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[Federal Register Volume 89, Number 219 (Wednesday, November 13, 2024)]
[Notices]
[Pages 89633-89636]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-26243]

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DEPARTMENT OF ENERGY

Bonneville Power Administration

[BPA File No.: PRDM-26]

Fiscal Year (FY) 2029 Public Rate Design Methodology; Public 
Hearing and Opportunities for Public Review and Comment

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

ACTION: Notice of FY 2029 public rate design methodology proceeding.

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SUMMARY: BPA is proposing to adopt a new tiered rate design for setting 
its Priority Firm Power (PFp) rates for the period beginning October 1, 
2028. The primary feature of the Public Rate Design Methodology (PRDM) 
is the establishment of two tiers of rates: one rate tier (Tier 1) will 
be based on generation output and costs attributed to BPA's current 
system resources and a second rate tier (Tier 2) will be based on the 
generation and costs associated with newly acquired resources.

DATES: 
    Prehearing Conference: The prehearing conference in the PRDM-26 
proceeding will be held on November 15, 2024, immediately following the 
conclusion of the prehearing conferences for Bonneville's TC-26 tariff 
proceeding and BP-26 rate proceeding, which begin 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 PRDM-26 proceeding must 
be filed on Bonneville's secure website no later than 4:30 p.m. on 
November 19, 2024. Part III of this notice, ``Public Participation in 
PRDM-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 January 30, 2025, to be considered in the 
Administrator's Record of Decision (ROD). Part III of this notice, 
``Public Participation in PRDM-26,'' provides details on submitting 
participant comments.

ADDRESSES: 
    Prehearing Conference: The prehearing conference in the PRDM-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 PRDM web page at https://www.bpa.gov/prdm2029 or from the Hearing Clerk at 
[email protected].
    Intervention: Anyone intending to become a party to the PRDM-26 
proceeding must file a petition to intervene on BPA'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 
November 19, 2024. Part III of this notice, ``Public Participation in 
PRDM-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

[[Page 89634]]

in PRDM-26,'' provides details on submitting participant comments.

FOR FURTHER INFORMATION CONTACT: Ms. Amanda Gobrele, 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 BPA'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 the PRDM.

SUPPLEMENTARY INFORMATION:

Table of Contents

Part I--Introduction and Procedural Matters
Part II--Scope of PRDM Proceeding
Part III--Public Participation in PRDM-26
Part IV--The Public Rate Design Methodology

Part I--Introduction and Procedural Matters

A. Background and Statutory Context

    BPA is a power marketing administration within the Department of 
Energy (DOE). BPA markets the output of 31 federal dams and one nuclear 
power plant located in the Pacific Northwest. Among other statutory 
duties, BPA is required to sell firm power to meet the net requirements 
of utilities within the Pacific Northwest region. Section 5(b) of the 
Northwest Power Act (NWPA or Act) establishes BPA's power supply 
obligation to these customers. Power supplied under section 5(b) is 
sold at rates established by section 7.
    Under section 7(b) of the NWPA, BPA is required to set power rates 
for the ``general requirements'' of its public body and cooperative 
customers pursuant to certain statutory directives. The section 7(b) 
rate that BPA charges its public body and cooperative customers is 
called the Priority Firm Power (PFp) rate. BPA establishes the PFp rate 
in a formal hearing conducted in accordance with section 7(i) of the 
NWPA.
    Historically, BPA designed the PFp rate in each section 7(i) rate 
proceeding. This approach meant the types of resource costs and credits 
included in the PFp rate, and the method for assessing the resulting 
rate, could change within each section 7(i) rate proceeding. In 2009, 
BPA adopted a standalone rate design for the PFp rate, known as the 
Tiered Rates Methodology (TRM). The TRM is not a rate, but a rate 
design that established the methods and allocations for developing the 
PFp rate in future section 7(i) proceedings. In effect, through the 
TRM, BPA agreed to establish the PFp rate in future section 7(i) 
proceedings consistent with the TRM's terms. The TRM was established in 
a section 7(i) proceeding and was designed to operate in conjunction 
with the terms of the then-applicable section 5(b) power contract 
(known colloquially as the Regional Dialogue Contract). The Regional 
Dialogue Contract commenced on October 1, 2011, and expires on 
September 30, 2028. The TRM also expires on September 30, 2028.
    The purpose of the PRDM-26 proceeding is to develop the rate design 
methodology for the period following the expiration of the TRM (i.e., 
beginning October 1, 2028). This rate methodology is called the Public 
Rate Design Methodology (PRDM). Concurrent with the PRDM-26 proceeding, 
BPA is also negotiating the section 5(b) contract for the supply of 
firm power for BPA's customers' requirements for the period covering 
October 1, 2028-September 30, 2044. The new section 5(b) contract is 
colloquially referred to as the ``Provider of Choice'' contract. The 
Provider of Choice contract and the PRDM are designed to work in 
tandem. Customers that elect to purchase their section 5(b) power under 
a Provider of Choice contract will also agree to have their PFp power 
rate set pursuant to the PRDM.

