In the draft record of decision released June 25 for the BP-22 rate period, BPA says it will adopt the proposed settlement reached April 29 with customers that caps revenue financing at $40 million for each business line.

The caps are expected to lower power rates by 2-2.5 percent per year over the two-year rate period compared to BP-20 rates, and to raise transmission rates by 6 to 8 percent (CU No. 2002 [17]).

The initial proposal released in December would keep power rates flat and boost transmission rates by 5.8 percent per year (CU No. 1982 [17])}.

The decision to adopt the settlement "is a reasonable exercise of BPA's ratemaking discretion," the ROD says, noting that it "ends substantial controversy in the rate proceeding, provides near-term rate relief to its customers, strengthens BPA's cost recovery over the rate period (including cost recovery for BPA's fish and wildlife funding), and supports BPA's long-term financial health."

The draft ROD also adopts the short-distance discount for transmission customers as stated in the initial proposal, but uses clarifying language suggested by BPA staff. The discount provides a reduction to some transmission rates where less than 75 circuit miles of BPA's grid are used.

Other draft ROD decisions bear on fish and wildlife issues.

One is whether the "equitable treatment" mandate of the Northwest Power Act applies to BPA's fish and wildlife mitigation spending; the draft ROD holds that the mandate applies to BPA's system operation and management actions, but not to fish and wildlife mitigation spending. This finding was based in part on a 1997 federal appeals court ruling that said the equitable treatment obligation can be met through a balancing of system operations and management actions, without regard to expenditures for fish and wildlife mitigation under a separate provision of the Northwest Power Act.

The ROD also held that the final rate determination does not significantly affect fish and wildlife to the level that BPA must demonstrate equitable treatment of fish and wildlife under the Northwest Power Act.

In addition, BPA's projected increase in net secondary revenue does not constitute a "changed circumstance" that would require it to reconsider fish and wildlife funding levels in order to satisfy its Northwest Power Act obligations to fish and wildlife, a stance BPA says is "supportable and sound."

Briefs on exceptions to the draft ROD are due by July 9, and the final ROD is slated to be issued on July 28.

Editor's note: Transmission rates have been corrected to reflect an expected increase.

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News Editor - Clearing Up

Rick Adair has been with NewsData since 2003, and is news editor for Clearing Up and editor for Water Power West. Previously, he covered environmental and energy issues in the Lake Tahoe area. He has a doctorate in earth sciences.