Federal Register / Vol. 60, No. 30 / Tuesday, February 14, 1995 / Notices 8505

power sales contract states that the rate

for Reserve Power shall be applied;

when BPA determines no other rate

schedule is applicable; or to serve a

purchaser’s firm power load when BPA

does not have a power sales contract in

force with such a purchaser, and BPA

determines that this rate should be

applied. The demand and energy

charges are seasonally and diurnally

differentiated, with no demand charge

during light load hours during any

month of the year.

Power Shortage Rate, PS–95

The PS–95 rate schedule is available

for sales under the Share-the-Shortage

agreement or a similar substitute

agreement. BPA is not obligated to make

Shortage Power available or broker

power under the PF–95 rate schedule

unless specified by contract.

VII. Charges Under the Amended and

Integrated Pacific Northwest

Coordination Agreement

The Pacific Northwest Coordination

Agreement (PNCA) is an agreement for

planned operations among the utilities

and other entities that operate the major

electric generating facilities and systems

in the Pacific Northwest. The parties

jointly and cooperatively plan and

coordinate their combined generation

facilities so as to produce the optimum

firm load carrying capability (FLCC) of

the coordinated system. FLCC is the

firm load that could be carried under

coordinated operation with critical

streamflow conditions and with the use

of all reservoir storage.

In order to coordinate operations, and

so that each party can meet its

individual FLCC, the PNCA provides for

exchanges of energy and capacity among

the parties. The agreement sets up

charges for each form of exchange. The

parties are negotiating a successor

agreement to the PNCA, and have

agreed on charges to apply under the

new agreement.

The PNCA Rate Schedules will be

published in a separate Federal Register

Notice as described in Section I of this

notice.

Issued in Portland, Oregon, on February 7,

1995.

J.H. Curtis,

Acting Administrator.

[FR Doc. 95–3534 Filed 2–13–95; 8:45 am]

BILLING CODE 6450–01–P

Proposed Transmission Rate

Adjustment, Public Hearing, and

Opportunities for Public Review and

Comment

AGENCY: Bonneville Power

Administration (BPA), DOE.

ACTION: Notice and Opportunities for

Review and Comment.

SUMMARY: BPA File No: TR–95. BPA

requests that all comments and

documents intended to become part of

the Official Record in this process

contain the file number designation TR–

95.

The Pacific Northwest Electric Power

Planning and Conservation Act

(Northwest Power Act) provides that

BPA must establish and periodically

review and revise its rates so that they

are adequate to recover, in accordance

with sound business principles, the

costs associated with the acquisition,

conservation, and transmission of

electric power, and to recover the

Federal investment in the Federal

Columbia River Power System (FCRPS)

and other costs incurred by BPA. BPA

is proposing to revise its transmission

rate schedules to be effective October 1,

1995, through September 30, 1997, to

produce sufficient revenues for BPA to

meet its costs for Fiscal Year (FY) 1996

and FY 1997.

Opportunities will be available for

interested persons to review BPA’s rate

proposal, to participate in the rate

hearing, and to submit oral and written

comments. During the development of

the final rate proposal, BPA will

evaluate all written and oral comments

received in the rate proceeding.

Consideration of comments and more

current data may result in the final rate

proposal differing from the rates

proposed in this Notice.

DATES: Persons wishing to become a

formal ‘‘party’’ to the proceedings must

notify BPA in writing of their intention

to do so in accordance with

requirements stated in this Notice.

Petitions to intervene must be received

by 9 a.m. February 13, 1995, and should

be addressed as follows: Hearing

Officer, c/o Francis (Jamie) Troy,

Hearing Clerk—LQ, Bonneville Power

Administration, NE. 11th Ave., Box

12999, Portland, Oregon 97212.

In addition, a copy of the petition

must be served concurrently on BPA’s

Office of Legal Services: Janet L. Prewitt,

Office of Legal Services—LQ,

Bonneville Power Administration, Box

3621, Portland, Oregon 97208.

Persons who have been denied party

status in any past BPA rate proceeding

shall continue to be denied party status

unless they establish a significant

change of circumstances.

A prehearing conference will be held

before the Hearing Officer at 9 a.m. on

February 13, 1995, in the BPA Rates

Hearing Room, 3rd Level, 2032 Lloyd

Center, Portland, Oregon. Registration

for the prehearing conference will begin

at 8:30 a.m. BPA will prefile

preliminary proposal studies at the

prehearing conference. The Hearing

Officer will act on all intervention

petitions and oppositions to

intervention petitions, rule on any

motions, establish additional

procedures, establish a service list,

establish a procedural schedule, and

consolidate parties with similar

interests for purposes of filing jointly

sponsored testimony and briefs, and for

expediting any necessary crossexamination. A notice of the dates and

times of any hearings will be mailed to

all parties of record. Objections to

orders made by the Hearing Officer at

the prehearing conference must be made

in person or through a representative at

the prehearing conference. The rate

hearing schedule will be published in

the Federal Register immediately

following the prehearing conference.

The following schedule information is

provided for informational purposes.

On or about February 9, 1995

Rate Schedules, General Rate

Schedule Provisions, and

Transmission Tariffs mailed to

customers and 1993 rate case

Parties, and available from BPA’s

Public Information Center; 905 NE.

11th, 1st Floor, Portland, Oregon.

February 13, 1995

Deadline for interventions to be filed

with Hearing Clerk at above

address.

On or about February 13, 1995

Preliminary proposal studies available

at BPA’s Rates Hearing Room, 2032

Lloyd Center, Portland, Oregon and

BPA’s Public Information Center,

905 NE. 11th, 1st Floor, Portland,

Oregon.

