§ 839e. — Rates.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 16USC839e]
TITLE 16--CONSERVATION
CHAPTER 12H--PACIFIC NORTHWEST ELECTRIC POWER PLANNING AND CONSERVATION
Sec. 839e. Rates
(a) Establishment; periodic review and revision; confirmation and
approval by Federal Energy Regulatory Commission
(1) The Administrator shall establish, and periodically review and
revise, rates for the sale and disposition of electric energy and
capacity and for the transmission of non-Federal power. 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 (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 chapter and
other provisions of law. Such rates shall be established in accordance
with sections 9 and 10 of the Federal Columbia River Transmission System
Act (16 U.S.C. 838) [16 U.S.C. 838g and 838h], section 5 of the Flood
Control Act of 1944 [16 U.S.C. 825s], and the provisions of this
chapter.
(2) Rates established under this section shall become effective
only, except in the case of interim rules as provided in subsection
(i)(6) of this section, upon confirmation and approval by the Federal
Energy Regulatory Commission upon a finding by the Commission, that such
rates--
(A) are sufficient to assure repayment of the Federal investment
in the Federal Columbia River Power System over a reasonable number
of years after first meeting the Administrator's other costs,
(B) are based upon the Administrator's total system costs, and
(C) insofar as transmission rates are concerned, equitably
allocate the costs of the Federal transmission system between
Federal and non-Federal power utilizing such system.
(b) General application of rates to meet general requirements
(1) The Administrator shall establish a rate or rates of general
application for electric power sold to meet the general requirements of
public body, cooperative, and Federal agency customers within the
Pacific Northwest, and loads of electric utilities under section 839c(c)
of this title. Such rate or rates shall recover the costs of that
portion of the Federal base system resources needed to supply such loads
until such sales exceed the Federal base system resources. Thereafter,
such rate or rates shall recover the cost of additional electric power
as needed to supply such loads, first from the electric power acquired
by the Administrator under section 839c(c) of this title and then from
other resources.
(2) After July 1, 1985, the projected amounts to be charged for firm
power for the combined general requirements of public body, cooperative
and Federal agency customers, exclusive of amounts charged such
customers under subsection (g) of this section for the costs of
conservation, resource and conservation credits, experimental resources
and uncontrollable events, may not exceed in total, as determined by the
Administrator, during any year after July 1, 1985, plus the ensuing four
years, an amount equal to the power costs for general requirements of
such customer if, the Administrator assumes that--
(A) the public body and cooperative customers' general
requirements had included during such five-year period the direct
service industrial customer loads which are--
(i) served by the Administrator, and
(ii) located within or adjacent to the geographic service
boundaries of such public bodies and cooperatives;
(B) public body, cooperative, and Federal agency customers were
served, during such five-year period, with Federal base system
resources not obligated to other entities under contracts existing
as of December 5, 1980, (during the remaining term of such
contracts) excluding obligations to direct service industrial
customer loads included in subparagraph (A) of this paragraph;
(C) no purchases or sales by the Administrator as provided in
section 839c(c) of this title were made during such five-year
period;
(D) all resources that would have been required, during such
five-year period, to meet remaining general requirements of the
public body, cooperative and Federal agency customers (other than
requirements met by the available Federal base system resources
determined under subparagraph (B) of this paragraph) were--
(i) purchased from such customers by the Administrator
pursuant to section 839d of this title, or
(ii) not committed to load pursuant to section 839c(b) of
this title,
and were the least expensive resources owned or purchased by public
bodies or cooperatives; and any additional needed resources were
obtained at the average cost of all other new resources acquired by
the Administrator; and
(E) the quantifiable monetary savings, during such five-year
period, to public body, cooperative and Federal agency customers
resulting from--
(i) reduced public body and cooperative financing costs as
applied to the total amount of resources, other than Federal
base system resources, identified under subparagraph (D) of this
paragraph, and
(ii) reserve benefits as a result of the Administrator's
actions under this chapter \1\
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\1\ So in original. Probably should be followed by a comma.
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were not achieved.
(3) Any amounts not charged to public body, cooperative, and Federal
agency customers by reason of paragraph (2) of this subsection shall be
recovered through supplemental rate charges for all other power sold by
the Administrator to all customers. Rates charged public body,
cooperative, or Federal agency customers pursuant to this subsection
shall not include any costs or benefits of a net revenue surplus or
deficiency occurring for the period ending June 30, 1985, to the extent
such surplus or deficiency is caused by--
(A) a difference between actual power deliveries and power
deliveries projected for the purpose of establishing rates to direct
service industrial customers under subsection (c)(1) of this
subsection, and
(B) an overrecovery or underrecovery of the net costs incurred
by the Administrator under section 839c(c) of this title as a result
of such difference.
