Notice2024-05681
Provider of Choice Policy and Record of Decision
Primary source
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Published
March 21, 2024
Issuing agencies
Energy DepartmentBonneville Power Administration
Abstract
Bonneville released its Provider of Choice Policy (Policy), which addresses the Agency's regional firm power sales policy for fiscal year 2029 through fiscal year 2044. The Policy will shape Bonneville's long-term power sales contracts following the expiration of current long-term Regional Dialogue contracts on September 30, 2028. The Policy describes the Agency's products and service offerings for the next contract period and how the Agency proposes to distribute the costs and benefits from its system of Federal resources, which includes the Federal Columbia River Power System, the Columbia Generating Station, as well as non-Federal resources. Alongside the Policy, Bonneville released a record of decision.
Full Text
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<title>Federal Register, Volume 89 Issue 56 (Thursday, March 21, 2024)</title>
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[Federal Register Volume 89, Number 56 (Thursday, March 21, 2024)]
[Notices]
[Pages 20193-20194]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-05681]
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DEPARTMENT OF ENERGY
Bonneville Power Administration
Provider of Choice Policy and Record of Decision
AGENCY: Bonneville Power Administration (Bonneville), Department of
Energy (DOE).
ACTION: Notice of policy and record of decision.
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SUMMARY: Bonneville released its Provider of Choice Policy (Policy),
which addresses the Agency's regional firm power sales policy for
fiscal year 2029 through fiscal year 2044. The Policy will shape
Bonneville's long-term power sales contracts following the expiration
of current long-term Regional Dialogue contracts on September 30, 2028.
The Policy describes the Agency's products and service offerings for
the next contract period and how the Agency proposes to distribute the
costs and benefits from its system of Federal resources, which includes
the Federal Columbia River Power System, the Columbia Generating
Station, as well as non-Federal resources. Alongside the Policy,
Bonneville released a record of decision.
DATES: On March 20, 2024, John Hairston, Administrator and Chief
Executive Officer of the Bonneville Power Administration signed the
Provider of Choice Record of Decision.
ADDRESSES: The Provider of Choice Policy and Record of Decision are
available on the Bonneville website at <a href="https://www.bpa.gov/energy-and-services/power">https://www.bpa.gov/energy-and-services/power</a>. Copies are also available by contacting the Bonneville
Public Information Center at 1-800-622-4520.
FOR FURTHER INFORMATION CONTACT:
David Wilson, DK-7, BPA Communications, Bonneville Power
Administration, P.O. Box 3621, Portland, Oregon 97208; by phone toll-
free at 1-800-622-4519; or by email to <a href="/cdn-cgi/l/email-protection#3d5e5250504853545e5c495452534e7d5f4d5c135a524b"><span class="__cf_email__" data-cfemail="5734383a3a22393e3436233e3839241735273679303821">[email protected]</span></a>.
Responsible Official: Kim Thompson, Vice President for Northwest
Requirements Marketing is the official responsible for the development
of Provider of Choice Policy and contracts.
SUPPLEMENTARY INFORMATION: The Provider of Choice Policy's (Policy)
primary focus is setting the framework for sales of electric power
pursuant to section 5(b) of the Northwest Power Act to public power
utilities and Federal agencies that qualify for service at a Priority
Firm (PF) power rate. The Policy addresses at a high-level how
Bonneville would serve other qualified customers but many of the
details are specific to PF-service. The Policy addresses how Bonneville
will determine its load obligations and outlines proposed products and
services.
Bonneville released a draft Policy on July 20, 2023. Bonneville
published a notice in the Federal Register on July 24, 2023, and opened
a public comment period from July 20, 2023, to October 13, 2023. 88 FR
47487. Bonneville received over 16,850 comments, the vast majority of
which were form letters or variations of the form letter submission.
Bonneville reviewed these comments and documented its deliberations in
a record of decision that explains what changes were made as well as
which commenter proposals were not adopted in the Policy. Bonneville's
Policy reflects changes made based on the comments received.
