Evaluation of Positions Clause Samples

Evaluation of Positions. Amending the Settlement to allow additional entities to become parties is broadly supported both by parties to the Settlement and by entities that are not parties. No entity expressed opposition. With the issuance of this Record of Decision, all parties are now on notice of BPA’s position as to the legal viability of the Settlement. Through the exhaustive analysis provided in this ROD, BPA hopes parties will see the value that the Settlement provides to the region in general and, more importantly, the way the Settlement satisfies the requirements of the Northwest Power Act, particularly in the manner in which it protects the position of the COUs. As a party to the Settlement, BPA is in favor of allowing additional entities to sign the Settlement. BPA believes that an amendment to allow additional parties to the Settlement is reasonable, within BPA's contracting authority, and does not conflict with any applicable laws. Several parties indicated giving additional entities until approximately October 1, 2011, to execute the Settlement. BPA is concerned that this may not allow for sufficient time to craft the amendment with representatives of the parties, get the amendment to all parties and for parties to act on the amendment. BPA’s concern stems from the fact that there is a very substantial amount of work, including decisions by its COU customers in particular, between now and October 1, 2011 in order to implement service under the new Regional Dialogue contracts, implement the Settlement, and implement the new BPA power rates that are effective October 1. A number of COU utilities are also considering retail rate changes that may need to be implemented between now and the end of the calendar year. BPA believes parties should be given ample time to consider and approve the amendment given that all current parties to the Settlement must agree to such amendment. While the specifics of the amendment need to be negotiated among current parties, BPA believes giving current parties until the end of November to sign the amendment and giving entities not currently parties until December 31, 2011 to sign the amended Settlement may be appropriate. BPA believes it is highly unlikely a court will issue any opinion between now and the end of the calendar year that would provide entities that are not currently parties to the Settlement new information on the pros and cons of signing the Settlement. Obviously, the possibility of court action prior to any new signing dead...

Evaluation of Positions. The proposed Settlement was developed in response to the particular factual, legal, and equitable issues related to the validity and calculation of Avista’s ▇▇▇▇▇▇ balance. As noted previously, Avista has certain legal claims related to the merits of the underlying ▇▇▇▇▇▇ balance Avista accrued under its 1981 RPSA. Avista also challenges BPA’s determination of the interest that is applicable to the outstanding balance. In its assessment of legal risk, BPA believes there is legal risk regarding its claim for interest on Avista’s ▇▇▇▇▇▇ balance beyond the early 1990s. As noted previously, BPA is not blind to the equities that led to Avista’s current ▇▇▇▇▇▇ balance, which concern both BPA’s revision of the 1981 ASCM (which raised Avista’s ▇▇▇▇▇▇ from $6.8 million to over $39 million in less than three years) and the application of interest to the principal amount. Taken together, BPA believes that the proposed Settlement properly responds to these particular facts in a reasonable and sound business manner. In its comments, ▇▇▇▇▇▇ argues that the disposition of the ▇▇▇▇▇▇ dispute between BPA and Avista is likely to have implications for other “▇▇▇▇▇▇ account balance” issues with potentially even larger impacts on BPA’s rates. (Inland, ADS090001, at 1.) Inland, therefore, recommends that BPA settle the dispute with Avista “via the court system (Ninth Circuit Court).” (Id.) NRU raises a similar concern in its comments. (NRU, ADS090003, at 2.) NRU notes that IPC has a ▇▇▇▇▇▇ balance that is much larger than Avista’s. (Id.) ▇▇▇ explains that it is very concerned that the settlement of this issue along the lines proposed here for Avista could set a precedent for a settlement with IPC. (Id.) BPA understands the concerns raised by ▇▇▇▇▇▇ and NRU. IPC, the only other utility with an outstanding ▇▇▇▇▇▇ balance, has a disputed ▇▇▇▇▇▇ balance that has many similarities to Avista’s dispute. IPC received a relatively small amount of REP benefits under the REP in relation to the ▇▇▇▇▇▇ balance that it ultimately accumulated. IPC’s ▇▇▇▇▇▇ balance also grew substantially after BPA changed the ASC Methodology in 1984, from $1.5 million at the end of 1984 to $32.3 million at the end of 1987. Like Avista, IPC executed a Suspension Agreement. Finally, IPC has disputed the validity and the calculation of its ▇▇▇▇▇▇ balance. BPA appreciates the parties’ concerns that BPA may be setting a precedent, given the similarities between Avista and IPC; however, BPA considers the legal risk...

