[Federal Register Volume 89, Number 56 (Thursday, March 21, 2024)]
[Notices]
[Pages 20193-20194]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-05681]


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DEPARTMENT OF ENERGY

Bonneville Power Administration


Provider of Choice Policy and Record of Decision

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

ACTION: Notice of policy and record of decision.

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SUMMARY: Bonneville released its Provider of Choice Policy (Policy), 
which addresses the Agency's regional firm power sales policy for 
fiscal year 2029 through fiscal year 2044. The Policy will shape 
Bonneville's long-term power sales contracts following the expiration 
of current long-term Regional Dialogue contracts on September 30, 2028. 
The Policy describes the Agency's products and service offerings for 
the next contract period and how the Agency proposes to distribute the 
costs and benefits from its system of Federal resources, which includes 
the Federal Columbia River Power System, the Columbia Generating 
Station, as well as non-Federal resources. Alongside the Policy, 
Bonneville released a record of decision.

DATES: On March 20, 2024, John Hairston, Administrator and Chief 
Executive Officer of the Bonneville Power Administration signed the 
Provider of Choice Record of Decision.

ADDRESSES: The Provider of Choice Policy and Record of Decision are 
available on the Bonneville website at https://www.bpa.gov/energy-and-services/power. Copies are also available by contacting the Bonneville 
Public Information Center at 1-800-622-4520.

FOR FURTHER INFORMATION CONTACT: 
    David Wilson, DK-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].
    Responsible Official: Kim Thompson, Vice President for Northwest 
Requirements Marketing is the official responsible for the development 
of Provider of Choice Policy and contracts.

SUPPLEMENTARY INFORMATION: The Provider of Choice Policy's (Policy) 
primary focus is setting the framework for sales of electric power 
pursuant to section 5(b) of the Northwest Power Act to public power 
utilities and Federal agencies that qualify for service at a Priority 
Firm (PF) power rate. The Policy addresses at a high-level how 
Bonneville would serve other qualified customers but many of the 
details are specific to PF-service. The Policy addresses how Bonneville 
will determine its load obligations and outlines proposed products and 
services.
    Bonneville released a draft Policy on July 20, 2023. Bonneville 
published a notice in the Federal Register on July 24, 2023, and opened 
a public comment period from July 20, 2023, to October 13, 2023. 88 FR 
47487. Bonneville received over 16,850 comments, the vast majority of 
which were form letters or variations of the form letter submission. 
Bonneville reviewed these comments and documented its deliberations in 
a record of decision that explains what changes were made as well as 
which commenter proposals were not adopted in the Policy. Bonneville's 
Policy reflects changes made based on the comments received.
    The Policy establishes Bonneville decision to develop contracts 
based on a tiered PF rate construct for the Provider of Choice contract 
period. The tiered rate construct sets a framework for an allocation of 
costs, not an allocation of power. Under the two-tier rate design and 
Provider of Choice contracts, customers will be entitled to

[[Page 20194]]

purchase firm power to serve PF-eligible load up to a contractually 
defined amount, referred to as the customer's Contract High Water Mark 
(CHWM), at the applicable PF Tier 1 rate. Customers may also purchase 
firm power for any PF-eligible load above a customer's CHWM, referred 
to as the customer's Above-Contract High Water Mark (Above-CHWM) load. 
A customer may elect to serve their Above-CHWM load either with firm 
power from Bonneville at a PF Tier 2 rate, from its own dedicated 
resources, or both. The specific terms and provisions of the tiered 
rate construct will be established in the 2029 Public Rate Design 
Methodology (PRDM), which will be determined in a separate process.
    In the Policy, Bonneville establishes how it will calculate 
Provider of Choice CHWMs. The calculation recognizes customer 
investments in conservation and non-Federal resources in support of the 
prior long-term Regional Dialogue Policy and contracts. The calculation 
also adjusts CHWMs in recognition of certain circumstance relative to 
the changing energy landscape and customers' needs. Bonneville will not 
revisit the calculation in a future process or in the Provider of 
Choice contracts.
    One of the Policy's goals is to offer customers flexibility to 
invest in and use non-Federal resources to serve their retail load 
growth needs. Bonneville balances the flexibility offered with the 
tiered rates foundational tenet to insulate customers from costs 
associated with other customers' resource choices for serving load 
growth. Bonneville offers several carefully constructed non-Federal 
resource flexibilities to provide customers with opportunities to 
invest in non-Federal resources while limiting the cost impact to other 
customers.
    Under the Policy, Bonneville recognizes the need for added 
flexibility around customers' non-Federal resources and permits 
customers to add a defined amount of non-Federal resources to offset 
their CHWM load. This will reduce the amount of power a customer is 
obligated to purchase from Bonneville without triggering take-or-pay 
provisions and without reduction to the customer's associated CHWM. 
Bonneville will also not track non-Federal resources with a nameplate 
capacity of less than one MW in the contract. Customers will retain the 
ability to serve their Above-CHWM load with non-Federal resources. 
Finally, Bonneville will continue to propose to recover the cost of a 
limited amount of transfer service in the PF Tier 1 rate for non-
Federal resources for its customers that are served off third-party 
transmission systems.
    The Policy addresses why Bonneville cannot offer a 100% carbon-free 
product at this time. Bonneville addresses some of the barriers to 
offering such a product and commits to continuing to look for ways to 
further improve its nearly carbon-free emissions rate. The Policy also 
addresses how Bonneville is proposing to approach its conservation 
(energy efficiency) program after Oct. 1, 2028.
    The Policy does not address how the products and services described 
will be priced. Bonneville has started the PRDM process to discuss rate 
designs and pricing. The PRDM will replace Bonneville's Tiered Rate 
Methodology that expires on Sept. 30, 2028. The PRDM and subsequent 
Northwest Power Act section 7(i) rate proceedings will determine rates 
for the products and services offered under the Provider of Choice 
contracts.
    Following the Policy release, Bonneville will initiate a follow-on 
process to implement the Policy through negotiation and development of 
contracts with the goal to offer and execute new long-term contracts by 
late 2025. Bonneville will additionally update other business processes 
to ensure implementation of the Policy, including the PRDM. Bonneville 
will use the time between contract execution and the start of power 
deliveries on Oct. 1, 2028, to ready systems to ensure a smooth 
transition between contracts.
    Signing Authority: This document of the Department of Energy was 
signed on March 12, 2024, by John Hairston, 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 the Department of 
Energy. For administrative purposes only, and in compliance with 
requirements of the Office of the Federal Register, the undersigned 
Department of Energy 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 March 13, 2024.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
[FR Doc. 2024-05681 Filed 3-20-24; 8:45 am]
BILLING CODE 6450-01-P