HomeMy WebLinkAbout20080505Westerfield Rebuttal Exhibits.pdfFEDERAL ENERGY REGULATORY COMMISSION
WASHINGTON, D.C. 20426
In Reply Refer To:
Docke t Nos. ER82-618-000
ER8 2-6 22-000
ER8 2-6 61-000
ER8 3- 241-000
ER8 3-68 7-000
ER8 3- 712-000
Perkins, Coie, Stone, Olsen & WilliamsAttention: Mr. Douglas S. Little
Attorney for Idaho Power Company1900 Washington Building
Seattle, Washington '98101
MA Y 2 0 1985
Dear Mr. Little:
On April 4, 1985, you filed a settlement aCJreement am~ng IdahoPower Company (IPC) Bonneville Power Administration (BPA) and DirectService Industrial customers of BPA in the above-referenced dockets.On April 12, 1985, staff submitted CO~TIents in support of the settleme~t.No other comments were received. On April 24, 1985, the presidingadministrative law judge certified the uncontested settlement to theCommiss ion.
The subject settlement is in the public interest and is herebyapproved. The settlement agreem~nt is accepted for filing and desig-
na ted as shown on the attached Enc losure. The Comm iss ion s approva 1of this settlement does not constitute approval of ,or precedentregarding, any principle or issue in this proceeding.
This letter tenninates Docket Nos. ER82-618-000, ER82-622-000,ER82-661-000, ER83-241-000, ER83-687-000 and ER83-712-000.
By direction of the Commission.
~:;
Secretary
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- 2 -
Enc losu re
cc:To All Parties
Idaho publ ic uti lit ies comrniss ionState House, Boise Idaho 83720
Nevada Public Service Commission
Capi tol Complex, Kinkead Bu ild i ng
505 E. King StreetCarson City, Nevada 89710
oregon Public Utility Commission
Labor & Industries Building
Salem , Oregon 97310
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Desig na t ion
ENCLOSU RE
Idaho Power Company
Docket Nos. ER82-6l8 et. ale
Settlement DesignatIon-
Descript ion
Settlement Agreement of
ASC for Nevada, Idaho
and Oregon Jurisdictions
Supplement No. 12 to
Idaho Power Company/
Bonneville Power Adminis-
tration Service Agreement
under Pacific Northwest
Electric Power and
Conversation Act FERC
Electric Tar iff,
orig inal Vol ume No.
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Page 3 of 8
UNITED STATES OF AMERICA
BEFORE THE
FEDERAL ENERGY REGULATORY COMMISSION
Idaho Power Company ) Docket Nos. ER82-618-000,
) ER82-622-000, ER82-66l-000,
) ER83-24l-000, ER83-687-000,
) ER83-712-000
SETTLEMENT AGREEMENT
INTRODUCTION
The purpose of this agreement is to settle proceedings
pending before the Federal Energy Regulatory Commission (Commis-
sion) regarding the Idaho Power Company (~PC) average system cost
(ASC)filings Docket Nos.ER8 2-618-000,ER82-622-000,
ER8 2-661-000,ER83-24l-000,ER83-687-000,and ER83-712-000.
Bonneville Power Administra tion (BPA)and each 0 the direct
service industrial customers of BPA (collectively, the DSIs) have
intervened in each of these dockets.There are no other inter-
venors.All parties and the Commission staff have pref~led
direct and rebuttal testimony which has not yet been made part
of any record.IPC, BPA, and the DSIs hereby agree to settle all
of these proceedings as set forth in this agreement.The parties
further agree to the prompt filing by IPC of this agreement in
the above-captioned dockets.
II.ISSUES -RESOLVED
This agreement resolves these proceedings.It neither
determines the merits of any issue ~n these proceedings, nor
constitutes any party t s agreement with the position taken by any
other party on any issue herein.This settlement agreement does
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not establish any principle or precedent for use in determining
the ASC of any utility, including IPC.
III. PROCEDURES FOR TERMINATING CASES
By this settlement agreement, IPC and the DSIs agree to
withdraw their respective requests for hearings and other Commis-
sion review proceedings the above-captioned dockets.BPA
. hereby joins with IPC and the DSIs in requesting the Commission
to issue an order approving this settlement agreement and ter-
minating all the above-captioned dockets in their entirety.
their request, the parties propose that the Commission order not
address the merits o.f any issue.IPC, BPA,and the DSIs agree
not to seek judicial review of the Commission order approving
this settlement agreement.
IPC, BPA, and the DSIs request the Presiding Judge to
certify on an expedited basis this settlement agreement to the
Commission for immediate disposition as an uncontested settlement.
The parties agree to seek the most expedited Commission review
and approval process possible.Pending certifica tion,the
parties request a stay ' of the schedule in the above-captioned
dockets effective March 14,1985.It is the parti~s intention
that none their J1refiled direct and rebuttal 1!oe s t imo n y
introduced into the record of these proceedings.
IV.CONSIDERATION FOR SET'l'LEMENT
The parties acknowledge that the following ASC rates were
de terrnined by the Administrator.The parties agree that this
settlement shall not construed ei ther approval
Settlement Agreement-2
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Page 5 of 8
disapproval of these ASC rates,and that the parties will not
further seek approval or disapproval of these ASC rates:
Docket No.Average System Cost Effective Date
ER82-618-000 (Idaho)
ER8 2-618-000 (Nevada)
ER82-622-000 (Idaho)
ER82-661-000 (Oregon)
ER83-241-000 (Idaho)
ER83-687-000 (Idaho)
ER83-712-000 (Oregon)
17.
15.
19.
16. 83
22.
21. 05
21.
12/2/81l2/2/812/5/821/l/82
8/20/82"
2/8/834/11/83
Time is of the essence hereunder.In recognition of this,
and in consideration of this agreement, the parties have settled
upon a lump sum payment and upon certain deemer account adjust-
ments in the amount and manner as follows:
BPA shall pay Idaho Power by wire transfer the sum
of Seven Million Five Hundred Thousand Dollars ($7,500,000).
Such payment shall be made no later than June 30, 1985, or
wi thin days after the date the Commission order
approving this settlement agreement, whichever occurs first.
such payment not timely received,the outstanding
balance owed BPA shall accrue interest the
Treasury rate charged to BPA during that period.
'the BPA report issued D~c:ember 17, 1982 regarding DocketNo. ER83-241-000 determined IPC'ASC to be 21.83. The
Commiss~on . ordered modification (refund) based upon
determinations of certain issues; however, the remaining issues
raised in Docket No. ER83-241-000 were set for further review andconsideration by the Commission. Pacific Power and Light
Company, et al.Docket Nos. ER81-780-000, et al.28 FERC
161,143, ssue July 25, 1984. The effect of the Commission
order was an increase in . the IPC ASC to 22.58, as reflected. The
refund has been paid and is not affected by this settlement
agreement.
Settlement Ag~eement-3
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Upon Commission approval this settlement
agreement,BPA s ha 11 adjust the IPC deemer accounts
crediting the following amounts to the specified account,
effective as of February 28, 1985.