Evaluation of Positions. APAC contends that Staff’s analysis is “fundamentally flawed” because it declines to apply subjective probabilities to each of the scenarios tested (as well as those combinations untested). APAC Br., REP-12-B-AP-01, at 14.

Evaluation of Positions. The evaluation of positions will be conducted as follows: Step three: The will conduct the evaluation of the position and communicate its recommendations to the Executive Committee Step four: If the recommendation of the is approved by the Executive Committee, the decision to implement it as is will be communicated to the manager, the employee, the union representative, and the regional Human Resources Advisor. If the recommendation of the is not supported by the Executive Committee, the decision to implement a different job class will also be communicated to the manager, the employee, the union representative and to the regional Human Resources Advisor.

Evaluation of Positions. Throughout this case, Alcoa has maintained that it has been excluded from the negotiations on the Settlement. For example, Alcoa argues that the DSIs were “precluded from participating in the COU and IOU negotiations that gave rise to the proposed Settlement.” Alcoa Br., REP-12- B-AL-02, at 4. Alcoa made similar representations in its direct case and at oral argument. ▇▇▇▇▇, REP-12-E-AL-01, at 6; Till, Oral Tr. at 70.

Evaluation of Positions. Before addressing the issues raised in parties’ comments, it is helpful to review BPA’s broad authority to settle contract claims.

Evaluation of Positions. PacifiCorp notes that the proposed ▇▇▇▇▇▇ Account Settlement is a compromise by the parties to resolve a contractual dispute arising out of the 1981 RPSA. (PacifiCorp, ADS090009, at 2.) PacifiCorp and PGE note that the disputes that the parties propose to resolve arise out of a term in the1981 RPSA, which is neither required by nor part of the REP statutory scheme set out in the Northwest Power Act. (Id.; PGE, ADS090008, at 1.) PacifiCorp states that BPA is authorized to settle such issues, and to enter into settlement agreements regarding such issues, by section 9(a) of the Northwest Power Act and section 2(f) of the Bonneville Project Act. (PacifiCorp, ADS090009, at 2.) PacifiCorp states that by fully and finally resolving disputed issues with Avista, BPA is able to avoid the substantial cost and uncertainty of litigation; thus, BPA’s decision to enter into the proposed ▇▇▇▇▇▇ Account Settlement is consistent with its charge to act in a businesslike manner. (Id.) Avista notes that on September 4, 2008, BPA issued its “Short-Term Bridge Residential Purchase and Sale Agreement for the Period Fiscal Years 2009-2011 and Regional Dialogue Long-Term Residential Purchase and Sale Agreement for the Period Fiscal Years 2012-2028: Administrator’s Record of Decision” (“RPSA ROD”). (Avista, ▇▇▇▇▇▇▇▇▇, at 5.) Pursuant to the RPSA ROD, BPA subsequently offered Avista a short-term bridge RPSA (“Bridge RPSA”) and a Regional Dialogue long-term RPSA (“Long-Term RPSA”) for execution to implement the REP. (Id.) Avista executed both the Bridge RPSA and the Long-Term RPSA. (Id.) In executing both the Bridge RPSA and the Long-Term RPSA, Avista expressly reserved its rights to any and all arguments or claims Avista has made or may make, or any rights or obligations it has or may have, regarding, among other things, “the calculation, implementation, or settlement of the Residential Exchange Program benefits for any period of time,” including any and all of Avista’s arguments regarding the disputed ▇▇▇▇▇▇ issues. (Id.) On December 1, 2008, Avista filed a petition for review with the United States Court of Appeals for the Ninth Circuit challenging the RPSA ROD, the Bridge RPSA, and the Long-Term RPSA (“RPSA Appeal”).9 (Avista, ▇▇▇▇▇▇▇▇▇, at 5.) In filing the RPSA Appeal, Avista intended to challenge, among other things, the validity and calculation of the ▇▇▇▇▇▇ amount asserted by BPA and the legality of the Balancing Account provisions (i.e., the ▇▇▇▇▇▇ provisions) in the Bridge ...

