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[Federal Register Volume 89, Number 219 (Wednesday, November 13, 2024)]
[Notices]
[Pages 89626-89633]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-26244]

[[Page 89626]]

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DEPARTMENT OF ENERGY

Bonneville Power Administration

[BPA File No.: BP-26]

Fiscal Year (FY) 2026-2028 Proposed Power and Transmission Rate 
Adjustments; Public Hearing and Opportunities for Public Review and 
Comment

AGENCY: Bonneville Power Administration (Bonneville or BPA), Department 
of Energy (DOE).

ACTION: Notice of FY 2026-2028 proposed power and transmission rate 
adjustments.

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SUMMARY: Bonneville is initiating a rate proceeding under the Northwest 
Power Planning and Conservation Act (Northwest Power Act) to establish 
power, transmission, and ancillary and control area services rates for 
the period from October 1, 2025, through September 30, 2028. Bonneville 
has designated this proceeding Docket No. BP-26.

DATES: 
    Prehearing Conference: The prehearing conference in the BP-26 
proceeding will be held on November 15, 2024, immediately following the 
conclusion of the prehearing conference for Bonneville's TC-26 tariff 
proceeding, which begins at 2:00 p.m. The Addresses section of this 
notice provides details on participating in the prehearing conference.
    Intervention: Petitions to intervene in the BP-26 proceeding must 
be filed on Bonneville's secure website no later than 4:30 p.m. on 
December 3, 2024. Part III of this notice, ``Public Participation in 
BP-26,'' provides details on requesting access to the secure website 
and filing a petition to intervene.
    Participant Comments: Written comments by non-party participants 
must be received by February 7, 2025, to be considered in the 
Administrator's Record of Decision (ROD). Part III of this notice, 
``Public Participation in BP-26,'' provides details on submitting 
participant comments.

ADDRESSES: 
    Prehearing Conference: The prehearing conference in the BP-26 
proceeding will be held in the Bonneville Rates Hearing Room, 1201 NE 
Lloyd Boulevard, Suite 200, Portland, Oregon 97232. Interested parties 
may attend in person or participate virtually via WebEx. The WebEx 
information will be available on Bonneville's BP-26 web page at http://bpa.gov/bp26 or from the Hearing Clerk at [email protected].
    Intervention: Anyone intending to become a party to the BP-26 
proceeding must file a petition to intervene on Bonneville's secure 
website. Petitions to intervene may be filed beginning on the date of 
publication of this Notice and are due no later than 4:30 p.m. on 
December 3, 2024. Part III of this notice, ``Public Participation in 
BP-26,'' provides details on requesting access to the secure website 
and filing a petition to intervene.
    Participant Comments: Written comments by non-party participants 
may be submitted through Bonneville's website at www.bpa.gov/comment or 
by hard copy to: BPA Public Involvement, Bonneville Power 
Administration, P.O. Box 14428, Portland, Oregon 97293. Part III of 
this notice, ``Public Participation in BP-26,'' provides details on 
submitting participant comments.

FOR FURTHER INFORMATION CONTACT: Ms. Elissa Haley, DKS-7, BPA 
Communications, Bonneville Power Administration, P.O. Box 14428, 
Portland, Oregon 97293; by phone toll-free at 1-800-622-4519; or by 
email to [email protected].
    The Hearing Clerk for this proceeding can be reached via email at 
[email protected] or via telephone at (503) 479-8506.
    Please direct questions regarding Bonneville's secure website to 
the Hearing Coordinator via email at [email protected] or, if the 
question is time-sensitive, via telephone at (503) 230-5107.
    Responsible Officials: Mr. Daniel H. Fisher, Power Rates Manager, 
is the official responsible for the development of Bonneville's power 
rates, and Mr. Brian McConnell, Manager of Transmission Tariff, Rates, 
and Regulatory Activities, is the official responsible for the 
development of Bonneville's transmission, ancillary, and control area 
services rates.

SUPPLEMENTARY INFORMATION:

Table of Contents

Part I Introduction and Procedural Matters
Part II Scope of BP-26 Rate Proceeding
Part III Public Participation in BP-26
Part IV Summary of Rate Proposals
Part V Proposed BP-26 Rate Schedules

Part I--Introduction and Procedural Matters

A. Introduction

    The Northwest Power Act provides that Bonneville must establish, 
and periodically review and revise, its power and transmission rates so 
that they recover, in accordance with sound business principles, the 
costs associated with the acquisition, conservation, and transmission 
of electric power, including amortization of the Federal investment in 
the Federal Columbia River Power System (FCRPS) over a reasonable 
number of years, and Bonneville's other costs and expenses. Section 
7(i) of the Northwest Power Act requires that Bonneville's rates be 
established according to certain procedures. Among other things, the 
procedures include publication of notice of the proposed rates in the 
Federal Register and one or more hearings conducted as expeditiously as 
practicable by a Hearing Officer to develop a full and complete record 
for a final decision by the Administrator. Bonneville is conducting the 
BP-26 proceeding to establish rates for FY 2026-2028.
    Bonneville's Rules of Procedure will govern the BP-26 proceeding. 
The rules are posted on Bonneville's website at https://www.bpa.gov/energy-and-services/rate-and-tariff-proceedings/rules-of-procedure-revision-process.

B. BP-26 Integrated Program Review

    Bonneville's Integrated Program Review (IPR) process is designed to 
allow the public an opportunity to review and comment on Bonneville's 
expense and capital cost forecasts before the forecast costs are used 
to set rates. Bonneville's BP-26 IPR process, which addressed the 
expense and capital program level cost forecasts for FY 2026-2028, 
began on June 25, 2024, with the publication of the BP-26 IPR Initial 
Publication. The process concluded on October 24, 2024, with the 
issuance of the BP-26 IPR Close-Out Report. Comments regarding any new 
information or changed circumstances arising after the date of this 
notice that affect BPA's cost projections should be directed to 
[email protected] and be submitted no later than March 3, 2025. At the 
discretion of the Administrator, Bonneville may hold additional 
processes to review these forecasts outside of the BP-26 rate 
proceeding. If Bonneville decides to update any cost information, such 
updates will be reflected in the final proposed rates.

