[Federal Register Volume 77, Number 217 (Thursday, November 8, 2012)]
[Notices]
[Pages 66963-66966]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-27306]
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DEPARTMENT OF ENERGY
Bonneville Power Administration
[BPA File No. OS-14]
Public Hearing and Opportunities for Public Review and Comment
AGENCY: Bonneville Power Administration (BPA), Department of Energy
(DOE).
ACTION: Notice of Proposed 2014 Oversupply Rates.
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SUMMARY: On March 6, 2012, BPA filed its Oversupply Management Protocol
with the Federal Energy Regulatory Commission (Docket No. EL11-44) as
an amendment to BPA's Open Access Transmission Tariff. The protocol
authorizes BPA to displace generation in its balancing authority area
with Federal hydropower and provide compensation to generators for
certain costs related to the displacement. BPA is holding the OS-14
rate proceeding to establish a rate to recover the costs incurred under
the protocol.
DATES: Persons wishing to intervene and become parties to the
proceeding must file a petition to intervene, via U.S. Mail or
electronic mail, no later than 5:00 p.m. on November 15, 2012. A
prehearing conference will be held at 9:00 a.m. on November 14, 2012.
Written comments by non-party participants must be received by February
15, 2013, to be considered in the Administrator's Record of Decision.
ADDRESSES:
1. Petitions to intervene should be directed to Hearing Clerk--L-7,
Bonneville Power Administration, 905 NE 11th Ave., Portland, Oregon
97232, or may be emailed to [email protected]. In addition, copies of
the petition must be served concurrently on BPA's General Counsel
directed to Mr. Allen Chan, LT-7, Office of General Counsel, 905 NE
11th Ave., Portland, Oregon 97232, or via email to [email protected] (see
section III.A. for more information regarding interventions).
2. Written comments by participants should be submitted to the
Public Engagement Office--DKE-7, Bonneville Power Administration, P.O.
Box 14428, Portland, Oregon 97293. You may also email your comments to
www.bpa.gov/comment. BPA requests that all comments and documents
intended to be part of the Official Record in this rate proceeding
contain the designation OS-14 in the subject line of the email.
3. The prehearing conference will be held in the BPA Rates Hearing
Room, 2nd floor, 911 NE 11th Ave., Portland, Oregon 97232.
FOR FURTHER INFORMATION CONTACT:
Heidi Helwig--DKE-7, Public Affairs Specialist, Bonneville Power
Administration, P.O. Box 3621, Portland, Oregon 97208-3621; by phone at
503-230-3458 or toll free at 1-800-622-4519; or via email to
[email protected].
Responsible Officials: Mr. Raymond D. Bliven, Power Rates Manager, and
Ms. Rebecca E. Fredrickson, Transmission Rates Manager.
BPA Attorney Advisor: Mr. Allen Chan is the principal BPA attorney in
this matter. Mr. Chan may be contacted by U.S. Mail at: Mr. Allen Chan,
Office of General Counsel, LT-7, Bonneville Power Administration, P.O.
Box 3621, Portland, OR 97208-3621 or via email at: [email protected].
SUPPLEMENTARY INFORMATION:
Part I--Introduction and Procedural Background
The Pacific Northwest Electric Power Planning and Conservation Act
(Northwest Power Act) provides that BPA must establish and periodically
review and revise its 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 BPA's other
costs and expenses. The Northwest Power Act also requires that BPA's
rates be established based on the record of a formal hearing, and for
transmission rates only, that the costs of the Federal transmission
system be equitably allocated between Federal and non-Federal power
utilizing the system.
This proceeding is being conducted under the rule for general rate
proceedings, section 1010.9 of BPA's Procedures. A proposed schedule
for the proceeding is provided below. A final schedule will be
established by the Hearing Officer at the prehearing conference.
