Bonneville Power Administration

Final Policy on Standards For Service

**Administrator's Record of Decision**

**I. [Introduction]{.underline}**

The Bonneville Power Administration (BPA) is formally adopting standards
for service an entity must meet prior to being offered a contract for
the purchase of firm power marketed by BPA under section 5(b) of the
Northwest Power Act. 16 U.S.C. § 839(c)(b). Section 5(b)(4) of the Act
requires that entities purchasing Federal power under section 5(b) must
comply with BPA's standards for service. BPA has traditionally made its
determination regarding compliance with BPA's standards for service on a
case-by-case basis and communicated its standards and assessment of a
party's qualifications in correspondence to parties seeking to purchase
Federal power under section 5(b). Formal adoption of these standards as
policy is being made in response to BPA's proposed modification to the
standard that requires prospective public body or cooperative utility
customers and privately owned companies selling to the general public to
own their own distribution facilities. BPA proposed that it modify this
standard to permit that a customer either (1) own a distribution system;
or (2) have an ownership-type lease arrangement for a distribution
system.

### A. Summary of BPA's Draft Policy Proposal

As described in BPA's proposal to change its standards for service, 64
Fed Reg. 24382 (May 6, 1999), the planned offering of new power sales
contracts under the Federal Power Subscription Strategy, plus the advent
of electricity deregulation in the wholesale market and in the retail
markets of some western states, prompted BPA to assess whether or not a
change in BPA's existing standards for service was needed. Interest by
various entities, including several tribes, in forming and operating
electric utilities also added to BPA's decision to issue its draft
policy proposal. As stated above, the proposal focused on whether to
broaden the distribution ownership standard by permitting prospective
customers the ability to enter ownership-type lease arrangements to
acquire distribution facilities.

As discussed in its proposal BPA has long interpreted sections 4(c) and
(d) of the Bonneville Project Act, 16 U.S.C. §832c(c) and (d), as
requiring prospective public customers to own the distribution
facilities necessary for such customers to be in the business of selling
and distributing the power purchased from BPA. Section 4(c) states that
prospective purchasers are to be in the "public business of selling and
distributing the electric energy proposed to be purchased." Section 4(d)
speaks to the opportunity and time necessary for prospective purchasers
"to construct or acquire necessary and desirable electric distribution
facilities . . . ." When read together BPA has interpreted the language
of these sections to require ownership of the physical distribution
facilities necessary to facilitate the delivery of Federal power to
retail consumers.

BPA proposed the ownership-type lease arrangement, which is consistent
with this interpretation. Such a proposed standard is also consistent
with Department of Energy (DOE) policy that allows the use of a lease by
a prospective public agency customer to obtain a distribution system.
[See]{.underline} DOE General Counsel Opinion, "Request of City of
Needles for Reinstatement of Sales of Federal Power for Benefit of its
Citizens" (Nov. 21, 1978). This policy was affirmed in [Salt Lake City,
et al. v. Western Area Power Administration]{.underline}, 926 F.2d 974
(10^th^ Cir. 1991). Without defining any of the necessary criteria to
establish such an ownership-like lease, BPA merely outlined its proposed
ownership-type lease as: (1) a long-term arrangement for the life of the
facilities or for the duration equal to the term of the BPA power supply
obligation; (2) giving the prospective customer the right to operate,
maintain and have repairs performed on the system; and (3) having
complete decision authority over costs of the distribution system.

### B. The Administrator's Decision

This Record of Decision (ROD) formalizes the Administrator's final
decision to adopt the standards for service as published in 64 Fed Reg.
24382 (May 6, 1999). BPA will retain its present standards for service
including ownership of distribution facilities and will not adopt the
proposed modification to permit ownership-type lease arrangements of
distribution facilities. This decision is made under section 5(b)(4) of
the Northwest Power Act, 16 U.S.C. §839c(b)(4), which directs the
Administrator to require all potential customers requesting a contract
for firm power under section 5(b) of the Act to comply with the
Administrator's standards for service in effect on December 5, 1980, or
as subsequently revised.

It is within the Administrator's discretion under section 5(b)(4) to
leave unchanged the present standard requiring that an entity own its
distribution system in order to purchase Federal power from BPA. The
Administrator has determined that there is no need to broaden the
current distribution ownership standard. In the exercise of discretion
under section 5(b)(4), however, the Administrator will consider, on a
case-by-case basis, future issues related to the ownership standard
regarding difficulties that tribes may face in pursuing the acquisition
of all the distribution facilities on tribal reservations.

Under certain circumstances the Administrator may determine it is
appropriate to provide an exception to the requirement to own all
distribution facilities located on tribal reservations. This need to
potentially make exceptions arises because of the potentially unique
circumstances that may confront tribes seeking to form and operate a
utility on a tribal reservation. Tribal reservations are frequently
located in sparsely populated rural areas that are more likely to be
served in part by electrical facilities that are radial in nature
without multiple interconnections to the local distribution facilities.
Such facilities can merely pass through a reservation and be used to
serve retail consumers both on and off the reservation. Requiring
multiple ownership of such facilities could result in the fragmentation
of such facilities which could affect system reliability and may present
additional operating and coordination difficulties for the involved
utilities. Therefore, the Administrator finds it reasonable to determine
for tribes on a case-by-case basis whether a prospective tribal utility
facing challenging service territory and distribution facility
configurations will be given an exception to owning all the distribution
facilities needed to serve a tribal utility's retail consumers.

The Administrator's decision not to modify the ownership standard is
grounded on several factors. Primarily, fee ownership of distribution
facilities, unlike an ownership-type lease, does not create any
ambiguity over meeting the standard for eligibility. It serves as a
standard that helps ensure that the benefits of Federal power are
directly reaching retail consumers. This standard has been interpreted
and used by BPA for over 60 years in a uniform manner without
administrative burden and is consistent with the intent of Congress as
expressed in sections 4(c) and (d) of the Bonneville Project Act that
utilities (public body and cooperative) construct or acquire electric
distribution facilities.

An ownership-type lease standard would create confusion and uncertainty
for both BPA and prospective purchasers. Such confusion and uncertainty
would serve neither prospective nor present customers. It could add
legal challenges to individual applications and increase the agency's
administrative burden under the ownership-type lease standard. The
standard for eligibility could become subject to varying interpretations
dependant on the specific factual situation presented. BPA would become
a regulator reviewing the terms and conditions of every distribution
lease transaction entered into by and between the prospective customer
and others. This would create new administrative costs for BPA at a time
when BPA is looking at ways to reduce its costs.

