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Administrator’s Record of Decision - BPA.gov .Administrator’s...

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  • B O N N E V I L L E P O W E R A D M I N I S T R A T I O N

    Tiered Rate Methodology Rate Case

    Administrators Record of Decision

    November 2008

    TRM-12-A-01

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  • Tiered Rate Methodology Rate Case

    Administrators Record of Decision

    Table of Contents

    List of Party Abbreviations............................................................................................................ iii 1.0 Introduction......................................................................................................................... 1

    1.1 Background..................................................................................................................... 1 1.1.1 Regional Dialogue Policy ....................................................................................... 1 1.1.2 Collaborative Development Process ....................................................................... 2

    1.2 Procedural History of This Rate Proceeding .................................................................. 2 1.2.1 Waiver of Issues by Failure to Raise in Briefs ....................................................... 4 1.2.2 Settlement of Issues ................................................................................................ 5 1.2.3 TRM Record of Decision as a Final Action............................................................ 5

    1.3 Legal Guidelines Governing Establishment of Rates ..................................................... 5 1.3.1 Statutory Guidelines................................................................................................ 5 1.3.2 The Broad Ratemaking Discretion Vested In the Administrator............................ 6 1.3.3 Confirmation and Approval of Rates...................................................................... 7

    1.4 Issues............................................................................................................................... 7 2.0 Tiering of Rates and Contracted For/Committed To Load............................................... 11 3.0 The Tiered Rate Methodology .......................................................................................... 44

    3.1 Cost Allocations............................................................................................................ 44 3.1.1 Rate Directives...................................................................................................... 44 3.1.2 Secondary Revenue Credit.................................................................................... 52

    3.2 Federal System Resources ............................................................................................ 56 3.2.1 Critical Period Definition...................................................................................... 56 3.2.2 Determination of the Critical Period..................................................................... 57 3.2.3 System Obligations ............................................................................................... 59

    3.3 Eligibility to Purchase at Tier 1 Rates .......................................................................... 71 3.3.1 Introduction........................................................................................................... 71 3.3.2 Changes to Attachment D ..................................................................................... 71 3.3.3 Calculation of CHWMs for CF/CT Load ............................................................. 72 3.3.4 Increasing CHWMs for Small New Publics ......................................................... 72

    3.4 Tier 1 Rate Design ........................................................................................................ 74 3.4.1 Demand Charge .................................................................................................... 74 3.4.2 Load Shaping Charge............................................................................................ 77

    3.5 Tier 2 Resource Cost Reallocation ............................................................................... 81 3.6 The Shared Rate Plan.................................................................................................... 83 3.7 Resource Support Services and Resource Shaping Charge .......................................... 84 3.8 Cost Verification Process for the Slice True-Up Adjustment Charge .......................... 87 3.9 Revising the TRM......................................................................................................... 94

    4.0 Residential Exchange Program, Sections 7(b)(2) and 7(b)(3) .......................................... 98 4.1 Introduction................................................................................................................... 98 4.2 PF Exchange Rate ......................................................................................................... 98

    TRM-12-A-01 Page i

  • 4.3 Section 7(b)(2) Rate Test ............................................................................................ 102 5.0 DSI Rate Issues ............................................................................................................... 104 6.0 Issues Outside the Scope of the TRM............................................................................. 113

    6.1 Flexibility for the Addition of Non-Federal Resources .............................................. 113 6.2 Expiration of New Federal Resources Added to Serve Loads During the CHWM Contract Term ......................................................................................................................... 116 6.3 Definition of Total Retail Load................................................................................... 117 6.4 Transmission to Enable Non-Federal Resource Development ................................... 117

    7.0 Participant Comments..................................................................................................... 119 7.1 Introduction................................................................................................................. 119 7.2 Evaluation of Participant Comments .......................................................................... 119

    7.2.1 Process Scheduling ............................................................................................. 119 7.2.2 New Publics ........................................................................................................ 122 7.2.3 TRM Overview ................................................................................................... 123 7.2.4 Cost Allocation ................................................................................................... 124 7.2.5 CHWM Calculation ............................................................................................ 124 7.2.6 Low Density Discount ........................................................................................ 125 7.2.7 Irrigation Rate Mitigation ................................................................................... 126

    8.0 National Environmental Policy Act Compliance............................................................ 127 9.0 Conclusion ...................................................................................................................... 129

    TRM-12-A-01 Page ii

  • Tiered Rate Methodology Rate Case List of Party Abbreviations

    AT Affiliated Tribes of Northwest Indians Economic Development Corp.

    AL Alcoa, Inc.

    AV Avista Corporation

    BC Benton County Public Utility District

    BPA Bonneville Power Administration

    CA Canby Utility Board

    CC Clark Public Utilities

    CK Clatskanie Peoples Utility District

    CL Central Lincoln Peoples Utility District

    CO Cowlitz County Public Utility District No. 1

    EW Eugene Water & Electric Board

    FR Franklin Public Utility District

    GC Public Utility District No. 2 of Grant County

    GE Portland General Electric Company

    GH Public Utility District No. 1 of Grays Harbor

    GP Georgia-Pacific, LLC

    IN Industrial Customers of Northwest Utilities (ICNU)

    IP Idaho Power Company

    JP Joint Party of Pacific Northwest Investor-Owned Utilities1

    LV Lower Valley Energy

    MW McMinnville Water and Light

    1 Joint Party of Investor-Owned Utilities includes Avista Corporation, Portland General Electric Company, Idaho Power Company, Pacificorp, and Puget Sound Energy, Inc.

    TRM-12-A-01 Page iii

  • NPJ Northwest Requirements Utilities and Pacific Northwest Generating

    Cooperative Joint Party2

    NR Northwest Requirements Utilities (NRU)3

    PG Public Generating Pool

    PL PacifiCorp

    PN Pacific Northwest Generating Cooperative (PNGC)4

    PO Public Utility District No. 1 of Pend Oreille County

    PP Public Power Council5

    2 Northwest Requirements Utilities and Pacific Northwest Generating Cooperative Joint Party includes Northwest Requirements Utilities and Pacific Northwest Generating Cooperative. 3 Northwest Requirements Utilities includes City of Ashland, Benton REA, Big Bend Electric Co-Operative, Inc., City of Bonners Ferry, City of Burley, City of Cascade Locks, Central Lincoln PUD, City of Cheney, Columbia Basin Electric Cooperative, Columbia Power Cooperative, Columbia REA, Colum

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