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Notice2024-26244

Fiscal Year (FY) 2026-2028 Proposed Power and Transmission Rate Adjustments; Public Hearing and Opportunities for Public Review and Comment

Primary source

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Published

November 13, 2024

Issuing agencies

Energy DepartmentBonneville Power Administration

Abstract

Bonneville is initiating a rate proceeding under the Northwest Power Planning and Conservation Act (Northwest Power Act) to establish power, transmission, and ancillary and control area services rates for the period from October 1, 2025, through September 30, 2028. Bonneville has designated this proceeding Docket No. BP-26.

Full Text

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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 89626-89633]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-26244]

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DEPARTMENT OF ENERGY

Bonneville Power Administration

[BPA File No.: BP-26]

Fiscal Year (FY) 2026-2028 Proposed Power and Transmission Rate
Adjustments; Public Hearing and Opportunities for Public Review and
Comment

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

ACTION: Notice of FY 2026-2028 proposed power and transmission rate
adjustments.

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SUMMARY: Bonneville is initiating a rate proceeding under the Northwest
Power Planning and Conservation Act (Northwest Power Act) to establish
power, transmission, and ancillary and control area services rates for
the period from October 1, 2025, through September 30, 2028. Bonneville
has designated this proceeding Docket No. BP-26.

DATES:
Prehearing Conference: The prehearing conference in the BP-26
proceeding will be held on November 15, 2024, immediately following the
conclusion of the prehearing conference for Bonneville's TC-26 tariff
proceeding, which begins 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 BP-26 proceeding must
be filed on Bonneville's secure website no later than 4:30 p.m. on
December 3, 2024. Part III of this notice, ``Public Participation in
BP-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 February 7, 2025, to be considered in the
Administrator's Record of Decision (ROD). Part III of this notice,
``Public Participation in BP-26,'' provides details on submitting
participant comments.

ADDRESSES:
Prehearing Conference: The prehearing conference in the BP-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 BP-26 web page at <a href="http://bpa.gov/bp26">http://bpa.gov/bp26</a> or from the Hearing Clerk at <a href="/cdn-cgi/l/email-protection#aeecfe9c98cdc2cbdcc5eec9c3cfc7c280cdc1c3">[email&#160;protected]</a>.
Intervention: Anyone intending to become a party to the BP-26
proceeding must file a petition to intervene on Bonneville'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
December 3, 2024. Part III of this notice, ``Public Participation in
BP-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 in BP-26,'' provides details on
submitting participant comments.

FOR FURTHER INFORMATION CONTACT: Ms. Elissa Haley, 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#5d3833353c3138241d3f2d3c733a322b">[email&#160;protected]</a>.
The Hearing Clerk for this proceeding can be reached via email at
<a href="/cdn-cgi/l/email-protection#e7a5b7d5d1848b82958ca7808a868e8bc984888a">[email&#160;protected]</a> or via telephone at (503) 479-8506.
Please direct questions regarding Bonneville's secure website to
the Hearing Coordinator via email at <a href="/cdn-cgi/l/email-protection#fb988c9c89929d9d9e95bb998b9ad59c948d">[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 Bonneville's power
rates, and Mr. Brian McConnell, Manager of Transmission Tariff, Rates,
and Regulatory Activities, is the official responsible for the
development of Bonneville's transmission, ancillary, and control area
services rates.

SUPPLEMENTARY INFORMATION:

Table of Contents

Part I Introduction and Procedural Matters
Part II Scope of BP-26 Rate Proceeding
Part III Public Participation in BP-26
Part IV Summary of Rate Proposals
Part V Proposed BP-26 Rate Schedules

Part I--Introduction and Procedural Matters

A. Introduction

The Northwest Power Act provides that Bonneville must establish,
and periodically review and revise, its power and transmission rates so
that they recover, in accordance with sound business principles, the
costs associated with the acquisition, conservation, and transmission
of electric power, including amortization of the Federal investment in
the Federal Columbia River Power System (FCRPS) over a reasonable
number of years, and Bonneville's other costs and expenses. Section
7(i) of the Northwest Power Act requires that Bonneville's rates be
established according to certain procedures. Among other things, the
procedures include publication of notice of the proposed rates in the
Federal Register and one or more hearings conducted as expeditiously as
practicable by a Hearing Officer to develop a full and complete record
for a final decision by the Administrator. Bonneville is conducting the
BP-26 proceeding to establish rates for FY 2026-2028.
Bonneville's Rules of Procedure will govern the BP-26 proceeding.
The rules are posted on Bonneville'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>.

