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BPA Upgrades Its Bulk Power Trading Technology and Eyes Market Opportunities

image credit: Credit: BPA

The Bonneville Power Administration implemented its new Energy Trading and Risk Management system in January. The system is designed to streamline how marketers sell surplus power. It complies with California Independent System Operator contract requirements and readies BPA to join the Western Energy Imbalance Market, possibly in 2022.

Previously, marketers sold surplus power based on analysis completed by a team of staff across multiple organizations, including trading, scheduling, finance and risk. This process involved contract administration, risk assessments, credit analysis and accounting, and was being done in a piecemeal fashion by individual organizations using an outdated system that relied on spreadsheets and faxes.

The new system allows for real-time, within-hour power trades captured at five-minute intervals.

“Truthfully, this project started off a little rocky as the diverse set of stakeholders from Power, Risk, and Finance had different views on the best solution,” said Suzanne Cooper, vice president of Power Services’ bulk marketing, in a statement.

BPA markets wholesale electrical power from 31 federal hydroelectric projects in the Northwest, one nonfederal nuclear plant and several small nonfederal power plants. BPA also operates and maintains about three-fourths of the high-voltage transmission in its service territory. BPA’s territory includes Idaho, Oregon, Washington, western Montana and small parts of eastern Montana, California, Nevada, Utah and Wyoming.

The ETRM is intended to enhance BPA’s ability to conduct real-time monitoring of its credit risk exposures while providing data to downstream users. The new system will support the Bulk Marketing, Transacting, Credit Risk, Contract Administration, Settlements and Technical Accounting groups.

In practice, the system consolidates and replaces an older, outdated one that was no longer supported by the vendor. The project was initiated by staff to improve existing processes by tightening integrations between trading, scheduling and internal office workflows, and to more effectively engage in new energy markets. The new system was developed by gathering critical feedback and input from end-users. ETRM is designed to be configured by users to meet BPA’s changing energy marketing and reporting needs.

The ETRM project was built using off-the-shelf products with little or no customization to simplify and streamline the information technology infrastructure. It is one of several grid modernization projects that are intended to support implementation of BPA’s goals to modernize federal power and transmission system operations and supporting technology, and to provide competitive power products and services

The project includes several components, including:

  • Trade management – monitors all workflows and procedures involved with the lifecycle of each energy trade deal, streamlining the entire process.
  • Portfolio management – integrates BPA’s systems and shares data across workgroups, allowing analysis of the probabilities of energy surpluses/deficits on the Federal Columbia River Power System to create various scenarios to help inform trade activity.
  • Operational, compliance and administrative activities – provides regulatory reporting and automates administrative tasks associated with energy trade deals.
  • Credit risk management – conducts real-time monitoring of credit risk exposures to better inform analysis of energy trades.
  • Accounting and analytics – documents all energy trades and their accounting.
  • Settlements – efficiently conducts monthly settlements required under bilateral contracts with the Western Systems Power Pool, of which BPA is a member, and for transfer services in the Western EIM.
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