C. Proposed Settlement of the Generator Interconnection Withdrawal 
Charge

    As part of a workshop process that preceded the BP-26 proceeding, 
Bonneville engaged in discussions with customers and other stakeholders 
about a proposal for a charge in the Transmission rate schedules that 
would apply to the withdrawal of a request for interconnection services 
under the Standard Large Generator Interconnection Procedures in 
Attachment L to Bonneville's open

[[Page 89627]]

access transmission tariff. These discussions have resulted in the BP-
26 Partial Rates Settlement Agreement, which includes the terms of the 
``Generator Interconnection Withdrawal Charge'' that Bonneville is 
proposing to adopt in the BP-26 proceeding. A description of the 
proposed charge is provided in Part IV of this notice. A link to the 
BP-26 Partial Rates Settlement Agreement is provided in Part V. The 
proposed settlement addresses the Generator Interconnection Withdrawal 
Charge only and no other issues in this proceeding.
    The proposed settlement calls for Bonneville to file a motion with 
the BP-26 Hearing Officer to establish a deadline for parties in the 
BP-26 proceeding to either object to the proposed settlement or waive 
the right to contest the settlement. Bonneville intends to file its 
motion soon after the BP-26 prehearing conference. If no party in the 
BP-26 proceeding objects to the proposed settlement, Bonneville staff 
will continue moving forward with the proposal to adopt the settlement. 
If a party objects, staff will notify all parties and decide how to 
proceed.

D. Proposed Procedural Schedule

    A proposed schedule for the BP-26 proceeding is provided below. The 
proposed schedule assumes there are no objections to the proposal to 
adopt the BP-26 Partial Rates Settlement Agreement. The official 
schedule will be established by the Hearing Officer and may be amended 
by the Hearing Officer as needed during the proceeding.

Prehearing Conference--November 15, 2024
BPA Files Initial Proposal--November 22, 2024
Deadline for Petitions to Intervene--December 3, 2024
Clarification--December 10, 2024
Motions to Strike Due--December 17, 2024
Data Request Deadline for BPA's Initial Proposal--December 17, 2024
Parties File Direct Cases--January 23, 2025
Clarification--January 30, 2025
Motions to Strike Due--February 6, 2025
Data Request Deadline for Parties' Direct Cases--February 6, 2025
Close of Participant Comments--February 7, 2025
Litigants File Rebuttal Cases--March 5, 2025
Clarification--March 12, 2025
Motions to Strike Due--March 14, 2025
Data Request Deadline for Litigants' Rebuttal--March 14, 2025
Parties Give Notice of Intent to Cross-Examine--March 26, 2025
Cross-Examination--April 9-10, 2025
Initial Briefs Filed--April 25, 2025
Oral Argument--May 7, 2025
Draft Record of Decision Issued--June 6, 2025
Briefs on Exceptions Filed--June 20, 2025
Final Record of Decision and Final Studies Issued--July 24, 2025

E. Ex Parte Communications

    Section 1010.5 of Bonneville's Rules of Procedure prohibits ex 
parte communications. Ex parte communications include any oral or 
written communication (1) relevant to the merits of any issue in the 
proceeding; (2) that is not on the record; and (3) with respect to 
which reasonable prior notice has not been given. The ex parte rule 
applies to communications with all Bonneville and DOE employees and 
contractors, the Hearing Officer, and the Hearing Clerk during the 
proceeding. Except as provided, any communications with persons covered 
by the rule regarding the merits of any issue in the proceeding by 
other executive branch agencies, Congress, existing or potential 
Bonneville customers, nonprofit or public interest groups, or any other 
non-DOE parties are prohibited. The rule explicitly excludes and does 
not prohibit communications (1) relating to matters of procedure; (2) 
otherwise authorized by law or the Rules of Procedure; (3) from or to 
the Federal Energy Regulatory Commission (Commission); (4) that all 
litigants agree may be made on an ex parte basis; (5) in the ordinary 
course of business, about information required to be exchanged under 
contracts, or in information responding to a Freedom of Information Act 
request; (6) between the Hearing Officer and Hearing Clerk; (7) in 
meetings for which prior notice has been given; or (8) as otherwise 
specified in section 1010.5(b) of Bonneville's Rules of Procedure. The 
ex parte rule is effective upon publication of this FRN and remains in 
effect until the Administrator's Final ROD is issued.

Part II--Scope of BP-26 Rate Proceeding

A. Joint Rate Proceeding

    The BP-26 proceeding is a joint proceeding for the adoption of both 
power and transmission rates for FY 2026-2028 (see Parts IV and V). 
This section provides guidance to the Hearing Officer regarding the 
scope of the rate proceeding and identifies specific issues that are 
outside the scope. In addition to the issues specifically listed below, 
any other issue that is not a ratemaking issue is outside the scope of 
this proceeding.
    Bonneville may revise the scope of the proceeding to include new 
issues that arise as a result of circumstances or events occurring 
outside the proceeding that are substantially related to the rates 
under consideration in the proceeding. See Rules of Procedure, section 
1010.4(b)(8)(iii), (iv). If Bonneville revises the scope of the 
proceeding to include new issues, Bonneville will provide public notice 
on its website, present testimony or other information regarding such 
issues, and provide a reasonable opportunity to intervene and respond 
to Bonneville's testimony or other information. Id.
1. Expense and Capital Cost Forecasts
    Bonneville's forecasts of its expense and capital costs are not 
determined in rate proceedings. Bonneville develops these forecasts in 
other processes, such as the IPR process described previously, with 
input from stakeholders. These forecasts are used in Bonneville's 
ratemaking, but do not establish Bonneville's budgets or spending 
levels for any program. Adjustments to, and selection of, projects for 
Bonneville's actual spending levels for its programmatic spending, 
including fish and wildlife spending, occur through the yearly 
budgetary review process, which includes submission of Bonneville's 
budget to Congress.
    Bonneville also depreciates the capital spending on the Federal 
power and transmission systems over the service lives of the associated 
assets. Power's investments are depreciated over fixed periods. 
Transmission's depreciation is based on a depreciation study calculated 
consistent with industry standards. The service lives of power and 
transmission assets, as well as the depreciation study and resulting 
depreciation rates, are not determined in rate proceedings.
    Pursuant to section 1010.4(b)(8) of the Rules of Procedure, the 
Administrator directs the Hearing Officer to exclude from the record 
all argument, testimony, or other evidence that seek to raise issues 
with or challenge the appropriateness or reasonableness of: (1) the 
Administrator's forecasts of cost and spending levels, (2) the 
identification of projects used in Bonneville's cost forecasts, or (3) 
any decisions on the depreciation rates that are used to calculate 
depreciation expense. Comments regarding new information or changed 
circumstances arising after the date of this FRN that affect BPA's cost 
projections should be submitted pursuant to section I.B of this notice.
    The exclusion does not extend to those portions of the revenue 
requirement related to the following: (1)