B. BP-26 Integrated Program Review

Bonneville's Integrated Program Review (IPR) process is designed to
allow the public an opportunity to review and comment on Bonneville's
expense and capital cost forecasts before the forecast costs are used
to set rates. Bonneville's BP-26 IPR process, which addressed the
expense and capital program level cost forecasts for FY 2026-2028,
began on June 25, 2024, with the publication of the BP-26 IPR Initial
Publication. The process concluded on October 24, 2024, with the
issuance of the BP-26 IPR Close-Out Report. Comments regarding any new
information or changed circumstances arising after the date of this
notice that affect BPA's cost projections should be directed to
<a href="/cdn-cgi/l/email-protection#99fff0f7f8f7fafcd9fbe9f8b7fef6ef">[email&#160;protected]</a> and be submitted no later than March 3, 2025. At the
discretion of the Administrator, Bonneville may hold additional
processes to review these forecasts outside of the BP-26 rate
proceeding. If Bonneville decides to update any cost information, such
updates will be reflected in the final proposed rates.

C. Proposed Settlement of the Generator Interconnection Withdrawal
Charge

As part of a workshop process that preceded the BP-26 proceeding,
Bonneville engaged in discussions with customers and other stakeholders
about a proposal for a charge in the Transmission rate schedules that
would apply to the withdrawal of a request for interconnection services
under the Standard Large Generator Interconnection Procedures in
Attachment L to Bonneville's open

[[Page 89627]]

access transmission tariff. These discussions have resulted in the BP-
26 Partial Rates Settlement Agreement, which includes the terms of the
``Generator Interconnection Withdrawal Charge'' that Bonneville is
proposing to adopt in the BP-26 proceeding. A description of the
proposed charge is provided in Part IV of this notice. A link to the
BP-26 Partial Rates Settlement Agreement is provided in Part V. The
proposed settlement addresses the Generator Interconnection Withdrawal
Charge only and no other issues in this proceeding.
The proposed settlement calls for Bonneville to file a motion with
the BP-26 Hearing Officer to establish a deadline for parties in the
BP-26 proceeding to either object to the proposed settlement or waive
the right to contest the settlement. Bonneville intends to file its
motion soon after the BP-26 prehearing conference. If no party in the
BP-26 proceeding objects to the proposed settlement, Bonneville staff
will continue moving forward with the proposal to adopt the settlement.
If a party objects, staff will notify all parties and decide how to
proceed.

D. Proposed Procedural Schedule

A proposed schedule for the BP-26 proceeding is provided below. The
proposed schedule assumes there are no objections to the proposal to
adopt the BP-26 Partial Rates Settlement Agreement. 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 Files Initial Proposal--November 22, 2024
Deadline for Petitions to Intervene--December 3, 2024
Clarification--December 10, 2024
Motions to Strike Due--December 17, 2024
Data Request Deadline for BPA's Initial Proposal--December 17, 2024
Parties File Direct Cases--January 23, 2025
Clarification--January 30, 2025
Motions to Strike Due--February 6, 2025
Data Request Deadline for Parties' Direct Cases--February 6, 2025
Close of Participant Comments--February 7, 2025
Litigants File Rebuttal Cases--March 5, 2025
Clarification--March 12, 2025
Motions to Strike Due--March 14, 2025
Data Request Deadline for Litigants' Rebuttal--March 14, 2025
Parties Give Notice of Intent to Cross-Examine--March 26, 2025
Cross-Examination--April 9-10, 2025
Initial Briefs Filed--April 25, 2025
Oral Argument--May 7, 2025
Draft Record of Decision Issued--June 6, 2025
Briefs on Exceptions Filed--June 20, 2025
Final Record of Decision and Final Studies Issued--July 24, 2025

E. Ex Parte Communications

Section 1010.5 of Bonneville'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 Bonneville 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
Bonneville 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 Bonneville'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 BP-26 Rate Proceeding

A. Joint Rate Proceeding

The BP-26 proceeding is a joint proceeding for the adoption of both
power and transmission rates for FY 2026-2028 (see Parts IV and V).
This section provides guidance to the Hearing Officer regarding the
scope of the rate 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 ratemaking issue is outside the scope of
this proceeding.
Bonneville 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 Bonneville revises the scope of the
proceeding to include new issues, Bonneville 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 Bonneville's testimony or other information. Id.
1. Expense and Capital Cost Forecasts
Bonneville's forecasts of its expense and capital costs are not
determined in rate proceedings. Bonneville develops these forecasts in
other processes, such as the IPR process described previously, with
input from stakeholders. These forecasts are used in Bonneville's
ratemaking, but do not establish Bonneville's budgets or spending
levels for any program. Adjustments to, and selection of, projects for
Bonneville's actual spending levels for its programmatic spending,
including fish and wildlife spending, occur through the yearly
budgetary review process, which includes submission of Bonneville's
budget to Congress.
Bonneville also depreciates the capital spending on the Federal
power and transmission systems over the service lives of the associated
assets. Power's investments are depreciated over fixed periods.
Transmission's depreciation is based on a depreciation study calculated
consistent with industry standards. The service lives of power and
transmission assets, as well as the depreciation study and resulting
depreciation rates, are not determined in rate proceedings.
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 seek to raise issues
with or challenge the appropriateness or reasonableness of: (1) the
Administrator's forecasts of cost and spending levels, (2) the
identification of projects used in Bonneville's cost forecasts, or (3)
any decisions on the depreciation rates that are used to calculate
depreciation expense. Comments regarding new information or changed
circumstances arising after the date of this FRN that affect BPA's cost
projections should be submitted pursuant to section I.B of this notice.
The exclusion does not extend to those portions of the revenue
requirement related to the following: (1)