Any such revenue surplus or deficiency incurred shall be recovered from,
or repaid to, customers over a reasonable period of time after July 1,
1985, through a supplemental rate charge or credit applied
proportionately for all other power sold by the Administrator at rates
established under other subsections of this section prior to July 1,
1985.
(4) The term ``general requirements'' as used in this section means
the public body, cooperative or Federal agency customer's electric power
purchased from the Administrator under section 839c(b) of this title,
exclusive of any new large single load.
(c) Rates applicable to direct service industrial customers
(1) The rate or rates applicable to direct service industrial
customers shall be established--
(A) for the period prior to July 1, 1985, at a level which the
Administrator estimates will be sufficient to recover the cost of
resources the Administrator determines are required to serve such
customers' load and the net costs incurred by the Administrator
pursuant to section 839c(c) of this title, based upon the
Administrator's projected ability to make power available to such
customers pursuant to their contracts, to the extent that such costs
are not recovered through rates applicable to other customers; and
(B) for the period beginning July 1, 1985, at a level which the
Administrator determines to be equitable in relation to the retail
rates charged by the public body and cooperative customers to their
industrial consumers in the region.
(2) The determination under paragraph (1)(B) of this subsection
shall be based upon the Administrator's applicable wholesale rates to
such public body and cooperative customers and the typical margins
included by such public body and cooperative customers in their retail
industrial rates but shall take into account--
(A) the comparative size and character of the loads served,
(B) the relative costs of electric capacity, energy,
transmission, and related delivery facilities provided and other
service provisions, and
(C) direct and indirect overhead costs.
all as related to the delivery of power to industrial customers, except
that the Administrator's rates during such period shall in no event be
less than the rates in effect for the contract year ending on June 30,
1985.
(3) The Administrator shall adjust such rates to take into account
the value of power system reserves made available to the Administrator
through his rights to interrupt or curtail service to such direct
service industrial customers.
(d) Discount rates; special rates
(1) In order to avoid adverse impacts on retail rates of the
Administrator's customers with low system densities, the Administrator
shall, to the extent appropriate, apply discounts to the rate or rates
for such customers.
(2) In order to avoid adverse impacts of increased rates pursuant to
this chapter on any direct service industrial customer using raw
minerals indigenous to the region as its primary resource, the
Administrator, upon request of such customer showing such impacts and
after considering the effect of such request on his other obligations
under this chapter, is authorized, if the Administrator determines that
such impacts will be significant, to establish a special rate applicable
to such customer if all power sold to such customer may be interrupted,
curtailed, or withdrawn to meet firm loads in the region. Such rate
shall be established in accordance with this section and shall include
such terms and conditions as the Administrator deems appropriate.
(e) Uniform rates; rates for sale of peaking capacity; time-of-day,
seasonal, and other rates
Nothing in this chapter prohibits the Administrator from
establishing, in rate schedules of general application, a uniform rate
or rates for sale of peaking capacity or from establishing time-of-day,
seasonal rates, or other rate forms.
(f) Basis for rates
Rates for all other firm power sold by the Administrator for use in
the Pacific Northwest shall be based upon the cost of the portions of
Federal base system resources, purchases of power under section 839c(c)
of this title and additional resources which, in the determination of
the Administrator, are applicable to such sales.
(g) Allocation of costs and benefits
Except to the extent that the allocation of costs and benefits is
governed by provisions of law in effect on December 5, 1980, or by other
provisions of this section, the Administrator shall equitably allocate
to power rates, in accordance with generally accepted ratemaking
principles and the provisions of this chapter, all costs and benefits
not otherwise allocated under this section, including, but not limited
to, conservation, fish and wildlife measures, uncontrollable events,
reserves, the excess costs of experimental resources acquired under
section 839d of this title, the cost of credits granted pursuant to
section 839d of this title, operating services, and the sale of or
inability to sell excess electric power.
(h) Surcharges
Notwithstanding any other provision of this section (except the
provisions of subsection (a) of this section), the Administrator shall
adjust power rates to include any surcharges arising under section
839b(f) of this title, and shall allocate any revenues from such charges
in such manner as the Administrator determines will help achieve the
purposes of section 839b(f) of this title.
