The Bonneville Power Administration’s proposed changes to its grid access process have prompted questions about how new readiness criteria will affect established industry practices and financing of new projects.
In February, BPA paused certain transmission planning processes to consider changes in light of significant growth of transmission service requests. The federal power agency’s 2025 transmission cluster study includes more than 65 GW of requests, compared with 5.9 GW in 2021. The requests exceed the total regional load predicted for the Pacific Northwest in 2034, according to the agency. (See BPA Halts Some Tx Planning Processes Amid Service Requests and Industry Sees Challenges as BPA Considers ‘Radical’ Updates to Tx Planning.)
On July 9, BPA outlined its proposed plan to tackle the queue during a workshop. The agency has developed a two-part approach: a transitional phase to get off the pause and a longer-term “future state” that will include more substantial reforms to BPA’s existing transmission processes. (See BPA Outlines Proposed Transmission Planning Reforms.)
“In general, our current model will not work to effectively evaluate and respond to the massive amount of requests and megawatts in the BPA transmission service queue,” BPA spokesperson Doug Johnson told RTO Insider. “The framework of our proposal revolves around instituting more rigorous requirements for transmission service requests. The goal is to process the queue as quickly as we can to advance our efforts to identify, plan and build the projects our customers need to do business as well as to provide interim service to those parties who have clarity about the service they need now.”
As part of this effort, BPA has proposed implementing readiness criteria to weed out speculative requests from commercially ready projects.
“The current practice in the Northwest is for load-serving entities to require developers who are bidding into their request for proposals to provide their own transmission,” Henry Tilghman, a consultant whose clients include Renewable Northwest and the Northwest & Intermountain Power Producers Coalition, told RTO Insider. (Tilghman spoke on his own behalf, not that of his clients.)
The load looking to purchase the output of a project doesn’t provide the transmission — the project provides it, Tilghman explained.
“So that puts the burden on the developer to get into the queue and obtain transmission service,” he noted.
Financing at Risk?
However, under BPA’s new proposal, the agency would require evidence of security or a power purchase agreement or bilateral transaction between a load and resource to establish commercial readiness, Tilghman said.
“You would not be allowed to even request transmission service until you have an agreement in place or provide security,” Tilghman said. “So that completely disrupts the existing model where the bidder into the [request for proposal] has to have transmission service placed in order to be eligible to bid.”
This could affect financing of new projects, Tilghman contended. He said lenders have conducted risk assessments based on criteria that have been in place for decades.
“One of those criteria is having transmission service in place with enough certainty that the project will be able to deliver … its output to its customer,” he added. “Now you’re going to have to do development without that … transmission as you bring your project through the development process.”
The Pacific Northwest Renewable Interconnection & Transmission Customer Advocates (PRITCA), a coalition whose members constitute more than 25% of the current BPA interconnection queue, has expressed similar concerns over BPA’s plans to apply commercial readiness criteria.
“Developers in the queue have generally sunk millions of dollars into developing their projects,” Eric Christensen, an attorney with Beveridge & Diamond PC, which represents PRITCA, told RTO Insider. “The fact that developers are willing to put their own money on the line demonstrates that projects are commercially viable,” Christensen said.
A more appropriate way to deal with the queue would be to study transmission requests in batches based on existing queue order, Christensen argued. He said this approach would allow viable projects to have a path forward to firm transmission while allowing unserious requests to exit on their own accord.
Because the proposals are new, it’s unclear whether lenders have had time to analyze how they could impact investments, Christensen said.
“We talk with financiers regularly, and one of the big variables in financing decisions is a certain path to [long-term firm] transmission,” Christensen added. “If BPA goes forward with the current proposal, we expect to see large financing cost increases or an unwillingness to provide financing, due to the uncertainty these changes create.”
PUD Support
However, in public comments submitted to BPA, public utility districts have supported readiness criteria.
For example, Mason PUD said it “generally supports the addition of readiness criteria, so encumbrances are not provided for requests that will likely not convert to service. This will create an actionable queue [that] only includes mature long-term transmission service requests.”
Grant County PUD said it “supports the development of additional and clarified readiness criteria in order for TSRs to remain in the queue.”
“Unknown and New-Point [Points of Receipt/Points of Delivery] should be deemed speculative and removed from the queue until and unless new procedures are developed to accommodate such PORs/PODs in a realistic and timely manner,” Grant argued.