[[Page 89628]]

interest rate forecasts, (2) interest expense and credit, (3) Treasury
repayment schedules, (4) calculation of depreciation and amortization
expense, (5) forecasts of system replacements used in repayment
studies, (6) purchased power expenses, (7) transmission cost incurred
by Power Services, (8) generation cost incurred by Transmission
Services, (9) minimum required net revenue, and (10) the costs of risk
mitigation actions resulting from the expense and revenue uncertainties
included in the risk analysis.
2. Federal and Non-Federal Debt Service and Debt Management
During the 2026 IPR process and in other forums, Bonneville
provided the public with background information on Bonneville's
internal Federal and non-Federal debt management policies and
practices. While these policies and practices are not decided in the
IPR process, these discussions were intended to inform interested
parties about these matters so the parties would better understand
Bonneville's debt structure. Bonneville's debt management policies and
practices remain outside the scope of the rate 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 the appropriateness or reasonableness of Bonneville's debt
management policies and practices. This exclusion does not encompass
how debt management actions are reflected in ratemaking.
3. Financial and Accounting Policies and Practices
Bonneville's Financial Plan outlines objectives to sustain the
agency's financial strength and resiliency. The Financial Plan focuses
on four main areas: cost management; debt utilization; debt capacity;
and liquidity. Bonneville has adopted certain financial policies to
help further its financial objectives. Bonneville's Financial Reserves
Policy establishes lower and upper thresholds for agency and business
line financial reserves and parameters for actions to be taken when
financial reserves are above or below the thresholds. The Sustainable
Capital Financing Policy guides Bonneville's use of debt and revenue
financing to finance capital investments. The terms of Bonneville's
Financial Plan and Policies, along with Bonneville's internal financial
and accounting policies and practices, are outside the scope of the BP-
26 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
visit or revisit the terms of Bonneville's Financial Plan, Financial
Reserves Policy, Sustainable Capital Financing Policy, internal
financial and accounting policies and practices, and previous decisions
regarding the adoption and implementation of the Financial Plan and
Policies.
4. Tiered Rate Methodology (TRM)
The TRM restricts Bonneville and its customers with Contract High
Water Mark (CHWM) contracts from proposing changes to the TRM's
ratemaking guidelines unless certain procedures have been successfully
concluded. No proposed changes have been subjected to the required
procedures.
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
propose revisions to the TRM made by Bonneville, customers with CHWM
contracts, or their representatives. This exclusion does not extend to
a party or customer that does not have a CHWM contract.
5. Rate Period High Water Mark (RHWM) Process
The RHWM Process preceded the start of the BP-26 proceeding. In
that process, as directed by the TRM, Bonneville established FY 2026-
2028 RHWMs for Public customers that signed contracts for firm
requirements power service providing for tiered rates, referred to as
CHWM contracts. Bonneville established the maximum planned amount of
power a customer is eligible to purchase at Tier 1 rates during the
rate period, the Above-RHWM Loads for each customer, the System Shaped
Load for each customer, the Tier 1 System Firm Critical Output, RHWM
Augmentation, the Rate Period Tier 1 System Capability (RT1SC), and the
monthly/diurnal shape of RT1SC. The RHWM Process provided customers an
opportunity to review, comment on, and challenge Bonneville's RHWM
determinations.
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
visit or revisit Bonneville's determination of a customer's FY 2026-
2028 RHWM or other RHWM Process determinations.
6. 2008 Average System Cost Methodology (2008 ASCM) and Average System
Cost Determinations
Section 5(c) of the Northwest Power Act established the Residential
Exchange Program, which provides benefits to residential and farm
consumers of Pacific Northwest utilities based, in part, on a utility's
``average system cost'' (ASC) of resources. The 2008 ASCM is not
subject to challenge or review in a section 7(i) proceeding.
Determinations of the ASCs of participating utilities are made in
separate processes conducted pursuant to the ASCM. Those processes
began with ASC filings on July 1, 2024, and will conclude in July 2025,
with the publication of the Final ASC Reports.
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
visit or revisit the appropriateness or reasonableness of the 2008 ASCM
or of any of the ongoing ASC determinations.
7. 2012 Residential Exchange Program Settlement Agreement (2012 REP
Settlement)
On July 26, 2011, the Administrator executed the 2012 REP
Settlement, which resolved longstanding litigation over Bonneville's
implementation of the Residential Exchange Program (REP) under section
5(c) of the Northwest Power Act, 16 U.S.C. 839c(c). The Administrator's
findings regarding the legal, factual, and policy challenges to the
2012 REP Settlement are explained in the REP-12 Record of Decision
(REP-12 ROD). The Administrator's decisions regarding the 2012 REP
Settlement and REP-12 ROD were upheld by the U.S. Court of Appeals for
the Ninth Circuit in Ass'n of Pub. Agency Customers v. Bonneville Power
Admin., 733 F.3d 939 (9th Cir. 2013). Challenges to Bonneville's
decision to adopt the 2012 REP Settlement and implement its terms in
Bonneville's rate proceedings are not within 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
visit or revisit in this rate proceeding Bonneville's determination to
adopt the 2012 REP Settlement or its terms.
8. Service to the Direct Service Industries (DSIs)
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,