Deemer Accountby Juri sdiction Amount of Credit
Idaho
Oregon
Nevada
$6,298,000
$ 335,000
$ 67 000
$6,700,000
MISCELLANEOUS
The parties agreements and obligations hereunder are
contingent upon the Commission 'approval this settlement
agreement in its entirety.If such ap~oval is not given or if
this settlement agreement is successfully challenged before any
court,the parties agree that this proceeding should return to
the status existing as of March 14, 1985.If Commission approval
is not given but the payment under subparagraph 1 of paragraph IV
has been made,. IPC will,wi thin days the Commission
disapproval, repay BPA by wire transfer the sum of Seven Million
Five Hundred Thousand Dollars ($7,500,000.00)plus interest
computed in accordance with 18 C. F. R. 35.19a and calculated from
the date IPC received the money fro~ BPA.Should this agreement
. be successfully challenged before any court,the parties agree
that (l)the repayment, if any, of the lump sum payment referred
to in subp~ragraph 1 of paragraph IV plus interest as allowed by
the Commission,shall be determined in the resumed proceeding,
(2 )such repayment,if any, will in any case not constitute an
adjustment to IPC' s deemer account,and (3 )the adjustments
the IPC deemer accounts referred to in subparagraph 2 of paragraph
IV, above, shall be rescinded effective as of February 28, 1985.
C=~+l =~~n~ ~~~==m=n~-WP-O7-ID-AT4
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With regard to each rescinded adjustment, if IPC has by the time
of such rescision come out of the deerner, IPC shall not be ob-
ligated to make any cash payment to BPA, but instead will cease
receiving exchange payments from BPA until thE: deemer account
reaches and exceeds zero.
DATED this second day of April, 1985
FOR THE DSI, INC. AND THE INDIVIDUAL
DIRECT SERVICE INDUSTRIAL CUSTOMERS:
~ ~
Michael P lcantar
Michael Peter Alcantar, P. C.
-rf
~~~
BalJn
Jnr
Lindsay, Hart, Neil & Weigler
MMI STMTION
A. Cameron, Jr.
istant General Counsel
FOR IDAHO POWER COMPANY
~. ):::
DsL
~e
r/4L-Perkins Coie
Settlement Agreement-5
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MA4: b4/2/85
SNAKE RIVER
.\.."'
"f.3I'l~""~
~,,:~,
~ I.
:~-::: '
IDAHO POVVER COMPANY
BOX 70 ~ BOISE, IDAHO B3707
HYDRO POWER
June 18 , 1985
Ha rry All
BonneYi 11 e PowerAttn: DRK
Box 3621
Portl and, Oregon
Admin; stration
97208
Dear Harry:
With the May 20 , 1985 FERC approval of the ASC settlement
agreement, we arc requesting verification with BPA of Idaho Powerthree jurisdictional "deemer " accounts. Listed below are the
balances that we have calculated as of May 31, 1985 both prior to
and after apply~ng the settlement amounts:
Jurisdiction
Idaho
Prior to
Settl ement
$ (13,897 911 56)
$ (667 115.86)
$ (202,993.08)
Post
Settl ement
$ (7.599,911.56)
$ (332)115.86)
$ (135,993.08)
Oregon
Nevada
Please indicate oelow by signatur-e if you agree with ourbal ances. If you do not agree. pl ease give us your bal ances and
we will contact you for reconciliation. You may return your response
to me at Idaho Power Company, P Box 70 ~ 80i se. Idaho 83707. Thankyou for your attention.
' .
Sincerely,
Fred ~Jri ght
Signature ~8~Date 7- 1-
L A Crowl ey
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. .
Contract No ----...!E-MS79-89BP92800
August 22 , 1989
SUSPENSION OF RESIDENTIAL P~RCHASE AND SALE AGREEME~T
executed by the
UNITED STATES OF AMERICA
DEPARTMENT OF ENERGY
act; ng by and through the
BONNEVILLE POWER ADMINISTRATION
Cl.IIU
IDAHO POWER COMPANY
Index to Sections
- - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Section
Suspension of Residential Purchase and Sale Agreement
.....,...- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Term of Agreement .,.,......."
......,...,.....................
3 ,Liabilities Incurred ..."
............,...,........,..,..,.....
Deemer Account ......,........,.."
............................
In Lieu .
..,.,...,.......,........",......,..........,.,......
6. Termination of Suspension Agreement
,...............,.....,....
Provision of Information by Idaho Power ........"
........,....
8. Ass1gnment of Agreement
.......................,.....,.........
Execution in Counterpart
.......,.....,.....................,..
Exhibit A (Data Requests)
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This Suspension Agreement, executed August 31 , 1989, by the United
states of Ameri ca (Government), Department of Energy, acti ng by and through
the BONN~VILLE POWER ADMINISTRATION (BPA), and IDAHO POWER COMPANY (Idaho
Power), a corporation organized and exis~ng under the laws of the State of
Idaho,
T N E SSE T H:
WHEREAS section S(c) of the Pacific Northwest Electric Power Planning and
Conservation Act (Northwest Power Act), 16 U.C. 99 839
~ ~"
provides
that a Pacific Northwest electri c uti1 i ty may sell el ectri c power to BPA at
the average system cost (ASC) of the utili ty I S resources and that BPA shall
sell in exchange an equivalent amount of electric power at BPA's Priority firm
rate (PF rate) to such utility for resale to that utility i s residential users
wi thi n the Region; and
WHEREAS Idaho Power and BPA entered nto a Res dent' a 1 Purchase and Sa 1 e
Agreement (RPSA) , Contract No DE-MS79-81BP90600 dated August 22, 1981 , and
executed November 13, 1981; and
WHEREAS Idaho Power has elected to deem its ASC equal to BPA's PF rate in
each of Idaho Power s exchange jurisdictions pursuant to sect'on 10 of the
RPSA; and
WHEREAS in BPA's 1987 wholesale power rate case BPA adopted a PF rate for
res1dent'al exchange part'c1pants, 'nclud1ng Idaho Power, that 1s based on the
applIcatIon of the supplementa1 rate charge provided for in section 7(b)(3) of
the Northwest Power Act; and
WHEREAS Idaho Power incurs and would continue to incur substantial costs
in connection with the preparation and rev1ew Qf its ASC submissions, and BPA
ncurs andwoul d cont1 nue to ncur substant1 a 1 costs 1 n connection w1 th 1 ts
rev1ew and process1ng of the ASC submissions and re1ated documents of Idaho
Power;
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NOH, THEREFORE, the parties hereto mutually agree as follows:
Suspension of Residential Purchase and Sale Agreement The
sect'on s(c) purchase and sale of power under the Idaho Power Residential
Purchase and Sal e Agreement (RPSA), Contract No. DE-MS79-81 BP90600 1 s hereby
suspended 'n accordance with and subject to the terms and cond,t1ons set forth
hereafter.
Term of Agreement This Suspension Agreement shall be effective at
2400 hours, July 31 1988, shall cont1nue 1n full force and effect until such
time as Idaho Power thereafter elects by giving a termination notice to BPA as
provided for in paragraph 6 of this Suspension Agreement, and shall terminate
at 2400 hours on the effecti ve date that BPA implements a new PF rate for
residential exchange participants which is not based on the application of the
supplemental rate charge provided for in section 7(b)(3) of the Northwest
Power Act,Until such time as term1 nat1on of thi s Suspens1on Agreement 1 s
effective, Idaho Power shall not offer to sell electric power to the BPA
Administrator pursuant to section S(e) of the Northwest Power Act.
L i abil i ti es Incurred Notwithstanding suspension of section S(c)
power sales under the RPSA , all liabilities incurred prior to the effective
date of thi s Suspens ion Agreement shall cont1 nue until sati sfi ed.BPA retains
its right pursuant to section 6 of the RPSA to conduct an audit or audits , at
BPA'expense, to determ'ne whether exchange benefits previously paid to Idaho
Power have benefitted only residential and small farm customers , as is
required by section S(c)(3) of the Northwest Power Act.
