[Federal Register Volume 66, Number 193 (Thursday, October 4, 2001)]
[Notices]
[Pages 50630-50632]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-24888]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket Nos. EF00-2012-000 and EF00-2012-001]


United States Department of Energy--Bonneville Power 
Administration; Order Approving Rates on an Interim Basis and Providing 
Opportunity for Additional Comments

Issued September 28, 2001.

    Before Commissioners: Pat Wood, III, Chairman; William L. 
Massey, Linda Breathitt, and Nora Mead Brownell.

    In this order, we approve the Bonneville Power Administration's 
(Bonneville) proposed wholesale power rates \1\ on an interim basis, 
pending our full review for final approval. We also provide for an 
additional period of time for the parties to file comments. The 
proposed wholesale power rates will allow Bonneville to recover its 
costs and repay the U.S. Treasury for the Federal investment in the 
Federal Columbia River Power System.
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    \1\ The proposed wholesale power rates schedules that Bonneville 
seeks approval for the period of October 1, 2001 to September 30, 
2006 include: PF-02 Priority Firm Power Rate, RL-02 Residential Load 
Firm Rate, NR-02 New Resource Firm Power Rate, IP-02 Industrial Firm 
Power Rate, NF-02 Nonfirm Energy Rate.
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Background

    On July 6, 2000, Bonneville filed a request for interim and final 
approval of its wholesale power rates in accordance with the Pacific 
Northwest Electric Power Planning and Conservation Act (Northwest Power 
Act) \2\ and Subpart B of Part 300 of the Commission's regulations.\3\
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    \2\ Sections 7(a)(2) and 7(i)(6) of the Northwest Power Act, 16 
U.S.C. Secs. 839e(a)(2) and 839e(i)(6)(1994).
    \3\ 18 CFR Part 300 (2001).
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    On August 4, 2000, Bonneville filed a motion to stay the 
proceedings citing the unprecedented wholesale power price spikes in 
the west during the summer of 2000. As a result of the price spikes, 
Bonneville explained, preference

[[Page 50631]]

power customers were expected to abandon their plans to seek out power 
supplies from the market and instead purchase significantly more power 
from Bonneville than originally anticipated. According to Bonneville, 
the combination of an unanticipated increase in load coupled with 
higher and more uncertain market prices greatly diminished the prospect 
that its original proposed wholesale power rates would recover its 
costs and repay the U.S. Treasury for the Federal investment in the 
Federal Columbia River Power System.
    On June 29, 2001, Bonneville filed a supplemental wholesale power 
rate filing.\4\ The supplemental wholesale power rate filing adjusts 
the General Rate Schedule Provisions by replacing the capped single 
Cost Recovery Adjustment Clause (CRAC) with a three-component CRAC. In 
addition, the Dividend Distribution Clause has been modified to trigger 
starting in the second year of the rate period, rather than in the 
first year.
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    \4\ Docket No. EF00-2012-001.
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    In the June 29, 2001 filing, Bonneville requests interim and final 
approval of the wholesale power rates that were originally filed on 
July 6, 2000, as revised by the supplemental wholesale power rate 
adjustment. Bonneville seeks approval of its wholesale power rates for 
the rate period October 1, 2001, through September 30, 2006.

