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BCP remarketing reaches major milestone

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​by Lisa Meiman  


Hoover Dam, pictured at night, produces the power that Western markets through the Boulder Canyon Project.

 

 

 

 

On Dec. 30, Desert Southwest published a notice in the Federal Register requesting applications from potential new power customers interested in receiving an allocation from Boulder Canyon Project’s 5-percent resource pool that will be available Oct. 1, 2017.

The notice also announced the marketing criteria that will be used to select new customers, also known as project contractors in BCP. Applications are due to DSW by March 31.

DSW is allocating about 80 megawatts to new contractors in this effort. “It is anticipated that there will be considerably more demand than what is available,” said DSW Public Utilities Specialist Mike Simonton, who is leading this effort for DSW. “Marketing criteria are needed to appropriately address applications for power and establish allocations deemed best suited to meet the public interest.”

“I believe the marketing criteria demonstrate DSW’s commitment to ensuring BCP power is used as widely as possible for the public benefit,” said DSW Regional Manager Darrick Moe. “The marketing criteria try to balance a multitude of interests and comments and provide an equitable and transparent method for allocating a limited and valuable resource.”

Remarketing complex, unique process

The announcement is a major milestone for an effort that is already four years in the making and has at least another year to go.

BCP’s existing contracts expire Sept. 30, 2017, which prompted Western to kick off a discussion in 2009 with customers on how to allocate power past that date. “Since 2009, Western has put forth efforts to remarket the power resources of the BCP Post-2017,” said Simonton. “Western’s marketing efforts can start 10 years before the existing contracts expire, but Western doesn’t usually need to take that long. However, because of the sensitive, controversial and unique history facing BCP, DSW anticipated a lengthy and complex effort would be needed to market the power post-2017.”

BCP contracts allocate power from Hoover Dam, the highest and third-largest concrete dam in the U.S. and arguably its most iconic. Hoover Dam also produces more power than any other single dam in Western’s service territory. 

Unlike Western’s other hydropower projects, Congress has historically had a special interest in the BCP. In the 1980s Congress provided specific direction and guidance for how Western should market BCP power through September 2017. At the request of the existing contractors, Congress passed the Hoover Power Allocation Act of 2011 on Dec. 20, 2011. Among other things, the legislation set 50-year contract terms and defined power allocations to existing contractors (Schedules A and B) and how Western was to distribute excess energy (Schedule C). T he legislation also set aside 5 percent, or about 103.7 MW, of Hoover’s rated capacity of 2,074 MW to be allocated to new contractors under Schedule D, whose interpretation has been DSW’s major focus since the bill’s passage. “Throughout the first 10 months of 2012, DSW conducted extensive informal outreach regarding the interpretation and implementation of the HPAA with existing contractors, Native American tribes and other interested parties,” said Simonton.

“In June 2012, DSW published its 2012 Conformed Criteria to lay the general groundwork of what resources will be marketed and allocated Schedules A, B, and prescribed portions of D,” said Simonton. Specifically, the 11.51 MW shared by Arizona and Nevada were allocated to Arizona Power Authority and Colorado River Commission of Nevada, respectively, to be further allocated in those states.

“As anticipated, the marketing of Hoover resources post-2017 has thus far presented significant challenges, conflicting positions, political interest and a unique process. DSW has navigated these challenges through widespread outreach with all stakeholders and careful consideration of comments,” said Moe.

Under the marketing criteria, DSW plans to allocate the new resource pool of about 69.17 MW, as well as California’s share, by the end of 2014, as required by the HPAA. “For me, I have really enjoyed learning about Hoover’s intriguing and dramatic history as it really provides a lot of color to our customers’ perspective and how many things came to be the way they are for the project,” said Simonton. “Hoover has always been a significant contributor to the development of the Southwest, American ingenuity and craftsmanship. I take pride in playing a small role in the lifespan of this remarkable project.”

​What are the marketing criteria?

Reserve first consideration to eligible Native American tribes for up to 25 percent of their peak load served by federal power.

Allocate the remainder to nonprofit applicants, such as rural electric cooperatives, municipalities, irrigation districts, cities and towns and other eligible applicants pro-rated on actual load recently experienced.

Establish a maximum allocation limit of 3 MW and minimum allocation of 0.1 MW.

Define a “ready, willing and able” standard, which means a potential customer must be able to receive the power allocated.  

Page Last Updated: 7/14/2015 6:56 AM