[Federal Register Volume 65, Number 101 (Wednesday, May 24, 2000)]
[Notices]
[Pages 33529-33531]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-13050]


-----------------------------------------------------------------------

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. EF00-2011-000]


United States Department of Energy--Bonneville Power 
Administration; Order Approving Rates on an Interim Basis and Providing 
Opportunity for Additional Comments

Issued May 19, 2000.
    In this order, we approve the Bonneville Power Administration's 
(Bonneville) proposed rates on an interim basis, pending our full 
review for final approval. We also provide for an additional period of 
time for the parties to file comments.

Background

    On March 21, 2000, the Bonneville Power Administration (Bonneville) 
filed a request for interim and final approval of an adjustment of its 
Firm Power Products and Services rate schedule (FPS-96R) in accordance 
with the Pacific Northwest Electric Power Planning and Conservation Act 
(Northwest Power Act) \1\ and Subpart B of Part 300 of the Commission's 
regulations.\2\ FPS-96R was previously approved by the Commission for a 
ten-year period through September 30, 2006.\3\ The filing incorporates 
into FPS-96R seasonally and diurnally adjusted rates for the capacity 
without energy product; the rates were inadvertently omitted when the 
rate schedule was originally adopted. Bonneville contends that the 
purpose of this filing is to allow Bonneville to recover the costs that 
are incurred by Bonneville offering this product, as the inadvertent 
omission could distort the revenue requirements already adopted by the 
Commission. Bonneville states that no other aspect of FPS-96R is being 
adjusted, and it otherwise continues in full force and effect through 
September 30, 2006.
---------------------------------------------------------------------------

    \1\ Sections 7(a)(2) and 7(i)(6) of the Northwest Power Act, 16 
USC Secs. 839e(a)(2) and 839e(i)(6) (1994).
    \2\ 18 C.F.R. Part 300 (1999).
    \3\ See United States Department of Energy--Bonneville Power 
Administration, 80 FERC para. 61,118 (1997).
---------------------------------------------------------------------------

    In accordance with the statutory procedure, \4\ Bonneville seeks 
interim approval of its rates, effective May 1, 2000, pending 
Commission consideration of whether to approve the rates on a final 
basis. Bonneville requests approval of the modification of the FPS-96R 
rate for the period beginning May 1, 2000, through September 30, 2006.
---------------------------------------------------------------------------

    \4\ Sections 7(a)(2) and 7 (i)(6), 16 U.S.C. Secs. 839e(a)(2) 
and 839e(i)(6) (1994).
---------------------------------------------------------------------------

Notice of Filing and Interventions

    Notice of Bonneville's filing was published in the Federal 
Register, 65 Fed. Reg. 19,370 (2000), with comments, protests, or 
motions to intervene due on or before April 20, 2000.
    Goldendale Aluminum Company, Northwest Aluminum Company, Reynolds 
Metals Company, Kaiser Aluminum & Chemical Corporation, and Elf 
Atochem, North America (the Aluminum Companies) jointly filed a timely 
motion to intervene, raising no substantive issues.
    Southern California Edison Company (SoCal Edison) filed a timely 
motion to intervene and protest. SoCal Edison requests that 
Bonneville's filing be rejected and that interim approval of the rate 
be denied. SoCal Edison argues that there is no evidence supporting the 
filing and that Bonneville has failed to comply with the applicable 
provisions of the Northwest Power Act. SoCal Edison further opposes 
Bonneville's request for waiver of the filing requirements and the 60-
day prior notice requirement of the Commission's regulations. In the 
alternative, SoCal Edison requests that the Commission deny Bonneville 
interim approval of the proposed rate, suspend the proposed rate and 
set this matter for an evidentiary hearing.
    SoCal Edison disputes both the procedure by which Bonneville 
developed the rate and the procedures it has followed in this 
processing. SoCal Edison states that the methodology used by Bonneville 
in developing the proposed rate is inconsistent with Bonneville's 
general obligations to set rates having regard to the recovery of the 
cost of generation and transmission, to encourage the most widespread 
use of Bonneville power, and to set rates at the lowest possible rates 
to consumers. SoCal Edison asserts that the proposed rate is not based 
upon the actual costs of generation and transmission incurred by 
Bonneville. Instead, SoCal Edison asserts, Bonneville has proposed a 
rate supposedly based upon the market even though, by the testimony of 
its own witness, no market exists.\5\ SoCal Edison argues that 
Bonneville's methodology used in developing this market rate is not 
supported by credible data or analyses and is inconsistent with the 
methodology used in developing either market-based rates or cost-based 
rates in both the 1996 general rate proceeding and the general rate 
proceeding that

