Proposed Wind Integration-Within-Hour Balancing Service Rate for Public Hearing, and Opportunity for Public Review and Comment, 7279-7282 [E8-2253]
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Federal Register / Vol. 73, No. 26 / Thursday, February 7, 2008 / Notices
filings PacifiCorp files with each
Regulatory Body.
jlentini on PROD1PC65 with NOTICES
8. Treatment of Purchased Power and
Sales for Resale Credit
Purchased power and sales for resale
are subject to significant variability for
a number of reasons including:
Temperature—colder than normal
winters increase the demand for
electricity, resulting in increased
purchases of electricity for utilities that
rely on market purchases for meeting a
portion of retail load.
Precipitation—heavier than normal
precipitation in the Columbia River
Basin increases the amount of electricity
available at the regional hydroelectric
facilities and could lower the need for
additional electricity.
Prices—the price of electricity
purchased by utilities varies with
temperature and precipitation, but also
the price of natural gas, which is the
fuel on the margin for most hours of the
year, and therefore affects the price of
electricity in power markets.
Regulatory Bodies use a process
called normalization to adjust quantity
and price for purchased power and sales
for resale in regulatory proceedings.
Normalization of purchased power and
sales for resale credits is a process used
by utilities and Regulatory Bodies to
adjust actual data to reflect what would
likely occur under conditions (water,
weather, market prices) that are closer to
long-term averages. For this reason, BPA
proposes to generally use a rolling 5year average of short-term (less than 1
year) energy sales and energy purchases
in the Appendix 1. For pricing, BPA
proposes to use the same models and
methodologies used to develop market
price forecasts in BPA’s wholesale
power rate filings.
BPA understands this area is not
simple, and its treatment can have a big
impact on hydro-intensive utilities. BPA
welcomes different approaches and
ideas on how to account for the
significant variability in this area.
9. Future Revision of Average System
Cost Methodology To Address Tiered
Rate Issues
BPA and its customers are currently
discussing the design of a Tiered Rates
Methodology (TRM) for BPA’s future
wholesale power rates. BPA expects to
conduct a hearing under section 7(i) of
the Northwest Power Act in 2008 in
order to establish a TRM, which would
be implemented in the rate period
beginning FY 2012. The establishment
of the TRM may affect the
implementation of the REP for
consumer-owned utilities. For example,
BPA may propose as part of the TRM
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that a consumer-owned utility that
elects to receive an individual Contract
High Water Mark will have an ASC that
excludes costs of any resources added
by the utility after September 30, 2006.
Other REP-related proposals and issues
will undoubtedly be raised in
connection with the TRM.
Consequently, BPA has included
placeholder language in the Proposed
Revised Average System Cost
Methodology that the Methodology will
be revised if necessary or appropriate to
accommodate establishment and
implementation of tiered rates.
The Proposed Revised Average
System Cost Methodology,
Functionalization for Average System
Cost Methodology, Endnotes and the
Proposed Average System Cost template
are incorporated herein by reference and
are available at the following link:
https://www.bpa.gov/corporate/Finance/
ascm.
In consideration of the foregoing
discussion, BPA proposes to revise the
Average System Cost Methodology as
set forth below.
Issued in Portland, Oregon, January 31,
2008.
Stephen J. Wright,
Administrator and Chief Executive Officer.
[FR Doc. E8–2258 Filed 2–6–08; 8:45 am]
BILLING CODE 6450–01–P
DEPARTMENT OF ENERGY
Bonneville Power Administration
[BPA Docket No. WI–09]
Proposed Wind Integration—WithinHour Balancing Service Rate for Public
Hearing, and Opportunity for Public
Review and Comment
7279
Persons wishing to intervene and
become parties in the rate case must file
a petition to intervene by 5 p.m., Pacific
Standard Time, on February 13, 2008.
The petition must state the name and
address of the intervenor and the
intervenor’s interest in the outcome of
the proceeding. Written comments by
non-party participants must be received
by BPA no later than April 15, 2008, to
be considered in the Record of Decision
(‘‘ROD’’). The Administrator will issue a
Final Record of Decision in these
proceedings by July 28, 2008.
ADDRESSES: Petitions to intervene
should be directed to Brandon Hignite,
Hearing Clerk—2009 Wind Integration
Rate Case, L–7, Bonneville Power
Administration, 905 NE 11th Avenue,
Portland, OR 97232 or by e-mail to:
wi09rate@bpa.gov, and must be received
no later than 5 p.m., Pacific Standard
Time, on February 13, 2008. In addition,
a copy of the petition must be served
concurrently on BPA’s General Counsel
and directed to Barry Bennett, LC–7,
Office of General Counsel, Bonneville
Power Administration, 905 NE 11th
Avenue, Portland, OR 97232 or by email to: bbennett@bpa.gov. Written
comments may be made online at BPA’s
website: www.bpa.gov/comment, or by
mail to: BPA Public Affairs, DKE–7, P.O.
Box 14428, Portland, OR, 97293–4428.
Please label your submission ‘‘2009
Wind Integration Rate Case.’’
FOR FURTHER INFORMATION CONTACT: Mr.
Elliot E. Mainzer, Transmission Policy
and Strategy Manager, at (360) 619–
6252.