(i) Procedures
In establishing rates under this section, the Administrator shall
use the following procedures:
(1) Notice of the proposed rates shall be published in the
Federal Register with a statement of the justification and reasons
supporting such rates. Such notice shall include a date for a
hearing in accordance with paragraph (2) of this subsection.
(2) One or more hearings shall be conducted as expeditiously as
practicable by a hearing officer to develop a full and complete
record and to receive public comment in the form of written and oral
presentation of views, data questions, and argument related to such
proposed rates. In any such hearing--
(A) any person shall be provided an adequate opportunity by
the hearing officer to offer refutation or rebuttal of any
material submitted by any other person or the Administrator, and
(B) the hearing officer, in his discretion, shall allow a
reasonable opportunity for cross examination, which, as
determined by the hearing officer, is not dilatory, in order to
development information and material relevant to any such
proposed rate.
(3) In addition to the opportunity to submit oral and written
material at the hearings, any written views, data, questions, and
arguments submitted by persons prior to, or before the close of,
hearings shall be made a part of the administrative record.
(4) After such a hearing, the Administrator may propose revised
rates, publish such proposed rates in the Federal Register, and
conduct additional hearings in accordance with this subsection.
(5) The Administrator shall make a final decision establishing a
rate or rates based on the record which shall include the hearing
transcript, together with exhibits, and such other materials and
information as may have been submitted to, or developed by, the
Administrator. The decision shall include a full and complete
justification of the final rates pursuant to this section.
(6) The final decision of the Administrator shall become
effective on confirmation and approval of such rates by the Federal
Energy Regulatory Commission pursuant to subsection (a)(2) of this
section. The Commission shall have the authority, in accordance with
such procedures, if any, as the Commission shall promptly establish
and make effective within one year after December 5, 1980, to
approve the final rate submitted by the Administrator on an interim
basis, pending the Commission's final decision in accordance with
such subsection. Pending the establishment of such procedures by the
Commission, if such procedures are required, the Secretary is
authorized to approve such interim rates during such one-year period
in accordance with the applicable procedures followed by the
Secretary prior to December 5, 1980. Such interim rates, at the
discretion of the Secretary, shall continue in effect until July 1,
1982.
(j) Cost figures to be indicated on rate schedules and power billings
All rate schedules adopted, and all power billings rendered, by the
Administrator pursuant to this section shall indicate--
(1) the approximate cost contribution of different resource
categories to the Administrator's rates for the sale of energy and
capacity, and
(2) the cost of resources acquired to meet load growth within
the region and the relation of such cost to the average cost of
resources available to the Administrator.
(k) Statutory basis for procedures used in establishing rates or rate
schedules
Notwithstanding any other provision of this chapter, all rates or
rate schedules for the sale of nonfirm electric power within the United
States, but outside the region, shall be established after December 5,
1980, by the Administrator in accordance with the procedures of
subsection (i) of this section (other than the first sentence of
paragraph (6) thereof) and in accordance with the Bonneville Project Act
[16 U.S.C. 832 et seq.], the Flood Control Act of 1944, and the Federal
Columbia River Transmission System Act [16 U.S.C. 838 et seq.].
Notwithstanding section 201(f) of the Federal Power Act [16 U.S.C.
824(f)], such rates or rate schedules shall become effective after
review by the Federal Energy Regulatory Commission for conformance with
the requirements of such Acts and after approval thereof by the
Commission. Such review shall be based on the record of proceedings
established under subsection (i) of this section. The parties to such
proceedings under subsection (i) of this section shall be afforded an
opportunity by the Commission for an additional hearing in accordance
with the procedures established for ratemaking by the Commission
pursuant to the Federal Power Act [16 U.S.C. 791a et seq.].
(l) Rates for sales outside United States; negotiations
In order to further the purposes of this chapter and to protect the
consumers of the region, the Administrator may negotiate, or establish,
rates for electric power sold by the Administrator to any entity not
located in the United States which shall be equitable in relation to
rates for all electric power which is, or may be, purchased by the
Administrator or the Administrator's customers from entities outside the
United States. In establishing rates other than by negotiation, the
provisions of subsection (i) of this section shall apply. In the case of
any negotiation with an entity not located in the United States, the
Administrator shall provide public notice of any proposal to negotiate
such rates. Such negotiated rates shall be not less than the rates
established under this chapter for nonfirm power sold within the United
States but outside the region. The Administrator shall also afford
notice of any rates negotiated pursuant to this subsection.
