[Federal Register Volume 86, Number 191 (Wednesday, October 6, 2021)]
[Notices]
[Pages 55597-55599]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-21814]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. EF21-3-000]


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

    1. In this order, we approve Bonneville Power Administration's 
(Bonneville) proposed fiscal years 2022-2023 wholesale power and 
transmission rates on an interim basis, pending our further review. We 
also provide an additional period of time for the parties to file 
comments.

I. Background

    2. On July 30, 2021, as supplemented on August 2, 2021, Bonneville 
filed a request for interim and final approval of its proposed 
wholesale power \1\ and transmission rates \2\ in accordance with the 
Pacific Northwest Electric Power Planning and Conservation Act 
(Northwest Power Act) \3\ and Subpart B of Part 300 of the Commission's 
regulations.\4\ Bonneville projects that the filed rates will produce 
average annual power revenues of $2.774 billion and average annual 
transmission revenues of $1.151 billion. Bonneville asserts that this 
level of annual revenues is sufficient to recover its costs for the 
2022-2023 rate approval period, while providing cash flow to assure at 
least a 95% probability of making all payments to the United States 
Treasury in full and on time for each year of the 2022-2023 rate 
approval period.
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    \1\ The proposed wholesale power rates for which Bonneville 
seeks approval for the fiscal years 2022-2023, which is the period 
October 1, 2021, through September 30, 2023, are: Priority Firm 
Power Rate (PF-22); New Resource Firm Power Rate (NR-22); Industrial 
Firm Power Rate (IP-22); Firm Power and Surplus Products and 
Services Rate (FPS-22). Bonneville also seeks approval of related 
General Rates Schedule Provisions for the same period.
    \2\ The proposed transmission and ancillary services rates 
(referred to collectively as transmission rates) for which 
Bonneville seeks approval for the period October 1, 2021, through 
September 30, 2023, are: Formula Power Transmission Rate (FPT-22.1); 
Formula Power Transmission Rate (FPT-22.3); Network Integration Rate 
(NT-22); Point-to-Point Rate (PTP-22); Southern Intertie Rate (IS-
22); Montana Intertie Rate (IM-22); Use-of-Facilities Transmission 
Rate (UFT-22); Advance Funding Rate (AF-22); Townsend-Garrison 
Transmission Rate (TGT-22); Regional Compliance Enforcement and 
Regional Coordinator Rates (RC-22); Oversupply Rate (OS-22); Eastern 
Intertie Rate (IE-22); and Ancillary and Control Area Services Rates 
(ACS-22). Bonneville also seeks approval of related General Rates 
Schedule Provisions for the same period.
    \3\ 16 U.S.C. 839e(i).
    \4\ 18 CFR 300.10-300.14 (2020).
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    3. On August 12, 2021, Bonneville submitted an erratum to its July 
30

[[Page 55598]]

Filing to correct certain errors in the final documents for the power 
and transmission rates from the BP-22 rate proceeding (August 12 
Erratum). Bonneville asserts that its corrections do not affect its 
cost recovery under the 2022-2023 rate approval period or the 
conclusions in its repayment studies. For power rates, Bonneville 
states that it corrected an error in a summary table in the power rates 
study. For transmission rates, Bonneville states that it corrected a 
forecast error that affected the allocation of costs among certain 
ancillary and control area services rates. Bonneville acknowledges 
that, although correcting the error has resulted in a change to certain 
ancillary and control area services rates in its filing, the change has 
no material impact on the transmission revenue forecast. Bonneville 
also states that this change in projected revenues has no material 
impact on Bonneville's recovery of costs during the 2022-2023 rate 
approval period or on the risk-adjusted expected value of transmission 
reserves for risk at the end of fiscal years 2022 or 2023.
    4. On August 26, 2021, Bonneville submitted an additional erratum 
(August 26 Erratum) to its July 30 Filing to correct certain errors to 
loads submitted by Portland General Electric (Portland General) that 
were used to calculate Portland General's allocation of benefits under 
the Residential Exchange Program (REP). According to Bonneville, 
Portland General informed Bonneville on August 12, 2021, that the 
exchange loads it submitted for calendar year 2020 contained erroneous 
data. Bonneville reports that the error roughly doubled Portland 
General's exchange load, resulting in a significant increase in 
Portland General's REP benefits and a concomitant reduction to other 
investor-owned utility REP participant benefits and the consumer-owned 
utility REP participant's benefits. The August 26 Erratum revised power 
rate schedules, a study, and study documentation to correct those 
errors.

