How Power Marketing Administrations (PMAs) Market Power and Work with Tribes

1. How Power Marketing Administrations (PMAs) Market Power and Work with Tribes

2. Today’s Presenters • Nathan Dexter, Office of Indian Energy Policy and Programs • Mike Simonton, Western Area Power Administration • Chris Lyles, Western Area Power Administration • Mike Radecki, Western Area Power Administration • Robert Shank, Bonneville Power Administration • Hope Ross, Bonneville Power Administration • Ken Johnston, Bonneville Power Administration

3. Power Marketing Administrations • Federal agencies formed under the Department of Energy Organization Act (1977) responsible for marketing hydropower primarily from multi-use water projects operated by the Bureau of Reclamation, the Army Corps of Engineers, and the International Boundary & Water Commission • 4 Distinct PMAs under the Department of Energy • Western Area Power Administration (WAPA) • Bonneville Power Administration (BPA) • Southeastern Power Administration (SEPA) • Southwestern Power Administration (SWPA)

4. Power Marketing Administrations

5. Western Area Power Administration (WAPA) • 15 Western states • Four Customer Service Regions • Market over 10,000 megawatts from 57 powerplants to almost 700 wholesale power customers • 17,000 miles of high voltage transmission line • 260 substations • Funded through at cost power and transmission rates…not taxes

6. Our Vital Mission • Market and deliver reliable, cost-based hydropower • Provide reliable transmission of power for the western part of the U.S.

8. 17,000 mi 15 states

9. The Power Grid

10. How Western Markets Power • Western markets long term power by developing a project specific marketing plan • Marketing plans and associated elements are determined through extensive public processes • Marketing plans typically consist of elements such as: • How and When Western will sell power • Contract terms & conditions • Geographic area where power will be sold • Classes of service • Amount of power offered • Who is eligible to apply for a power allocation • How power is allocated among applicants • Deadlines for power applications and contracts

11. How Western Markets Power • Public Process Consists of: • Proposals published in a Federal Register Notice (FRN) • Information Forums – presentation of information/ideas • Comment Forums – opportunity to submit oral comments • Comment Period Deadline • Consideration of Comments • Decisions published in a FRN • Western seeks to market Federal hydropower in such a manner as to encourage the most widespread use at the lowest possible rates to consumers consistent with sound business principles • Retain flexibility to foster new and existing tribal relationships to the benefit of the tribes • Utilize an extensive transmission system to reliably deliver Federal hydropower

12. Transmission v. Distribution • Transmission is the transport of bulk power over large distances at high voltages • Distribution is the delivery of power at lower voltages into communities

13. Why do Customers want to interconnect? • Get their product to “market” • Cost-based power and maintenance • Very reliable and dependable system • Connection to other power systems • WAPA serves a wide service territory

14. Desert Southwest Customer Service Liaison • Single point of contact and assistance for the DSW Customer base • Avenue for addressing specific questions, concerns, or unresolved Customer issues • Serves the Tribes with experience in both the technical and business aspects of power transmission • Interest and experience in Tribal relationships

15. Tribal Renewable Efforts • San Carlos Tribe • Interest in establishing photo voltaic generation • Evaluation of potential interconnection sites • Market analysis • Provides recommendations on scope, schedule, and cost • Chemehuevi Tribe • Interest in connecting up to 450MW in the Parker area • Feasibility study being completed • Possible power delivery to 161-kV and 230-kV systems

16. Assessing Interest in Tribal Projects • Conducted to Requests for Interest (RFI) • Inter-Tribal Council on Utility Policy (ICOUP) • March 2007, requested support from Western • July 2007, UGP issued RFI to all customers in UGP • Multiple 20 MW/up to 50 MW projects at up to six locations • Provided four expressions of interest to ICOUP for action • Cheyenne River Sioux Tribe • March 2012, requested support from Western • April 2012, issued RFI to all customers in UGP • 99MW Tate Topa Wind Energy Project • Provided 22 expressions of interest to the Tribe for action

17. WAPA working with oiepp and assisting tribes with renewable development • WAPA looks for opportunities that promote renewable development and bring benefits to both Tribes and WAPA. • Identify potential renewable sites adjacent to WAPA transmission lines. • Assist with market assessments to locate potential renewable energy off takers. • Assist with analysis needed to help off taker make economic decisions, i.e. congestion analysis. • Assist tribes in understanding the transmission and interconnection process.