DATES:
SUPPLEMENTARY INFORMATION:
Part I—Introduction and Procedural
Background
AGENCY:
A. Statutory Provisions Governing This
Rate Proceeding
SUMMARY: The purpose of the hearing is
to adopt a rate for Wind Integration—
Within-Hour Balancing Service. As
increasing amounts of wind generation
have integrated into BPA’s Balancing
Authority, the variability and
uncertainty of wind generation have led
to increased costs through the need for
additional reserve capacity, the shift of
energy generation from heavy load
hours to light load hours, and reduced
system efficiency. The Wind
Integration—Within-Hour Balancing
Service rate will ensure that these costs
are borne by the parties causing the
costs.
Section 7 of the Northwest Power Act,
16 U.S.C. 839e, sets forth a number of
general directives that the BPA
Administrator must consider in
establishing rates for the sale of electric
energy and capacity and transmission
services. In particular, section 7(a)(1), 16
U.S.C. 839e(a)(1), provides in part that
‘‘[s]uch 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 (FCRPS)
(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
Bonneville Power
Administration (BPA), Department of
Energy (DOE).
ACTION: Notice of Wind Integration—
Within-Hour Balancing Service Rate
(Notice), BPA Docket No. WI–09.
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Federal Register / Vol. 73, No. 26 / Thursday, February 7, 2008 / Notices
Administrator pursuant to this Act and
other provisions of law.’’
Rates established by BPA are effective
on an interim or final basis as approved
by FERC. 16 U.S.C. 839e(a)(2). In
addition to the Northwest Power Act,
BPA ratemaking is governed by the
Bonneville Project Act, 16 U.S.C. 832, et
seq., the Federal Columbia River
Transmission System (FCRTS) Act, 16
U.S.C. 838, et seq., and the Flood
Control Act of 1944, 16 U.S.C. 825, et
seq.
Section 7(i) of the Northwest Power
Act, 16 U.S.C., 839e(i), requires that
BPA’s rates be set according to certain
procedures, including issuance of a
Federal Register notice announcing the
proposed rates; one or more hearings
conducted as expeditiously as
practicable by a hearing officer; public
opportunity to provide 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. This proceeding will be
governed by the Procedures Governing
Bonneville Power Administration Rate
Hearings, 51 FR 7611 (March 5, 1986),
which implement and, in most
instances, expand these statutory
requirements.
B. Proposed Schedule Concerning This
Rate Proceeding
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The hearing will be conducted under
the rule for general rate proceedings,
section 1010.9 of the Procedures
Governing Bonneville Power
Administration Rate Hearings. The
following proposed schedule is
provided for informational purposes. A
final schedule will be established by the
Hearing Officer at the prehearing
conference.
14 February 2008—Prehearing/BPA
Direct Case
20–21 February 2008—Clarification of
BPA Direct Case
22 February 2008—Motions to Strike
22 February 2008—Data Request
Deadline
29 February 2008—Answers to Motions
to Strike
29 February 2008—Data Response
Deadline
4 March 2008—Public Hearing
(Portland)
14 March 2008—Parties file Direct Case
17–18 March 2008—Clarification of
Parties’ Direct Cases
20 March 2008—Motions to Strike
20 March 2008—Data Request Deadline
27 March 2008—Answers to Motions to
Strike
27 March 2008—Data Response
Deadline
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15 April 2008—Parties file Rebuttal
15 April 2008—Close of Participant
Comment Period
16–17 April 2008—Clarification of
Rebuttal
18 April 2008—Motions to Strike
18 April 2008—Data Request Deadline
25 April 2008—Answers to Motions to
Strike
25 April 2008—Data Response Deadline
1–2 May 2008—Cross Examination
9 May 2008—Initial Briefs Filed
19May 2008—Oral Argument
30 May 2008—Draft ROD issued
16 June 2008—Briefs on Exceptions
By 28 July 2008—Final ROD—Final
Proposal
C. Ex Parte Communications Prohibited
Section 1010.7 of the BPA Hearing
Procedures prohibits ex parte
communications. The ex parte rule
applies to all BPA and DOE employees
and contractors. Except as provided
below, any outside communications
with BPA and/or DOE personnel
regarding BPA’s rate case by other
Executive Branch agencies, Congress,
existing or potential BPA customers
(including tribes), and nonprofit or
public interest groups are considered
outside communications and are subject
to the ex parte rule. The general rule
does not apply to communications
relating to: (1) Matters of procedure only
(the status of the rate case, for example);
(2) exchanges of data in the course of
business or under the Freedom of
Information Act; (3) requests for factual
information; (4) matters for which BPA
is responsible under statutes other than
the ratemaking provisions; or (5) matters
which all parties agree may be made on
an ex parte basis. The ex parte rule
remains in effect until the
Administrator’s Final ROD is issued,
which is scheduled to occur by July 28,
2008.
Part II—Purpose and Scope of Hearing
A. Purpose of the Hearing
The purpose of the hearing is to adopt
a rate for Wind Integration—WithinHour Balancing Service. As increasing
amounts of wind generation have
integrated into BPA’s transmission
system, the variability and uncertainty
of wind generation have led to increased
costs through the need for additional
reserve capacity, the shift of energy
generation from heavy load hours to
light load hours, and reduced system
efficiency. The Wind Integration—
Within-Hour Balancing Service Rate is
intended to ensure that these costs are
borne by the parties causing the costs.
