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-CITE-
16 USC Sec. 839c 01/26/98-EXPCITE-
TITLE 16 - CONSERVATION
CHAPTER 12H - PACIFIC NORTHWEST ELECTRIC POWER PLANNING AND
CONSERVATION-HEAD-
Sec. 839c. Sale of power-STATUTE-
(a) Preferences and priorities
All power sales under this chapter shall be subject at all times
to the preference and priority provisions of the Bonneville Project
Act of 1937 (16 U.S.C. 832 and following) and, in particular,
sections 4 and 5 thereof (16 U.S.C. 832c and 832d). Such sales
shall be at rates established pursuant to section 839e of this
title.
(b) Sales to public bodies, cooperatives, and Federal agency
customers
(1) Whenever requested, the Administrator shall offer to sell to
each requesting public body and cooperative entitled to preference
and priority under the Bonneville Project Act of 1937 (16 U.S.C.
832 et seq.) and to each requesting investor-owned utility electric
power to meet the firm power load of such public body, cooperative
or investor-owned utility in the Region to the extent that such
firm power load exceeds -
(A) the capability of such entity's firm peaking and energy
resources used in the year prior to December 5, 1980, to serve
its firm load in the region, and
(B) such other resources as such entity determines, pursuant to
contracts under this chapter, will be used to serve its firm load
in the region.
In determining the resources which are used to serve a firm load,
for purposes of subparagraphs (A) and (B), any resources used to
serve a firm load under such subparagraphs shall be treated as
continuing to be so used, unless such use is discontinued with the
consent of the Administrator, or unless such use is discontinued
because of obsolescence, retirement, loss of resource, or loss of
contract rights.
(2) Contracts with investor-owned utilities shall provide that
the Administrator may reduce his obligations under such contracts
in accordance with section 5(a) of the Bonneville Project Act of
1937 (16 U.S.C. 832d(a)).
(3) In addition to his authorities to sell electric power under
paragraph (1), the Administrator is also authorized to sell
electric power to Federal agencies in the region.
(4) Sales under this subsection shall be made only if the public
body, cooperative, Federal agency or investor-owned utility
complies with the Administrator's standards for service in effect
on December 5, 1980, or as subsequently revised.
(5) The Administrator shall include in contracts executed in
accordance with this subsection provisions that enable the
Administrator to restrict his contractual obligations to meet the
loads referred to in this subsection in the future if the
Administrator determines, after a reasonable period of experience
under this chapter, that the Administrator cannot be assured on a
planning basis of acquiring sufficient resources to meet such loads
during a specified period of insufficiency. Any such contract with
a public body, cooperative, or Federal agency shall specify a
reasonable minimum period between a notice of restriction and the
earliest date such restriction may be imposed.
(6) Contracts executed in accordance with this subsection with
public body, cooperative, and Federal agency customers shall -
(A) provide that the restriction referred to in paragraph (5)
shall not be applicable to any such customers until the operating
year in which the total of such customers' firm loads to be
served by the Administrator equals or exceeds the firm capability
of the Federal base system resources;
(B) not permit restrictions which would reduce the total
contractual entitlement of such customers to an amount less than
the firm capability of the Federal base system resources; and
(C) contain a formula for determining annually, on a uniform
basis, each such customer's contractual entitlement to firm power
during such a period of restriction, which formula shall not
consider customer resources other than those the customer has
determined, as of December 5, 1980, to be used to serve its own
firm loads.
The formula referred to in subparagraph (C) shall obligate the
Administrator to provide on an annual basis only firm power needed
to serve the portion of such customer's firm load in excess of the
capability of such customer's own firm resources determined by such
customer under paragraph (1) of this subsection to be used to serve
its firm load.
(c) Purchase and exchange sales
(1) Whenever a Pacific Northwest electric utility offers to sell
electric power to the Administrator at the average system cost of
that utility's resources in each year, the Administrator shall
acquire by purchase such power and shall offer, in exchange, to
sell an equivalent amount of electric power to such utility for
resale to that utility's residential users within the region.
(2) The purchase and exchange sale referred to in paragraph (1)
of this subsection with any electric utility shall be limited to an
amount not in excess of 50 per centum of such utility's Regional
residential load in the year beginning July 1, 1980, such 50 per
centum limit increasing in equal annual increments to 100 per
centum of such load in the year beginning July 1, 1985, and each
year thereafter.
(3) The cost benefits, as specified in contracts with the
Administrator, of any purchase and exchange sale referred to in
paragraph (1) of this subsection which are attributable to any
electric utility's residential load within a State shall be passed
through directly to such utility's residential loads within such
State, except that a State which lies partially within and
partially without the region may require that such cost benefits be
distributed among all of the utility's residential loads in that
State.