BPA is also concerned that the ownership-type lease standard could
result in the creation of entities that do not perform any actual
utility function. Through lease arrangements, an entity leasing a
distribution system would be able to contract out all physical utility
services back to the lessor/owner of the system. In this situation, the
lessor/owner continues as the actual operator of the system and the
distributor of Federal power. The leasing entity could constitute a
paper entity only, and would therefore not be actually in the business
of distributing Federal power purchased from BPA as required by section
4(c) of the Bonneville Project Act. 16 U.S.C. § 832c(c). Selling to such
an entity could become a circumvention of the prohibition on the resale
of Federal power to investor- owned utilities as provided in section
5(a) of the Act.

Finally, a significant number of parties opposed BPA's proposed policy
change. Assessing BPA's proposed policy in light of the old adage "if it
ain't broke, don't fix it" these parties expressed support for BPA's
existing ownership standard. Comments in opposition to BPA's proposed
policy expressed the view that even with the changes that are occurring
in both wholesale and retail electricity markets utilities will continue
to own their distribution systems. Continuation of such ownership allows
BPA to fulfill its statutory purposes of marketing Federal power without
becoming unnecessarily involved with the changing regulatory
environment.

[Environmental Compliance]{.underline}

The Final Policy on Standards for Service is consistent with BPA's
Business Plan Final Environmental Impact Statement (DOE/EIS-0183, June
1995), the Business Plan Record of Decision (ROD), signed August 15,
1995, and the subsequent Power Subscription Strategy ROD, signed
December 21, 1998.

[Public Process]{.underline}

This ROD addresses the issues raised by commenters who responded to
BPA's proposed policy on standards for service, published in Federal
Register at 24382 (May 6, 1999). On June 3, 1999, the thirty (30) day
comment period was extended by BPA through June 30, 1999. In addition to
the comment period BPA held two public meetings. The first meeting was
held on May 27, 1999, in Spokane, Washington. The second meeting was
held on June 2, 1999, in Portland, Oregon.

BPA received over seventy-five written comments from various interested
parties. [See]{.underline} appendix for commenter abbreviation/acronym.
This ROD will separate the comments into three (3) categories: (1)
comments opposed to adopting the proposed modification; (2) comments in
support of the proposed modification; and (3) comments in support of
modifying BPA's standards for service beyond the proposed modification
to accommodate changes in states that have restructured their retail
electric industries.

**Responses to Comment**

**[II. Parties Opposed to Modifying Ownership Standard to Include
Ownership-type Lease]{.underline}**

# **A. "If it ain't broke, don't fix it"**

**Comment:** We do not approve of the proposed standard and are opposed
to it. *Benton PUD; Benton REA; Blachly-Lane; CPU; Consumers Power,
Inc.; Coos-Curry Electric Coop.; Flathead Electric Coop.; ICOUA; IPC;
Lost River Electric Coop.*; *Montana Electric Coop. Assn.; NRU; OTEC;
PacifiCorp; PSE; The Companies; Seattle City Light; SUB; WPAG; WRECA*.
Maintain BPA's current interpretation of §§ 4(c) and (d). *Fergus
Electric Coop.; Park Electric Coop.* There is no compelling reason to
justify a change from BPA's current interpretation of the law. *PNGC;*
*PPC; WPAG.* It is not an opportune time to change BPA's historic
standard. *WDCTED.* Proposal to lease distribution facilities is a major
departure from the current long-standing requirement that a utility must
own and operate a distribution system. Administrative action by BPA
cannot abrogate the statutory language nor the intent of the underlying
statutory requirement. *Mid-West Electric Consumers Assn., Inc.*

**BPA Response:** The Administrator has decided not to adopt the
proposed ownership-type lease modification to the standards for service.
The Administrator has latitude in administering the provisions of
statutes under which BPA operates. While an ownership-type lease
standard is viewed as consistent with these statutes, the Administrator
has decided to retain BPA's long-standing ownership standard.

# **B. Comments on Distribution**

**Comment:** The proposal should clarify the distinction between the
utility's distribution function and transmission function as the term
"distribution" is used in the criteria. *Whatcom PUD*. It is important
to continue requiring preference customers to own and operate a
distribution system; leasing a distribution system should be limited to
a small fraction of a total distribution system. *Whatcom PUD*. If
direct ownership of distribution facilities is the standard, what
happens to existing customers that take service through contracted
distribution facilities? *WIC.*

BPA's proposal ignores long-standing interpretations of law that
cooperatives qualifying for preference be financed by the Rural
Electrification Administration (REA) and own, or be in the process of
acquiring, a distribution system. *Seattle City Light*.

**BPA Response:** BPA acknowledges that there is some confusion over the
distinction between "transmission" and "distribution." While there may
be no single voltage criteria for readily distinguishing transmission
from distribution, BPA considers the lower voltage system that is needed
to directly deliver power to, as well as interconnect with, retail
consumers as distribution. Under BPA's standards for service, a
prospective utility customer is required to own its distribution system
as provided under sections 4(c) and (d) of the Bonneville Project Act.
The retail load that is physically served from the distribution system
owned by the utility forms its regional firm power load for which that
utility has the right to request a contract for Federal power from BPA
to serve such load under section 5(b)(1) of the Northwest Power Act. As
defined in the BPA Definitions book, "distribution" is "the transport of
electricity to ultimate use points, such as homes and businesses, from a
source of generation or from one or more substations." DOE/BP-2279
(1994).

In determining what constitutes an interconnected distribution system
BPA looks to typical industry practice. Interconnected distribution
systems are typically made up of various components, such as primary and
secondary distribution lines, distribution transformers, service drops
and meters. BPA also recognizes that in certain situations it is
necessary and prudent for one utility to wheel electrical power over the
distribution facilities of another utility in order to have power
delivered to its own distribution system. Such customers required to
obtain wheeling over another utility's distribution system will continue
to be eligible to purchase from BPA.

In response to the comment that a cooperative qualifying for preference
must be financed by the REA, BPA's statutes are silent on this matter.
While it is true that cooperatives have historically had financing
available through the REA (now the Rural Utility Service, or RUS), BPA's
statutes do not limit cooperatives to only RUS financing.