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B. Scope
Pursuant to Rule 1010.3(f) of BPA’s
Procedures, the Administrator limits the
scope of this hearing to issues
concerning the rate for Wind
Integration—Within-Hour Balancing
Service described in Part IV hereof. In
particular, the following issues are not
part of the scope of the case, and the
Hearing Officer is directed to strike all
testimony contesting these issues: how
BPA operates the FCRPS to provide
control area services and ancillary
services; how or from which entities
BPA’s transmission business obtains
capacity to provide any such services;
program levels and program level
forecasts for any BPA program; and rates
previously established or to be
established in any other rate case,
including BPA’s WP–07 Supplemental
Wholesale Power Rate Case.
C. National Environmental Policy Act
Evaluation
BPA is in the process of assessing the
potential environmental effects of the
Wind Integration Within-Hour
Balancing Service rate, consistent with
the National Environmental Policy Act
(‘‘NEPA’’). The NEPA process is
conducted separately from BPA’s formal
rate proceedings. Therefore, the
Administrator directs the Hearing
Officer to exclude from the record all
evidence and argument that seek in any
way to address the potential
environmental impacts of the rates
being developed in the 2009 Wind
Integration—Within-Hour Balancing
Service Rate Case.
BPA’s Business Plan Environmental
Impact Statement (‘‘Business Plan EIS’’),
completed in June 1995, evaluated the
environmental impacts of a range of
business plan alternatives that could be
varied by applying various policy
modules, including one for rates. Any
combination of alternative policy
modules should allow BPA to balance
its costs and revenues. The Business
Plan EIS also addressed response
strategies, including adjusting rates that
BPA could pursue if BPA’s costs
exceeded its revenues.
In August 1995, the BPA
Administrator issued a Record of
Decision (‘‘Business Plan ROD’’) that
adopted the Market-Driven Alternative
from the Business Plan EIS. This
alternative was selected because, among
other reasons, it allows BPA to: (1)
Recover costs through rates; (2)
competitively market BPA’s products
and services; (3) develop rates that meet
customer needs for clarity and
simplicity; (4) continue to meet BPA’s
legal mandates; and (5) avoid adverse
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environmental impacts. BPA also
committed to apply as many response
strategies as necessary when BPA’s costs
and revenues do not balance.
In April 2007, BPA completed and
issued a Supplement Analysis to the
Business Plan EIS. The Supplement
Analysis found that the Business Plan
EIS’s relationship-based and policylevel analysis of potential
environmental impacts from BPA’s
business practices remains valid, and
that BPA’s current business practices
remain consistent with BPA’s MarketDriven approach. The Business Plan EIS
and ROD thus continue to provide a
sound basis for making determinations
under NEPA concerning BPA’s policylevel decisions, including rates.
Because the Wind Integration rate
proposal likely would assist BPA in
accomplishing the goals identified in
the Business Plan ROD, the proposal
appears consistent with these aspects of
the Market-Driven Alternative. In
addition, this rate proposal is similar to
the type of rate designs and resulting
rate levels evaluated in the Business
Plan EIS; thus implementation of this
rate proposal would not be expected to
result in significantly different
environmental impacts from those
examined in the Business Plan EIS.
Therefore, BPA expects that this rate
proposal will fall within the scope of
the Market-Driven Alternative that was
evaluated in the Business Plan EIS and
adopted in the Business Plan ROD.
As part of the Administrator’s Record
of Decision that will be prepared
regarding the Wind Integration—
Within-Hour Balancing Service rate,
BPA may tier its decision under NEPA
to the Business Plan ROD. However,
depending upon the ongoing
environmental review, BPA may,
instead, issue another appropriate NEPA
document. Persons may submit
comments regarding the potential
environmental effects of the proposal to
Katherine Pierce, NEPA Compliance
Officer, KEC–4, Bonneville Power
Administration, 905 NE. 11th Avenue,
Portland, OR 97232. Any such
comments received by the comment
deadline in Part III.A above will be
considered by BPA’s NEPA compliance
staff in the NEPA process that will be
conducted for this proposal.
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Part III—Public Participation
A. Distinguishing Between Participants
and Parties
BPA distinguishes between
participants in and parties to the
hearings. Apart from the formal hearing
process, BPA will accept comments,
views, opinions, and information from
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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 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.
Participants’ written and oral
comments will be made part of the
official record and considered by the
Administrator, if they are submitted on
or before April 15, 2008. Participants’
written views, supporting information,
questions, and arguments should be
submitted to the address noted in the
ADDRESSES section of this Notice or at
the public hearing.
The second category of interest is that
of a party as defined in Rules 1010.2
and 1010.4 of the BPA Procedures. 51
Fed. Reg. 7611 (1986). Parties may
participate in any aspect of the hearing
process.
B. Petitions To Intervene
Persons wishing to become parties to
BPA’s rate proceeding must notify BPA
in writing of their interest by submitting
a petition to intervene. Petitions to
intervene are due to the Hearing Officer
by February 13, 2008, and should be
directed to Brandon Hignite, Hearing
Clerk, L–7, Bonneville Power
Administration, 905 NE. 11th Avenue,
Portland, OR 97232 or by e-mail to:
wi09rate@bpa.gov, and must be received
no later than 5 p.m., Pacific Standard
Time, on February 13, 2008. In addition,
a copy of the petition must be served
concurrently on BPA’s General Counsel
and directed to Barry Bennett, LC–7,
Office of General Counsel, Bonneville
Power Administration, 905 NE. 11th
Avenue, Portland, OR 97232 or by email to: bbennett@bpa.gov.
