[Federal Register Volume 62, Number 22 (Monday, February 3, 1997)]
[Notices]
[Pages 4991-4992]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-2552]
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DEPARTMENT OF ENERGY
Bonneville Power Administration
Firm Non-Requirements Products and Services Contracts
AGENCY: Bonneville Power Administration (BPA), Department of Energy
(DOE).
ACTION: Notice of availability of supplement to record of decision
(ROD).
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SUMMARY: This notice announces the availability of a Supplement to the
Firm Non-Requirements Products and Services Contracts (FNR) ROD
(October 17, 1995). This Supplement relies on BPA's Business Plan
Environmental Impact Statement (EIS) (June 1995) and the Business Plan
ROD (August 15, 1995).
BPA has decided to modify an earlier decision regarding the energy
services portion of its business. BPA's historical role in regional
conservation is extended to enlarge the energy efficiency market beyond
that which is currently being profitably captured by the private
sector.
ADDRESSES: Copies of the Business Plan, Business Plan EIS, the Business
Plan ROD, and the FNR ROD and additional copies of this Supplement to
the FNR ROD are available from BPA's Public Involvement Office, PO Box
12999, Portland, Oregon 97212. Copies of these documents may also be
obtained by using BPA's nationwide toll-free document request line, 1-
800-622-4520.
FOR FURTHER INFORMATION, CONTACT: Katherine S. Pierce--EC, Bonneville
Power Administration, PO Box 3621, Portland, Oregon, 97208-3621, phone
number (503) 230-3962, fax number (503) 230-5166.
SUPPLEMENTARY INFORMATION:
Introduction
The Bonneville Power Administration (BPA) has decided to modify an
earlier decision regarding the energy services portion of its business.
BPA issued the FNR ROD on October 17, 1995. The FNR ROD was consistent
with BPA's Business Plan, Business Plan EIS (DOE/EIS-0183, June 1995),
and the Business Plan ROD (August 15, 1995).
The FNR ROD noted that, within the context of increased marketplace
competitiveness, BPA needed to develop new strategies to retain
existing customers and to attract new ones. FNR contracts increased
BPA's flexibility and offered BPA an opportunity to sell a wide variety
of power, transmission, and energy products and services. The FNR ROD
also provided examples of energy services business products and
services to increase business and enhance BPA's revenue potential.
Over the following year, BPA continued to examine its energy
services role in the Pacific Northwest (PNW). On June 19, 1996, BPA
submitted a proposal to the Comprehensive Review to create an ``Energy
Services Business.'' There were concerns in the region about the broad
scope of BPA's activities and the appearance BPA was competing with the
private sector. As a result, BPA has decided to supplement the FNR ROD.
Only the Energy Services portion of the FNR ROD is affected.
Description of Changes to the Energy Services Business
On December 12, 1996, the Comprehensive Review Steering Committee
released its final report to the four PNW Governors. The report
proposed an energy efficiency market development role for BPA. BPA's
historical role in regional conservation would be extended to enlarge
the energy efficiency market beyond that which is currently being
profitably captured by the private sector. BPA worked closely with the
committee to develop the 13 guiding principles in the final report:
1. Not a Business: Bonneville's energy-efficiency activities are
not a ``business.'' The purpose of these activities is to serve
Bonneville's statutory directive to promote cost-effective energy-
efficiency investments. The Committee considers it unlikely that
these activities will completely recover their costs without unduly
competing with private enterprises. To address concerns about the
net cost of these activities, the Committee proposes borrowing and
spending caps in items 11 and 12 below.
2. Grow the Pie: Bonneville's role in market development should
be structured and managed to enlarge energy-efficiency markets
beyond that which is being profitably captured by private business.
3. Market Catalyst: Bonneville's market development activities
should be limited to markets or individual situations that are not
currently accessible, viable, or profitable for the private sector
energy-efficiency industry.
4. Leverage Private Sector Services: Bonneville's market
development activities should be designed and implemented to take
full advantage of private sector energy goods and services. These
activities should not favor one competitor over another.
5. Match Maker: Bonneville will act primarily as a facilitator/
aggregator of transactions for services provided by its partners.
6. Exiting Viable Markets After Cost Recovery: Specific
Bonneville market development activities will be discontinued when
they become viable and profitable for the private sector energy-
efficiency business.