[[Page 89629]]

or other evidence that seeks in any way to revisit the appropriateness
or reasonableness of Bonneville's decisions regarding service to the
DSIs, including Bonneville's decision to offer contracts to the DSIs
and the method, level of service, or other terms embodied in the
existing DSI contracts.
9. Operation and Maintenance of the Power and Transmission Systems
Bonneville operates and maintains the Federal Columbia River
Transmission System and, in coordination with other Federal entities,
the FCRPS in accordance with good utility practice and with applicable
reliability standards and operating requirements. Bonneville's power
and transmission systems operation and maintenance practices and
protocols, such as dispatcher standing orders, operating instructions,
reliability of the system, compliance programs, and other operating
requirements are non-rate matters.
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 issues regarding operation and maintenance practices and
protocols.
10. Terms and Conditions of Transmission Service
Bonneville offers and provides transmission services, including
interconnection service and ancillary and control area services, in
accordance with the terms and conditions specified in its open access
transmission tariff (Tariff), business practices, and applicable
contracts. In addition to and concurrent with this rate proceeding,
Bonneville is initiating the TC-26 proceeding to modify the terms and
conditions of the Tariff. Bonneville's business practices provide
implementation details for the Tariff. Bonneville's decisions regarding
the business practices are determined in other forums and follow the
procedures in Bonneville's Business Practice Process posted on its
website. The Tariff terms and conditions, business practices, and the
contracts and contract disputes between Bonneville and its customers
are outside the scope of the BP-26 rate proceeding.
Pursuant to section 1010.4(b)(8) of the Rules of Procedure, and
except as otherwise provided in this section II.A.10, the Administrator
directs the Hearing Officer to exclude from the record all argument,
testimony, or other evidence that seeks in any way to address issues
regarding terms and conditions of transmission service, including
interconnection service, and ancillary and control area services. This
includes, but is not limited to, argument, testimony, or other evidence
regarding Bonneville's decisions whether to offer particular
transmission services, the terms and conditions for participating in
the Western Energy Imbalance Market (EIM), the procedures and standards
for modifications to Bonneville's Tariff or business practices, and
whether to include certain terms and conditions in the Tariff or in
business practices.
Bonneville is proposing to adopt a Generator Interconnection
Withdrawal Charge in this proceeding in order to implement certain
modifications to the Standard Large Generator Interconnection
Procedures in the Tariff proposed in the TC-26 proceeding. The
exclusion in this section does not extend to testimony or other
evidence related to Tariff terms and conditions that may be necessary
to provide context for the proposed adoption of the general rate
schedule provision for the Generator Interconnection Withdrawal Charge
in the BP-26 proceeding.
11. Oversupply Management Protocol
The proposed OS-26 Oversupply rate is a formula rate designed to
recover Bonneville's actual oversupply costs incurred during the BP-26
rate period. Bonneville incurs oversupply costs pursuant to the
Oversupply Management Protocol, Attachment P of Bonneville's Tariff.
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 the terms of the Oversupply Management Protocol; whether the
Oversupply Management Protocol complies with orders of the Commission;
and whether Bonneville took all actions to avoid using the Oversupply
Management Protocol, including the payment of negative prices to
generators outside of Bonneville's balancing authority area. This
exclusion does not extend to issues concerning the rates for recovering
the costs of the Oversupply Management Protocol.
12. Market Initiatives and Regional Carbon Policies
Bonneville is engaged in a number of market initiatives that are
outside of the scope of this proceeding. These include (1) the Western
EIM, which is an extension of the California Independent System
Operator's (CAISO) real-time market; (2) the Western Resource Adequacy
Program (WRAP); (3) regional cap-and-trade policies, and (4)
consideration of CAISO's extended day-ahead market proposal and
Southwest Power Pool's Markets+ proposal.
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
raise or revisit Bonneville's decision to join the EIM or the WRAP, or
review or address Bonneville's position on regional cap-and-trade
policies or Bonneville's consideration of CAISO's extended day-ahead
market proposal or Southwest Power Pool's Markets+ proposal. This
exclusion does not extend to issues concerning rate incentives and the
recovery or distribution of EIM-related, carbon-related, and WRAP-
related costs or credits, which are within the scope of the BP-26
proceeding.
13. Potential Environmental Impacts, Biological Constraints, and
Related Operations
Environmental impacts are addressed in a National Environmental
Policy Act (NEPA) process Bonneville conducts concurrent with the rate
proceeding. See section II.B of this notice. In addition, biological
constraints on hydropower operations are determined outside of the rate
case through processes such as intra-agency consultations under the
Endangered Species Act, 16 U.S.C. 1536(a)(2). Finally, implementation
of the decision regarding operations, maintenance and configuration
(management) of the Columbia River System evaluated in the Columbia
River System Operations Environmental Impact Statement (CRSO EIS) and
associated joint ROD with the U.S. Army Corps of Engineers and Bureau
of Reclamation, and associated biological opinions, court orders, and
other agreements, are also not issues to be addressed in this
proceeding.
Pursuant to section 1010.4(a)(8) of Bonneville's Procedures, the
Administrator directs the Hearing Officer to exclude from the record
all argument, testimony, or other evidence that seeks in any way to
address the potential environmental impacts of the rates being
developed in this rate proceeding, potential biological effects of
operations modeled in the proceeding, the appropriate hydroelectric
constraints defined in these environmental compliance processes, or the
operations, maintenance, configuration, (management) assumptions,
studies, decisions, or matters addressed in the CRSO EIS or CRSO EIS
joint ROD and

