[Federal Register Volume 74, Number 102 (Friday, May 29, 2009)]
[Notices]
[Pages 25729-25732]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-12489]


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DEPARTMENT OF ENERGY

Bonneville Power Administration

[BPA File No.: TRM-12S]


2012 Tiered Rate Methodology Supplemental Proceeding; Public 
Hearings and Opportunities for Public Review and Comment

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

ACTION: Notice of proposed modifications to the Tiered Rate 
Methodology.

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SUMMARY: BPA is proposing modifications to its Tiered Rate Methodology 
(TRM), TRM-12-A-02, which specifies the methodology to be used in 
setting BPA's Priority Firm Power (PF) rates beginning with the FY 
2012-2013 rate period and continuing through the life of the Regional 
Dialogue Contracts. The TRM was established on November 10, 2008, by 
the Administrator's Record of Decision (ROD), TRM-12-A-01, following a 
procedural hearing held pursuant to section 7(i) of the Pacific 
Northwest Electric Power Planning and Conservation Act (Northwest Power 
Act), 16 U.S.C., section 839e(i). The TRM contains specified procedures 
that govern its modification. The modifications proposed here are made 
in accordance with the provisions in section 12 of the TRM, which 
include changes to the TRM that were identified and agreed to between 
BPA and preference customer representatives designated by the Public 
Power Council prior to February 1, 2009.
    One of those modifications would substantively change the 
calculation of Contract High Water Marks (CHWM) under the TRM. Another 
proposed modification changes one public utility customer's existing 
resource amount shown in Attachment C to the TRM. The remaining 
proposed modifications are offered to clarify the TRM language in 
specific places.
    Determinations of specific rate levels applicable to sales under 
the Regional

[[Page 25730]]

Dialogue Contracts will not be made in this proceeding. Rather, the 
specific rate levels will be developed consistent with the TRM in the 
respective Northwest Power Act section 7(i) rate proceedings.
    BPA is reopening the TRM proceeding pursuant to section 7 of the 
Northwest Power Act to consider the proposed TRM modifications. 
Entities that were parties to TRM-12 do not need to intervene again in 
this reopened proceeding. Other entities wishing to become a formal 
party to the proceeding must file a petition to intervene, notifying 
BPA in writing of their intention to do so in conformance with the 
requirements stated in this Notice.

DATES: Petitions to intervene must be received no later than 5 p.m., 
Pacific Daylight Time (PDT), on June 2, 2009. Proposed hearing dates 
are supplied in SUPPLEMENTARY INFORMATION, Part I.A. below. Non-party 
participants may make written comments between May 28, 2009, and July 
8, 2009. Comments must be received by 5 p.m., PDT, on July 8, 2009, in 
order to be considered in the Administrator's ROD.

ADDRESSES: Petitions to intervene should be directed to Ericka Doot, 
Hearing Clerk, LP-7, Bonneville Power Administration, 905 NE 11th 
Avenue, Portland, OR 97232 or by e-mail to: <a href="/cdn-cgi/l/email-protection#384c4a55090a4a594c5d785a4859165f574e"><span class="__cf_email__" data-cfemail="7307011e424101120716331103125d141c05">[email protected]</span></a>, and must 
be received no later than 5 p.m., PDT, on June 2, 2009. In addition, a 
copy of the petition must be served concurrently on BPA's General 
Counsel directed to Peter J. Burger, LP-7, Office of General Counsel, 
Bonneville Power Administration, 905 NE. 11th Avenue, Portland, OR 
97232 or by e-mail to: <a href="/cdn-cgi/l/email-protection#e4948e869196838196a4869485ca838b92"><span class="__cf_email__" data-cfemail="ee9e848c9b9c898b9cae8c9e8fc0898198">[email protected]</span></a>. (See Part III (A) for more 
information.) Written comments can be submitted online at BPA's Web 
site http://www.bpa.gov/comment, or by mail to: BPA Public Affairs, 
DKE-7, P.O. Box 14428, Portland, OR 97293-4428. Please identify written 
or electronic comments as ``TRM-12S Proceeding'' comments. Documents 
will be available for public viewing after June 4, 2009. The documents 
are available at: http://www.bpa.gov/corporate/ratecase, or at BPA's 
Public Information Center, BPA Headquarters Building, 1st Floor; 905 
NE. 11th, Portland, Oregon. The prehearing conference will be held on 
June 4, 2009, beginning at 1:30 p.m. in Room 223, 911 NE. 11th, 
Portland, Oregon. Due to increased security requirements, attendees 
should allow sufficient time to enter the building and complete the 
required screening process. Photo identification will be required for 
entry.