[[Page 89628]]

interest rate forecasts, (2) interest expense and credit, (3) Treasury 
repayment schedules, (4) calculation of depreciation and amortization 
expense, (5) forecasts of system replacements used in repayment 
studies, (6) purchased power expenses, (7) transmission cost incurred 
by Power Services, (8) generation cost incurred by Transmission 
Services, (9) minimum required net revenue, and (10) the costs of risk 
mitigation actions resulting from the expense and revenue uncertainties 
included in the risk analysis.
2. Federal and Non-Federal Debt Service and Debt Management
    During the 2026 IPR process and in other forums, Bonneville 
provided the public with background information on Bonneville's 
internal Federal and non-Federal debt management policies and 
practices. While these policies and practices are not decided in the 
IPR process, these discussions were intended to inform interested 
parties about these matters so the parties would better understand 
Bonneville's debt structure. Bonneville's debt management policies and 
practices remain outside the scope of the rate proceeding.
    Pursuant to section 1010.4(b)(8) of the Rules of Procedure, the 
Administrator directs the Hearing Officer to exclude from the record 
all argument, testimony, or other evidence that seeks in any way to 
address the appropriateness or reasonableness of Bonneville's debt 
management policies and practices. This exclusion does not encompass 
how debt management actions are reflected in ratemaking.
3. Financial and Accounting Policies and Practices
    Bonneville's Financial Plan outlines objectives to sustain the 
agency's financial strength and resiliency. The Financial Plan focuses 
on four main areas: cost management; debt utilization; debt capacity; 
and liquidity. Bonneville has adopted certain financial policies to 
help further its financial objectives. Bonneville's Financial Reserves 
Policy establishes lower and upper thresholds for agency and business 
line financial reserves and parameters for actions to be taken when 
financial reserves are above or below the thresholds. The Sustainable 
Capital Financing Policy guides Bonneville's use of debt and revenue 
financing to finance capital investments. The terms of Bonneville's 
Financial Plan and Policies, along with Bonneville's internal financial 
and accounting policies and practices, are outside the scope of the BP-
26 proceeding.
    Pursuant to section 1010.4(b)(8) of the Rules of Procedure, the 
Administrator directs the Hearing Officer to exclude from the record 
all argument, testimony, or other evidence that seeks in any way to 
visit or revisit the terms of Bonneville's Financial Plan, Financial 
Reserves Policy, Sustainable Capital Financing Policy, internal 
financial and accounting policies and practices, and previous decisions 
regarding the adoption and implementation of the Financial Plan and 
Policies.
4. Tiered Rate Methodology (TRM)
    The TRM restricts Bonneville and its customers with Contract High 
Water Mark (CHWM) contracts from proposing changes to the TRM's 
ratemaking guidelines unless certain procedures have been successfully 
concluded. No proposed changes have been subjected to the required 
procedures.
    Pursuant to section 1010.4(b)(8) of the Rules of Procedure, the 
Administrator directs the Hearing Officer to exclude from the record 
all argument, testimony, or other evidence that seeks in any way to 
propose revisions to the TRM made by Bonneville, customers with CHWM 
contracts, or their representatives. This exclusion does not extend to 
a party or customer that does not have a CHWM contract.
5. Rate Period High Water Mark (RHWM) Process
    The RHWM Process preceded the start of the BP-26 proceeding. In 
that process, as directed by the TRM, Bonneville established FY 2026-
2028 RHWMs for Public customers that signed contracts for firm 
requirements power service providing for tiered rates, referred to as 
CHWM contracts. Bonneville established the maximum planned amount of 
power a customer is eligible to purchase at Tier 1 rates during the 
rate period, the Above-RHWM Loads for each customer, the System Shaped 
Load for each customer, the Tier 1 System Firm Critical Output, RHWM 
Augmentation, the Rate Period Tier 1 System Capability (RT1SC), and the 
monthly/diurnal shape of RT1SC. The RHWM Process provided customers an 
opportunity to review, comment on, and challenge Bonneville's RHWM 
determinations.
    Pursuant to section 1010.4(b)(8) of the Rules of Procedure, the 
Administrator directs the Hearing Officer to exclude from the record 
all argument, testimony, or other evidence that seeks in any way to 
visit or revisit Bonneville's determination of a customer's FY 2026-
2028 RHWM or other RHWM Process determinations.
6. 2008 Average System Cost Methodology (2008 ASCM) and Average System 
Cost Determinations
    Section 5(c) of the Northwest Power Act established the Residential 
Exchange Program, which provides benefits to residential and farm 
consumers of Pacific Northwest utilities based, in part, on a utility's 
``average system cost'' (ASC) of resources. The 2008 ASCM is not 
subject to challenge or review in a section 7(i) proceeding. 
Determinations of the ASCs of participating utilities are made in 
separate processes conducted pursuant to the ASCM. Those processes 
began with ASC filings on July 1, 2024, and will conclude in July 2025, 
with the publication of the Final ASC Reports.
    Pursuant to section 1010.4(b)(8) of the Rules of Procedure, the 
Administrator directs the Hearing Officer to exclude from the record 
all argument, testimony, or other evidence that seeks in any way to 
visit or revisit the appropriateness or reasonableness of the 2008 ASCM 
or of any of the ongoing ASC determinations.
7. 2012 Residential Exchange Program Settlement Agreement (2012 REP 
Settlement)
    On July 26, 2011, the Administrator executed the 2012 REP 
Settlement, which resolved longstanding litigation over Bonneville's 
implementation of the Residential Exchange Program (REP) under section 
5(c) of the Northwest Power Act, 16 U.S.C. 839c(c). The Administrator's 
findings regarding the legal, factual, and policy challenges to the 
2012 REP Settlement are explained in the REP-12 Record of Decision 
(REP-12 ROD). The Administrator's decisions regarding the 2012 REP 
Settlement and REP-12 ROD were upheld by the U.S. Court of Appeals for 
the Ninth Circuit in Ass'n of Pub. Agency Customers v. Bonneville Power 
Admin., 733 F.3d 939 (9th Cir. 2013). Challenges to Bonneville's 
decision to adopt the 2012 REP Settlement and implement its terms in 
Bonneville's rate proceedings are not within the scope of this 
proceeding.
    Pursuant to section 1010.4(b)(8) of the Rules of Procedure, the 
Administrator directs the Hearing Officer to exclude from the record 
all argument, testimony, or other evidence that seeks in any way to 
visit or revisit in this rate proceeding Bonneville's determination to 
adopt the 2012 REP Settlement or its terms.
8. Service to the Direct Service Industries (DSIs)
    Pursuant to section 1010.4(b)(8) of the Rules of Procedure, the 
Administrator directs the Hearing Officer to exclude from the record 
all argument, testimony,