(m) Impact aid payments; formula
(1) Beginning the first fiscal year after the plan and program
required by section 839b(d) and (h) of this title are finally adopted,
the Administrator may, subject to the provisions of this section, make
annual impact aid payments to the appropriate local governments within
the region with respect to major transmission facilities of the
Administrator, as defined in section 3(c) of the Federal Columbia River
Transmission Act [16 U.S.C. 838a(c)]--
(A) which are located within the jurisdictional boundaries of
such governments,
(B) which are determined by the Administrator to have a
substantial impact on such governments, and
(C) where the construction of such facilities, or any
modification thereof, is completed after December 5, 1980, and, in
the case of a modification of an existing facility, such
modification substantially increases the capacity of such existing
transmission facility.
(2) Payments made under this subsection for any fiscal year shall be
determined by the Administrator pursuant to a regionwide, uniform
formula to be established by rule in accordance with the procedures set
forth in subsection (i) of this section. Such rule shall become
effective on its approval, after considering its effect on rates
established pursuant to this section, by the Federal Energy Regulatory
Commission. In developing such formula, the Administrator shall
identify, and take into account, the local governmental services
provided to the Administrator concerning such facilities and the
associated costs to such governments as the result of such facilities.
(3) Payments made pursuant to this subsection shall be made solely
from the fund established by section 11 of the Federal Columbia River
Transmission System Act [16 U.S.C. 838i]. The provisions of section 13
of such Act [16 U.S.C. 838k], and any appropriations provided to the
Administrator under any law, shall not be available for such payments.
The authorization of payments under this subsection shall not be
construed as an obligation of the United States.
(4) No payment may be made under this subsection with respect to any
land or interests in land owned by the United States within the region
and administered by any Federal agency (other than the Administrator),
without regard to how the United States obtained ownership thereof,
including lands or interests therein acquired or withdrawn by a Federal
agency for purposes of such agency and subsequently made available to
the Administrator for such facilities.
(n) Limiting the inclusion of costs of protection of, mitigation of
damage to, and enhancement of fish and wildlife, within rates
charged by the Bonneville Power Administration, to the rate
period in which the costs are incurred
Notwithstanding any other provision of this section, rates
established by the Administrator, under this section shall recover costs
for protection, mitigation and enhancement of fish and wildlife, whether
under this chapter or any other Act, not to exceed such amounts the
Administrator forecasts will be expended during the fiscal year 2002-
2006 rate period, while preserving the Administrator's ability to
establish appropriate reserves and maintain a high Treasury payment
probability for the subsequent rate period.
(Pub. L. 96-501, Sec. 7, Dec. 5, 1980, 94 Stat. 2723; Pub. L. 106-60,
title III, Sec. 316, Sept. 29, 1999, 113 Stat. 497.)
References in Text
The Bonneville Project Act, referred to in subsec. (k), is act Aug.
20, 1937, ch. 720, 50 Stat. 731, as amended, popularly known as the
Bonneville Project Act of 1937, which is classified generally to chapter
12B (Sec. 832 et seq.) of this title. For complete classification of
this Act to the Code, see Short Title note set out under section 832 of
this title and Tables.
The Flood Control Act of 1944, referred to in subsec. (k), is act
Dec. 22, 1944, ch. 665, 58 Stat. 887, as amended, which enacted sections
460d and 825s of this title, sections 701-1, 701a-1, 708, and 709 of
Title 33, Navigation and Navigable Waters, and section 390 of Title 43,
Public Lands, and enacted provisions set out as notes under sections
701c, 701f, and 701j of Title 33. For complete classification of this
Act to the Code, see Tables. For provisions of the Act relating to sale
of electric power, see section 825s of this title.
The Federal Columbia River Transmission System Act, referred to in
subsec. (k), is Pub. L. 93-454, Oct. 18, 1974, 88 Stat. 1376, as
amended, which is classified generally to chapter 12G (Sec. 838 et seq.)
of this title. For complete classification of this Act to the Code, see
Short Title note set out under section 838 of this title and Tables.
The Federal Power Act, referred to in subsec. (k), is act June 10,
1920, ch. 285, 41 Stat. 1063, as amended, which is classified generally
to chapter 12 (Sec. 791a et seq.) of this title. For complete
classification of this Act to the Code, see section 791a of this title
and Tables.
Amendments
1999--Subsec. (n). Pub. L. 106-60 added subsec. (n).
Section Referred to in Other Sections
This section is referred to in sections 824k, 832m, 838l, 839c,
839f, 839g of this title.