## **C. Comments on the Potential for Increasing the Administrator's Load Obligation**

**Comment:** BPA's strategy of limiting benefits of the Federal Columbia
River Power System enjoyed by the residential and small farm customers
of the IOUs encourages those same customers to leave IOUs and form small
public utilities to obtain full preference benefits. *IPC; EEI; PSE.*
The OPUC does not support increasing the regional acrimony by inventing
new classes of public agencies and cooperatives as proposed. *OPUC.* The
proposal, by encouraging the formation of new publics, will result in
greater load responsibility for BPA and thus result in growth in the
system itself, thus diluting the benefits of the Federal system. *IPC;
OPUC; PacifiCorp; PNGC; The Companies.*

If implemented there will likely be a proliferation of sham utilities.
*Central Electric Coop.; Congressman DeFazio; Flathead Electric Coop.;
Idaho Consumer-Owned Utilities Assn.; PNGC; PPC; The Companies; Seattle
City Light; SUB; WRECA*. The ability of private for-profit utilities to
obtain (under this proposed rule change) increased access to Federal
preference power for their customers encourages the sale of low-cost
private power resources in the Northwest to customers outside the
region. *Montana Electric Coop. Assn.* Permitting entities that only
lease distribution facilities to qualify for the purchase of Federal
power creates a potential opportunity for IOUs to circumvent the
compromises struck in the Subscription Strategy regarding availability
of Federal power. *Seattle City Light;* *WPAG.*

**BPA Response:** These comments express concern over the possibility
that adoption of the ownership-type lease standard is unnecessary and,
if adopted, could lead to increasing the amount of regional load BPA is
obligated to meet. Their concern is that such a standard could increase
the number of preference customers BPA would be obligated to serve. Many
of the comments express doubt over the legitimacy of such new preference
customers.

BPA's proposed modification was not intended to make it easier for
entities to form new preference customers; rather, BPA sought to review
the ownership standard and proposed a modification to it, in part, in
light of the ongoing efforts to deregulate the electric utility
industry. Having made this review BPA has decided to retain its
ownership standard. The ownership standard provides BPA a clear standard
that is easy to administer and which does not create the burdens and
uncertainties associated with the proposed ownership-type lease
standard. BPA also agrees with comments that the proposed ownership-type
lease standard could lead to the formation of paper utilities that would
otherwise not qualify to purchase Federal power directly from BPA. In
contrast, the standard of ownership does not lend itself to the easy
formation of paper utilities.

## **D. Comments on the Existing Ownership Standard**

**Comment:** The requirement to own has served as a bright line
standard. It is simple, easy to administer, and is not subject to
varying interpretations. *CPU; Umatilla Electric Coop.; WPAG.* It should
not be abandoned in this period of rapid change and uncertainty.
*Umatilla Electric Coop.; CPU; WPAG.* A shift to an ownership-like lease
standard would result in administrative confusion and uncertainty. What
constitutes an ownership-lease would be the subject of varying
interpretations. *CPU; PacifiCorp; SUB*. Permit lease/purchases for
annexations or mergers between existing customers served with PF power.
*United Electric Coop., Inc*.

Lessening the requirements for a public body or rural electric
cooperative for purposes of eligibility for preference raises concern
that it will nullify the purposes of the Bonneville Project Act.
*Central Montana Electric Power Coop.; Mid-West Electric Consumers
Assn., Inc.* BPA should incorporate all the characteristics of a
preference customer stated by the Second Circuit in [Allegheny Elec.
Coop., Inc. V. FERC]{.underline}, 922 F.2d 73 (2d Cir. 1990), and the
FERC in Opinion No. 329, 48 FERC ¶ 61,124 (1989). *Central Montana
Electric Power Coop.; Mid-West Electric Consumers Assn., Inc.*

BPA should not create eligibility standards that would provide a
"one-size fits all" under any type of permanent lease arrangement.
*NRECA*. It is not certain that allowing leases would put BPA in closer
conformance with DOE policy. *PNGC.* The proposal is inconsistent with
the purpose and long standing interpretation of the Bonneville Project
Act. *Seattle City Light*. BPA has properly interpreted the Bonneville
Project Act requiring outright ownership of distribution facilities.
*NRECA*. The question of eligibility to purchase power from BPA on a
preference and priority basis is fundamentally important and should be
answered in the context of whether the entity is a public body under the
Bonneville Project Act. Eligibility standards should preserve the
qualities of public power that make it unique. *PPC.* Do not change the
existing six standards for service for eligibility. *NRU; PPC.*
Ownership of the distribution system is essential and when combined with
the five other criteria allows for a meaningful distinction between new
preference entities as envisioned by statute and other utility
formations whose purpose may simply be to reallocate competitively
priced preference power to other entities. *NRU*. The proposed change
raises serious policy and administrative risks because there is no clear
definition of what constitutes a life of facilities lease, nor what
would be appropriate maintenance requirements during the term of such
lease. *WPAG.*

**BPA Response**: BPA agrees with many of the views and concerns
expressed in these comments. While it is likely that an ownership-type
lease standard would create ambiguities and be subject to varying
interpretations, a strict ownership standard does not suffer from these
difficulties. BPA is cognizant of the congressional intent for the
preference and priority given to public body and cooperative utilities.
BPA will continue to market Federal power consistent with preference as
directed in the Bonneville Project Act.

As discussed in the proposal, an ownership-type lease would conform to
DOE policy. It has become clear though that broadening the ownership
standard is unnecessary. In cases where one preference customer is
"acquiring" by annexation or merger another preference customer, BPA
will consider the means by which such acquisition will be made. At this
time BPA is meeting all of its statutory purposes under the existing
standards for service and does not need to revise the clear standard now
applicable, ownership. The Administrator has latitude in administering
the provisions of statutes under which BPA operates. Congress committed
the standards for service to the Administrator's discretion under
section 5(b)(4). While an ownership-type lease standard is viewed as
consistent with these statutes, the Administrator does not want
additional administrative regulation, confusion, or uncertainty
associated with adopting such a standard.

## **E. Comments on Tribal Utility Acquisition of Distribution**

**Comment**: In states without statutory deregulation there should be no
relaxation of the standards for service. BPA must continue to adhere to
standards of service which require that a new public or tribal utility
seeking access to Federal power as a preference customer actually own a
distribution system. By allowing ownership-type lease in its eligibility
standards, BPA would be opening the door to condemnation disputes.
Avista strongly opposes initiatives which would permit its distribution
system to be acquired for purposes of gaining access to Federal power
under any circumstances that involved less than full adherence to
condemnation procedures required for obtaining full ownership of public
utility facilities. *Avista*. BPA should adopt distribution ownership
standards that reflect full operation and control of customer
distribution services. *OPUC.* The benefit of forming tribal utilities
in cases where the utility currently providing service is publicly owned
utility \[preference customer\] will be minimal. *WPAG.* The proposed
change to lease will not help tribes; in the absence of condemnation
authority the incumbent utility will be under no compulsion to lease
distribution facilities to a tribal utility. *WPAG*.

