Subject: Proposed Adjustment to the ACS-02 Generation Imbalance
[Federal Register: April 17, 2002 (Volume 67, Number 74)]
[Notices]
[Page 18871-18875]
>From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr17ap02-50]
-----------------------------------------------------------------------
DEPARTMENT OF ENERGY
Bonneville Power Administration
[BPA File No. GI-02]
Proposed Adjustment to the ACS-02 Generation Imbalance Service
Rate
AGENCY: Bonneville Power Administration (BPA), Department of Energy
(DOE).
ACTION: Notice of Proposed Adjustment to the Rate for Generation
Imbalance Service, Schedule ACS-02.
-----------------------------------------------------------------------
SUMMARY: By this notice, BPA's Transmission Business Line (TBL)
announces its proposal to revise the ACS-02 Generation Imbalance
Service rate (rate) found in its 2002 Transmission and Ancillary
Service Rate Schedules. BPA proposes to eliminate the 100 mills per
kilowatthour minimum rate for wind resources for imbalances that exceed
the Generation Imbalance Deviation Band and where energy delivered in a
schedule hour is less than the energy scheduled. The revision will
remove an impediment to continued development of wind resources in the
BPA Control Area.
DATES: A proposed schedule for the proceeding is supplied in
Supplementary Information, Section I.B. Petitions to Intervene must be
received by BPA at the address below no later than 12:00 noon on April
22, 2002. All references to timelines are Pacific prevailing time. At
10:00 a.m. on April 24, 2002, a scheduling conference will be held in
the BPA Rate Hearing Room to discuss the proposed schedule. The rate
adjustment proceeding will begin with a pre-hearing conference at 9:00
a.m. on April 25, 2002. Persons intending to intervene in the
proceeding as a party must appear in person at the pre-hearing
conference. Written comments by non-party participants must be received
by BPA no later than 4:30 p.m. May 28, 2002, at the address below.
ADDRESSES: BPA File No. GI-02. BPA requests that all comments and
documents intended to become a part of the Official Record in this
proceeding refer to this file number.
Persons wishing to become a party to the proceeding must notify BPA
in writing of their intention to do so. Petitions to Intervene as a
party in the proceeding must be submitted to Judy Cornish, Hearing
Clerk--L-7, Bonneville Power Administration, P.O. Box 3621, 905 NE 11th
Ave., Portland, OR, 97208-3621. In addition, petitioners must
concurrently serve a copy of their Petition to Intervene on BPA's
Office of General Counsel, directed to Eric H. Carter, Bonneville Power
Administration, Office of General Counsel--LT-7, P.O. Box 3621, 905
N.E. 11th Ave., Portland, OR, 97208-3621.
Written comments must be submitted to BPA Communications--KC-7,
Comments, Bonneville Power Administration, P.O. Box 12999, Portland,
Oregon 97212. Comments may also be sent by facsimile to (503) 230-3285,
or by e-mail to comment@bpa.gov.
The pre-hearing conference on April 25, 2002, will be held in the
BPA Rate Hearing Room, 2nd Floor, Room 223, 911 NE 11th Ave., Portland,
Oregon. The Hearing Officer will establish a final schedule at the pre-
hearing conference. During or after the pre-hearing conference the
Hearing Officer will also issue orders addressing special rules of
practice to govern the proceedings, document handling, and discovery.
BPA's Initial Proposal to revise the rate will be provided at the
April 24th scheduling conference and at the April 25th pre-hearing
conference and will be available for public viewing after that date at
BPA's Public Information Center, BPA Headquarters Building, 1st Floor,
905 NE 11th Avenue, Portland, Oregon. The documents will also be
available on BPA's Web site at www.transmission.bpa.gov/giratecase.
FOR FURTHER INFORMATION CONTACT: Information related to this proceeding
may also be obtained by telephone at (503) 230-4413 or toll free at 1-
800-622-4519. Ms. Mary A. Dalton, Transmission Rates Manager, is the
official responsible for this rate case. Ms. Dalton may be contacted at
P.O. Box 491, 5411 NE Hwy 99, Vancouver, WA 98663.