II. Notice of Filing

    5. Notices of Bonneville's July 30, 2021 application and August 2, 
2021 supplement were published in the Federal Register, 86 FR 43,651 
(Aug. 10, 2021); 86 FR 48,132 (Aug. 27, 2021). Protests and motions to 
intervene were due on or before August 30, 2021, and September 1, 2021, 
respectively. Timely motions to intervene were filed by Pacific 
Northwest Generating Cooperative, Avangrid Renewables, LLC, Northwest 
Requirements Utilities, Public Power Council, Powerex Corp., M-S-R 
Public Power Agency, and Idaho Conservation League, Great Old Broads 
for Wilderness, and Idaho Rivers United (collectively, Environmental 
Parties). Environmental Parties filed a protest opposing the 
confirmation and approval of Bonneville's proposed power and 
transmission rates for the 2022-2023 rate period. On September 7, 2021, 
Bonneville filed a request for leave to answer and an answer to 
Environmental Parties' protest.
    6. Environmental Parties assert that Bonneville has a statutory 
obligation to protect, mitigate, and enhance fish and wildlife affected 
by the federal hydropower system,\5\ and that Bonneville violated its 
statutory obligation by underfunding or failing to fund much-needed 
fish mitigation and enhancement projects.\6\ Further, Environmental 
Parties assert that Bonneville violated the Northwest Power Act and the 
Administrative Procedure Act by failing to demonstrate ``equitable 
treatment'' for fish and wildlife in its final rate determination.\7\ 
Finally, Environmental Parties aver that Bonneville is obligated to 
comply with the Administrative Procedure Act's requirement of reasoned 
decision-making \8\ and that by failing to consider important aspects 
of the issues before it--namely, Environmental Parties' previous 
comments during Bonneville's environmental review--Bonneville 
disregarded this obligation.
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    \5\ 16 U.S.C. 839b(h)(11)(A)(i).
    \6\ Envtl. Parties August 27 Protest at 1.
    \7\ Id. at 2.
    \8\ Id. at 11 (citing Golden Nw. Aluminum, Inc. v. Bonneville 
Power Admin., 501 F.3d 1037, 1045, 1051 (9th Cir. 2007)).
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    7. In response, Bonneville asserts that the protesters' arguments 
fall outside the Commission's limited jurisdiction over Bonneville's 
power and transmission rates established by section 7(a)(2) of the 
Northwest Power Act.\9\ Bonneville states that Bonneville's compliance 
with its environmental review and fish and wildlife protection 
obligations are outside the scope of section 7(a)(2) and thus are not 
within the scope of the Commission's review.\10\ Bonneville argues 
that, even though it complied with section 4(h)(11)(A) of the 
Administrative Procedure Act, the Commission's scope of review is 
limited to section 7(a)(2) of the Northwest Power Act, which does not 
extend to Bonneville's obligations under the Administrative Procedure 
Act.\11\
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    \9\ Bonneville September 7 Answer at 3 (citing 16 U.S.C. 
839e(a)(2)).
    \10\ Id. at 4 (citing U.S. Dep't of Energy--Bonneville Power 
Admin., 32 FERC ] 61,014 (1985)).
    \11\ Id. at 5-6.
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III. Discussion

A. Procedural Matters

    8. Pursuant to Rule 214 of the Commission's Rules of Practice and 
Procedure, 18 CFR 385.214 (2020), the timely, unopposed motions to 
intervene serve to make the entities that filed them parties to this 
proceeding.

B. Standard of Review

    9. 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: \12\
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    \12\ 16 U.S.C. 839e(a)(2). 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.
    10. 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,\13\ 
which requires that they comply with the Bonneville Project Act, the 
Flood Control Act of 1944, and the Federal Columbia River Transmission 
System Act. Taken together, those statutes require that Bonneville's 
non-regional, non-firm rates:
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    \13\ Id. Sec.  839e(k).
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    (A) 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) encourage the most widespread use of Bonneville power; and
    (C) provide the lowest possible rates to consumers consistent with 
sound business principles.
    11. 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

[[Page 55599]]

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.\14\
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    \14\ See, e.g., U.S. Dept. 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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    12. 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,\15\ 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.\16\
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    \15\ See 18 CFR 300.10(a)(3)(ii).
    \16\ See, e.g., U.S. Dept. of Energy--Bonneville Power Admin., 
168 FERC ] 62,178, at 4 (2019); U.S. Dept. of Energy--Bonneville 
Power Admin., 160 FERC ] 61,113, at P 6 (2017).
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    13. The Commission declines at this time to grant final 
confirmation and approval of Bonneville's proposed wholesale power and 
transmission rates. The Commission's preliminary review nevertheless 
indicates that Bonneville's wholesale power and transmission rates 
filing appears to meet the statutory standards and the minimum 
threshold filing requirements of Part 300 of the Commission's 
regulations.\17\ 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 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.\18\
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    \17\ See, e.g., U.S. Dept. of Energy--Bonneville Power Admin., 
168 FERC ] 62,178 at P 4; U.S. Dept. of Energy--Bonneville Power 
Admin., 160 FERC ] 61,113 at P 13.
    \18\ 18 CFR 300.20(c) (2020).
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    14. 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 and 
transmission rates is hereby granted, to become effective on October 1, 
2021, through September 30, 2023, subject to refund with interest as 
set forth in section 300.20(c) of the Commission's regulations,\19\ 
pending final action and either their approval or disapproval.
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    \19\ Id.
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    (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 30, 2021.
Kimberly D. Bose,
Secretary.
[FR Doc. 2021-21814 Filed 10-5-21; 8:45 am]
BILLING CODE 6717-01-P