[[Page 89629]]

or other evidence that seeks in any way to revisit the appropriateness 
or reasonableness of Bonneville's decisions regarding service to the 
DSIs, including Bonneville's decision to offer contracts to the DSIs 
and the method, level of service, or other terms embodied in the 
existing DSI contracts.
9. Operation and Maintenance of the Power and Transmission Systems
    Bonneville operates and maintains the Federal Columbia River 
Transmission System and, in coordination with other Federal entities, 
the FCRPS in accordance with good utility practice and with applicable 
reliability standards and operating requirements. Bonneville's power 
and transmission systems operation and maintenance practices and 
protocols, such as dispatcher standing orders, operating instructions, 
reliability of the system, compliance programs, and other operating 
requirements are non-rate matters.
    Pursuant to section 1010.4(b)(8) of the Rules of Procedure, the 
Administrator directs the Hearing Officer to exclude from the record 
all argument, testimony, or other evidence that seeks in any way to 
address issues regarding operation and maintenance practices and 
protocols.
10. Terms and Conditions of Transmission Service
    Bonneville offers and provides transmission services, including 
interconnection service and ancillary and control area services, in 
accordance with the terms and conditions specified in its open access 
transmission tariff (Tariff), business practices, and applicable 
contracts. In addition to and concurrent with this rate proceeding, 
Bonneville is initiating the TC-26 proceeding to modify the terms and 
conditions of the Tariff. Bonneville's business practices provide 
implementation details for the Tariff. Bonneville's decisions regarding 
the business practices are determined in other forums and follow the 
procedures in Bonneville's Business Practice Process posted on its 
website. The Tariff terms and conditions, business practices, and the 
contracts and contract disputes between Bonneville and its customers 
are outside the scope of the BP-26 rate proceeding.
    Pursuant to section 1010.4(b)(8) of the Rules of Procedure, and 
except as otherwise provided in this section II.A.10, the Administrator 
directs the Hearing Officer to exclude from the record all argument, 
testimony, or other evidence that seeks in any way to address issues 
regarding terms and conditions of transmission service, including 
interconnection service, and ancillary and control area services. This 
includes, but is not limited to, argument, testimony, or other evidence 
regarding Bonneville's decisions whether to offer particular 
transmission services, the terms and conditions for participating in 
the Western Energy Imbalance Market (EIM), the procedures and standards 
for modifications to Bonneville's Tariff or business practices, and 
whether to include certain terms and conditions in the Tariff or in 
business practices.
    Bonneville is proposing to adopt a Generator Interconnection 
Withdrawal Charge in this proceeding in order to implement certain 
modifications to the Standard Large Generator Interconnection 
Procedures in the Tariff proposed in the TC-26 proceeding. The 
exclusion in this section does not extend to testimony or other 
evidence related to Tariff terms and conditions that may be necessary 
to provide context for the proposed adoption of the general rate 
schedule provision for the Generator Interconnection Withdrawal Charge 
in the BP-26 proceeding.
11. Oversupply Management Protocol
    The proposed OS-26 Oversupply rate is a formula rate designed to 
recover Bonneville's actual oversupply costs incurred during the BP-26 
rate period. Bonneville incurs oversupply costs pursuant to the 
Oversupply Management Protocol, Attachment P of Bonneville's Tariff.
    Pursuant to section 1010.4(b)(8) of the Rules of Procedure, the 
Administrator directs the Hearing Officer to exclude from the record 
all argument, testimony, or other evidence that seeks in any way to 
address the terms of the Oversupply Management Protocol; whether the 
Oversupply Management Protocol complies with orders of the Commission; 
and whether Bonneville took all actions to avoid using the Oversupply 
Management Protocol, including the payment of negative prices to 
generators outside of Bonneville's balancing authority area. This 
exclusion does not extend to issues concerning the rates for recovering 
the costs of the Oversupply Management Protocol.
12. Market Initiatives and Regional Carbon Policies
    Bonneville is engaged in a number of market initiatives that are 
outside of the scope of this proceeding. These include (1) the Western 
EIM, which is an extension of the California Independent System 
Operator's (CAISO) real-time market; (2) the Western Resource Adequacy 
Program (WRAP); (3) regional cap-and-trade policies, and (4) 
consideration of CAISO's extended day-ahead market proposal and 
Southwest Power Pool's Markets+ proposal.
    Pursuant to section 1010.4(b)(8) of the Rules of Procedure, the 
Administrator directs the Hearing Officer to exclude from the record 
all argument, testimony, or other evidence that seeks in any way to 
raise or revisit Bonneville's decision to join the EIM or the WRAP, or 
review or address Bonneville's position on regional cap-and-trade 
policies or Bonneville's consideration of CAISO's extended day-ahead 
market proposal or Southwest Power Pool's Markets+ proposal. This 
exclusion does not extend to issues concerning rate incentives and the 
recovery or distribution of EIM-related, carbon-related, and WRAP-
related costs or credits, which are within the scope of the BP-26 
proceeding.
13. Potential Environmental Impacts, Biological Constraints, and 
Related Operations
    Environmental impacts are addressed in a National Environmental 
Policy Act (NEPA) process Bonneville conducts concurrent with the rate 
proceeding. See section II.B of this notice. In addition, biological 
constraints on hydropower operations are determined outside of the rate 
case through processes such as intra-agency consultations under the 
Endangered Species Act, 16 U.S.C. 1536(a)(2). Finally, implementation 
of the decision regarding operations, maintenance and configuration 
(management) of the Columbia River System evaluated in the Columbia 
River System Operations Environmental Impact Statement (CRSO EIS) and 
associated joint ROD with the U.S. Army Corps of Engineers and Bureau 
of Reclamation, and associated biological opinions, court orders, and 
other agreements, are also not issues to be addressed in this 
proceeding.
    Pursuant to section 1010.4(a)(8) of Bonneville's Procedures, the 
Administrator directs the Hearing Officer to exclude from the record 
all argument, testimony, or other evidence that seeks in any way to 
address the potential environmental impacts of the rates being 
developed in this rate proceeding, potential biological effects of 
operations modeled in the proceeding, the appropriate hydroelectric 
constraints defined in these environmental compliance processes, or the 
operations, maintenance, configuration, (management) assumptions, 
studies, decisions, or matters addressed in the CRSO EIS or CRSO EIS 
joint ROD and

