[Federal Register Volume 85, Number 231 (Tuesday, December 1, 2020)]
[Notices]
[Pages 77189-77196]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-26016]


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DEPARTMENT OF ENERGY

Bonneville Power Administration

[BPA File No.: BP-22]


Fiscal Year (FY) 2022-2023 Proposed Power and Transmission Rate 
Adjustments Public Hearing and Opportunities for Public Review and 
Comment

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

ACTION: Notice of FY 2022-2023 proposed power and transmission rate 
adjustments.

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SUMMARY: Bonneville is initiating a rate proceeding under the Northwest 
Power Planning and Conservation Act (Northwest Power Act) to establish 
power, transmission, and ancillary and control area services rates for 
the period from October 1, 2021, through September 30, 2023. Bonneville 
has designated this proceeding Docket No. BP-22.

DATES: 
    Prehearing Conference: The BP-22 proceeding begins with a 
prehearing conference at 9:00 a.m. on Monday, December 7, 2020, which 
will be held telephonically. Interested parties may obtain the call-in 
information by accessing Bonneville's BP-22 rate case web page at 
www.bpa.gov/goto/BP22 or by contacting the Hearing Clerk at 
[email protected].
    Intervention: Anyone intending to become a party to the BP-22 
proceeding must file a petition to intervene on Bonneville's secure 
website. Petitions to intervene may be filed beginning on the date of 
publication of this Notice and are due no later than 4:30 p.m. on 
Tuesday, December 8, 2020. Part III of this notice, ``Public 
Participation in BP-22,'' provides details on requesting access to the 
secure website and filing a petition to intervene.

ADDRESSES: 
    Participant Comments: Written comments by non-party participants 
must be received by March 1, 2021, to be considered in the 
Administrator's Record of Decision (ROD). Part III of this notice, 
``Public Participation in BP-22,'' provides details on submitting 
participant comments.

FOR FURTHER INFORMATION CONTACT: Ms. Abigail Rhoads, DKE-7, BPA 
Communications, Bonneville Power Administration, P.O. Box 3621, 
Portland, Oregon 97208; by phone toll-free at 1-800-622-4519; or by 
email to [email protected].
    The Hearing Clerk for this proceeding can be reached via email at 
[email protected] or via telephone at (503) 960-8722.
    Please direct questions regarding Bonneville's secure website to 
the Hearing Coordinator via email at [email protected] or, if the 
question is time-sensitive, via telephone at (503) 230-3107.
    Responsible Officials: Mr. Daniel H. Fisher, Power Rates Manager, 
is the official responsible for the development of Bonneville's power 
rates, and Ms. Rebecca E. Fredrickson, Manager of Transmission Rates, 
Tariff and Regulatory, is the official responsible for the development 
of Bonneville's transmission, ancillary, and control area services 
rates.

SUPPLEMENTARY INFORMATION:

Table of Contents

Part I. Introduction and Procedural Matters
Part II. Scope of BP-22 Rate Proceeding
Part III. Public Participation in BP-22
Part IV. Summary of Rate Proposals
Part V. Proposed BP-22 Rate Schedules

Part I--Introduction and Procedural Matters

A. Introduction and Procedural Matters

    The Northwest Power Act provides that Bonneville must establish, 
and periodically review and revise, its power and transmission rates so 
that they recover, in accordance with sound business principles, the 
costs associated with the acquisition, conservation, and transmission 
of electric power, including amortization of the Federal investment in 
the Federal Columbia River Power System (FCRPS) over a reasonable 
number of years, and Bonneville's other costs and expenses. Section 
7(i) of the Northwest Power Act requires that Bonneville's rates be 
established according to certain procedures, including publication in 
the Federal Register of a notice of the proposed rates; one or more 
hearings conducted as expeditiously as practicable by a Hearing 
Officer; opportunity for both oral presentation and written submission 
of views, data, questions, and arguments related to the proposed rates; 
and a decision by the Administrator based on the record.

[[Page 77190]]

Bonneville is conducting the BP-22 proceeding to establish rates for FY 
2022-2023.
    Bonneville's Rules of Procedure will govern the BP-22 proceeding. 
The rules are posted on Bonneville's website at https://www.bpa.gov/Finance/RateCases/RulesProcedure/Pages/.aspx and published in the 
Federal Register, 83 FR 39993 (Aug. 13, 2018).

B. Proposed Procedural Schedule

    A proposed schedule for the BP-22 proceeding is provided below. The 
official schedule will be established by the Hearing Officer and may be 
amended by the Hearing Officer as needed during the proceeding.

Prehearing Conference--December 7, 2020
BPA Files Initial Proposal--December 7, 2020
Deadline for Petitions to Intervene--December 8, 2020
Clarification--December 18, 2020, January 6-7, 2021
Motions to Strike Due--January 15, 2021
Data Request Deadline--January 15, 2021
Answers to Motions to Strike Due--January 22, 2021
Data Response Deadline--January 22, 2021
Parties File Direct Cases--February 3, 2021
Clarification--February 9-10, 2021
Motions to Strike Due--February 16, 2021
Data Request Deadline--February 16, 2021
Answers to Motions to Strike Due--February 23, 2021
Data Response Deadline--February 23, 2021
Close of Participant Comments--March 1, 2021
Litigants File Rebuttal Cases--March 16, 2021
Clarification--March 22, 2021
Motions to Strike Due--March 26, 2021
Data Request Deadline--March 26, 2021
Answers to Motions to Strike Due--April 2, 2021
Data Response Deadline--April 2, 2021
Parties Give Notice of Intent to Cross-Examine--April 5, 2021
Cross-Examination--April 8-9, 2021
Initial Briefs Filed--April 27, 2021
Oral Argument--May 4, 2021
Draft ROD Issued--June 11, 2021
Briefs on Exceptions Filed--June 25, 2021
Final ROD and Final Studies Issued--July 28, 2021

