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Notice2024-26243

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

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Published

November 13, 2024

Issuing agencies

Energy DepartmentBonneville Power Administration

Abstract

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.

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<title>Federal Register, Volume 89 Issue 219 (Wednesday, November 13, 2024)</title>
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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 [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[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 <a href="https://www.bpa.gov/prdm2029">https://www.bpa.gov/prdm2029</a> or from the Hearing Clerk at
<a href="/cdn-cgi/l/email-protection#e2b2b0a6afd0db818e879089a2858f838b8ecc818d8f">[email&#160;protected]</a>.
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 <a href="http://www.bpa.gov/comment">www.bpa.gov/comment</a> 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 <a href="/cdn-cgi/l/email-protection#0e6f636961616a6b4e6c7e6f20696178">[email&#160;protected]</a>.
The Hearing Clerk for this proceeding can be reached via email at
<a href="/cdn-cgi/l/email-protection#401012040d7279232c25322b00272d21292c6e232f2d">[email&#160;protected]</a> or via telephone at (503) 479-8506.
Please direct questions regarding BPA's secure website to the
Hearing Coordinator via email at <a href="/cdn-cgi/l/email-protection#9efde9f9ecf7f8f8fbf0defceeffb0f9f1e8">[email&#160;protected]</a> 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 <a href="https://www.bpa.gov/energy-and-services/rate-and-tariff-proceedings/rules-of-procedure-revision-process">https://www.bpa.gov/energy-and-services/rate-and-tariff-proceedings/rules-of-procedure-revision-process</a>.

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 <a href="https://www.bpa.gov/prdm2029">https://www.bpa.gov/prdm2029</a>.
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 <a href="/cdn-cgi/l/email-protection#9af1f9fde8fbf4fdffdaf8eafbb4fdf5ec">[email&#160;protected]</a>. 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 (<a href="https://proceedings.bpa.gov/">https://proceedings.bpa.gov/</a>). 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 <a href="/cdn-cgi/l/email-protection#e3809484918a8585868da3819382cd848c95">[email&#160;protected]</a> 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
<a href="http://www.bpa.gov/comment">www.bpa.gov/comment</a> 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 <a href="https://www.bpa.gov/prdm2029">https://www.bpa.gov/prdm2029</a>.
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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