[Federal Register Volume 71, Number 187 (Wednesday, September 27, 2006)]
[Notices]
[Pages 56510-56512]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-15798]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. EF06-2011-000]


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

Issued September 21, 2006.
Before Commissioners: Joseph T. Kelliher, Chairman; Suedeen G. 
Kelly, Marc Spitzer, Philip D. Moeller, and Jon Wellinghoff.

    1. 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 an 
additional period of time for parties to file comments. The proposed 
wholesale power rates are intended to allow Bonneville to recover its 
costs and repay the Federal investment in the Federal Columbia River 
Power System.

Background

    2. On July 28, 2006, 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\

Interventions and Comments

    3. Notice of Bonneville's July 28, 2006 wholesale power rates 
filing was published in the Federal Register, 71 FR 45,801 (2006), with 
protests or interventions due on or before August 28, 2006. Avista 
Corporation, Portland General Electric Company, Idaho Power Company, 
PacifiCorp, Puget Sound Energy, Inc., Northwest Requirements

[[Page 56511]]

Utilities,\4\ and the Industrial Customers of Northwest Utilities filed 
timely motions to intervene, raising no substantive issues.
    4. In addition, the Columbia River Inter-Tribal Fish Commission, 
the Nez Perce Tribe, and the Yakama Nation (collectively, Tribes), LS 
Power Associates, LLC (LS Power), and PPM Energy, Inc., Northwest 
Independent Power Producers Coalition, TransAlta Centralia Generation, 
LLC, and Calpine Corporation (collectively, Generators) filed timely 
motions to intervene and protests. Bonneville filed an answer in 
response to Generators protest. Additionally, Bonneville filed an 
answer in opposition to LS Power's intervention and protest.

Discussion

Procedural Matters
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    \1\ The proposed wholesale power rates for which Bonneville 
seeks approval for the period October 1, 2006 through September 30, 
2009, include: PF-07 Priority Firm Power Rate, NR-07 New Resource 
Firm Power Rate, IP-07 Industrial Firm Power Rate, FPS-07 Firm Power 
Products and Services Energy Rate, and GTA General Transfer 
Agreement Delivery Charge in addition to related General Rates 
Schedule Provisions (GRSPs).
    \2\ 16 U.S.C. 839e(a)(2), 839e(i)(6) (2000).
    \3\ 18 CFR part 300 (2006).
    \4\ They are comprised of various municipalities, public utility 
districts, cooperatives, etc., and they seek to intervene jointly 
and also individually.
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    5. Pursuant to Rule 214 of the Commission's Rules of Practice and 
Procedure, 18 CFR 385.214 (2006), the timely, unopposed motions to 
intervene serve to make the entities that filed them parties to this 
proceeding. Notwithstanding Bonneville's opposition, we will grant LS 
Power's motion to intervene given its interest in this proceeding, the 
early stage of this proceeding, and the absence of undue prejudice or 
delay.

Standard of Review

    6. 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) of the Northwest Power Act: \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.
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    (A) 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 Bonneville's other costs;
    (B) They must be based upon Bonneville's total system costs; and
    (C) Insofar as transmission rates are concerned, they must 
equitably allocate the costs of the Federal transmission system between 
Federal and non-Federal power.
    7. 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 Power 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).
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    (A) 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;
    (B) To encourage the most widespread use of Bonneville power; and
    (C) To provide the lowest possible rates to consumers consistent 
with sound business principles.
    8. 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 ] 61,351 at 62,216-17 (1994); see also, 
e.g., Aluminum Co. of America v. Bonneville Power Administration, 
903 F.2d 585, 592-93 (9th Cir. 1989).
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    9. 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 in which to raise issues with 
regard to Bonneville's filing.\9\
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    \8\ See 18 CFR Sec.  300.10(a)(3)(ii) (2006).
    \9\ See, e.g., United States Department of Energy--Bonneville 
Power Administration, 64 FERC ] 61,375 at 63,606 (1993); United 
States Department of Energy--Bonneville Power Administration, 40 
FERC ] 61,351 at 62,059-60 (1987).
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Interim Approval

    10. The Tribes argue that Bonneville's proposed rates are not 
sufficient to assure repayment of the Federal investment in the Federal 
Columbia River Power System, particularly given Bonneville's fish and 
wildlife obligations. Generators and LS Power challenge Bonneville's 
plan to deny compensation to unaffiliated generators within its control 
area for generation-supplied reactive power service as unduly 
discriminatory and in violation of Commission policy.
    11. The Commission declines at this time to grant final 
confirmation and approval of Bonneville's proposed wholesale power 
rates. The Commission's preliminary review nevertheless indicates that 
Bonneville's wholesale power rates filing appears to meet the statutory 
standards and the minimum threshold filing requirements of part 300 of 
the Commission's regulations.\10\ Moreover, the Commission's 
preliminary review of Bonneville's submittal indicates that it does not 
contain any patent deficiencies. The proposed rates therefore 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.\11\
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    \10\ See, e.g., United States Department of Energy--Bonneville 
Power Administration, 105 FERC ] 61,006 at P13-14 (2003); United 
States Department of Energy--Bonneville Power Administration, 96 
FERC ] 61,360 at 62,358 (2001).
    \11\ 18 CFR 300.20(c) (2006).
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    12. In addition, we will provide an additional period of time for 
parties to file comments and reply comments on 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) Interim approval of Bonneville's proposed wholesale power rates 
is hereby granted, to become effective on October 1, 2006, subject to 
refund with interest as set forth in section 300.20(c) of the 
Commission's regulations, 18 CFR Sec.  300.20(c) (2006), pending final 
action and either their approval or disapproval.
    (B) Within thirty (30) days of the date of this order, parties who 
wish to do so may file additional comments regarding final confirmation 
and approval of Bonneville's proposed rates. Parties who wish to do so 
may file reply comments within twenty (20) days thereafter.
    (C) The Secretary shall promptly publish this order in the Federal 
Register.


[[Page 56512]]


    By the Commission.
Magalie R. Salas,
Secretary.
 [FR Doc. E6-15798 Filed 9-26-06; 8:45 am]
BILLING CODE 6717-01-P