The execut10n of this Suspens1on Agreement by Idaho Power is wholly
dependent upon Idaho Power I s understandi ng that such suspens 'on may be agreed
upon byBPA without causing Idaho Power to Incur any cash obligation to BPA as
a resul t of the suspens ion.If 1 t shou 1 d be determ; ned by a court
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Page 3 of 9
..........-
competent jur1sd1ctlon that th1s understand1ng 1s Incorrect, then th1s
Suspens1on Agreement shall be null and v01d; prov1ded however , that Idaho
Power shall be excused from not hav1ng made ASC f111ngs and not1ces dur1ng the
per1od of suspensIon and the part1es shall cooperate 1n reconstruct1ng the
ba 1 ance , n the deemer account.
Deemer Account The part1es agree that Idaho Power s accrued deemer
account balance as provided 1n sect1on 10 of the RPSA Is $52,903 825,00,
1 nc1 ud1 ng nterest, as of 2400 hours, July 31. 1988, for the Idaho
Jur1sdlct10n; $4 561 ,262.00, 'nc1~d1ng 1nterest , as of 2400 hours , July 31
1988, for the Oregon Jur1sd1ctlon; and $689 064.00, 1nc1udlng 1nterest , as of
2400 hours, July 31, 1988, for the Nevada Jur1sdlct10n.Dur1ng the per10d of
suspens10n under th1s Suspension Agreement, accruals to the deemer account
sha 11 cease , except for nterest upon such amounts.From and after August 1
1988, such amounts shall accrue 1nterest, wh1ch shall be compounded quarterly,
at an average pr1me rate for each calendar quarter, wh1ch shall be the
ar1thmet1c mean, to the nearest one-hundredth of 1 percent , of the pr1me rate
values pub11shed 1n the Federal Reserve Bu11et1n , or In the Federal Reserve
Selected Interest Rates " (Statistical Release G. 13), for the fourth, th1rd,
and second months precedi ng the fi rst month of the calendar quarter.
Notwithstanding the parties ' agreement to the aforementIoned deemer
account balances, wh1ch 1s a comprom'se , neIther party, by enterIng 1nto th1s
Suspens I on Agreement, shall be deemed to have ' n any way approved, accepted,
or consented to the facts , pr1nc'pal methods , or theor'es employed bye1ther
party in arr'v1ng at the stated balances for each Jurisd1ct10n of the deemer
account as of July 31 , 1988,
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Page 4 of 9
In lieu Any rights and obligat1ons of Idaho Power and BPA
respecting an RPSA section 4 In lieu acqu1s1t1on shall be unaffected by this
Suspens 10n Agreement and shall be the same as woul d pertain in the case of a
utility that has elected to deem its ASC equal to BPA's PF rate.Thi s
paragraph shall ne1 ther be cons trued nor argued to be cons trued as havi ng any
bearing on the proper Interpretation of the parties ' rights and obligations
respecting an RPSA section 4 in lieu acquisition.
Termination of Suspension Agreement Idaho Power shall provide BPA
at least 13 month's written notice of Its election to terminate the suspension
of section S(c) purchases and sales under this Suspension Agreement , unless a
shorter period is otherwise mutually agreed to, or at least 1 month's written
notice of Its election to terminate prior to the proposed effective date of
proposed changes to BPA's PF rates, in which instance the terminat10n shall be
effective upon interim approval of the rates by the Federal Energy Regulatory
CommIssIon (FERC).
Notice of termination of suspension of section S(c) purchases and sales
under this Suspension Agreement shall not constitute notice of an election to
rescind Idaho Power s deeming election as to any subsequent sectIon 5(c)
purchases and sales under 1 ts RPSA.A notice to rescind Idaho Power s deeming
election may be separately given by Idaho Power, at Its opt10n, as prov1ded by
sect; on 10 of the RPSA to be effect; ve on or after the date of Idaho Power I
termlnat10n under this paragraph.On or before the effect1 ve date of Idaho
Power s termination of suspens1on of section S(c) purchases and sales under
this Suspension Agreement , Idaho Power shall file a Revised Append'x 1 with
BPA based on its then current rates In each jurisdIction , and the f11ing shall
be governed by the substance and procedures spec 1 fl ed in BPA' s then current
Average System Cost Methodology.
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Prov1s1on of Information by Idaho Power Idaho Power shall provide
the Information listed on Exhibit A to th1s Suspens1on Agreement to BPA'
Exchange Program Branch , Forecasting and Records Management Section, within
30 days after the date of execution of th1s Suspension Agreement by Idaho
Power and thereafter as prov1 ded for 1 n Exh1 b1 t A.
Assignment of Agreement This Suspension Agreement shall Inure to
the beneti t of, and shall be bi ndi ng upon the respectl ve successors and
assigns of the parties to this Suspension Agreement.Ne1ther this Suspension
Agreement nor any i nterest therei n shall be transf~rred or ass i gned by ei ther
party to any party other than the Government or an agency thereof wI thout the
written consent of the other except as specifica11y provided in this section.
The consent of BPA is hereby given to any security assignment or other like
fi nanci ng 1 nstrument whi ch may be requl red under terms of any mortgage, trust,
security agreement or ho1der of such Jnstrument of 1ndebtedness made by and
between Idaho Power and any mortgagee , trustee , secured party, subs I d1 ary
Idaho Power or holder of such Instrument of indebtedness , as security for
bonds or other ndebtedness of Idaho Power, present or future; such mortgagee,
trustee, secured party, subsidiary, or h01der may realize upon such security
in foreclosure or other suitable proceedings , and succeed to a11 right, title,
and interests of Idaho Power.
I I I
I I I
I I I
I I I
I I I
I I I
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Page 6 of 9
-----
Execution in Counterpart Thf s Suspension Agreement may be executed
f n counterpart.Upon execution by BPA and Idaho Power, each executed
counterpart shall have the same force and effect as f f both Idaho Power and
BPA had executed the same document,Any signature page of this Suspension
Agreem~nt may be detached from any counterpart w1 thout 1 mpa 1 r1 ng the 1 ega 1
effect of any signature(s) thereon, and may be attached to another counterpart
of this Suspension Agreement.
IN ~ITNESS ~HEREOF , the part1es have executed th1 s Agreement:
UNITED STATES OF AMERICA
Department of Energy \stratlon
ACTiNG Adm1 n1 strator
AUe 3 1 1989Date
IDAHO POWER COMPANY
TH1 e
Date
ATTEST:
fn,
T1 tl e orney
Date AUG ~ 1~l:"
nOOSe)
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Execution in Counterpart This Suspension Agreement may be executed
1 n counterpart. Upon execut, on by BPA and Idaho Power. each executed
counterpart shall have the same force and effect as , f both Idaho Power and
BPA had executed the same document,Any signature page of this Suspens'on
Agreement may be detached from any counterpart w1 thout 1mpa 1 r1 ng the 1 ega 1
effect of any s gnature (s) thereon. and may be attached to another counterpart
of th' s Suspens i on Agreement,
IN WITNESS WHEREOF. the parti es have executed th1 s Agreement:
UNITED STATES OF AMERICA
Department of Energy
Bonnev 111 e Power Adm' n 1 s trat \ on
Adm1nistrator
Date
:~~Ji IN
n tl e C:;e.u ~ t(AC ~
Date ~~tC-"'ber 1 . Iq~q
IDAHO POWER COMPANY
By
&~.e~
,. .
