Record of Decision for the Bonneville Power Administration's Service to Direct Service Industrial Customers for Fiscal Years 2007-2011
Beginning in July 2004, the Bonneville Power Administration (BPA) initiated the Regional Dialogue process as part of its effort, in cooperation with its customers and constituents, to identify and decide issues regarding BPA's power supply role for FY 2007-2011. BPA service to Direct Service Industries (DSIs) has been steadily declining since the pre-1995 period when contracts totaled over 3,000 aMW, to 1995 when contracts were reduced to 2,000 average megawatts (aMW), to 2002 when contracts were reduced to 1,500 aMW (with much less actually delivered in the 2002-2006 period). Over the same period, BPA service to public utilities has grown significantly. Among the issues presented by BPA was whether it should continue the steady ramp-down of service to its DSI customers when existing power supply contracts with those customers expire on Sept. 30, 2006, or whether to eliminate further service. BPA proposed providing up to 500 aMW of service (cumulative) to creditworthy DSIs, at a known and capped cost, where such service would enable continued operation of DSI facilities, thereby maintaining Pacific Northwest jobs. BPA indicated that, in order to eliminate the market and default risks to BPA associated with a traditional ''take-or-pay'' physical power sales contract, and to meet the known and capped cost prerequisite for DSI service, its preferred alternative was to provide service benefits to the DSIs financially, by cashing-out, or monetizing, the value of a power sales contract in lieu of physically delivering power. BPA indicated also that it believed it was unlikely that service to the DSIs under the Industrial Firm Power (IP) rate schedule would provide a rate low enough to support economic operation by DSI customers that use BPA power to smelt aluminum. The aluminum smelters would make up over 95% of BPA's DSI load under a 500 aMW scenario. The proposal to provide 500 aMW of service benefits to the DSIs represented a continuation in the ramping-down of BPA's role as a supplier of power service to the DSIs.
- Research Organization:
- Bonneville Power Administration
- Sponsoring Organization:
- USDOE; USDOE Office of NEPA Policy and Assistance (EH-42)
- OSTI ID:
- 842209
- Report Number(s):
- DOE/EIS-0183; TRN: US200516%%128
- Country of Publication:
- United States
- Language:
- English
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