Message-ID: <1349690.1075860338789.JavaMail.evans@thyme> Date: Tue, 10 Apr 2001 09:58:00 -0700 (PDT) From: sawestenberg@bpa.gov To: abuckley@wutc.wa.gov, alan@epud.org, ali.rodol@ci.seattle.wa.us, archive-power-ratecase@bpa.gov, aw_turner@pgn.com, bassl@sce.com, bessex@cowlitzpud.org, bferranti@mbllp.com, bpadiscovery@merkellaw.com, ccopatrny@e-z.net, crow@millernash.com, cub@teleport.com, cwagers@dcpud.org, dan.meek@usa.net, darcy@tonkon.com, darkills@popud.com, dbkinnard@pplmt.com, dfaulk@puget.com, discoveryparalegal@bpa.gov, dldorrell@stoel.com, dmacgregor@morganlewis.com, doney@doneylaw.com, doug_brawley@pngc.com, dparrish@prmllp.com, dws@keywaycorp.com, eauverde@hotmail.com, eboyd@ppcpdx.org, efinklea@energyadvocates.com, elisackf@aol.com, energlaw@aol.com, eric.larson@oremetwahchang.com, erick_johnson@pngc.com, ghuhta@cowlitzpud.org, huse@eesconsulting.com, ias@dvclaw.com, jack.speer@alcoa.com, jacksonc@ida.net, janet.prewitt@state.or.us, jdeason@chbh.com, jeffn@subutil.com, jhartso@enron.com, jlh@mc-power.com, johk@critfc.org, john.yanov@eweb.eugene.or.us, johncameron@dwt.com, jolynnr@mresearch.com, jpw@duncanallen.com, jrb_ora@televar.com, jsaven@pacifier.com, jschlect@avistacorp.com, kevin.clark@ci.seattle.wa.us, kknitte@gcpud.org, kmoxness@cencoast.com, kpom@mail.pacifier.com, kyle@ppcpdx.org, lawyer@teleport.com, lhamilton@avistaenergy.com, lpeters@pacifier.com, lwolv@worldaccessnet.com, lyn_williams@pgn.com, marc.hellman@state.or.us, marss@perkinscoie.com, matts1@atg.wa.gov, mershanlaw@aol.com, mhain@ect.enron.com, michaelearly@earthlink.net, mike.macdougall@powerex.com, mmetzler@ci.tacoma.wa.us, mschaff@worldnet.att.net, mthomas@mtpower.com, paul@kinergyllc.com, pete.forsyth@kaiseral.com, pete@ashland.or.us, peter@richardsonandoleary.com, pfox@bracepatt.com, pljacklin@stoel.com, pmurphy@mbllp.com, pnichols@idahopower.com, pobenchain@idahopower.com, pspi@dynegy.com, pvickery@tpud.org, rachel@rnp.org, ratecase@pngc.com, rates@ppcpdx.org, rbstrong@painehamblen.com, rdb@keywaycorp.com, rfoiani@gcpud.org, rkindley@schwabe.com, rle@givenspursley.com, rpierce@avistaenergy.com, scott.brattebo@pacificorp.com, seligman@teleport.com, simonf@atg.wa.gov, sjohnsto@wutc.wa.gov, skaravit@ci.tacoma.wa.us, stephens@eslerstephens.com, steve@nwenergy.org, tdeboer@painehamblen.com, terrym@millcreeklaw.com, tgrim@chbh.com, townsend@chbh.com, tracigrundon@dwt.com, tstevenson@ci.burbank.ca.us, weavertr@yakima-wa.com, wmgt3@montana.com Subject: WP-02 Data Response Mime-Version: 1.0 Content-Type: text/plain; charset=ANSI_X3.4-1968 Content-Transfer-Encoding: quoted-printable X-From: Sarah Westenberg X-To: abuckley@wutc.wa.gov, alan@epud.org, ali.rodol@ci.seattle.wa.us, archive-power-ratecase@bpa.gov, aw_turner@pgn.com, BASSL@sce.com, bessex@cowlitzpud.org, bferranti@mbllp.com, bpadiscovery@merkellaw.com, ccopatrny@e-z.net, crow@millernash.com, cub@teleport.com, cwagers@dcpud.org, dan.meek@usa.net, darcy@tonkon.com, darkills@popud.com, dbkinnard@pplmt.com, dfaulk@puget.com, discoveryparalegal@bpa.gov, dldorrell@stoel.com, dmacgregor@morganlewis.com, doney@doneylaw.com, doug_brawley@pngc.com, dparrish@prmllp.com, dws@keywaycorp.com, eauverde@hotmail.com, eboyd@ppcpdx.org, efinklea@energyadvocates.com, elisaCKF@aol.com, EnerGlaw@aol.com, Eric.Larson@oremetwahchang.com, erick_johnson@pngc.com, ghuhta@cowlitzpud.org, huse@eesconsulting.com, ias@dvclaw.com, jack.speer@alcoa.com, jacksonc@ida.net, janet.prewitt@state.or.us, jdeason@chbh.com, jeffn@subutil.com, jhartso@enron.com, JLH@mc-power.com, johk@critfc.org, john.yanov@eweb.eugene.or.us, johncameron@dwt.com, jolynnr@mresearch.com, jpw@duncanallen.com, jrb_ora@televar.com, jsaven@pacifier.com, jschlect@avistacorp.com, kevin.clark@ci.seattle.wa.us, kknitte@gcpud.org, kmoxness@cencoast.com, kpom@mail.pacifier.com, kyle@ppcpdx.org, lawyer@teleport.com, Lhamilton@avistaenergy.com, lpeters@pacifier.com, lwolv@worldaccessnet.com, lyn_williams@pgn.com, marc.hellman@state.or.us, marss@perkinscoie.com, matts1@atg.wa.gov, mershanlaw@aol.com, mhain@ect.enron.com, michaelearly@earthlink.net, mike.macdougall@powerex.com, mmetzler@ci.tacoma.wa.us, mschaff@worldnet.att.net, mthomas@mtpower.com, Paul@KinergyLLC.com, pete.forsyth@kaiseral.com, pete@ashland.or.us, peter@richardsonandoleary.com, pfox@bracepatt.com, pljacklin@stoel.com, pmurphy@mbllp.com, pnichols@idahopower.com, pobenchain@idahopower.com, pspi@dynegy.com, pvickery@tpud.org, rachel@rnp.org, ratecase@pngc.com, rates@ppcpdx.org, rbstrong@painehamblen.com, rdb@keywaycorp.com, rfoiani@gcpud.org, rkindley@schwabe.com, rle@givenspursley.com, rpierce@avistaenergy.com, scott.brattebo@pacificorp.com, seligman@teleport.com, simonf@atg.wa.gov, sjohnsto@wutc.wa.gov, skaravit@ci.tacoma.wa.us, stephens@eslerstephens.com, steve@nwenergy.org, tdeboer@painehamblen.com, terrym@millcreeklaw.com, tgrim@chbh.com, townsend@chbh.com, tracigrundon@dwt.com, tstevenson@ci.burbank.ca.us, weavertr@yakima-wa.com, wmgt3@montana.com