February 13, 1995

Prehearing conference to set schedule

and act on petitions to intervene.

On or about April 5, 1995

BPA Initial Proposal filed.

October 29, 1995

Final Record of Decision published.

BPA also will be conducting public

field hearings. A field hearing schedule

will be announced at the prehearing

conference. A notice of the dates, times,

and locations of the field hearings will

be made later through mailings and

public advertising.
8506 Federal Register / Vol. 60, No. 30 / Tuesday, February 14, 1995 / Notices

When BPA holds public field

hearings, written transcripts are made

and included in the official record. A

notice of the dates and times of the field

hearings also will be published in the

Federal Register.

ADDRESSES: Written comments by

participants must be received by May

15, 1995, to be considered in the Draft

Record of Decision (ROD). Written

comments should be submitted to the

Manager; Corporate Communications—

CK; Bonneville Power Administration;

905 NE. 11th; P.O. Box 12999; Portland,

Oregon 97212.

FOR FURTHER INFORMATION CONTACT: Mr.

Michael Hansen, Public Involvement

and Information Specialist, at the

address listed above, (503) 230–4328 or

call toll-free 1–800–622–4519.

Information also may be obtained from:

Mr. Steve Hickok; Group Vice President,

Sales and Customer Service; P.O. Box

3621; Portland, OR 97208, (503) 230–

5356.

Mr. George Eskridge; Manager, SE Sales

and Customer Service District; 1101

W. River, Suite 250; Boise, ID 83702,

(208) 334–9137.

Mr. Ken Hustad; Manager, NE Sales and

Customer Service District; Crescent

Court, Suite 500; 707 Main; Spokane,

WA 99201, (509) 353–2518.

Ms. Ruth Bennett; Manager, SW Sales

and Customer Service District; 703

Broadway; Vancouver, WA 98660,

(360) 418–8600.

Ms. Marg Nelson; Manager, NW Sales

and Customer Service District; Suite

400, 201 Queen Anne Ave. N.; Seattle,

WA 98109–1030, (206) 216–4272.

Responsible Official: Mr. Geoff

Moorman, Manager for Pricing,

Marginal Cost and Ratemaking, is the

official responsible for the development

of BPA’s rates.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Introduction

II. Purpose and Scope of Hearing

III. Procedures Governing Rate Adjustments

and Public Participation

IV. Major Studies

V. Major Studies

Transmission Rates

Transmission Rate Schedules

I. Introduction

After the 1993 Rate Case, BPA

conducted a series of workshops on

subjects relevant to BPA’s ratemaking.

The purpose of the workshops was to

identify, simplify, and reduce the

number of issues that might become part

of the 1995 rate case and to reduce the

amount of discovery normally required

during the formal rate proceedings.

Opportunity was provided to address

the impacts of reinvention, transmission

issues, risk mitigation, forecasted

revenue requirements, and rate design

issues. The workshops provided

opportunity for informal public

comment on issues prior to the formal

hearing process.

On December 28, 1994, BPA

published in the Federal Register a

Notice of ‘‘Intent to Revise Transmission

Rates to Become Effective October 1,

1995,’’ 57 FR 66946, in order to satisfy

contractual provisions between BPA

and its customers. Since then, BPA has

continued to study the adequacy of its

current rates and has concluded that

current rates must be adjusted for the

FY 1996 and FY 1997 rate period.

In order to assess its current rates,

BPA first determined the amount of

revenues required to meet its financial

obligations in FY 1996 and FY 1997.

BPA has determined that the revenues

it would expect to collect from projected

sales under its current rates will not

recover these revenue requirements.

Therefore, BPA proposes to revise its

current transmission rates. At the

conclusion of this rate proceeding, BPA

will file its rates with FERC for

confirmation and approval.

The proposed transmission rates were

prepared in accordance with BPA’s

statutory authority to develop rates,

including the Bonneville Project Act of

1937, as amended, 16 U.S.C. 832 (1982);

the Flood Control Act of 1944, 16 U.S.C.

825s (1982); the Federal Columbia River

Transmission System Act (Transmission

System Act), 16 U.S.C. 838 (1982); the

Pacific Northwest Electric Power

Planning and Conservation Act, 16

U.S.C. 839 (1982); and the Energy Policy

Act of 1992, Pub. L. No. 102–486, 106

Stat. 2776 (1992).

In the Energy Policy Act of 1992,

Congress approved amendments to the

Federal Power Act that allow FERC to

order access to transmitting utilities’

systems. As a result, FERC has

developed standards for providing

comparable access including guidelines

for pricing such access. This rate

proposal includes two new rate

schedules (the Network Integration and

Point-to-Point Firm rates) to be used for

FERC-ordered transmission access and

which are designed to allow comparable

access to BPA’s transmission system.

BPA’s Energy Transmission rate

schedule will be used to price

comparable service for nonfirm uses of

the transmission system. In a process

concurrent with the 1995 rate case, BPA

is proposing terms and conditions for

these new services for FERC approval.

For further information about the terms

and conditions process, please contact

Mr. Dennis Metcalf, Transmission Team

Lead, (503) 230–3410 or Mr. Michael

Hansen, Public Involvement and

Information Specialist, (503) 230–4328.

BPA proposes that its transmission

rate schedules, including the

adjustments, charges and special rate

provisions, and the General Rate

Schedule Provisions (GRSPs) associated

with these rate schedules, become

effective upon interim approval or upon

final confirmation and approval by

FERC. (BPA’s proposal combines the

general rate schedule provisions for

wholesale power rates and transmission

rates into one document—the GRSPs.)