SUPPLEMENTARY INFORMATION:
Table of Contents
Part I: Introduction and Procedural Background
A. Relevant Statutory Provisions Governing This Rate Proceeding
B. Proposed Schedule Concerning This Rate Proceeding
Part II: Purpose and Scope of Hearing
A. The Circumstances Necessitating Adjustment
B. Scope
C. NEPA Evaluation
Part III: Public Participation
A. Distinguishing Between ``Participants'' and ``Parties''
B. Petitions for Intervention
C. Developing the Record
Part IV: Summary of the Proposal
Part I--Introduction and Procedural Background
The Pacific Northwest Electric Power Planning and Conservation Act
(Northwest Power Act) provides that BPA must establish and periodically
review its rates so that they are adequate to recover, in accordance
with sound business principles, the costs associated with the
acquisition, conservation, and transmission of electric power, and to
recover the Federal investment in the Federal Columbia River Power
System (FCRPS) and other costs incurred by BPA. Section 7(i) of the
Northwest Power Act requires that BPA's rates be established based on
the record in a formal hearing (proceeding).
By this notice, BPA's Transmission Business Line (TBL) announces
its proposal to revise the ACS-02 Generation Imbalance Service rate
(rate) found in its 2002 Transmission and Ancillary Service Rate
Schedules. Generation Imbalance Service is taken when there is a
difference between scheduled and actual energy delivered from a
generation resource in the BPA Control Area during a schedule hour. The
existing Generation Imbalance Service rate was established in BPA's
2002 Transmission and Ancillary Service rate proceeding and
subsequently was approved by the Federal Energy Regulatory Commission
(FERC) for use during the October 1, 2001 to September 30, 2003 rate
period.\1\ For imbalances outside the Generation Imbalance Deviation
Band, the current rate charges the greater of: (i) BPA's incremental
cost for energy, plus 10 percent, or (ii) 100 mills per kilowatthour
when the actual energy delivered from a resource in a schedule hour is
less than the energy scheduled for that hour. The 100 mills per
kilowatthour minimum rate is designed to encourage accurate scheduling
by generators. TBL proposes to eliminate the 100 mills per kilowatthour
minimum rate when applying the rate to wind generation resources
because wind generators are not currently able to accurately schedule
their output during each delivery hour. This proposed change will
result in the Generation Imbalance Service rate for wind resource
imbalances outside the Deviation Band being BPA's incremental cost for
energy plus 10 percent when delivered energy in an hour is less than
scheduled energy. All other aspects of the existing Generation
Imbalance Service rate are unchanged.
---------------------------------------------------------------------------
\1\ FERC later approved BPA's request to accelerate the
effective date to July 1, 2001.
---------------------------------------------------------------------------
A. Relevant Statutory Provisions Governing This Rate Proceeding
Section 7 of the Northwest Power Act, 16 U.S.C. 839e, contains a
number of general directives that the BPA Administrator must consider
in establishing rates for the sale of electric energy and transmission
capacity. In particular, section 7(a)(1), 16 U.S.C. 839e(a)(1),
provides in part that:
Such rates shall be established and, as appropriate, revised to
recover, in accordance with sound business principles, the costs
associated with the acquisition, conservation, and transmission of
electric power, including the amortization of the Federal investment
in the Federal Columbia River Power System
[[Page 18873]]
(including irrigation costs required to be repaid out of power
revenues) over a reasonable period of years and the other costs and
expenses incurred by the Administrator pursuant to this Act and
other provisions of law.
Rates established by BPA are effective on an interim or final basis
when approved by the Federal Energy Regulatory Commission (FERC). 16
U.S.C. 839e(a)(2). In addition to the Northwest Power Act, BPA
ratemaking is governed by the Federal Columbia River Transmission
System Act, 16 U.S.C. 838 et seq., and the Flood Control Act of 1944,
16 U.S.C. 825 et seq. The Federal Power Act, 16 U.S.C.
212(i)(1)(B)(ii), provides additional guidance regarding BPA's
ratemaking.
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 issuance of a Federal Register
Notice announcing the proposed rates; one or more hearings; the
opportunity to submit written views, supporting information, questions,
or arguments; and a decision by the Administrator based on the record
developed during the hearing process.
This proceeding is governed by the Procedures Governing Bonneville
Power Administration Rate Hearings (BPA's Procedures), 51 FR 7611
(March 5, 1986), which implement and expand upon these statutory
requirements.
Pursuant to Rule 1010.3(c) of BPA's Procedures, this hearing will
be conducted as a 90-day Expedited Rate Proceeding under section
1010.10 of BPA's Procedures. The expedited procedures will be used
rather than the procedures for General Rate Proceedings (Rule 1010.9),
which are intended for use when the Administrator proposes to revise
all, or substantially all, of BPA's wholesale power and transmission
rates.
