[Federal Register Volume 61, Number 189 (Friday, September 27, 1996)]
[Notices]
[Pages 50810-50812]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-24807]


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DEPARTMENT OF ENERGY
Bonneville Power Administration


Policy on Excess Federal Power

AGENCY: Bonneville Power Administration (Bonneville), Department of 
Energy (DOE).

ACTION: Notice.

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SUMMARY: On March 29, 1996, BPA initiated a public process to develop a 
policy to implement the excess federal power marketing provisions of 
the Energy and Water Development Act of 1996, Pub. L. No. 104-46, 
Sec. 508(a) and (b), 109 Stat. 402, (1995) (codified at 16 U.S.C. 
Sec. 832m) (hereinafter ``P.L. 104-46''). BPA published a proposed 
policy in the Federal Register for public review and received comment 
during a 60-day public comment period. BPA has considered all comments 
received and has finalized its policy to implement this new power 
marketing authority. The policy is published below.
    A Record of Decision (ROD) regarding this policy has been prepared 
and explains the public process; the distinction between BPA's surplus 
power marketing under prior legislation and excess federal power 
marketing activities under P.L. 104-46; provides an overview and 
delineates BPA's final policy on excess federal power; responds to 
public comment; explains this action's compliance with the National 
Environmental Policy Act; and adopts a final policy on excess federal 
power.
    The publication of this policy and execution of the ROD is a final 
action of the BPA Administrator under section 9(e) of the Pacific 
Northwest Electric Power Planning and Conservation Act (Northwest Power 
Act), 16 U.S.C. Sec. 839(e).

ADDRESSES: Copies of the ROD may be obtained by calling BPA's toll-free 
document request line: 1-800-622-4520.

FOR FURTHER INFORMATION, CONTACT: David J. Armstrong--MPF, Bonneville 
Power Administration, P.O. Box 3621, Portland, Oregon, 97208-3621, 
phone number (503) 230-3658, fax number (503) 230-7568.

Policy on Excess Federal Power

I. Definitions

    A. Firm Contractual Obligations: are those Bonneville sales or 
other dispositions of power entered into under and governed by sections 
5(b) and 5(d) of the Pacific Northwest Electric Power Planning and 
Conservation Act (Northwest Power Act), 16 U.S.C. 839c(b) and 839c(d). 
Such sales include the firm requirements power sales in the Pacific 
Northwest region to Bonneville's actual and planned computed 
requirements customers, metered requirements customers, direct-service 
industrial customers and investor-owned utility customers.
    B. Delayed-Delivery Contracts: are contracts by Bonneville for the 
sale or disposition of power which provide for actual delivery of power 
to begin at some time after the effective date of the contract.
    C. Surplus Power: shall have the same meaning as electric power 
which is surplus under section 5(f) of the Northwest Power Act. 16 
U.S.C. 839c(f).

II. Determination of Excess Federal Power

    A. Reductions in Contractual Obligations under Sections 5(b) and 
5(d) of the Northwest Power Act:
    1. As of January 1, 1995, BPA's Firm Contractual Obligations 
equaled 8298 average megawatts (aMW). This number

[[Page 50811]]