[[Page 89630]]

associated biological opinions, court orders, and other agreements.
14. 2029 Public Rate Design Methodology
The 2029 Public Rate Design Methodology is a rate methodology that
will apply to the establishment of the Priority Firm Power (PFp) rate
beginning in FY 2029 (October 1, 2028). The PRDM will replace the TRM
upon the TRM's expiration. Concurrent with the BP-26 rate proceeding,
BPA is conducting a section 7(i) process (PRDM-26) to establish the
terms and provisions of the PRDM. Arguments, evidence, or issues
related to the PRDM are not within the scope of this proceeding.
Pursuant to section 1010.4(a)(8) of Bonneville's Procedures, the
Administrator directs the Hearing Officer to exclude from the record
all argument, testimony, or other evidence that seeks in any way to
address the PRDM.
15. Provider of Choice Contract Policy, Policy Record of Decision, and
Contract Negotiations
Under section 5(b) of the Northwest Power Act, Bonneville is
required to offer a contract for the sale of firm power to meet the net
requirements of eligible customers requesting such a contract. The
current form of that agreement, colloquially called the Regional
Dialogue Contract, expires on September 30, 2028, which occurs at the
end of the BP-26 rate period. For the better part of two years, BPA,
its customers, and other interested parties have been discussing the
terms, conditions, products, and policies that will form the basis of
the follow-on section 5(b) power sales contract, known colloquially as
the Provider of Choice Contract. The Provider of Choice Contract will
apply to the section 5(b) power sales from Bonneville for the period of
October 1, 2028-September 30, 2044. To support the development of the
Provider of Choice Contract, on March 21, 2024, Bonneville issued a
Policy (Provider of Choice Policy) and Record of Decision (Provider of
Choice ROD). The Provider of Choice Policy and ROD describe the
policies, primary elements, and key provisions of the new section 5(b)
Provider of Choice Contract. Following the publication of the Provider
of Choice Policy and ROD, in April 2024, Bonneville commenced a series
of public workshops to discuss and negotiate the draft terms and
provisions of the Provider of Choice Contract. Those workshops are
ongoing.
The Provider of Choice Policy, ROD, contract, and negotiations, and
any issue pertaining to those matters, are outside of the scope of the
BP-26 rate proceeding. Pursuant to section 1010.4(a)(8) of Bonneville's
Procedures, the Administrator directs the Hearing Officer to exclude
from the record all argument, testimony, or other evidence that seeks
in any way to address the Provider of Choice Policy, ROD, contract, and
negotiations, as well as any issue or argument pertaining to those
matters.
16. Capacity for Ancillary and Control Area Services
Bonneville is forecasting a significant increase in balancing
reserve capacity needs to provide certain Ancillary and Control Area
Services. These capacity needs are expected to exceed the capability of
the FCRPS during the BP-26 rate period. Bonneville is still exploring
methods for filling the balancing reserve capacity shortfall outside of
the BP-26 rate proceeding.
Pursuant to section 1010.4(a)(8) of Bonneville's Procedures, the
Administrator directs the Hearing Officer to exclude from the record
all argument, testimony, or other evidence that seeks in any way to
specify the method or operation Bonneville should adopt in order to
address the balancing reserve shortfall, or that seeks to determine the
operation or capability of the FCRPS to provide additional balancing
reserve capacity.