FOR FURTHER INFORMATION CONTACT: Ms. Nita Burbank, Public Utilities 
Specialist, Power Policy Development, PFP-6, P.O. Box 3621, Portland, 
OR 97208. Interested persons may also call 503-230-3935 or 1-800-622-
4519 (toll-free).

SUPPLEMENTARY INFORMATION:

Table of Contents

Part I. Introduction and Procedural Background
Part II. Purpose and Scope of Proceeding
Part III. Public Participation
Part IV. Tiered Rate Methodology Proposed Modifications

Part I--Introduction and Procedural Background

    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: 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. This proceeding is governed by section 1010 of 
BPA's Rules of Procedure Governing Rate Hearings, 51 FR 7611 (1986) 
(Procedures). These Procedures implement the statutory section 7(i) 
requirements.
    This proceeding will be conducted under section 1010.10 of the 
Procedures--Expedited Rate Proceedings. Expedited Rate Proceedings 
provide for a ROD to be issued 90 days after this Notice. The 
Administrator has chosen an Expedited Rate Proceeding because of the 
limited scope of issues that will be addressed in this reopened 
proceeding and that such issues will not require extensive examination 
of factual material by BPA or parties.
    Section 1010.7 of the BPA Hearing Procedures prohibits ex parte 
communications. The ex parte rule applies to all BPA and DOE employees 
and contractors. Except as provided below, any outside communications 
with BPA and/or DOE personnel regarding BPA's rate case by other 
Executive Branch agencies, Congress, existing or potential BPA 
customers (including Tribes), and nonprofit or public interest groups 
are considered outside communications and are subject to the ex parte 
rule. The general rule does not apply to communications relating to: 
(1) Matters of procedure only (the status of the rate case, for 
example); (2) exchanges of data in the course of business or under the 
Freedom of Information Act; (3) requests for factual information; (4) 
matters BPA is responsible for under statutes other than the ratemaking 
provisions; or (5) matters that all parties agree may be made on an ex 
parte basis. The ex parte rule remains in effect until the 
Administrator's Final ROD is issued, which is scheduled to occur on 
September 2, 2009.
    The Bonneville Project Act, 16 U.S.C. 832, the Flood Control Act of 
1944, 16 U.S.C. section 825s, the Federal Columbia River Transmission 
System Act, 16 U.S.C. 838, and the Northwest Power Act, 16 U.S.C. 839, 
provide guidance regarding BPA ratemaking. The Northwest Power Act 
requires BPA to set rates that are sufficient to recover, in accordance 
with sound business principles, the cost of acquiring, conserving and 
transmitting electric power, including amortization of the Federal 
investment in the Federal Columbia River Power System (FCRPS) over a 
reasonable period of years, and certain other costs and expenses 
incurred by the Administrator.
    BPA's proposed TRM modifications are available for viewing and 
downloading on BPA's Web site at http://www.bpa.gov/corporate/ratecase 
and are discussed in Part IV below. BPA will be conducting a formal 
rate proceeding open to rate case parties. Interested parties must file 
petitions to intervene in order to take part in the formal hearing, as 
discussed in Part III (A) below. A proposed schedule is as follows. The 
Hearing Officer will establish a final procedural schedule.