Petitions shall state the name and
address of the person requesting party
status and the person’s interest in the
hearing. Petitioners must explain their
interests in sufficient detail to permit
the Hearing Officer to determine
whether they have a relevant interest in
the hearing. Pursuant to Rule 1010.1(d)
of BPA’s Procedures, BPA waives the
requirement in Rule 1010.4(d) that an
opposition to an intervention petition be
filed and served 24 hours before the
prehearing conference. Any opposition
to an intervention petition may instead
be made at the prehearing conference.
Any party, including BPA, may oppose
a petition for intervention. All timely
applications will be ruled on by the
Hearing Officer. Late interventions are
strongly disfavored. Opposition to an
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7281
untimely petition to intervene shall be
filed and received by BPA within two
days after service of the petition.
C. Developing the Record
The record will include, among other
things, the testimony and evidence
submitted by the parties, the transcripts
of any hearings and cross-examination,
written material submitted by the
participants, and evidence accepted into
the record by the Hearing Officer. The
Hearing Officer will review the record
and certify the record to the
Administrator for decision. Parties will
have the opportunity to file initial briefs
at the close of cross-examination. After
the close of the hearings, and following
submission of initial briefs, BPA will
issue a draft ROD that states the
Administrator’s preliminary decision(s).
Parties may file briefs on exceptions,
after that the Administrator will issue
the final ROD establishing the rate.
The Administrator will develop the
final rate for Wind Integration—WithinHour Balancing Service based on the
entire record. The Administrator will
serve copies of the final Record of
Decision on all parties and will file the
final proposed rate, together with the
record, with FERC for confirmation and
approval.
Part IV—Summary of the Proposal
In 2006 BPA and the Northwest
Power and Conservation Council
convened a regional forum to discuss
the operational and economic issues
raised by the expected integration of
significant amounts of wind generation
into the Pacific Northwest power
system. In March 2007 the group, which
included investor-owned utilities,
public power organizations,
environmental groups, and others,
produced the Northwest Wind
Integration Action Plan. The Action
Plan recognized that the emergence of
wind energy as a significant resource on
the Northwest transmission grid—which
has 17 separate Balancing Authorities—
raised new cost recovery and cost
allocation issues.
Historically, most of the variability
and uncertainty in a Balancing
Authority’s operations has been caused
by loads. As a result, most Northwest
transmission providers do not have rate
schedules that charge generators for the
variability they add to the system.
However, the output of wind generators
is significantly more variable and
uncertain than the output of traditional
generation sources. The variability and
uncertainty associated with wind
generation increases the demand for
reserves required to maintain Balancing
Authority reliability.
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Federal Register / Vol. 73, No. 26 / Thursday, February 7, 2008 / Notices
Under current rate schedules, BPA
power customers pay most of the costs
of these additional reserves. For BPA,
wind integration cost recovery is a
particularly important issue because the
majority of the 1,425 MW of wind
generation in the BPA Balancing
Authority is exported to other Balancing
Authorities to serve the loads of other
regional utilities. Therefore, BPA power
customers are paying the costs of
providing balancing services for wind
generation used to serve other loads.
This pattern of large-scale exports of
wind generation is expected to continue
through the end of 2009, at which point
BPA expects that 2,880 MW of wind
will be interconnected to the BPA
system.
To better align cost causation and cost
allocation, BPA is proposing a Wind
Integration—Within-Hour Balancing
Service rate under which wind
generators will be charged for the costs
of the additional reserve capacity that is
needed to support their operations, as
well as other incremental costs caused
by the variability of wind generation.
Additional costs are caused by the need
to shift energy generation from heavy
load hours to light load hours to
preserve the ability to change generation
levels to compensate as wind output
changes and by reduced efficiency
because demands on the system become
less predictable as wind generation
increases. The new rate is intended to
ensure that BPA recovers the costs that
wind generation places on the system,
and that the costs are allocated to the
parties that cause the costs.
BPA currently estimates that, during
FY 2009, it will need an average of 203
MW of capacity to provide these
balancing services for wind generation.
Therefore, BPA is proposing a wind
integration rate to recover the embedded
costs of 203 MW of Federal system
resources plus the other costs, noted
above, that wind generation places on
the system.
BPA projects the cost of providing
this service is $22.9 million. To recover
this cost, BPA is proposing a rate not to
exceed $0.81 per installed kW of wind
capacity per month.
The proposed rate schedule is
attached at the end of this Notice.
Issued this 30th day of January, 2008.
Stephen J. Wright,
Administrator and Chief Executive Officer.
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ACS–09
ANCILLARY SERVICES AND CONTROL
AREA SERVICES RATE
SECTION I. AVAILABILITY
* * *
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Control Area Service rates available
under this rate schedule are:
* * *
5. Wind Integration—-Within-Hour
Balancing Service
* * *
SECTION III. CONTROL AREA
SERVICE RATES
E. WIND INTEGRATION—WITHINHOUR BALANCING SERVICE
The rate below applies to all wind
plants in the BPA Control Area. WithinHour Balancing Service provides the
generation capability to follow withinhour variations of wind resources in the
BPA Control Area and to maintain the
power system frequency at 60 Hz in
conformance with NERC and WECC
reliability standards.
1. RATE
The rate shall not exceed $0.81 per
kilowatt per month.
