The Bonneville Power Administration will begin to issue long-term contract offers under its Provider of Choice (POC) initiative after finalizing the set of policies and decisions that will guide the 20-year contracts.
On Aug. 14, BPA released several documents under its POC policy: POC Contract Record of Decision, Contract High Water Mark Implementation (CHWM) Policy and accompanying Record of Decision, New Resource Rate Block Policy and final POC CHWM contract templates. (See BPA Issues Final Long-term Power Contract, Updates Strategic Plan.)
With the documents finalized, BPA can begin to issue contract offers to customers. The goal is to complete all contract offers by Sept. 30 and for customers to return signed contracts by Dec. 5, allowing the administration to execute them by the end of the year. BPA will focus on implementation and preparation for power deliveries under the new contracts, which are set to begin Oct. 1, 2028, according to a news release.
“While this multiyear effort will not be complete until signed contracts are in hand, the contracts, policies and records of decision released this summer are a significant culmination of work,” said Kim Thompson, BPA vice president for Northwest Requirements Marketing. “Thanks to the significant time, thought, leadership and attention to detail from power, legal and other supporting staff, BPA will have policies and contracts that serve BPA and its customers for decades to come.”
Bonneville delivers power to regional public power customers under contracts executed in 2008. The agreements provided approximately 76% of BPA’s power services’ revenue requirement in 2022, according to a concept paper. (See BPA Close to Issuing New Long-term Power Contract.)
The long-term contracts by statute cannot exceed 20 years, and BPA launched the POC initiative to begin contract discussions with stakeholders before the current agreements expire in 2028, according to the paper.
BPA also must offer contracts to investor-owned utilities under the Pacific Northwest Electric Power Planning and Conservation Act. However, no IOU has requested a new contract. Instead of drafting new contract language for IOUs, BPA developed the NR Block Policy, outlining how the agency would establish contracts and product offerings if IOUs should request them, according to a news release.
Another new feature relates to the CHWM.
CHWM determines how much power a customer can buy at the Priority Firm Tier 1 rate, which represents most of BPA’s power sales. Under the new contracts, BPA will calculate CHWMs once in 2026, and those will be fixed for the duration of the contract to reduce the Tier 1 load service uncertainty for customers. (See BPA Customers to See Increased Power, Transmission Rates.)
“CHWMs were a significant focus during the policy development and remain a focal point of customers,” Sarah Burczak, policy lead for Provider of Choice, said in a statement. “CHWMs set customer-specific limits for buying power at what is typically BPA’s lowest rate. The CHWM Implementation Policy addresses specific eligibility, calculation, process and adjustment details. The policy establishes clear expectations for how CHWMs will be established and provides assurances for how BPA will conduct ongoing related processes.”