BPA Direct Case November 14, 2012
Prehearing Conference November 14, 2012
Parties File Petition to Intervene November 15, 2012
Motions to Strike December 7, 2012
Data Request Deadline December 7, 2012
Answers to Motions to Strike December 14, 2012
Data Response Deadline December 14, 2012
Parties file Direct Case January 18, 2013
Clarification January 29-February 1, 2013
Motions to Strike February 6, 2013
Data Request Deadline February 6, 2013
Answers to Motions to Strike February 13, 2013
Data Response Deadline February 13, 2013
Close of Participant Comments February 15, 2013
Litigants file Rebuttal March 5, 2013
Clarification March 7-8, 2013
Motions to Strike March 13, 2013
Data Request Deadline March 13, 2013
Answers to Motions to Strike March 20, 2013
Data Response Deadline March 20, 2013
Cross-Examination March 25-29, 2013
Initial Briefs Filed April 29, 2013
Oral Argument May 9, 2013
[[Page 66964]]
Draft ROD issued June 11, 2013
Briefs on Exceptions June 28, 2013
Final ROD--Final Studies July 22, 2013
Section 1010.7 of BPA's Procedures prohibits ex parte
communications. The ex parte rule applies to all BPA and DOE employees
and contractors. Except as provided below, any outside communications
with BPA and/or DOE personnel regarding the merits of any issue in
BPA's rate proceeding by other Executive Branch agencies, Congress,
existing or potential BPA customers (including tribes), and nonprofit
or public interest groups are considered outside communications and are
subject to the ex parte rule. The general rule does not apply to
communications relating to: (1) Matters of procedure only (the status
of the rate proceeding, for example); (2) exchanges of data in the
course of business or under the Freedom of Information Act; (3)
requests for factual information; (4) matters for which BPA is
responsible under statutes other than the ratemaking provisions; or (5)
matters which all parties agree may be made on an ex parte basis. The
ex parte rule remains in effect until the Administrator's Final ROD is
issued, which is scheduled to occur on or about July 22, 2013.
Part II--Description of the Rate Proceeding
A. Purpose of the Hearing
During periods of high water flows on the Columbia River, primarily
during the spring and early summer, BPA, the Army Corps of Engineers
(Corps), and the Bureau of Reclamation (Bureau) must take all
reasonable actions to avoid excess spill in order to protect endangered
fish and other aquatic species in accordance with the Clean Water Act,
Endangered Species Act, and court orders. At times, spilling water over
the dams, rather than running water through the turbines to generate
electricity, increases the levels of nitrogen, oxygen, and other gases
in the water, beyond state water quality standards. To meet applicable
environmental responsibilities, during periods of high flows BPA, the
Corps, and the Bureau attempt to moderate spill and avoid total
dissolved gases (TDG) beyond state water quality standards by running
more water through the turbines.
To avoid spilling water beyond approved TDG levels, other
generation serving load is reduced or shut down and an equal amount of
additional hydroelectric generation is delivered to that load. In May
2011, the BPA Administrator issued a Final Record of Decision adopting
an Interim Environmental Redispatch policy, under which BPA could
displace generation within its balancing authority area with free
Federal hydropower. On June 13, 2011, a group of wind customers filed a
complaint with the Commission, requesting, among other things, that the
Commission use its authority under section 211A of the Federal Power
Act to order BPA to cease its environmental redispatch policy because
it failed to provide transmission service on terms and conditions that
are comparable to those under which BPA provides service to itself and
that are not unduly discriminatory or preferential.
On December 7, 2011, the Commission issued an order finding that
BPA's environmental redispatch policy failed to provide comparable
transmission service and ordered BPA to file revisions to its Open
Access Transmission Tariff to comply with the order. On March 6, 2012,
BPA filed the Oversupply Management Protocol with the Commission, under
which generators can elect to be compensated for certain costs related
to displacement. Such costs are limited to (1) Production tax credits;
(2) renewable energy credits unbundled from the sale of energy; and (3)
for contracts executed prior to March 6, 2012, costs related to bundled
sales of renewable energy credits and energy. The Oversupply Management
Protocol is set to expire on March 30, 2013.
This OS-14 rate proceeding will establish rates to recover the
costs already incurred under the Oversupply Management Protocol, and
any future costs incurred up to September 30, 2015, in the event the
Oversupply Management Protocol is renewed after it expires on March 30,
2013. The extension of the effective period of the rates is contingent
on further guidance from the Commission. BPA will revise its proposal
as necessary to conform to such guidance. BPA is proposing to adopt a
power rate to collect 50 percent of the costs from power customers and
a new control area services rate to collect the other 50 percent of the
costs from those generators that elect to be compensated for
displacement.
B. The National Environmental Policy Act
BPA is in the process of assessing the potential for environmental
effects resulting from implementation of the proposed OS-14 rates,
consistent with the National Environmental Policy Act (NEPA). BPA has
previously prepared an Environmental Clearance Memorandum, dated March
23, 2012, for the Oversupply Management Protocol, which considered
environmental implications of the protocol and documented the
categorical exclusion of the protocol from further NEPA review. BPA
will evaluate whether the OS-14 rate proposal is covered within the
scope of this previous NEPA documentation or whether additional NEPA
documentation is necessary for any aspects of the OS-14 rate proposal.
