PGE, BPA sign MOU to obtain more transfer capability for PGE

Portland General Electric (PGE, NYSE:POR) and the Bonneville Power Administration (BPA) have signed a memorandum of understanding (MOU) that could provide PGE with the transfer capability it would previously have gained from the Cascade Crossing transmission project.

PGE originally proposed the Cascade Crossing project as a double-circuit, 500-kV line that would connect Boardman, Ore., with Salem, Ore., and which would provide PGE with approximately 2,600 MW of transfer capability. Under an MOU signed by BPA and PGE in January, the parties agreed to explore modifying the project in a way that would reduce the project’s environmental impact but still provide PGE the same amount of transfer capability.

The most recent MOU, signed May 30 and released publicly June 3, sets out a framework for the parties to explore a capacity ownership option that would enable PGE to obtain ownership of approximately 1,500 MW of transfer capability through a variety of means, including an exchange of assets with BPA and potential non-wires solutions. The option may also be an alternative to the option described in the January MOU, which called for shortening the Cascade Crossing project by more than 100 miles and for PGE to make up for the lost transmission capacity by investing in grid enhancements.

“Although we are in the early stages of exploring the option described in the MOU, this type of collaboration could provide potential ratepayer benefits and could enhance transmission system utilization,” Larry Bekkedahl, senior vice president, BPA transmission services, said in a statement announcing the MOU.

The parties will consider whether the capacity ownership option could further reduce, or at least delay, the potential environmental impacts associated with the Cascade Crossing project while also ensuring optimized use of the regional transmission system, enhanced operational efficiencies, and “a collaborative joint approach to right-time/right-build transmission expansion for purposes of improving reliability, adding transfer capability and/or removing constraints on the regional transmission system”, the parties said in the MOU.

Under the capacity ownership option, PGE could acquire a perpetual ownership interest in transfer capability in exchange for an investment and conveyance to BPA of ownership or rights to use PGE assets, transfer capability, rights to direct the operation of certain PGE generation facilities, or some combination of those items.

The MOU states that, once acquired, PGE would make its newly acquired transfer capability available in a manner consistent with its Open Access Transmission Tariff (OATT), or as otherwise authorized by FERC.

Specifics of the capacity ownership option still have to be worked out.

In addition, the parties will pursue additional studies and analyses of future transmission system expansion opportunities that will increase transfer capability, including transfer capability between Boardman and Oregon’s Willamette Valley, the area originally intended to be served by the Cascade Crossing project.

Pending the outcome of those studies, the parties expect that PGE could obtain and own approximately 1,100 MW of additional transfer capability. When combined with the 1,500 MW anticipated under the capacity ownership option, transfer capacity would equal the 2,600 MW expected from the Cascade Crossing project as originally designed.

After details are agreed to, the parties will complete the appropriate reviews and processes, including environmental reviews, according to the MOU. The proposed agreement would also be made available for public review and comment, and would not be entered into until BPA fulfills its obligations and responsibilities under NEPA and other federal laws.