**BPA Response:** BPA will continue with the existing standard requiring
a prospective purchaser to own all its distribution facilities. However,
the Administrator may in certain limited circumstances find it
appropriate to allow an exception for prospective tribal utilities on
reservations. BPA understands that tribes, in evaluating the benefits of
forming and operating a tribal utility, may include factors other than
those related to the costs of wholesale electric power. Tribes may
choose to form a tribal utility even where the current utility providing
service on the reservation is already purchasing from BPA on a
preference basis.

### F. Comments on State Electricity Industry Restructuring

**Comment:** BPA should not be in the business of facilitating
electricity deregulation and the break-up of the current regulated
utility structure. BPA's proposal to loosen the requirements that a new
public agency must meet in order to qualify for preference under
Bonneville's organic statutes runs afoul of this principle. BPA's
current standard requiring a new preference agency to own the
distribution system is well grounded both in law and common sense.
Actual ownership of the wires serves to distinguish a utility committed
to providing quality electric service from a sham cover organization
committed primarily to facilitating deregulation of the utility
industry. *Congressman DeFazio.* To give preference to "wireless"
cooperatives could effectively force deregulation on utilities located
in states that have not adopted deregulation legislation. *City of
Cheney.* The proposal prejudges the outcome of retail deregulation in
the Northwest. *PacifiCorp;* *PNGC; SUB; The Companies.* If BPA adopts
this proposed change, an administrative decision will have been made
that the preference right belongs to the end-use consumer. This should
be a legislative decision, not an administrative one. *ICOUA.* Resist
calls to fundamentally shift interpretation of eligibility standards in
order to avoid conflicting or interfering with state restructuring
efforts. *CUB.*

BPA should not feel an obligation to step in and add further benefits to
Montana. BPA should not, and need not, change the rules to accommodate
certain interests in Montana. *Kootenai Electric Coop.; CUB.* Do not
change BPA policy (standards for service) or definition of preference
customers or give Montana any greater benefit than would have been
received through the residential exchange. *Umatilla Electric Coop*.
Although the residential and small farm customers of Montana Power
Company (MPC) should receive the allotment of BPA power and money they
would have received as residential exchange customers, BPA should not
fix the Montana legislation by substantially altering eligibility
standards. *CUB.* With relaxed standards, utilities like MPC would be
allowed to walk out on its \[retail\] customers with impunity. *CUB.*

The degree to which restructuring should impact regional decisions on
eligibility standards allowing Federal power purchases should be
approached with caution. Modification of standards should be consistent
with the purpose of public power. The decision to modify eligibility
standards warrants further review. *Lewis County PUD*.

It is difficult to imagine how a utility can have an obligation to serve
without owning the distribution system. *City of Cheney.* The
description of the utility obligation to serve is insufficient. Total
displacement of the incumbent provider and ultimate responsibility for
the distribution function and the delivery of service must be maintained
by the preference customer. *Central Montana Electric Power Coop*. Under
Montana's restructuring law existing public power entities face a
specific and unavoidable obligation to serve. It is arguable that an
entity under a lease-type arrangement faces a similar statutory
responsibility for service. *Montana Electric Coop. Assn.*

**BPA Response:** These comments express the view that BPA should not
get involved with decisions by states to restructure their electricity
industries. BPA agrees. BPA does not intend to cause the initiation of
electricity deregulation by states. BPA's proposal was based, in part,
on a perceived need by BPA to review its standards for service in light
of retail access and electricity restructuring developing in some
states. BPA does not find, however, that it is necessary to change BPA's
existing standards for service to accommodate the changes in state law
regarding the retail electricity industry in Montana or other states.
BPA will retain the existing ownership standard.

In response to comments on the obligation to serve, BPA's proposal
discussed the relationship between the obligation to serve and the
requirement to own distribution. BPA highlighted this relationship and
sought input from commenters on the effect state deregulation might have
on that relationship. BPA's interest in seeking input relates to the
direction given to the Administrator by Congress that the Federal power
distributed by BPA's customers to the general public be resold in a fair
and nondiscriminatory manner. Because the Administrator is not adopting
the proposed modification it is neither necessary nor required at this
time to consider making a change to the standard on a utility's
obligation to serve the general public.

**[III. Parties in Support of an Ownership-type Lease
Standard]{.underline}**

The following section describes comments made in support of the proposed
modification to allow an ownership-type lease of distribution facilities
and BPA's response to such comments. While some comments provide general
support, many comments discuss support for the proposal only in specific
situations.

**Comment**: Adopt a strict distribution-related interpretation of
eligibility; require that the customer own the distribution system or
lease the system with full operation and cost control rights, including
rights over costs, improvements and additions, and responsibilities over
operation, maintenance, billing and metering, and outage restoration.
*CUB*. An ownership-type lease could suffice if properly structured and
does not diminish preference. *EPUD; PGP.* Selection of vendors for
system operations and maintenance services should be done on an open and
competitive basis, and should not be bundled together with the lease of
the distribution system. *EPUD.*

Ownership-type lease standard should require (1) "arms length"
transaction; (2) lessee be financially independent of lessor; (3) lessee
controls cost of operating and maintaining the distribution system; (4)
lessee controls capital decisions (i.e., replacement and additions); (5)
lessee has clear obligations to serve at retail; (6) lease is long-term;
(7) lease payments yield a reasonable rate of return to the asset
owner---avoid above market payments; and (8) BPA has right to review
leases to ensure these conditions are met. *PGP.*

We support both BPA's proposal to permit ownership-type lease
arrangement and contractual capacity rights for delivery of Bonneville
power. *ATNI;* *Coquille Indian Tribe; Spokane Tribe of Indians;
Confederated Tribes of Coos, Lower Umpqua and Siuslaw Indians;
Confederated Tribes of the Umatilla Indian Reservation; Confederated
Tribes and Bands of the Yakama Indian Nation; Shoshone-Bannock Tribes;
Warm Springs Tribes*. These approaches provide flexibility that tribes
may need to deal with varying situations. Requiring tribes to acquire
and own all distribution facilities is unduly burdensome and a large
up-front capital expense. Leasing or obtaining contractual capacity
rights to distribution facilities encourages cooperation and promotes
maximum facility usage. Ownership-type lease allows tribes time to
develop a working relationship with existing service providers.
*Confederated Tribes of Coos, Lower Umpqua and Siuslaw Indians;
Confederated Tribes of the Umatilla Indian Reservation; Confederated
Tribes and Bands of the Yakama Indian Nation.*