Title CJh9..,~~ C~
Date
~/~
/9s'j
(700Se)
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Exhi bit A
, '
1 of
Contract No~E-MS79-89BP928o0
Idaho Power Company
Effecti ve at 2400 Hours on July 31, 1988
DATA REQUESTS
Idaho Power, or 1ts successor , will supply to BPA, by June 30 of each
year, the following information:
The Power Supp 1y Report or its equi va 1 ent, prepared by the Department.
A 20 year load forecast.
The current tabu1 at1on of resources and requi rements.
The current Least Cost plan on file with the Idaho Public Utilities
Commi s s 1 on.
BPA agrees to accept Idaho Power I s then-current Resource Management Report
prepared for the Idaho Public Utilities Commission in place of items 1 - 4,
However, shou1 d the content of the Resource Management Report be modifi ed to
exclude any of the information contained in items 1 - 4 , Idaho Power agrees to
provide any and all of the items so excluded.
The current FERC Form 1 on file with the Federal Energy Regulatory
Comm i s s i on .
The Annua 1 Report to Shareholders.
At'BPA's request, made prior to the deadline for Intervention in any
rate proceeding or avoided cost proceeding, Idaho Power will provide
timely service of copies of all documents submitted by Idaho Power in
such proceedings , including, but not limited to, copies of all
responses to data requests made by the staff of any regulatory
commission, or intervenors, In such proceedings.
Responses to any reasonable data requests made by BPA which , 1n the
judgment of Idaho Power Company, are not unduly burdensome and do not
defeat the purpose of this Suspension Agreement. Such requests and
responses may be made at a reasonable time other than June 30.
CMa 1 che l/GKroni ck: b 1 m: 4201/7496: 8-21-89 (VS l-DRE- 7005e)
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SUSPENSION OF RESIDENTIAL PURCHASE AND SALE AGREEMENT
executed by the
UNITED STATES OF AMERICA
DEPARTMENT OF ENERGY
;,rot-; n,., hu ;,nrl t-h...,...",.,h '..h~.................'" "'J
""..~ .....~'"'~",.. ........
BONNEVILLE POWER ADMINISTRATION
and
THE WASHINGTON WATER POWER COMPANY
This Suspension Agreement, executed by the United States of
America (Government), Department of Energy, acting by and through
the Bonneville Power Administration (BPA), and The Washington Water
Power Company (WWP), a corporation of the State of Washington,
WITNESSETH
WHEREAS section 5 (c) of the Pacific Northwest Electric Power
Planning and Conservation Act, 16 U.C. SS 839 et seq., provides
that a Pac if ic Nor thwest electr ic utility may sell electr ic power
to BPA at the average system cost (ASC) of that utility s resources
and that BPA shall sell in exchange an equivalent amount of
electr ic power to such utility for resale to that utility I
residential users within the Region; and
WHEREAS wWP and BPA entered into a Residential Purchase and
Sale Agreement (RPSA), Contract No. DE-MS79-8lBP90606, dated
8/22/81 and executed 11/12/81; and
WHEREAS WWP has elected to deem its ASC equal to BPA's Priority
Firm Rate (PF rate) pursuant to section 10 of the RPSA; and
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Page 1 of 8
-'
WHEREAS in BPA 's 1987 wholesale power rate case BPA adopted a
PF rate for residential exchange participants, such as WWP, that is
based on the application of the supplemental rate charge provided
for in section 7 (b) (3) of the Pacific Northwest Electric Power
Planning and Conservation Act; and
r.TU,;'Dt;"7\t:: T.IT.TD ;~,...,...."" ,,~-'I 0.
"",
1-'1 ,...,.......1-;...".,,1-.... ;'H..".. "",h"'I-"",t-i",lnU.u~n..., nn~ ..L11"""""y all"" YYV"""'" ""VII""""""'" "'V
.....""""" ..."'...........................
costs in connection with the preparation and review of its ASC
submissions, and BPA incurs substantial costs in connection with
its review and processing of the ASC submissions and related
documents of WWP;
NOW, THEREFORE, the parties hereto mutually agree as follows:
SUSPENSION OF RPSA:The section 5 (c) purchase and sale of
power under the 'WWP Residential Purchase and Sale Agreement (RPSA),
Contract No. DE-MS79-81BP90606, dated 8/22/81 and executed 11/12/81
is hereby suspended in accordance wi th and subject to the terms and
conditions set forth hereafter.
TERM OF AGREEMENT:This Suspension Agreement shall be
effective at 2400 hours, June 30, 1987, shall continue in full
force and effect until such time on or after at least 2400 hours on
September 30, 1990, as W~P thereafter elects by giving a revocation
notice to BPA as provided for in paragraph 6 of this Suspension
Agreement, and shall terminate at 2400 hours on September 30 , 1994,
unless BPA and WWP shall have previQusly agreed in wr i ting to
extend the term of the Suspension Agreement, either as it is
currently wr it ten or as modif ied by mutual ag reement of BPA and
WWP.Until such time as revocation of this Suspension Agreement is
WP-O7-ID-AT7
Page 2 of 8
effective, WWP shall not offer to sell electric power to the BPA
Administrator pursuant to section 5 (c) of the Pacific Northwest
Electr ic Power Planning and Conservation Act.
LIABILITIES INCURRED:Notwithstanding suspension of
section 5 (c) power sales under the RPSA, all liabilities heretofore
incurred shall continue until satisfied . nrnvi npn hnwpvpr. thatr-~'---- .._n_.__
neither a surcharge shall be assessed, nor a rebate given, to WWP
under the Exchange Adj ustment Clause of the General Rate Schedule
provisions of BPA' s 1985 Wholesale Power Rates.BPA retains its
right to conduct an audi t or audits to determine whether exchange
benef i ts previously paid to WWP have benefitted only residential
and small farm customers, as required by section 5 (c) (3) of the
Pacific Northwest Electric Power Planning and Conservation Act.
The execution of this Suspension Agreement by WWP is wholly
dependent upon WWP' S understanding that such suspension may be
agreed upon by BPA without causing WWP to incur any cash obligation
to BPA as a result of the suspension.If it should be determined
by a court of competent jur isdiction that this interpretation of
the RPSA is incor rect, then this Suspension Agreement shall be null
and void.
DEEMER ACCOUNT:The parties agree that the WWpl S accrued
deerner account balance as provided in section 10 of the RPSA is
$27,336,185, including interest, as of 2400 hours, June 30, 1987,
for the Washington Jurisdiction, and $11,988,313, including
interest, as of 2400 hour s, June 30, 1987, for the Idaho
Jur isdiction.Dur ing the per iod of suspension under this
Agreement, accruals to the deemer account shall cease except for
interest upon such amounts.From and after October 1, 1987, such
WP-O7-ID-A T7
Page 3 of 8
amounts shall accrue interest, which shall not. be compounded, at an
average pr ime rate for each calendar quarter, which shall be the
ar i thmet ic mean, to the nearest one-hundredth of one percent, of
the pr ime rate values published in the Federal Reserve Bulletin , or
in the Federal Reserve s "Selected Interest Rates " (Statistical
Release G. 13) for the fourth! third! and second months preceding
the first month of the calendar quarter.