BPA currently anticipates that it will

request FERC approval effective October

1, 1995, or at the same time as its

revised power rates. The 1995

transmission rate schedules and the

GRSPs shall supersede BPA’s 1993 rate

schedules and General Transmission

Rate Schedule Provisions (which

became effective October 1, 1993) to the

extent stated in the Availability section

of each 1995 rate schedule.

BPA is proposing extension of the

Townsend-Garrison Transmission rate

and the Use of Facilities rate with no

changes. The Market Transmission rate

is being revised only to the extent that

the Reactive Power Charge is being

included in the rate schedule. Three

new rates are proposed: the Network

Integration Transmission rate; the Pointto-Point Firm Transmission rate; and the

Advance Funding rate. The proposed

Southern Intertie Annual Costs rate is

substantially changed to reflect the

outcome of contract negotiations. In

addition, a Reservation Charge for

Transmission Capacity and a Reactive

Power Charge are included in many of

the transmission rate schedules. BPA

also has provided for charging

opportunity costs in the firm

transmission rates for new requests for

transmission capacity.

In developing the proposed

transmission rates, BPA considered

many factors, including revenue

requirements, ease of administration,

revenue stability, rate continuity,

comparability, ease of comprehension,

contract provisions, and BPA’s statutory

obligations. The studies that have been

prepared to support the proposed

preliminary transmission rates will be

mailed to all parties in BPA’s 1993 rate

case and will be available for

examination on February 13, 1995, at

BPA’s Public Information Center; BPA

Headquarters Building; 1st Floor; 905

NE. 11th; Portland, and will be available

at the prehearing conference, to the

extent they are available. The

preliminary studies and documents that

relate to transmission rates are:
Federal Register / Vol. 60, No. 30 / Tuesday, February 14, 1995 / Notices 8507

1. Loads and Resources Study and

Documentation

2. Revenue Requirement Study and

Documentation

3. Segmentation Study

4. Wholesale Power Rate Development

Study and Documentation

5. Transmission Rate Design Study

6. Wholesale Power Rate and

Transmission Rate Schedules

BPA’s proposed Wholesale Power and

Transmission Rate Schedules, General

Rate Schedule Provisions, and

Transmission Tariffs will be published

in a separate Federal Register Notice on

or about February 13, 1995. The

documents described above will be

mailed to BPA’s customers, 1993 rate

case parties, and other interested

persons, and will be available from

BPA’s Public Information Center on or

about February 9, 1995.

To request any of the above

documents by telephone, call BPA’s

document request line: (503) 230–3478

or call toll-free 1–800–622–4520. Please

request the document by its above-listed

title. Also state whether you require the

accompanying documentation (these

can be quite lengthy); otherwise the

study alone will be provided. (For

example, ask for the ‘‘Revenue

Requirement Study and

Documentation.’’)

Because of the complexity of the

issues in this rate case, in part

occasioned by continuing contract

negotiations between BPA and its

customers as well as BPA’s

‘‘reinvention’’ and Competitiveness

Project, BPA anticipates that there will

be a need to meet with customers and

other interested third parties during the

rate case on a very frequent, and

possibly extended, basis. To comport

with the rate case procedural rule

prohibiting ex parte communications,

BPA will provide necessary notice of

meetings involving rate case issues for

participation by all rate case parties.

Parties should be aware, however, that

such meetings may be held on very

short notice and they should be

prepared to devote the necessary

resources to fully participate in every

aspect of the rate proceeding.

Consequently, parties should be

prepared to attend meetings every day

during the course of the rate case.

II. Purpose and Scope of Hearing

BPA’s proposal to revise its rates is

needed in order to continue to recover

all costs and expenses allocated to the

power system, including amortization of

the Federal investment in the FCRPS

over a reasonable period of time, and to

recover costs in a way that achieves the

goals of BPA’s Competitiveness Project.

BPA began its Competitiveness

Project in early 1993 in response to

market forces and deregulation of the

electric utility industry. The project, a

re-invention of the agency to make it

more competitive in the new

marketplace, included the development

of a new business concept, a marketing

plan, a review of all of BPA’s activities

leading to structural reorganization,

strategic action plans for each of BPA‘s

major activities, an internal effort to

promote leadership and employee

empowerment, and proposals to

eliminate unnecessary administrative

and regulatory requirements.

BPA’s Draft Strategic Business Plan

and the Draft Business Plan EIS were

released to the public in June 1994. The

Draft Strategic Business Plan sets the

overall strategic direction for both

serving BPA’s customers and meeting

BPA’s legislated responsibilities,

including new statements of BPA’s

mission, values, and strategic business

objectives to guide BPA’s activities. The

Draft Strategic Business Plan also

describes the conceptual framework for

the products BPA is offering. As stated

in the Draft Strategic Business Plan,

BPA’s pricing policies are designed to

meet many objectives, including: (1)

providing maximum customer choice

and encouraging optimal use of the

FCRPS; (2) contributing to BPA’s

continued viability in an increasingly

competitive energy market environment;

and (3) allowing BPA to take full

advantage of its responsibility and

authority to manage the FCRPS,

consistent with all statutory

requirements.

