[Federal Register Volume 82, Number 189 (Monday, October 2, 2017)]
[Notices]
[Pages 45839-45841]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-21060]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. EF17-3-000]


Bonneville Power Administration; Order Approving Rates on an 
Interim Basis and Providing Opportunity for Additional Comments

Before Commissioners: Neil Chatterjee, Chairman; Cheryl A. LaFleur, 
and Robert F. Powelson.

    1. In this order, we approve on an interim basis Bonneville Power 
Administration's (Bonneville) proposed 2018-2019 transmission rates, 
with the exception of the rates for transmission service on the 
Southern Intertie, which are addressed separately in another order, 
pending our further review. We also provide an additional period of 
time for parties to file comments.

I. Background

    2. On July 31, 2017,\1\ Bonneville filed a request for interim and 
final approval of its transmission rates \2\ in accordance with section 
7 of the Pacific Northwest Electric Power Planning and Conservation Act 
(Northwest Power Act) \3\ and Part 300 of the Commission's 
regulations.\4\ Bonneville projects that the filed rates will produce 
average annual transmission revenues of $1.044 billion and annual net 
revenues of $4.65 million.\5\ Bonneville asserts that this level of 
annual revenues is sufficient to recover its costs for the 2018-2019 
rate approval period, while providing cash flow to ensure at least a 95 
percent probability of making all payments to the United States 
Treasury in full and on time for each year of the rate period.\6\
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    \1\ Bonneville submitted errata filings on August 7, 2017, and 
August 10, 2017, respectively, to correct various attachments to the 
July 31, 2017 Transmittal Letter and to add inadvertently omitted 
documents to the record.
    \2\ The proposed transmission rates for which Bonneville seeks 
approval for the period of October 1, 2017 through September 30, 
2019 are: Formula Power Transmission Rate (FPT-18.1); Formula Power 
Transmission Rate (FPT-18.3); Integration of Resources Rate (IR-18); 
Network Integration Rate (NT-18); Point-to-Point Rate (PTP-18); 
Montana Intertie Rate (IM-18) (IM Rate); Use-of-Facilities 
Transmission Rate (UFT-18); Advance Funding Rate (AF-18); Townsend-
Garrison Transmission Rate (TGT-18); WECC and Peak Service Rate (PW-
18); Oversupply Rate (OS-18); Eastern Intertie Rate (IE-18); 
Ancillary and Control Area Services Rates (ACS-18); and Transmission 
General Rate Schedule Provisions. Bonneville July 31, 2017 
Transmittal Letter at 3.
    \3\ 16 U.S.C. 839e (2012).
    \4\ 18 CFR pt. 300 (2017).
    \5\ These values are the totals of all of Bonneville's 
transmission revenues, inclusive of the transmission rates at issue 
in Docket No. EF17-4-000. See Bonneville August 7, 2017 Transmittal 
Letter at 2; Bonneville Power Admin., 160 FERC ] 61,113 (2017) 
(approving on an interim basis the transmission rates associated 
with the Southern Intertie).
    \6\ Bonneville July 31, 2017 Transmittal Letter at 5, 8.
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II. Notice of Filing