[[Page 89630]]

associated biological opinions, court orders, and other agreements.
14. 2029 Public Rate Design Methodology
    The 2029 Public Rate Design Methodology is a rate methodology that 
will apply to the establishment of the Priority Firm Power (PFp) rate 
beginning in FY 2029 (October 1, 2028). The PRDM will replace the TRM 
upon the TRM's expiration. Concurrent with the BP-26 rate proceeding, 
BPA is conducting a section 7(i) process (PRDM-26) to establish the 
terms and provisions of the PRDM. Arguments, evidence, or issues 
related to the PRDM are not within the scope of this proceeding.
    Pursuant to section 1010.4(a)(8) of Bonneville's Procedures, the 
Administrator directs the Hearing Officer to exclude from the record 
all argument, testimony, or other evidence that seeks in any way to 
address the PRDM.
15. Provider of Choice Contract Policy, Policy Record of Decision, and 
Contract Negotiations
    Under section 5(b) of the Northwest Power Act, Bonneville is 
required to offer a contract for the sale of firm power to meet the net 
requirements of eligible customers requesting such a contract. The 
current form of that agreement, colloquially called the Regional 
Dialogue Contract, expires on September 30, 2028, which occurs at the 
end of the BP-26 rate period. For the better part of two years, BPA, 
its customers, and other interested parties have been discussing the 
terms, conditions, products, and policies that will form the basis of 
the follow-on section 5(b) power sales contract, known colloquially as 
the Provider of Choice Contract. The Provider of Choice Contract will 
apply to the section 5(b) power sales from Bonneville for the period of 
October 1, 2028-September 30, 2044. To support the development of the 
Provider of Choice Contract, on March 21, 2024, Bonneville issued a 
Policy (Provider of Choice Policy) and Record of Decision (Provider of 
Choice ROD). The Provider of Choice Policy and ROD describe the 
policies, primary elements, and key provisions of the new section 5(b) 
Provider of Choice Contract. Following the publication of the Provider 
of Choice Policy and ROD, in April 2024, Bonneville commenced a series 
of public workshops to discuss and negotiate the draft terms and 
provisions of the Provider of Choice Contract. Those workshops are 
ongoing.
    The Provider of Choice Policy, ROD, contract, and negotiations, and 
any issue pertaining to those matters, are outside of the scope of the 
BP-26 rate proceeding. Pursuant to section 1010.4(a)(8) of Bonneville's 
Procedures, the Administrator directs the Hearing Officer to exclude 
from the record all argument, testimony, or other evidence that seeks 
in any way to address the Provider of Choice Policy, ROD, contract, and 
negotiations, as well as any issue or argument pertaining to those 
matters.
16. Capacity for Ancillary and Control Area Services
    Bonneville is forecasting a significant increase in balancing 
reserve capacity needs to provide certain Ancillary and Control Area 
Services. These capacity needs are expected to exceed the capability of 
the FCRPS during the BP-26 rate period. Bonneville is still exploring 
methods for filling the balancing reserve capacity shortfall outside of 
the BP-26 rate proceeding.
    Pursuant to section 1010.4(a)(8) of Bonneville's Procedures, the 
Administrator directs the Hearing Officer to exclude from the record 
all argument, testimony, or other evidence that seeks in any way to 
specify the method or operation Bonneville should adopt in order to 
address the balancing reserve shortfall, or that seeks to determine the 
operation or capability of the FCRPS to provide additional balancing 
reserve capacity.