7. Establish Advisory Board: An advisory board should be
established immediately to monitor Bonneville's compliance with
these restrictions. The advisory board should consist, among others,
of private businesses that could be adversely affected by
Bonneville's failure to comply with these restrictions as well as
power and transmission customers. Bonneville should consult with and
report to this board at regular intervals, and the board should
report concerns to the Northwest Power Planning Council.
8. Focus on Federal Agencies and Power Sales Customers:
Bonneville's market development activities should be limited to its
regional power sales contract customers and federal agencies.
Bonneville should provide energy-efficiency services for federal
[[Page 4992]]
agencies in cooperation with the serving utility or when the serving
utility cannot or elects not to provide those services itself.
9. Full Cost Recovery: Agencies and customers contracting for
market development services should repay the full cost of those
services, including repayment of loans at the appropriate U.S.
Treasury rate.
10. Energy-Efficiency Focus: Any Bonneville organizational unit
or activity currently named ``Energy Services'' should be renamed
``Energy Efficiency.'' This is intended to clarify that previous
proposals to undertake a broad spectrum of other retail services
have been dropped, and to preclude Bonneville support for load-
building activities that are inconsistent with Bonneville's
conservation directives.
11. Capital Borrowing Guidelines: Bonneville's use of U.S.
Treasury capital should be limited to $5 million per year and
restricted to federal projects. This represents a reduction of
roughly 50 percent relative to Bonneville's October 31, 1996
proposal, and a reduction of $71 million relative to the final rate
case figure. Capital borrowed from the U.S. Treasury should be
repaid in full by the participating federal entity. All third party
borrowing shall be non-recourse to Bonneville.
12. Self-Supporting: Bonneville's net costs for market
development activities should not exceed $8 million for the Fiscal
Years 1997-2001. Bonneville's energy-efficiency activities should be
self-supporting by September 30, 1999 or these activities should be
terminated.
13. ROD Modifications: Bonneville should revise its October 1995
record of decision for firm non-requirements products and services
contracts by replacing the ``Energy Services'' section with an
``Energy-Efficiency'' section that incorporates a final plan for
energy-efficiency activities consistent with the restrictions
herein. The energy-efficiency plan should not include activities
listed in the original Record of Decision ``Energy Services''
section except those directly related to energy-efficiency. Other
new activities listed in the original Record of Decision ``Energy
Services'' section should not be offered by any part of Bonneville
in competition with the private sector.
In order to provide a public service to help meet the region's
energy efficiency needs and in response to principle 13 above, BPA is
replacing, in total, the Energy Services section of the FNR ROD as
outlined in the box below. This new section, Energy Efficiency, more
accurately describes BPA's intent to properly manage the public assets
to enhance and enlarge the energy efficiency market in the region
through a process that is consistent with the other 12 principles.
Energy Efficiency
In order to fulfill its energy efficiency market development
role, BPA proposes to provide products and services such as:
Rebates or incentives for achieving energy or capacity
conservation; Demand-side management (DSM) services; Power quality
services; and
Tracking and accounting for the use of power and other services
under the terms of customized contracts.
The fundamental purpose of these products and services is to
help enlarge the energy efficiency marketplace. Using its unique
characteristics as a Federal agency with extensive experience in
managing conservation efforts, BPA will serve as a catalyst or
facilitator in making energy efficiency happen. While BPA must be
financially self-sufficient, it will not compete with the private
sector. Instead, BPA will work with private business partners,
government and the utility community to help overcome barriers to
conservation and efficiency efforts. BPA's success will be measured
by its ability to make a difference, increasing the amount of
conservation investments and expanding the business opportunities
for private sector partners.
All other parts of the original FNR ROD remain unchanged to
continue quality service to the region's electric industry.
Anticipated Effects of These Changes
The supplement outlined above is consistent with the Business Plan,
Business Plan EIS, the Business Plan ROD, and the other sections of the
FNR ROD. No change in environmental effects is expected. Nothing in
this ROD Supplement is intended to affect BPA's practice of providing
traditional reimbursable services to its customers.
Conclusion
I have decided that the focus of BPA's energy efficiency market
development role is to enlarge the energy efficiency opportunities
beyond that which is currently being profitably captured by the private
sector. This decision remains consistent with BPA's Market-Driven
approach for participation in the increasingly competitive electric
power market. BPA is ensuring continued public benefits while being
responsive to its customers'' needs.
Issued in Portland, Oregon, on January 21, 1997.
Randall W. Hardy,
Administrator.
[FR Doc. 97-2552 Filed 1-31-97; 8:45 am]
BILLING CODE 6450-01-P