Notwi thstanding the parties ' agreement to the aforementioned
deemer account balances, which is a compromise, neither party, by
entering into this Suspension Agreement, shall be deemed to have in
any way approved, accepted, or consented to the facts, pr incipal
methods, or theories employed by either party in arriving at the
stated balances of the deemer accounts as of June 30; 1987.
IN LIEU:Any rights and obligations of WWP and BPA
respecting an RPSA section 4 in lieu acquisition shall be
unaffected by this Suspension Agreement and shall be the same
would pertain in the case of a utility that has elected to deem its
ASC equal to BPA's PF rate.This paragraph shall neither be
construed nor argued to be construed as hav ing any bear ing on the
proper interpretation of the parties ' rights and obligations
respecting an RPSA section 4 in lieu acquisition.
REVOCATION OF SUSPENSION AGREEMENT:WWP shall provide BPA
at least 13 months ' wr i tten notice of its election to revoke the
suspension of section 5 (c) purchases and sales under this
Suspension Agreement, unless a shorter period is otherwise mutually
agreed to, or at least 7 months ' written notice prior to the
proposed effective date of proposed changes to BPA I S pr ior i ty firm
(PF) power rates, in which instance the revocation shall be
WP-O7-ID-A T7
Page 4 of 8
effective upon interim approval of the rates by FERC.Notice of
revocation of suspension of section (c) purchases and sales under
this Suspension Agreement shall not constitute notice of an
election to rescind WWP I S deeming election as to any subsequent
section 5 (c) purchases and sales.A notice to rescind WWP'
deeming elect ion may be separately given by WWP, at its option, as
provided by section 10 of the RPSA to be effective on or after the
date of WWP's revocation.On or before the effective date of WWP' s
revocation of section 5 (c) purchases
and sales under this Suspension Agreement, WWP shall file a Revised
Appendix 1 filing wi th BPA based on the company s then-current
rates in each jurisdiction, and the filing shall be governed by the
substance and procedures specified in the then-current Average
System Cost Methodology.
PROVISION OF INFORMATION BY WWP:WWP shall provide the
information listed on Attachment 1 to this Suspension Agreement to
BPA's Exchange Program Oversight Branch, Forecasting and
Intervention Section on a September 30 annual basis unless another
reasonable time is specified in the case of items 8 and 9.
ASSIGNMENT OF AGREEMENT.This Agreement shall inure to the
benefit of, and shall be binding upon the respective successors and
assigns of the parties to this Agreement.Such Agreement or any
interest therein shall not be transferred or assigned by either
par ty to any par ty other than the Government or an agency thereof
wi thout the wr it ten consent of the other except as specif ically
provided in this section.The consent of BPA is hereby given to
any secur ity assignment or other like financing instrument which
may be required under terms of any mortgage, trust, security
WP-O7-ID-A T7
Page 5 of 8
agreement or holdef of such instrument of indebtedness made by and
between the purchaser and any mortgagee, trustee, secured party,
subsidiary of the purchaser or holder of such instrument
indebtedness, as secur i ty for bonds or other indebtedness of such
Purchaser, present or future; such mortgagee, trustee, secured
party: subs id iary or holder may realize upon such secur i ty in
foreclosure or other sui table proceedings, and succeed to all
right, ti tIe, and interests of such Purchaser.
EXECUTION IN COUNTERPART.This Suspension Agreement may be
executed in counterpart.Upon execution by BPA and WWP, each
executed counterpart shall have the same force and effect as
both WWP and BPA had executed the same document.Any signature
page of this Suspension Agreement may be detached from any
counterpart without impair ing the legal effect of any signature (s)
thereon, and may be attached to another counterpart of this
Suspension Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement:
UNITED STATES OF AMERICA
Department of Energy
Bonneville Power Administration
The Washington Water Power Company
Ti tie Vice President Power Supply
ATTEST:
Title
WP-O7-ID-A T7
Page 6 of 8
...-'
agreement or holder of such instrument of indebtedness made by and
between the purchaser and any mortgagee, trustee, secured party,
subsidiary of the purchaser or holder of such instrument of
indebtedness , as secur i ty for bonds or other indebtedness of such
Purchaser, present or future; such mortgagee, trustee, secured
party, subsidiary, or holder may realize upon such secur i ty in
foreclosure or other suitable proceedings, and succeed to all
right, ti tle, and interests of such Purchaser.
EXECUTION IN COUNTERPART.This Suspension Agreement may be
executed in counterpart.Upon execution by BPA and WWP , each
executed counterpart shall have the same force and effect as if
both WWP and BPA had executed the same document.Any signature
page of this Suspension Agreement may be detached from any
counterpar t wi thou t impair ing the legal effect of any signature (s)
thereon, and may be attached to another counterpart of this
Suspension Ag reement.
IN WITNESS WHEREOF, the parties have executed this Agreement:
UNITED STATES OF AMERICA
Department of Energy
Bonnev~ e Power A m~nlstrat~on
The Washington Water Power Company
Title
ATTEST:
Title
WP-O7-ID-AT7
Page 7 of 8
ATTACHMENT 1
DA'
,!.
A REQUESTS
The Power Supply Department of the Washington Water Power
Company will supply to BPA, on an annual basis, the following
.L .
information:
Department.
commission.
The Power Supply Report or its equivalent, prepared by the
A twenty-year load forecast.
The current tabulation of resources and requirements.
The current Avoided Cost Methodology and Rates.
A summary of PURPA contracts.
Copies of any new power sales or exchange agreements.
The current Least Cost plan on file with any regulatory
At BPA I S request, copies of all responses to date requests
made by the staff of any regulatory commission, or intervenors, in
Such requests and responses may be made atany general rate case.
a reasonable time other than September 30.
Responses to any reasonable data requests made by BPA
which, in the judgment of WwP, are not burdensome and do not defeat
Such requests andthe purpose of this Suspension Agreement.
responses may be made at a reasonable time other than September 30.
10.The current FERC Form 1 on file with the Federal Energy
Regulatory Commission.
11.The Annual Report to Shareholders.
WP-O7-ID-A T7
Page 8 of 8
,_.,,-,--,.,.,"-'~-"'"_-~.,.,.__.,'...
m_-...m..
.3; IU:: iq;~)~,UvE~i\ JU!'t'tlf, \,\,J, :)..1 J (,t::5c iV i i.
Wli'J!sMngton Wtder Power
le~IBf Bryilo
$eninrVice P"",id&ntRal"" and R~"u(.:x.t
September 29, 1993
Mr. Richard Raynor
Chief, Exchange Program Bmnch
Bonnf5ville Pov,rer Administration
O. Bo~ 3621
Portland , Oregon 97208-3621
RE:Contract No.DE-MS79-81BP90606
Dear Mr. Rayoor.
!". U(.
The Washington Water Power Comp:ifJY (Company) hcIr-by
gives notice, pursuant to Section 9 of its above-referenced
Residential Purchase and Sale Agreement (RPSA). of its election to
terminate its RPSA effective September 30, 1993 and continuing
through 2400 hours on June 30, 2001.