The Administrator has elected to do an expedited rate procedure
because this proceeding is limited in scope, involves the revision of a
single rate, and the rate revision adopted as a result of this
proceeding, if any, will be in effect for one year, the remainder of
the current rate period for BPA's 2002 Transmission and Ancillary
Services Rate Schedules. A 90-day rate proceeding will be adequate to
develop a full and complete record, and receive public comment and
argument related to the proposed rate, upon which the Administrator
will establish the final rate.
B. Proposed Schedule Concerning This Rate Proceeding
BPA expects to issue a final Record of Decision related to this
rate revision on July 15, 2002. The following proposed schedule is
provided for informational purposes. The Hearing Officer will establish
a final schedule at the pre-hearing conference.
------------------------------------------------------------------------
Date Action
------------------------------------------------------------------------
April 22.................................. Deadline for Petitions to
Intervene (Noon).
April 24.................................. Scheduling Conference.
April 25.................................. Pre-hearing Conference and
Filing of BPA's Direct
Case.
May 10.................................... Parties File Direct Cases.
May 28.................................... Close of Participant
Comments.
May 31.................................... Litigants File Rebuttal
Testimony.
June 13................................... Cross-Examination.
June 18................................... Initial Briefs Filed.
June 28................................... BPA Files Draft Record of
Decision.*
July 8.................................... Parties File Briefs on
Exceptions, if applicable.
July 15................................... Administrator Issues Final
Record of Decision.
------------------------------------------------------------------------
* Pursuant to 1010.10(c) of BPA's Procedures, oral argument will not be
heard in expedited rate proceedings unleess all parties agree to
subtitute Oral Arugment for a brief on exceptions.
The procedural schedule established for Docket No. GI-02 will
provide an opportunity for interested persons to review BPA's proposed
rate adjustment, to participate in the rate hearing, and to submit oral
and written comments.
Part II--Purpose and Scope of Hearing
The purpose of the hearing is to revise the ACS-02 Generation
Imbalance Service charge under BPA's 2002 Transmission and Ancillary
Service Rate Schedules. BPA proposes to eliminate the 100 mills per
kilowatthour minimum rate for wind resources for imbalances that exceed
the Generation Imbalance Deviation Band and where energy delivered in a
schedule hour is less than the energy scheduled.
A. The Circumstances Necessitating Adjustment
TBL's ACS-02 Ancillary Services and Control Area Services Rate
Schedule includes a Control Area Service Rate for Generation Imbalance
Service (see ACS-02, Section III.B). The current ACS-02 Generation
Imbalance Service rate schedule charges the greater of BPA's
incremental cost plus 10 percent or 100 mills per kilowatthour for
imbalances outside the Deviation Band when the actual energy delivered
from a resource in a schedule hour is less than the energy scheduled
for that hour. The 100 mills per kilowatthour minimum charge is
designed to encourage generators to operate their resources so that the
difference between scheduled and actual energy delivered is within the
Deviation Band. Wind resource developers and operators assert that they
are not able to operate their resources to schedule with sufficient
accuracy to avoid incurring substantial Generation Imbalance Service
charges, and thus, wind resources cannot respond to this rate design.
TBL's proposal to eliminate the 100 mills per kilowatthour minimum rate
for wind resources in the ACS-02 Generation Imbalance Service rate
would result in the rate for these imbalances being BPA's incremental
cost plus 10 percent.
B. Scope
This section provides guidance to the Hearing Officer as to those
matters that are within the scope of this transmission rate proceeding
and those that are outside the scope of this proceeding.
Pursuant to Rule 1010.3(f) of BPA's Procedures, the Administrator
directs the Hearing Officer to limit the scope of this hearing to the
rate adjustment proposed herein. No other issues will be considered in
this proceeding, including without limitation: (1) Issues related to
any other rates adopted in BPA's 2002 Transmission and Ancillary
Service rates proceeding; (2) other rates within the ACS-02 rate
schedule; (3) aspects of the existing Generation Imbalance Service rate
other than those relating to the rate adjustment proposed herein; (4)
the General Rate Schedule Provisions; (5) revenue requirements; (6)
rate design issues; (7) segmentation studies; and (8) transmission rate
studies or other rate issues. Further, no issues relating to BPA's Open
Access Transmission Tariff will be considered in this proceeding. The
Hearing Officer will interpret the scope of this proceeding in the
narrowest possible manner.
C. NEPA Evaluation
BPA has assessed the potential environmental effects of its rate
proposal, as required by the National Environmental Policy Act (NEPA).
