[Federal Register Volume 59, Number 248 (Wednesday, December 28, 1994)]
[Unknown Section]
[Page ]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-31948]
[Federal Register: December 28, 1994]
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DEPARTMENT OF ENERGY
Southeastern Power Administration
Notice of Issuance of Final Power Marketing Policy, Georgia-
Alabama-South Carolina System of Projects
AGENCY: Southeastern Power Administration (Southeastern), Department of
Energy.
ACTION: Notice.
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SUMMARY: The Administrator has adopted the attached Final Power
Marketing Policy for Southeastern's Georgia-Alabama-South Carolina (Ga-
Ala-SC) System of Projects. It will be effective upon publication in
the Federal Register and will be applicable to the sale of system power
when contracts can be negotiated. The policy was developed in
accordance with Southeastern's Procedure for Public Participation in
the Formulation of Marketing Policy published in the Federal Register
on July 6, 1978, 43 FR 29186. The process was initiated by the
Administrator with a decision that a new written marketing policy for
the Ga-Ala-SC System of Projects was needed. A Notice of Intent to
Formulate Power Marketing Policy was subsequently published in the
Federal Register on September 8, 1993, 58 FR 47273, requesting, among
other things proposals and recommendations for consideration by
Southeastern.
On July 11, 1994, a Proposed Power Marketing Policy for the Ga-Ala-
SC System of Projects was published in the Federal Register, 59 FR
35332. Seven comments were received relative to the proposed policy.
Public Comment Forums were held in Columbia, South Carolina on
September 12, 1994 and in Atlanta, Georgia on September 14, 1994.
Comments were requested to be provided to the Administrator prior to
September 30, 1994. Several consultations were held with
representatives of entities or groups of entities interested in the
proposed policy. Additionally, a number of conferences were held with
representatives of the electric power companies in the area and the
Southeastern Federal Power Customers, Inc. to consider matters inherent
in facilitating whatever policy might be finally adopted. All of the
responses and comments from whatever source and within whatever
timeframe were considered.
Thereafter, a Southeastern staff committee was selected by the
Administrator to prepare a Staff Evaluation of all oral and written
comments and responses received by Southeastern. The Staff Evaluation
was completed on November 30, 1994.
Following the Staff Evaluation, the Administrator decided to adopt
the policy as modified.
SUPPLEMENTARY INFORMATION: The Final Power Marketing Policy sets forth
the guidelines which Southeastern will follow in the future disposition
of power from the Ga-Ala-SC System. The policy covers power from the
Allatoona, Buford, Carters, J. Strom Thurmond, Hartwell, Robert F.
Henry, Millers Ferry, Walter F. George, West Point and Richard B.
Russell projects. The policy establishes the marketing area for system
power and deals with the allocation of power to area preference
customers. It also deals with utilization of area utility systems for
essential purposes, wholesale rates, and energy and economic efficiency
measures.
An Environmental Assessment and a Finding of No Significant Impact
for the proposed policy was approved by the Assistant Secretary,
Environment, Safety and Health on June 9, 1994, and is available at
Southeastern's headquarters.
A recital of the primary comments regarding the proposed marketing
policy brief responses of explanations to those comments, and specific
decisions and changes in the proposed marketing policy approved by the
Administrator, precede the text of the final policy as adopted.
Issued at Elberton, Georgia: December 8, 1994.
John A. McAllister, Jr.,
Administrator.
Final Power Marketing Policy Georgia-Alabama-South Carolina System
of Projects
Introduction. The efforts to develop a new written power marketing
policy for Southeastern Power Administration's (Southeastern) Ga-Ala-SC
System of Porjects began on September 8, 1993. Southeastern has
followed the step by step requirements of its Procedure for Public
Participation in Formulation of Marketing Policy published in the
Federal Register on July 6, 1978, 43 FR 29186. Numerous public comments
have been received and evaluated. This public input, offered in an
orderly and timely fashion, was carefully considered in the decision
making process.
Purpose and Legal Authority. The purpose of the policy is to
establish with public input written guidelines which Southeastern will
follow in the future to reasonably and equitably carry out the
statutory requirements set forth in section 5 of the Flood Control Act
of 1944, 16 U.S.C. 825s. Southeastern's authority to formulate the
policy and perform these functions is derived from section 302(a) of
the Department of Energy (DOE) Organization Act, 42 U.S.C. 7152, and
delegations pursuant thereto.