Notice of Filing and Interventions

    Notice of Bonneville's July 6, 2000 wholesale power rate filing was 
published in the Federal Register, 65 Fed. Reg. 44,041 (2000), with 
comments, protests, or motions to intervene due on or before August 1, 
2000. Notice of Bonneville's June 29, 2001 supplemental wholesale power 
rate adjustment filing was published in the Federal Register, 66 FR 
37664 (2001), with comments, protests, or motions to intervene due on 
or before August 3, 2001.
    Avista Energy, Inc., Avista Corporation, Industrial Customers of 
Northwest Utilities, Vanalco, Inc., Idaho Consumer-Owned Utilities 
Association, Public Power Council, Goldendale Aluminum Company, 
Northwest Aluminum Company, Reynolds Metals Company, Kaiser Aluminum & 
Chemical Corporation, Columbia Falls Aluminum Company, Atofina 
Chemicals, Inc., (collectively, the DSI's), Alcoa Inc., Market Access 
Coalition, Blue Ridge Environmental Defense League, Columbia River 
Inter-Tribal Fish Commission, Confederated Tribes of the Umatilla 
Indian Reservation, Yakama Nation, Enron Power Marketing, Inc., 
Portland General Electric Company, Idaho Power Company filed timely 
motions to intervene, raising no substantive issues. The Oregon Public 
Utility Commission and Washington Utilities and Transportation 
Commission filed notices of intervention. PPL Montana, Upper Columbia 
United Tribes, Central Montana Electric Power Cooperative, Inc., Oregon 
Utility Resource Coordination Association, Shoshone-Bannock Tribes, and 
Springfield Utility Board, Northwest Requirements Utilities, filed 
motions to intervene out of time.
    In addition, Industrial Customers of Northwest Utilities, Northwest 
Energy Coalition, Save Our Wild Salmon Coalition, City of Burbank, 
Puget Sound Energy, Inc., PacifiCorp, and Public Generating Pool (PGP) 
and the PNGC Group filed timely motions to intervene and protests. The 
DSI's filed an answer to PGP's and PNGC Group's protest.

Discussion

Procedural Matters

    Under Rule 214 of the Commission's Rules of Practice and Procedure, 
18 CFR Sec. 385.214 (2001), the notices of intervention and timely, 
unopposed motions to intervene serve to make the entities that filed 
them parties to this proceeding. We will grant the untimely, unopposed 
motions to intervene of PPL Montana, Upper Columbia United Tribes, 
Central Montana Electric Power Cooperative, Inc., Oregon Utility 
Resource Coordination Association, Shoshone-Bannock Tribes, and 
Springfield Utility Board, Northwest Requirements Utilities. Finally, 
we will deny the motion by the DSI's for leave to file an answer to a 
protest and an answer to an answer. We are not persuaded that good 
cause is present to depart from our general rule that such a pleading 
is prohibited.\5\
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    \5\ See 18 CFR Sec. 385.213(a)(2)(2001).
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Standard of Review

    Under the Northwest Power Act, the Commission's review of 
Bonneville's regional power and transmission rates is limited to 
determining whether Bonneville's proposed rates meet the three specific 
requirements of section 7(a)(2):
    (1) They must be sufficient to assure repayment of the Federal 
investment in the Federal Columbia River Power System over a reasonable 
number of years after first meeting the Administrator's other costs;
    (2) They must be based upon the Administrator's total system costs; 
and
    (3) Insofar as transmission rates are concerned, they must 
equitably allocate the costs of the Federal transmission system between 
Federal and non-Federal power.\6\
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    \6\ 16 U.S.C. Sec. 839e(a)(2)(1994). Bonneville also must comply 
with the financial, accounting, and ratemaking requirements in 
Department of Energy Order No. RA 6120.2.
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    Commission review of Bonneville's non-regional, nonfirm rates also 
is limited. Review is restricted to determining whether such rates meet 
the requirements of section 7(k) of the Northwest Power Act,\7\ which 
requires that they comply with the Bonneville Project Act, the Flood 
Control Act of 1944, and the Federal Columbia River Transmission System 
Act (Transmission System Act). Taken together, those statutes require 
Bonneville to design its non-regional, nonfirm rates:
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    \7\ 16 U.S.C. Sec. 839e(k)(1994).
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    (1) To recover the cost of generation and transmission of such 
electric energy, including the amortization of investments in the power 
projects within a reasonable period;
    (2) To encourage the most widespread use of Bonneville power; and
    (3) To provide the lowest possible rates to consumers consistent 
with sound business principles.
    Unlike the Commission's statutory authority under the Federal Power 
Act, the Commission's authority under sections 7(a) and 7(k) of the 
Northwest Power Act does not include the power to modify the rates. The 
responsibility for developing rates in the first instance is vested 
with Bonneville's Administrator. The rates are then submitted to the 
Commission for approval or disapproval. In this regard, the 
Commission's role can be viewed as an appellate one: to affirm or 
remand the rates submitted to it for review.\8\
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    \8\ E.G., United States Department of Energy--Bonneville Power 
Administration, 67 FERC para. 61,351 at 62,216-17 (1994); see also, 
e.g., Aluminum Company of America v. Bonneville Power 
Administration, 903 F.2d 585, 592-93 (9th Cir. 1989), and cases 
cited therein.
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    Moreover, review at this interim stage is further limited. In view 
of the volume and complexity of a Bonneville rate application, such as 
the one now before the Commission in this filing, and the limited 
period in advance of the requested effective date in which to review 
the application,\9\ the Commission generally defers resolution of 
issues on the merits of Bonneville's application until the order on 
final confirmation. Thus, the proposed rates, if not patently 
deficient, generally are approved on an interim basis and the parties 
are afforded an additional