In the Business Plan Environmental Impact Statement (Business Plan EIS)
BPA evaluated the environmental impacts of a range of business
structure alternatives that included, among other things, various
combinations of rate designs and resulting rate levels for BPA's
transmission services. In August 1995, the BPA Administrator issued a
Record of Decision (Business Plan ROD) that adopted the Market-Driven
Alternative from the Business Plan Final EIS completed in June 1995. In
the Business Plan ROD, the Administrator committed to avoid the
environmental impacts from new generation resources by not discouraging
renewable resources. This rate proposal would reduce the
[[Page 18874]]
additional environmental impacts associated with non-renewable
resources, and it would remove the unintended burden BPA's current
Generation Imbalance Service rate structure imposes on wind resources.
The impacts from these actions were examined in the Business Plan EIS.
Therefore, BPA expects the proposal to revise the ACS-02 rate for
Generation Imbalance Service under BPA's 2002 Transmission and
Ancillary Service Rate Schedules will fall within the scope of the
Market-Driven Alternative that was evaluated in the Final Business Plan
EIS and adopted in the Business Plan ROD.
Part III--Public Participation
A. Distinguishing Between Participants and Parties
BPA distinguishes between ``participants in'' and ``parties to''
its ratemaking hearings. Apart from the formal hearing process, BPA
will receive comments, views, opinions, and information from
``participants,'' who are defined in the BPA Procedures as persons who
may submit comments without being subject to the duties of, or having
the privileges of, parties. Participants' written comments will be made
part of the official record and considered by the Administrator.
Participants are not entitled to participate in the pre-hearing
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.
Written comments by participants will be included in the record if
they are received by BPA on or before May 28, 2002. Participants'
written views, supporting information, questions, and arguments should
be submitted to the Hearing Clerk at the address listed in the
ADDRESSES section of this Notice.
The second category of interest is that of a ``party'' as defined
in Rules 1010.2 and 1010.4 of the BPA Procedures. 51 FR 7611 (1986).
Parties may participate in any aspect of the hearing process after
intervening in the proceeding as provided below.
B. Petitions for Intervention
Persons wishing to become a party to BPA's rate proceeding must
notify BPA in writing of their interest. Petitioners may designate no
more than two representatives upon whom service of documents will be
made. Petitions to Intervene shall state the name and address of the
person requesting party status and the person's interest in the
hearing. Petitioners must also explain their interest in the outcome of
the hearing in sufficient detail to permit the Hearing Officer to
determine whether they have a relevant interest in the hearing to be a
party. Finally, petitioners must state whether they intend to file a
brief on exceptions.
Petitions to Intervene as a party in the rate proceeding are due to
the Hearing Officer by 12 noon on April 22, 2002. Petitions to
Intervene should be directed to the Hearing Clerk at the address
specified in the ADDRESSES section of this Notice. A copy of the
petition shall be served upon BPA's Office of General Counsel at the
address specified in the ADDRESSES section of this Notice.
Pursuant to Rule 1010.1(d) of the BPA Procedures, BPA waives the
requirement in Rule 1010.4(d) that an opposition to a Petition to
Intervene be filed and served 24 hours before the pre-hearing
conference. Any opposition to a Petition to Intervene may instead be
made orally at the pre-hearing conference. Any party, including BPA,
may oppose a Petition to Intervene. 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. The Hearing Officer will rule on all timely Petitions to
Intervene at the pre-hearing conference. Late interventions are
strongly disfavored. Oppositions to an untimely Petition to Intervene
shall be filed and served on BPA within two days after service of the
untimely petition.
C. Developing the Record
The hearing record will include, among other things, the
transcripts of the hearing, written materials entered into the record
by BPA and the parties, written comments from participants and other
materials accepted into the record by the Hearing Officer. The Hearing
Officer will then review, supplement (if necessary) and certify the
record to the BPA Administrator for decision.
The Hearing Officer, at his discretion, may schedule reasonable
opportunity for cross-examination following completion of the filing of
all parties and BPA's direct cases, and rebuttal testimony. Parties
will have the opportunity to file initial briefs at the close of the
evidentiary portion of the hearing. Parties may file briefs on
exceptions, or if all parties have previously agreed, oral argument may
be substituted for briefs on exceptions. If oral argument is scheduled
in lieu of briefs on exceptions, the argument will be transcribed and
made part of the record. After the close of the hearing, and following
submission of initial briefs, BPA will issue a Draft Record of Decision
(ROD).