Very truly yours,
The Washington' Water Power Company
J3 LA,
-,-- .:'---
W. I..ester 13, 'an
Senior Vice lreside.nt
Rates & Resources
WLB :jla
Tl1o WMhlnglon 'lVa!~r P"WUf Coml'nny P.O Bo;, ~7'J.7 Spol:aM, Wa3hlnfl!6n 1J922!J \~09) 4ro..OOC(J 11-000-72"11170
SERVING EASTERN WM;I4I~IGTQN I\NO \-IO6n'HeFlH II)N-IO '/111"1"1-1 ELECTRlC"Y AND NATURAL (';1\&
WP-O7-ID-A T8
Page 1 of
;DArJJ
FGiv"ER
10iIH\) POWER COMPANY
PO BOX "0
BOISE. IDAHO 83707
ROBERT W. STAHMAN
Vice Presklent, General Counsel
..nd Secretary
September 28 , 1993
Mr. Richard Raynor
Chief, Exchange Program Branch
Bonneville Power Administration
O. Box 3621
Portland, Oregon 97208-3621
Re: Residential Purchase and Sale Agreement
Contract No. DE-MS79-81 BP90S00
Dear Mr. Raynor.
Idaho Power Company ("Company ) hereby gives notice, pursuant to Section 9 of
the above-referenced Residential Purchase and Sale Agreement("RPSA j, of its election to
terminate that RPSA effective September 30 1993. We request that BPA notify us as soon as
possible of its calculations of the Company s deemer account balances through September 30
1993 . so that we might then either agree to the calculations or resolve any disagreements about
them. VVhatever the correct balances are determined to be , the Company agrees that the
Company s deemer account balances accrued as of September 30, 1993, for each of its
excl1ange jurisdictions shall continue to accrue interest, said interest to be compounded quarterly,
at an average prime rate for each calendar quarter, which shall be the arithmetic mean, to the
nearest one-hundredth of one (1) percent, of the prime rate values published in the Federal
Reserve Bulletin,or in the Federal Reserve s "Selected Interest Rates" (Statistical Release G. 13)
for the fourth, third and second months preceding the first month of the calendar quarter.
Consistent with section 10 of the Company s RPSA, we understand that the balances in the
Company s deemer accounts shall not be a cash obligation of the Company, but shall be carried
forward to apply to any subsequent exchange by the Company for the jurisdiction under any new
or succeeding agreement.
~ery truIY~,
~\JJ .
Robert W. Stahman
RWS:sm
cc: Randy Roach
Telephone (208) 383-2675 Fax (208) 368-6936
WP-O7-ID-A T9
Page 1 of
C___'...m ..
.."..."....".."..,... ",..----".................
"'."m.mm"."'."".."'-'.-'__~.'m_.'___'m"'
.."
September 21 , 1993
TO:Gary A. Dahl ke --representi ng Hashi ngton Hater Power
Jim Thompson -- representi ng Idaho Power Company
FROtvJ:Randy A, Roach
RE:J'1~~P drat J10 ..RP51Lte.rJnionation faxed
_--
t~..-'nf;,_....9L29
Thi s note is i n response to the draft termi nati on 1 anguage that Gary faxed me
on September 20. Inasmuch as section 9 of the RPSA references a time period
for termination , BPA would request that you specify the duration of
termination. That should, on that basis at least , remove any questions about
the effectiveness of your termination and whether the agreement somehow
revives itself once 7(6)(2) is no longer triggering. In addition , BPA
bel leves we should agree now upon what the termination letter should state
regardi ng how j nterest shoul d be computed on the outstandi ng deemer account
balance since (1) section 1 of the RPSA states that , notwithstanding
termj nation of the agreement 1 I abi I I tl es under the agreement conti nue until
satisfied, (2) section 10 states that the net balance in the deemer account
shall accumulate interest and (3) section 10 later states that the balance
the deemer account shall be carried forward to apply to any subsequent
exchange by the utility. We believe the interest rate formula set forth in
Idaho s RPSA suspension should apply. Re your suggestion that other matters
be deferred to the time of a request for a post-20m contract , we agree.
With all of the above changes , I would suggest that the inside caption of the
etter reference the RPSA number or numbers and that the body of the etter
read as follows:
The
....._-
Company (Company) hereby gi ves noti ce
pursuant to section 9 of its above-referenced Resi denti al Purchase and
Sale Agreement (RPSA) , of its election to terminate its RPSA effective
September 30 , 1993 , and continuing through 2400 hours on June 30 , 2001.
He request that BPA notify us as soon as possible of its calculations of
the Company s deemer account balances through September 30,1993, so that
we might then either agree to the calculations or resolve any
disagreements about them. Whatever the correct balances are , the Company
agrees that the Company s deemer account balances accrued as of September
. 1993 , for each of its exchange jurisdictions shall continue to accrueinterest, which shall be compounded quarterly, at an average prime rate
for each calendar quarter , which shall be the arithmetic mean, to the
nearest one-hundredth of 1 percent, of the prime rate values publ I shed In
the f~Q~x al ReserY ELJ3.ul1etin , or in the Fdederal Reserve s "Selected
Interest Rates " (Statistical Release G. 13), for the fourth , third and
second months preceding the first month of the calendar quarter.
Cons i stent wi th sect; on 10 of the Company 's RPSA. we unders tand that the
balances In the Company s deemer accounts shall not be a cash obligation
of the Company, but shall be carri ed forward to appply to any subsequent
exchange by the Company for the jurisdiction under any new or succeedIng
agreement.
I have faxed this to the Public Power Coucil (Geoff Carr) and the Direct
Service Industries (Steve Waddington) for their information and quick revIew.
WP-O7-ID-A TIO
Page 1 of 2
September 23 . 1993
TO:Gary A. Dahlke -- representing Washington Water Power
Jim Thompson -- representing Idaho Power Company
FRO~1:Randy A, Roach -- representing Bonneville Power Administration
RE:Dahlke- 9/23/93, 9 a.m. fax re additi ona l sentence
Gary:
I would prefer the following language: "We understand that the balances In
the Company s deemer account will not be a cash obligation of the utility, but
will be carried forward to apply to any new or succeeding exchange
agreement. I th Ink th is ge t s at what you wan t--a work I ng down of the ba lance
before net positive benefits are available under any new agreement--but
eliminates what I see as some ambiguity in your language that might infer the
new exchange contracts will have a deemer account mechani sm 1 i ke the current
contracts. While it may be a stretch to draw that i nference. you know how
sensitive people are on thls(!). 50 I think it would be best to avoid that
quagmire, particularly gIven our clients ' interest in speed, accuracy, and
simplicity.
On a somewhat related note, the PPC asked whether the 2001 date In my previous
anguage was I ntended to address the question of what happens I f all of the
partIes, including WWP and IPC , agree to renegotiate and execute their BPA
contracts before the 2001 expl ratIon of the current contracts. I , stated that
was a rompl I cation we hadn t deal t wi th , that we wanted the current
termination to be fairly simple and uncluttered, and that I thought we could
deal with that issue when It came time to negotiate the new contracts. Based
on your (Gary s) discussion about leaving future complIcations to the future
I assumed you would agree.