Evaluation of Positions. In its comments, Avista notes that its long-standing ▇▇▇▇▇▇ dispute arises from a provision in a bilateral contract between BPA and The Washington Water Power Company (“WWP”) (now Avista). (Avista, ▇▇▇▇▇▇▇▇▇, at 1-2.) Specifically, WWP’s 1981 RPSA with BPA included a provision that allowed WWP to deem its ASC equal to the PF rate. (Id.) In the event WWP made such election, BPA debited to a separate account any net exchange payment to BPA, and credited to that separate account any net exchange payment to the utility, that would have been required if the utility had not made such election. (Id.) Any debit balance that existed at the time the 1981 RPSA was terminated would not be a cash obligation. (Id.) This provision of the 1981 RPSA is commonly referred to as the ▇▇▇▇▇▇ provision. (Id.) Avista notes that the ▇▇▇▇▇▇ provision is clearly not a requirement of the Northwest Power Act and, consequently, has no statutory link to the REP; rather, the ▇▇▇▇▇▇ provision is a purely contractual term created by BPA that was included as part of the 1981 RPSA. (Avista, ▇▇▇▇▇▇▇▇▇, at 2.) Avista states the parties intended the ▇▇▇▇▇▇ provision to provide a mechanism to account for short-term fluctuations that may cause WWP’s ASC to temporarily fall below the PF rate. (Id.) Although the ▇▇▇▇▇▇ provision contemplated that ▇▇▇▇▇▇ amounts would be carried forward to subsequent exchange agreements, the parties expected any such amounts to be small and for the deeming utility to quickly pay off such amounts from future positive REP benefits. (Id.) At the time the parties executed the 1981 RPSA, the parties did not expect, or intend, the ▇▇▇▇▇▇ provision to cause WWP (and later Avista) to accrue substantial ▇▇▇▇▇▇ amounts that would effectively wipe Avista out of the REP and require future generations of Avista’s customers to forego benefits. (Id.) Avista states that at the time that WWP entered into the 1981 RPSA, BPA used the 1981 ASCM to calculate the REP benefits that utilities would receive. (Avista, ▇▇▇▇▇▇▇▇▇, at 2.) In 1984, over WWP’s and other IOUs’ objections, BPA adopted a new 1984 ASCM, which eliminated some of the legitimate costs of WWP’s, and other utilities’ resources—costs commonly charged to wholesale and retail customers. (Id.) Two of those costs—return on equity and income taxes—pertained solely to IOUs. (Id.) The 1984 ASCM was challenged. (Id.) Avista claims the Ninth Circuit found that BPA’s justifications had no logical support: Petitions correctly observe...

Evaluation of Positions. APAC argues that due to the “inherent uncertainty” embedded in long-term forecasts, “the conclusion of BPA Staff as to the reasonableness of the [S]ettlement is also defective because Staff’s analysis used projected costs over a 17-year period; all parties agreed that projections over such a period have inherent uncertainty.” APAC Br., REP-12-B-AP-01, at 15. APAC refers in the abstract to WPAG’s testimony, where WPAG states “[f]orecasts of this nature are not capable of providing reliable predictions of the precise future outcomes, such as the amount of REP cost protection that preference customers will or will not receive from the statutory provisions over the next 17 years.” Saleba et al., REP-12-E-WG-01, at 19. BPA disagrees that uncertainty in future projections means that BPA cannot rely on such projections to determine whether the Settlement complies with the Northwest Power Act. There is uncertainly in forecasting the future; forecasts rarely are “precise.” Yet, BPA continues to set rates based upon projections of future loads, resources, costs, and revenues, all of which vary significantly from year to year and forecast to forecast. ▇▇▇▇▇▇▇▇ et al., REP-12-E-BPA-13, at 7. In fact, this approach is statutorily mandated by the Northwest Power Act, and as such, ratesetting on a forecast basis is inherently unavoidable. JP02 Br., REP-12-B-JP02-01, at 11-12. Arguments against using long-term projections to evaluate the Settlement pose two questions: first, whether the long-term projections produce unreliable and unreasonable results, and second, whether the results of the long-term analysis are the same as those that would be provided through coetaneous rate tests. The parties in this proceeding debate whether the long-term projections produce unreliable and unreasonable results. JP02 notes that the long-term forecasts are both necessary and sufficient: “forecasts extending for longer than 17 years are frequently used to inform important decisions.” JP02 Br., REP-12-B-JP02-01, at 11. JP02 notes that ratesetting on a forecast basis is both “statutorily mandated by the Northwest Power Act” and “inherently unavoidable” and that the proper question from a ratemaking perspective is not speculation as to whether any forecast can be perfectly accurate in hindsight, but rather whether the projection is reasonable and based upon the best available information. Id. at 12. Recognizing inherent hurdles with forecasting, Staff takes great effort in developing a rang...