Reasons for Marketing Policy. The current marketing policy became
effective on October 1, 1980 and the earliest contracts executed under
the marketing policy commenced at midnight, January 31, 1985. Contracts
negotiated under the existing marketing policy in the states of
Alabama, Florida, Georgia, and Mississippi were scheduled to expire on
May 31, 1994, but have been extended to expire on January 31, 1995.
Contracts negotiated under the policy in the states of North and South
Carolina expire at midnight, September 30, 1995. Because of the
expiration of contracts as well as DOE requirements for implementation
of the National Environmental Policy Act (NEPA) and the Energy Policy
Act of 1992 which is causing changes in the electric industry, it was
determined that a new marketing policy should be formulated.
Primary Comments and Responses. The primary comments to the
proposed marketing policy were:
1. Comment: We have serious concern about an energy commitment
exceeding 2\1/2\ hours use per day, on average. Overcommitment during
drought conditions will severely impact reservoir levels and will
adversely impact all users of the system. Limit contracts to a one year
or interim contract pending the results of the Apalachicola-
Chattahoochee-Flint/Alabama-Coosa-Tallapoosa (ACF/ACT) Comprehensive
Water Resources Study.
Response: The U.S. Army Corps of Engineers (Corps or Corps of
Engineers), taking into effect the minimum quantity of water needed for
electric generation, navigation, water quality, etc., determines the
quantity of water (energy) available for generation purposes. Energy is
allocated to customers on a percentage of energy available basis taking
into consideration that minimum quantities of energy are required to
make peaking capacity usable. Provisions to accommodate congressionally
mandated project operational changes which impact power production at
the Federal projects will be included in the implementing contracts for
this power marketing policy. Assuming that releases will be scheduled
by the Corps in accordance with criteria established by the results of
the ACF/ACT study, it was determined that a temporary contract would
serve no useful purpose.
2. Comment: Existing preference customers within the marketing area
should retain their present allocations of capacity and essentially the
same energy accompaniment.
Response: For the purposes of this power marketing policy,
Southeastern agrees that existing preference customers should retain
their present allocations of capacity and essentially the same energy
accompaniments.
3. Comment: The City of Oxford, Georgia, contends it should receive
an allocation of ``existing'' power as well as an allocation of any
future power. The City purchased its power from a neighboring
municipality when the existing allocation of power was made. The City
of Oxford received its ``allocation'' as part of the allocation of the
municipality through which it was purchasing its power. When the City
of Oxford changed its power source it no longer received an
``allocation'' of power. Now that the contracts are to be re-
negotiated, the City of Oxford should receive an allocation of
Government power in its own right.
Response: After reviewing the previous power marketing policy
allocation process as applied to the City of Oxford, it has been
determined that an allocation of existing power can be made to the City
of Oxford. Utilizing the need to schedule generation in whole megawatt
increments and the available capacity operating margin, it has been
determined that capacity is available in the system to provide an
allocation of power to the City of Oxford. This determination, however,
is independent of and should not be considered a precedent with regard
to the establishment of a marketing policy addressing allocation
portability. The issue of allocation portability is currently under
examination by Southeastern. (See Comment 4)
4. Comment: A current preference customer's allocation of SEPA
power should be freely transferable from one transmission system to
another.
Response: This is a very complex issue involving the nature of
peaking power, different system control areas, transmission systems,
industry standards, duplication of allocation, etc. Southeastern has
determined that, because of the complexity of the issue, a separate
marketing policy is needed to address this issue.
5. Comment: The Marketing Policy should include a statement that
pricing for transmission integration service will conform to Federal
Energy Regulatory Commission (FERC) principles that develop through
implementation of the National Energy Policy Act of 1992.
Response: Southeastern has no transmission system of its own.
Transmission is arranged through negotiated transmission contracts with
area utilities. Southeastern has always and will continue to consider
and utilize FERC guidance, however, any specific contract language will
have to be viewed in the context of overall contract negotiations.
6. Comment: Southeastern's wholesale rates need to continue to be
cost based rates.
Response: Southeastern will continue to use cost based rates,
subject to Congressional, FERC, and Department of Energy mandates.
7. Comment: The Policy should allow for contracts with terms up to
20 years. Not all contracts should be 20 years in length, merely allow
for such contract terms if appropriate.
Response: Southeastern agrees that this action will give maximum
flexibility in the negotiation of contracts under this policy, and will
allow for contracts to be entered into for a term greater than 10 years
if necessary or if found desirable during contract negotiations.