Randy A. Roach
WP-O7-ID-A Tl 0
Page 2 of 2
Department of Energy
Bonneville Power Administration
O, Box 3621
Portland, Oregon 97208.3621
nCT 1 9 1993
10 ,eply ,ef., to DRE
Mr. W. Lester Bryan
Senior Vice President, Rates and Resources
Washington Water Power Company
O. Box 3727
Spokane, W A 99220
Re: Contract No. DE-MS79-81BP90606 - Residential Purchase and Sale Agreement (RPSA)
DE-r..,1S79-87BP92803 - Suspension of Residential Purchase and Sale Agreement
Dear Mr. Bryan:
This letter is in response to your letter of September 29, 1993 , notifying Bonneville Power Administration
(BP A) of the Wasnington Water Power Company s (Company) election to tenninate the above-referenced
RPSA. BP A accepts the tennination subject to the following conditions, which arc required by your
Company s RPSA and authorized by the Suspension of Residential Purchase and Sale Agreement
(Suspension Agreement) previously executed by you on behalf of the Company. 111e Company s deemer
account balance through September 30, 1993, is $18 271 996 for its Washington Jurisdiction and
$41 664 455 for its Idaho Jurisdiction. TI1C Company'sdeemer accountba!ances accrued as of
September 30, 1993 , for each of its exchange jurisdictions shaH continue to accrue interest, which shall be
compounded quarterly, at an average prime rate for each calendar quarter, which shall be the arithmetic
mean, to the nearest one-hundredth of one (1) percent, of the prime rate values published in the Federal
Reserve Bulletin or in the Federal Reserve s "Selected Interest Rates" (Statistical Release G. 13), for the
fourth, third and second months preceding the first month of the calendar q\larter. Consistent with section 10
ofthe Company s RPSA, the balances in the Company s deerner accounts shaH not be a cash obligation of
the Company, but shall be calTied folward to apply to any new or succeeding exchange agreern(~nt by the
Company for the jurisdiction(s).
T cm1ination of the Company s RP SA in accordance wi tl1 the above-stated conditions is agreed by 131' A
meet the requirements of the Company s RPSA for tennination and to satisfy the Company s obligations
under paragraphs 4 and 6 of the Suspension Agreement conceming effective revocation of the Suspension
Agreement. Termination ofthe.company s RPSA withput the above-stated conditions is unacceptable to
BP A as not meeting the requirements of the Company s RI)SA and Suspension Agreement.
Sincerely,
. -~~-
Richard A. Raynor
Chief. Exchange Pcog"m B""eh
cc:
Mr. Gary Dahlke, Paine, Hamblen, Coffm , Brooke & Miner
WP-O7-ID-ATll
Page 1 of 1
Department of Energy
Bonneville Power t,drninistration
PO. Box 3621
Portland. Oregon 97208.3621
October 20, 1993
'n '"ply ,,1., to:DRE
:M.r. W. Lester Bryan
Senior Vice President, Rates and Resources
Washington Water Power Company
O. Box 3727
Spokane, W A 99220
Re: Contract No. DE-MS79-8 1BP90606 " Residential Purchase and Sale Agreement
DE-MS79-87BP92803 - Suspension of Residential Purchase and Sale Agreement
Dear Mr. Bryan:
This letter is to notify you of a correction to Bonneville Power Administration s letter dated
October 19 1993. Washington Water Power Company s (Company) deemer balances for the
Washington and Idaho jurisdictions were reversed in the letter. The letter should have stated
The Company s deemer account balance through September 30, 1993 , is $41 664 455 for its
Washington Jurisdiction and $18 271 996 for it Idaho Jurisdiction.
I apologize for the inconvenience. Please contact me at 503-230-7494 if you have any questions
regarding the correction.
Sincerely,
cc:
Mr. Gary Dahlke Pa.inc, Hamblen, Coffin, Brooke & MilicI'
RRaynor:run:7494: 10/20/93 (WORD.C/DRElRaynorlWashl.doc)
bee:
Area Manager - UC
R. Roach - APR
R. Russell - DREF
L. Weirather - DRE/D&T
S. Melton - DR
D. Wills - DRER
Utility File - ORE
M. Roberts - DR
C. Blanco - DRES
OffIcial File - DRE (FI-27)
,co l::;~T 'J:;
:' '
WP-O7-ID-A T12
Page 1 of
Noti ce of Fi 1 i ng 1993
UNITED STATES OF AMERICA
FEDERAL ENERGY REGULATORY COMMISSION
washi ngton water Power company Docket No. ER93-980-oo0
NOTICE OF FILING
(october 26, 1993)
Take noti ce that on septembr 30, 1993, washi ngton Water
Power company (wwP) tendered for fi 1 i ng a Noti ce of Termi nati on
of Rate schedul e FERC El ectri c Tari ff No.1 between wWP and
Bonneville Power Administration.
Any person desiring to be heard or to protest said filing
should file a motion to intervene or protest with the Federal
Energy Regulatory commission , 825 North capitol Street, N.washlngton , D.C. 20426, in accordance with Rules 211 and 214
of the commi ssi on s Rul es of practi ce and procedu re (18 CFR
385.211 and 18 CFR 385.214). All such moti ons or protests shoul d
be filed on or before November 10,1993. protests will be
consi dered by the commi ssi on in determi ni ng the appropri ateacti on to be taken , but wi 11 not serve to make protestantsparti es to the proceedi ng. Any person wi shi ng to become a party
must fi 1 e a moti on to intervene. copi es of thi s fi 1 i ng are on
file with the commission and are available for public lnspection.
Linwood A. Watson, Jr.Acti ng secretary
Page 1
WP-O7-ID-A T13
Page 1 of
Letter Order 1993
Docket No. ER93-980-o0o
DECEMBER 6, 1993
washi n~ton Water Power companyAttentlon: MS. Rhonda R. Horobiowski
Manager , Power Resources
Post offi ce BOX 3727
spokane , washi ngton 99220
Dear MS. Horobi owski
By 1 etters dated september 29 and October 29, 1993, you
submitted for filing with the commission a notice of cancellation
of your Residential Purchase and Sale Agreement with Bonneville
Power Administration. Authority to act on this matter is
delegated to the Director, Division of Applications, under
section 375.308 of the commission s Regulations; pursuant to
Section 375.308(a)(1), your submittal is accepted for filing anddesi gnated as follows:
washi ngton Water Power company
suppl ement No.7 to servi ce Agreement No.under washi ngton Water power company
Bonnevi 11 e Power Admi ni strati on Agreementunder paci fi c Northwest El ectri c Power
pl anni ng and Conservati on Act, FERC El ectri cTariff, original volume No.
(cancel s servi ce Agreement No.
as supplemented).
Notices of your filing were published in the Federal
Regi ster wi th comments, protests , or i nterventi ons due on or
before November 19, 1993. No comments, protests, ori nterventi ons were fi 1 ed.
Good cause is shown for ~ranti ng wai ver of the noti
requi rements pursuant to Sectlon 205(d) of the Federal power Act
and Secti on 35.11 of the Commi ssi on s Regul ati on thereunder;therefore , the rate schedul e shall become effecti ve september 30,
1993, as requested.
Thi s acceptance for fi 1 i ng does not consti tute approval of
any servi ce , rate , charge, cl assi fi cati on , or any rul e,regul ati on, contract, or practi ce affecti ng such rate or servi
provi ded for in the fi 1 ed documents; nor shall such acceptance be
deemed as recognition of any claimed contractual right or
obligation affecting or relating to such service or rate; and
such acceptance is wi thout prej udi ce to any fi ndi ngs or orders
Page 1
WP-O7-ID-A T14
Page 1 of 2
Letter Order 1993
washi ngton Water Power company
whi ch have been or may hereafter be made by the commi ssi on in any
proceedi ng now pendi ng or hereafter i nsti tuted by or agai nstwashi ngton Water power company.
Thi s order consti tutes fi nal agency acti on. Requests forreheari n~ by the commi ssi on may be fi 1 ed wi thi n 30 days of the
date of lssuance of this order , pursuant to 18 CFR 385.713.
000.