The Draft Strategic Business Plan

envisions BPA as having three separate

and distinct business lines—power,

transmission, and energy services

(conservation)—which will be selfsupporting and serve customers

according to their unique needs. The

Draft Strategic Business Plan also

outlines a number of initiatives to

improve BPA’s competitiveness,

including strategies to close the

projected gap between BPA’s costs and

revenues, a financial strategy, and

proposals to change BPA’s power rate

structures to give customers more

choice, to more accurately reflect BPA’s

costs associated with providing the

discrete components of electric service

selected by customers, and thereby to

encourage investment in cost-effective

conservation. BPA proposes to close the

revenue gap by exerting strict cost

management and becoming market

driven.

To provide customers with a price

signal that encourages efficient resource

investment decisions, including

conservation resources, and

appropriately shares the benefits of the

relatively low-cost Federal power and

transmission systems, BPA is proposing

to tier its power rates for requirements

service and for the residential exchange.

The rate for requirements service would

be divided into two parts: a Tier 1 rate,

and one or several alternative Tier 2

rates. BPA expects that the Tier 1 rate

will be available to serve most of the

existing customers’ firm loads. The Tier

1 rate is expected to be a lower rate than

Tier 2 because it will be based primarily

on the costs associated with the existing

Federal system. The Tier 2 rates will be

available to serve regional firm

requirements in excess of Tier 1,

including future load growth, and will

be based on the costs associated with

supplying power to meet these loads.

To address the increasingly

competitive market for power,

transmission, and energy services, BPA

is proposing to offer a limited menu of

unbundled products in the 1995 rate

case. BPA expects that the products

offered will be available both under the

current power sales contracts and under

new power sales contracts. BPA expects

to offer additional unbundled products

in future rate cases and to price these

products to meet market conditions and

its cost recovery obligations. In some

cases, BPA expects the market will

require flexible pricing. BPA is planning

to ‘‘unbundle’’ what it offers so

customers can choose among products

and services based on what they need to

meet their loads and support their own

resources, if any.

BPA owns most of the high-voltage

transmission system in the PNW and

recognizes the need to ensure that BPA’s

transmission system is not an

impediment to a fully functioning and

competitive bulk power market. To

assure that the transmission system does

not provide BPA with anticompetitive

market power, BPA is proposing

network transmission services and

prices for such services on a basis

comparable to its own use of its system.

In setting rates, terms, and conditions of

service, BPA will be consistent with

FERC comparability standards

applicable to other transmitting utilities

under sections 210 and 211 of the

Federal Power Act except where

prohibited by statute or regulation.

BPA is assessing the potential

environmental effects of its rate

proposal as required by the National

Environmental Policy Act (NEPA) as

part of the Business Plan Environmental

Impact Statement (EIS). Beginning in

June 1994, BPA solicited input to the

Draft Strategic Business Plan and the

Draft Business Plan EIS from customers
8508 Federal Register / Vol. 60, No. 30 / Tuesday, February 14, 1995 / Notices

throughout the region. From August 3 -

August 9, BPA held numerous public

comment meetings throughout the

region. Additionally, BPA held a Draft

Business Plan EIS workshop where

participants were invited to design their

own alternatives and consider the

environmental and fiscal results. The

draft EIS evaluates BPA’s Business Plan

proposal and a range of alternatives,

including the impacts of the range of

potential rate designs for BPA’s power

and transmission services. It also

documents the impact of the current

rate proposal for purposes of the

National Environmental Policy Act. A

supplemental Draft Business Plan EIS,

revised in response to comments

received, will be available for public

comment in February. Comments will

be received outside the formal rate

hearing process, but will be included in

the rate case record and considered by

the Administrator in making a final

decision establishing BPA’s 1995 rates.

The Final Strategic Business Plan and

the Business Plan EIS that elaborates

BPA’s strategic action plans will be

released in June 1995.

Spending levels are developed as a

part of the BPA Strategic Business Plan,

with the benefit of a public comment

process. They also are determined as a

part of the Federal budget process.

Consistent with the Business Plan, the

Administrator formally announced

spending levels for FYs 1996–2001 to

the public on January 12, 1995. BPA

will continue to refine its strategic

business objectives, goals, and spending

levels, and inform the public

accordingly, as part of its Strategic

Business Plan development process.

That process is expected to culminate in

a Final Strategic Business Plan

published in June 1995. Therefore,

except for the limited exceptions

hereafter noted, spending level

decisions will not be addressed in this

rate case. Accordingly, pursuant to

§ 1010.3(f) of the ‘‘Procedures Governing

Bonneville Power Administration Rate

Hearings,’’ 51 FR 7611 (March 5, 1986)

(hereinafter Procedures), the

Administrator directs the Hearing

Officer to exclude from the record any

material attempted to be submitted or

arguments attempted to be made in the

hearing which seek to visit in any way

the appropriateness or reasonableness of

BPA’s decisions on spending levels, as

included in BPA’s cost evaluation

period of FY 1995 through FY 1997 and

its test period revenue requirements for

FYs 1996 and 1997. If, and to the extent,

any re-examination of spending levels is

necessary, that re-examination will

occur outside of the rate case. The

Revenue Requirement Study will

incorporate BPA’s spending levels and

reflect BPA’s risk mitigation, capital

funding, and other financial goals in the

rates. Excepted from this direction on

account of their variable nature,

dependency on BPA’s rate case models,

or timing, are: (1) Forecasts of

residential exchange benefits; (2)

forecasts of short-term purchase power

costs; (3) provision in BPA’s revenue

requirement for cash working capital or

cash lag needs; (4) repayment matters

such as interest rate forecasts, scheduled

amortization, depreciation,

replacements, and interest expense; and

(5) updates to forecasts by BPA which

may occur in the Spring of 1995 and for

which no other review forum has been

provided.