(4) An electric utility may terminate, upon reasonable terms and
conditions agreed to by the Administrator and such utility prior to
such termination, its purchase and sale under this subsection if
the supplemental rate charge provided for in section 839e(b)(3) of
this title is applied and the cost of electric power sold to such
utility under this subsection exceeds, after application of such
rate charge, the average system cost of power sold by such utility
to the Administrator under this subsection.
(5) Subject to the provisions of sections 839b and 839d of this
title, in lieu of purchasing any amount of electric power offered
by a utility under paragraph (1) of this subsection, the
Administrator may acquire an equivalent amount of electric power
from other sources to replace power sold to such utility as part of
an exchange sale if the cost of such acquisition is less than the
cost of purchasing the electric power offered by such utility.
(6) Exchange sales to a utility pursuant to this subsection shall
not be restricted below the amounts of electric power acquired by
the Administrator from, or on behalf of, such utility pursuant to
this subsection.
(7) The ''average system cost'' for electric power sold to the
Administrator under this subsection shall be determined by the
Administrator on the basis of a methodology developed for this
purpose in consultation with the Council, the Administrator's
customers, and appropriate State regulatory bodies in the region.
Such methodology shall be subject to review and approval by the
Federal Energy Regulatory Commission. Such average system cost
shall not include -
(A) the cost of additional resources in an amount sufficient to
serve any new large single load of the utility;
(B) the cost of additional resources in an amount sufficient to
meet any additional load outside the region occurring after
December 5, 1980; and
(C) any costs of any generating facility which is terminated
prior to initial commercial operation.
(d) Sales to existing direct service industrial customers
(1)(A) The Administrator is authorized to sell in accordance with
this subsection electric power to existing direct service
industrial customers. Such sales shall provide a portion of the
Administrator's reserves for firm power loads within the region.
(B) After December 5, 1980, the Administrator shall offer in
accordance with subsection (g) of this section to each existing
direct service industrial customer an initial long term contract
that provides such customer an amount of power equivalent to that
to which such customer is entitled under its contract dated January
or April 1975 providing for the sale of ''industrial firm power.''
(2) The Administrator shall not sell electric power, including
reserves, directly to new direct service industrial customers.
(3) The Administrator shall not sell amounts of electric power,
including reserves, to existing direct service industrial customers
in excess of the amount permitted under paragraph (1) unless the
Administrator determines, after a plan has been adopted pursuant to
section 839b of this title, that such proposed sale is consistent
with the plan and that -
(A) additional power system reserves are required for the
region's firm loads,
(B) the proposed sale would provide a cost-effective method of
supplying such reserves,
(C) such loads or loads of similar character cannot provide
equivalent operating or planning benefits to the region if served
by an electric utility under contractual arrangements providing
reserves, and
(D) the Administrator has or can acquire sufficient electric
power to serve such loads, and
unless the Council has determined such sale is consistent with the
plan. After such determination by the Administrator and by the
Council, the Administrator is authorized to offer to existing
direct service industrial customers power in such amounts in excess
of the amount permitted under paragraph (1) of this subsection as
the Administrator determines to be necessary to provide additional
power system reserves to meet the region's firm loads.
(4)(A) As used in this section, the term ''existing direct
service industrial customer'' means any direct service industrial
customer of the Administrator which has a contract for the purchase
of electric power from the Administrator on December 5, 1980.
(B) The term ''new direct service industrial customer'' means any
industrial entity other than an existing direct service industrial
customer.
(C)(i) Where a new contract is offered in accordance with
subsection (g) of this section to any existing direct service
industrial customer which has not received electric power prior to
December 5, 1980, from the Administrator pursuant to a contract
with the Administrator existing on December 5, 1980, electric power
delivered under such new contract shall be conditioned on the
Administrator reasonably acquiring, in accordance with this chapter
and within such estimated period of time (as specified in the
contract) as he deems reasonable, sufficient resources to meet, on
a planning basis, the load requirement of such customer. Such
contract shall also provide that the obligation of the
Administrator to acquire such resources to meet such load
requirement shall, except as provided in clause (ii) of this
subparagraph, apply only to such customer and shall not be sold or
exchanged by such customer to any other person.
(ii) Rights under a contract described in clause (i) of this
subparagraph may be transferred by an existing direct service
industrial customer referred to in clause (i) to a successor in
interest in connection with a reorganization or other transfer of
all major assets of such customer. Following such a transfer, such
successor in interest (or any other subsequent successor in
interest) may also transfer rights under such a contract only in
connection with a reorganization or other transfer of all assets of
such successor in interest.
