2007 Wholesale Power Rate Case Final Proposal : Risk Analysis Study.
BPA's operating environment is filled with numerous uncertainties, and thus the rate-setting process must take into account a wide spectrum of risks. The objective of the Risk Analysis is to identify, model, and analyze the impacts that key risks have on BPA's net revenue (total revenues less total expenses). This is carried out in two distinct steps: a risk analysis step, in which the distributions, or profiles, of operating and non operating risks are defined, and a risk mitigation step, in which different rate tools are tested to assess their ability to recover BPA's costs in the face of this uncertainty. Two statistical models are used in the risk analysis step for this rate proposal, the Risk Analysis Model (RiskMod), and the Non-Operating Risk Model (NORM), while a third model, the ToolKit, is used to test the effectiveness of rate tools options in the risk mitigation step. RiskMod is discussed in Sections 2.1 through 2.4, the NORM is discussed in Section 2.5, and the ToolKit is discussed in Section 3. The models function together so that BPA can develop rates that cover all of its costs and provide a high probability of making its Treasury payments on time and in full during the rate period. By law, BPA's payments to Treasury are the lowest priority for revenue application, meaning that payments to Treasury are the first to be missed if financial reserves are insufficient to pay all bills on time. For this reason, BPA measures its potential for recovering costs in terms of probability of being able to make Treasury payments on time (also known as Treasury Payment Probability or TPP).
- Research Organization:
- Bonneville Power Administration (BPA), Portland, OR (United States)
- Sponsoring Organization:
- USDOE
- DOE Contract Number:
- WP-07-FS-BPA-04
- OSTI ID:
- 899132
- Report Number(s):
- DOE/BP-3731; TRN: US200713%%183
- Country of Publication:
- United States
- Language:
- English
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2007 Wholesale Power Rate Case Final Proposal : Risk Analysis Study Documentation.
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