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Prehearing/Initial Proposal..............  June 4.
Clarification............................  June 9.
Data Requests Deadline...................  June 10.
Data Responses Deadline..................  June 16.
Parties file their Direct Case...........  June 22.
Clarification............................  June 25.
Data Requests Deadline...................  June 25.
Data Responses Deadline..................  July 1.
Rebuttal.................................  July 8.
Public Comments Deadline.................  July 8.
Clarification............................  July 10.
Cross Examination........................  July 16.
Initial Briefs...........................  July 28.
Oral Argument............................  August 2.
Final Record of Decision.................  September 2.
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Part II--Purpose and Scope of Proceeding

A. Purpose of Proceeding

    The TRM, together with new power sales contracts, is a key 
component implementing BPA's post-2011 power marketing policy and 
tiered rate construct as defined in BPA's Long-Term Regional Dialogue 
Final Policy and the corresponding Record of Decision, which were 
published on July 19, 2007. Because the TRM was

[[Page 25731]]

developed and established prior to BPA's 135 PF rate customers signing 
Regional Dialogue Contracts, the TRM included a special modification 
provision to allow BPA to propose changes, if BPA and representatives 
of its PF customers identified and agreed on the changes that would be 
needed prior to February 1, 2009. These changes would not be subject to 
the more restrictive requirements under the TRM for modifications after 
that date. The purpose of the special modification provision was to 
assure BPA and its customers that the TRM and the accompanying power 
sales contracts would be consistent and work together.
    The TRM provides for a two-tiered PF rate design applicable to firm 
requirements power service for public utility customers that have 
signed an applicable Regional Dialogue Contract. The tiered rate design 
differentiates between the cost of service associated with Tier 1 
System Resources and the cost associated with additional amounts of 
power sold by BPA to serve any remaining portion of a public utility 
customer's Net Requirement (Tier 2). Contract High Water Marks (CHWM), 
determined according to the TRM, are one basis for determining how much 
of each customer's Net Requirement purchase from BPA is charged Tier 1 
rates and how much may be charged Tier 2 rates. The TRM specifies that 
CHWMs will be developed based on public utility customers' FY 2010 load 
with certain modifications.

B. Scope of the Proceeding

    This additional hearing will address the issues as discussed below 
in Section IV. In this supplemental TRM rate proceeding, the 
Administrator will not open issues previously determined to be outside 
the scope of the TRM rate case, as described in the original 2007 
Federal Register notice \1\ and in the final TRM ROD, TRM-12-A-01. 
Under the TRM, this proceeding is limited to reviewing only the 
proposed modifications and does not allow BPA or other parties to 
reexamine issues that was already debated and decided in the prior 
proceeding.
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    \1\ The details of the elements that were excluded from the 
earlier proceeding are described in detail at 73 FR 24961, at 24962-
63 (2008).
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    Therefore, the scope of this supplemental proceeding is limited by 
those guidelines the Administrator established during the first TRM 
proceeding and limited to the parameters of the specific issues that 
are being addressed in Section IV below. Additionally, the TRM defines 
specific procedures to be followed to propose a modification of the 
TRM. Any modification that is proposed contrary to the TRM's procedures 
will not be considered in this proceeding. Pursuant to section 
1010.3(f) of the Procedures, the Administrator directs the Hearing 
Officer to exclude from the record any materials attempted to be 
submitted or arguments attempted to be made in the proceeding that seek 
to in any way address the decisions made in the prior proceeding as 
well as any other modifications to the TRM that were not identified and 
agreed to by BPA and PF customer representatives prior to February 1, 
2009.

