Intent To Revise Transmission Rates To Become Effective

DEPARTMENT OF ENERGY

Bonneville Power Administration

Intent To Revise Transmission Rates To Become Effective

October 1, 1995.

agency: Bonneville Power Administration (BPA), DOE.

action: Notice of Intent and Request for Comments.

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summary: BPA is developing transmission rates proposed to become

effective October 1, 1995. At this time, BPA announces its intent to

revise its rates.

BPA expects to publish a notice of the proposed rates in the

Federal Register in early 1995. That notice also will announce BPA's

proposed schedule for formal hearings as specified in section 7(i) of

the Pacific Northwest Electric Power Planning and Conservation Act

(Northwest Power Act). A final schedule will be established by the

Hearing Officer who presides over BPA's rate hearings. These hearing,

and planned general public field hearings, will give interested persons

an opportunity to present oral and written comments on the rate

proposal. BPA File No.: TR-95. BPA requests that all comments and

documents to become part of the Official Record compiled in the process

of adjusting transmission rates contain the file number designation TR-

95.

addresses: Written comments should be submitted to the Manager,

Corporate Communications, Bonneville Power Administration, P.O. Box

12999, Portland, Oregon 97212.

for further information contact: Mr. Michael Hansen, Public Involvement

and Information Specialist, at the address listed above, 503-230-4328,

or call 1-800-622-4519. Information may also be obtained from:

Mr. Steve Hickok, Group Vice President, Sales and Customer Service,

P.O. Box 3621, Portland, Oregon 97232, 503-230-5356.

Mr. George Eskridge, Manager, SE Sales and Customer Service District,

1101 West River, Suite 250, Boise, Idaho 83702, 208-334-9137.

Mr. Ken Hustad, Manager, NE Sales and Customer Service District,

Crescent Court, Suite 500, 707 Main, Spokane, Washington 99201, 509-

353-2518.

Ms. Ruth Bennett, Manager, SW Sales and Customer Service District, 703

Broadway, Vancouver, Washington 98660, 206-418-8600.

Ms. Marg Nelson, Manager, NW Sales and Customer Service District, 201

Queen Anne Avenue North, Suite 400, Seattle, Washington 98109-1030,

206-553-4130.

Responsible Official: Mr. Geoff Moorman, Manager, Pricing, Marginal

Cost, and Ratemaking, is the official responsible for the development

of BPA's rates.

supplementary information: The Federal Columbia River Transmission

System (FCRTS) is owned and operated by BPA, a Federal power marketing

agency within the Department of Energy. The FCRTS encompasses

approximately 80 percent of the capacity of the high-voltage electric

transmission system within the Pacific Northwest. Electric power from

Federal and non-Federal generating units is integrated and transmitted

utilizing the FCRTS. Interregional transmission services to customers

outside the Pacific Northwest also are provided by BPA.

Current rates apply to four types of transmission service: (1) firm

integration of utilities' remote resources; (2) firm interregional

transactions; (3) nonfirm transactions between systems both within and

outside the Pacific Northwest Region; and (4) firm transmission over

specified facilities. Firm transmission generally is sold pursuant to

contracts for periods up to 20 years. Firm transmission on BPA's

network (main grid) is available on a mileage basis as well as a

postage stamp rate structure.

BPA began a Competitiveness Project in early 1993 in response to

market forces and the deregulation of the electric utility industry.

The project, a re-invention of the agency to make it more competitive

in the new marketplace, included the development of a new business

concept, a marketing plan, a structural reorganization, strategic

action plans for each of BPA's major activities, an internal effort to

promote leadership and employee empowerment, and proposals to eliminate

unnecessary administrative and regulatory requirements.

The rates that BPA charges its customers must produce revenues that

are sufficient to repay, with interest, the Federal investment in

generation, conservation, and transmission facilities. Revenues also

must pay BPA's operation and maintenance expenses, purchased power

costs, and other miscellaneous expenses. BPA also sets rates to recover

a certain amount of net revenues. These planned net revenues, combined

with BPA's existing financial reserves, are intended to mitigate

financial risk to help assure BPA's ability to recover costs, including

its timely repayment of the Federal investment.

BPA develops a Revenue Requirement Study that set forth BPA's total

costs of providing services to BPA's customers, including repayment of

the Federal investment in the Federal Columbia River Power System. The

revenue requirement calculation is a major input in determining the

overall level of BPA's proposed rates for power and transmission.

Program levels for FY 1996 and 1997 were developed outside of BPA's

rate case, and as a part of the BPA draft Strategic Business Plan, with

the benefit of a public comment process. BPA has reduced programs

through a combination of cost cutting, program reinvention, and

reductions in government and contractor employees. Program level

decisions will not be an issue in the rate case. The Revenue

Requirement Study will incorporate BPA's program level decisions and

implement BPA's risk mitigation, capital funding, and other financial

goals in 1996-1997 rates.

In developing the 1995 transmission rate proposal, BPA plans to

revise the level and changes of some of the existing transmission rate

schedules and revise the General Transmission Rate Schedule Provisions

as necessary. In light of BPA's business plan and continuing

development of national energy policy, BPA plans to review its existing

transmission rates and to implement appropriate changes, beginning with

the 1995 rate case. In addition, BPA is considering new rate schedules

to recover reservation fees and contributions in aid of construction,

and will revise the rate for annual costs associated with non-Federal

ownership rights on the Pacific Northwest AC Intertie to be consistent

with the contracts for non-Federal ownership.

BPA has prepared a draft environmental impact statement (EIS)

addressing the alternatives and impacts of its proposed business

direction, as expressed in its draft Strategic Business Plan. The draft

EIS was released for public comment on June 1994, along with the draft

Business Plan. The Business Plan EIS is designed to evaluate the

proposed actions and the range of alternatives, including the impacts

of the range of potential rate designs for BPA's power and transmission

services. It also is intended to provide documentation of BPA's 1995

rate proposal for the purposes of the National Environmental Policy

Act. A second draft of the EIS will be available for public comment in

late January.

Following publication of the initial proposal in the Federal

Register, formal public hearings and planned general public field

hearings will be conducted by BPA. Written comments from individuals or

entities other than parties to BPA's formal rate case also will be

accepted through a date established by the Hearing Officer at the

prehearing conference. Oral communications should be for the purpose of

requesting either status reports or procedural information. After

completion of an environmental process pursuant to the National

Environmental Policy Act and following the hearings, BPA will announce

its final proposed transmission rates and submit them to the Federal

Energy Regulatory Commission for approval.

Issued in Portland, Oregon, on December 12, 1994.

Randall W. Hardy,

Administrator and Chief Executive Officer.

[FR Doc. 94-31952 Filed 12-27-94; 8:45 am]

BILLING CODE 6450-01-M