X-cc: X-bcc: X-Folder: \Mary_Hain_Aug2000_Jul2001\Notes Folders\All documents X-Origin: Hain-M X-FileName: mary-hain.nsf request_number: PG-BPA: 132 firstname: Sarah lastname: Westenberg e-mail: sawestenberg@bpa.gov exhibit_wp-02-e-: BPA-77 page_numbers: 9 request_text: Please provide a short description of each line in the two= =20 tables (lines 4-24) including (a) a comparison of the differences between t= he=20 two tables (either the reasons for any differences in amounts for a line=20 description that is the same in both tables, or the reason for any=20 differences in the logic of the calculations), and (b) a =01&crosswalk=018 = showing=20 how each line in each table corresponds to a variable or equation (or both)= =20 in section f of the GRSPs beginning on p. 15 of Attachment A to this=20 testimony. response_text: The following two tables are excerpted out of WP-02-E-BPA-77, page 9, lines= =20 4-26. Table Illustrating JCG Method Table Illustrating BPA Method Before beginning the comparison of the two tables, it should be pointed out= =20 that the tables calculate gross augmentation costs. We left out the step= =20 that calculates the net augmentation costs. As a result, the =01&Total=018= line=20 dollar amounts ($6M and $6.2M in the JCG table, and $6M and $6M in the BPA= =20 table) should all be reduced by the amount of augmentation resale revenue. = =20 However, since this modification will not affect the comparison requested i= n=20 the data request, let us continue as if the =01&Total=018 line dollar amoun= ts are=20 already net of the augmentation revenue. See the attachment to the data=20 response. Another item that may be confusing is the item labeled =01&Pre-purchase =01= ) 0 day=20 rule=018. This is the incremental cost associated with purchases made betw= een=20 the 120-day cut-off and the 0-day cut-off. Also, a crosswalk of each table showing how it corresponds to a variable or= =20 equation in section f is not possible since section f reflects the BPA=20 method, not the JCG method. Perhaps an overview of BPA=01,s perspective on= the=20 difference between the JCG method and the BPA method will be helpful. JCG calculated the augmentation costs using two different cost pools, one= =20 cost pool for the Slice product (using the 120 day rule), and a second cost= =20 pool for all other products (using the 0 day rule). The products then=20 collected a portion of the augmentation costs associated with a specific=20 rule. When these two cost pools yield different net augmentation costs=20 (which they usually will unless all of the augmentation is purchased under= =20 the 120-day rule), the JCG method doesn=01,t collect the actual amount of e= ither=20 of those pools from Slice or non-Slice. Rather it collects a proportion of= =20 each of the cost pools. In contrast to the JCG method, the BPA method distributes the costs using t= he=20 120-day rule proportionally between the Slice and non-Slice products, and= =20 then assesses all the incremental cost from using the 0-day rule rather tha= n=20 the 120-day rule to the non-Slice products. In contrast to JCG method, thi= s=20 assures that all the actual incremental net augmentation costs calculated b= y=20 replacing the =01&120-day=018 rule with the =01&0-day=018 rule are recovere= d from=20 purchasers of non-Slice power products. In addition, this also assures tha= t=20 purchasers of the Slice product do not bear any nearer term market prices= =20 fluctuations. Now for a short description of each line in the two tables, and a compariso= n=20 of the differences. The example assumes that we don=01,t actually purchase= all=20 of our augmentation, that some of it is served from BPA=01,s secondary, or = is=20 bought in the spot market. =01&Pre-purchase =01) 120 day rule=018 is the total cost of augmentation pu= rchases=20 made at least 120 days prior to the month of delivery. This amount is $2M = in=20 both tables in both columns. This amount represents the sum of DIURNALACA= =20 for the six-month period. This would have represented DIURNALACA(S) in the= =20 GRSPs proposed by the JCG in their Direct Case. =01&Pre-purchase =01) 0 day rule=018 is the additional cost of pre-purchase= s made less=20 than 120 days prior to the month of delivery. This amount is $1M in both= =20 tables in the non-Slice column. The 0-day rule pre-purchases are not=20 applicable to the Slice product, thus the N/A in the Slice column in both= =20 tables. If =01&Pre-purchase =01) 120 day rule=018 and =01&Pre-purchase =01= ) 0 day rule=018=20 were summed the sum would represent DIURNALACA(NS) in the GRSPs proposed by= =20 the customers. Note that the Pre-purchase =01) 0 day rule appears in a=20 different row in the BPA table since BPA has proposed that these incrementa= l=20 cost enter the calculations at a different point. Short position is the cost of the amount of AAMTA that is not pre-purchased= . =20 This is the amount that is valued at PRICE in the GRSPs. In the JCG, the= =20 short position is different between the Slice and non-Slice columns. This = is=20 because the example has BPA purchasing some additional augmentation ($1M=20 worth) under the 0-day rule, and there is a corresponding reduction in the= =20 value of BPA=01,s short position. The change also reflects that the short= =20 position is valued using different PRICEs for the 120 day rule and the 0 da= y=20 rule. In the BPA example, Short position is $3M for both Slice and non-Sli= ce=20 products, and the difference (-$0.8M) is found in the row =01&Short positio= n 0=20 day rule=018 =01&Buydown=018 is the cost of all buydowns. It is the same in both tables= , for=20 both Slice and non-Slice products. In the examples BPA spent $1M buying do= wn=20 load. =01&Total=018 is the gross cost of augmentation. As stated above, it shoul= d be=20 reduced by the augmentation resale revenue. To continue on, let us assume= =20 that =01&Total=018 has been reduced by augmentation resale revenue, and rep= resents=20 the net augmentation costs. In the JCG example, =01&Total=018 is $6M for = Slice=20 and $6.2M for non-Slice. These would represent NACA(S) and NACA(NS) in the= =20 GRSPs proposed by the JCG in their Direct Case.. In the BPA example, Total= =20 is $6M for both Slice and non-Slice. This represents NACA in the BPA GRSPs= . =01&Percent of CRACable revenue=018 is the same in both tables. The exampl= e shows=20 that the Slice revenue is 30% of the total CRACable revenue, and the=20 non-Slice revenue is 70% of the total CRACable revenue. =01&LB CRAC Costs=018 only appears in the BPA example. It is the NACA dist= ributed=20 between Slice and non-Slice products in proportion to actual revenue. =01&Pre-purchase 0 day rule=018 and =01&Short position 0 day rule=018 are t= he changes in=20 the valuation of pre-purchases ($1M) and Short position (-$0.8M) between th= e=20 120 day rule and the 0 day rule. The net difference of $0.2M is equivalent= =20 to the difference that is seen in =01&Total=018 in the JCG example (the dif= ference=20 between $6M and $6.2M). This difference is also equivalent to NACDIFF in t= he=20 BPA GRSPs. =01&Total LB CRAC Cost(s)=018 is the cost that the Slice and non-Slice grou= ps true=20 up to. In the JCG example, the Slice product trues up to 30% of $6M, or=20 $1.8M while the non-Slice products true up to 70% of $6.2M for a total from= =20 both groups of $6.14M. In BPA=01,s example, the Slice product pays 30% of = $6M=20 or $1.8M (the same as in the JCG example) while the non-Slice products pay= =20 70% of $6M plus the net difference between valuation of net augmentation=20 costs using the 120 day rule and valuation using the 0 day rule. The=20 non-Slice amount is $4.2M plus $0.2M or $4.4M. The following information is from the web server: 1. Logon: IUSR_GRANITE 2. Remote Host: 53.180.74.220 3. Remote IP Address: 53.180.74.220 4. Form URL: =20 http://www.bpa.gov/power/secure/psp/ratecase/discovery/wp_02_response.html 5. Browser Client: Mozilla/4.0 (compatible; MSIE 5.01; Windows NT; BPA 4.= 01=20 SP2; BPA 5.01 SP1)