Draft Closeout Report, Power Function Review II, issued for public comment on April 4, 2006

Bonneville Power Administration Power Function Review II Draft Closeout Report Overview In a time when the region’s electric industry is emerging from the lingering effects of the 2001 power crisis and the process of setting new power rates is underway, BPA is committed to making FY07-09 rates as low as possible while still meeting its mission objectives. Meeting that mission requires a careful balance of applying cost pressure to each program area without going too far and jeopardizing the accomplishment of other key goals for the region. BPA conducted an extensive Power Function Review (PFR) in 2005 in anticipation of the 2007 Power Initial Rate Proposal. The purpose of Power Function Review II (PFR II) was to re-examine each of the major power cost categories to seek additional cost savings prior to setting FY07-09 power rates. Like the first round of the PFR last year, PFR II has involved many meetings between BPA, customers, interest groups, the Corps of Engineers, the Bureau of Reclamation, and Energy Northwest. The ongoing sharing of information has led to new ideas and long-term cost savings and program review that would not have been possible without this effort. Last year, $96 million per year in cost savings for the FY07-09 rate period were identified in the PFR process. The PFR II followed up by exploring the issues left outstanding in the 2005 PFR combined with a top-to-bottom look at each of the cost categories in order to ...