B. The National Environmental Policy Act

    Bonneville is in the process of assessing the potential 
environmental effects of its proposed power and transmission rate 
adjustments, consistent with NEPA. The NEPA process is conducted 
separately from the rate proceeding. As discussed above, all evidence 
and argument addressing potential environmental impacts of the rate 
adjustments being developed in the BP-26 rate proceeding are excluded 
from the rate proceeding record. Instead, comments on environmental 
effects should be directed to the NEPA process.
    Based on its most current assessment of the proposed power and 
transmission rate adjustments, Bonneville believes this proposal may be 
the type of action typically excluded from further NEPA review pursuant 
to U.S. DOE NEPA regulations, which apply to Bonneville. More 
specifically, the proposal appears to solely involve changes to 
Bonneville's rates and other cost recovery and management mechanisms to 
ensure that there are sufficient revenues to meet Bonneville's 
financial obligations and other costs and expenses, while using 
existing generation sources operating within normal limits. As such, it 
appears this rate proposal falls within Categorical Exclusion B4.3, 
found at 10 CFR part 1021, subpart D, app. B4.3, which provides for the 
categorical exclusion from further NEPA review of ``[r]ate changes for 
electric power, power transmission, and other products or services 
provided by a Power Marketing Administration that are based on a change 
in revenue requirements if the operations of generation projects would 
remain within normal operating limits.''
    Nonetheless, Bonneville is still assessing the proposal, and, 
depending upon the ongoing environmental review, Bonneville may instead 
issue another appropriate NEPA document. Comments regarding the 
potential environmental effects of the proposal may be submitted to 
Katey Grange, NEPA Compliance Officer, EC-4, Bonneville Power 
Administration, 905 NE 11th Avenue, Portland, Oregon 97232, and to 
[email protected]. Any such comments received by the comment deadline 
for Participant Comments identified in section III.A of this notice 
will be considered by Bonneville's NEPA compliance staff in the NEPA 
process that is being conducted for this proposal.

Part III--Public Participation in BP-26

A. Interventions

    Any entity or person intending to become a party in the BP-26 
proceeding must file a petition to intervene through Bonneville's 
secure website, https://proceedings.bpa.gov/. Because Bonneville is 
introducing a new secure website interface, all prospective users must 
create a new user account to submit an intervention. The secure website 
contains a link to the user guide, which provides step-by-step 
instructions for creating user accounts, submitting filings, and 
uploading interventions. Please contact the Hearing Coordinator via 
email at [email protected] or, if the question is time-sensitive, via 
telephone at (503) 230-5107, with any questions regarding the 
registration and submission process.
    All petitions to intervene must be submitted through Bonneville's 
secure website by the deadline in the procedural schedule adopted by 
the Hearing Officer. Late interventions are strongly disfavored. 
Petitions to intervene must conform to the format and content 
requirements in sections 1010.6 and 1010.11 of Bonneville's Rules of 
Procedure. Petitions must state the name and address of the entity or 
person requesting party status and the entity or person's interest in 
the hearing.

[[Page 89631]]

    The Hearing Officer will rule on all petitions to intervene. 
Bonneville customers and affiliated customer groups will be granted 
intervention based on petitions filed in conformance with the Rules of 
Procedure. Other petitioners must explain their interests in sufficient 
detail to permit the Hearing Officer to determine whether the 
petitioners have a relevant interest in the hearing.
    Bonneville or any party may oppose a petition to intervene. The 
deadline for opposing a timely petition to intervene is two business 
days after the deadline for filing the petition. Opposition to an 
untimely petition to intervene must be filed within two business days 
after service of the petition.

B. Participant Comments

    Bonneville distinguishes between ``participants in'' and ``parties 
to'' the BP-26 proceeding. Separate from the formal hearing process, 
Bonneville will accept written comments, views, opinions, and 
information from participants who have not intervened in the BP-26 
proceeding and been granted ``party'' status by the Hearing Officer. 
Participants are not entitled to participate in the prehearing 
conference; may not cross-examine parties' witnesses, seek discovery, 
or serve or be served with documents; and are not subject to the same 
procedural requirements as parties. Bonneville customers whose rates 
are subject to this proceeding, or their affiliated customer groups, 
may not submit participant comments. Members or employees of 
organizations that have intervened in the proceeding may submit 
participant comments as private individuals (that is, not speaking for 
their organizations) but may not use the comment procedures to address 
specific issues raised by their intervener organizations.
    Written comments by participants must be received by February 7, 
2025, to be included in the record and considered by the Administrator. 
Participants should submit comments through Bonneville's website at 
www.bpa.gov/comment or by hard copy to: BPA Public Involvement, 
Bonneville Power Administration, P.O. Box 14428, Portland, Oregon 
97293. All comments should contain the designation ``BP-26'' in the 
subject line.

C. Developing the Record

    The hearing record will include, among other things, the 
transcripts of the hearing, written evidence and argument entered into 
the record by Bonneville and the parties, written comments from 
participants, and other material accepted into the record by the 
Hearing Officer. The Hearing Officer will review and certify the record 
to the Administrator for final decision.
    The Administrator will develop final rates based on the record and 
such other materials and information as may have been submitted to or 
developed by the Administrator. The Final ROD will be made available to 
all parties. Bonneville will file its rates with the Commission for 
confirmation and approval after issuance of the Final ROD.