B. The National Environmental Policy Act

Bonneville is in the process of assessing the potential
environmental effects of its proposed power and transmission rate
adjustments, consistent with NEPA. The NEPA process is conducted
separately from the rate proceeding. As discussed above, all evidence
and argument addressing potential environmental impacts of the rate
adjustments being developed in the BP-26 rate proceeding are excluded
from the rate proceeding record. Instead, comments on environmental
effects should be directed to the NEPA process.
Based on its most current assessment of the proposed power and
transmission rate adjustments, Bonneville 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 Bonneville. More
specifically, the proposal appears to solely involve changes to
Bonneville's rates and other cost recovery and management mechanisms to
ensure that there are sufficient revenues to meet Bonneville's
financial obligations and other costs and expenses, while using
existing generation sources operating within normal limits. As such, it
appears this rate proposal 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, Bonneville is still assessing the proposal, and,
depending upon the ongoing environmental review, Bonneville 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#aac1c9cdd8cbc4cdcfeac8dacb84cdc5dc">[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 Bonneville's NEPA compliance staff in the NEPA
process that is being conducted for this proposal.

Part III--Public Participation in BP-26

A. Interventions

Any entity or person intending to become a party in the BP-26
proceeding must file a petition to intervene through Bonneville'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#ed8e9a8a9f848b8b8883ad8f9d8cc38a829b">[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 Bonneville's
secure website by the deadline in the procedural schedule adopted by
the Hearing Officer. Late interventions are strongly disfavored.
Petitions to intervene must conform to the format and content
requirements in sections 1010.6 and 1010.11 of Bonneville'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.

[[Page 89631]]

The Hearing Officer will rule on all petitions to intervene.
Bonneville 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.
Bonneville 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

Bonneville distinguishes between ``participants in'' and ``parties
to'' the BP-26 proceeding. Separate from the formal hearing process,
Bonneville will accept written comments, views, opinions, and
information from participants who have not intervened in the BP-26
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. Bonneville customers whose rates
are subject to this proceeding, or their affiliated customer groups,
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 February 7,
2025, to be included in the record and considered by the Administrator.
Participants should submit comments 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. All comments should contain the designation ``BP-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 Bonneville 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.
The Administrator will develop final rates based on the record and
such other materials and information as may have been submitted to or
developed by the Administrator. The Final ROD will be made available to
all parties. Bonneville will file its rates with the Commission for
confirmation and approval after issuance of the Final ROD.

Part IV--Summary of Rate Proposals

A. Summary of the Power Rate Proposal

Bonneville is proposing four primary rates for Federal power sales
and services, along with general rate schedule provisions to implement
such rates.
1. Priority Firm Power Rate (PF-26)
The PF rate schedule applies to sales of firm power to public body,
cooperative, and Federal agency customers to meet their ``general
requirements'' pursuant to section 7(b) of the Northwest Power Act. The
PF Public rate applies to the general requirements portion of a
customer's Firm Requirements Power under CHWM contracts with customers
taking Load Following, Block, or Slice/Block service. Consistent with
the TRM, Tier 1 rates include three charges: (1) customer charges, (2)
a demand charge, and (3) a load shaping charge. In addition, two Tier 2
Short-Term rates are proposed, the Short-Term and Load Growth rates.
These rates would be applicable to customers that have elected to
purchase power from Bonneville for service to their Above-RHWM Load.
The proposed average Tier 1 non-Slice product rate impact, which
represents the majority of Bonneville's power sales, is 9.8 percent
higher than its BP-24 equivalent rate. Customer-specific results will
vary around this average impact, with some customers experiencing
higher rate impacts and some lower rate impacts, based on the specific
situation of a particular customer. A customer's overall rate impact--
the rate impact that includes the power it purchases from Bonneville at
Tier 1 and Tier 2 rates--will also vary based on the specific situation
of the particular customer, the amount of Above-RHWM Load the customer
has, and how much of that Above-RHWM Load the customer elected
Bonneville to serve at Tier 2 rates. With regard to BPA's Tier 2 rates,
Bonneville is proposing new electable Tier 2 rate options--a fixed rate
option and a formula rate option.
The Base PF Exchange rate and its associated surcharges apply to
sales pursuant to Residential Purchase and Sale Agreements and
Residential Exchange Program Settlement Implementation Agreements with
regional utilities that participate in the REP established under
section 5(c) of the Northwest Power Act, 16 U.S.C. 839c(c). The Base PF
Exchange rate establishes the threshold for participation in the REP;
only utilities with ASCs above the appropriate Base PF Exchange rate
may receive REP benefits. If a utility meets the threshold, a utility-
specific PF Exchange rate will be established in this proceeding for
each eligible utility. The utility-specific PF Exchange rate is used in
calculating the REP benefits each REP participant will receive during
FY 2026-2028.
The proposed PF-26 rate schedule also includes resource support
services rates for customers with non-Federal resources, and a melded
PF rate for Public customers that would have been applicable to
customers had any elected power sales contracts other than CHWM
contracts for firm requirements service. No PF Public customer has its
general requirements power served at anything other than a CHWM
contract.
2. New Resource Firm Power Rate (NR-26)
The NR-26 rate applies to firm power sales to investor-owned
utilities (IOUs) to meet their net requirements pursuant to section
5(b) of the Northwest Power Act. The NR-26 rate is also applied to
sales of firm power to the portion of a Public customer's Firm
Requirements Power that is used to serve new large single loads. In
addition, the NR rate schedule includes rates for services to support
Public customers serving new large single loads with non-Federal
resources. In the BP-26 Initial Proposal, Bonneville is forecasting 18
aMW per year of power sales to one PF Public customer at the NR rate.
One of the services Bonneville provides to support Public customers
with serving new large single loads with non-Federal resources is the
NR Energy Shaping Service (NR ESS). Bonneville provided this service in
past rate periods but is proposing to revise this service for the BP-26
rate period. BPA is also proposing to remove the NR Flattening Service
from the rate schedule.
3. Industrial Firm Power Rate (IP-26)
The IP rate is applicable to firm power sales to DSI customers
authorized by section 5(d)(1)(A) of the Northwest Power Act, 16 U.S.C.
839c(d)(1)(A). In the BP-26 Initial Proposal, Bonneville is