Existing distribution systems do not always conform to reservation
boundaries. A non-tribal utility could seek to acquire an intact
distribution system that might define such a new preference utility. A
tribal utility does not have this option because reservation boundaries
are defined by Treaty. *Confederated Tribes and Bands of the Yakama
Indian Nation.*

Tribes should not be required to have ownership-like responsibilities
over the distribution system; BPA should change its standards for the
benefit of tribal utilities regardless of what the agency determines its
policy should be for other utilities. *NWEC.* The distinctiveness of the
legal status of tribes creates risks to all other governmental units if
generic standards are modified to suit the tribes. It appears to be far
better to use the distinctive legal status of tribes to fashion an
approach tailored to their specific needs without changing the rules for
everyone else. *WDCTED.*

**BPA response**: BPA is not modifying the standard requiring ownership
of distribution to one of ownership or ownership-type lease. As
expressed in these comments, adopting the ownership-type lease standard
would require BPA to develop, define, and establish additional criteria
in order to administer the standard. Beyond the need to develop and
define such criteria is the burden it would create for BPA in having to
administer it. The PGP proposed lease type does not result in the public
utility owning the distribution system over time and is thus more like a
"use" form of lease. Ownership of distribution provides the clearest
standard to apply and is not subject to varying interpretations.

BPA understands that tribes face distinct legal issues when providing
utility service to reservations. Under certain circumstances the
Administrator may find it appropriate to allow an exception for
prospective tribal utilities on reservations due to potentially unique
circumstances that may confront tribes seeking to form and operate a
utility. Such circumstances may arise because tribal reservations are
frequently located in sparsely populated rural areas that are more
likely to be served by electrical facilities that are radial in nature
without multiple interconnections to the local distribution facilities.
These types of facilities can merely pass through a reservation and be
used to serve retail consumers both on and off the reservation.
Requiring multiple ownership of such facilities could result in the
fragmentation of such facilities. This could affect system reliability
and may present additional operating and coordination difficulties for
the involved utilities served by multiple distribution systems.
Therefore, the Administrator finds it reasonable to determine on a
case-by-case basis whether prospective tribal utilities facing difficult
distribution facility acquisitions will be given an exception to the
standard requiring ownership of all distribution facilities for serving
their reservations. It is assumed that in these cases the owner of the
distribution system will be willing to enter into an ownership-type
lease arrangement with the prospective tribal utility so that the terms
of the lease agreement will provide ownership-type control of certain
reservation facilities to the tribal utility.

**Comment:** Ownership of distribution facilities should not be made a
prerequisite for continuing to receive Federal power allocation when
Federal customers are establishing policies to reduce their operating
costs. *FEMP*.

**BPA response**: BPA is cognizant of efforts by agencies of the Federal
government to reduce costs. However, the economic decisions Federal
agencies must make about whether to remain eligible to take a
disposition of Federal power at wholesale from BPA or to become a retail
consumer served by a local utility are independent of BPA's decision to
maintain the standard requiring ownership of distribution facilities.
BPA's policies regarding service to Federal agencies are not changed by
this decision.

**[IV. Parties in Support of Loosening BPA's Standards for Service
Beyond the Ownership-type Lease Standard]{.underline}**

### A. Comments on State Electricity Industry Restructuring 

**Comment:** BPA's efforts to modify the standards have not gone far
enough to accommodate major industry changes. It is recommended that BPA
modify the proposal to acknowledge unique circumstances faced by
consumers in states that have adopted utility restructuring legislation.
*Joint Montana Commenters; Avista; ICNU; Montana Governor's Office;
NWEC; PSE*. Nothing in the Project Act precludes BPA from allowing
ownership-type leases as a mechanism for satisfying the eligibility
requirements. *ICNU.*

Amend the eligibility standards to allow Federal power to be sold to any
entity that can demonstrate that it is obligated to distribute the power
to the intended users at cost and will not resell the power on the
market for its own or another's financial benefit. *PGE.* Specific
standards are not required by statute; agencies must have latitude to
adopt standards that may evolve over time as long as those standards are
consistent with the statute's purpose and not contrary to law.
[Allegheny Elec. Coop., Inc. v. FERC]{.underline}, 922 F2d 73, 81 (1^st^
Cir. 1990). *PGE.* The primary mandate of the Bonneville Project Act is
to encourage the "widest possible use of Bonneville Power." BPA's
eligibility standards should not defeat them \[the mandate\] by failing
to transition to modern industry structures and trends. *PGE.*

Preference must ultimately be fundamentally redefined if electricity
deregulation becomes a reality in the region. *NWEC;* *WDCTED;* *CUB.*

**BPA response**: BPA's proposal was not intended solely to accommodate
those states in the Northwest that deregulate their electricity markets.
It was not intended to create opportunities for utilities to develop
creative power supply alternatives while eliminating or restructuring
portions of their utility operations. Changes in state law cannot
rewrite the language and meaning expressed by Congress in the Bonneville
Project Act.

In administering the Act, the Administrator is to read each section
consistent with one another. BPA has interpreted the language of section
4(c) that states "such prospective purchaser to enter into the public
business of selling and distributing the electric energy proposed to be
purchased," when read together with the language in section 4(d) which
speaks to the opportunity and time necessary for prospective purchasers
"to construct or acquire necessary and desirable electric distribution
facilities . . ." to mean ownership of the physical distribution
facilities necessary to facilitate the delivery of Federal power to
retail consumers. While it may be possible to use an ownership-type
lease to effectuate the purposes of the statute, it is an inconsistent
construction of such language to allow entities that are only authorized
to "sell" Federal power to purchase power from BPA. Preference entities,
and privately held utilities selling to the general public, purchasing
Federal power from BPA must also be the distributors of such power. For
over 60 years, BPA has consistently interpreted this language to mean
that ownership of distribution facilities is required. And, during all
of this time, the Administrator has carried out the purpose of
encouraging the widest possible use and nonmonopolization of Federal
power. Changes in state law do not, and are not expected to, impair the
Administrator's ability to continue to meet this purpose by requiring a
change.

Some commenters expressed a desire that BPA redefine the statutory
preference granted to public bodies and cooperatives. Congress
specifically identified such utility customers as having "preference and
priority" at all times in the disposition and sale of Federal power by
the Administrator. The Administrator cannot administratively change
Congress' intent that preference and priority be given to public bodies
and cooperatives as explicitly directed in section 4(a) of the
Bonneville Project Act.