will be the baseline for comparing reductions in such obligations to 
determine annual amounts of excess federal power. This is a fixed 
number that will not change.
    2. To determine the energy component of excess federal power, each 
year Bonneville will prepare a current forecast, in average megawatts, 
of Firm Contractual Obligations based upon its then-current contracts. 
In order to allow for sales or dispositions of excess federal power 
under Delayed-Delivery Contracts with delivery terms of up to 7 years, 
Bonneville will produce a 10-year annual average energy (average 
megawatts) forecast of its then-current Firm Contractual Obligations. 
For each year of the forecast period, the excess federal power in firm 
energy from reductions in Firm Contractual Obligations will equal the 
difference between the forecasted Firm Contractual Obligations and 8298 
aMW.
    3. Bonneville will calculate an amount of excess peaking capacity 
(megawatts) associated with reductions and increases in its then-
current Firm Contractual Obligations by calculating an average annual 
load factor based on all of its forecasted Firm Contractual 
Obligations. This load factor will be applied to the result of the 
calculation in section (2) above to determine an amount of excess 
capacity.
    B. Operations of the Federal Columbia River Power System Primarily 
for the Benefit of Fish and Wildlife: The amount of excess federal 
power resulting from operations of the Federal Columbia River Power 
System primarily for the benefit of fish and wildlife is 129 average 
megawatts annually. The amount of excess peaking capacity associated 
with these operations is 129 megawatts. This is a fixed number that 
will not change unless there is a need to modify the number as 
determined by Bonneville.
    C. Net Excess Federal Power: The sum of the results of the 
calculation in (2) above (the Reductions in Bonneville's sections 5(b) 
and 5(d) contractual obligations) and, unless modified, 129 aMW will be 
reduced by the amount of then-current sales or other dispositions of 
excess federal power to determine the net amount available for 
marketing in each year of the forecast period. Bonneville will 
determine this amount annually.
    D. Process: The results of the preceding determinations will be 
included in an annual notification to Bonneville's then-existing 
regional customers, and at Bonneville's discretion, non-regional 
customers, of Bonneville's intent to market excess federal power. 
Bonneville may also include in this annual notification the amount of 
Surplus Power available for disposition.

III. Sales of Excess Federal Power in Any Region

    A. Bonneville will, at its discretion, sell or otherwise dispose of 
excess federal power in any region consistent with its authority to 
market federal power under its authorizing legislation, including 
section 508 of the 1996 Energy and Water Development Appropriations Act 
(P.L. 104-46). The actual amount of power sold or otherwise disposed of 
as excess federal power will not exceed and may be less than the amount 
of Surplus Power projected to be available based upon Bonneville's 
then-current load/resource planning and the amount of excess federal 
power Bonneville determines to be available consistent with section II 
above.
    B. Sales or other dispositions of excess federal power shall not be 
subject to the second sentence of section 5(a) of the Bonneville 
Project Act. 16 U.S.C 832d(a).
    C. Bonneville will annually notify then-existing regional 
customers, and at its discretion, non-regional customers, of the amount 
of excess federal power resulting from the determinations in section II 
above. This notification will also contain the range of rates, terms 
and conditions within which Bonneville will market available power and 
may contain the amount of Surplus Power determined by Bonneville to be 
available for marketing. This notice will be an invitation to contract 
for the sale or other disposition of power consistent with the range of 
terms and conditions contained in the notice. Regional customers will 
have 30 days from the date of this notification to contact Bonneville 
with a request to purchase power consistent with the notice in order to 
have preference and priority to purchase the power. Upon such a 
request, Bonneville will enter into good faith negotiations for the 
sale or other disposition of power with the regional customer 
consistent with the general rate, terms and conditions contained in the 
notice. Upon conclusion of the negotiations, Bonneville will offer the 
power to the regional customer. If Bonneville receives competing 
requests to purchase excess federal power, Bonneville will proceed to 
negotiate sales consistent with public preference and then preference 
under section 508 of P.L. 104-46. Within each class of customer, 
Bonneville will negotiate and offer to sell, based upon the time of 
receipt of the request.
    D. On a case by case basis, Bonneville will average the net amount 
of available excess federal power in each year of a proposed sale or 
other disposition to determine whether the amount of excess federal 
power is sufficient for a multi-year transaction.
    E. All contracts for the sale or other disposition of excess 
federal power will be binding in accordance with their terms for the 
duration of the contract and will be firm obligations of the 
Administrator.

