SRP recognizes the thoroughness in detailing the methodology for Calculating the Deficiency Charge and appreciates the WPPs efforts to provide detailed guidelines. However, to enhance clarity for all participants, SRP suggests the inclusion of examples within this section. The addition of examples may assist participants in better understanding and applying these complex calculations.

Section 3.2 states “If there is a Monthly Deficiency in the Winter Season with a higher MW value than the highest MW value of any Monthly Deficiency in the Summer Season, the Monthly Deficiency with the highest MW value in the Summer Season shall be assessed an additional Deficiency Charge calculated per Formula 2.”

The underlined word needs to be Winter since this is calculating the incremental deficiency chages for the Winter season. This is inconsistent with the Tariff language.

City Light has no comments on this section.  

There is a paragraph of information related to Formula 2 that appears after Formula 3. If possible, it may be best to put this information preceding Formula 2 as is the case with the descriptions of Formula 1, and 3-4.

1.  BPA suggests for consideration naming the formulas appropriately as "formula 1, 2, 3, and 4" are not descriptive or helpful in conversations.

2.  BPA believes we should look closer at the formulas as they pose concerns.  We believe the objective of the CONE penalty is to send a very specific signal to participants to acquire the needed capacity to meet the FS Requirement and just accepting the penalty is not a financial alternative. We are concerned that it is sending a different punitive message, which could cause participants to not want to participant in the program. Base assumption is that capacity is available (physical resource and or transmission), in todays world that may not be an appropriate assumption between given huge potential load groth, constrainted transmission systems (and interconnections) and resource aquisition, it is possible for loads to come on-line faster than infrustructure can support. Current BPM methodology doesn’t support this issue or acknowledge it. Causing Cone penalties to be excessively punative: Max month penalties (1&3) include Annual CONE charges based on full year costs, additional months of deficit include layered additive changes for every MW of deficit, even if already paid for under the max month annual Charge.  This causes a layering effect for a deficit spanning multiple months in a season. Need to evaluate these possibilities and make potential adjustment to maintain the stiff penalty, but not make them excessively punitive.

Section 3.2 Calculating Deficiency Charge

BOX Formula 3 refers to a Winter Season Annual CONE factor in accordance with Section 3.4 which does not seem to exist.

The layering of costs could grow to a point of seeming excessive, depending on the value of the CONE that is used. It would be helpful to have examples which demonstrate the magnitude of the potential penalty a Participant might have assigned for one or two consecutive deficiency seasons.

Although the tariff is explicit that the CONE be a based on a new natural gas generator, there is still a significant range of costs that could be included, or that could vary widely. Depending on cost assumptions adopted, the penalty could significantly change and Participants should understand the range of a potential penalty.