UNITED STATES OF AMERICA

U.S. DEPARTMENT OF ENERGY

BEFORE THE

BONNEVILLE POWER ADMINISTRATION

PROPOSED SAFETY-NET COST )

RECOVERY ADJUSTMENT CLAUSE ) BPA Docket SN-03

(SN CRAC) ADJUSTMENT TO 2002 )

WHOLESALE POWER RATES )

**[ORDER GRANTING MOTION TO STRIKE DIRECT TESTIMONY OF THE GENERATING
PUBLIC UTILITIES]{.underline}**

On April 18, 2003, Generating Public Utilities (GPU) filed its direct
testimony in this proceeding. On April 23, 2003, Bonneville Power
Administration (BPA) filed a Motion to Strike a Portion of GPU's Direct
Testimony. On April 29, 2003, GPU filed its Answer and the Public Power
Council (PPC) filed a Response in support of GPU and requested that the
BPA Motion be denied.

BPA asserts that the portion of GPU's testimony entitled "Compliance
with the National Environmental Policy Act" (NEPA) is outside the scope
of the issues to be litigated in this proceeding because
"BPA\...conducts environmental review of its ratemaking actions
*separately* under the NEPA, 42.U.S.C. § 4321-4347, as well as under
Council of Environmental Quality (CEQ) and U.S. Department of Energy
(DOE) NEPA regulations\..." and that appropriate NEPA compliance
document for the rate proposal preceded the Federal Register
Announcement[^1] and currently "*is in the process* of assessing the
potential environmental effects of this proposed rate
adjustment\..."[^2] Furthermore, BPA notes that adopting the procedure
of having NEPA issues considered within the docket would preclude
participation by a broader range of the public which the act was
intended to foster. BPA affirms that the information submitted will not
be ignored but rather transmitted to the appropriate personnel for
consideration in conjunction with BPA's NEPA review.[^3]

GPU "challenges BPA's statements in its Federal Register Notice (Notice)
that the proposed SN CRAC rate adjustment falls within the scope of
BPA's Final Business Plan Environmental Impact Statement (EIS). BPA has
made these claims to justify its rate proposal and, therefore challenges
to those statements should be addressed in this rate proceeding\...The
purpose of \[GPU's\] testimony is to rebut BPA's unsupported statements
that the existing NEPA documents provide adequate environmental review
of the proposed rates."[^4] In essence, GPU claims that the proposed
rate increases are of a magnitude far beyond the 1995 EIS. GPU seeks to
create a record showing that the EIS does not comply with NEPA when
applied to the proposed rates. GPU further disputes BPA claims that it
is properly addressing NEPA compliance. Contrary to BPA's assertions,
the current BPA publication, *Journal*, does not list the SN CRAC case
among current NEPA proceedings. This proceeding, according to GPU, is
the only means available to explore these issues. Furthermore, public
participation is available in a 7(i) proceeding such as this.[^5] Public
Power Council (PPC) concurs with GPU.[^6]

**Discussion.** In the Notice, BPA states that "An initial review of
this proposed rate adjustment indicates that it is consistent with these
aspects of the Market-Driven Alternative. This rate proposal\...thus
would not be expected to result in significantly different environmental
impacts from those examined for the Market-Driven alternative in the
Business Plan\....Therefore, BPA expects that this rate proposal will
fall within the scope of the Market-Driven Alternative that was
evaluated in the Final Business Plan EIS."[^7] It is essentially these
statements that GPU sought to rebut with its testimony.

BPA's assertions were, however, not made in sworn testimony to be given
weight in the decisionmaking process associated with this proceeding,
but rather as a means to provide the public with its current opinion as
to how the separate proceeding would be affected by the outcome of the
SN-03 CRAC.

Had BPA made assertions about NEPA compliance in its sworn testimony,
rebuttal testimony proffered by GPU would have been appropriate.
However, this was not the case. BPA, by its Motion, asserts on the
record that the NEPA review is in progress. The failure of the SN CRAC
case to appear in the current issue of BPA's *Journal*, absent a showing
that such appearance is mandated by statute, rule or regulation, is not
sufficient evidence to demonstrate that the appropriate NEPA review of
BPA's SN CRAC proposal is not underway.

**ORDER**

The Bonneville Power Administration's Motion to Strike a Portion of the
Direct Testimony of the Generating Public Utilities is GRANTED.

Page 11, line 17 through page 23. line 20 and Exhibits SN-03-E-GP-01A,
B, C, D, and E of the Direct Testimony of Lovely, Robinson and Peters,
SN-03-E-GP-01, presented on behalf of the Generating Public Utilities is
stricken from the record.

SO ORDERED, May 2, 2003.

**[  /s/ Allan J. Arlow     ]{.underline}**

Allan J. Arlow, ALJ

SN-03

BPA Hearing Officer

[^1]: 68 Fed. Reg. 12048-12055, March 13, 2003.

[^2]: BPA Motion, pp. 1-2, emphases in text.

[^3]: *Id.,* pp. 2-3.

[^4]: GPU Answer, pp. 1-2.

[^5]: *Id.*, pp. 2-5.

[^6]: PPC Response, p. 1.

[^7]: Notice, p. 12052.