IV. Sales or Other Dispositions of Excess Federal Power to Purchasers 
Outside the Pacific Northwest Region

    A. Bonneville will, at its discretion, sell or otherwise dispose of 
excess federal power, to purchasers outside the region for delivery 
terms of up to 7 years as permitted by section 508(b) of P.L. 104-46. 
Such transactions may be renewed subject to the availability of excess 
federal power. Prior to executing a renewal of one or more years, 
Bonneville will notify regional customers of the proposed renewal, 
consistent with the notice procedures for long-term transactions in 
subsection IV(C) below.
    B. Sales or other dispositions of excess federal power to 
purchasers outside the region will not be subject to section 2, 
subsections (a), (b), and (c) of section 3, and section 7 of the Act of 
August 31, 1964, 16 U.S.C. 837a, 837b(a), (b) and (c), and 837f (the 
Northwest Preference Act), and section 9(c) of the Northwest Power Act, 
16 U.S.C. 839f(c).
    C. Long-term Sales or Other Dispositions of Excess Federal Power To 
Purchasers Outside the Pacific Northwest: For proposed sales or other 
dispositions of excess federal power to purchasers outside the region 
for a period of one or more years, Bonneville will notify then-existing 
regional customers of the proposed transactions. This notice will 
contain information on the essential rate, terms and conditions of the 
proposed out-of-region transaction as determined by Bonneville. 
Regional customers interested in purchasing the power under the rate, 
terms and conditions contained in the notice will have up to 30 days 
and no less than five days, as determined by Bonneville, to request a 
purchase. Upon a request to purchase, Bonneville will offer the power 
to the regional customer under the identical rate, terms and conditions 
in the notice, except those terms and conditions that clearly do not 
apply to the particular purchaser (such as points of delivery). This 
offer will remain open for five days.

[[Page 50812]]

    D. Short-term Sales or Other Dispositions of Excess Federal Power 
To Purchasers Outside the Pacific Northwest:
    1. Primary Notice: For proposed sales or other dispositions of 
excess federal power to purchasers outside the region for a period of 
less than one year, the annual notification in section III(C) above 
will be the primary notification.
    2. Additional Notice: As determined by Bonneville and as warranted 
in Bonneville's opinion by system or market conditions, Bonneville will 
issue additional notices of available excess federal power which will 
contain the same type of information as in the annual notice. Regional 
customers interested in purchasing this power will have 5 days or less, 
depending upon the effective delivery date and the duration of the 
short-term sale or other disposition, within which to contact 
Bonneville may provide such notices in its daily prescheduling 
conferences with customers.

Policy on Sales of Excess Federal Power Outside the Pacific Northwest 
Region to Retail Customers

    In marketing excess Federal power outside the Pacific Northwest, 
Bonneville does not intend to use its status as a Federal agency as a 
basis for seeking to shield retail sales to non-Federal entities from 
restrictions, terms and conditions of State law concerning access to 
retail markets. Moreover, Bonneville intends to defer to State policies 
concerning access to retail markets with respect to any dispositions of 
excess Federal power to Federal end users unless an exception is made 
by the Secretary of Energy in a specific circumstance. Consequently, 
Bonneville adopts the following policy:
    A. Retail Sales to non-Federal Customers: Bonneville will not make 
direct retail sales of excess Federal power outside the Pacific 
Northwest to non-Federal customers unless the purchaser obtains any 
third-party transmission or distribution services needed to effect 
delivery of such power to the purchaser. As a matter of law, the 
purchaser's acquisition of such transmission or distribution services 
would be subject to any terms and conditions of service established 
under applicable State and Federal law (including rules and orders 
thereunder).
    B. Dispositions to Federal End Users: The policy under subsection 
(a) will guide dispositions of excess Federal power to Federal end 
users outside the Pacific Northwest unless the Secretary of Energy 
determines on a case-by-case basis that the interests of the United 
States otherwise require.

    Issued in Portland, OR on September 19, 1996.
Randall W. Hardy,
Administrator and Chief Executive Officer.
[FR Doc. 96-24807 Filed 9-26-96; 8:45 am]
BILLING CODE 6450-01-P