    3. Notice of Bonneville's July 31, 2017 filing was published in the 
Federal Register, 82 FR 37,445 (2017),\7\ with protests and 
interventions due on or before August 30, 2017. Timely motions to 
intervene were filed by Pacific Northwest Generating Cooperative, 
Powerex Corporation, Turlock Irrigation District, Avista Corporation, 
Sacramento Municipal Utility District, Northwest Requirements 
Utilities, Industrial Customers of Northwest Utilities, NorthWestern 
Corporation, Western Public Agencies Group, M-S-R Public Power Agency, 
Snohomish County Public Utility District No. 1, Public Power Council, 
Puget Sound Energy Inc., Idaho Power Company, and Avangrid Renewables 
LLC. Renewable Northwest filed a timely motion to intervene and 
comments. Sierra Club and Montana Environmental Information Center 
(Sierra Club/MEIC) filed a timely motion to intervene and protest. On 
September 14, 2017, Bonneville filed a request for leave to answer and 
answer to Sierra Club/MEIC's protest and Renewable Northwest's 
comments.
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    \7\ Notices of Bonneville's errata filings were published in the 
Federal Register, 82 FR 41,014 (2017) and 82 FR 40,151 (2017). The 
notices of the errata filings retained the August 30, 2017 date by 
which protests or interventions were due.
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    4. Sierra Club/MEIC argues that eliminating Bonneville's IM 
Rate,\8\ in particular, is necessary to meet Bonneville's statutory 
mandate to encourage the widest possible diversified use of electric 
power at the lowest possible rates to consumers, consistent with sound 
business principles.\9\ Sierra Club/MEIC asserts that the IM Rate is 
the primary impediment to renewable resource development in 
Montana.\10\ Sierra Club/MEIC explains that Bonneville effectively 
charges two rates for Montana producers seeking to use the Eastern 
Intertie--the IM Rate and the Network Rate--which inequitably allocates 
transmission costs and has impeded subscription of the Eastern 
Intertie.\11\ According to Sierra Club/

[[Page 45840]]

MEIC, eliminating this ``pancake'' rate structure would enable high-
quality Montana wind resources to affordably transmit their power and 
meet growing needs for renewable power in the Pacific Northwest.\12\ 
Sierra Club/MEIC states that the IM Rate yields very little revenue for 
Bonneville because it is undersubscribed, and that cost recovery 
principles, cost causation principles, and Bonneville's segmentation 
policy do not support maintaining the IM Rate.\13\ Lastly, Sierra Club/
MEIC states that speculation on future upgrades to Bonneville's 
transmission network is not a legitimate basis for maintaining the IM 
Rate, and eliminating the IM Rate does not require Bonneville to roll-
in the Southern Intertie.\14\ Sierra Club/MEIC urges the Commission to 
disapprove the IM Rate and direct Bonneville to establish a rate 
structure for the Eastern Intertie that is consistent with Bonneville's 
statutory mandate.\15\
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    \8\ The IM Rate is the rate that Bonneville charges for the 
available 200 megawatts (MW) of capacity on the Eastern Intertie, 
which is the portion of the Montana Intertie between the Townsend 
and Garrison substations in western Montana that Bonneville built 
and continues to operate.
    \9\ Sierra Club/MEIC Protest at 1.
    \10\ Id. at 11.
    \11\ Id. at 2-3, 11.
    \12\ Id. at 2-3.
    \13\ Id. at 3, 12.
    \14\ Id. at 31, 33.
    \15\ Id. at 12.
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    5. Renewable Northwest similarly filed comments requesting that the 
Commission disapprove Bonneville's proposed IM Rate on the basis that 
the rate does not ``encourag[e] the widest possible diversified use of 
electric power at the lowest possible rates to consumers consistent 
with sound business principles.'' \16\ Renewable Northwest asserts that 
the IM Rate imposes a financial disadvantage that is a disincentive to 
the use of Bonneville's 184 MW of unsubscribed Eastern Intertie 
capacity.\17\ Renewable Northwest suggests that eliminating the IM Rate 
would encourage subscription of Eastern Intertie capacity and generate 
additional revenue for Bonneville.\18\ Renewable Northwest encourages 
the Commission to direct Bonneville to work with stakeholders on a rate 
structure that would encourage subscription of Bonneville's available 
Eastern Intertie capacity in a manner that is consistent with 
Bonneville's statutory directives.\19\
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    \16\ Renewable Northwest Comments at 7 (quoting 16 U.S.C. 838g 
(2012).
    \17\ Of the 200 MW available on the Eastern Intertie that are 
subject to the IM Rate, 16 MW are subscribed, leaving 184 MW still 
available. Id.
    \18\ Id. at 4.
    \19\ Id. at 10.
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III. Discussion

A. Procedural Matters

    6. Pursuant to Rule 214 of the Commission's Rules of Practice and 
Procedure, 18 CFR 385.214 (2017), the timely, unopposed motions to 
intervene serve to make the entities that filed them parties to this 
proceeding.
    7. Rule 213(a)(2) of the Commission's Rules of Practice and 
Procedure, 18 CFR 385.213(a)(2) (2017), prohibits an answer to a 
protest or an answer unless otherwise ordered by the decisional 
authority. We are not persuaded to accept Bonneville's answer to the 
comments and protests, and therefore, reject it.

