Please supply any comments related to the proposed changes in BPM 109 - Forward Showing Transition
No response submitted.
Please supply any comments related to the proposed changes in BPM 210 - Binding and Non-Binding Participation in Operations Program
No response submitted.
Please supply any comments related to the proposed changes in the WRAP Tariff
No response submitted.
General Comment
Dear Western Power Pool Board:
The Committee of State Representatives (COSR) appreciates the extensive effort undertaken by WRAP stakeholders and WPP staff through the Resource Adequacy Participants Committee (RAPC) to develop the proposed Deficiency Charge Deferral Resolution. Developing this proposal required compromise among participants to arrive at an acceptable framework that supports the program's progression toward its first binding season. We support the overall goals of addressing the unique challenges associated with the Transition Period and recognize the need to provide participants with additional flexibility during this time, while also preserving the economic incentives necessary to maintain the program's fundamental objectives. Accordingly, we respectfully offer the following observations for the Board's consideration as it evaluates the potential near-term and long-term impacts of the proposal.
The development of this resolution involved months of technical discussion between WPP staff and RAPC members. The framework in its entirety was developed during closed sessions, culminating in an expedited proposal with a two-week, concurrent stakeholder review period prior to Board consideration. COSR recognizes that closed sessions were warranted due to the nature of the discussion, and we commend WPP's willingness to share as much information as possible on the draft policy several months in advance. However, a review period more commensurate with its extensive development timeline and overall importance may have yielded more stakeholder engagement, evaluation, discussion, and refinement. COSR further appreciates WPP staff’s willingness to accept our request for a one-day extension, despite the compressed timeline of two other expedited proposals under consideration.
In reviewing the various components of this proposal, COSR supports the underlying logic and central objective: preserving capital for deficient participants that may be better directed toward near-term capacity investments, while retaining sufficient financial consequences to discourage capacity deficiencies and support program reliability. It is difficult to foresee whether the deferral structure (i.e., payment schedule and percentages) selected by the RAPC will produce the desired outcomes, given the wide array of capacity portfolios, load-serving obligations, and resource adequacy positions across the WRAP. Although the deferral mechanism established by this proposal is limited to the Transition Period and will expire following Winter 2028/2029, some participants may nonetheless begin incorporating the availability of deferrals into their resource procurement and compliance strategies, despite the proposal’s safeguards intended to discourage such behavior. Therefore, COSR supports the close oversight in the use of the mechanism to ensure that it functions as a temporary compliance bridge for participants facing legitimate challenges meeting their Forward Showings. To support this objective, COSR recommends that WPP develop and publish “deferral activity reports” during the Transition Period. These reports should be released following each season, summarizing aggregated deficiency charge deferral activity (total MWs) for all preceding seasons on a subregional basis. These reports would provide regulators and other stakeholders with meaningful insight into the utilization and overall effectiveness of the mechanism, without disclosing the deferrals of individual participants. Where additional detail is needed, individual state commissions could seek participant-specific information concerning their regulated utilities through existing data request processes and appropriate confidentiality safeguards. As the WRAP transitions to binding operations, the information collected through these reports could also inform the development of future policy refinements related to the deficiency charge framework.
COSR further believes the effectiveness of the deferral mechanism will depend heavily on how rigorously the attestation process is implemented and enforced. As participants demonstrate "commercially reasonable efforts," additional clarity regarding how attestations will be evaluated and how the commercially reasonable efforts standard will be consistently applied could enhance stakeholder confidence in the proposal's incentive structure. In addition to verifying all attestations, the implementation of the Deficiency Charge Deferral mechanism has the potential to create significant administrative complexity. WPP will need to introduce protocols for the separate tracking of each deficiency event and its associated resolution pathway on a season-specific basis (i.e., deferred deficiency balances will need to be tracked across multiple years and seasons simultaneously). While these challenges may be manageable, we believe they warrant consideration when evaluating the overall costs and benefits of the proposed framework.
Another potential enhancement involves requiring compliant participants to reinvest allocated deficiency charge revenues toward qualifying capacity, transmission infrastructure, or other resources to help alleviate limited supply constraints within the WRAP footprint. This provision would further strengthen the existing compliance framework by directing the program's deficiency charge revenues toward addressing the underlying capacity shortfalls that gave rise to them. Although practical implementation challenges remain, exploration of this concept could help inform future policy development.