8. Other Comment: It is imperative that new contracts permit real
time scheduling of preference customers Southeastern declarations by
the Generation and Transmission (G&T) cooperatives and public power
joint action agencies for the benefit of their participants which are
preference customers. Southeastern should offer both unreserved, non-
firm capacity and energy and reserved, firm capacity and energy to its
current preference customers as a choice. A storage arrangement to be
able to maximize utilization of the available water is needed. A rating
based on average water year (not adverse water year) should be used.
Response: Southeastern considers these diverse comments to be issue
related to future contract negotiations to implement this policy.
Traditionally, Southeastern has negotiated contracts in close
coordination and consultation with our customers; Southeastern intends
to continue this practice.
Changes or revisions in proposed marketing policy. It was
determined to allocate existing power to the City of Oxford, Georgia,
as well as to provide for an allocation of any future power which might
become available (See Comment 3). It was determined to allow for
contracts to be entered into for a period of time greater than 10 years
if necessary or if found desirable during contract negotiations (see
comment 7). It was also determined to have a separate power marketing
policy on the portability of a power allocation. (See Comment 4)
The Resale Rate section has been eliminated and will be addressed
in the forthcoming power marketing policy for portability of
allocations of power to preference customers. A new section, Transfer
of Preference Customer Allocation Between Utility Service Areas, has
been added.
Final Power Marketing Policy, Georgia-Alabama-South Carolina System
of Projects
General. The projects and power subject to this policy are:
------------------------------------------------------------------------
Capacity Energy
(kw) (mwh)
Projects (name- (average
plate) annual)
------------------------------------------------------------------------
Allatoona......................................... 74,000 156,000
Buford............................................ 86,000 193,000
Carters:
(1)............................................... 250,000 *198,000
(2)............................................... 250,000 .........
J. Strom Thurmond................................. 280,000 729,000
Hartwell.......................................... 344,000 483,000
Robert F. Henry................................... 68,000 343,000
Millers Ferry..................................... 75,000 397,000
Walter F. George.................................. 130,000 436,000
West Point........................................ 73,375 208,000
Richard B. Russell:
(1)............................................... 300,000 *484,000
(2)............................................... 340,000 .........
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(1) Carters has 2 generating units rated at 125,000 kw each. Russell has
4 generating units rated at 75,000 kw each.
(2) Carters has 2 pumping units rated at 125,000 kw each. Russell has 4
pumping units rated at 80,000 kw each. Based upon latest test
information.
*Natural stream flow energy only.
There will be one policy for the Ga-Ala-SC System of Projects
progressively implemented. It will become effective upon publication in
the Federal Register and will be applicable to the sale of system power
in respective utility areas as then existing contracts, or necessary
extensions, expire.
The policy will be implemented through negotiated contracts for
terms of approximately 10 years, but may be negotiated for terms of up
to 20 years if found desirable or necessary.
Transmission facilities owned by utilities within the marketing
area will be used for all necessary purposes including transmitting
power to load centers. Deliveries may be made at the projects, at
utilities interconnections or at customer substations, as determined by
Southeastern. The projects will be hydraulically, electrically, and
financially integrated, and will be operated to make maximum
contribution to the power supply of the selected utility areas.
Preference in the sale of the power shall be given to public bodies and
cooperative.
Marketing area. The marketing area shall consist of the approximate
112,000 square mile area generally known as The Southern Company
service area, and the approximate 40,000 square mile area generally
known as the service areas of the South Carolina Public Service
Authority and the South Carolina Electric and Gas Company plus that
portion of the Duke Power Company's service area within a radius of 150
miles of the Hartwell, Russell or Thurmond projects. Eligible public
bodies and cooperatives in this marketing area are listed in Appendix A
attached hereto.
Allocations of Existing Power. Existing power available under this
policy for allocation from the Ga-Ala-SC System will primarily be
peaking power. The power will be allocated as follows subject to
possible future adjustments to conform to a power marketing policy
regarding portability of allocation, change of power suppliers, change
of control areas, scheduling requirements, or other relevant factors
pertaining to portability of allocations:
------------------------------------------------------------------------
Customer KW
------------------------------------------------------------------------
Alabama Electric Cooperative............................... 91,000
South Carolina Public Service Authority.................... 215,000
South Mississippi Electric Power Association............... 61,000
Customers in Duke Power Company service area............... 238,000
Customers in S.C. Electric & Gas Co. service area.......... 16,000
Customers in The Southern Company service area (including
Oxford, GA)............................................... *1,298,000
------------------------------------------------------------------------
*Increased for scheduling purposes.
