253 



- 3 - 



Administrator will report directly to the Deputy Secretary of 

 Energy. During the Bush Administration the Administrator 

 reported to the Assistant Secretary for Conservation and 

 Renewable Energy. 



status of the Rate Case 



BPA is in the process of developing electric rates for the 

 next two years beginning in October 1993. BPA rates are set by 

 the Administrator following an adjudicative ratemaJcing process 

 that is presided over by an administrative law judge. After the 

 Administrator has set the rates they are then reviewed by FERC 

 before they go into effect. 



In January 1993 BPA proposed increasing the priority firm 

 rate by 11.6 percent. Since that time BPA's financial condition 

 has worsened significantly due to low alxuninum prices, cold 

 weather, low streamflows and other factors. BPA now believes 

 that it may have to raise rates by more than twenty percent. 



BPA is currently conducting settlement discussion with the 

 parties to the rate case. It expects to make a new rate proposal 

 in June 1993. 



Rate Case Ex Parte Rules 



Because the rate case is considered through a formal 

 adjudicative hearing process it is imlawful for BPA staff to 

 engage in any ex parte communications relating to the rate case. 

 The purpose of the ex parte rule is to prevent BPA from being 

 influenced by "back door" private communications that the public 

 and parties to the rate case are unaware of. 



Section 1010.2(d) of BPA's hearing procedures defines an ex 

 parte communication as follows: 



... an oral or written communication regarding the merits of 

 any issue pending in a hearing conducted pursuant to 

 Northwest Power Act section 7(1) which is not on the record 

 and with respect to which reasonable notice has not been 

 given, but it shall not include requests for status reports 

 on any hearing. 



In a letter dated J^ril 14, 1993 BPA notified the parties to 

 the rate case that the BPA Task Force hearing "may also consider 

 issues and potential budget savings and efficiencies that may 

 have been raised as issues in the rate case." Because BPA has 

 provided notice to the parties the most likely outcome of any ex 