[[Page 33530]]

Bonneville initiated concurrently with the FPS-96R expedited 
proceeding.
---------------------------------------------------------------------------

    \5\ SoCal Edison cites to the Cross-Examination Testimony of 
Gary Bolden, Tr. at 146, lines 6-11.
---------------------------------------------------------------------------

    Bonneville filed an answer to SoCal Edison's motion to intervene 
and protest. Bonneville states, among other things, that it has no 
objection to a proposed effective date of May 22, 2000. SoCal Edison 
filed a reply to Bonneville's answer on May 12, 2000.

Discussion

    Under Rule 214 of the Commission's Rules of Practice and Procedure, 
18 CFR 385.214 (1996), the timely and unopposed motions to intervene to 
the Aluminum Companies and SoCal Edison serve to make them parties to 
this proceeding.
    Rule 213 of the Commission's Rules of Practice and Procedure, 18 
CFR 385.213(a)(2), (1999), prohibits answers unless otherwise permitted 
by decisional authority. We find good cause to allow part of 
Bonneville's answer, that pertaining to the issue of the effective 
date, because it provides additional information that assists us in the 
decision-making process. We will, however, reject that the remainder of 
Bonneville's answer and SoCal Edison's reply as an impermissible answer 
to a protest and an answer to an answer, respectively, because they 
deal with issues other than the effective date.

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):
    (1) 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 the Administrator's other costs;
    (2) They must be based upon the Administrator's total system costs; 
and
    (3) Insofar as transmission rates are concerned, they must 
equitably allocate the costs of the Federal transmission system between 
Federal and non-Federal power.\6\
---------------------------------------------------------------------------

    \6\ 16 U.S.C. Sec. 839e(a)(2) (1994). Bonneville also must 
comply with the financial, accounting, and ratemaking requirements 
in Department of Energy Order No. RA 6120.2.
---------------------------------------------------------------------------

    Commission review of Bonneville's non-regional, nonfirm rates also 
is limited. Review is restricted to determining whether such rates meet 
the requirements of section 7(k) of the Northwest Power Act,\7\ 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 
Bonneville to design its non-regional, nonfirm rates:
---------------------------------------------------------------------------

    \7\ 16 U.S.C. Sec. 839e(k) (1994).
---------------------------------------------------------------------------

    (1) To recover the cost of generation and transmission of such 
electric energy, including the amortization of investments in the power 
projects within a reasonable period;
    (2) To encourage the most widespread use of Bonneville power; and
    (3) To 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.\8\
---------------------------------------------------------------------------

    \1\ E.g., United States Department of Energy--Bonneville Power 
Administration, 67 FERC para. 61,351 at 62,216-17 (1994); see also, 
e.g., Aluminum Company of America v. Bonneville Power 
Administration, 903 F.2d 585, 592-93 (9th cir. 1989), and cases 
cited therein.
---------------------------------------------------------------------------

    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,\9\ 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.\10\
---------------------------------------------------------------------------

    \9\ See 18 CFR Sec. 300.10(a)(3)(ii) (1996).
    \10\ See, e.g., United States Department of Energy--Bonneville 
Power Administration, 64 FERC para. 61,375 at 63,606 (1993); United 
States Department of Energy--Bonneville Power Administration, 40 
FERC para. 61,351 at 62,059-60 (1987).
---------------------------------------------------------------------------

