Northwest Passage: BPA's Changing Role

The treacherous journey toward a more efficient and transparent Northwest power market may be nearing its conclusion.

Steve Wright stands at the helm of an agency with a seemingly impossible task. As CEO and administrator of the Bonneville Power Administration (BPA), Wright must serve a broad spectrum of interests, from aluminum smelters to sockeye salmon. And no matter what he or anyone does, it's impossible to make them all happy at the same time.

In 2000 and 2001, when power shortages caused brownouts and price spikes on the West Coast, several load-serving utilities and big industrial customers showed up at BPA's door, looking for power. These customers previously had negotiated out of their BPA contracts so they could obtain cheaper supplies on the wholesale market. Now they were seeking shelter under the federal dams of the Columbia River system.

BPA took them back, pursuant to law, tradition, and regulatory edict.¹ But the sudden influx of demand outstripped BPA's generating resources by more than 30 percent. The agency was forced to take drastic measures. It bought down its commitment to some industrial customers, and it contracted for more than 3,000 MW of additional purchased power.

Those contracts were signed in October 2001-virtually the worst possible time to buy power in the Western wholesale market. But BPA's administrator had little choice.

"There's a limited amount that you can do in that situation," Wright says. "You're dealt a set of cards and you can move them around, but you have limited options to change the fundamental setup."