[Federal Register Volume 59, Number 132 (Tuesday, July 12, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-16844]


[[Page Unknown]]

[Federal Register: July 12, 1994]


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DEPARTMENT OF ENERGY
Western Area Power Administration

 

Provo River Project--Proposed Rate Methodology of Annual Charges

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of Proposed Provo River Project Rate Methodology of 
Annual Charges.

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SUMMARY: The Western Area Power Administration (Western) is proposing a 
methodology to determine annual charges to accompany the independent 
marketing of Provo River Project (PRP) resources. A previous proposal 
to integrate this project and its resources with Western's Salt Lake 
City Area/Integrated Projects (Integrated Projects) was not supported 
by customers. To date, PRP's resources have been sold to the Colorado 
River Storage Project (CRSP) at a rate to cover project costs. Western 
proposes that capacity and energy produced by the PRP be marketed to 
those members of two Western customers, Intermountain Consumers Power 
Association (ICPA) and Utah Municipal Power Agency (UMPA), located in 
the area of the Provo River drainage, in Utah and Wasatch Counties in 
Utah. Power will be allocated to these two customers proportional to 
the electrical sales of their members who meet the criteria for 
receiving it. These customers will pay all of the annual expenses of 
the PRP, including an amount to be used to assist the Provo River Water 
Users Association's (Water Users) timely repayment of the original 
Federal investment in the PRP. In return, these customers will receive 
all of the total marketable output of the PRP.
    The proposed rate methodology constitutes a minor rate adjustment 
as defined by the procedures for public participation in general rate 
adjustments covered in 10 CFR 903.2(f). The PRP annual sales are less 
than 100 million kilowatthours and installed capacity is less than 
20,000 kilowatts. A 30-day comment period will begin with the 
publication of this Federal Register notice and end 30 days thereafter. 
After review of public comments, Western will recommend a proposed rate 
methodology for establishing the annual charge to be approved on an 
interim basis by the Deputy Secretary of DOE. The proposed rate 
methodology will be sent to the Federal Energy Regulatory Commission 
for approval on a final basis. The proposed rate methodology for 
marketing capacity and energy is expected to become effective November 
1, 1994, and it will remain in effect until October 31, 1999, unless 
superseded by another rate action.
    At present there is no existing PRP rate. Energy has been sold to 
the CRSP at an amount that meets the PRP's annual revenue requirements 
for expenses and repayment obligations.
    The following table shows the investment repayment status:

                                             Cost Evaluation Period                                             
----------------------------------------------------------------------------------------------------------------
                                                                                                     Estimated  
                                                                  Estimated paid  Estimated paid  unpaid balance
                                                       Total        through FY     from FY 1995-   at the end of
                                                                       1994             99            FY 1999   
----------------------------------------------------------------------------------------------------------------
Project & Additions.............................      $1,070,952      $1,070,952              $0              $0
Replacements through 1994.......................         521,989          85,593          62,340         374,056
Projected Replacements 1995-1999................          98,385             N/A           8,918          89,467
                                                 ---------------------------------------------------------------
      Total.....................................       1,691,326       1,156,545          71,258         463,523
----------------------------------------------------------------------------------------------------------------

DATES: The consultation and comment period will begin with publication 
of this notice in the Federal Register and will end August 11, 1994.
    Written comments should be received by Western by the end of the 
consultation and comment period to be assured consideration and should 
be sent to the address below.
    A related notice appears in today's Federal Register.

FOR FURTHER INFORMATION CONTACT: Acting Area Manager, Salt Lake City 
Area Office, Western Area Power Administration, P.O. Box 11606, Salt 
Lake City, UT 84147-0606, (801) 524-5493.

Background Information

    Construction of the PRP was begun in May 1938, with the powerplant 
completed in 1958. It has a present generating capacity of 5 megawatts 
of power. The Water Users, a corporation of stockholders owning 
prorated water entitlements, executed contract No. Ilr-874 in 1936, 
with the Federal Government to construct and repay project facilities. 
Contract No. Ilr-1082, dated December 20, 1938, established a contract 
among several entities to compensate the Utah Power and Light Company 
with PRP power in exchange for power foregone at its powerplant. Only 
energy excess to project purposes has been available for Federal 
marketing. Since 1963, CRSP has needed additional energy and has 
purchased the available PRP energy at an amount established annually 
for the PRP to cover its costs, including operation, maintenance, and 
replacement costs and repayment expenses. These expenses have included 
$1.623 million of irrigation assistance to the Water Users. PRP's 
original power investment has been repaid.
    In December 1993, Western proposed to change the way it marketed 
power and energy produced by PRP in response to customer interest in 
its available resources. The part of the proposal that suggested 
inclusion of the PRP in the Integrated Projects was not supported by 
customers for various reasons, thereby requiring Western to modify its 
original proposal to one which will market PRP's power and energy 
independent of the Integrated Projects. Two Western customers, ICPA and 
UMPA, pursued acquiring the available PRP capacity and energy. The 
members of these customers are located in the PRP drainage area in Utah 
and Wasatch Counties. Western proposes that these customers receive all 
of the total marketable output, with the power allocated proportionally 
to their eligible members' energy sales. ICPA and UMPA would pay all of 
the annual expenses of the project. An amount to meet the repayment 
assistance to the Water Users would be recovered under separate 
agreement.