III. Procedures Governing Rate

Adjustments and Public Participation

Section 7(i) of the Northwest Power

Act, 16 U.S.C. § 839e(i), requires that

BPA’s rates be established according to

certain procedures. These procedures

include, among other things, issuance of

a Federal Register Notice announcing

the proposed rates; one or more

hearings; the opportunity to submit

written views, supporting information,

questions, and arguments; and a

decision by the Administrator based on

the record. The proceedings for BPA’s

proposal to adjust transmission rates

will be combined with the proceedings

for BPA’s proposal to adjust wholesale

power rates. This proceeding will be

governed by BPA’s rule for general rate

proceedings, § 1010.9 of BPA’s

Procedures. These Procedures

implement the statutory section 7(i)

requirements. Section 1010.7 of the

Procedures prohibits ex parte

communications.

BPA distinguishes between

‘‘participants in’’ and ‘‘parties to’’ the

hearings. Apart from the formal hearing

process, BPA will receive comments,

views, opinions, and information from

‘‘participants,’’ who are defined in the

procedures as any person who may

express views, but who does not

petition successfully to intervene as a

party. Participants’ written comments

will be made part of the official record

of the case and considered by the

Administrator. The participant category

gives the public the opportunity to

participate and have its views

considered without assuming the

obligations incumbent upon ‘‘parties.’’

Participants are not entitled to

participate in the prehearing conference,

cross-examine parties’ witnesses, seek

discovery, or serve or be served with

documents, and are not subject to the

same procedural requirements as

parties.

Written comments by participants

will be included in the record if they are

received by May 15, 1995. This date

follows the anticipated submission of

BPA’s and all other parties’ direct cases.

Written views, supporting information,

questions, and arguments should be

submitted to BPA’s Manager of

Corporate Communications at the

address listed in Section I of this Notice.

In addition, BPA will hold several field

hearings in the Pacific Northwest

Region. Participants may appear at the

field hearings and present oral

testimony. The transcripts of these

hearings will be a part of the record

upon which the Administrator makes

the rate decision.

The second category of interest is that

of a ‘‘party’’ as defined in §§ 1010.2 and

1010.4 of BPA’s Procedures. Parties may

participate in any aspect of the hearing

process.

Persons wishing to become a party to

BPA’s rate proceeding must notify the

Hearing Officer and BPA in writing of

their request. Petitions to intervene shall

state the name and address of the person

and the person’s interests in the

outcome of the hearing. Petitioners may

designate no more than two

representatives upon whom service of

documents will be made. BPA

customers and customer groups whose

rates are subject to revision in the

hearing will be granted intervention

based on a petition filed in conformance

with this section. Other petitioners must

explain their interests in sufficient

detail to permit the Hearing Officer to

determine whether they have a relevant

interest in the hearing. Intervention

petitions will be available for inspection

in BPA’s Public Information Center, 1st

Floor, 905 NE. 11th, Portland, Oregon.

Any opposition to a petition to

intervene must be raised at the February

13, 1995, prehearing conference. All

timely applications will be ruled on by

the Hearing Officer. Opposition to an

untimely petition to intervene shall be

filed and served within 2 days after

service of the petition. Interventions are

subject to § 1010.4 of the Procedures.

The record will include, among other

things, the transcripts of any hearings,

any written material submitted by the

parties and participants, documents

developed by BPA staff, BPA’s

environmental analysis and comments

accepted on it, and other material

accepted into the record by the Hearing

Officer. The Hearing Officer then will

review the record, will supplement it if

necessary, and will certify the record to

the Administrator for decision.
Federal Register / Vol. 60, No. 30 / Tuesday, February 14, 1995 / Notices 8509

The Administrator will develop final

proposed rates based on the entire

record, including the record certified by

the Hearing Officer, comments received

from participants, other material and

information submitted to or developed

by the Administrator, and any other

comments received during the rate

development process. The basis for the

final proposed rates first will be

expressed in the Administrator’s Draft

ROD. Parties will have an opportunity

to comment on the Draft ROD as

provided in BPA’s hearing procedures.

The Administrator will serve copies of

the Final ROD on all parties and will

file the final proposed wholesale power

and transmission rates together with the

record with FERC for confirmation and

approval.

IV. Major Studies

A. Major Studies

1. Loads and Resources Study

BPA’s forecast of regional loads by

customer group are the basis from

which public utility and direct service

industry (DSI) customer purchases from

BPA (Federal system firm loads) are

projected. BPA also projects Federal

transmission losses, obligations to

regional investor-owned utilities (IOUs)

under their power sales contracts, and

other inter- and intraregional

contractual obligations.

BPA’s resource acquisition plans are

based on work by BPA and the

Northwest Power Planning Council staff

and reflect extensive input and review

by the general public and the region’s

utilities. The specific resource

acquisitions and associated costs

included in this proposal are based on

BPA’s 1994 Draft Strategic Business

Plan.

The load/resource balance determines

BPA’s obligation to serve firm loads

during the test years under 1930 water

conditions. It also contributes to the

determination of the supply of surplus

firm power in the region and on the

Federal system. A related hydro

regulation study incorporates the

operation of thermal plants, exports and

imports of power, projected resource

acquisitions, and system constraints

such as the Columbia River flow

augmentation project, ‘‘spill’’, and the

water budget for fish migration. For this

proposal, a 50-year hydro study was

completed which includes assumptions

regarding the Columbia River flow

augmentation. The hydro study starts in

August 1995. The 50-year study

determines nonfirm energy availability

for the region.