C. Ex Parte Communications

    Section 1010.5 of Bonneville's Rules of Procedure prohibits ex 
parte communications. Ex parte communications include any oral or 
written communication (1) relevant to the merits of any issue in the 
proceeding; (2) that is not on the record; and (3) with respect to 
which reasonable prior notice has not been given. The ex parte rule 
applies to communications with all Bonneville and DOE employees and 
contractors, the Hearing Officer, and the Hearing Clerk during the 
proceeding. Except as provided, any communications with persons covered 
by the rule regarding the merits of any issue in the proceeding by 
other executive branch agencies, Congress, existing or potential 
Bonneville customers, nonprofit or public interest groups, or any other 
non-DOE parties are prohibited. The rule explicitly excludes and does 
not prohibit communications (1) relating to matters of procedure; (2) 
otherwise authorized by law or the Rules of Procedure; (3) from or to 
the Federal Energy Regulatory Commission (Commission); (4) that all 
litigants agree may be made on an ex parte basis; (5) in the ordinary 
course of business, about information required to be exchanged under 
contracts, or in information responding to a Freedom of Information Act 
request; (6) between the Hearing Officer and Hearing Clerk; (7) in 
meetings for which prior notice has been given; or (8) as otherwise 
specified in Section 1010.5(b) of Bonneville's Rules of Procedure. The 
ex parte rule remains in effect until the Administrator's Final ROD is 
issued.

Part II--Scope of BP-22 Rate Proceeding

A. Joint Rate Proceeding

    The BP-22 proceeding is a joint proceeding for the adoption of both 
power and transmission rates for FY 2022-2023. A summary of the 
proposal for Bonneville's power and transmission rates is provided in 
Part IV of this notice.

B. 2020 Integrated Program Review

    Bonneville began its 2020 Integrated Program Review (IPR) process 
in June 2020. The IPR process is designed to allow the public an 
opportunity to review and comment on Bonneville's proposed expense and 
capital spending level estimates before the spending levels are used to 
set rates. On September 30, 2020, Bonneville issued the Final Close-Out 
Report for the IPR process, which establishes the expense and capital 
program level cost estimates that are used in the BP-22 Initial 
Proposal. At the discretion of the Administrator, Bonneville may hold 
additional processes to review these estimates outside of this rate 
proceeding.

C. Scope of the BP-22 Proceeding

    This section provides guidance to the Hearing Officer regarding the 
scope of the rate proceeding and identifies specific issues that are 
outside the scope. In addition to the issues specifically listed below, 
any other issue that is not a ratemaking issue is outside the scope of 
this proceeding.
    Bonneville may revise the scope of the proceeding to include new 
issues that arise as a result of circumstances or events occurring 
outside the proceeding that are substantially related to the rates 
under consideration in the proceeding. See Rules of Procedure, Section 
1010.4(b)(8)(iii), (iv). If Bonneville revises the scope of the 
proceeding to include new issues, Bonneville will provide public notice 
on its website, present testimony or other information regarding such 
issues, and provide a reasonable opportunity to intervene and respond 
to Bonneville's testimony or other information. Id.
1. Program Cost Estimates
    Bonneville's projections of its program costs and spending levels 
are not determined in rate proceedings. These projections are 
determined by Bonneville in other forums, such as the IPR process 
described above, with input from stakeholders. In addition, Bonneville 
depreciates the capital spending on the Federal power and transmission 
system over the service lives of the associated assets. Transmission's 
depreciation is based on a depreciation study calculated consistent 
with industry standards. The service lives of power and transmission 
assets as well as the depreciation study and resulting depreciation 
rates are not determined in rate proceedings.
    Pursuant to Section 1010.4(b)(8) of the Rules of Procedure, the 
Administrator directs the Hearing Officer to exclude from the record 
all argument, testimony, or other evidence that challenges the 
appropriateness or reasonableness of the Administrator's decisions on 
cost and spending levels, including decisions on the depreciation rates 
that are used to calculate depreciation expense. If any re-examination 
of spending levels is necessary, such re-examination will occur outside 
of the rate proceeding. The above exclusion does not extend to those 
portions of the revenue requirement related to the following: (1) 
Interest rate forecasts, (2) interest expense and credit, (3) Treasury 
repayment schedules, (4) calculation of depreciation and amortization 
expense, (5) forecasts of system replacements used in repayment 
studies, (6) purchased power expenses, (7) transmission cost incurred 
by Power Services, (8) generation cost incurred by Transmission 
Services, (9) minimum required net revenue, and (10) the costs of risk 
mitigation actions resulting from the expense and revenue uncertainties 
included in the risk analysis.

[[Page 77191]]