19. Columbia Basin Federal Columbia River Power System Columbia River Basin & BPA Service Area BPA Service Area Mica BPA Transmission Grid Federal Dams: Revelstroke Corps of Engineers Bureau of Reclamation Non-Federal Dams Duncan Canadian Dams Canada Keenleyside U.S.A. Libby Washington Hungry Horse Albeni Falls Chief Joseph • WHAT IS BPA? • Self-funding federal agency within DOE. Sets rates to recover costs. • Markets power at cost from 31 federal dams and 1 nuclear plant – over one-third of electricity used in PNW • Markets transmission services – owns 75% (15,000 miles) of the high-voltage lines in PNW • Protects, mitigates & enhances fish & wildlife in the Columbia River Basin • 300,000 square mile service area – includes WA, OR, ID, and Western MT • Serves 3 tribal utilities • 3,000 employees • Headquarters in Portland, OR • Established in 1937 Wells Grand Coulee Montana Rocky Reach Rock Island Lower Granite Lower Monumental Wanapum Rosa Priest Rapids Dworshak Little Goose Chandler Ice Harbor The Dalles McNary John Day Bonneville Hells Canyon Big Cliff Oxbow Brownlee Idaho Detroit Oregon Foster Green Peter Black Canyon Cougar Dexter Palisades Lookout Point Boise Diversion Hills Creek American Falls Anderson Ranch Swan Falls Minidoka Lost Creek C J Strike Bliss Upper Salmon Falls Green Springs Wyoming Utah California Nevada

20. Tribal Reservations in BPA’s Service Territory

21. BPA Tribal Affairs Program Robert ShankTribal Account Executive 509-625-1345

22. BPA TRIBAL AFFAIRS PROGRAM Established in 1996 to coordinate implementation of BPA Tribal Policy government to government commitments. Seven full time staff. A manager and assistant plus five geographically based account executives. Serve from an agency-wide perspective.

24. Tribal Program Strategic Function Assist BPA fulfill it’s tribal trust responsibility through: education/training; early communication; consultation prior to agency decisions; and fostering collaborative working relationships with the 47 federally recognized tribes in the BPA service territory.

25. Tribal Program Achievements Access to BPA Executives and Sr. Managers Access to Tribal elected leaders and Managers Ability to shape internal and external business relationships Ability to define what program success looks like Opportunity to be involved in historic and precedent setting initiatives

26. Tribal Program Services Liaison Services: The primary point of contact to the PNW tribes for agency issues and opportunities Policy Analysis/Development: Political assessment and providing input to internal teams developing policies with the potential to effect tribal values or interests. Facilitation/Coordination: Diligently address tribal issues and to provide mutually beneficial solutions for BPA and tribal governments. Tribal Education/Training Services: Identify educational and training opportunities designed to increase positive interactions of BPA and tribes. (scholarships, Inter Personnel Agreements etc.) Communication Services: Provide methodologies for better engaging tribes affected by BPA programs and projects. Relationship/Consensus Building: Provide methodologies for developing and maintaining positive working relationships at all levels of BPA personnel working with tribes.

27. BPA Fish & Wildlife Program Bryan MercierManager, Business Operations 503-230-3991

28. BPA Fish and Wildlife Program Largest environmental mitigation program in the U.S., perhaps the world, with more than $100 million annually invested directly into tribal communities. 65 employees, 6 are enrolled tribal members F&W Staff visit tribal communities on a weekly basis. Leadership on a monthly basis.