B. Standard of Review

    8. Under the Northwest Power Act, our review of Bonneville's 
transmission rates is limited to determining whether Bonneville's 
proposed rates satisfy the specific requirements of section 7(a)(2) of 
the Northwest Power Act, including that such rates:
    (A) Are 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) are based upon [Bonneville's] total system costs; and
    (C) insofar as transmission rates are concerned, equitably allocate 
the costs of the Federal transmission system between Federal and non-
Federal power utilizing such system.\20\
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    \20\ 16 U.S.C. 839e(a)(2) (2012). Bonneville also must comply 
with the financial, accounting, and ratemaking requirements in 
Department of Energy Order No. RA 6120.2.
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    9. Unlike the Commission's statutory authority under the Federal 
Power Act, the Commission's authority under section 7(a) 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.\21\
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    \21\ See, e.g., Bonneville Power Admin., 152 FERC ] 61,201, at P 
10 (2015) (citing U.S. Dep't of Energy--Bonneville Power Admin., 67 
FERC ] 61,351, at 62,216-17 (1994); Aluminum Co. of Am. v. 
Bonneville Power Admin., 903 F.2d 585, 592-93 (9th Cir. 1989)).
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    10. 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,\22\ the Commission generally defers resolution 
of issues on the merits of Bonneville's application until the order on 
final confirmation. Thus, we generally approve the proposed rates on an 
interim basis, unless the filing is patently deficient, and provide the 
parties with an additional opportunity to raise issues with regard to 
Bonneville's filing.\23\
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    \22\ See 18 CFR 300.10(a)(3)(ii) (2017).
    \23\ See, e.g., Bonneville Power Admin., 152 FERC ] 61,201 at P 
11 (citing U.S. Dep't of Energy--Bonneville Power Admin., 64 FERC ] 
61,375, at 63,606 (1993); U.S. Dep't of Energy--Bonneville Power 
Admin., 40 FERC ] 61,351, at 62,059-60 (1987)).
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    11. We decline at this time to grant Bonneville's request for final 
confirmation and approval of Bonneville's proposed transmission rates. 
However, we will grant Bonneville's request for interim approval. Our 
preliminary review indicates that Bonneville's transmission rates 
filing appears to meet the statutory standards and the minimum 
threshold filing requirements of Part 300 of the Commission's 
regulations.\24\ Moreover, our preliminary review of Bonneville's 
submittal indicates that it does not contain any patent deficiencies. 
The proposed rates, with the exception of the rates for transmission 
service on the Southern Intertie which are addressed separately in 
another order, therefore will be approved on an interim basis pending 
our further review. In addition, we note 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.\25\
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    \24\ See, e.g., id. P 12 (citing U.S. Dep't of Energy--
Bonneville Power Admin., 105 FERC ] 61,006, at PP 13-14 (2003); U.S. 
Dep't of Energy--Bonneville Power Admin., 96 FERC ] 61,360, at 
62,358 (2001)).
    \25\ 18 CFR 300.20(c) (2017).
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    12. We will also 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. Specifically, if parties wish to file additional comments, 
they will be due within 30 days of the date of this order. Reply 
comments are due 20 days thereafter.
The Commission orders:
    (A) Interim approval of Bonneville's proposed transmission rates, 
with the exception of the rates for transmission service on the 
Southern Intertie, is hereby granted, to become effective on October 1, 
2017, through September 30, 2019, subject to refund with interest as 
set forth in section 300.20(c) of the Commission's regulations, 18 CFR 
300.20(c), pending final action and

[[Page 45841]]

either their approval or their disapproval.
    (B) Within 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 20 days thereafter.
    (C) The Secretary shall promptly publish this order in the Federal 
Register.


    By the Commission.

    Issued: September 25, 2017.
Kimberly D. Bose,
Secretary.
[FR Doc. 2017-21060 Filed 9-29-17; 8:45 am]
 BILLING CODE 6717-01-P