2. Federal and Non-Federal Debt Service and Debt Management
    During the 2020 IPR process and in other forums, Bonneville 
provided the public with background information on Bonneville's 
internal Federal and non-Federal debt management policies and 
practices. While these policies and practices are not decided in the 
IPR process, these discussions were intended to inform interested 
parties about these matters so the parties would better understand 
Bonneville's debt structure. Bonneville's debt management policies and 
practices remain outside the scope of the rate proceeding.
    Pursuant to Section 1010.4(b)(8) of the Rules of Procedure, the 
Administrator directs the Hearing Officer to exclude from the record 
all argument, testimony, or other evidence that seeks in any way to 
address the appropriateness or reasonableness of Bonneville's debt 
management policies and practices. This exclusion does not encompass 
how debt management actions are reflected in ratemaking.
3. Financial and Accounting Policies and Practices
    Bonneville published its third Financial Plan in 2018, outlining 
objectives to help strengthen the agency's financial health and 
resiliency. The Financial Plan focused on four main areas: Cost 
management; debt utilization; debt capacity; and liquidity. Since 
publishing the Plan, Bonneville has adopted certain financial policies 
to help further its financial objectives. Bonneville's Financial 
Reserves Policy establishes lower and upper thresholds for agency and 
business line financial reserves and parameters for actions to be taken 
when financial reserves are above or below the thresholds. Bonneville's 
Leverage Policy provides guidance on managing the agency's and business 
lines' debt-to-asset ratios and establishes near-term, mid-term, and 
long-term targets for agency and business line ratios. The terms of 
Bonneville's Financial Plan and Policies, along with Bonneville's 
internal financial and accounting policies and practices, are outside 
the scope of the BP-22 proceeding.
    Pursuant to Section 1010.4(b)(8) of the Rules of Procedure, the 
Administrator directs the Hearing Officer to exclude from the record 
all argument, testimony, or other evidence that seeks in any way to 
visit or revisit the terms of Bonneville's Financial Plan, Financial 
Reserves Policy, Leverage Policy, internal financial and accounting 
policies and practices, and previous decisions regarding the adoption 
and implementation of the Financial Plan and Policies in the BP-18 ROD, 
the Financial Reserves Policy Phase-In ROD, the Leverage Policy ROD, 
and the BP-20E ROD.
4. Tiered Rate Methodology (TRM)
    The TRM restricts Bonneville and its customers with Contract High 
Water Mark (CHWM) contracts from proposing changes to the TRM's 
ratemaking guidelines unless certain procedures have been successfully 
concluded. No proposed changes have been subjected to the required 
procedures.
    Pursuant to Section 1010.4(b)(8) of the Rules of Procedure, the 
Administrator directs the Hearing Officer to exclude from the record 
all argument, testimony, or other evidence that seeks in any way to 
propose revisions to the TRM made by Bonneville, customers with CHWM 
contracts, or their representatives. This exclusion does not extend to 
a party or customer that does not have a CHWM contract.
5. Rate Period High Water Mark (RHWM) Process
    The RHWM Process preceded the start of the BP-22 proceeding. In 
that process, as directed by the TRM, Bonneville established FY 2022-
2023 RHWMs for Public customers that signed contracts for firm 
requirements power service providing for tiered rates, referred to as 
CHWM contracts. Bonneville established the maximum planned amount of 
power a customer is eligible to purchase at Tier 1 rates during the 
rate period, the Above-RHWM Loads for each customer, the System Shaped 
Load for each customer, the Tier 1 System Firm Critical Output, RHWM 
Augmentation, the Rate Period Tier 1 System Capability (RT1SC), and the 
monthly/diurnal shape of RT1SC. The RHWM Process provided customers an 
opportunity to review, comment on, and challenge Bonneville's RHWM 
determinations.
    Pursuant to Section 1010.4(b)(8) of the Rules of Procedure, the 
Administrator directs the Hearing Officer to exclude from the record 
all argument, testimony, or other evidence that seeks in any way to 
visit or revisit Bonneville's determination of a customer's FY 2022-
2023 RHWM or other RHWM Process determinations.
6. 2008 Average System Cost Methodology (2008 ASCM) and Average System 
Cost Determinations
    Section 5(c) of the Northwest Power Act established the Residential 
Exchange Program, which provides benefits to residential and farm 
consumers of Pacific Northwest utilities based, in part, on a utility's 
``average system cost'' (ASC) of resources. The 2008 ASCM is not 
subject to challenge or review in a Section 7(i) proceeding. 
Determinations of the ASCs of participating utilities are made in 
separate processes conducted pursuant to the ASCM. Those processes 
began with ASC filings on July 1, 2020, and are continuing through July 
2021.
    Pursuant to Section 1010.4(b)(8) of the Rules of Procedure, the 
Administrator directs the Hearing Officer to exclude from the record 
all argument, testimony, or other evidence that seeks in any way to 
visit or revisit the appropriateness or reasonableness of the 2008 ASCM 
or of any of the ongoing ASC determinations.
7. 2012 Residential Exchange Program Settlement Agreement (2012 REP 
Settlement)
    On July 26, 2011, the Administrator executed the 2012 REP 
Settlement, which resolved longstanding litigation over Bonneville's 
implementation of the Residential Exchange Program (REP) under Section 
5(c) of the Northwest Power Act, 16 U.S.C. 839c(c). The Administrator's 
findings regarding the legal, factual, and policy challenges to the 
2012 REP Settlement are explained in the REP-12 Record of Decision 
(REP-12 ROD). The Administrator's decisions regarding the 2012 REP 
Settlement and REP-12 ROD were upheld by the U.S. Court of Appeals for 
the Ninth Circuit in Association of Public Agency Customers v. 
Bonneville Power Administration, 733 F.3d 939 (9th Cir. 2013). 
Challenges to Bonneville's decision to adopt the 2012 REP Settlement 
and implement its terms in Bonneville's rate proceedings are not within 
the scope of this proceeding.
    Pursuant to Section 1010.4(b)(8) of the Rules of Procedure, the 
Administrator directs the Hearing Officer to exclude from the record 
all argument, testimony, or other evidence that seeks in any way to 
visit or revisit in this rate proceeding Bonneville's determination to 
adopt the 2012 REP Settlement or its terms.
8. Service to the Direct Service Industries (DSIs)
    Pursuant to Section 1010.4(b)(8) of the Rules of Procedure, the 
Administrator directs the Hearing Officer to exclude from the record 
all argument, testimony, or other evidence that seeks in any way to 
revisit the appropriateness or reasonableness of Bonneville's decisions 
regarding service to the DSIs, including Bonneville's decision to offer 
contracts to the DSIs and the method, level of service, or other terms 
embodied in the existing DSI contracts.

