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Share-the-Shortage Agreement and Regional Curtailment Planning 



For the last few years, BPA, the region's utilities and states, and the Direct Service 

 Industries (DSIs) have been working on two closely-related projects: a Share-the-Shortage 

 Agreement and a Regional Curtailment Plan. These two efforts are designed to work 

 together, to help ensure that electrical demand or load in the Northwest is met in an orderly 

 and economic manner during a prolonged shortage of electrical power, lasting at least 

 several months. The 1992 Regional Curtailment Plan is a guide for the states, BPA, and 

 the region's utilities to use in managing reductions in loads, which are designed to allow 

 available resources to cover loads. The Regional Curtailment Plan is intended as a guide 

 for the four individual Northwest states (Washington, Oregon, Idaho, and Montana), who 

 are expected to adopt state plans that will govern load reductions and information 

 exchanges. It is the states, not Bonneville, that have the authority and responsibility to call 

 for and implement curtailments. The Share-the-Shortage Agreement is a formal contract 

 between the region's generating utilities, publicly-owned, privately-owned, and BPA which 

 contains notification requirements, prices and some terms of delivery for the electrical 

 energy that is available during a shortage. It is intended to get all generating resources on 

 line as the final step before curtailments. The contract will be filed with the Federal 

 Energy Regulatory Commission (FERC), and BPA and the region's investor-owned utilities 

 will also file rate schedules, or tariffs, that will govern the actual sales of power during a 

 share-the-shortage situation. The maximum price allowed by the contract during a period 

 of actual curtailments is expected to be about 100 mills/kilowatt-hour. 



On three occasions during the 1970s the region's electrical resources were projected 

 to be unable to meet Northwest loads (1974, 1977, and 1979). In these three cases, 

 reactions across the region varied, with some states ordering certain reductions in load (e.g., 

 no outside lighting) and other states allowing the same load to continue in operation. 

 Perceptions of inequity arose, because some of the region's utilities experienced reduced 

 energy use and thus lower revenues while other utilities made no curtailments and lost no 

 revenues. In the wholesale power sales contracts signed in 1981, BPA and the region's 

 utilities agreed to negotiate a share-shortage agreement to cover these situations, and BPA 

 agreed to compensate most of the publicly-owned utilities for "lost retail margins" if state- 

 ordered curtailments occurred. The rationale for these payments is to regionalize the costs 

 of curtailment and to temper the effects of differential levels of curtailment ampng states. 



About three years ago, the region's publicly-owned utilities, through the Public 

 Power Council, raised a concern about dwindling energy supplies and the increased 

 likelihood of a recurrence of the share-shortage situation. Negotiations began on both the 

 Share-the-Shortage Agreement and the Regional Curtailment Plan. The Regional 

 Curtailment Plan was fmished in 1992 and the four states have moved toward individual 

 implementation. The Share-the-Shortage Agreement is near completion, and BPA has 

 prepared a tariff (the "Power Shortage rate", or PS-93) to enable sales of energy during 

 shortage situations. There is substantial consensus, but not unanimity, among the region's 

 utilities about the exact form of the Agreement. We expect the Share-the-Shortage 



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