[Federal Register Volume 68, Number 196 (Thursday, October 9, 2003)]
[Notices]
[Pages 58322-58323]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-25573]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. EF03-2011-000]


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

Issued: October 1, 2003.
    Before Commissioners: Pat Wood III, Chairman; William L. Massey, 
and Nora Mead Brownell.
    1. In this order we approve on an interim basis, pending our full 
review for final approval, the Bonneville Power Administration's 
(Bonneville) proposed modification to the Safety-Net and Financial-
Based Cost Recovery Adjustment Clauses (CRACs), and to the Dividend 
Distribution Clause, under the 2002 Wholesale Power Rate Schedule 
General Rate Schedule Provisions (GRSPs). We also provide an additional 
period of time for the parties to file comments. The proposed rates 
will allow Bonneville to recover its costs and repay the U.S. Treasury 
for the Federal investment.

Background

    2. On July 29, 2003, Bonneville filed a request for interim and 
final approval to modify its CRACs and the Dividend Distribution Clause 
under the 2002 Wholesale Power Rate Schedule General Rate Schedule 
Provisions (GRSPs), in accordance with the Pacific Northwest Electric 
Power Planning and Conservation Act (Northwest Power Act) \1\ and 
subpart B of part 300 of the Commission's regulations.\2\ The 
Commission previously granted final approval of the 2002 GRSPs for a 
five-year period ending September 30, 2006.\3\ Bonneville contends that 
the CRACs allowed BPA to keep rates low while still addressing any 
financial shortfalls, rather than instituting higher base rates for the 
entire rate period.
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    \1\ Sections 7(a) and 7(i)(6) of the Northwest Power Act, 16 
U.S.C. 839e(a)(2) and 839e(i)(6) (2000).
    \2\ 18 CFR part 300 (2003).
    \3\ United States Department of Energy--Bonneville Power 
Administration, 104 FERC ] 61,093 (2003).
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    3. In accordance with the statutory procedure,\4\ Bonneville seeks 
interim approval of this adjustment effective October 1, 2003, and 
final approval effective October 1, 2003 through September 30, 2006.
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    \4\ Sections 7(a) and 7(i)(6) of the Northwest Power Act, 16 
U.S.C. 839e(a)(2) and 839e(i)(6) (2000).
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Notice of Filing and Interventions

    4. Notice of Bonneville's filing was published in the Federal 
Register, 68 FR 47561 (2003), with comments, protests, or motions to 
intervene due on or before September 3, 2003.
    5. Avista Corporation, Generating Public Utilities, Eugene Water & 
Electric Board, Golden Northwest Aluminum, Inc., PacifiCorp, Portland 
General Electric, Puget Sound Energy, Inc., and the City of Tacoma, 
Department of Public Utilities, Light Division, d/b/a Tacoma Power 
filed timely motions to intervene raising no issues. Northwest 
Requirements Utilities (NRU) filed a motion to intervene out of time.
    6. In addition, Alcoa, Inc., Generating Public Utilities, 
Industrial Customers of Northwest Utilities, Golden Northwest Aluminum, 
Inc., Pacific Northwest Generating Cooperative, Public Power Council, 
and the Columbia River Inter-Tribal Fish Commission, Confederated 
Tribes of the Umatilla Reservation, and the Yakama Nation 
(collectively, Protesters) filed timely motions to intervene and 
protests.

Discussion

Procedural Matters

    7. Under Rule 214 of the Commission's Rules of Practice and 
Procedure, 18 CFR 385.214 (2003), the notices of intervention and 
timely, unopposed motions to intervene make the entities that filed 
them parties to this proceeding. We will grant NRU's untimely, 
unopposed motion to intervene because: NRU's interests cannot be 
adequately represented by other parties; NRU intervened at an early 
stage of the proceeding; and no prejudice or additional burden upon 
existing parties will result from permitting the intervention.

Standard of Review

    8. 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):

    They must be sufficient to assure repayment of the Federal 
investment in the Federal Columbia River Power System over

[[Page 58323]]

a reasonable number of years after first meeting the Administrator's 
other costs;
    They must be based upon the Administrator's total system costs; 
and
    Insofar as transmission rates are concerned, they must equitably 
allocate the costs of the Federal transmission system between 
Federal and non-Federal power.\5\
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    \5\ 16 U.S.C. 839e(a)(2) (2000). Bonneville also must comply 
with the financial, accounting, and ratemaking requirements in 
Department of Energy Order No. RA 6120.2.

    9. Commission review of Bonneville's non-regional, non-firm rates 
also is limited. Review is restricted to determining whether such rates 
meet the requirements of section 7(k) of the Northwest Act,\6\ 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, non-firm rates:
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    \6\ 16 U.S.C. 839e(k) (2000).

    (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.

    10. 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.\7\
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    \7\ E.g., United States Department of Energy--Bonneville Power 
Administration, 67 FERC [para] 61351 at 62216-17 (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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    11. 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,\8\ 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 opportunity to raise issues.\9\
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    \8\ 18 CFR 300.10(a)(3)(ii) (2003).
    \9\ See, e.g., United States Department of Energy--Bonneville 
Power Administration, 64 FERC [para] 61375 at 63606 (1993); United 
States Department of Energy--Bonneville Power Administration, 40 
FERC [para] 61351 at 62059-60 (1987).
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Interim Approval

    12. Protesters contend that Bonneville has not shown the need for 
the rate increase. They argue that the proposed GRSPs will operate to 
preclude the Commission's statutorily mandated review of future SN CRAC 
rate adjustments, as required under the Northwest Power Act. They 
contend that Bonneville has not based the rates on its total system 
costs, as required by the Northwest Power Act. Protesters also argue, 
among other things, that (1) Bonneville's application is deficient and 
fails to comply with the Northwest Power Act, (2) Bonneville failed to 
file a complete evidentiary record, (3) Bonneville relied on data and 
information that was not included in the evidentiary record, (4) 
Bonneville denied the parties in this proceeding due process, and (5) 
Bonneville submitted materials and a Notice of Filing that do not 
comply with the Commission's regulations.
    13. The Commission's preliminary review indicates that Bonneville's 
filing appears 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 submittal 
indicates that they do not contain any patent deficiencies, the 
proposed modifications 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 refunds with interest if the 
Commission later determines in its final decision not to approve the 
rates.\10\
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    \10\ 18 CFR 300.20(c) (2003).
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    14. 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.

The Commission Orders

    (A) Protesters' requests to reject Bonneville's filing are hereby 
denied.
    (B) Interim approval of Bonneville's filing is hereby granted, to 
become effective on October 1, 2003, subject to refund with interest as 
set forth in section 300.20(c) of the Commission's regulations, 18 CFR 
300.20(c) (2003), 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.
Magalie R. Salas,
Secretary.
[FR Doc. 03-25573 Filed 10-8-03; 8:45 am]
BILLING CODE 6717-01-P