**B. Comments on Ownership and Lease**

**Comment:** BPA misinterprets the statutory language of § 4(d) of the
Bonneville Project Act. Such misinterpretation may have been of little
consequence prior to the national and state actions establishing
wholesale and retail open access. *City of Missoula.* BPA's
ownership-type lease is based on an overly restrictive or inaccurate
reading of § 4(d). *Montana Governor's Office*. The artificial
requirement/constraint for ownership or long- term lease of distribution
facilities is antiquated and is not consistent with national and state
policy for wholesale and retail open access. *City of Missoula*. In
Montana it is "neither necessary or desirable" to require ownership or
long-term lease of distribution facilities to assure that customers,
served by otherwise bona fide public bodies, gain non-discriminatory
access to Federal preference power at the lowest cost based rates. *City
of Missoula*. Permit delivery through open access tariffs; BPA's failure
to evolve its standard to the changing energy business will thwart
rather than promote its mandate to distribute its power widely. *PGE.*

BPA's proposed service standards would encroach on state authority to
determine whether a particular entity may sell power to retail
customers. *WIC.* Two questions are relevant in determining whether an
entity is entitled to service from BPA: (1) is the entity a public
agency or cooperative? (2) is that entity permitted or affirmatively
authorized to sell power to customers under state law? *WIC.* The
proposed policy is inconsistent with the efficient use of existing
facilities and will encourage construction of duplicate facilities, nor
is it consistent with the requirement that BPA "encourage the widest
possible use" of Federal power. *WIC.*

The proposed policy on PF eligibility is another instance in which BPA
attempts to discriminate among customers based on a historical
distinction that is not required by law and is not relevant to current
and emerging industry practices. *Alcoa/Vanalco; WIC.* The DOE opinion,
Request of City of Needles for Reinstatement of Sales of Federal Power
for Benefit of its Citizens (1978) is not on point. The implication is
that any means available under state law to obtain distribution services
is sufficient. *Alcoa/Vanalco.* Ownership of distribution may have been
necessary in the 1930's when distribution services were not available on
an unbundled basis. But ownership is not necessary today if distribution
access is mandated by the state or voluntarily made available by
distribution owners. Contrary to BPA's assertion, in the current state
regulatory environment, § 4(d) requires BPA to afford a public utility
reasonable time to secure a means of delivering power, including a
distribution service contract. *Alcoa/Vanalco; WIC.* There are no
standards for service established in the Act beyond becoming a legally
constituted public body or cooperative under the laws of the respective
states. *WIC.*

BPA should expand its proposal because: (1) the Bonneville Project Act
does not require ownership of distribution assets as a condition of
purchasing preference power; (2) it does not comport with the Clinton
Administration's recent electricity industry restructuring proposal; (3)
the Montana Public Service commission continues to regulate distribution
of electricity; (4) BPA relies on a 1978 DOE General Counsel advisory
opinion to justify an ownership-type lease requirement, which does not
mention the additional requirements associated with an ownership-type
lease that BPA is proposing; and (5) WAPA's recent proposal to sell
power to Native American tribes, ownership of wires and poles is not a
necessary condition for receiving preference power (BPA should adopt a
similar policy for open access jurisdictions). *Joint Montana
Commenters; Montana Governor's Office; WMG&T.*

**BPA response**: These comments express the view that changes in state
law that grant entities access to distribution facilities owned,
controlled, and operated by another compel the Administrator to permit
such entities to purchase Federal power from BPA. BPA does not agree
with this view. They also express disagreement with BPA's view of
sections 4(c) and (d) of the Bonneville Project, section 5(b)(4) of the
Northwest Power Act, the 1978 DOE opinion, and they cite recent
proposals by WAPA to sell power to Native American tribes.

The Bonneville Project Act explicitly provides in subsections 4(c) and
(d) that the Administrator sell Federal power to those public bodies and
cooperatives which are in the public business of selling and
distributing electric power. The Act further provides that public bodies
and cooperatives acquire and/or construct the distribution facilities
needed to become legally qualified sellers and distributors of power.
The terms "acquire" and "construct" when read together express the
congressional intent of ownership. When the Act was drafted Congress
considered ownership as the only means to control and operate
distribution facilities. [See]{.underline} Report of the National Power
Policy Committee, 75^th^ Cong., 1^st^ Sess., at 3 (1937). This intent is
reinforced by the specific direction that the Administrator afford
people reasonable time and opportunity to finance, through bond measures
and other means, the acquisition and/or construction of the necessary
distribution facilities.

Of course, Congress did not contemplate, and has not yet addressed,
states deregulating their electricity industries. And while states may
do so, it is axiomatic that the states do not govern Federal actions.
The Administrator may or may not change the standard for service
requirement to own the distribution facilities consistent with Federal
law. While some states have changed their retail utility laws, even now
public bodies and cooperatives can still form and own their distribution
facilities. Neither Congress' intent nor the Administrator's ability to
market Federal power consistent with the purposes of the Bonneville
Project Act and the Northwest Power Act are frustrated by changes in
state law.

For many years BPA has responded to inquiries by prospective public
utility customers by stating they must acquire a distribution system to
serve their retail loads, among other actions, to meet BPA's standards
for service for becoming a customer. WIC and Alcoa/Vanalco are simply
wrong in stating that meeting state law or forming a public body or
cooperative is sufficient.

BPA's reference to the DOE City of Needles opinion in the draft proposal
points out that such a proposal is consistent with DOE policy which
allows use of a lease to acquire distribution. Parties are correct that
WAPA markets power under different statutes; however, the City of
Needles Opinion reflects a determination of criteria for standards for
service that a prospective customer must meet under the preference
clause in section 9(c) of the Reclamation Act of 1939. Such criteria are
contained within the principle standard of being "ready, willing, and
able" to take service. Recognizing the distinction between sections 4(c)
and (d) of the Bonneville Project Act and section 9(c) of the
Reclamation Act, BPA relies on DOE policy as guidance in making the
draft proposal because the policy was general and BPA's own standards
for service accommodate the "ready, willing, and able" principle.

In response to questions why BPA is not proposing something similar to
WAPA's efforts to deliver the benefits of Federal power to Indian
tribes, BPA markets Federal power under separate and different marketing
statutes. In brief, WAPA has established a bill crediting program to
more directly provide the benefit of low-cost Federal power to Indian
tribes without actual power deliveries. For further information
regarding WAPA's final power allocations of the post-2001 resources
pool, [see]{.underline} 62 Fed. Reg. 11174 (March 11, 1997); 10 C.F.R.
part 905.