2. Revenue Requirement Study

The Bonneville Project Act, the Flood

Control Act of 1944, the Transmission

System Act, and the Northwest Power

Act require BPA to set rates that are

projected to collect revenues sufficient

to recover the cost of acquiring,

conserving, and transmitting the electric

power that BPA markets, including

amortization of the Federal investment

in the FCRPS over a reasonable period,

and to recover BPA’s other costs and

expenses. The Revenue Requirement

Study determines whether current rates

will produce enough revenues to

recover all BPA costs and expenses,

including BPA’s repayment obligations

to the U.S. Treasury. Revenue

requirements are the major factor in

determining the overall level of BPA’s

proposed power and transmission rates.

The Transmission System Act and the

Northwest Power Act require that

transmission rates be based on an

equitable allocation of the costs of the

Federal transmission system between

Federal and non-Federal power using

the system. In compliance with a FERC

order dated January 27, 1984, 26 FERC

¶ 61,096, the Revenue Requirement

Study incorporates the results of

separate repayment studies for the

generation and transmission

components of the FCRPS. The

repayment studies for generation and

transmission demonstrate the adequacy

of the projected revenues to recover all

of the Federal investment in the FCRPS

over the allowable repayment period.

Separate generation and transmission

revenue requirements are developed in

the Revenue Requirement Study. The

adequacy of projected revenues to

recover test period revenue

requirements and to meet repayment

period recovery of the Federal

investment is tested and demonstrated

separately for the generation and

transmission functions.

The Revenue Requirement Study for

the 1995 preliminary rate proposal is

based on revenues and cost estimates for

FY 1996 and FY 1997. BPA’s Revenue

Requirement Study reflects actual

amortization and interest payments paid

through September 30, 1994. In

addition, it reflects all FCRPS

obligations incurred pursuant to the

Northwest Power Act, including

residential exchange costs.

3. Segmentation Study

BPA operates and maintains the

Federal Columbia River Transmission

System (FCRTS) to provide transmission

services throughout the region. Because

most services do not require the use of

the entire system, the FCRTS is divided

into nine segments, each providing a

distinct type of service. The nine

segments are: integrated network;

Pacific Northwest-Pacific Southwest

(Southern) Intertie; Northern Intertie;

Eastern Intertie; generation integration;

fringe area; and delivery segments for

public agency, DSI, and IOU customers.

The Segmentation Study categorizes

the facilities of the FCRTS according to

the types of services they provide. This

provides the basis for segmenting the

projected transmission revenue

requirements used in BPA’s rate

proposals. The results of the Study

include the historical investment and

the average of the last 3 years’

operations and maintenance expenses.

In addition, the facilities of the

integrated network similarly are divided

among distinct services. This division of

the FCRTS into segments provides for

equitable allocation of transmission

costs between Federal and non-Federal

customers based on their usage of the

segments.

4. Wholesale Power Rate Development

Study (WPRDS)

BPA is proposing substantial changes

in the method used to develop its

wholesale power rates. The cost of

service analysis (COSA) and rate design

adjustments are the two central parts of

the rate development process. The

COSA apportions BPA’s test year

generation and transmission revenue

requirements to customer classes based

on the use of specific types of service by

each customer class and in accord with

the rate directives of the Northwest

Power Act. Costs are allocated to classes

of service on the basis of the relative use

of services. The coincidental peak (CP)

allocation of network transmission costs

to customer classes uses an average of

a 12–CP and 3–CP (December, January,

and February) method to reflect

transmission cost causation. The

transmission costs allocated to the

Federal power uses of the transmission

system form the basis for the power

rates’ demand charge; the transmission

costs allocated to non-Federal uses form

the basis for the transmission, or

wheeling, rates that are calculated in the

Transmission Rate Design Study

(discussed below).

The rate design adjustment portion of

the WPRDS modifies the allocated costs

developed in the COSA to: (1) Reflect

BPA’s rate design objectives; (2)

conform with contractual requirements;

(3) reflect the results of other BPA

studies and commitments made in other

public involvement processes under

section 7(i) of the Northwest Power Act;

and (4) conform with requirements of

applicable legislation. BPA’s rate design
8510 Federal Register / Vol. 60, No. 30 / Tuesday, February 14, 1995 / Notices

objectives include recovery of BPA’s

revenue requirement, rate and revenue

stability, practicality, fairness,

comparability, and efficiency. All of the

rate design adjustments are

functionalized, classified, segmented,

and seasonalized where appropriate.

After all adjustments are made, the final

power rates are calculated.

5. Transmission Rate Design Study

(TRDS)

In the TRDS, rates for various

transmission services are calculated

using the portion of the transmission

revenue requirement allocated to nonFederal uses of the transmission system.

Wheeling load forecasts are developed

in the TRDS in order to calculate rates.

The design of individual rate schedules

also is accomplished in the TRDS.

B. Transmission Rates

In a process concurrent with the 1995

rate case, BPA is proposing terms and

conditions for new and existing services

(network integration, point-to-point

firm, and nonfirm) that allow

comparable access to the Federal

transmission system. Two new rate

schedules (the Network Integration

Transmission rate and the Point-to-Point

Firm Transmission rate) are proposed to

price the new services. BPA’s Energy

Transmission rate is proposed to price

comparable nonfirm transmission

services. These new services ensure that

all parties have access to the Federal

transmission system under comparable

terms, conditions, and rates as BPA.

Such comparability allows for a

competitive marketplace for power

products.