29. Columbia Basin Fish Accords MOA with regional Tribes for >$1 billion in Fish and Wildlife projects over 10 years. Contractual relationship between partners Long term commitment has facilitated improved professional relationship and built trust between former adversaries. Recognized and supported in Federal Court

30. F&W Tribal Trust BPA Tribal Policy progressive, substantive and inclusive of Tribal point of view. BPA Programs try to accommodate unique tribal circumstances and history. BPA Executives meet regularly with Tribal leadership and regional tribal stakeholders. Government to government relationship well recognized and respected.

31. AI/AN Employer of Choice • BPA active in recruiting tribal employees. • AISES summer internship program. • Tribal employee network active in developing cultural awareness within agency. • Leadership opportunities for tribal employees. • Strong support for cultural events and recognition of strong tribal partnership

32. New Publics Formation Hope RossAccount Executive 509-625-1340

33. BPA Power Sales & Marketing BPA markets wholesale electrical power from 31 federal hydro projects in the Columbia River Basin, one nonfederal nuclear plant and several other small nonfederal power plants The dams are operated by the U.S. Army Corps of Engineers and the Bureau of Reclamation About one-third of the electric power used in the Northwest comes from BPA

34. Bonneville Project Act of 1937 Directs the Administrator to give preference in the sale or marketing of federal power to public and cooperative utilities

35. Purchasing Federal Power from BPA Meet BPA Standards for Service Sign a Regional Dialogue power sales contract

36. Standards for Service Be legally formed in accordance with local, state, tribal or federal laws; Own a distribution system and be ready, willing and able to take power from BPA within a reasonable period of time; Have a general utility responsibility within the service area; Have the financial ability to pay BPA for the federal power purchases; Have adequate utility operations and structure; and Be able to purchase power in wholesale amounts.

37. Regional Dialogue • Public discussion regarding BPA and the region’s energy future • BPA’s role is distributing power from the federal system • Preference customers receive a share of the federal output • As needed, customers acquire power to meet growing demand

38. Long-Term Regional Dialogue Policy • New Publics • 250 aMW at Tier 1 rates over 20 year period • New and Existing Tribal Utilities • 40 aMW Load Growth Exception • Exception ends fiscal year 2021 or when the 250 aMW utilized

39. Tribal Utilities within BPA’s Service Area • Umpqua Indian Utility Cooperative • Owned and operated by the Cow Creek Band of Umpqua Indians • Yakama Power • Owned and operated by the Yakama Nation • Mission Valley Power • Owned by the BIA and operated by the Confederated Salish and Kootenai Tribes

40. Transmission Services Ken JohnstonAccount Executive 360-619-6009

42. http://transmission.bpa.gov/

43. Business with Transmission Services

44. Becoming a Transmission Services Customer

45. Becoming a Transmission Services Customer

46. Becoming a Transmission Services Customer

47. Other Links • Generation Interconnection Queue • http://transmission.bpa.gov/business/generation_interconnection/ • Wind Generation Reports • http://transmission.bpa.gov/Business/Operations/Wind/default.aspx • Environmental Reviews • http://www.efw.bpa.gov/environmental_services/nepadocs.aspx

48. Wind Generation Capacity in the BPA Balancing Authority Area

49. Challenges and Solutions for Integrating Wind Resources • Wind plant interconnection has become the overwhelming motivator for new transmission facilities as well as the primary driver of the transmission planning challenge. • BPA is using several tools to meet this challenge: • managing occasional periods of oversupply during high water events to protect fish and comply with Clean Water Act and Endangered Species Act requirements • offering Conditional Firm Transmission Service to allow greater use of existing transmission • prioritizing requests in the queue for thousands of megawatts of new transmission projects to support wind and other new power sources (NOS process) • setting rates for wind integration services and other BPA services through the BPA rate cases • Moving to within-hour schedule changes to help manage within-hour variations in wind power

50. Looking Ahead • Two fundamental challenges: • Ensuring that there is sufficient transmission capacity to move energy to load; • Providing the necessary integration services to maintain system reliability • Strong movement from conventional to variable energy resources • How do you find a balance between reliability, economic, environmental & other public purpose objectives? • How can transmission and resources be optimized to best meet the needs? • What is the relationship between the physical adequacy of the transmission system & economic adequacy?