Except where duplication of allocation would result, each public
body and cooperative within the marketing areas as shown in Appendix A
will be eligible for an allocation of existing power. Existing
preference customers within the marketing area will retain their
present allocations of capacity and essentially the same energy
accompaniment. The City of Oxford, Georgia, will receive an allocation
of existing power. It is Southeastern's goal to allocate all available
and useful system power (that power remaining after provision for an
appropriate capacity operating margin and losses) to preference
customers, except power that may be used for pumping.
Allocation of Power From Russell Pumped Storage Units. Currently,
pump generator units at the Richard B. Russell Project are undergoing a
series of environmental tests to meet the requirements of an injunction
imposed by the U.S. District Court in the case of South Carolina
Department of Wildlife and Marine Resources v. Marsh et al, 866 F.2d 97
(4th Cir 1989). The first opportunity for commercial operation of the
pumping units is after the completion of these tests. The environmental
tests and schedules were agreed upon by the Corps of Engineers and the
party litigants, and the results of the tests must be approved by the
district court before the units become commercially available. Should
pumped storage units at the Russell project become commercially
available during the tenure of contracts implementing this policy,
after the approval of the district court, after further mitigating
modifications required by environmental concerns, or by any other
means, Southeastern will allocate this additional power to those
preference customers identified in the Power Marketing Policy for the
Ga-Ala-SC System of Projects promulgated on October 1, 1980 in the
Federal Register (45 FR 65140) and the City of Oxford, Georgia. The
Russell pumped storage power will be allocated as follows subject to
possible future adjustments to conform to a power marketing policy
regarding portability of allocation, change of power suppliers, change
of control areas, scheduling requirements, or other relevant factors
pertaining to portability of allocations:
------------------------------------------------------------------------
Customer KW
------------------------------------------------------------------------
Alabama Electric Cooperative................................. 9,000
South Carolina Public Service Authority...................... 60,000
South Mississippi Electric Power Association................. 7,000
Customers in Duke Power Company service area................. 65,000
Customers in S.C. Electric & Gas Co. service area............ 5,000
Customers in The Southern Company service area (including
City of Oxford)............................................. 114,000
------------------------------------------------------------------------
Adequate capacity may be retained to provide an appropriate
capacity operating margin. Russell pumped storage capacity is predicted
at this time on testing accomplished to date and reflects the best
estimate at this time. Energy accompaniment to the pumped storage
capacity will be sufficient to provide viable peaking capacity.
Power From Pumped Water. Southeastern will utilize its combination
pumped storage and generation resources to produce high-value on-peak
power. Pumping power, whether generated within the system of projects
or obtained by purchasing or exchange agreement, will be used in pumped
storage operations, at Southeastern's discretion. Should the purchase
alternative be selected, Southeastern will obtain pumping energy from
utilities offering the best terms, and/or resulting in the most
benefits to the system. Should the exchange alternative be selected,
pumped storage operations will be handled with public bodies,
cooperatives and the utilities in a manner not involving the direct
purchase and sales approach, with preference given to public bodies and
cooperatives.
Utilization of Utility Systems. In the absence of transmission
facilities of its own, Southeastern will use area generation and
transmission systems to integrate the Government's projects, provide
firming, wheeling, exchange and backup services and such other
functions as may be necessary to dispose of system power under
reasonable and acceptable marketing arrangements. Utilities systems
providing such services shall be entitled to adequate compensation.
Specific terms and conditions of all such arrangements shall be the
subject of negotiations between Southeastern and the generation and
transmission utilities providing the services. Individual preference
agencies directly affected by the negotiations shall, through
representatives selected at the outset of negotiations, be kept
currently advised on the status and progress of negotiations.
Southeastern also will consult with and seek advice from these affected
parties.
Wholesale Rates. Rate schedules shall be drawn to recover all costs
associated with producing and transmitting the power in accordance with
then current repayment criteria. Production costs will be determined on
a system basis and rate schedules will relate to the integrated output
of the projects. Rate schedules may be revised periodically.
Energy and Economic Efficiency Measures. Each customer who
purchases Southeastern's power is encouraged to participate in an
integrated resource plan that considers both supply and demand side
alternatives. It is recognized that some Southeastern customers are
members of a power supply organization that does resource planning for
its customers (i.e., power supply cooperatives and joint action
agencies). Where a customer, or a power supply organization that does
resource planning for a Southeastern customer, is responsible to a
regulatory body or another Government agency for an integrated resource
plan, the customer will make a copy of such integrated resource plan
available to Southeastern. All Southeastern customers shall agree to
encourage the efficient use of energy by ultimate customers.