[[Page 77192]]

9. Operation and Maintenance of the Power and Transmission Systems
    Bonneville, in coordination with other Federal entities, operates 
and maintains the Federal Columbia River power and transmission systems 
in accordance with good utility practice and with applicable 
reliability standards and operating requirements. Bonneville's power 
and transmission systems operation and maintenance practices and 
protocols, such as dispatcher standing orders, operating instructions, 
reliability of the system, compliance programs, and other operating 
requirements, are non-rate matters.
    Pursuant to Section 1010.4(b)(8) of the Rules of Procedure, the 
Administrator directs the Hearing Officer to exclude from the record 
all argument, testimony, or other evidence that seeks in any way to 
address issues regarding operation and maintenance practices and 
protocols.
10. Terms and Conditions of Transmission Service
    Bonneville offers and provides transmission services, including 
interconnection service, and ancillary and control area services in 
accordance with the terms and conditions specified in its open access 
transmission tariff (Tariff), business practices, and applicable 
contracts. In addition to and concurrent with this rate proceeding, 
Bonneville is initiating the TC-22 proceeding to modify the Tariff 
terms and conditions. Bonneville's business practices provide 
implementation details for the Tariff. Bonneville's decisions regarding 
the business practices are determined in other forums and follow the 
procedures in Bonneville's Business Practice Process posted on its 
website. The Tariff terms and conditions, business practices, and the 
contracts and contract disputes between Bonneville and its customers 
are outside the scope of the BP-22 rate proceeding.
    Pursuant to Section 1010.4(b)(8) of the Rules of Procedure, the 
Administrator directs the Hearing Officer to exclude from the record 
all argument, testimony, or other evidence that seeks in any way to 
address issues regarding terms and conditions of transmission service, 
including interconnection service, and ancillary and control area 
services. This includes, but is not limited to, argument, testimony, or 
other evidence regarding Bonneville's decisions whether to offer 
particular transmission services, the terms and conditions for 
participating in the EIM, the procedures and standards for 
modifications to Bonneville's Tariff or business practices, and whether 
to include certain terms and conditions in the Tariff or in business 
practices.
11. Oversupply Management Protocol
    The proposed OS-22 Oversupply rate is a formula rate designed to 
recover Bonneville's oversupply costs. Bonneville incurs oversupply 
costs pursuant to the Oversupply Management Protocol, Attachment P of 
Bonneville's Tariff. Under the proposed formula rate, Bonneville would 
recover actual costs incurred during the BP-22 rate period rather than 
forecast costs.
    Pursuant to Section 1010.4(b)(8) of the Rules of Procedure, the 
Administrator directs the Hearing Officer to exclude from the record 
all argument, testimony, or other evidence that seeks in any way to 
address the terms of the Oversupply Management Protocol; whether the 
Oversupply Management Protocol complies with orders of the Commission; 
and whether Bonneville took all actions to avoid using the Oversupply 
Management Protocol, including the payment of negative prices to 
generators outside of Bonneville's balancing authority area. This 
exclusion does not extend to issues concerning the rates for recovering 
the costs of the Oversupply Management Protocol.
12. Energy Imbalance Market Policy Decisions
    Since 2018, Bonneville has been exploring whether to join the 
Western Energy Imbalance Market (EIM). The EIM is an extension of the 
California Independent System Operator's (CAISO) real-time market. It 
economically dispatches resources that elect to participate in the EIM 
to solve for the energy imbalance of participating Balancing Authority 
Areas (BAAs), consistent with transmission and system constraints. 
Following an extensive public process, on September 26, 2019, 
Bonneville issued the Energy Imbalance Market Policy Administrator's 
Record of Decision, in which the Administrator made a number of policy 
decisions related to Bonneville's potential participation in the EIM. 
Later, on October 30, 2020 following another public process, Bonneville 
issued a follow-on decision document, the EIM Phase III Final Decision 
Document, addressing other policy issues related to Bonneville's 
potential EIM participation. Further, Bonneville will make its final 
decision on whether to join the EIM in a separate process that is 
expected to begin following completion of this case. None of these 
decisions are within the scope of the BP-22 proceeding.
    Pursuant to Section 1010.4(b)(8) of the Rules of Procedure, the 
Administrator directs the Hearing Officer to exclude from the record 
all argument, testimony, or other evidence that seeks in any way to 
raise or revisit the issues or decisions addressed in the Energy 
Imbalance Market Policy Administrator's Record of Decision or Phase III 
EIM Decision Document. In addition, the Administrator directs the 
Hearing Officer to exclude from the record all argument, testimony, or 
other evidence that seeks to address whether Bonneville should join the 
EIM. This exclusion does not extend to issues concerning the recovery 
or distribution of EIM-related costs or credits, which are within the 
scope of the BP-22 proceeding.
13. Potential Environmental Impacts, Biological Constraints, and 
Related Operations
    Environmental impacts are addressed in a National Environmental 
Policy Act (NEPA) process Bonneville conducts concurrent with the rate 
proceeding. See Section II.D of this notice. In addition, biological 
constraints on hydropower operations are determined outside of the rate 
case through intra-agency consultations under the Endangered Species 
Act, 16 U.S.C.1536(a)(2). Finally, implementation of the decision 
regarding operations, maintenance and configuration of the Columbia 
River System evaluated in the Columbia River System Operations 
Environmental Impact Statement (CRSO EIS) and associated joint Record 
of Decision with the U.S. Army Corps of Engineers and Bureau of 
Reclamation are also not issues to be addressed in this proceeding.
    Pursuant to Section 1010.4(a)(8) of Bonneville's Procedures, the 
Administrator directs the Hearing Officer to exclude from the record 
all argument, testimony, or other evidence that seeks in any way to 
address the potential environmental impacts of the rates being 
developed in this rate proceeding, potential biological effects of 
operations modeled in the proceeding, the appropriate hydroelectric 
constraints defined in these environmental compliance processes, or the 
operations, maintenance, and configuration, assumptions, studies, 
decisions, or matters addressed in the CRSO EIS or CRSO EIS joint 
Record of Decision.