Thi s acceptance for fi 1 i ng termi nates Docket NO. ER93-98o-
sincerely,
Donald J. Gelinas , Director
Division of Applications
cc:Bonneville Power AdministrationAttenti on: Mr. Ri chard Raynorchi ef , Exchange Program
post offi ce Box 3621portl and, oregon 97208-3621
Branch
page 2
WP-O7-ID-A T14
Page 2 of 2
SEP-11-9S FR I 05: 31 PM RESOURCEOP F AX NO,P, 02
Washington Water Power
1411 East Mission
O. Box 3727
Spokane, Washington 99220-3727
1800-727.9170
SO9 489-0500 Telephone
iiiWJ
Washington Water Power
September 9, 1998
~s. J udi Johansen
Administrator, Bonneville Power Administration
905 NE 11 th Avenue
Portland, Oregon 97232
Subject: Subscription Principles and WWP Residential Exchange Participation
Dear M~sen:
I am encouraged by the public statements made by representatives of the Bonneville
Power Administration (Bonneville) that you are committed to ensuring that federal power
benefits are spread',to all eligible residential customers in the Pacific Northwest. I also
understand that Bonneville is looking for new ways to equitably distribute these benefits
and that you have received a set of principles to guide subscription from the four
Northwest state utility commissions in Idaho, Montana, Oregon, and Washington
(Commissions), dated August 27, 1998. The Washington Water Power Company
(WWP) is very supportive of the subscription principles set forth by the Commissions,
particularly the principles which provide the Commissions with the responsibility
further allocating power and financial benefits among the states and among the 10Us, and
establish a role for an independent third party administrator of the financial benefits of the
program. I encourage Bonneville to incorporate these principles in developing a
subscription program for the period beginning October 200 1, as a replacement for the
residential exchange.
While in agreement with the principles outlined by the Commissions, I remain concerned
that Bonneville may be taking a position that WWP's deemer balance may disqualify
WWP's residential and small farm customers from participating in the subscription
program replacing the residential exchange for the period beginning October 200
Please find attached a prepared statement outlining WWP's position that the perception
that WWP has not been an active exchanger, and therefore not dependent upon
Bonneville power in the 1981-200 1 period, should have no bearing whatsoever as to
WWP's rights to exchange or purchase power during the period beginning October 200
When WWP tenrunated its residential exchange agreement with Bonneville in 1993,
WWP expressly did not agree with Bonneville s position that the deemer balance
resulting from the changed average system cost methodology would be carried over to
new contract. The only balance which arguably might be carried over is the balance
which would have resulted from the use of the original 1981 average system cost
WP-O7-ID-A TIS
Page 1 of 4
SEP-11-98 FR I 05: 31 PM RESOURCEOP FAX NO,P. 03
Ms. Judi Johansen
September 9.1998
Page 2 of 2
methodology applied over the entire twenty-year period. Had use of the original 1981
methodology continued WWP roughly estimates that it would have received
accumulated residential exchange benefits in excess of $100 million for our Washington
jurisdiction and would not have a substantial outstanding deemer balance for our Idaho
jurisdiction.
Please review the attached position statement. I trust that you will concur that Bonneville
should not adhere to a position which excludes WWP's residential and small fann
customers from a subscription program designed to distribute power and financial
benefits to such customers of the IOUs, based upon WWP's deemer balance resulting
from the changed average system cost methodology. Additionally, I am hopeful that you
will allow the Commissions the opportunity to dispense the power and financial
allocation to the residential and small fann customers of the laDs. I eagerly look forward
to reviewing your subscription proposal to ensure that your goal of appropriately
spreading the benefits of the federal power system is met.
ResP
Gary G. Ely
Senior Vice President and General Manager
Energy Trading & Market Services
Attachment
JAS
cc: Alan Buckley, WDTC
Stephanie Miner, IPUC
WP-O7-ID-AT15
Page 2 of 4
SEP-11-98 FRI 05:32 PM RESOURCEOP F AX NO,Po 04
Prepared By:Gary A. Dahlke
Attorney for The Washington Water Power Company
Question: Should the deemer balance of The Washington Water Power Company cwwP) disqualify
WWP's residential and small fann customers from participation in a subscription program for
replacement of the residential exchange for the period beginning October 2001
Answer: No. The perception that WWP was not an active exchanger, and therefore not dependent
upon Bonneville Power Adminstration (Bonneville) power in the 1981-2001 period should have no
relationship to rights to exchange power or purchase power during the period beginning October
2001. WWP is not fairly deemed an inactive exchanger as WWP was essentially forced out of the
first twenty-year exchange by the unilateral change in the average system cost methodology in 1984.
This change in methodology was reported by BP A and confirmed by the Courts as necessary to
prevent continued violation of the Regional Act and Oregon law by Portland General Electric
Company (PGE) by concealing terminated plant costs through a financing scheme approved by its
Commissioner. The Court confinned the existence of the financing scheme which concealed
terminated nuclear plant costs in the return on equity component of PGE's rates, and thus passed
those costs on to Bonneville , when in fact the 1981 average system cost methodology did not pennit
terminated plant costs to be recovered. No misconduct by WWP was involved in these cases.
The effect of the change in methodology was to eliminate certain costs that originally were a part of
the negotiation in 1981 as costs to be included in the exchange calculation. Following the change
in methodology, PGE still received a substantial amount of monetary benefits through the exchange.
WWP has, however, received nothing. Had the revised 1984 methodology been the basis of the
1981 negotiations. WWP might well have refrained from entering into the exchange at all at its
inception, which would have been WWP's right. WWP could have later requested an exchange
contract at any time during the following twenty years , or not at all. In the latter case WWP would
have no deemer balance going into the period beginning October 2001.
The only balance which arguably might be carried over is the balance which would have resulted
from the use of the original 1981 average system cost methodology applied over the entire twenty-WP-O7-ID-AT1 ::
Page 3 of 4
WWP Residential E;l.change - position Sl:ll~menl
GAD 9-Sep-
SEP-11-9S FR! 05: 32 PM RESOURCEOP F AX NO.P, 05
year period. Had use of the original 1981 methodology continued, WWP roughly estimates that it
would have received accumulated residential exchange benefits in excess of $100 million for its
Washington jurisdiction and would not have a substantial outstanding deemer balance for its Idaho
jurisdiction.
When WWP terminated the exchange in 1993 , WWP expressly did not agree with Bonneville
position that the deemer balance resulting from the changed methodology would be carried over to
a new contract. WWP's notice of tennination contains no such language. While Bonneville sent
a confmnation of the termination with its position stated, WWP has never agreed with this position.
The 1986 decision which confirmed Bonneville s implementation of the change to the methodology
(and the Court clearly noted that it did not sanction a permanent implementation of the changes) did
not in any way deal with the issue of carrying deemer balances over to a new contract. While
Bonneville relies on the language of the 1981 contract that deemer balances would be carried over
to the new contracts, clearly this is intended to be deemer balances resulting from use of the original
1981 methodology. To suggest that WWP intended that Bonneville could decide for itself to change
the methodology (because of the abuse of other utilities, not WWP) and to require WWP to carry
over the resulting greater deemer balance renders the 1981 contract wholly unilateral. I do not think.
tbat this position would be upheld by the Ninth Circuit, notwithstanding its earlier confinnation
Bonneville s right to temporarily change the methodology.
Attachment: Excerpt from Ninth Circuit Court Opinion
W:\11\150\O2343\MIO7
WW? Rc:sidenrinl E;l.chang.: - Position Statement
WP-O7-ID-A TIS
Page 4 of 4
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