Facing mounting concerns from customers over its financial health, Bonneville Power Administration unveiled a five-year strategic plan to address its challenges.

"Our power customers have expressed significant concerns that BPA's recent pattern of rising costs and rates is unsustainable. They have noted that the resurgence of competition in power markets will provide them with alternatives when their long-term wholesale power contracts with BPA expire in 2028," Bonneville said in the BPA 2018-2023 Strategic Plan released Jan. 30.

BPA provides power to 54 electric co-ops in the Northwest. Its most recent rate hike took effect Oct. 1. Looking to the future, BPA said it plans to provide "competitive power products and services."

"This plan will serve as the reference point for everything we at BPA do over the next five years," said Elliot Mainzer, BPA administrator and CEO.

Bonneville stressed that as of January it has "sufficient liquidity and high credit ratings" but that "absent any changes, the continuation of some financial policies and practices—particularly those around cost management, debt management and reserves—would put BPA's long-term financial health at risk."

BPA said it is "taking aggressive steps to manage the rising costs of operating the federal power and transmission systems." That includes setting a goal of keeping "the sum of program costs, by business line, at or below the rate of inflation through 2028."

BPA's primary source of debt financing is its U.S. Treasury borrowing authority. That's capped at $7.7 billion, and at the end of 2017 only $2.7 billion was left. Bonneville projects that will be depleted by 2023, "putting BPA's future capital program at risk."

BPA said it will "look beyond its traditional financing source and consider an 'all of the above' capital financing strategy," with possible sources including authority to issue debt directly to capital markets.

Bonneville also acknowledged its transmission customers have expressed concern about the complexity of accessing transmission service.

"BPA is responding with a strategic goal to meet their needs more efficiently and responsively. We will provide more clarity on how to access additional transmission service by standardizing and streamlining our products, services and processes," the report said. "We will also use a more scalable, flexible, economical and operationally efficient approach to meet future transmission service requests."

Bonneville's other strategic goals include modernizing its billions of dollars in assets, keeping fish and wildlife program costs at or below inflation, and modernizing the 1964 Columbia River Treaty "so that it better reflects today's realities and continues to provide appropriate benefits to the region." Talks are expected to start this year, and BPA said it is "particularly interested in making sure that the downstream benefits of the Treaty are shared equitably" between the U.S. and Canada.

Scott Corwin, executive director of the Public Power Council, representing consumer-owned utilities in the Northwest, was encouraged by the plan.

"The focus on responsiveness to customers and the urgent need to make progress toward future competitive products and services is timely. Consistent implementation is critical," said Corwin. He added that the council will continue to work with BPA "to stress the targets, tools, performance, and accountability needed to reach these goals."