### C. Comments on Obligation to Serve

**Comment:** Allow more flexibility in how BPA interprets the general
utility responsibility standard when a state restructures. *CUB; NWEC.*
BPA should change this standard to be one of a showing that the
applicant will sell BPA power in a non-discriminatory manner for the
benefit of the general public and particularly of domestic and rural
customers. *PGE.* It is necessary and reasonable that BPA establish a
public policy that recognizes and approves otherwise qualifying public
bodies subject to comprehensive state electric restructuring retail open
access and regulatory control, including "default supplier" or
"obligation to serve" provisions. *City of Missoula.*

Montana has passed laws that allow municipal governments to become
"default supplier" for residential and commercial customers, and allow
the opportunity for buying cooperatives to become a default provider,
both subject to approval by the Montana PSC. *City of Missoula*. The
responsibilities or obligations for providing default electric supply
services to all customers are equivalent whether provided by the
distribution services provider or licensed default supplier. *City of
Missoula*. The default supplier is limited by law to serving only
residential and small commercial customers with average monthly demands
of 100 kW or less. Default electric supply service is equivalent to a
franchise type restriction. This restriction assures that the benefits
of public preference power are focused on the residential and small
commercial customers, which surely meets the language in § 4(a) of the
Bonneville Project Act. *City of Missoula; Joint Montana Commenters;
Montana Governor's Office; WMG&T.* Montana small customer size
limitation imposed on default electric suppliers is not inconsistent
with general utility responsibility. Domestic and rural customers are
those customers the default supplier is obligated to serve which
implements the provisions of the Act. *Joint Montana Commenters.*

**BPA Response:** BPA's proposed modification to its standards for
service policy discussed the relationship between the standard of the
obligation to serve and the requirement to own distribution. BPA
highlighted this relationship and sought input from commenters on the
affect state deregulation might have on that relationship. BPA raised
this issue in light of Congress's direction that the Federal power
marketed by BPA and distributed by BPA's customers to the general public
be resold in a fair and nondiscriminatory manner.

Part of BPA's requirements to buy Federal power has been that the
purchaser be authorized to sell and distribute electric power to the
general public and not limit, or discriminate, its sales to the public.
A utility responsibility to serve all those public consumers who request
service has been the common phrase used. Generally, a company, a public
body, or a cooperative cannot refuse to provide services to members of
the public except on very limited grounds, like nonpayment of bills. BPA
views this requirement as necessary to accomplish the purposes of the
Bonneville Project Act\--nonmonopolization of Federal power and
widespread use\--as well as other statutory purposes.

The comments suggest that BPA must accept the limitations imposed by
state law upon some electric service providers. BPA disagrees. BPA does
not find a state law that prevents service to certain consumers by
certain electric service providers to be like a "franchise type" right
which is geographical in nature. Nor does this state law substitute for
a general utility responsibility to serve the public with Federal power
purchased from BPA. Many comments expressed by these parties go beyond
the scope of BPA's proposed modification. Because the Administrator is
not adopting the proposed modification it is neither necessary nor
reasonable at this time to consider making a change to the standard
requiring the obligation to serve.

### D. Comments on Operations and Structure

**Comment:** There are no legal, practical or economic reasons to
require a particular "operations and structure" for distributing BPA
preference power to otherwise bona fide public entities capable of
selling such power to residential and commercial customers and
contracting with and paying for BPA power. *City of Missoula; Joint
Montana Commenters*. BPA's proposal should be clarified to distinguish
that the agency is really only interested in whether the purchasing
utility can fulfill its contractual obligations. *WMG&T*. Montana's
comprehensive electric restructuring and retail open access laws fully
satisfy the legal and practical requirements that a public body (1) sell
preference power on a non-discriminatory basis to all customers in its
service area; and (2) fulfill its contract and payment responsibilities
to BPA. In the case of the City of Missoula, Montana Power Company is
the distribution provider whose regulated services include facilities
ownership and control; metering, billing, operation and maintenance are
provided pursuant to regulated tariffs under conditions of retail open
access. *City of Missoula*.

**BPA Response:** These comments go beyond the scope of BPA's proposed
modification. The view expressed above suggests that what is only
necessary is the ability to make monetary payment to BPA for Federal
power sold. Although ability to make payment in conformance with the
underlying contract is an important criterion, it is not the only
standard. BPA needs the assurance provided by formation, operations, and
function that the benefits of Federal power flow to retail consumers. In
contrast, acceptance of the views expressed in these comments would lead
to a result in which the actual utility function of providing
distribution (and the metering, billing, and actual operation and
control of the system) would remain in the control of an investor owned
utility. Such a dual arrangement is not consistent with section 4(c) of
the Bonneville Project Act that requires a prospective purchaser to be
both a seller and distributor of the power purchased from BPA. The
formation of mere paper "utilities" to specifically receive the benefits
of preference and priority on behalf of any investor-owned utility would
become problematic. As noted in preceding responses, BPA cannot ignore
statutory direction that its Federal power purchasers be distributors of
the power, as well as sellers. Furthermore, selling to a private entity
could also result in circumventing the prohibition on the resale of
Federal power to investor-owned utilities as provided in section 5(a) of
the Act.

**Comment:** BPA should set this standard in a way that does not inhibit
the changes now occurring in the energy business. The decision to
outsource any function, including the entire distribution function, is
an economic decision made by the entity purchasing Federal power. BPA
should not require the purchaser to retain functions, and lose economic
efficiencies, just to remain eligible to purchase Federal power. *PGE.*

**BPA Response:** BPA is open to considering on a case-by-case basis the
economic efficiencies, opportunities, and concomitant decisions that
utilities make regarding the outsourcing of utility functions for assets
they own. However, a utility owner of distribution facilities must
control the cost, operation, and maintenance of its facilities (plus
metering, billing, and associated costs). If a utility, in carrying out
these functions, outsources certain services for its assets, it is
reasonable that BPA would consider any such efficiencies from
outsourcing, assuming utility control is retained over its distribution
facilities and distribution services.