If additional NEPA documentation is necessary, a preliminary review of
the OS-14 rate proposal indicates that it involves primarily
administrative and financial matters that appear to fall within a class
of actions that are also categorically excluded from further NEPA
review pursuant to applicable NEPA regulations. Persons may submit
comments regarding potential environmental effects of the proposal to
Katherine Pierce, NEPA Compliance Officer, KEC-4, Bonneville Power
Administration, 905 NE 11th Avenue, Portland, OR 97232. Any such
comments received by the comment deadline for Participant Comments
identified in section III.A. below will be considered by BPA's NEPA
compliance staff in its environmental evaluation of the OS-14 rate
proposal.
C. Oversupply Workshops
In preparation for the OS-14 rate proceeding, BPA staff held three
public workshops with customers and interested parties from March 2012
through May 2012. BPA published notices for all workshops, which were
well attended. During the workshops, BPA staff presented and discussed
information about the potential costs arising from oversupply
conditions, the functionalization of oversupply costs between power and
transmission, and the allocation of the functionalized costs among
customers. BPA also shared drafts of rate schedule language for the
oversupply rates and potential procedural schedules. Staff has used the
comments received at the workshops to assist in constructing the
Initial Proposal.
Part III--Public Participation
A. Distinguishing Between ``Participants'' and ``Parties''
BPA distinguishes between ``participants in'' and ``parties to''
the hearing. Apart from the formal hearing process, BPA will receive
written comments, views, opinions, and information from
``participants,'' who are defined in BPA's Procedures as persons who
may submit comments without being subject to the duties of, or having
the privileges of, parties. Participants' written comments will be
[[Page 66965]]
made part of the official record and considered by the Administrator.
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. BPA customers whose rates are
subject to this proceeding, or their affiliated customer groups, may
not submit participant comments. Persons who are members or employees
of organizations that have intervened in the rate proceeding may submit
general comments as participants but may not use the comment procedures
to address specific issues raised by their intervenor organization.
Written comments by participants will be included in the record if
they are received by February 15, 2013, and should be submitted to the
address listed in the ADDRESSES section of this notice.
Entities or persons become parties to the proceeding by filing
petitions to intervene, which must state the name and address of the
entity or person requesting party status and their interest in the
hearing. BPA customers and affiliated customer groups will be granted
intervention based on a petition filed in conformance with BPA's
Procedures. Other petitioners must explain their interests in
sufficient detail to permit the Hearing Officer to determine whether
such petitioners have a relevant interest in the hearing. Pursuant to
Rule 1010.1(d) of BPA's Procedures, BPA waives the requirement in Rule
1010.4(d) that an opposition to an intervention petition be filed and
served 24 hours before the prehearing conference. Any opposition to an
intervention petition must instead be made at the prehearing
conference. Any party, including BPA, may oppose a petition for
intervention. All timely petitions will be ruled on by the Hearing
Officer. Late interventions are strongly disfavored. Opposition to an
untimely petition to intervene must be filed and received by BPA within
two days after service of the petition.
BPA is holding the OS-14 rate proceeding at the same time as the
BP-14 rate proceeding for power, transmission, and ancillary and
control area service rates. However, these proceedings are separate. As
a result, entities or persons wishing to intervene in both dockets must
file separate petitions to intervene, and all filings must be made in
the rate proceeding to which the filing pertains.
B. Developing the Record
The record will include, among other things, the transcripts of the
hearing; testimony, evidence, and argument entered into the record by
BPA and the parties; written comments from participants; and other
material accepted into the record by the Hearing Officer. The Hearing
Officer then will review the record and certify the record to the
Administrator for final decision.
Parties will have the opportunity to file initial briefs after the
close of cross-examination. BPA then will issue a Draft Record of
Decision that will include the Administrator's preliminary decisions.
Parties may file briefs on exceptions, after which the Administrator
will issue the Final Record of Decision establishing the rate.
The Administrator will develop a final rate based on the entire
record. The Administrator will serve copies of the Final Record of
Decision on all parties and will file its rates with the Commission for
confirmation and approval.
