
[Federal Register Volume 80, Number 184 (Wednesday, September 23, 2015)]
[Notices]
[Pages 57351-57353]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-24136]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. EF15-9-000]


Before Commissioners: Norman C. Bay, Chairman; Philip D. Moeller, 
Cheryl A. LaFleur, Tony Clark, and Colette D. Honorable; Bonneville 
Power Administration; Order Approving Rates on an Interim Basis and 
Providing Opportunity for Additional Comments

    1. In this order, we approve the Bonneville Power Administration's 
(Bonneville) proposed 2016 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 29, 2015, Bonneville filed a request for interim and 
final approval of its wholesale power \1\ and transmission rates \2\ in 
accordance with

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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 power revenues of $2.861 billion, and average annual 
revenues from transmission and ancillary services rates of $1.085 
billion. Bonneville asserts that this level of annual revenues is 
sufficient to recover its costs for the 2016-2017 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.
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    \1\ The proposed wholesale power rates for which Bonneville 
seeks approval for the period October 1, 2015 through September 30, 
2017, include: Priority Firm Power Rate (PF-16); New Resource Firm 
Power Rate (NR-16); Industrial Firm Power Rate (IP-16); Firm Power 
Products and Services Rate (FPS-16); and Power General Rate Schedule 
Provisions (GRSPs).
    \2\ The proposed transmission rates for which Bonneville seeks 
approval for the period October 1, 2015 through September 30, 2017, 
include: Formula Power Transmission Rate (FPT-16.1); Formula Power 
Transmission Rate (FPT-16.3); Integration of Resources Rate (IR-16); 
Network Integration Rate (NT-16); Point-to-Point Rate (PTP-16); 
Southern Intertie Rate (IS-16); Montana Intertie Rate (IM-16); Use-
of-Facilities Transmission Rate (UFT-16); Advance Funding Rate (AF-
16); Ancillary Services and Control Area Services Rates (ACS-16); 
Townsend-Garrison Transmission Rate (TGT-16); WECC and Peak Service 
Rate (PW-16); Oversupply Rate (OS-16); Eastern Intertie Rate (IE-
16); and Transmission General Rate Schedule Provisions (GRSPs).
    \3\ 16 U.S.C. 839e (2012).
    \4\ 18 CFR Part 300 (2015).
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II. Notice of Filing

