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###### Department of Energy

###### Federal Energy Regulatory Commission

          - [Docket No. EF09-2011-000]

*Summary:*                     On July 31, 2009, and September 3, 2009, the Bonneville Power Administration (Bonneville) filed a request for interim and final approval of its wholesale power [1]                                          and transmission rates [2]                                          in accordance with the Pacific Northwest Electric Power Planning and Conservation Act (Northwest Power Act) [3]                                          and Subpart B of Part 300 of the Commission's regulations.[4]                                          Bonneville projects that the filed rates will produce average annual power revenues of $2.925 billion, and average annual revenues from transmission and ancillary services rates of $866 million. Bonneville asserts that this level of annual revenues is sufficient to recover its costs for the 2009-2011 rate approval period, while providing cash flow to assure 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.                

                    Notice of Bonneville's July 31, 2009, application was published in the                     **Federal Register**                    , 74 FR 42,068 (2009), with protests, or motions to intervene due on or before August 31, 2009. The Association of Public Agency Customers, Alcoa Inc, Avista Corporation, Clatskanie People's Utility District, Eugene Water and Electric Board, Iberdrola Renewables, Inc., Idaho Power Company, Idaho Public Utilities Commission, Industrial Customers of Northwest Utilities, Northwest Requirements Utilities,[5]                                          Northwest Wind Group,[6]                                          PacifiCorp, Portland General Electric Company, Powerex Corp., Public Power Council, Puget Sound Energy, Inc., and Tillamook People's Utility District filed timely motions to intervene, raising no substantive issues. Notices of interventions and unopposed timely filed motions to intervene are granted pursuant to the operation of Rule 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.214). Any opposed or untimely filed motion to                           ( print page 52486)                        intervene is governed by the provisions of Rule 214.                

                    Notice of Bonneville's September 3, 2009, errata corrections was published in the                     **Federal Register**                    , 74 FR 47,243 (2009), with protests, or motions to intervene due on or before September 15, 2009. None were filed.                

## Standard of Review

                    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:[7] 

(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.

                    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,[8]                                          which requires that they comply with the Bonneville Project Act, the Flood Control Act of 1944, and the Federal Columbia River Transmission System Act (Transmission System Act). Taken together, those statutes require that Bonneville's non-regional, non-firm rates:                

(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

(C) Provide the lowest possible rates to consumers consistent with sound business principles.

                    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.[9] 

                    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,[10]                                          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.[11] 

                    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.[12]                                          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 full review for final approval. 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.[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 Director

Interim approval of Bonneville's proposed wholesale power and transmission rates is hereby granted, to become effective on October 1, 2009, through September 30, 2011, subject to refund with interest as set forth in section 300.20(c) of the Commission's regulations, 18 CFR 300.20(c) (2009), pending final action and either their approval or disapproval.

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.

                    The Secretary shall promptly publish this order in the                     **Federal Register**                    .                

## Authorities

This action is taken pursuant to authority delegated to the Director, Division of Tariffs and Market Development—Central, under 18 CFR 375.307 of the Commission's Regulations. This order constitutes final agency action. Requests for rehearing by the Commission may be filed within 30 days of the date of issuance of this order pursuant to 18 CFR 385.713.

Penny S. Murrell,

Director, Division of Tariffs and Market Development—Central.

# Footnotes

1.                             The proposed wholesale power rates for which Bonneville seeks approval for the period October 1, 2009 through September 30, 2011, include: Priority Firm Power Rate (PF-10); New Resource Firm Power Rate (NR-10); Industrial Firm Power Rate (IP-10); Firm Power Products and Services Rate (FPS-10); General Transfer Agreement Service Rate (GTA-10); and Power General Rates Schedule Provisions (GRSPs).                    
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2.                             The proposed transmission rates for which Bonneville seeks approval for the period October 1, 2009, through September 30, 2011, include: Formula Power Transmission Rate (FPT-10.1), Formula Power Transmission Rate (FPT-10.3); Integration of Resources Rate (IR-10); Network Integration Rate (NT-10); Point-to-Point Rate (PTP-10); Southern Intertie Rate (IS-10); Montana Intertie Rate (IM-10); Use-of-Facilities Transmission Rate (UFT-10); Advance Funding Rate (AF-10); Ancillary Services and Control Area Services Rates (ACS-10); Townsend-Garrison Transmission Rate (TGT-10); Eastern Intertie Rate (IE-10); and Transmission General Rate Schedule Provisions (GRSPs).                    
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3.                             16 U.S.C. 839e(i) (2006).                    
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4.                             18 CFR Part 300 (2009).                    
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5.                             They comprise various municipalities, public utility districts, cooperatives, etc., and they seek to intervene jointly and also individually.                    
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6.                             The Northwest Wind Group is an unincorporated Bonneville customer group comprising Renewable Northwest Project and wind developers BP America, Inc., Columbia Energy Partners LLC, enXco Development Corporation, Horizon Wind Energy and RES America Developments Inc. Renewable Northwest Project is an advocacy organization representing numerous environmental and consumer groups, renewable resource developers, energy efficiency companies, and manufacturers of renewable energy products.                    
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7.                             16 U.S.C. 839e(a)(2) (2006). Bonneville also must comply with the financial, accounting, and ratemaking requirements in Department of Energy Order No. RA 6120.2.                    
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8.                             16 U.S.C. 839e(k) (2006).                    
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9.                                                     *E.g., United States Department of Energy—Bonneville Power Administration*, 67 FERC ¶ 61,351 at 62,216-17 (1994);                         *see also, e.g., Aluminum Co. of America*                         v.                         *Bonneville Power Administration*, 903 F.2d 585, 592-93 (9th Cir. 1989).                    
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10.                                                     *See*18 CFR 300.10(a)(3)(ii) (2009).                    
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11.                                                     *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 Administration*, 40 FERC ¶ 61,351 at 62,059-60 (1987).                    
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12.                                                     *See, e.g., United States Department of Energy—Bonneville Power Administration*, 105 FERC ¶ 61,006 at P13-14 (2003);                         *United States Department of Energy—Bonneville Power Administration*, 96 FERC ¶ 61,360 at 62,358 (2001).                    
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13.                             18 CFR 300.20(c) (2009).                    
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[FR Doc. E9-24545 Filed 10-9-09; 8:45 am]

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