[[Page 77193]]

D. The National Environmental Policy Act

    Bonneville is in the process of assessing the potential 
environmental effects of its proposed power and transmission rate 
adjustments, consistent with NEPA. The NEPA process is conducted 
separately from the rate proceeding. As discussed above, all evidence 
and argument addressing potential environmental impacts of the rate 
adjustments being developed in the BP-22 rate proceeding are excluded 
from the rate proceeding record. Instead, comments on environmental 
effects should be directed to the NEPA process.
    Based on its most current assessment of the proposed power and 
transmission rate adjustments, Bonneville believes this proposal may be 
the type of action typically excluded from further NEPA review pursuant 
to U.S. Department of Energy NEPA regulations, which apply to 
Bonneville. More specifically, the proposal appears to solely involve 
changes to Bonneville's rates and other cost recovery and management 
mechanisms to ensure that there are sufficient revenues to meet 
Bonneville's financial obligations and other costs and expenses, while 
using existing generation sources operating within normal limits. As 
such, it appears this rate proposal falls within Categorical Exclusion 
B4.3, found at 10 CFR part 1021, subpart D, app. B4.3 (2015), which 
provides for the categorical exclusion from further NEPA review of 
``[r]ate changes for electric power, power transmission, and other 
products or services provided by a Power Marketing Administration that 
are based on a change in revenue requirements if the operations of 
generation projects would remain within normal operating limits.''
    Nonetheless, Bonneville is still assessing the proposal, and, 
depending upon the ongoing environmental review, Bonneville may instead 
issue another appropriate NEPA document. Comments regarding the 
potential environmental effects of the proposal may be submitted to 
Katey Grange, NEPA Compliance Officer, EC-4, Bonneville Power 
Administration, 905 NE 11th Avenue, Portland, Oregon 97232, and to 
[email protected]. Any such comments received by the comment deadline 
for Participant Comments identified in Section III.A of this notice 
will be considered by Bonneville's NEPA compliance staff in the NEPA 
process that is being conducted for this proposal.

Part III--Public Participation in BP-22

A. Distinguishing Between ``Participants'' and ``Parties''

    Bonneville distinguishes between ``participants in'' and ``parties 
to'' the BP-22 proceeding. Separate from the formal hearing process, 
Bonneville will receive written comments, views, opinions, and 
information from participants who may submit comments without being 
subject to the duties of, or having the privileges of, parties. 
Participants are not entitled to participate in the prehearing 
conference; may not cross-examine parties' witnesses, seek discovery, 
or serve or be served with documents; and are not subject to the same 
procedural requirements as parties. Bonneville customers whose rates 
are subject to this proceeding, or their affiliated customer groups, 
may not submit participant comments. Members or employees of 
organizations that have intervened in the proceeding may submit 
participant comments as private individuals (that is, not speaking for 
their organizations) but may not use the comment procedures to address 
specific issues raised by their intervener organizations.
    Written comments by participants will be included in the record and 
considered by the Administrator if they are received by March 1, 2021. 
Participants should submit comments through Bonneville's website at 
www.bpa.gov/comment or by hard copy to: BPA Public Involvement, DKE-7, 
Bonneville Power Administration, P.O. Box 3621, Portland, Oregon 97208. 
All comments should contain the designation ``BP-22'' in the subject 
line.

B. Interventions

    Any entity or person intending to become a party in the BP-22 
proceeding must file a petition to intervene through Bonneville's 
secure website (https://www.bpa.gov/secure/Ratecase/). A first-time 
user of Bonneville's secure website must create a user account to 
submit an intervention. Returning users may request access to the BP-22 
proceeding through their existing accounts, and may submit 
interventions once their permissions have been updated. The secure 
website contains a link to the user guide, which provides step-by-step 
instructions for creating user accounts, generating filing numbers, 
submitting filings, and uploading interventions. Please contact the 
Hearing Coordinator via email at [email protected] or, if the question 
is time-sensitive, via telephone at (503) 230-3107 with any questions 
regarding the submission process. A petition to intervene must conform 
to the format and content requirements set forth in Bonneville's Rules 
of Procedure Sections 1010.6 and 1010.11 and must be uploaded to the 
BP-22 proceeding secure website by the deadline established in the 
procedural schedule.
    A petition to intervene must state the name and address of the 
entity or person requesting party status and the entity or person's 
interest in the hearing. Bonneville customers and affiliated customer 
groups will be granted intervention based on petitions filed in 
conformance with the Rules of Procedure. Other petitioners must explain 
their interests in sufficient detail to permit the Hearing Officer to 
determine whether the petitioners have a relevant interest in the 
hearing. The deadline for opposing a timely intervention is two 
business days after the deadline for filing petitions to intervene. 
Bonneville or any party may oppose a petition for intervention. All 
petitions will be ruled on by the Hearing Officer. Late interventions 
are strongly disfavored. Opposition to an untimely petition to 
intervene must be filed within two business days after service of the 
petition.

C. Developing the Record

    The hearing record will include, among other things, the 
transcripts of the hearing, written evidence and argument entered into 
the record by Bonneville and the parties, written comments from 
participants, and other material accepted into the record by the 
Hearing Officer. The Hearing Officer will review and certify the record 
to the Administrator for final decision.
    The Administrator will develop final rates based on the record and 
such other materials and information as may have been submitted to or 
developed by the Administrator. The Final ROD will be made available to 
all parties. Bonneville will file its rates with the Commission for 
confirmation and approval after issuance of the Final ROD.

