B O N N E V I L L E P O W E R A D M I N I S T R A T I O N

Retained Provisional CHWM Amountsand

CDQ Adjustments

March 14, 2014

B O N N E V I L L E P O W E R A D M I N I S T R A T I O N

Agenda

Inputs to Retained Provisional CHWM Calculations− Calculation for customers with Path 1 Provisional Load amounts− Calculation for customers with Path 2 Provisional Load amounts

• FY 2013 load and weather data• FY 2011-2013 credited conservation amounts

RHWM, TOCA, and System Shaped Load Adjustments

Contract Demand Quantities (CDQs) Adjustments

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What are Provisional Loads?

In 2011, BPA calculated CHWMs for all customer utilities with a Regional Dialogue contract. The CHWMs determine customers’ eligibility to purchase power at BPA’s low-cost Tier 1 rates.− Generally, the CHWMs are based on 2010 loads (less non-Federal

resources) with adjustments for abnormal weather and conservation achievements from FY 2007-2010. The resulting load amounts were also adjusted upward for the forecast Tier 1 system capability.

− The methodology for calculating the CHWMs is described in BPA’s Tiered Rate Methodology (TRM).

For 41 customers, the CHWM also includes a Provisional Load amount. These amounts become a permanent part of the customer’s CHWM if the load returned by the end of FY 2013.

Draft calculations of the Retained Provisional Load amounts were posted on the BPA website on Friday, March 7, 2014.

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Path 1 Retained Provisional Load Determination

Path 1 Provisional Load amounts were for customers with specific consumer load reductions.

To calculate the Path 1 Retained Provisional Load amount, BPA compared the specific load’s highest 12-month consecutive period in FY 2011-2013 to FY 2010.− These loads were not adjusted for weather or conservation.

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Path 2 Retained Provisional Load Determination

Path 2 Provisional Load amounts were for customers with general system load reductions.

To calculate retained provisional load, BPA compared the FY 2013 load to FY 2010 load.− These loads were adjusted for weather and conservation achievements.

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Path 2: FY 2013 Load and Weather Data

Weather normalization general steps:

1. Gather and review historical daily loads and average temperature.2. Gather necessary monthly and annual irrigation data from customers.3. Deliver data for customer review.4. Model the load temperature relationship for each customer separately.5. Calculate adjusted values.

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Path 2: Credited Conservation Amounts

Credited conservation from FY 2011-2013 is included in the calculation of the customer’s “Adjusted FY 2013 Load.”− These amounts were determined in accordance with the TRM, section 4.1.4

and Attachment D.

The Adjusted FY 2013 Load also includes credited conservation amounts from FY 2007-2010, as determined in the CHWM Process.

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RHWM, TOCA, and SSL Adjustments

Customers that do not retain all of their Provisional CHWM Amount will have an adjustment to their FY 2014 - FY 2015 RHWM based on the final CHWM.

The change in the RHWM may change the customer’s Tier 1 Cost Allocator (TOCA) and System Shaped Load (SSL).

These changes are effective retroactively to October 1, 2013.

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Contract Demand Quantities (CDQs)

CDQs are:− ‘Grandfathered’ kW amounts that reduce PF Demand Billing Determinants;− Monthly amounts, ‘fixed’ for the term of the Regional Dialogue contract; and− In all customers’ Regional Dialogue contracts, but only used in billing for Load

Following customers.

CDQs mitigate demand charge increases from prior rates to the TRM. They were targeted to bill Demand on 9 percent of historical Customer System Peak (CSP).

CDQs were developed from historical load factors applied to actual FY2010 loads.

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CDQ Adjustments

Provisional CHWM Amounts were not used in the original CDQ calculations, but the CDQs are adjusted for Retained Provisional CHWM amounts (Section 4.1.9 of the TRM).

The Retained Provisional CDQ adjustment is calculated as:

Retained Provisional CHWM amounts can only increase CDQs.

These changes are effective retroactively to October 1, 2011.

CHWM resulting from Retained Provisional AmountX Original CDQ = Adjusted CDQ

Original CHWM less Provisional CHWM Amount

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Next Steps

BPA is accepting comments on these calculations through March 24, 2014.− Comments can be submitted on BPA’s webpage: www.bpa.gov/comments

After considering any comments, BPA will republish the calculations.

Customers have an opportunity to request dispute resolution with a third party neutral on qualifying issues (see TRM section 13.10).− In accordance with the TRM, within three days of this meeting customers must

submit to BPA a written statement of any potential dispute resolution issues.− Any such statements must be received by Wednesday, March 19, 2014 and

may be submitted to www.bpa.gov/comments, alkaseweter@bpa.gov, and your Power Account Executive.

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