C. The National Environmental Policy Act

    BPA has previously completed an evaluation under the National 
Environmental Policy Act (NEPA), 42 U.S.C. 4321 et seq., of the TRM and 
its provisions as part of the Administrator's ROD for TRM-12-A-01 (see 
Administrator's ROD, Section 8.0). This NEPA evaluation found that the 
TRM is an implementation of an already-adopted policy concerning tiered 
rates with little to no environmental impact, and any potential 
environmental effects had already been considered and evaluated in 
prior BPA NEPA documentation. The TRM NEPA evaluation also found that 
the TRM is consistent with the Market-Driven Alternative that was 
evaluated in BPA's Business Plan Environmental Impact Statement (DOE/
EIS-0183, June 1995) and adopted in BPA's Business Plan ROD (August 
1995), as well as with the Long-Term Regional Dialogue Policy and its 
associated NEPA ROD.
    BPA is in the process of assessing whether the proposed TRM 
modifications identified in Part IV represent a significant change in 
the TRM relevant to environmental effects such that additional 
evaluation under NEPA from what was included in the TRM-12-A-01 
Administrator's ROD is required. The NEPA process is conducted 
separately from BPA's formal rate proceedings. Therefore, pursuant to 
section 1010.3(f) of the Procedures, the Administrator directs the 
Hearing Officer to exclude from the record all evidence and argument 
that addresses the potential environmental impacts of the proposed TRM 
modifications.
    During the public review and comment period for the proposed TRM 
modifications, persons interested in submitting comments regarding the 
potential environmental effects of the proposal may do so by submitting 
comments to Katherine Pierce, NEPA Compliance Officer, KEC-4, 
Bonneville Power Administration, 905 NE. 11th Avenue, Portland, OR 
97232. Any such comments received by July 8, 2009 will be considered by 
BPA's NEPA compliance staff in their review of the proposal.

Part III--Public Participation

A. Distinguishing Between ``Participants'' and ``Parties''

    BPA distinguishes between ``participants in'' and ``parties to'' 
the section 7(i) hearing process. Apart from the formal hearing 
process, BPA will accept comments, views, opinions, and information 
from ``participants,'' who are defined in BPA's Procedures as persons 
who may submit comments without being subject to the duties of, or 
having the privileges of, parties. Participants' comments will be made 
a part of the official record and considered by the Administrator when 
making his decision. 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. Any entity that 
has intervened in this proceeding may not submit participant comments. 
Persons who are members or employees of organizations that have 
intervened in the rate proceeding may submit general comments as 
participants but may not use the comment procedures to address specific 
issues raised by their intervenor organization.
    The views of participants are important to BPA. Written comments by 
participants will be included in the record if they are received by 5 
p.m. PDT on July 8, 2009. Written views, supporting information, 
questions, and arguments should be submitted to BPA Public Affairs at 
the Web or postal address listed in the ADDRESSES section.
    Persons wishing to become a party to BPA's rate proceeding must 
notify BPA in writing and file a Petition to Intervene with the Hearing 
Officer. Petitioners may designate no more than two representatives 
upon whom service of documents will be made. Petitions to Intervene 
must state the name and address of the person requesting party status 
and the person's interest in the hearing. Petitions to Intervene as 
parties in the rate proceeding are due to the Hearing Officer by 5 p.m. 
PDT on June 2, 2009, and should be directed as stated in the ADDRESSES 
section above.
    Petitioners must explain their interests in sufficient detail to 
permit the Hearing Officer to determine whether they have a relevant 
interest in the proceeding. Pursuant to section

[[Page 25732]]

1010.1(d) of BPA's Procedures, BPA waives the requirement in section 
1010.4(d) that an opposition to an intervention petition must be filed 
and served 24 hours before the prehearing conference. Any opposition to 
an intervention petition may instead be made at the prehearing 
conference. Any party, including BPA, may oppose a petition for 
intervention. 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. All timely 
applications will be ruled on by the Hearing Officer. Late 
interventions are strongly disfavored.