[[Page 89632]]

forecasting 11 aMW per year of power sales to one DSI customer at the
IP rate.
4. Firm Power and Surplus Products and Services Rate (FPS-26)
The FPS rate schedule is applicable to sales of various surplus
power products and surplus transmission capacity for use inside and
outside the Pacific Northwest. The rates for these products are
negotiated between Bonneville and the purchasers. The FPS-26 rate
schedule also includes rates for customers with non-Federal resources;
the Unanticipated Load Service rate; rates for other capacity, energy,
and scheduling products and services; rates for reserve services for
use outside the Bonneville balancing authority area; and real power
losses rates for customers that elect financial settlement of real
power losses.
5. Power General Rate Schedule Provisions (GRSPs)
The Power GRSPs include general rate schedule terms and conditions
applicable to Bonneville's power rates. In addition, the Power GRSPs
contain special rate adjustments, charges, credits, and pass-through
mechanisms for specific events and customer circumstances. Among other
matters covered by the Power GRSPs are provisions related to
calculating rates, resource support services, charges associated with
transfer service, risk adjustments, Slice True-up, the Residential
Exchange Program, conservation, payment options, and other charges. Of
particular note for BP-26 is Bonneville's proposal to rework the
Unauthorized Increase Charge and proposing to remove the Transfer
Service Delivery Charge.

B. Summary of the Transmission Rate Proposal

Bonneville is proposing separate transmission rates for its network
segment, intertie segments, ancillary and control area services, and
for various specific purposes.
1. Network Rates
The Network Integration Transmission Rate (NT-26) applies to
customers taking network integration service, which allows customers to
flexibly serve retail load.
The Point-to-Point Rate (PTP-26) is a contract demand rate that
applies to customers taking Point-to-Point service on Bonneville's
network. Point-to-Point service provides customers with service from
identified points of receipt to identified points of delivery. There
are separate rates for long-term firm service and various increments of
firm and non-firm short-term service.
2. Intertie Rates
The Southern Intertie Rate (IS-26) is a contract demand rate that
applies to customers taking Point-to-Point service on the Southern
Intertie.
The Montana Intertie Rate (IM-26) applies to customers taking
Point-to-Point service on the Eastern Intertie and that are not parties
to the Montana Intertie Agreement.
The Townsend-Garrison Transmission Rate (TGT-26) applies to parties
to the Montana Intertie Agreement taking firm service over Bonneville's
section of the Montana Intertie.
The Eastern Intertie Rate (IE-26) applies to parties to the Montana
Intertie Agreement taking non-firm service on the portion of the
Eastern Intertie capacity that exceeds Bonneville's firm transmission
rights.
3. Other Transmission Rates and General Rate Schedule Provisions
The Use-of-Facilities Rate (UFT-26) establishes a formula rate for
the use of a specific facility based on the annual cost of that
facility.
The Advance Funding Rate (AF-26) allows Bonneville to collect the
capital and related costs of specific facilities through an advance-
funding mechanism.
The Regional Compliance Enforcement and Regional Coordinator rate
(RC-26) recovers costs assessed to Bonneville for regional reliability
compliance monitoring, enforcement, and reliability coordination
services.
The Oversupply Rate (OS-26) recovers the costs Bonneville incurs to
displace generation under the Oversupply Management Protocol,
Attachment P to Bonneville's Tariff.
Other proposed transmission rates and charges include: a
Reservation Fee for customers that postpone the service commencement
date of transmission service; incremental cost rates for transmission
service requests that require new facilities; a penalty charge for
failure to comply with dispatch, curtailment, redispatch, or load
shedding orders; an Unauthorized Increase Charge for use of the
transmission system in excess of contracted-for demand; and rate
adjustment mechanisms consistent with Bonneville's Financial Policies.
Bonneville proposes a new GRSP for a ``Generator Interconnection
Withdrawal Charge'' that applies to the removal of interconnection
requests at certain stages of the Large Generator Interconnection
Procedures in the Tariff.
Bonneville also proposes to discontinue certain transmission rates
and charges in the current (BP-24) rate schedules. The FPT-24.1 rate
applies to a ``legacy'' transmission service agreement that will no
longer be in effect in the BP-26 rate period. The FPT rate will no
longer be necessary once the FPT agreement expires. The Utility
Delivery Charge applies to deliveries over low-voltage facilities on
Bonneville's system that have been segmented to the Utility Delivery
segment. BPA proposes elimination of the Utility Delivery Charge in
conjunction with the proposal to segment the low voltage facilities to
the network segment.
4. Ancillary Service and Control Area Service Rates
The BP-26 Transmission Rates Proposal includes rates for
Bonneville's Ancillary and Control Area Services, along with certain
updates to those rates and new rates. Bonneville is proposing two new
rates related to Western EIM participation and modifications to three
existing rates.
Bonneville proposes a new rate to account for balancing costs that
are not settled by the EIM. At times, there is a discrepancy between
the schedules used by the EIM for settlement and schedules submitted to
Bonneville. If the schedules do not match, there is an additional use
of balancing reserves that the EIM does not account for. The proposed
new rate is intended to account for this use of balancing reserves. In
addition, Bonneville is proposing a new rate to recover costs related
to Bid Cost Recovery charges in the EIM that Bonneville did not
previously allocate to customers.
Bonneville also proposes modifications to the Variable Energy
Resource Balancing Service (VERBS) rate to allow for the recovery of
costs related to balancing reserve purchases. Bonneville is projecting
a shortage of the capacity needed to provide VERBS throughout the rate
period, as Bonneville is projecting a significant increase in
interconnections of Variable Energy Resources during the rate period.
As a result, Bonneville will need to obtain capacity to fill the
balancing reserve shortfall. As the method for filling the balancing
reserves shortfall is currently unknown, Bonneville is proposing a
formula rate intended to allow for the recovery of costs related to
whatever method by which Bonneville is able to fill the shortfall.
Additionally, Bonneville proposes modifications to the Persistent
Deviation Penalty Charge to clarify rate language and to the New
Technology