2. BILLING FACTOR
The Billing Factor is as follows:
i. For each wind plant, or phase of a
wind plant, that has completed
installation of all units no later than the
15th day of the month prior to the
billing month, the billing factor will be
the nameplate of the plant in kW. A unit
has completed installation when it has
generated and delivered power to the
BPA system.
ii. For each wind plant, or phase of a
wind plant, for which some but not all
units have been installed by the 15th
day of the month prior to the billing
month, the billing factor will be the
maximum measured hourly output of
the plant through the 15th day of the
prior month in kW.
[FR Doc. E8–2253 Filed 2–6–08; 8:45 am]
BILLING CODE 6450–01–P
DEPARTMENT OF ENERGY
Federal Energy Regulatory
Commission
[Project No. 2146–117]
Alabama Power Company; Notice of
Application for Amendment of License
and Soliciting Comments, Motions to
Intervene, and Protests
Take notice that the following
hydroelectric application has been filed
with the Commission and is available
for public inspection:
a. Application Type: Non-Project Use
of Project Lands and Waters.
b. Project No: 2146–117.
c. Date Filed: January 18, 2008.
d. Applicant: Alabama Power
Company.
e. Name of Project: Coosa River
Project.
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Fmt 4703
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f. Location: On the Coosa River, in
Elmore County, Alabama, and Floyd
County, Georgia.
g. Filed Pursuant to: Federal Power
Act, 16 U.S.C. 791a–825r.
h. Applicant Contact: Keith Bryant,
600 18th Street North, Birmingham, AL
35203; (205) 257–1403.
i. FERC Contact: Gina Krump,
Telephone (202) 502–6704, and e-mail:
Gina.Krump@ferc.gov.
j. Deadline for filing comments,
motions to intervene, and protest:
March 3, 2008.
All documents (original and eight
copies) should be filed with: Secretary,
Federal Energy Regulatory Commission,
888 First Street, NE., Washington, DC
20426.
The Commission’s Rules of Practice
and Procedure require all interveners
filing documents with the Commission
to serve a copy of that document on
each person whose name appears on the
official service list for the project.
Further, if an intervener files comments
or documents with the Commission
relating to the merits of an issue that
may affect the responsibilities of a
particular resource agency, they must
also serve a copy of the document on
that resource agency. A copy of any
motion to intervene must also be served
upon each representative of the
Applicant specified in the particular
application.
k. Description of Request: Alabama
Power Company is seeking Commission
approval to issue a permit to RHEMA,
LLC for the construction of a boat ramp,
four boat docks, totaling 60 slips,
walking trails, and two storm water
drains. The proposed facilities would
serve the residents of Sunset Shores
Condominiums. APC is also seeking
authorization to allow RHEMA, LLC to
withdrawal of up to 2,400 gallons per
day of water from the project reservoir
for landscape watering, as needed. The
proposal would not require dredging or
excavation.
l. Locations of the Application: A
copy of the application is available for
inspection and reproduction at the
Commission’s Public Reference Room,
located at 888 First Street, NE., Room
2A, Washington, DC 20426, or by calling
(202) 502–8371. This filing may also be
viewed on the Commission’s Web site at
https://www.ferc.gov using the
‘‘eLibrary’’ link. Enter the docket
number excluding the last three digits in
the docket number field to access the
document. You may also register online
at https://www.ferc.gov/docs-filing/
esubscription.asp to be notified via
email of new filings and issuances
related to this or other pending projects.
For assistance, call 1–866–208–3676 or
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Agencies
[Federal Register Volume 73, Number 26 (Thursday, February 7, 2008)]
[Notices]
[Pages 7279-7282]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-2253]
-----------------------------------------------------------------------
DEPARTMENT OF ENERGY
Bonneville Power Administration
[BPA Docket No. WI-09]
Proposed Wind Integration--Within-Hour Balancing Service Rate for
Public Hearing, and Opportunity for Public Review and Comment
AGENCY: Bonneville Power Administration (BPA), Department of Energy
(DOE).
ACTION: Notice of Wind Integration--Within-Hour Balancing Service Rate
(Notice), BPA Docket No. WI-09.
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SUMMARY: The purpose of the hearing is to adopt a rate for Wind
Integration--Within-Hour Balancing Service. As increasing amounts of
wind generation have integrated into BPA's Balancing Authority, the
variability and uncertainty of wind generation have led to increased
costs through the need for additional reserve capacity, the shift of
energy generation from heavy load hours to light load hours, and
reduced system efficiency. The Wind Integration--Within-Hour Balancing
Service rate will ensure that these costs are borne by the parties
causing the costs.
DATES: Persons wishing to intervene and become parties in the rate case
must file a petition to intervene by 5 p.m., Pacific Standard Time, on
February 13, 2008. The petition must state the name and address of the
intervenor and the intervenor's interest in the outcome of the
proceeding. Written comments by non-party participants must be received
by BPA no later than April 15, 2008, to be considered in the Record of
Decision (``ROD''). The Administrator will issue a Final Record of
Decision in these proceedings by July 28, 2008.
