rating agency meetings
Download
Skip this Video
Download Presentation
Rating Agency Meetings

Loading in 2 Seconds...

play fullscreen
1 / 15

Rating Agency Meetings - PowerPoint PPT Presentation


  • 120 Views
  • Uploaded on

Rating Agency Meetings. October 16/18, 2001. Confidential – Sensitive Material. Summary of Fiscal Year 2001. The Water Situation. FY 2001 Market Prices. Managed Hydro System Under Crisis Conditions. Plan:

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about ' Rating Agency Meetings' - emmett


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
rating agency meetings

Rating Agency Meetings

October 16/18, 2001

Confidential – Sensitive Material

slide2

Summary of Fiscal Year 2001

Confidential – Sensitive Material

the water situation
The Water Situation

Confidential – Sensitive Material

fy 2001 market prices
FY 2001 Market Prices

Confidential – Sensitive Material

managed hydro system under crisis conditions
Managed Hydro System Under Crisis Conditions

Plan:

  • Develop criteria based on reliability and financial considerations to trigger a different operation of the river

Actual:

  • Triggering of power system emergency resulted in reducing spill by 4,700 MW-mo and saved BPA approximately $780 million.

Confidential – Sensitive Material

fy 2002 06 power rate case
FY 2002-06 Power Rate Case

Plan:

  • Manage power rate increase to acceptable level with increased flexibility for the future.

Actual:

  • February 2001: BPA reached a partial settlement with many of its utility customers based upon their suggestion for flexible rates rather than fixed rates.
  • February-June 2001: BPA was expecting a first year rate increase of 250-300%, but due to an unprecedented load reduction effort by utilities and industries, it was cut to 46%.
  • The Region responded very positively and collectively to reach this goal for the common good of the Region, with little opposition.
  • It is estimated that 25,000 people will still be working who otherwise would have lost their jobs and this effort also saved ratepayers about $4 billion for the current fiscal year.

Confidential – Sensitive Material

fy 2002 06 power rate case1
FY 2002-06 Power Rate Case
  • Load-Based CRAC:. It allows an adjustment in rates every six months, based on costs to buy power to serve the BPA load, which is then corrected after each six-month period for over- or under-collections, based on actual augmentation costs (loads and prices). The adjustment was set at 46% for October-March. The next review will be in February 2002, and at this time the rate level for the second six-month period is expected to change little from the current six-month period.
  • Financial-Based CRAC: This allows a temporary, one-year adjustment in the base rate in addition to the LB CRAC, if PBL’s accumulated net revenues fall below a preset threshold. The FB CRAC did not trigger for FY 2002. The decision for FY 2003 will be based upon BPA’s 3rd Quarter Review next August.
  • The Safety-Net CRAC: It triggers if BPA forecasts a 50 percent or greater probability that it will miss a payment to Treasury or other creditor or if BPA actually misses a payment. The SNCRAC review is ongoing, but it is too early to tell if it will trigger in FY 2002.
  • The Dividend Distribution Clause: The DDC allows BPA to distribute rebates to customers if accumulated net revenues at the end of the prior year exceed a pre-set threshold.

Confidential – Sensitive Material

successful negotiation with treasury and omb
Successful Negotiation with Treasury and OMB
  • In FY 2001, significantly higher 4(h)(10)(c) credits were claimed than in previous years.
  • In FY2001, FCCF credits were claimed for the first time.
  • BPA will be engaging DOE in discussions to clarify the procedures for accessing these credits in the future.

Confidential – Sensitive Material

court decision regarding listed fish
Court Decision Regarding Listed Fish
  • September 10, 2001 – In the Alsea Valley Alliance v. Evans case, the US District Court for the District of Oregon issued an order finding that NMFS exceeded its authority in listing only the wild-salmon portion of the Pacific Coastal Coho salmon as endangered or threatened.
  • The Court found that because NMFS did not include the entire “distinct population segment” which also includes hatchery fish, it acted arbitrarily and capriciously.
  • The court delisted the Pacific Coastal Coho salmon as endangered or threatened.
  • NMFS listings of other fish populations may have to be reconsidered if appeals of the decision are unsuccessful.
  • Other groups have commenced litigation to remove several species of salmon and steelhead located in the Snake and Columbia River basins from the endangered species list.
  • Federal appeal period ends November 9, 2001.

Confidential – Sensitive Material

slide10

Outlook for Fiscal Year 2002

Confidential – Sensitive Material

hydro conditions and uncertainty
Hydro Conditions and Uncertainty
  • Potential scenarios for FY 2002 must consider the fact that the Region is starting from both a significant soil moisture and river flow deficit.
  • BPA is applying a conservative approach, giving heavier weighting to some of the below normal years for modeling purposes
  • Currently projecting about 90 maf runoff at The Dalles (January-July 2002), with a 95% confidence range of 65-120 maf
  • Would take roughly 115% of a normal water year to get the region back to “normal conditions”
  • Bottom line: It’s too early to draw conclusions.

Confidential – Sensitive Material

forward price curve
Forward Price Curve

Confidential – Sensitive Material

system augmentation
System Augmentation

Plan:

  • With about a 3,700 aMW projected shortage in FY 2002, BPA pursued conservation measures, load buy-downs, and up to 5-year power purchases.

Actual:

FY2002-FY2006Price Range

Conservation and Load Buy-Downs 2,400 700 aMW $30-40/MWh

Up to 5-Year Purchases 1,300 aMW $20-35/MWh

Short-Term Market 0 1,400 aMW Market Price

Confidential – Sensitive Material

current agenda for fy 2002
Current Agenda for FY 2002
  • Implement new rate and contract systems
  • Recover hydro system
  • Obtain additional borrowing authority or utilize the Debt Optimization program to fund infrastructure

Confidential – Sensitive Material

bpa is moving forward with a renewed sense of mission
BPA is Moving Forward With aRenewed Sense of Mission
  • BPA is investing in infrastructure for the Region in both the Transmission and Power business lines.
  • BPA will engage the Region in a discussion of BPA’s obligation to serve load beyond FY 2006.
  • BPA will continue to be an active participant in a Northwest and possibly West Coast RTO.
  • BPA will continue to work with states, tribes, environmental interest, and others to reach agreement on a sustainable fish funding agreement.

Confidential – Sensitive Material

ad