(iii) The limitations of clause (i) of this subparagraph shall
not apply to any customer referred to in clause (i) whenever the
Administrator determines that such customer is receiving electric
power pursuant to a contract referred to in such clause (ii).
(e) Contractual entitlements to firm power
(1) The contractual entitlement to firm power of any customer
from whom, or on whose behalf, the Administrator has acquired
electric power pursuant to section 839d of this title may not be
restricted below the amount of electric power so acquired from, or
on behalf of, such customer. If in any year such customer's
requirements are less than such entitlement, any excess of such
entitlement shall be first made available to increase the
entitlement of other customers of the same class before being
available for the entitlement of other customers. For purposes of
this paragraph, the following entities shall each constitute a
class:
(A) public bodies and cooperatives;
(B) Federal agencies;
(C) direct service industrial; and
(D) investor owned utilities.
(2) Any contractual entitlement to firm power which is based on
electric power acquired from, or on behalf of, a customer pursuant
to section 839d of this title shall be in addition to any other
contractual entitlement to firm power not subject to restriction
that such customer may have under this section. For the purposes
of this subsection, references to amounts of power acquired by the
Administrator pursuant to section 839d of this title shall be
deemed to mean the amounts specified in the resource acquisition
contracts exclusive of any amounts recognized in such contracts as
replacement for Federal base system resources.
(3) The Administrator shall, consistent with the provisions of
this chapter, insure that any restrictions upon any particular
customer class made pursuant to this subsection and subsection (b)
of this section are distributed equitably throughout the region.
(f) Surplus power
The Administrator is authorized to sell, or otherwise dispose of,
electric power, including power acquired pursuant to this and other
Acts, that is surplus to his obligations incurred pursuant to
subsections (b), (c), and (d) of this section in accordance with
this and other Acts applicable to the Administrator, including the
Bonneville Projects Act of 1937 (16 U.S.C. 832 and following), the
Federal Columbia River Transmission System Act (16 U.S.C. 838 and
following), and the Act of August 31, 1964 (16 U.S.C. 837-837h).
(g) Long-term contracts
(1) As soon as practicable within nine months after December 5,
1980, the Administrator shall commence necessary negotiations for,
and offer, initial long-term contracts (within the limitations of
the third sentence of section 5(a) of the Bonneville Project Act
(16 U.S.C. 832d(a))) simultaneously to -
(A) existing public body and cooperative customers and
investor-owned utility customers under subsection (b) of this
section;
(B) Federal agency customers under subsection (b) of this
section;
(C) electric utility customers under subsection (c) of this
section; and
(D) direct service industrial customers under subsection (d)(1)
of this section.
(2) Each customer offered a contract pursuant to this subsection
shall have one year from the date of such offer to accept such
contract. Such contract shall be effective as provided in this
subsection.
(3) An initial contract with a public body, cooperative or
investor-owned electric utility customer or a Federal agency
customer pursuant to subsection (b) of this section shall be
effective on the date executed by such customer, unless another
effective date is otherwise agreed to by the Administrator and the
customer.
(4) An initial contract with an electric utility customer
pursuant to subsection (c) of this section shall be effective on
the date executed by such customer, but no earlier than the first
day of the tenth month after December 5, 1980.
(5) An initial contract with a direct service industrial customer
pursuant to subsection (d)(1) of this section, shall be effective
on the date agreed upon by the Administrator and such customer, but
no later than the first day of the tenth month after December 5,
1980. When such contract is executed, it may for rate purposes be
given retroactive effect to such first day.
(6) Initial contracts offered public body, cooperative and
Federal agency customers in accordance with this subsection shall
provide that during a period of insufficiency declared in
accordance with subsection (b) of this section each customer's
contractual entitlement shall, to the extent of its requirements on
the Administrator, be no less than the amount of firm power
received from the Administrator in the year immediately preceding
the period of insufficiency.
(7) The Administrator shall be deemed to have sufficient
resources for the purpose of entering into the initial contracts
specified in paragraph (1)(A) through (D).-SOURCE-
(Pub. L. 96-501, Sec. 5, Dec. 5, 1980, 94 Stat. 2712.)-REFTEXT-
REFERENCES IN TEXT
The Bonneville Project Act of 1937, referred to in subsecs. (a),
(b)(1), and (f), is act Aug. 20, 1937, ch. 720, 50 Stat. 731, as
amended, 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 Federal Columbia River Transmission System Act, referred to
in subsec. (f), 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.
Act of August 31, 1964, referred to in subsec. (f), is Pub. L.
88-552, Aug. 31, 1964, 78 Stat. 756, as amended, which is
classified generally to chapter 12F (Sec. 837 et seq.) of this
title. For complete classification of this Act to the Code, see
Tables.-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 832m, 839d, 839e, 839f,
839g of this title.