ADDRESSES: Petitions to intervene should be directed to Brandon
Hignite, Hearing Clerk--2009 Wind Integration Rate Case, L-7,
Bonneville Power Administration, 905 NE 11th Avenue, Portland, OR 97232
or by e-mail to: wi09rate@bpa.gov, and must be received no later than 5
p.m., Pacific Standard Time, on February 13, 2008. In addition, a copy
of the petition must be served concurrently on BPA's General Counsel
and directed to Barry Bennett, LC-7, Office of General Counsel,
Bonneville Power Administration, 905 NE 11th Avenue, Portland, OR 97232
or by e-mail to: bbennett@bpa.gov. Written comments may be made online
at BPA's website: www.bpa.gov/comment, or by mail to: BPA Public
Affairs, DKE-7, P.O. Box 14428, Portland, OR, 97293-4428. Please label
your submission ``2009 Wind Integration Rate Case.''
FOR FURTHER INFORMATION CONTACT: Mr. Elliot E. Mainzer, Transmission
Policy and Strategy Manager, at (360) 619-6252.
SUPPLEMENTARY INFORMATION:
Part I--Introduction and Procedural Background
A. Statutory Provisions Governing This Rate Proceeding
Section 7 of the Northwest Power Act, 16 U.S.C. 839e, sets forth a
number of general directives that the BPA Administrator must consider
in establishing rates for the sale of electric energy and capacity and
transmission services. In particular, section 7(a)(1), 16 U.S.C.
839e(a)(1), provides in part that ``[s]uch 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 (FCRPS) (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
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Administrator pursuant to this Act and other provisions of law.''
Rates established by BPA are effective on an interim or final basis
as approved by FERC. 16 U.S.C. 839e(a)(2). In addition to the Northwest
Power Act, BPA ratemaking is governed by the Bonneville Project Act, 16
U.S.C. 832, et seq., the Federal Columbia River Transmission System
(FCRTS) Act, 16 U.S.C. 838, et seq., and the Flood Control Act of 1944,
16 U.S.C. 825, et seq.
Section 7(i) of the Northwest Power Act, 16 U.S.C., 839e(i),
requires that BPA's rates be set according to certain procedures,
including issuance of a Federal Register notice announcing the proposed
rates; one or more hearings conducted as expeditiously as practicable
by a hearing officer; public opportunity to provide 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. This proceeding will be governed by the Procedures
Governing Bonneville Power Administration Rate Hearings, 51 FR 7611
(March 5, 1986), which implement and, in most instances, expand these
statutory requirements.
B. Proposed Schedule Concerning This Rate Proceeding
The hearing will be conducted under the rule for general rate
proceedings, section 1010.9 of the Procedures Governing Bonneville
Power Administration Rate Hearings. The following proposed schedule is
provided for informational purposes. A final schedule will be
established by the Hearing Officer at the prehearing conference.
14 February 2008--Prehearing/BPA Direct Case
20-21 February 2008--Clarification of BPA Direct Case
22 February 2008--Motions to Strike
22 February 2008--Data Request Deadline
29 February 2008--Answers to Motions to Strike
29 February 2008--Data Response Deadline
4 March 2008--Public Hearing (Portland)
14 March 2008--Parties file Direct Case
17-18 March 2008--Clarification of Parties' Direct Cases
20 March 2008--Motions to Strike
20 March 2008--Data Request Deadline
27 March 2008--Answers to Motions to Strike
27 March 2008--Data Response Deadline
15 April 2008--Parties file Rebuttal
15 April 2008--Close of Participant Comment Period
16-17 April 2008--Clarification of Rebuttal
18 April 2008--Motions to Strike
18 April 2008--Data Request Deadline
25 April 2008--Answers to Motions to Strike
25 April 2008--Data Response Deadline
1-2 May 2008--Cross Examination
9 May 2008--Initial Briefs Filed
19May 2008--Oral Argument
30 May 2008--Draft ROD issued
16 June 2008--Briefs on Exceptions
By 28 July 2008--Final ROD--Final Proposal
C. Ex Parte Communications Prohibited
Section 1010.7 of the BPA Hearing Procedures prohibits ex parte
communications. The ex parte rule applies to all BPA and DOE employees
and contractors. Except as provided below, any outside communications
with BPA and/or DOE personnel regarding BPA's rate case by other
Executive Branch agencies, Congress, existing or potential BPA
customers (including tribes), and nonprofit or public interest groups
are considered outside communications and are subject to the ex parte
rule. The general rule does not apply to communications relating to:
(1) Matters of procedure only (the status of the rate case, for
example); (2) exchanges of data in the course of business or under the
Freedom of Information Act; (3) requests for factual information; (4)
matters for which BPA is responsible under statutes other than the
ratemaking provisions; or (5) matters which all parties agree may be
made on an ex parte basis. The ex parte rule remains in effect until
the Administrator's Final ROD is issued, which is scheduled to occur by
July 28, 2008.
Part II--Purpose and Scope of Hearing
A. Purpose of the Hearing
The purpose of the hearing is to adopt a rate for Wind
Integration--Within-Hour Balancing Service. As increasing amounts of
wind generation have integrated into BPA's transmission system, the
variability and uncertainty of wind generation have led to increased
costs through the need for additional reserve capacity, the shift of
energy generation from heavy load hours to light load hours, and
reduced system efficiency. The Wind Integration--Within-Hour Balancing
Service Rate is intended to ensure that these costs are borne by the
parties causing the costs.
B. Scope
Pursuant to Rule 1010.3(f) of BPA's Procedures, the Administrator
limits the scope of this hearing to issues concerning the rate for Wind
Integration--Within-Hour Balancing Service described in Part IV hereof.