Part IV--Summary of Rate Proposals

A. Summary of the Power Rate Proposal

    Bonneville is proposing four primary rates for Federal power sales 
and services, along with general rate schedule provisions to implement 
such rates.
1. Priority Firm Power Rate (PF-26)
    The PF rate schedule applies to sales of firm power to public body, 
cooperative, and Federal agency customers to meet their ``general 
requirements'' pursuant to section 7(b) of the Northwest Power Act. The 
PF Public rate applies to the general requirements portion of a 
customer's Firm Requirements Power under CHWM contracts with customers 
taking Load Following, Block, or Slice/Block service. Consistent with 
the TRM, Tier 1 rates include three charges: (1) customer charges, (2) 
a demand charge, and (3) a load shaping charge. In addition, two Tier 2 
Short-Term rates are proposed, the Short-Term and Load Growth rates. 
These rates would be applicable to customers that have elected to 
purchase power from Bonneville for service to their Above-RHWM Load.
    The proposed average Tier 1 non-Slice product rate impact, which 
represents the majority of Bonneville's power sales, is 9.8 percent 
higher than its BP-24 equivalent rate. Customer-specific results will 
vary around this average impact, with some customers experiencing 
higher rate impacts and some lower rate impacts, based on the specific 
situation of a particular customer. A customer's overall rate impact--
the rate impact that includes the power it purchases from Bonneville at 
Tier 1 and Tier 2 rates--will also vary based on the specific situation 
of the particular customer, the amount of Above-RHWM Load the customer 
has, and how much of that Above-RHWM Load the customer elected 
Bonneville to serve at Tier 2 rates. With regard to BPA's Tier 2 rates, 
Bonneville is proposing new electable Tier 2 rate options--a fixed rate 
option and a formula rate option.
    The Base PF Exchange rate and its associated surcharges apply to 
sales pursuant to Residential Purchase and Sale Agreements and 
Residential Exchange Program Settlement Implementation Agreements with 
regional utilities that participate in the REP established under 
section 5(c) of the Northwest Power Act, 16 U.S.C. 839c(c). The Base PF 
Exchange rate establishes the threshold for participation in the REP; 
only utilities with ASCs above the appropriate Base PF Exchange rate 
may receive REP benefits. If a utility meets the threshold, a utility-
specific PF Exchange rate will be established in this proceeding for 
each eligible utility. The utility-specific PF Exchange rate is used in 
calculating the REP benefits each REP participant will receive during 
FY 2026-2028.
    The proposed PF-26 rate schedule also includes resource support 
services rates for customers with non-Federal resources, and a melded 
PF rate for Public customers that would have been applicable to 
customers had any elected power sales contracts other than CHWM 
contracts for firm requirements service. No PF Public customer has its 
general requirements power served at anything other than a CHWM 
contract.
2. New Resource Firm Power Rate (NR-26)
    The NR-26 rate applies to firm power sales to investor-owned 
utilities (IOUs) to meet their net requirements pursuant to section 
5(b) of the Northwest Power Act. The NR-26 rate is also applied to 
sales of firm power to the portion of a Public customer's Firm 
Requirements Power that is used to serve new large single loads. In 
addition, the NR rate schedule includes rates for services to support 
Public customers serving new large single loads with non-Federal 
resources. In the BP-26 Initial Proposal, Bonneville is forecasting 18 
aMW per year of power sales to one PF Public customer at the NR rate. 
One of the services Bonneville provides to support Public customers 
with serving new large single loads with non-Federal resources is the 
NR Energy Shaping Service (NR ESS). Bonneville provided this service in 
past rate periods but is proposing to revise this service for the BP-26 
rate period. BPA is also proposing to remove the NR Flattening Service 
from the rate schedule.
3. Industrial Firm Power Rate (IP-26)
    The IP rate is applicable to firm power sales to DSI customers 
authorized by section 5(d)(1)(A) of the Northwest Power Act, 16 U.S.C. 
839c(d)(1)(A). In the BP-26 Initial Proposal, Bonneville is

[[Page 89632]]

forecasting 11 aMW per year of power sales to one DSI customer at the 
IP rate.
4. Firm Power and Surplus Products and Services Rate (FPS-26)
    The FPS rate schedule is applicable to sales of various surplus 
power products and surplus transmission capacity for use inside and 
outside the Pacific Northwest. The rates for these products are 
negotiated between Bonneville and the purchasers. The FPS-26 rate 
schedule also includes rates for customers with non-Federal resources; 
the Unanticipated Load Service rate; rates for other capacity, energy, 
and scheduling products and services; rates for reserve services for 
use outside the Bonneville balancing authority area; and real power 
losses rates for customers that elect financial settlement of real 
power losses.
5. Power General Rate Schedule Provisions (GRSPs)
    The Power GRSPs include general rate schedule terms and conditions 
applicable to Bonneville's power rates. In addition, the Power GRSPs 
contain special rate adjustments, charges, credits, and pass-through 
mechanisms for specific events and customer circumstances. Among other 
matters covered by the Power GRSPs are provisions related to 
calculating rates, resource support services, charges associated with 
transfer service, risk adjustments, Slice True-up, the Residential 
Exchange Program, conservation, payment options, and other charges. Of 
particular note for BP-26 is Bonneville's proposal to rework the 
Unauthorized Increase Charge and proposing to remove the Transfer 
Service Delivery Charge.