Proposed Methodology

    If Western adopts the proposal, Western will prepare a power 
repayment study (PRS) annually for PRP to establish the revenue needed 
to meet annual costs, including operation, maintenance, and replacement 
repayment costs and interest. Budgeted estimates of these future costs 
will be used in the PRS. The power assistance to the Water Users will 
not be included in the PRS but will, instead, be paid under a separate 
arrangement among the Bureau of Reclamation, Western, ICPA, UMPA, and 
the Water Users which will provide for equal annual installments of 
$102,285.71 over 14 years.
    If the proposed methodology is adopted and PRP energy is no longer 
sold to the CRSP, it will be necessary to collect the PRP's share of 
transmission costs in Utah under contract No. 2436 with PacifiCorp. 
Assigning proportional shares of Western's Tier 1 and Tier 2 costs will 
result in an annual transmission expense of approximately $30,348. This 
amount also will be included as an annual expense of the PRP. The 
annual revenue requirement of the PRP, as determined by the PRS, will 
then be prorated between ICPA and UMPA and divided by 12 for monthly 
billing to the customers. The rate methodology used to determine the 
annual revenue requirement will be recalculated each year during the 5-
year period that the methodology is proposed to be in effect.

SUPPLEMENTARY INFORMATION: The PRP rate methodology is established 
pursuant to the Department of Energy Organization Act (42 U.S.C. 7101 
et seq.) and the Reclamation Act of 1902, 32 U.S.C. Sec. 388 et seq., 
as amended and supplemented by subsequent enactments, particularly 
Sec. 9(c) of the Reclamation Project Act of 1939, 43 U.S.C. 
Sec. 485h(c).
    By Amendment No. 3 to Delegation Order No. 0204-108, published 
November 10, 1993 (58 FR 58716), the Secretary of Energy delegated (1) 
The authority to develop long-term power and transmission rates on a 
nonexclusive basis to the Administrator of Western; (2) the authority 
to confirm, approve, and place such rates into effect on an interim 
basis to the Deputy Secretary; and (3) the authority to confirm, 
approve, and place into effect on a final basis, to remand, or to 
disapprove such rates to the Federal Energy Regulatory Commission. 
Existing DOE procedures for public participation in power rate 
adjustments (10 CFR Part 903) became effective on September 18, 1985 
(50 FR 37835).

Availability of Information

    All brochures, studies, comments, letters, memorandums, and other 
documents made or kept by Western for the purpose of developing the 
proposed rate methodology for capacity and energy are and will be made 
available for inspection and copying at the Salt Lake City Area Office 
located at 257 East 200 South, Salt Lake City, Utah.

Regulatory Flexibility Analysis

    Pursuant to the Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et 
seq.), each agency, when required by 5 U.S.C. 553 to publish a proposed 
rule, is further required to prepare and make available for public 
comment an initial regulatory flexibility analysis to describe the 
impact of the proposed rule on small entities. In this instance, the 
initiation of the PRP rate proposal is related to nonregulatory 
services provided by Western at a particular rate. Under 5 U.S.C. 
601(2), rules of particular applicability relating to rates or services 
are not considered rules within the meaning of the act. Since the PRP 
capacity and energy rate methodology is of limited applicability, no 
flexibility analysis is required.

Determination Under Executive Order 12866

    DOE has determined that this is not a significant regulatory action 
because it does not meet the criteria of Executive Order 12866, 58 FR 
51735. Western has an exemption from centralized regulatory review 
under Executive Order 12866; accordingly, no clearance of this notice 
by Office of Management and Budget is required.

Environmental Evaluation

    In compliance with the National Environmental Policy Act of 1969, 
42 U.S.C. 4321 et seq.; Council on Environmental Quality Regulations 
(40 CFR Parts 1500-1508); and DOE NEPA Regulations (10 CFR Part 1021), 
Western has determined that this action is categorically excluded from 
the preparation of an environmental assessment or an environmental 
impact statement.

    Issued in Golden, Colorado, June 24, 1994.
William H. Clagett,
Administrator.
[FR Doc. 94-16844 Filed 7-11-94; 8:45 am]
BILLING CODE 6450-01-P