B. Procedural Context

    Section 7(i) of the Northwest Power Act, 16 U.S.C. 839e(i), sets 
forth the rules and procedures for the establishment of BPA's rates. 
The Public Rate Design Methodology (PRDM) is a rate methodology that 
will apply to customers that execute a Provider of Choice contract. No 
rates are being established through the PRDM-26 proceeding. Instead, 
this proceeding will develop the terms of the PRDM, which will become 
effective in the section 7(i) proceeding that establishes the PFp rate 
for the period beginning October 1, 2028. Because the PRDM will affect 
future power rates, BPA is using the procedural rules of section 7(i) 
to establish this methodology. The procedures applicable to this 
proceeding include, among other things: Publication of a notice of the 
proposed rates in the Federal Register; one or more hearings conducted 
as expeditiously as practicable by a Hearing Officer; public 
opportunity to provide both oral and written views related to the 
proposed rates; opportunity to offer refutation or rebuttal of 
submitted material; and a decision by the Administrator based on the 
record. BPA's Rules of Procedure will govern the PRDM-26 proceeding. 
Those procedural rules are posted on BPA's website at https://www.bpa.gov/energy-and-services/rate-and-tariff-proceedings/rules-of-procedure-revision-process.

C. Proposed Procedural Schedule

    A proposed schedule for the PRDM-26 proceeding is provided below. 
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 Initial Proposal--November 15, 2024
Petition to Intervene Deadline--November 19, 2024
Clarification of BPA's Initial Proposal--November 22, 2024
Notice of Objections Due--December 6, 2024
Motions to Strike Due--December 12, 2024
Data Request Deadline for BPA's Initial Proposal--December 12, 2024
Parties File Direct Cases (Prehearing Brief Optional)--January 15, 2025
Clarification of Parties' Direct Cases--January 22, 2025
Motions to Strike Due--January 29, 2025
Data Request Deadline for Parties' Direct Cases--January 29, 2025
Close of Participant Comments--January 30, 2025
Litigants File Rebuttal Cases--February 14, 2025
Clarification of Litigants' Rebuttal Cases--February 18, 2025
Motions to Strike Due--February 18, 2025
Data Request Deadline for Litigants' Rebuttal--February 19, 2025
Parties Give Notice of Intent to Cross Examine--February 21, 2025
Cross-Examination--February 26, 2025
Initial Briefs Filed--March 1, 2025
Parties Give Notice of Intent to Present Oral Argument--March 5, 2025
Oral Argument--March 12, 2025
Draft Record of Decision--April 9, 2025
Briefs on Exceptions--April 23, 2025
Deadline for Parties to Adopt the Position of Another Party--May 2, 
2025
Final ROD and Studies--May 21, 2025

[[Page 89635]]

D. Ex Parte Communications

    Section 1010.5 of BPA'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 BPA 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 BPA 
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 BPA'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 PRDM-26

A. Issues Within and Outside the Scope of PRDM-26

    This section provides guidance to the Hearing Officer regarding the 
scope of the PRDM 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 matter relevant to the PRDM is outside 
the scope of this proceeding.
    BPA 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 BPA revises the scope of the proceeding to 
include new issues, BPA 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 BPA's 
testimony or other information. Id.
1. Matters Within the Scope of the PRDM-26 Proceeding
    The scope of PRDM-26 is limited to issues and evidence regarding 
the terms of the PRDM. As noted above, the PRDM describes the cost 
allocation and rate design treatment of the PFp rate for the period 
beginning October 1, 2028, for customers that elect to purchase section 
5(b) power under a Provider of Choice contract. The terms of the PRDM 
are available on Bonneville's PRDM web page https://www.bpa.gov/prdm2029.
2. Matters Not Within the Scope of the PRDM-26 Proceeding
    The PRDM-26 proceeding is focused on the development of the PRDM. 
No rates are being established through this proceeding. Parties that 
seek to raise arguments and or present evidence that address matters 
unrelated to the PRDM are outside 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 
address matters unrelated to the terms of the PRDM. This exclusion 
incudes, but is not limited to, the following areas: (a) matters within 
the scope of the BP-26 rate case, (b) BPA program and cost projections, 
(c) statutory issues unrelated to the PRDM, (d) matters that have been, 
or will be addressed in, the Provider of Choice Policy, Policy Record 
of Decision, or related contract negotiation processes, (e) matters 
related to the Residential Exchange Program, (f) matters related to any 
other rate set pursuant to section 7 of the Northwest Power Act, and 
(g) matters related to the environmental impacts of the PRDM.