B. Summary of the Transmission Rate Proposal

    Bonneville is proposing separate transmission rates for its network 
segment, intertie segments, ancillary and control area services, and 
for various specific purposes.
1. Network Rates
    The Network Integration Transmission Rate (NT-26) applies to 
customers taking network integration service, which allows customers to 
flexibly serve retail load.
    The Point-to-Point Rate (PTP-26) is a contract demand rate that 
applies to customers taking Point-to-Point service on Bonneville's 
network. Point-to-Point service provides customers with service from 
identified points of receipt to identified points of delivery. There 
are separate rates for long-term firm service and various increments of 
firm and non-firm short-term service.
2. Intertie Rates
    The Southern Intertie Rate (IS-26) is a contract demand rate that 
applies to customers taking Point-to-Point service on the Southern 
Intertie.
    The Montana Intertie Rate (IM-26) applies to customers taking 
Point-to-Point service on the Eastern Intertie and that are not parties 
to the Montana Intertie Agreement.
    The Townsend-Garrison Transmission Rate (TGT-26) applies to parties 
to the Montana Intertie Agreement taking firm service over Bonneville's 
section of the Montana Intertie.
    The Eastern Intertie Rate (IE-26) applies to parties to the Montana 
Intertie Agreement taking non-firm service on the portion of the 
Eastern Intertie capacity that exceeds Bonneville's firm transmission 
rights.
3. Other Transmission Rates and General Rate Schedule Provisions
    The Use-of-Facilities Rate (UFT-26) establishes a formula rate for 
the use of a specific facility based on the annual cost of that 
facility.
    The Advance Funding Rate (AF-26) allows Bonneville to collect the 
capital and related costs of specific facilities through an advance-
funding mechanism.
    The Regional Compliance Enforcement and Regional Coordinator rate 
(RC-26) recovers costs assessed to Bonneville for regional reliability 
compliance monitoring, enforcement, and reliability coordination 
services.
    The Oversupply Rate (OS-26) recovers the costs Bonneville incurs to 
displace generation under the Oversupply Management Protocol, 
Attachment P to Bonneville's Tariff.
    Other proposed transmission rates and charges include: a 
Reservation Fee for customers that postpone the service commencement 
date of transmission service; incremental cost rates for transmission 
service requests that require new facilities; a penalty charge for 
failure to comply with dispatch, curtailment, redispatch, or load 
shedding orders; an Unauthorized Increase Charge for use of the 
transmission system in excess of contracted-for demand; and rate 
adjustment mechanisms consistent with Bonneville's Financial Policies.
    Bonneville proposes a new GRSP for a ``Generator Interconnection 
Withdrawal Charge'' that applies to the removal of interconnection 
requests at certain stages of the Large Generator Interconnection 
Procedures in the Tariff.
    Bonneville also proposes to discontinue certain transmission rates 
and charges in the current (BP-24) rate schedules. The FPT-24.1 rate 
applies to a ``legacy'' transmission service agreement that will no 
longer be in effect in the BP-26 rate period. The FPT rate will no 
longer be necessary once the FPT agreement expires. The Utility 
Delivery Charge applies to deliveries over low-voltage facilities on 
Bonneville's system that have been segmented to the Utility Delivery 
segment. BPA proposes elimination of the Utility Delivery Charge in 
conjunction with the proposal to segment the low voltage facilities to 
the network segment.
4. Ancillary Service and Control Area Service Rates
    The BP-26 Transmission Rates Proposal includes rates for 
Bonneville's Ancillary and Control Area Services, along with certain 
updates to those rates and new rates. Bonneville is proposing two new 
rates related to Western EIM participation and modifications to three 
existing rates.
    Bonneville proposes a new rate to account for balancing costs that 
are not settled by the EIM. At times, there is a discrepancy between 
the schedules used by the EIM for settlement and schedules submitted to 
Bonneville. If the schedules do not match, there is an additional use 
of balancing reserves that the EIM does not account for. The proposed 
new rate is intended to account for this use of balancing reserves. In 
addition, Bonneville is proposing a new rate to recover costs related 
to Bid Cost Recovery charges in the EIM that Bonneville did not 
previously allocate to customers.
    Bonneville also proposes modifications to the Variable Energy 
Resource Balancing Service (VERBS) rate to allow for the recovery of 
costs related to balancing reserve purchases. Bonneville is projecting 
a shortage of the capacity needed to provide VERBS throughout the rate 
period, as Bonneville is projecting a significant increase in 
interconnections of Variable Energy Resources during the rate period. 
As a result, Bonneville will need to obtain capacity to fill the 
balancing reserve shortfall. As the method for filling the balancing 
reserves shortfall is currently unknown, Bonneville is proposing a 
formula rate intended to allow for the recovery of costs related to 
whatever method by which Bonneville is able to fill the shortfall.
    Additionally, Bonneville proposes modifications to the Persistent 
Deviation Penalty Charge to clarify rate language and to the New 
Technology

[[Page 89633]]

Pilot to expand the scope of the pilot to include additional new 
technologies.

C. Risk Mitigation Tools

    Bonneville is proposing three rate adjustment mechanisms for BP-26 
power and transmission rates to mitigate the risk that actual costs and 
revenues will differ from forecast over the rate period and to protect 
the agency's solvency and strong credit rating. These mechanisms 
implement Bonneville's Financial Reserves Policy (FRP) and provide for 
adjustments to a business line's rates or other action in the event the 
business line's Financial Reserves fall below or exceed certain 
thresholds.
    The Cost Recovery Adjustment Clause (CRAC) will adjust rates upward 
to generate additional revenue within the rate period if business line 
Financial Reserves fall below a defined lower threshold.
    The Financial Reserves Policy Surcharge (FRP Surcharge) will also 
adjust rates upward to generate additional revenue within the rate 
period if business line Financial Reserves fall below a defined lower 
threshold.
    Finally, the Reserves Distribution Clause (RDC) will trigger if 
Financial Reserves exceed upper thresholds for the business line and 
the agency as a whole. If the RDC triggers, Bonneville will consider 
the amount of Financial Reserves above the threshold for rate relief or 
investment in high-value, business line-specific purposes such as debt 
retirement. The process for determining the RDC amounts (which is 
described in the power and transmission General Rate Schedule 
Provisions) is also being revised.
    Bonneville is proposing to maintain risk-related provisions and 
proposes to include additional Planned Net Revenues for Risk (PNRR) in 
power rates if the average effective PF Public Non-Slice Tier 1 rate is 
no greater than 38.85 mills/kWh. First, for FY 2026, the three Power 
risk adjustment clauses will not be applicable to the portion of a 
customer's service at PF Tier 1 rates that has been converted from a 
Slice product to a non-Slice product beginning October 1, 2025. 
However, the three risk adjustment clauses will apply to such 
customer's entire service at PF Tier 1 rates for FY 2026 and 2027. 
Second, any FY 2026, 2027 or 2028 Power RDC will automatically provide 
a dividend distribution in an amount equal to the lesser of the RDC 
amount and the amount of PNRR included in the BP-26 power rates. And 
third, the caps on the Power and Transmission RDCs are removed for the 
BP-26 rate period.

Part V--Proposed BP-26 Power Rate Schedules and BP-26 Transmission 
Rates Schedules

    Bonneville's proposed BP-26 Power Rate Schedules and BP-26 
Transmission Rate Schedules, which includes Transmission, Ancillary, 
and Control Area Services Rate Schedules, are a part of this notice and 
are available on Bonneville's website at https://www.bpa.gov/BP26. The 
BP-26 Partial Rates Settlement Agreement is also posted at this 
website.

Signing Authority

    This document of the Department of Energy was signed on October 31, 
2024, by John L. Hairston, Administrator and Chief Executive Officer of 
the Bonneville Power Administration, pursuant to delegated authority 
from the Secretary of Energy. This document with the original signature 
and date is maintained by DOE. For administrative purposes only, and in 
compliance with requirements of the Office of the Federal Register, the 
undersigned DOE Federal Register Liaison Officer has been authorized to 
sign and submit the document in electronic format for publication, as 
an official document of the Department of Energy. This administrative 
process in no way alters the legal effect of this document upon 
publication in the Federal Register.

    Signed in Washington, DC, on November 7, 2024.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
[FR Doc. 2024-26244 Filed 11-12-24; 8:45 am]
BILLING CODE 6450-01-P
```