BPA also is proposing the Advance

Funding rate to allow BPA to collect the

cost of specified BPA-owned

transmission facilities through advance

payment. In addition to the three new

rate schedules, all of BPA’s traditional

transmission rate schedules are

proposed to be confirmed. A charge is

included in the firm transmission rates

to allow BPA to charge opportunity cost

when that is higher than the embedded

cost charge for new requests for

transmission capacity. BPA also

provides notice in the firm rate

schedules that requests for new or

increased firm transmission service may

be subject to incremental cost rates that

would be developed pursuant to section

7(i) of the Northwest Power Act. In

applying incremental or opportunity

cost rates, BPA would be consistent

with FERC’s ‘‘or’’ pricing—the higher of

embedded cost or incremental cost (or,

the higher of embedded cost or

opportunity cost), but not the sum of the

two. Finally, a Reservation Charge for

Transmission Capacity and a Reactive

Power Charge are included in the many

of the transmission rate schedules.

1. Formula Power Transmission (FPT)

The FPT–95 rate schedule is available

for the firm wheeling of power on the

network segment of the FCRTS. This

rate includes a distance or mileage

component for transmission lines and

various transformation and terminal

charges. The FPT rate form is designed

to reflect a wheeling formula that is

prescribed by contract provisions.

In calculating the FPT–95 rate, the

first step is to quantify costs for the

specific types of transmission facilities

treated in the rate components.

Estimates of the use of these facilities

are determined from a simulation of the

power flow of the projected peak load

during the test period. Unit costs for the

FPT rate components are derived by

dividing facility cost by facility use as

determined in a power flow study.

2. Integration of Resources (IR)

The IR service is a flexible

transmission service that may be used to

integrate multiple resources and

transmit non-Federal power to multiple

points of delivery on the FCRTS

Integrated Network facilities. The IR–95

rate is structured as a postage-stamp

(independent of distance) rate with a

demand and energy charge. The

proposed IR–95 rate schedule continues

to include the Short-Distance Discount,

an exception to the postage stamp rate

design for contractually specified points

of integration.

The IR–95 rate is calculated by

dividing the revenue requirement for

the class into two equal parts to reflect

a 50–50 classification of costs to

capacity and energy. The quotient of

these costs and the appropriate billing

determinant (contract demand for

capacity-related costs; total energy usage

for energy) yields the rates.

3. Energy Transmission (ET); Southern

Intertie (IS), Northern Intertie (IN), and

Eastern Intertie (IE) Transmission; and

Market Transmission (MT)

The ET–95 rate is designed to

approximate the average cost of firm

wheeling on the network. It is

calculated by dividing the costs

allocated to the FPT/IR class of service

by all wheeling under firm wheeling

contracts. The ET rate applies to use of

intra-regional FCRTS facilities

excluding the Interties and will provide

comparable nonfirm transmission

service.

The proposed IS–95 rate consists of

two parts: a nonfirm energy-only rate,

and a firm rate with separate demand

and energy components.

BPA also is proposing two rates for

the IN–95 rate schedule: an energy-only

rate for nonfirm wheeling, and a rate

with demand and energy components

for firm wheeling. The cost of the

Northern Intertie is allocated to Federal

and non-Federal power; the cost

allocated to non-Federal power is the

basis for the calculation of the rate.

The IE–95 rate is available for nonfirm

transmission on the Eastern Intertie. It is

calculated as the ratio of the Eastern

Intertie segment cost to the projected

wheeling of energy from the Colstrip

plant.

BPA is continuing its MT–95 rate

unchanged, except for the addition of

the Reactive Power Charge. This rate

schedule was developed for use among

Western Systems Power Pool (WSPP)

participants and allows for flexible

hourly, daily, weekly, and monthly

charges.

4. Use of Facilities Transmission (UFT)

and Townsend-Garrison Transmission

(TGT)

The UFT–95 and TGT–95 rate

schedules are formula rates that are

being proposed unchanged from the

current 1993 rates. The UFT rate

recovers the annual cost of identified

facilities over which specific wheeling

transactions occur. The TGT rate is a

contract rate that recovers the cost of the

Montana (Eastern) Intertie.

5. Southern Intertie Annual Costs (AC)

BPA is proposing the AC–95 rate to be

applied to owners of AC Intertie

capacity. This rate recovers the Capacity

Owner’s prorata share of actual AC

Intertie costs: Operations, maintenance,

general plant, and other identified

expenses, as well as capital costs of

replacements and reinforcements. The

proposed AC–95 rate takes the place of

the AC–93 rate which was a ‘‘bridge’’

rate until Capacity Ownership contracts

were complete.

6. Network Integration Transmission

(NT) and Point-to-Point Firm

Transmission (PT)

The proposed NT–95 and PT–95 rates,

along with the associated terms and

conditions of service, are designed to

provide customers with transmission

service that is comparable to what BPA

provides itself in serving its power

customers. Network Integration

transmission service allows customers

to serve their load located in the PNW

region. The proposed NT–95 rate is

based on a load-ratio share concept. The

load-ratio share measures the Network
Federal Register / Vol. 60, No. 30 / Tuesday, February 14, 1995 / Notices 8511

Integration customer’s contribution to

the FCRTS peak.

The proposed PT rate, along with

terms and conditions of service,

provides transmission service for

customer’s native load and/or

transactions with third parties over the

FCRTS Integrated Network. The PT rate

is based on transmission costs allocated

to the FPT/IR class of service and is

structured as a monthly demand charge.

7. Advance Funding (AF)

The proposed AF rate allows BPA to

collect the capital and related costs of

specified BPA-owned transmission

facilities through advance payment.