In particular, the following issues are not part of the scope of the
case, and the Hearing Officer is directed to strike all testimony
contesting these issues: how BPA operates the FCRPS to provide control
area services and ancillary services; how or from which entities BPA's
transmission business obtains capacity to provide any such services;
program levels and program level forecasts for any BPA program; and
rates previously established or to be established in any other rate
case, including BPA's WP-07 Supplemental Wholesale Power Rate Case.
C. National Environmental Policy Act Evaluation
BPA is in the process of assessing the potential environmental
effects of the Wind Integration Within-Hour Balancing Service rate,
consistent with the National Environmental Policy Act (``NEPA''). The
NEPA process is conducted separately from BPA's formal rate
proceedings. Therefore, the Administrator directs the Hearing Officer
to exclude from the record all evidence and argument that seek in any
way to address the potential environmental impacts of the rates being
developed in the 2009 Wind Integration--Within-Hour Balancing Service
Rate Case.
BPA's Business Plan Environmental Impact Statement (``Business Plan
EIS''), completed in June 1995, evaluated the environmental impacts of
a range of business plan alternatives that could be varied by applying
various policy modules, including one for rates. Any combination of
alternative policy modules should allow BPA to balance its costs and
revenues. The Business Plan EIS also addressed response strategies,
including adjusting rates that BPA could pursue if BPA's costs exceeded
its revenues.
In August 1995, the BPA Administrator issued a Record of Decision
(``Business Plan ROD'') that adopted the Market-Driven Alternative from
the Business Plan EIS. This alternative was selected because, among
other reasons, it allows BPA to: (1) Recover costs through rates; (2)
competitively market BPA's products and services; (3) develop rates
that meet customer needs for clarity and simplicity; (4) continue to
meet BPA's legal mandates; and (5) avoid adverse
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environmental impacts. BPA also committed to apply as many response
strategies as necessary when BPA's costs and revenues do not balance.
In April 2007, BPA completed and issued a Supplement Analysis to
the Business Plan EIS. The Supplement Analysis found that the Business
Plan EIS's relationship-based and policy-level analysis of potential
environmental impacts from BPA's business practices remains valid, and
that BPA's current business practices remain consistent with BPA's
Market-Driven approach. The Business Plan EIS and ROD thus continue to
provide a sound basis for making determinations under NEPA concerning
BPA's policy-level decisions, including rates.
Because the Wind Integration rate proposal likely would assist BPA
in accomplishing the goals identified in the Business Plan ROD, the
proposal appears consistent with these aspects of the Market-Driven
Alternative. In addition, this rate proposal is similar to the type of
rate designs and resulting rate levels evaluated in the Business Plan
EIS; thus implementation of this rate proposal would not be expected to
result in significantly different environmental impacts from those
examined in the Business Plan EIS. Therefore, BPA expects that this
rate proposal will fall within the scope of the Market-Driven
Alternative that was evaluated in the Business Plan EIS and adopted in
the Business Plan ROD.
As part of the Administrator's Record of Decision that will be
prepared regarding the Wind Integration--Within-Hour Balancing Service
rate, BPA may tier its decision under NEPA to the Business Plan ROD.
However, depending upon the ongoing environmental review, BPA may,
instead, issue another appropriate NEPA document. Persons may submit
comments regarding the potential environmental effects of the proposal
to Katherine Pierce, NEPA Compliance Officer, KEC-4, Bonneville Power
Administration, 905 NE. 11th Avenue, Portland, OR 97232. Any such
comments received by the comment deadline in Part III.A above will be
considered by BPA's NEPA compliance staff in the NEPA process that will
be conducted for this proposal.
Part III--Public Participation
A. Distinguishing Between Participants and Parties
BPA distinguishes between participants in and parties to the
hearings. Apart from the formal hearing process, BPA will accept
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 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.
Participants' written and oral comments will be made part of the
official record and considered by the Administrator, if they are
submitted on or before April 15, 2008. Participants' written views,
supporting information, questions, and arguments should be submitted to
the address noted in the ADDRESSES section of this Notice or at the
public hearing.
The second category of interest is that of a party as defined in
Rules 1010.2 and 1010.4 of the BPA Procedures. 51 Fed. Reg. 7611
(1986). Parties may participate in any aspect of the hearing process.
B. Petitions To Intervene
Persons wishing to become parties to BPA's rate proceeding must
notify BPA in writing of their interest by submitting a petition to
intervene. Petitions to intervene are due to the Hearing Officer by
February 13, 2008, and should be directed to Brandon Hignite, Hearing
Clerk, L-7, Bonneville Power Administration, 905 NE. 11th Avenue,
Portland, OR 97232 or by e-mail to: wi09rate@bpa.gov, and must be
received no later than 5 p.m., Pacific Standard Time, on February 13,
2008. In addition, a copy of the petition must be served concurrently
on BPA's General Counsel and directed to Barry Bennett, LC-7, Office of
General Counsel, Bonneville Power Administration, 905 NE. 11th Avenue,
Portland, OR 97232 or by e-mail to: bbennett@bpa.gov.
Petitions shall state the name and address of the person requesting
party status and the person's interest in the hearing. Petitioners must
explain their interests in sufficient detail to permit the Hearing
Officer to determine whether they have a relevant interest in the
hearing. Pursuant to Rule 1010.1(d) of BPA's Procedures, BPA waives the
requirement in Rule 1010.4(d) that an opposition to an intervention
petition be filed and served 24 hours before the prehearing conference.