[[Page 50632]]

opportunity in which to raise issues with regard to Bonneville's 
filing.\10\
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    \9\ See 18 CFR Sec. 300.10(a)(3)(ii)(2001).
    \10\ See, e.g., United States Department of Energy--Bonneville 
Power Administration, 64 FERC para. 61,375 at 63,606(1993); United 
States Department of Energy--Bonneville Power Administration, 40 
FERC para. 61,351 at 62,059-60(1987).
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Interim Approval

    PGP and the PNGC Group request the Commission to make an early 
final determination of Bonneville's proposed rates and to reject the 
proposed rates because the rates are insufficient to assure repayment 
of the Federal investment. They also contend that Bonneville's proposed 
rates violate the Bonneville Project Act and the Northwest Power Act, 
which prohibit the subsidy of Direct Service Industrial customer rates 
by preference power customers.\11\
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    \11\ See Bonneville Project Act, 16 U.S.C. Sec. U.S.C. 
832c(a)(1994) and Northwest Power Act, 16 U.S.C. Sec. 839c(a)(1994).
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    The Commission declines at this time to make an early final 
determination of Bonneville's proposed rates as requested by PGP and 
the PNGC Group. The Commission's preliminary review indicates that 
Bonneville's rate filings appear to meet the minimum threshold filing 
requirements of Part 300 of the Commission's regulations and the 
statutory standards. Because the Commission's preliminary review of 
Bonneville's submittals indicates that they do not contain any patent 
deficiencies, the proposed rates will be approved on an interim basis 
pending our full review for final approval. We note, as well, that no 
one will be harmed by this decision because interim approval allows 
Bonneville's rates to go into effect subject to refund with interest. 
The Commission may order refunds with interest if the Commission later 
determines in its final decision not to approve the rates.\12\
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    \12\ 18 CFR Sec. 300.20(c)(2001).
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    In addition, we will provide an additional period of time for the 
parties to file comments and reply comments on all issues related to 
final confirmation and approval of Bonneville's proposed rates. This 
will ensure that the record in this proceeding is complete and fully 
developed.
    The Commission orders:
    (A) PGP and the PNGC Group's request to reject Bonneville's request 
for interim approval of the proposed rates is hereby denied.
    (B) Interim approval of Bonneville's proposed wholesale power rates 
is hereby granted, to become effective on October 1, 2001, subject to 
refund with interest as set forth in section 300.20(c) of the 
Commission's regulations, 18 CFR Sec. 300.20(c) (2001), pending final 
action on either its approval or disapproval.
    (C) Within thirty (30) days of the date of this order, all parties 
who wish to do so may file additional comments regarding final 
confirmation and approval of Bonneville's proposed rates. All parties 
who wish to do so may file reply comments within twenty (20) days 
thereafter.
    (D) The Secretary shall promptly publish this order in the Federal 
Register.

    By the Commission.
Linwood A. Watson, Jr.,
Acting Secretary.
[FR Doc. 01-24888 Filed 10-3-01; 8:45 am]
BILLING CODE 6717-01-P