The Policy establishes Bonneville decision to develop contracts
based on a tiered PF rate construct for the Provider of Choice contract
period. The tiered rate construct sets a framework for an allocation of
costs, not an allocation of power. Under the two-tier rate design and
Provider of Choice contracts, customers will be entitled to
[[Page 20194]]
purchase firm power to serve PF-eligible load up to a contractually
defined amount, referred to as the customer's Contract High Water Mark
(CHWM), at the applicable PF Tier 1 rate. Customers may also purchase
firm power for any PF-eligible load above a customer's CHWM, referred
to as the customer's Above-Contract High Water Mark (Above-CHWM) load.
A customer may elect to serve their Above-CHWM load either with firm
power from Bonneville at a PF Tier 2 rate, from its own dedicated
resources, or both. The specific terms and provisions of the tiered
rate construct will be established in the 2029 Public Rate Design
Methodology (PRDM), which will be determined in a separate process.
In the Policy, Bonneville establishes how it will calculate
Provider of Choice CHWMs. The calculation recognizes customer
investments in conservation and non-Federal resources in support of the
prior long-term Regional Dialogue Policy and contracts. The calculation
also adjusts CHWMs in recognition of certain circumstance relative to
the changing energy landscape and customers' needs. Bonneville will not
revisit the calculation in a future process or in the Provider of
Choice contracts.
One of the Policy's goals is to offer customers flexibility to
invest in and use non-Federal resources to serve their retail load
growth needs. Bonneville balances the flexibility offered with the
tiered rates foundational tenet to insulate customers from costs
associated with other customers' resource choices for serving load
growth. Bonneville offers several carefully constructed non-Federal
resource flexibilities to provide customers with opportunities to
invest in non-Federal resources while limiting the cost impact to other
customers.
Under the Policy, Bonneville recognizes the need for added
flexibility around customers' non-Federal resources and permits
customers to add a defined amount of non-Federal resources to offset
their CHWM load. This will reduce the amount of power a customer is
obligated to purchase from Bonneville without triggering take-or-pay
provisions and without reduction to the customer's associated CHWM.
Bonneville will also not track non-Federal resources with a nameplate
capacity of less than one MW in the contract. Customers will retain the
ability to serve their Above-CHWM load with non-Federal resources.
Finally, Bonneville will continue to propose to recover the cost of a
limited amount of transfer service in the PF Tier 1 rate for non-
Federal resources for its customers that are served off third-party
transmission systems.
The Policy addresses why Bonneville cannot offer a 100% carbon-free
product at this time. Bonneville addresses some of the barriers to
offering such a product and commits to continuing to look for ways to
further improve its nearly carbon-free emissions rate. The Policy also
addresses how Bonneville is proposing to approach its conservation
(energy efficiency) program after Oct. 1, 2028.
The Policy does not address how the products and services described
will be priced. Bonneville has started the PRDM process to discuss rate
designs and pricing. The PRDM will replace Bonneville's Tiered Rate
Methodology that expires on Sept. 30, 2028. The PRDM and subsequent
Northwest Power Act section 7(i) rate proceedings will determine rates
for the products and services offered under the Provider of Choice
contracts.
Following the Policy release, Bonneville will initiate a follow-on
process to implement the Policy through negotiation and development of
contracts with the goal to offer and execute new long-term contracts by
late 2025. Bonneville will additionally update other business processes
to ensure implementation of the Policy, including the PRDM. Bonneville
will use the time between contract execution and the start of power
deliveries on Oct. 1, 2028, to ready systems to ensure a smooth
transition between contracts.
Signing Authority: This document of the Department of Energy was
signed on March 12, 2024, by John Hairston, Administrator and Chief
Executive Officer of the Bonneville Power Administration, pursuant to
delegated authority from the Secretary of Energy. That document with
the original signature and date is maintained by the Department of
Energy. For administrative purposes only, and in compliance with
requirements of the Office of the Federal Register, the undersigned
Department of Energy 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 March 13, 2024.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
[FR Doc. 2024-05681 Filed 3-20-24; 8:45 am]
BILLING CODE 6450-01-P
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