B. The National Environmental Policy Act

    BPA is in the process of assessing the potential environmental 
effects of its proposed rate design methodology, consistent with NEPA. 
The NEPA process is conducted separately from this proceeding. As 
discussed above, all evidence and argument addressing potential 
environmental impacts of the PRDM are excluded from the proceeding 
record. Instead, comments on environmental effects should be directed 
to the NEPA process.
    Based on its most current assessment of the PRDM, BPA 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 BPA. More 
specifically, the proposal appears to solely involve changes to BPA's 
rates and other cost recovery and management mechanisms to ensure that 
there are sufficient revenues to meet BPA's financial obligations and 
other costs and expenses, while using existing generation sources 
operating within normal limits. As such, it appears the PRDM 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, BPA is still assessing the proposal, and, depending 
upon the ongoing environmental review, BPA 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 BPA's 
NEPA compliance staff in the NEPA process that is being conducted for 
this proposal.

Part III--Public Participation in PRDM-26

A. Interventions

    Any entity or person intending to become a party in the PRDM 
proceeding must file a petition to intervene through BPA'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 BPA's secure 
website by the deadline in the procedural schedule adopted by the 
Hearing Officer. Late interventions are strongly

[[Page 89636]]

disfavored. Petitions to intervene must conform to the format and 
content requirements in sections 1010.6 and 1010.11 of BPA'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.
    The Hearing Officer will rule on all petitions to intervene. BPA 
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.
    BPA 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

    BPA distinguishes between ``participants in'' and ``parties to'' 
the PRDM proceeding. Separate from the formal hearing process, BPA will 
accept written comments, views, opinions, and information from 
participants who have not intervened in the PRDM 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. Entities who intervene in this proceeding 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 January 30, 
2025, to be included in the record and considered by the Administrator. 
Participants should submit comments through BPA'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 ``PRDM-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 BPA 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.

Part IV--Public Rate Design Methodology

    The PRDM establishes a predictable and durable means by which to 
tier and calculate BPA's Priority Firm (PFp) power rate. Specific 
determinations of rate levels will be made in each general rate case in 
a manner consistent with the PRDM in the respective section 7(i) 
proceedings applicable during the term of this PRDM. Tiered PFp rates 
consistent with the PRDM will be implemented beginning in FY 2029 
(October 1, 2028) when power deliveries under the Provider of Choice 
contracts commence.
    The PRDM provides for a two-tiered PFp rate design that will be 
applicable to the general requirements portion of BPA's customer's firm 
power service. The ``general requirements'' of BPA's customers are 
defined by section 7(b)(4) of the Act, and exclude service to a 
customer's New Large Single Load, as defined by section 3(13)(A)-(B) of 
the Act. Section 7(b) establishes the power ``rate or rates'' 
applicable to a customer's general requirements. That rate is called 
the PFp rate. The PRDM operates within the section 7(b) rate statutory 
construct by developing multiple PFp rates for service to a customer's 
general requirements. The PRDM uses a ``tiered'' rate design to 
establish two primary PFp rates. The first tier, Tier 1, recovers the 
costs of service associated with BPA's existing power system up to a 
specified amount. The second tier, Tier 2, recovers the costs 
associated with additional amounts of power needed to serve any 
remaining portion of the customers' general requirements (i.e., the 
portion not otherwise served by Tier 1). The PRDM specifies how the 
Tier 1 and Tier 2 rates will be developed and charged.
    The PRDM addresses: (1) how the cost pools for the Tier 1 and Tier 
2 PFp rates will be established and what costs, or category of costs, 
will be included in those pools; (2) how the resource costs for the 
existing power system will be differentiated from the cost of new 
resources; (3) how the costs described in the above categories will be 
allocated to the Tier 1 and Tier 2 cost pools; (4) how rates for Tier 1 
and Tier 2 sales will be designed; (5) how rates for resource support 
services will be designed; (6) how the PRDM interacts with other 
services and credits; and (7) how changes and disputes regarding the 
PRDM are addressed. The full terms of the proposed PRDM is available on 
Bonneville's PRDM webpage at https://www.bpa.gov/prdm2029.
    The cost allocation and rate design methods will be implemented in 
each BPA power rate case during the term of the Provider of Choice 
contracts. Power rates will be calculated on at least a two-year cycle 
under the PRDM.

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. 2024-26243 Filed 11-12-24; 8:45 am]
BILLING CODE 6450-01-P
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