The Administrator will develop the final rate for Generation
Imbalance Service based on the entire record, documents prepared
pursuant to the National Environmental Policy Act and other statutes
and such other material or information as may have been submitted to or
developed by the Administrator. The basis for the final adjustment will
be expressed in the Administrator's Final ROD, which shall be issued
July 15, 2002. The Administrator will serve copies of the Final ROD on
all parties and will file the final proposed rate adjustment, together
with the record, with the Federal Energy Regulatory Commission for
confirmation and approval.
BPA must continue to meet with customers in the ordinary course of
business during the rate proceeding. To comport with section 1010.7 of
BPA's Procedural Rules on ex parte communications, BPA will provide
notice of meetings involving rate proceeding issues to provide an
opportunity for participation by all parties to the proceeding. Such
meetings may be held on short notice and parties should be prepared to
devote necessary resources to fully participate in every aspect of the
rate proceeding.
Part IV--Summary of the Proposal
BPA proposes to revise the rate for Generation Imbalance Service by
eliminating the 100 mills per kilowatthour floor rate when actual
energy is less than scheduled energy for wind generation resources. The
revision will remove an impediment to continued development of wind
resources in the BPA Control Area.
Below is the proposed adjustment to the Generation Imbalance
Service rate. The proposed revision to the rate is the addition of the
second sentence in the first paragraph of section III.B.1.b.(i), below
(in italics). All capitalized terms have the meaning accorded them in
TBL's Open Access Transmission Tariff and 2002 Transmission and
Ancillary Service Rate Schedules. TBL intends to seek FERC approval of
the revised rate beginning October 1, 2002 and intends the revised rate
to remain in effect until September 30, 2003, the expiration date of
BPA's 2002 Transmission and Ancillary Service Rate Schedules.
Schedule ACS-02 Ancillary Services and Control Area Services Rate
Section III. Control Area Service Rates
B. Generation Imbalance Service
The rates below apply to generation resources in the BPA Control
Area if
[[Page 18875]]
Generation Imbalance Service is provided for in an interconnection
agreement or other arrangement. Generation Imbalance Service is taken
when there is a difference between scheduled and actual energy
delivered from generation resources in the BPA Control Area during a
schedule hour. The rates for this service differ depending upon whether
the Generation Imbalance occurs within the Generation Imbalance
Deviation Band or outside the Generation Imbalance Deviation Band. The
Generation Imbalance Deviation Band is + or -1.5% of the scheduled
amount of energy, or 2 MW, whichever is larger (absolute value).
1. Rates
a. For Imbalance Within the Generation Imbalance Deviation Band
BPA-TBL will maintain a deviation account showing the net
Generation Imbalance (the sum of positive and negative deviations from
schedule for each hour). Return energy must be scheduled to bring the
deviation account balance to zero each month. BPA-TBL will designate
the hours and amounts of return energy for each hour that will be
scheduled. The customer shall make the arrangements and submit the
schedule for the balancing transaction.
b. For Imbalance Outside the Generation Imbalance Deviation Band
i. When energy delivered in a schedule hour by the generation
resource, not including wind generation resources, is less than the
energy scheduled, the charge will be the greater of: (I) BPA's
incremental cost plus 10%, or (ii) 100 mills per kilowatthour. When
energy delivered in a schedule hour by a wind generation resource is
less than the energy scheduled, the charge will be BPA's incremental
cost plus 10%.
BPA's incremental cost will be based on an hourly energy index in
the PNW, if one exists. If one does not exist, an alternative index
will be based on: The Dow-Jones Mid-Columbia, California PX, or NYMEX
Mid-Columbia index prices. On September 30 each year, BPA-TBL will post
on the OASIS the index to be used for the ensuing fiscal year.
ii. When energy delivered by the generation resource is greater
than the scheduled amount, a credit equal to 90% of BPA's decremental
cost may be given for deviations.
2. Billing Factors
For each hour a Generation Imbalance occurs, the Billing Factor for
the rates specified in section 1.b. for Imbalance Outside the
Generation Imbalance Deviation Band, is:
a. The amount of energy that the customer delivers, in
kilowatthours, less than the lower limit of the Generation Imbalance
Deviation Band, or
b. The amount of energy the customer delivers, in kilowatthours, in
excess of the upper limit of the Generation Imbalance Deviation Band.
No credit will be given for an energy difference if: (a) The imbalance
was an Intentional Deviation (as determined by BPA-TBL); or (b) the
Federal System was in a Spill Condition at any time during the month.
Issued in Portland, Oregon, this 3rd day of April, 2002.
Stephen J. Wright,
Administrator and Chief Executive Officer, Bonneville Power
Administration.
[FR Doc. 02-9274 Filed 4-16-02; 8:45 am]
BILLING CODE 6450-01-P