Part IV--Oversupply OS-14
A. Scope of the Oversupply Rate Proceeding
Pursuant to Rule 1010.3(f) of BPA's Procedures, the Administrator
limits the scope of this proceeding to issues concerning the rates for
recovering the costs of the Oversupply Management Protocol described in
Part II.A of this notice. In particular, the following issues are not
part of the scope of the case, and the Hearing Officer is directed to
strike all testimony concerning these issues: the terms of the
Oversupply Management Protocol; whether the Oversupply Management
Protocol complies with the Commission's Order issued on December 7,
2011; whether BPA took all actions to avoid using the Oversupply
Management Protocol, including the payment of negative prices to
generators outside of BPA's balancing authority area; the scope of
BPA's environmental obligations; program levels and program level
forecasts for any BPA program; and rates previously established or to
be established in any other rate case. In addition, potential
environmental impacts are not an issue in this proceeding.
Environmental impacts are addressed in a concurrent NEPA process. See
section II.B. Pursuant to Sec. 1010.3(f) of BPA'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 rate being developed
in this OS-14 rate proceeding.
B. Summary of the 2014 Oversupply Rate Proposal
The proposed OS-14 rates are formula rates designed to recover
BPA's oversupply costs. See Part II.A for a description of oversupply,
the Oversupply Management Protocol, and BPA's incurrence of costs to
mitigate oversupply conditions.
The rates will recover the following costs incurred between March
31, 2012, and September 30, 2015 (again, costs will be recovered for
periods after March 30, 2013, if the protocol is renewed and pending
Commission guidance): (1) Costs of an independent evaluator; and (2)
payments to generators for (a) production tax credits, (b) renewable
energy credits, and (3) losses with respect to certain power sales
contracts. Under the proposed formula rates, BPA would recover actual
costs rather than forecast costs, therefore avoiding the need to
perform a later true-up between forecast costs and actual costs.
The OS-14 rate proposal consists of two parts: (1) A power rate
that applies as a separate charge to the Priority Firm Power (PF-14)
rate, the Industrial Firm Power (IP-14) rate, and the New Resource Firm
Power (NR-14) rate; and (2) a new control area service rate. The
oversupply costs to be recovered would be allocated equally between the
power rate and the control area services rate--one-half of the costs to
the power Oversupply rate and the other half to the control area
service Oversupply rate. The costs would then be charged to the
customers that are subject to the two rates.
The power Oversupply rate would be charged to customers subject to
PF-14, IP-14, and NR-14 rates. The Oversupply charge would be 50
percent of the costs incurred under the Oversupply Management Protocol
multiplied by the customer's load, divided by the sum of all power
customers' load. For PF customers' loads, BPA proposes to use the
lesser of each customer's Rate Period High Water Mark (RHWM) and the
customer's net requirement. For IP customers' loads, BPA proposes to
use each customer's contract energy load. Currently, there are no
customers being served at the NR rate and BPA does not expect any such
customers during the effective period of the OS-14 rates.
The control area service Oversupply rate would be charged to each
generator that elects compensation pursuant to the Oversupply
Management Protocol, based on the facility nameplate capacity
[[Page 66966]]
in kilowatts. The control area service charge would be 50 percent of
the costs incurred under the Oversupply Management Protocol multiplied
by the nameplate capacity of each participating generator, divided by
the sum of all generating facility nameplate capacities of all
participating generators.
BPA proposes to bill for costs incurred prior to the effective date
of the OS-14 rate after the effective date of the OS-14 rate. BPA would
include charges for costs incurred after the effective date on the bill
for the month those costs were incurred, subject to a rate cap as
discussed below. BPA proposes to make the OS-14 rates effective until
all costs have been billed and such bills have been fully paid.
BPA is proposing to cap the total amount that would be billed under
each Oversupply rate at $4,000,000 in any one month. The rate cap would
allow the billing to be spread over several months to ease the cash
flow effect on customers. Any oversupply costs in excess of the cap
will carry over to subsequent months' bills until the balance is
completely billed.
Part V--Proposed Oversupply Rate Schedules
BPA's proposed 2014 control area service Oversupply Rate Schedule
and power General Rate Schedule Provision Oversupply Rate are a part of
this notice and are available for viewing and downloading on BPA's Web
site at www.bpa.gov/goto/OS14Schedule Copies of the proposed rate
schedules also are available for viewing in BPA's Public Reference Room
at the BPA Headquarters, 1st Floor, 905 NE 11th Avenue, Portland, OR
97232.
Issued this 29th day of October, 2012.
Stephen J. Wright,
Administrator and Chief Executive Officer.
[FR Doc. 2012-27306 Filed 11-7-12; 8:45 am]
BILLING CODE 6450-01-P