BPA announced its decision on how to handle its FY2011 overspend on energy efficiency (higher than anticipated energy efficiency project activity in BPA’s federal fiscal year 2011 placed BPA’s 5 year conservation budget into jeopardy, necessitating last minute negotiations with their retail utility customers and affected the activity of third party program implementers of BPA regional programs). BPA Administrator, Steve Wright, announced earlier this month that the agency would not add any additional budget dollars to their 5 year planned spending on conservation, but would fully fund obligations in their 2011 pipeline. Wright also indicated that BPA would keep their 2012 efficiency budgets at planned amounts, but would be making downward adjustments to the 2013 and 2014 spending to compensate for the 2011 overspend. Exactly how that compensation affects individual utilities is yet to be determined (post-2011, retail utility customers of BPA will be on an allocation formula different from the rule set in 2011). Unfortunately, BPA also intends to reduce out year budgets at a greater rate than dollar for dollar under the supposition that the 2011 conservation acquisition was cheaper than it would have been in later years. What does this mean? Unless decisions about the budget for energy efficiency are re-visited pursuant to future rate-making processes, BPA spending for energy efficiency is going to decline over the next three years.
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