Part IV--Summary of Rate Proposals

A. Rate Proposals Affecting Power and Transmission Rates

    Bonneville will be introducing a number of rate proposals that will 
affect power and transmission rates for the BP-22 rate period.
1. Energy Imbalance Market (EIM) Rate Proposals
    Since 2018, Bonneville has been exploring whether to join the 
Western Energy Imbalance Market (EIM), which is an extension of the 
California Independent System Operator's (CAISO) real-time market. 
Currently, six regional BAAs have joined the EIM. The EIM is

[[Page 77194]]

operated by the CAISO, which uses market software to economically 
dispatch participating generation resources to balance supply, 
transfers between balancing authority areas (interchange), and load 
across the market's footprint, while also simultaneously ensuring 
generation and transmission limitations are respected. For balancing 
authorities in the EIM (EIM Entities), the EIM replaces the Energy 
Imbalance and Generator Imbalance services under the EIM Entities' 
respective Open Access Transmission Tariffs. In September of 2019, 
following an extensive public process, Bonneville issued the Energy 
Imbalance Market Policy Administrator's Record of Decision, in which 
the Administrator made a number of policy decisions related to 
Bonneville's potential participation in the EIM and signed an EIM 
Implementation Agreement--a first step to joining the EIM. In that ROD, 
Bonneville explained its intent to continue through the EIM evaluation 
process, with the expectation that a final decision on EIM 
participation would be made in 2021 after the completion of BP-22 rate 
case. If Bonneville decides to join the EIM, actual participation is 
projected to begin in March of 2022. To position Bonneville to join the 
EIM by March 2022, Bonneville must set its rates for the BP-22 rate 
period to recover or distribute EIM-related costs and credits. Thus, a 
major portion of the BP-22 rate case will be dedicated to developing 
the cost allocations, methodologies, and rate schedule language 
necessary to facilitate potential Bonneville participation in the EIM 
in 2022.
2. Compensation for Real Power Losses
    Bonneville provides two loss settlement methods for customers 
wheeling non-Federal resources over the Federal transmission system. 
Customers may opt to return losses 168 hours (one week) after the 
original wheeling transaction (``in-kind loss returns''), or may 
purchase the losses from Bonneville (``financial settlement''). 
Bonneville has identified and calculated a capacity cost associated 
with each method and is proposing charges applicable to wheeling 
customers to recover capacity costs. For in-kind loss returns, the 
proposed capacity charge is included in the transmission rate 
schedules. For financial settlements, the proposed power rate for 
purchasing losses from Bonneville includes an energy charge and a 
capacity charge. In addition, the transmission rate schedules include a 
proposed penalty rate designed to incent accurate and timely return of 
in-kind loss return obligations.
3. Revenue Financing
    Bonneville is proposing to include the cost of revenue financing in 
power rates to provide longer-term benefits to power customers. The 
amount of revenue financing included in power rates would be set at a 
level that would keep the PF Tier 1 Rate flat relative to the BP-20 
rates--a zero percent base rate increase. For the Initial Proposal, 
Bonneville is proposing to include an average of $95 million per year 
in revenue financing for capital projects.
    For Transmission Rates, Bonneville's Initial Proposal includes an 
average of $45 million per year in revenue financing to help address 
the financial impacts from the increasing amount of debt outstanding 
from funding transmission capital projects.

B. Summary of the Power Rate Proposal

    Bonneville is proposing four primary rates for Federal power sales 
and services, along with general rate schedule provisions to implement 
such rates.
1. Priority Firm Power Rate (PF-22)
    The PF rate schedule applies to sales of firm power to public body, 
cooperative, and Federal agency customers to meet their requirements 
pursuant to Section 5(b) of the Northwest Power Act. The PF Public rate 
applies to the sale of Firm Requirements Power under CHWM contracts 
with customers taking Load Following, Block, or Slice/Block service. 
Consistent with the TRM, Tier 1 rates include three charges: (1) 
Customer charges, (2) a demand charge, and (3) a load shaping charge. 
In addition, two Tier 2 Short-Term rates are proposed, the Short-Term 
and Load Growth rates. These rates would be applicable to customers 
that have elected to purchase power from Bonneville for service to 
their Above-RHWM Load.
    Because very few of Bonneville's customers are subject to exactly 
the same mix of PF rate components, Bonneville has developed a PF rate 
measure for an average customer purchasing at PF Tier 1 rates. This 
quantification, the Tier 1 Average Net Cost, is $35.81/MWh for the PF-
22 rate, resulting in no change from the PF-20 rate.
    The Base PF Exchange rate and its associated surcharges apply to 
sales pursuant to Residential Purchase and Sale Agreements and 
Residential Exchange Program Settlement Implementation Agreements with 
regional utilities that participate in the REP established under 
Section 5(c) of the Northwest Power Act, 16 U.S.C. 839c(c). The Base PF 
Exchange rate establishes the threshold for participation in the REP; 
only utilities with ASCs above the appropriate Base PF Exchange rate 
may receive REP benefits. If a utility meets the threshold, a utility-
specific PF Exchange rate will be established in this proceeding for 
each eligible utility. The utility-specific PF Exchange rate is used in 
calculating the REP benefits each REP participant will receive during 
FY 2022-2023.
    The proposed PF-22 rate schedule also includes resource support 
services rates for customers with non-Federal resources, and a melded 
PF rate for Public customers that have elected power sales contracts 
other than CHWM contracts for firm requirements service.
2. New Resource Firm Power Rate (NR-22)
    The NR-22 rate applies to firm power sales to investor-owned 
utilities (IOUs) to meet their net requirements pursuant to Section 
5(b) of the Northwest Power Act. The NR-22 rate is also applied to 
sales of firm power to Public customers when this power is used to 
serve new large single loads. In addition, the NR rate schedule 
includes rates for services to support Public customers serving new 
large single loads with non-Federal resources. In the BP-22 Initial 
Proposal, Bonneville is forecasting no sales at the NR rate. The 
average NR-22 rate in the Initial Proposal is $77.48/MWh, a decrease of 
2.8 percent from the NR-20 rate.
3. Industrial Firm Power Rate (IP-22)
    The IP rate is applicable to firm power sales to DSI customers 
authorized by Section 5(d)(1)(A) of the Northwest Power Act, 16 U.S.C. 
839c(d)(1)(A). The average IP-22 rate in the Initial Proposal is 
$41.36/MWh, an increase of 0.9 percent compared to the IP-20 rate.
4. Firm Power and Surplus Products and Services Rate (FPS-22)
    The FPS rate schedule is applicable to sales of various surplus 
power products and surplus transmission capacity for use inside and 
outside the Pacific Northwest. The rates for these products are 
negotiated between Bonneville and the purchasers. The FPS-22 rate 
schedule also includes rates for customers with non-Federal resources; 
the Unanticipated Load Service rate; rates for other capacity, energy, 
and scheduling products and services; and rates for reserve services 
for use outside the Bonneville balancing authority area. Bonneville is 
proposing a new FPS rate for customers that elect financial