Recognizing the potential increase in WPP’s operating costs related to attestation management and the tracking of deferred charges, the framework introduces the potential for significant delays in WPP's receipt of revenues, while simultaneously reducing the total charges collected. If multiple participants utilize the deferral option, a meaningful portion of charge revenues could remain outstanding for extended periods. While we recognize that the proposal addresses certain aspects of this risk by requiring payment of the full deficiency charge should a participant exit the program prior to resolving the deficiency, collection risk remains. These revenue collection risks would be amplified if multiple participants encounter financial distress, exit the program, or become involved in other disputes before their deferred balances are fully settled.
Finally, COSR highlights that this Deficiency Charge Deferral resolution will not be implemented in isolation. Several WRAP policies have been recently adopted, are currently under development, or remain under consideration, that may interact with this new charge deferral mechanism in ways that are difficult to fully understand today. In particular, the proposed deferral percentages appear to have been developed under assumptions regarding deficiency charge levels that could change materially following implementation of the proposed BPM 110 and its revised Cost of New Entry (CONE) methodology (currently out for public comment). Because the deferral framework is based on percentage reductions rather than fixed dollar amounts, any significant increase or decrease in deficiency charge calculations could substantially alter the financial consequences experienced by participants. For example, a deficiency charge initially expected to be $10 million would result in payments of $1.5 million, $4.0 million, and $7.0 million under the 15%, 40%, and 70% schedules, respectively. If the revised CONE methodology were to produce a $20 million deficiency charge, those same percentages would result in payments of $3.0 million, $8.0 million, and $14.0 million. Consequently, COSR encourages the Board to further explore how other near-term proposals related to the Forward Showing could affect the core elements of the proposal and whether the selected deferral percentages will continue to achieve their intended policy objectives.
As the Board evaluates and considers this proposal, COSR encourages careful review of the deferral mechanism’s potential impacts on participant incentives, administrative complexity and associated costs, and the broader interplay with other related policies. The ongoing evaluation of these factors, combined with the development of post-season deferral reports, will help advance the proposal’s intended objectives. COSR appreciates the substantial effort undertaken by WPP staff and stakeholders in developing this resolution and looks forward to continued engagement as the program progresses toward its first binding season.
Thank you for your consideration of these comments. Additionally, COSR has included Attachment A: Additional Comments from Commissioner Myers, Arizona, which offers supplemental perspectives on this proposal.
Respectfully,
Chris Parker, Chair, Committee of State Representatives, Director, Utah Division of Public Utilities
Brian Rybarik, Vice Chair, Committee of State Representatives, Chair, Washington Utilities and Transportation Commission
Arizona, Nick Myers, Chairman, Arizona Corporation Commission
Nevada, Tammy Cordova, Commissioner, Nevada Public Utilities Commission
California, Darcie Houck, Commissioner, California Public Utilities Commission
New Mexico, Pat O'Connell, Commissioner, New Mexico Public Regulation Commission
Colorado, Eric Blank, Chair, Colorado Public Utilities Commission
Oregon, Letha Tawney, Chair, Oregon Public Utility Commission
Idaho, Dayn Hardie, Commissioner, Idaho Public Utilities Commission
Wyoming, Chris Petrie, Deputy Chairman, Wyoming Public Service Commission
Attachment A: Additional Comments from Commissioner Myers, Arizona
Dear Western Power Pool Board:
I recommend requiring the following metrics to be included in the deferral activity report:
• How many resources were assessed for deficiency charges
• Deficiency rate per MW-day (weighted average capacity resource clearing price)
• Total deficiency charges
I also suggest exploring the feasibility and value of including the following metrics in the deferral activity report:
• Total auction revenues received by transmission ratepayers from congestion revenue
• Total reduction in payments to congestion revenue rights holders
• Net Payments to non-load serving entities
• Total transmission ratepayer losses by percentage of total congestion rent
• Average transmission ratepayer losses by percent of congestion rent
Submitted Responses
2026-EP-03 (Deficiency Charge Deferral)
Please supply any comments related to the proposed changes in BPM 109 - Forward Showing Transition
Please supply any comments related to the proposed changes in BPM 210 - Binding and Non-Binding Participation in Operations Program
Please supply any comments related to the proposed changes in the WRAP Tariff
General Comment
Dear Western Power Pool Board:
The Committee of State Representatives (COSR) appreciates the extensive effort undertaken by WRAP stakeholders and WPP staff through the Resource Adequacy Participants Committee (RAPC) to develop the proposed Deficiency Charge Deferral Resolution. Developing this proposal required compromise among participants to arrive at an acceptable framework that supports the program's progression toward its first binding season. We support the overall goals of addressing the unique challenges associated with the Transition Period and recognize the need to provide participants with additional flexibility during this time, while also preserving the economic incentives necessary to maintain the program's fundamental objectives. Accordingly, we respectfully offer the following observations for the Board's consideration as it evaluates the potential near-term and long-term impacts of the proposal.