    3. Notice of Bonneville's application was published in the Federal 
Register,\5\ with protests and interventions due on or before August 
28, 2015. Timely motions to intervene were filed by the Turlock 
Irrigation District, Calpine Corporation, Public Power Council, 
Industrial Customers of Northwest Utilities, Northwest Requirements 
Utilities, Public Power Council, Idaho Power Company, PacifiCorp, Puget 
Sound Company, M-S-R Public Power Agency, Caithness Shepherds Flat LLC, 
Modesto Irrigation District, Pacific Northwest Generating Cooperative, 
Western Public Agencies Group, Powerex Corporation and Portland General 
Electric Company.
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    \5\ 80 FR 46,983 (Aug. 8, 2015).
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    4. Iberdrola Renewables, LLC (Iberdrola) filed a motion to 
intervene and protest. Iberdrola asserts that Bonneville's Oversupply 
Rate, OS-16, violates the Northwest Power Act by incorrectly allocating 
Bonneville's power costs to Bonneville's transmission customers.\6\ 
Iberdrola quotes Northwest Power Act section 7(g) as saying all costs 
of fish and wildlife measures, as well as all costs associated with the 
sale of or inability to sell excess power, must be allocated to power 
rates.\7\ Iberdrola argues Bonneville's oversupply management costs are 
fish and wildlife costs as well as costs associated with the inability 
to sell excess electric power, and thus should be allocated to power 
customers, not transmission customers.\8\ Iberdrola continues that, 
although Bonneville states that oversupply costs occur because wind 
generators have been interconnected to its system, the oversupply costs 
are actually caused by Bonneville having too much generation and not 
enough load, and having fish-protection restrictions on spillage that 
require Bonneville to pay someone to take the excess generation.\9\ 
Finally, Iberdrola argues that if Bonneville wishes to extend the use 
of the Oversupply Management Proposal (OMP) for the 2016-17 rate 
period, it should submit those rates to the Commission for review and 
approval under Federal Power Act section 211A.\10\
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    \6\ Iberdrola Protest at 3.
    \7\ Id. at 4.
    \8\ Id. at 5.
    \9\ Id. at 6.
    \10\ Id. at 7-8; 16 U.S.C. 824j-1(f) (2012).
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    5. Avista Corporation, Portland General Electric Company, Puget 
Sound Energy, Inc, and PacifiCorp (collectively Joint Commenters) filed 
Joint Comments requesting that the Commission reject Bonneville's 
proposed allocation of oversupply costs to transmission customers and 
deny Bonneville's application for confirmation and approval of the OS-
16 Rate.\11\ The Joint Commenters request that the OS-16 Rate should be 
rejected as a permanent solution to Bonneville's purported 
oversupply.\12\ The Joint Commenters also request that the Commission 
not rely on its prior OS-14 rate determinations in reviewing the OS-16 
rate,\13\ and that Bonneville's proposed allocation of oversupply costs 
to transmission is based on the flawed premise that interconnection of, 
or scheduling of transmission for, generation in Bonneville's Balancing 
Authority Area causes oversupply.\14\ The Joint Commenters also assert 
that it is Bonneville's reliance on OMP and its failure to take all 
reasonable actions to avoid excess spill that lead to the erroneous 
conclusion that transmission of displaceable generation interconnected 
in Bonneville's Balancing Authority Area causes oversupply.\15\ The 
Joint Commenters further assert that the Northwest Power Act \16\ and 
Transmission System Act \17\ cost allocation standards prohibit the 
allocation of oversupply costs to transmission rates.\18\
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    \11\ Joint Commenters at 18.
    \12\ Joint Commenters at 2, citing Bonneville Power Admin., 149 
FERC ] 61,043 (2014).
    \13\ Id. at 5-6.
    \14\ Id. at 7-11.
    \15\ Id. at 11-14.
    \16\ 16 U.S.C. 839 (2012).
    \17\ 16 U.S.C. 838 (2012).
    \18\ Id. at 14-17.
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III. Discussion

A. Procedural Matters

    6. Pursuant to Rule 214 of the Commission's Rules of Practice and 
Procedure,\19\ the timely, unopposed motions to intervene serve to make 
the entities that filed them parties to this proceeding.
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    \19\ 18 CFR 385.214 (2015).
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    7. Rule 213(a)(2) of the Commission's Rules of Practice and 
Procedure \20\ prohibits an answer to a protest or an answer unless 
otherwise ordered by the decisional authority.
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    \20\ 18 CFR 385.213(a)(2) (2015),
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B. Standard of Review

    8. 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: \21\
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    \21\ 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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    (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.
    9. 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,\22\ 
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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    \22\ 16 U.S.C. 839e(k) (2012).
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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

[[Page 57353]]

    (C) provide the lowest possible rates to consumers consistent with 
sound business principles.
    10. 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.\23\
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    \23\ See, e.g., United States Department of Energy--Bonneville 
Power Admin., 67 FERC ] 61,351, at 62,216-17 (1994); see also, e.g., 
Aluminum Co. of America v. Bonneville Power Admin., 903 F.2d 585, 
592-93 (9th Cir. 1989).
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    11. 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,\24\ 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.\25\
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    \24\ See 18 CFR 300.10(a)(3)(ii) (2015).
    \25\ 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 Admin., 40 FERC ] 
61,351, at 62,059-60 (1987).
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    12. 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.\26\ 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 further review. 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.\27\
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    \26\ See, e.g., United States Department of Energy--Bonneville 
Power Admin., 105 FERC ] 61,006, at PP 13-14 (2003); United States 
Department of Energy--Bonneville Power Admin., 96 FERC ] 61,360, at 
62,358 (2001).
    \27\ See 18 CFR 300.20(c) (2015).
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    13. 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, 
2015, through September 30, 2017, subject to refund with interest as 
set forth in section 300.20(c) of the Commission's regulations \28\ 
pending final action and either their approval or disapproval.
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    \28\ 18 CFR 300.20(c) (2015).
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    (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.

    By the Commission.

    Issued: September 17, 2015.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2015-24136 Filed 9-22-15; 8:45 am]
 BILLING CODE 6717-01-P