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settlement of real power losses that includes an energy charge based on 
a market index and a capacity charge.
5. Power General Rate Schedule Provisions (GRSPs)
    The Power GRSPs include general rate schedule terms and conditions 
applicable to Bonneville's power rates. In addition, the Power GRSPs 
contain special rate adjustments, charges, credits, and pass-through 
mechanisms for specific events and customer circumstances. Among other 
matters covered by the Power GRSPs are provisions related to 
calculating rates, resource support services, charges associated with 
transfer service, risk adjustments, Slice True-up, the Residential 
Exchange Program, conservation, payment options, and other charges.

C. Summary of Transmission Rates

    Bonneville is proposing an overall 11.6 percent weighted average 
increase in transmission rates for the two-year rate period, or 5.8 
percent on an average annual basis. Bonneville is proposing separate 
transmission rates for its Network segment, intertie segments, 
ancillary and control area services, and for various specific purposes.
1. Network Rates
    Network Integration Transmission Rate (NT-22)--The NT-22 rate 
applies to customers taking network integration service, which allows 
customers to flexibly serve retail load.
    Point-to-Point Rate (PTP-22)--The PTP-22 rate is a contract demand 
rate that applies to customers taking Point-to-Point service on 
Bonneville's network. Point-to-Point service provides customers with 
service from identified points of receipt to identified points of 
delivery. There are separate rates for long-term firm service, and 
various increments of firm and non-firm short-term service.
    Formula Power Transmission Rate (FPT-22)--The FPT-22 rate is based 
on the cost of using specific types of facilities, including a distance 
component for the use of transmission lines, and is charged on a 
contract demand basis.
2. Intertie Rates
    The Southern Intertie Rate (IS-22) is a contract demand rate that 
applies to customers taking Point-to-Point service on the Southern 
Intertie.
    The Montana Intertie Rate (IM-22) applies to customers taking 
Point-to-Point service on the Eastern Intertie and that are not parties 
to the Montana Intertie Agreement.
    The Townsend-Garrison Transmission Rate (TGT-22) applies to parties 
to the Montana Intertie Agreement taking firm service over Bonneville's 
section of the Montana Intertie.
    The Eastern Intertie Rate (IE-22) applies to parties to the Montana 
Intertie Agreement taking non-firm service on the portion of the 
Eastern Intertie capacity that exceeds Bonneville's firm transmission 
rights.
3. Other Transmission Rates and General Rate Schedule Provisions
    The Use-of-Facilities Rate (UFT-22) establishes a formula rate for 
the use of a specific facility based on the annual cost of that 
facility.
    The Advance Funding Rate (AF-22) allows Bonneville to collect the 
capital and related costs of specific facilities through an advance-
funding mechanism.
    The Regional Compliance Enforcement and Regional Coordinator rate 
(RC-22) recovers costs assessed to Bonneville for regional reliability 
compliance monitoring, enforcement, and reliability coordination 
services.
    The Oversupply Rate (OS-22) recovers the costs Bonneville incurs to 
displace generation under the Oversupply Management Protocol, 
Attachment P to Bonneville's Tariff.
    Other proposed transmission rates and charges include: A Utility 
Delivery Charge for the use of low-voltage delivery substations; a 
Reservation Fee for customers that postpone the service commencement 
date of transmission service; incremental cost rates for transmission 
service requests that require new facilities; a penalty charge for 
failure to comply with dispatch, curtailment, redispatch, or load 
shedding orders; an Unauthorized Increase Charge for use of the 
transmission system in excess of contracted-for demand; and rate 
adjustment mechanisms consistent with Bonneville's Financial Policies.
    Bonneville's proposed transmission rates for BP-22 include two new 
charges associated with real power loss returns. First, Bonneville is 
proposing a charge to recover capacity costs associated with in-kind 
loss returns. The charge will apply to customers that opt for this 
settlement method. In addition, the Financial for Inaccuracy penalty 
charge is proposed to incent accurate and timely return of in-kind loss 
return obligations.
4. Ancillary Service and Control Area Service Rates
    The BP-22 Transmission Rates Proposal includes rates for 
Bonneville's Ancillary and Control Area Services, along with certain 
updates to those rates and new rates that would be necessary if 
Bonneville joins the EIM. A description of the new rates and changes to 
existing rates is included below.
1. Energy Imbalance Market Services and Rates
    Bonneville proposes to adopt a series of new rates to position the 
agency to recover its costs, or distribute credits, if Bonneville joins 
the EIM beginning in March of 2022. The new rate schedules include the 
following:
    Schedule 4E (Energy Imbalance) and Schedule 9E (Generator 
Imbalance). Schedule 4E will replace the current Schedule 4 (Energy 
Imbalance) and Schedule 9E will replace the current Schedule 9 
(Generator Imbalance) when Bonneville is in the EIM. Both schedules 4E 
and 9E contain new terms to enable Bonneville to recover its costs or 
distribute credits from the EIM to loads and resources located in the 
Bonneville BAA.
    Interchange and Intrachange Imbalance Charges. Interchange and 
Intrachange imbalance charges are new charges Bonneville is proposing 
to recover costs and credits associated with EIM participation. 
Interchange Imbalance Charges assess charges or pays credits resulting 
from interchange schedules that create imbalance in the EIM. 
Intrachange imbalance is an optional imbalance settlement that 
transmission customers may elect to use to align EIM costs and credits 
for loads and resources located within the Bonneville BAA.
    Under and Over Scheduling Penalties or Proceeds. As a participant 
in the EIM, Bonneville may be assessed under or over scheduling 
penalties or payments. The Under-Schedule or Over Scheduling Penalty or 
Proceeds rate schedule describes how Bonneville intends to recover the 
costs or payout the proceeds from these penalties.
    EIM Neutrality and Uplift Charges and Credits. Costs and credits 
not otherwise distributed by the EIM through application of the 
foregoing charges or credits are distributed by the CAISO to EIM 
Entities as neutrality and uplift costs. Bonneville will recover these 
costs or distribute the credits from neutrality and uplifts from the 
CAISO to transmission customers through new rate scheduling provisions.
2. Other Changes to Ancillary and Control Area Service Rates
    Bonneville is proposing changes to the Variable Energy Resource 
Balancing Service (VERBS), Intentional Deviation, and Persistent 
Deviation rates to put in

