FERC denies BPA request for reciprocity status for its tariff

FERC on Nov. 21 partially approved the reciprocity tariff revisions filed by the Bonneville Power Administration (BPA) on March 29, 2012, but withheld approval of BPA’s request that the tariff be granted safe harbor reciprocity status pending the submission of additional modifications to the agency’s method of providing generator imbalance service and calculating available transfer capacity (Docket Nos. NJ12-7-000 and NJ12-13-000).

Under FERC Order 890, non-public utilities, such as BPA, that had a safe harbor reciprocity tariff were required to amend their tariffs so that their provisions would substantially conform with, or be superior to, the pro forma open-access transmission tariff (OATT) contained in Order 890. If FERC finds the tariff acceptable and grants reciprocity status, it means that FERC has found the non-public utility grants open access to its transmission assets, and that public utilities are therefore required to provide open access transmission service to the non-public utility upon its request.

BPA’s efforts to have its reciprocity tariff approved date to Sept. 6, 2007, when BPA filed a petition seeking a ruling that Attachment M and other provisions of its OATT were equal or superior to the pro forma tariff contained in Order 890. The agency filed a second petition on Oct. 3, 2008, asserting that certain deviations in its tariff substantially complied with Order 890. On July 15, 2009, FERC granted the 2007 petition, and granted in part and denied in part the 2008 petition, explaining what BPA needed to do so that its tariff would qualify for safe harbor reciprocity status.

After a year-long public process with customers and stakeholders that BPA officials described as “extensive and collaborative,” BPA filed its 2012 petition, which the agency said at the time “took care of numerous issues, and we’ve also been working to provide information [on issues] that were pointed out to us by FERC when they returned it to us originally.”

In its Nov. 21 order, the commission found several of BPA’s proposed revisions deficient, including one that covers BPA’s generator imbalance service, which is provided when there is a difference between a generator’s actual output and its delivery schedule in individual interconnection agreements.

Under Order 890, a transmission provider can determine what resources must be reserved for all its reliability needs, including imbalance service. However, FERC said BPA’s Schedules 9 and 10 give BPA broad authority to limit its provision of imbalance service through a rate proceeding under the Northwest Power Act based on a range of factors including “customer willingness to pay” and “economic considerations.”

FERC said the proposed language “would give Bonneville virtually unlimited discretion to set a level of imbalance service based on whatever factors and whatever weighting of these factors it deems appropriate.” Such provisions, FERC said, do not substantially conform with, nor are they superior to, the pro forma OATT obligation.

While they are still studying and digesting the 50-page order, BPA officials suggest that FERC’s order did not properly evaluate its proposal for administering its imbalance service.

“We do have significant concerns that it does not appear to address the reliability, operational and other issues associated with the provision of imbalance service from a hydro-based system like ours, which is very dynamic and less predictable than thermal-based systems in other parts of the country,” Elliot Mainzer, BPA’s acting administrator, said in a statement provided to TransmissionHub Nov. 22. “We are committed to further clarify to FERC the physical and statutory constraints and customer options that guide our approach to the provision of imbalance service as well as the enhancements we have made since filing our tariff.”

In its order, FERC said BPA could meet its requirement “by developing a long term planning methodology that allows it to provide imbalance service consistent with the pro forma tariff while also taking into account the various and complex factors that affect its system” and incorporate the process it intends to use to set the level of imbalance service that it will provide in its OATT and not in individual rate cases.

FERC’s order also addressed BPA’s proposed oversupply management protocol (OMP), which it filed March 1 under a separate complaint proceeding. Stating that the complaint proceeding was the appropriate venue for its consideration, FERC would not address whether the OMP satisfies the commission’s reciprocity standards pending resolution of that matter.

FERC also rejected BPA’s reinstituted price cap on reassigned transmission capacity.

In Order 739 and Order 890, the commission found that the removal of a price cap for all transmission customers reassigning transmission capacity would foster the development of a more robust secondary market for transmission capacity and, in Order 890-A, ordered the removal of a price cap for a two-year pilot program that ended Oct. 1, 2010. Following that program, BPA reinstated its price cap, citing the statutory requirements under which it operates.

FERC disagreed with BPA’s action.

“We continue to find that Bonneville’s tariff is incomplete and, therefore, we find it does not meet the safe harbor reciprocity requirements without the removal of the price cap on transmission capacity reassignments and the inclusion of the transmission capacity reassignment provisions under [the] pro forma OATT,” the commission said in its order.

BPA was ordered to submit a compliance tariff filing detailing its plan for compliance with Orders 739 and 890, and communicate its timeline to its customers, FERC said.

In other actions, FERC accepted BPA’s clarifications of its proposed methods of conducting and charging customers for cluster studies regarding transmission service requests. In the July 15, 2009 order, the commission accepted BPA’s proposal for cluster studies but ordered it to make certain clarifications. In the Nov. 21 order, FERC said, “Bonneville has made these clarifications here and we accept Bonneville’s clarifications. “

FERC also addressed BPA’s plans to develop and implement automated means to process transmission service requests. Based on BPA’s progress, FERC said it would not withhold the reciprocity based on its ongoing automation efforts.

In the previous orders, the commission directed BPA to redefine the calculations and methodologies dealing with available transfer capacity. In the Nov. 21 order, FERC found that the clarifications substantially conform with, or are superior to, Order 890’s pro forma tariff.

Finally, the commission found that BPA provided a satisfactory explanation of the process by which capacity is set aside for network service and freed up for seasonal adjustments.

There is no set deadline by which BPA must respond, an agency spokesperson told TransmissionHub.