Interim Approval

    SoCal Edison argues that Bonneville violated the procedural 
requirements of section 7(i) of the Northwest Power Act in proposing 
these rates. The Commission, however, does not review purported 
deficiencies in the Administrator's compliance with the procedural 
requirements of the Act. \11\
---------------------------------------------------------------------------

    \11\ See U.S. Department of Energy--Bonneville Power 
Administration, 28 FERC para. 61,078 at 61,146-47 and 61,148 n.2 
(1984).
---------------------------------------------------------------------------

    In addition, we are unpersuaded that the arguments of SoCal Edison 
justify summary rejection of the filing or refusal to approve these 
rates on an interim basis. We believe, rather, that these issues should 
be addressed in the course of our final review of these rates. At that 
time, intervenors may challenge the assumptions underlying Bonneville's 
filing. Moreover, intervenors will be protected by an express condition 
that the interim rates will be collected subject to refund with 
interest. \12\
---------------------------------------------------------------------------

    \12\ 18 CFR Sec. 300a.20(c) (1999).
---------------------------------------------------------------------------

    In its transmittal letter, Bonneville requests interim approval of 
its proposed FPS-96R rate adjustment effective May 1, 2000; however, 
the transmittal letter does not include a request for waiver of the 
Commission's 60-day prior notice requirement to permit a May 1, 2000 
effective date or any justification for such waiver. SoCal Edison 
points out that the draft notice filed by Bonneville with the 
Commission states that Bonneville is requesting an effective date of 
May 19, 2000, which date is 60 days after the date of Bonneville's 
transmittal letter, and which appears to be Bonneville's attempt to 
design an effective date that complies with the 60-day prior notice 
requirement. SoCal Edison requests that Bonneville's request for a May 
19, 2000 effective date be rejected because the 60th day would be May 
20, 2000, and a request for waiver should be filed for any date prior 
to May 21, 2000. SoCal Edison adds that Bonneville did not request such 
a waiver, nor did Bonneville show any good cause for the waiver. In its 
answer, Bonneville states that it simply miscalculated the number of 
days, and inadvertently requested to have the effective date occur on 
the 59th day. Bonneville states that it has no objection to changing 
the proposed effective date to Monday, May 22, 2000. Accordingly, we 
will accept Bonneville's proposed rate schedule to become effective on 
May 22, 2000.
    The Commission's preliminary review indicates that the filing 
appears to meet the minimum threshold filing requirements of Part 300 
of the Commission's regulations and the statutory standards. Because 
the Commission's preliminary review of Bonneville's submittal indicates 
that it does not contain any patent deficiencies, the proposed rates 
will be approved on an interim basis pending our full review for final 
approval.
    In addition, we will provide an additional period of time for the 
parties to file comments and reply comments on all issues related to 
final

[[Page 33531]]

confirmation and approval of Bonneville's proposed rates.

The Commission Orders:

    (A) SoCal Edison's request to reject Bonneville's request for 
interim approval of the proposed rates is hereby denied.
    (B) SoCal Edison's motion for summary rejection of the filing is 
hereby denied.
    (C) Interim approval of Bonneville's proposed FPS-96R rate schedule 
is hereby granted, to become effective on May 22, 2000, subject to 
refund with interest as set forth in section 300.20(c) of the 
Commission's regulations, 18 CFR 300.20(c) (1999), pending final action 
on either its approval or disapproval.
    (D) Within thirty (30) days of the date on the date of this order, 
all parties who wish to do so may file additional comments regarding 
final confirmation and approval of Bonneville's proposed rates. All 
parties who wish to do so may file reply comments within twenty (20) 
days thereafter.
    (E) The Secretary shall promptly publish this order in the Federal 
Register.

    By the Commission.
Linwood A. Watson, Jr.,
Acting Secretary.
[FR Doc. 00-13050 Filed 5-23-00; 8:45 am]
BILLING CODE 6717-01-M