[[Page 77196]]

place provisions that account for a potential decision by Bonneville to 
join to EIM. In order to operate in the EIM, Bonneville would have to 
change the way it calculates balancing reserve capacity from three 
components (regulating, following, and imbalance) to two (regulating 
and non-regulating). In addition, Bonneville would be unable to offer 
the scheduling elections for Variable Energy Resources that it 
currently does, as the EIM scheduling timelines make the scheduling 
elections unworkable. Bonneville is proposing to update the VERBS and 
Intentional Deviation rates to reflect these differences.
    Bonneville is also proposing changes to the Persistent Deviation 
rate. First, Bonneville is proposing to include the Persistent 
Deviation rate in a separate section of the General Rate Schedule 
Provisions rather than a specific provision in each of the Energy 
Imbalance and Generation Imbalance rate schedules. Second, Bonneville 
is proposing certain changes to account for the potential to join the 
EIM, such as extending certain timing requirements for when Persistent 
Deviation applies and only assessing Persistent Deviation to the 
portion of imbalance that affects Bonneville's operations.

D. Risk Mitigation Tools

    Bonneville is proposing three rate adjustment mechanisms for BP-22 
power and transmission rates, primarily to buffer against poor 
financial performance over the rate period and protect the agency's 
solvency and strong credit rating. These mechanisms implement 
Bonneville's Financial Reserves Policy and provide for adjustments to a 
business line's rates or other action in the event the business line's 
financial reserves for risk (Financial Reserves) fall below or exceed 
certain thresholds.
    The Cost Recovery Adjustment Clause (CRAC) will adjust rates upward 
to generate additional revenue within the rate period if business line 
Financial Reserves fall below a defined lower threshold.
    The Financial Reserves Policy Surcharge (FRP Surcharge) will also 
adjust rates upward to generate additional revenue within the rate 
period if business line Financial Reserves fall below a defined lower 
threshold. Bonneville is proposing to reinstate the FRP Surcharge 
following the suspension of the mechanism in the BP-20E proceeding and 
to increase the maximum Power FRP Surcharge from $30 million to $40 
million per year, consistent with Bonneville's previous decisions 
regarding the phase-in of the Financial Reserves Policy.
    Finally, the Reserves Distribution Clause (RDC) will trigger if 
Financial Reserves exceed upper thresholds for the business line and 
the agency as a whole. If the RDC triggers, Bonneville will consider 
the amount of Financial Reserves above the threshold for rate relief or 
investment in high-value, business line-specific purposes such as debt 
retirement.
    For each of the three rate adjustment mechanisms, Bonneville 
proposes to change the trigger metric for BP-22 from a calculation of 
Accumulated Calibrated Net Revenue to Reserves for Risk. In addition, 
Bonneville is proposing modifications to the CRAC and FRP Surcharge for 
both Power and Transmission rates to account for the revenue financing 
proposals discussed in Section IV.A.3.

Part V--Proposed BP-22 Power Rate Schedules and BP-22 Transmission 
Rates Schedules

    Bonneville's proposed BP-22 Power Rate Schedules and BP-22 
Transmission Rate Schedules, which includes Transmission, Ancillary, 
and Control Area Services Rate Schedules, are a part of this notice and 
are available for viewing and downloading on Bonneville's website at 
www.bpa.gov/goto/BP22.

Signing Authority

    This document of the Department of Energy was signed on November 
19, 2020, by John L. Hairston, Acting Administrator and Chief Executive 
Officer of the Bonneville Power Administration, pursuant to delegated 
authority from the Secretary of Energy. That document with the original 
signature and date is maintained by DOE. For administrative purposes 
only, and in compliance with requirements of the Office of the Federal 
Register, the undersigned DOE Federal Register Liaison Officer has been 
authorized to sign and submit the document in electronic format for 
publication, as an official document of the Department of Energy. This 
administrative process in no way alters the legal effect of this 
document upon publication in the Federal Register.

    Signed in Washington, DC, on November 19, 2020.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
[FR Doc. 2020-26016 Filed 11-30-20; 8:45 am]
BILLING CODE 6450-01-P