Transfer of Preference Customer Allocation Between Utility Service
Areas. This subject is being examined for formulation of a proposed
marketing policy on power allocation portability. Until such time as a
policy is established, Southeastern intends to include a clause in any
contract negotiated under this policy to leave this matter open for
negotiation after a policy has been established.
Appendix A.--Preference Agencies in the Georgia-Alabama-South
Carolina System Area
Distribution--Type Preference Agencies
Alabama
Alexander City, Dothan, Evergreen, Fairhope, Foley, Hartford,
LaFayette, Lanett, Luverne, Opelika, Piedmont, Robertsdale, Sylacauga,
Troy, Tuskegee, Baldwin County EMC, Black Warrior EMC, Central Alabama
EC, Clarke-Washington EMC, Coosa Valley EC, Dixie EC, Pea River EC,
Pioneer EC, Tallapoosa River EC, Tombigbee EC, Wiregrass EC.
Florida
Choctawhatchee EC, West Florida ECA.
Georgia
Acworth, Adel, Albany, Barnesville, Blakely, Brinson, Buford,
Cairo, Calhoun, Camilla, Cartersville, College Park, Commerce,
Covington, Dalton, Doerun, Douglas, East Point, Elberton, Ellaville,
Fairburn, Fitzgerald, Forsyth, Fort Vallley, Grantville, Griffin,
Hampton, Hogansille, Jackson, LaFayette, LaGrange, Lawrenceville,
Mansfield, Marietta, Monroe, Monticello, Moultrie, Newnan, Norcross,
Oxford, Palmetto, Quitman, Sandersville, Sylvania, Sylvester,
Thomaston, Thomasville, Washington, West Point, Whigham, Crisp County
Power Commission, Altamaha EMC, Amicalola EMC, Canoochee EMC, Carroll
EMC, Central Georgia EMC, Coastal EMC, Cobb EMC, Colquitt EMC, Coweta-
Fayette EMC, Excelsior EMC, Flint EMC, Grady EMC, GreyStone Power
Corporation, Habersham EMC, Hart EMC, Irwin EMC, Jackson EMC, Jefferson
EMC, Lamar EMC, Little Ocmulgee EMC, Middle Georgia EMC, Mitchell EMC,
Ocmulgee EMC, Oconee EMC, Okefenoke REMC, Pataula EMC, Planters EMC,
Rayle EMC, Satilla Rural EMC, Sawnee EMC, Slash Pine EMC, Snapping
Shoals EMC, Sumter EMC, Three Notch EMC, Tri-County EMC, Troup EMC,
Upson County EMC, Walton EMC, Washington EMC.
Mississippi
Coast EPA, East Mississippi EPA, Singing River EPA.
North Carolina
Bostic, Cherryville, Concord, Cornelius, Dallas, Drexel, Forest
City, Gastonia, Granite Falls, Huntersville, Kings Mountain, Landis,
Lincolton, Maiden, Monroe, Morgantown, Newton, Pineville, Shelby,
Stateville, Blue Ridge EMC, Crescent EMC, Haywood EMC, Pee Dee EMC,
Rutherford EMC, Union EMC.
South Carolina
Abbeville, Bamberg, Clinton, Due West, Easley, Gaffney, Georgetown,
Greenwood, Greer, Laurens, McCormick, Newberry, Orangeburg, Prosperity,
Seneca, Rock Hill, Union, Westminster, Winnsboro, S.C. Public Service
Authority,\1\ Blue Ridge EC, Broad River EC, Laurens EC, Little River
EC, York EC.
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\1\Also operates generation and transmission facilities and
serves at wholesale.
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Publicly-Owned Wholesale Power Supply Agencies
Alabama Electric Cooperative, South Mississippi Electric Power
Association. Central Electric Power Cooperative (S.C.), on behalf of
Aiken EC, Berkeley EC, Black River EC, Coastal EC, Edisto EC, Fairfield
EC, Horry EC, Lynches River EC, Marlboro EC, Mid-Carolina EC, Newberry
EC, Palmetto EC, Pee Dee EC, Santee EC and Tri-County EC.22.
[FR Doc. 94-31948 Filed 12-27-94; 8:45 am]
BILLING CODE 6150-01-M