### E. Comments on Tribal Utilities

**Comment:** BPA's policies should be as flexible as possible to allow
tribal governments, tribal-owned enterprises, and tribal members to
receive low-cost electricity from BPA. *Confederated Tribes and Bands of
the Yakama Indian Nation.* Tribes should be able to form either
cooperatives or public bodies depending on which structure best meets
the needs and goals of the tribe. *Spokane Tribe of Indians;*
*Confederated Tribes and Bands of the Yakama Indian Nation.* Clearly, a
sovereign nation is also a public body. *Confederated Tribes and Bands
of the Yakama Indian Nation.* BPA should explore the option of direct
purchase of power by tribes under § 5 of the Bonneville Project Act.
Tribal governments and/or tribal enterprises could use such purchases to
reduce their costs. *Confederated Tribes and Bands of the Yakama Indian
Nation.*

There are good policy reasons why sovereign tribes should be able to
take Federal preference power; BPA has trust responsibilities, beyond
its obligations to other customers, for working with tribes to enable
them to receive preference power for their reservations. *NWEC.* We
recommend a new preference category specifically for tribal lands.
*Shoshone-Bannock Tribes.*

Tribal utilities formed under tribal laws for service within reservation
lands should be determined by the Administrator to be "public bodies"
under Section 3 of the Bonneville Project Act. Decisions that limit
tribal utilities to the status of "cooperatives" is an unnecessary
barrier to their ability to use tribal tax exempt bonds and other
financing stemming from government status. Failure to recognize a tribal
utility as a public or governmental body does not recognize the
Government-to-Government status between tribes and BPA. *Coquille Indian
Tribe; Confederated Tribes of Coos, Lower Umpqua and Siuslaw Indians;
Confederated Tribes of the Umatilla Indian Reservation; Confederated
Tribes and Bands of the Yakama Indian Nation; Warm Springs Tribes*.

**BPA Response**: These comments express the view that tribes are
domestic dependent nations and sovereign self-governing bodies on their
reservations which are "public bodies" with the authority to form their
own utility to provide electricity service on their reservations.
Federal policy has been to recognize the inherent sovereign power of
tribes over their members and territories. [See]{.underline} Executive
Order 13084 (May 14, 1998). BPA already recognizes the authority of
tribes, pursuant to tribal constitution and bylaws, to form electric
utility cooperatives that meet the term "cooperative" as defined in
section 3 of the Bonneville Project Act. BPA recognizes the inherent
sovereignty of Indian tribes and the government-to-government
relationship between tribes and BPA. Therefore, the Administrator finds
it reasonable and in accord with the meaning and purpose of "public
body" as defined in section 3 to consider tribes as "public bodies" for
purposes of qualifying for preference and priority. Recognition of
"public body" status is limited to the formation of tribal utilities
providing service to retail consumers only within reservation
boundaries.

**Comment:** Afford tribes a "reasonable time and opportunity" in which
to create the necessary utility entity and to secure financing for
acquisition and operation of the utility system so they may become
eligible preference customers. *Spokane Tribe of Indians; Warm Springs
Tribes.* We support an approach that provides the opportunity for tribal
utilities to subscribe to lower cost BPA power through the next 20
years. This should be done under flexible rules to allow a reasonable
time to determine engineering, economic and managerial feasibility for
utility establishment. An extension of time is requested. *Coquille
Indian Tribe; Confederated Tribes of Coos, Lower Umpqua and Siuslaw
Indians; Confederated Tribes of the Umatilla Indian Reservation; Makah
Tribal Council.* Provide some timing flexibility so a tribal utility
could sign a contingent contract approximately four months after the
conclusion of the rate case. *Confederated Tribes and Bands of the
Yakama Indian Nation; NWEC*. BPA should accept a Letter of Intent to
establish an electrical utility by the contract deadline to be
sufficient. *Shoshone-Bannock Tribes*.

**BPA Response:** Indian tribes and any other people desiring to form a
new utility have as much time as needed to do so. The Administrator is
not limiting the "reasonable time and opportunity" for people to form
new utilities. Whenever a new utility is formed and qualifies for
service as a customer from BPA, then at that time the Administrator
shall offer a contract at the applicable wholesale power rate if
requested. Comments regarding aspects of BPA's Power Subscription
Strategy are beyond the scope of this Record of Decision.

**V. [Conclusion]{.underline}**

After having considered fully the comments made by parties in response
to BPA's draft proposal I conclude that there is no need to revise BPA's
historical standards for service. It is within the Administrator's
discretion under section 5(b)(4) of the Northwest Power Act to leave
unchanged the standard requiring that an entity own its distribution
system in order to purchase Federal power from BPA. I have determined
that this standard need not be broadened. Furthermore, a new standard
would create additional risks and burdens to the agency. The standard
requiring distribution facility ownership has been administered for over
60 years in a uniform and easy manner. It is a clear standard and has
not been subject to varying interpretations. This standard will continue
to fulfill the agency's needs and meet its statutory directives.
Therefore, BPA will retain its historical standards for service as set
forth in the Federal Register Notice.

Issued in Portland, Oregon, on December 22, 1999.

/s/ J. A. Johansen

  -----------------------------------------------------------------------
  Administrator and

  Chief Executive Officer
  -----------------------------------------------------------------------

**Appendix**

[Commenter Abbreviations and Acronyms]{.underline}

ATNI Affiliated Tribes of Northwest Indians

Avista Avista Corp.

Blachly-Lane Blachly-Lane Rural Electric Cooperative

CUB Citizens Utility Board

CPU Clark Public Utilities

EEI Edison Electric Institute

EPUD Emerald PUD

EWEB Eugene Water & Electric Board

FEMP Federal Energy Management Programs

ICNU Industrial Customers of Northwest Utilities

ICOUA Idaho Consumer Owned Utility Association

IPC Idaho Power Company

Joint Montana Commenters Montana Public Service Commission, Montana
Consumer Counsel, Montana Power Company, Natural Resources Defense
Council, Montana Environmental Information Center, and the City of
Missoula

NWEC Northwest Energy Coalition

NRECA Northwest Rural Electric Cooperative Association

NRU Northwest Requirements Utilities

OPUC Oregon Public Utilities Commission

PGE Portland General Electric

PGP Public Generating Pool

PNGC Pacific Northwest Generating Cooperative

PPC Public Power Council

PSE Puget Sound Energy, Inc.

SUB Springfield Utility Board

The Companies Reynolds Metals Company, Northwest Aluminum Company, and
Goldendale Aluminum Company

WDCTED Washington Department of Community, Trade and Economic
Development

WIC Washington Industrial Cooperative

WMG&T Western Montana Generation & Transmission Cooperative

WPAG Washington Public Agency Group

WRECA Washington Rural Electric Cooperative Association