Such facilities could include

interconnection and resource

integration facilities, and upgrades or

reinforcements to the FCRTS. Following

commercial operation of the specified

facilities, a true-up of estimated costs

with actual costs would occur.

8. Reservation Charge for Transmission

Capacity, and Reactive Power Charge

The proposed Reservation Charge is

included in the firm transmission rate

schedules for application to customers

who enter into a contract with BPA for

new or increased firm transmission

service on the FCRTS and want to

reserve transmission capacity to

accommodate such service. Payment of

the Reservation Charge for Transmission

Capacity would allow a customer to

reserve capacity for up to 3 years, with

the possibility of two annual extensions

granted by BPA on a case-by-case basis.

The proposed Reactive Power Charge

is included in BPA’s transmission rate

schedules as well as BPA’s power rate

schedules, and charges customers for

their reactive power requirements by

point of delivery.

V. Transmission Rate Schedules

The proposed transmission rates are

incorporated in the Wholesale Power

and Transmission Rate Schedules. The

rate schedule document includes three

sections. The first section contains the

wholesale power and transmission rate

schedules. Each schedule is comprised

of sections stating to whom the rate

schedule is available, rates for the

products offered under the schedule,

and billing factors. Each rate schedule

also lists the adjustments, charges, and

special provisions that apply to that rate

schedule.

The second section contains detailed

descriptions of the adjustments, charges,

and special provisions that apply to the

various rate schedules. The third section

contains the GRSPs for power and

transmission rates. The GRSPs include a

lengthy list of definitions, both of

products and services and of rate

schedule terms.

The Wholesale Power and

Transmission Rate Schedules and the

GRSPs will be published in a separate

Federal Register Notice as described in

Section I of this Notice.

Issued in Portland, Oregon, on February 7,

1995.

J.H. Curtis,

Acting Administrator.

[FR Doc. 95–3535 Filed 2–13–95; 8:45 am]

BILLING CODE 6450–01–P

Hearing and Opportunity for Public

Comment; Regarding Proposed

Comparable Transmission Terms and

Conditions

AGENCY: Bonneville Power

Administration (BPA), DOE.

ACTION: Notice of Hearing and

Opportunity to Comment.

SUMMARY: BPA File No. TC–95. BPA

requests that all comments and

documents intended to become part of

the Official Record in this process

contain the file number designation TC–

95. BPA will be proposing terms and

conditions applicable to three

transmission services over the network

transmission system of the Federal

Columbia River Transmission System

(FCRTS) which BPA considers to be

comparable to the uses BPA itself makes

of such system for its own power

transactions. The Federal Power Act, as

amended by the Energy Policy Act of

1992, provides that BPA may institute a

regional hearing process on proposed

transmission terms and conditions of

general applicability. By this notice,

BPA is announcing such a proceeding

and the dates on which the proposed

transmission terms and conditions will

be available.

DATES: Persons wishing to comment on

the proposed transmission terms and

conditions but not wishing to become

‘‘parties’’ to the proceeding must submit

written comments on the proposals by

May 15, 1995. Persons wishing to

become formal ‘‘parties’’ to the

proceeding must notify BPA in writing

of their intention to do so in accordance

with requirements stated in this Notice.

Intervention petitions must be received

by 9 a.m. February 13, 1995.

A prehearing conference will be held

before the Hearing Officer at 9:00 a.m.

on February 13, 1995, in the BPA Rates

Hearing Room located at 2032 Lloyd

Center, Portland, Oregon. Registration

for the prehearing conference will begin

at 8:30 a.m. The prehearing conference

for BPA’s 1995 power and transmission

rate case will occur at the same time and

place as the prehearing conference for

this proceeding. BPA’s present intent is

for the Hearing Officer for this

transmission terms and conditions

proceeding to be other than the Hearing

Officer presiding over BPA’s 1995

power and transmission rate

proceeding. However, it also is BPA’s

intent to merge as much as possible the

schedules and records for these two

proceedings in order to address

common transmission issues efficiently.

At the prehearing conference, BPA may

move to consolidate common

transmission issues.

The Hearing Officer will act on all

intervention petitions and oppositions

to intervention petitions, rule on any

motions, establish additions or changes

to the Procedures, establish a service

list, establish a procedural schedule in

conjunction with the rates hearing

officer, and consolidate parties with

similar interests for purposes of filing

jointly-sponsored testimony and briefs

and for expediting any necessary crossexamination. A notice of the dates and

times of any hearings will be mailed to

all parties of record. Objections to

orders made by the Hearing Officer at

the prehearing conference must be made

in person or through a representative at

the prehearing conference.

The following schedule information is

provided for informational purposes. A

final schedule will be established by the

Hearing Officer at the prehearing

conference.

February 9, 1995 (on or about)

Proposed Transmission Terms and

Conditions mailed to customers and

1993 rate case parties and available

from BPA’s Public Information

Center, 1st Floor, 905 N.E. 11th

Ave., Portland, Oregon.

February 13, 1995 (on or about)

Proposed Transmission Terms and

Conditions published in Federal

Register.

February 13, 1995

Prehearing conference to set schedule

and act on petitions to intervene.

April 5, 1995 (on or about)

Supplemental testimony filed.

October 29, 1995

Administrator’s Final Decision

BPA also will be conducting public

field hearings on it proposed power and

transmission rates. Comments on the

proposed transmission terms and

conditions also will be accepted at these

hearings. The dates and locations of the

field hearings will be announced later

through mailings and public

advertising.

ADDRESSES: Written comments by

‘‘participants’’ should be submitted by

May 15, 1995, to: Manager, Corporate