Any opposition to an intervention petition may instead be made at the
prehearing conference. Any party, including BPA, may oppose a petition
for intervention. All timely applications will be ruled on by the
Hearing Officer. Late interventions are strongly disfavored. Opposition
to an untimely petition to intervene shall be filed and received by BPA
within two days after service of the petition.
C. Developing the Record
The record will include, among other things, the testimony and
evidence submitted by the parties, the transcripts of any hearings and
cross-examination, written material submitted by the participants, and
evidence accepted into the record by the Hearing Officer. The Hearing
Officer will review the record and certify the record to the
Administrator for decision. Parties will have the opportunity to file
initial briefs at the close of cross-examination. After the close of
the hearings, and following submission of initial briefs, BPA will
issue a draft ROD that states the Administrator's preliminary
decision(s). Parties may file briefs on exceptions, after that the
Administrator will issue the final ROD establishing the rate.
The Administrator will develop the final rate for Wind
Integration--Within-Hour Balancing Service based on the entire record.
The Administrator will serve copies of the final Record of Decision on
all parties and will file the final proposed rate, together with the
record, with FERC for confirmation and approval.
Part IV--Summary of the Proposal
In 2006 BPA and the Northwest Power and Conservation Council
convened a regional forum to discuss the operational and economic
issues raised by the expected integration of significant amounts of
wind generation into the Pacific Northwest power system. In March 2007
the group, which included investor-owned utilities, public power
organizations, environmental groups, and others, produced the Northwest
Wind Integration Action Plan. The Action Plan recognized that the
emergence of wind energy as a significant resource on the Northwest
transmission grid--which has 17 separate Balancing Authorities--raised
new cost recovery and cost allocation issues.
Historically, most of the variability and uncertainty in a
Balancing Authority's operations has been caused by loads. As a result,
most Northwest transmission providers do not have rate schedules that
charge generators for the variability they add to the system. However,
the output of wind generators is significantly more variable and
uncertain than the output of traditional generation sources. The
variability and uncertainty associated with wind generation increases
the demand for reserves required to maintain Balancing Authority
reliability.
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Under current rate schedules, BPA power customers pay most of the
costs of these additional reserves. For BPA, wind integration cost
recovery is a particularly important issue because the majority of the
1,425 MW of wind generation in the BPA Balancing Authority is exported
to other Balancing Authorities to serve the loads of other regional
utilities. Therefore, BPA power customers are paying the costs of
providing balancing services for wind generation used to serve other
loads. This pattern of large-scale exports of wind generation is
expected to continue through the end of 2009, at which point BPA
expects that 2,880 MW of wind will be interconnected to the BPA system.
To better align cost causation and cost allocation, BPA is
proposing a Wind Integration--Within-Hour Balancing Service rate under
which wind generators will be charged for the costs of the additional
reserve capacity that is needed to support their operations, as well as
other incremental costs caused by the variability of wind generation.
Additional costs are caused by the need to shift energy generation from
heavy load hours to light load hours to preserve the ability to change
generation levels to compensate as wind output changes and by reduced
efficiency because demands on the system become less predictable as
wind generation increases. The new rate is intended to ensure that BPA
recovers the costs that wind generation places on the system, and that
the costs are allocated to the parties that cause the costs.
BPA currently estimates that, during FY 2009, it will need an
average of 203 MW of capacity to provide these balancing services for
wind generation. Therefore, BPA is proposing a wind integration rate to
recover the embedded costs of 203 MW of Federal system resources plus
the other costs, noted above, that wind generation places on the
system.
BPA projects the cost of providing this service is $22.9 million.
To recover this cost, BPA is proposing a rate not to exceed $0.81 per
installed kW of wind capacity per month.
The proposed rate schedule is attached at the end of this Notice.
Issued this 30th day of January, 2008.
Stephen J. Wright,
Administrator and Chief Executive Officer.
ACS-09
ANCILLARY SERVICES AND CONTROL AREA SERVICES RATE
SECTION I. AVAILABILITY
* * *
Control Area Service rates available under this rate schedule are:
* * *
5. Wind Integration---Within-Hour Balancing Service
* * *
SECTION III. CONTROL AREA SERVICE RATES
E. WIND INTEGRATION--WITHIN-HOUR BALANCING SERVICE
The rate below applies to all wind plants in the BPA Control Area.
Within-Hour Balancing Service provides the generation capability to
follow within-hour variations of wind resources in the BPA Control Area
and to maintain the power system frequency at 60 Hz in conformance with
NERC and WECC reliability standards.
1. RATE
The rate shall not exceed $0.81 per kilowatt per month.
2. BILLING FACTOR
The Billing Factor is as follows:
i. For each wind plant, or phase of a wind plant, that has
completed installation of all units no later than the 15th day of the
month prior to the billing month, the billing factor will be the
nameplate of the plant in kW. A unit has completed installation when it
has generated and delivered power to the BPA system.
ii. For each wind plant, or phase of a wind plant, for which some
but not all units have been installed by the 15th day of the month
prior to the billing month, the billing factor will be the maximum
measured hourly output of the plant through the 15th day of the prior
month in kW.
[FR Doc. E8-2253 Filed 2-6-08; 8:45 am]
BILLING CODE 6450-01-P