The development of this resolution involved months of technical discussion between WPP staff and RAPC members. The framework in its entirety was developed during closed sessions, culminating in an expedited proposal with a two-week, concurrent stakeholder review period prior to Board consideration. COSR recognizes that closed sessions were warranted due to the nature of the discussion, and we commend WPP's willingness to share as much information as possible on the draft policy several months in advance. However, a review period more commensurate with its extensive development timeline and overall importance may have yielded more stakeholder engagement, evaluation, discussion, and refinement. COSR further appreciates WPP staff’s willingness to accept our request for a one-day extension, despite the compressed timeline of two other expedited proposals under consideration.
In reviewing the various components of this proposal, COSR supports the underlying logic and central objective: preserving capital for deficient participants that may be better directed toward near-term capacity investments, while retaining sufficient financial consequences to discourage capacity deficiencies and support program reliability. It is difficult to foresee whether the deferral structure (i.e., payment schedule and percentages) selected by the RAPC will produce the desired outcomes, given the wide array of capacity portfolios, load-serving obligations, and resource adequacy positions across the WRAP. Although the deferral mechanism established by this proposal is limited to the Transition Period and will expire following Winter 2028/2029, some participants may nonetheless begin incorporating the availability of deferrals into their resource procurement and compliance strategies, despite the proposal’s safeguards intended to discourage such behavior. Therefore, COSR supports the close oversight in the use of the mechanism to ensure that it functions as a temporary compliance bridge for participants facing legitimate challenges meeting their Forward Showings. To support this objective, COSR recommends that WPP develop and publish “deferral activity reports” during the Transition Period. These reports should be released following each season, summarizing aggregated deficiency charge deferral activity (total MWs) for all preceding seasons on a subregional basis. These reports would provide regulators and other stakeholders with meaningful insight into the utilization and overall effectiveness of the mechanism, without disclosing the deferrals of individual participants. Where additional detail is needed, individual state commissions could seek participant-specific information concerning their regulated utilities through existing data request processes and appropriate confidentiality safeguards. As the WRAP transitions to binding operations, the information collected through these reports could also inform the development of future policy refinements related to the deficiency charge framework.
COSR further believes the effectiveness of the deferral mechanism will depend heavily on how rigorously the attestation process is implemented and enforced. As participants demonstrate "commercially reasonable efforts," additional clarity regarding how attestations will be evaluated and how the commercially reasonable efforts standard will be consistently applied could enhance stakeholder confidence in the proposal's incentive structure. In addition to verifying all attestations, the implementation of the Deficiency Charge Deferral mechanism has the potential to create significant administrative complexity. WPP will need to introduce protocols for the separate tracking of each deficiency event and its associated resolution pathway on a season-specific basis (i.e., deferred deficiency balances will need to be tracked across multiple years and seasons simultaneously). While these challenges may be manageable, we believe they warrant consideration when evaluating the overall costs and benefits of the proposed framework.
Another potential enhancement involves requiring compliant participants to reinvest allocated deficiency charge revenues toward qualifying capacity, transmission infrastructure, or other resources to help alleviate limited supply constraints within the WRAP footprint. This provision would further strengthen the existing compliance framework by directing the program's deficiency charge revenues toward addressing the underlying capacity shortfalls that gave rise to them. Although practical implementation challenges remain, exploration of this concept could help inform future policy development.
