

·       If service or maintenance is necessary, service requests will need to come from Reclamation.

·       If Reclamation fails to pay a bill for distribution service, then PacifiCorp could initiate a temporary disconnect until the bill is paid. This process could be invisible to irrigators until disconnect occurred.

·       Irrigators would remain PacifiCorp customers on residential meters and would continue to have full access to information and service for those meters.

New Tariff: PacifiCorp will seek approval from the Public Utility Commission for the tariff that would govern the federal power distribution service.

·       OPUC will determine whether the rates to deliver federal power are fair, just and reasonable and do not shift costs to other PacifiCorp customers.

·       OPUC may approve the tariff, disapprove it, or approve with certain conditions.  Process could take up to 10 months.

·       OPUC staff has suggested that the OPUC could impose a transition charge on loads switching to federal power to recover fixed costs that were previously incurred to serve those loads.

Customer Charges: In addition to the charges for distribution service that Reclamation will pay, there are other charges that will apply to service under the federal power schedule.

·       Franchise fees charged as a percentage tax on each bill for service within certain cities.

·       Low-income surcharge (PacifiCorp Schedule 91).

·       Klamath dam removal surcharges (PacifiCorp Schedule 199).

·       Distribution Safety Surcharge (PacifiCorp Schedule 94).  Surcharge will end around November 2015.

Responses to specific KWAPA questions:

1.     What is the cost for an irrigator to leave PAC energy?

Answer: PacifiCorp does not intend to propose an exit fee for an irrigator to leave PAC energy.  However, the OPUC and other customers will be concerned about shifting costs to other Oregon customers as a result of irrigators moving to federal power.  As discussed above, the OPUC may impose a transition charge on irrigator loads switching to federal power.  This transition charge could be as high as 6-8 cents/kwh for 5 years based on a filing that is currently pending in front of the Oregon Commission.

2.     If they decide to return to PAC energy later, what is the cost? 

Answer: Irrigators are only able to return to PacifiCorp if Reclamation is no longer able to obtain federal power.  If irrigators return, they would not automatically return as PacifiCorp’s cost of service customers, but PacifiCorp would work cooperatively to provide generation services in a cost-neutral manner to PacifiCorp’s other customers.

3.     How will those locations with net meter solar be handled? 

Answer: See Nos. (6) and (7) above.

4.     What is PAC forecast for cost of energy in light of President Obama’s recent executive order on carbon?

Answer: PacifiCorp does not have an estimate for the cost of energy in light of the recent executive order.  

5.     How will complaints of outages be handled?  Can a power user in the federal program call PAC? 

Answer: See No. (8) above.  Further, if an outage occurs, anybody could report the outage.  However, if service or maintenance is necessary, services requests, questions on the account and general information sharing on the account could only come from Reclamation, as the account holder.

6.   Is there likely to be a system improvement cost to facilitate PAC wheeling the Federal power to the place of use?

BPA will need to make a transmission service request to PacifiCorp Transmission under PacifiCorp’s Open Access Transmission Tariff. PacifiCorp would then do a system impact study to determine any additional system improvements and the potential costs.  It is expected that some level of additional metering on the transmission system may be necessary.   

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