Challenging, changing hydropower market addressed in BPA Strategic Plan

In the face of what it calls “challenging industry dynamics and other risks that could otherwise hinder its commercial performance,” the Bonneville Power Administration has released the BPA 2018-2023 Strategic Plan to help it adjust to the changing hydropower market.

BPA is a nonprofit federal power marketing administration based in the U.S. Pacific Northwest. Although BPA is part of the U.S. Department of Energy, it is self-funding and covers its costs by selling its products and services. BPA markets wholesale electrical power from 31 federal hydroelectric projects in the Northwest, one nonfederal nuclear plant and several small nonfederal power plants.

The 1,242-MW Bonneville hydropower plant is located on the Columbia River between the states of Oregon and Washington on the U.S. Pacific Northwest coastline.

In the plan, released on Jan. 30, BPA said, “Our power customers have expressed significant concerns that BPA’s recent pattern of rising costs and rates is unsustainable. They have noted that the resurgence of competition in power markets will provide them with alternatives when their long-term wholesale power contracts with BPA expire in 2028. For these reasons, one of BPA’s principal strategic goals is to provide competitive power products and services.”

To its transmission customers, BPA said, “Our Transmission customers, on the other hand, have expressed a different concern when it comes to BPA’s commercial performance – the complexity of accessing transmission service. BPA is responding with a strategic goal to meet their needs more efficiently and responsively. We will provide more clarity on how to access additional transmission service by standardizing and streamlining our products, services and processes. We will also use a more scalable, flexible, economical and operationally efficient approach to meet future transmission service requests.”

The BPA 2018-2023 Strategic Plan is a reference point for their actions during the next five years.

“This plan will serve as the reference point for everything we at BPA do over the next five years,” said BPA Administrator and Chief Executive Officer Elliot Mainzer. “It all comes down to our commercial success. With that, we can deliver on all of our public responsibilities – from low rates to environmental stewardship – which are so vital to the people of the Northwest.”

BPA has identified four strategic goals that will address industry dynamics and other risks, while also leveraging opportunities presented by evolving markets and technology developments.

  • Strengthen financial health: BPA is taking aggressive actions to manage costs, which will help the agency offer competitive rates; and build financial resiliency to ensure it can withstand market volatility or other disruptive events. 
  • Modernize asset and system operations: As the steward of valuable federal assets, BPA is adopting an asset-management approach to extract the highest economic value, while also preparing to operate these assets in evolving markets. This includes taking advantage of new opportunities to maximize revenues and potentially decrease the need for transmission expansion. 
  • Provide competitive power products and services: In addition to managing costs and leveraging market opportunities, BPA will invest wisely in energy efficiency and fish and wildlife, and support the Columbia River Treaty modernization, which could support the development of more competitive BPA products and services, among other benefits. 
  • Meet transmission customer needs efficiently and responsively. In response to calls for greater clarity on how to access additional transmission service, BPA will standardize and streamline its transmission products, services and processes. The agency will also develop a more flexible, scalable, economical and operationally efficient approach to meeting customers’ needs, consistent with the commitment BPA made when it decided in 2017 not to build the estimated $1.2 billion I-5 Corridor Reinforcement Project.

In 2016, reported the U.S. Army Corps of Engineers awarded a contract worth US$2.593 million to Northbank Civil and Marine Inc. to construct a lamprey passage system at the Bonneville hydropower plant.

Per the contract, Northbank fabricated and installed a new lamprey passage system, as well as modified the facility’s existing system.

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