[[Page 89633]]

Pilot to expand the scope of the pilot to include additional new
technologies.

C. Risk Mitigation Tools

Bonneville is proposing three rate adjustment mechanisms for BP-26
power and transmission rates to mitigate the risk that actual costs and
revenues will differ from forecast over the rate period and to protect
the agency's solvency and strong credit rating. These mechanisms
implement Bonneville's Financial Reserves Policy (FRP) and provide for
adjustments to a business line's rates or other action in the event the
business line's Financial Reserves fall below or exceed certain
thresholds.
The Cost Recovery Adjustment Clause (CRAC) will adjust rates upward
to generate additional revenue within the rate period if business line
Financial Reserves fall below a defined lower threshold.
The Financial Reserves Policy Surcharge (FRP Surcharge) will also
adjust rates upward to generate additional revenue within the rate
period if business line Financial Reserves fall below a defined lower
threshold.
Finally, the Reserves Distribution Clause (RDC) will trigger if
Financial Reserves exceed upper thresholds for the business line and
the agency as a whole. If the RDC triggers, Bonneville will consider
the amount of Financial Reserves above the threshold for rate relief or
investment in high-value, business line-specific purposes such as debt
retirement. The process for determining the RDC amounts (which is
described in the power and transmission General Rate Schedule
Provisions) is also being revised.
Bonneville is proposing to maintain risk-related provisions and
proposes to include additional Planned Net Revenues for Risk (PNRR) in
power rates if the average effective PF Public Non-Slice Tier 1 rate is
no greater than 38.85 mills/kWh. First, for FY 2026, the three Power
risk adjustment clauses will not be applicable to the portion of a
customer's service at PF Tier 1 rates that has been converted from a
Slice product to a non-Slice product beginning October 1, 2025.
However, the three risk adjustment clauses will apply to such
customer's entire service at PF Tier 1 rates for FY 2026 and 2027.
Second, any FY 2026, 2027 or 2028 Power RDC will automatically provide
a dividend distribution in an amount equal to the lesser of the RDC
amount and the amount of PNRR included in the BP-26 power rates. And
third, the caps on the Power and Transmission RDCs are removed for the
BP-26 rate period.

Part V--Proposed BP-26 Power Rate Schedules and BP-26 Transmission
Rates Schedules

Bonneville's proposed BP-26 Power Rate Schedules and BP-26
Transmission Rate Schedules, which includes Transmission, Ancillary,
and Control Area Services Rate Schedules, are a part of this notice and
are available on Bonneville's website at <a href="https://www.bpa.gov/BP26">https://www.bpa.gov/BP26</a>. The
BP-26 Partial Rates Settlement Agreement is also posted at this
website.

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. 2024-26244 Filed 11-12-24; 8:45 am]
BILLING CODE 6450-01-P

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