B. Developing the Record

    The record of this proceeding will comprise, among other things, 
comments made by participants, transcripts of all hearings, any written 
materials submitted by the parties, documents developed by BPA staff, 
and other materials accepted into the record by the Hearing Officer. 
Written comments by participants will be included in the record if they 
are received by 5 p.m., PDT, on July 8, 2009. The Hearing Officer will 
review the record, supplement it if necessary, and will certify the 
record to the Administrator for decision.
    The Administrator will adopt the final TRM modifications based on 
the entire record, which includes the record certified by the Hearing 
Officer, as described above. The basis for the final TRM modifications 
will be expressed in the Administrator's ROD. BPA will serve copies of 
the Final ROD on all parties. The ROD will also be publicly available 
at http://www.bpa.gov/corporate/ratecase.
    BPA must continue to meet with customers in the ordinary course of 
business during the rate case. To comport with the rate case procedural 
rule prohibiting ex parte communications, BPA will provide the 
prescribed notice of meetings involving rate case issues in order to 
permit the opportunity for participation by all rate case parties. 
These meetings may be held on very short notice. Consequently, parties 
should be prepared to devote the necessary resources to participate 
fully in every aspect of the rate proceeding and attend meetings any 
day during the course of the rate proceeding.

Part IV--Tiered Rate Methodology Proposed Modifications

    On January 30, 2009, BPA published the Final TRM Clean Up List 
pursuant to section 12 of the TRM. The Clean Up List identified nine 
revisions agreed to by BPA and preference customer representatives 
designated by the Public Power Council. Revision 1 provides an 
amendment to the amount of Pend Oreille Public Utility District's Box 
Canyon Dam resource specified in TRM Attachment C--Existing Resources 
for CHWMs.
    Revision 2, the CHWM adjustment, provides an amendment to the 
calculation of the CHWM pursuant to section 4.1 of the TRM. During the 
Clean-Up review, some of BPA's customers became concerned that the 
effects of the current economic recession may adversely affect their FY 
2010 load, thereby reducing their CHWM. BPA met with public power 
representatives and jointly developed the proposed modification to the 
calculation of CHWM. The proposed modification would provide each 
customer with an option to include provisional amounts in its CHWM if 
it has experienced qualifying load reductions due to the current 
economic recession. The provisional CHWM would be made permanent if the 
load recovers within specified parameters.
    Revision 3 proposes clarification to certain language regarding 
Forecast Monthly/Diurnal Tier 1 Load throughout the TRM. These proposed 
modifications do not change the intent of the original language, but 
change certain terms to add clarity.
    Revision 4 deletes certain language from TRM section 8.5. This 
proposed modification does not change the intent of the original 
language, but removes unnecessary language.
    Revision 5 adds a minimum duration for public comment during the 
Rate Period High Water Mark process. The original language in TRM 
section 4.2.2 provided for public comment, but did not specify a length 
of time for such comment.
    Revision 6 proposes clarification to certain language in TRM 
section 1.2 regarding cost allocation. This proposed modification does 
not change the intent of the original language, but changes certain 
terms to add clarity.
    Revision 7 proposes clarification to certain language in TRM 
sections 4 and 4.2 regarding Net Requirements. This modification will 
also add a definition of net requirement consistent with the power 
sales contract definition. These proposed modifications do not change 
the intent of the original language, but change certain terms to add 
clarity.
    Revision 8 proposes to add language to TRM section 12.5, an action 
that is not considered to be a revision to the TRM. This proposed 
modification does not change the intent of the original language, but 
includes an inadvertent oversight of the basis for allocating an 
interest credit.
    BPA's proposed modifications to the TRM are available for viewing 
and downloading on BPA's Web site at http://www.bpa.gov/corporate/ratecase. Copies will also be available for viewing at BPA's Public 
Information Center, BPA Headquarters Building, 1st Floor, 905 NE. 11th 
Avenue, Portland, Oregon.

    Issued in Portland, Oregon, the 21st of May 2009.
Stephen J. Wright,
Administrator and Chief Executive Officer.
[FR Doc. E9-12489 Filed 5-28-09; 8:45 am]
BILLING CODE 6450-01-P


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