Recognizing the potential increase in WPP’s operating costs related to attestation management and the tracking of deferred charges, the framework introduces the potential for significant delays in WPP's receipt of revenues, while simultaneously reducing the total charges collected. If multiple participants utilize the deferral option, a meaningful portion of charge revenues could remain outstanding for extended periods. While we recognize that the proposal addresses certain aspects of this risk by requiring payment of the full deficiency charge should a participant exit the program prior to resolving the deficiency, collection risk remains. These revenue collection risks would be amplified if multiple participants encounter financial distress, exit the program, or become involved in other disputes before their deferred balances are fully settled.
Finally, COSR highlights that this Deficiency Charge Deferral resolution will not be implemented in isolation. Several WRAP policies have been recently adopted, are currently under development, or remain under consideration, that may interact with this new charge deferral mechanism in ways that are difficult to fully understand today. In particular, the proposed deferral percentages appear to have been developed under assumptions regarding deficiency charge levels that could change materially following implementation of the proposed BPM 110 and its revised Cost of New Entry (CONE) methodology (currently out for public comment). Because the deferral framework is based on percentage reductions rather than fixed dollar amounts, any significant increase or decrease in deficiency charge calculations could substantially alter the financial consequences experienced by participants. For example, a deficiency charge initially expected to be $10 million would result in payments of $1.5 million, $4.0 million, and $7.0 million under the 15%, 40%, and 70% schedules, respectively. If the revised CONE methodology were to produce a $20 million deficiency charge, those same percentages would result in payments of $3.0 million, $8.0 million, and $14.0 million. Consequently, COSR encourages the Board to further explore how other near-term proposals related to the Forward Showing could affect the core elements of the proposal and whether the selected deferral percentages will continue to achieve their intended policy objectives.
As the Board evaluates and considers this proposal, COSR encourages careful review of the deferral mechanism’s potential impacts on participant incentives, administrative complexity and associated costs, and the broader interplay with other related policies. The ongoing evaluation of these factors, combined with the development of post-season deferral reports, will help advance the proposal’s intended objectives. COSR appreciates the substantial effort undertaken by WPP staff and stakeholders in developing this resolution and looks forward to continued engagement as the program progresses toward its first binding season.
Thank you for your consideration of these comments. Additionally, COSR has included Attachment A: Additional Comments from Commissioner Myers, Arizona, which offers supplemental perspectives on this proposal.
Respectfully,
Chris Parker, Chair, Committee of State Representatives, Director, Utah Division of Public Utilities
Brian Rybarik, Vice Chair, Committee of State Representatives, Chair, Washington Utilities and Transportation Commission
Arizona, Nick Myers, Chairman, Arizona Corporation Commission
Nevada, Tammy Cordova, Commissioner, Nevada Public Utilities Commission
California, Darcie Houck, Commissioner, California Public Utilities Commission
New Mexico, Pat O'Connell, Commissioner, New Mexico Public Regulation Commission
Colorado, Eric Blank, Chair, Colorado Public Utilities Commission
Oregon, Letha Tawney, Chair, Oregon Public Utility Commission
Idaho, Dayn Hardie, Commissioner, Idaho Public Utilities Commission
Wyoming, Chris Petrie, Deputy Chairman, Wyoming Public Service Commission
Attachment A: Additional Comments from Commissioner Myers, Arizona
Dear Western Power Pool Board:
I recommend requiring the following metrics to be included in the deferral activity report:
• How many resources were assessed for deficiency charges
• Deficiency rate per MW-day (weighted average capacity resource clearing price)
• Total deficiency charges
I also suggest exploring the feasibility and value of including the following metrics in the deferral activity report:
• Total auction revenues received by transmission ratepayers from congestion revenue
• Total reduction in payments to congestion revenue rights holders
• Net Payments to non-load serving entities
• Total transmission ratepayer losses by percentage of total congestion rent
• Average transmission ratepayer losses by percent of congestion rent
Sincerely,
Chairman Nick Myers, Arizona Corporation Commission