[Federal Register Volume 60, Number 146 (Monday, July 31, 1995)]
[Notices]
[Pages 38995-38996]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-18736]



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DEPARTMENT OF ENERGY
Western Area Power Administration


Pacific Northwest-Pacific Southwest Intertie Project--Proposed 
Firm and Nonfirm Transmission Service Rates for the Phoenix Area

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of Proposed Rates for Firm Transmission Service and 
Nonfirm Transmission Service for the Pacific Northwest-Pacific 
Southwest Intertie Project Rate Adjustment.

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SUMMARY: The Western Area Power Administration (Western) is proposing 
two rates for firm transmission service and a rate for nonfirm 
transmission service for the Pacific Northwest-Pacific Southwest 
Intertie Project (AC Intertie).
    The power repayment study indicates that the proposed rates for 
firm and nonfirm transmission service are necessary because of 
increases in operation and maintenance expenses, and the anticipated 
decrease in current marketable capacity from the 500-kilovolt (kV) 
transmission lines. The proposed rates for firm and nonfirm 
transmission service will supersede the existing rates that became 
effective August 1, 1993, and were extended on May 17, 1995 (60 FR 
26433) until October 1, 1996. The proposed rates for firm and nonfirm 
transmission service are to become effective January 1, 1996.
    The existing firm transmission service rate for the 230/345-kV 
transmission lines is $4.46 per kilowatt per year (kW/year) and the 
existing nonfirm transmission service rate is 1.00 mills per 
kilowatthour (mills/kWh).
    The proposed firm transmission service rate for the 230/345-kV 
transmission lines is $7.37/kW/year; the proposed rate for the 500-kV 
transmission lines is $16.00/kW/year; and the proposed combined nonfirm 
transmission service rate is 2.11 mills/kWh.
    The Acting Assistant Secretary of Energy for Energy Efficiency and 
Renewable Energy of the Department of Energy (DOE), approved the 
existing rates on an interim basis for firm and nonfirm transmission 
service on July 14, 1993. The Federal Energy Regulatory Commission 
(FERC) confirmed and approved the rates on a final basis for firm and 
nonfirm transmission service on March 24, 1994 (66 FERC para.62,180). 
The existing rates were designed to recover all annual costs and 
investment repayment of both the existing 230/345-kV lines and the new 
500-kV lines. The existing rates for firm and nonfirm transmission 
service were placed in effect on August 1, 1993, and consisted of a 
two-step rate adjustment process. Step one of the firm transmission 
service rate was approved to be in effect through September 30, 1995, 
and step two of the existing rates was to become effective on October 
1, 1995, and continue through July 31, 1998.
    During the last AC Intertie rate adjustment process (WAPA-56), the 
Colorado River Commission of Nevada, the Arizona Power Authority, the 
Arizona Subcontractor Group, the Arizona Power Pooling Association, 
Inc., and the Salt River Project Agricultural Improvement and Power 
District filed a Motion to Intervene and Protest FERC confirmation and 
approval of the AC Intertie rates described in Rate Order No. WAPA-56. 
On December 28, 1993, Western filed a Stipulation Agreement signed by 
Western and these customers in which the intervenors withdrew their 
protests and Western agreed to re-examine the issues raised as well as 
commence a new rate adjustment proceeding during fiscal year 1995.
    Western has re-examined the issues raised during the last rate 
adjustment process along with the current issues regarding the rate 
impact from the additional capacity. Due to customer request, Western 
has developed and is proposing two firm transmission service rates and 
a nonfirm transmission service rate for the AC Intertie Project to 
supersede step one of the existing rates which were extended for firm 
and nonfirm transmission service. The major difference between step two 
of the existing rates and the proposed rates is the separate marketing 
and rate-setting design of the 500-kV system.
    In response to additional AC Intertie customer requests, Western is 
proposing a rate design for the firm transmission 

[[Page 38996]]
service that consists of (1) a rate for the firm transmission service 
from the existing 230/345-kV transmission lines and (2) a rate for the 
firm transmission service of the 500-kV transmission lines. The firm 
transmission service rate for the 500-kV transmission lines is designed 
to recover all annual costs for repayment of the new investment. Based 
upon its studies, Western expects that the marketable capacity used in 
the rate calculation for the 500-kV transmission lines to be 668 
megawatts (MW). Western is proposing a firm transmission service rate 
of $7.37/kW/year for the 230/345-kV system and a firm transmission 
service rate of $16.00/kW/year for the 500-kV system.
    Western is also proposing a nonfirm transmission service rate of 
2.11 mills/kWh for both the 230/345-kV and 500-kV system that will 
supersede the existing nonfirm transmission service rate of 1.00 mills/
kWh. The non-firm transmission service rate combines the rate of 1.40 
mills/kWh for the 230/345-kV system and a rate of 3.04 mills/kWh for 
the 500-kV system for a combined rate of 2.11 mills/kWh.
    The following table displays the existing rates, the step two of 
the previously approved rates, the proposed AC Intertie 230/345-kV 
transmission system rates, and the proposed 500-kV transmission system 
rates:

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                                                 Existing rates 230/345-kV    Existing rates step two    Proposed rates 230/345-kV   Proposed rates 500-
                Type of service                 system extended through 10/ 230/345/ 500-kV system 07/   system 01/01/1996 through  kV system 01/01/1996
                                                          01/1996                      31/98                    09/30/2000           through 09/30/2000 
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Firm Transmission Service.....................  $4.46/kW/year.............  $8.01/kW/year.............  $7.37/kW/year.............  $16.00/kW/year.     
Combined Nonfirm Transmission Service.........  1.00 mills/kWh............  1.52 mills/kWh............  2.11 mills/kWh............  2.11 mills/kWh.     
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    The proposed rates for the 500-kV transmission lines are based on 
investments, an estimated marketable capacity, and a percentage 
distribution of the projected expenses and revenues. The final 
marketable capacity that will be contracted is not yet determined. 
Should there be contracts for more than the estimated marketable 
capacity of 668 MW, Western would foresee an increase in firm revenue, 
thereby, providing for a decrease to the proposed rate of $16.00/kW/
year. Conversely, if less than the estimated capacity is contracted, 
Western would increase the proposed rate of $16.00/kW/year to ensure 
that the revenue requirement is satisfied. The proposed rate for the 
230/345 kV system represents an 8.68 percent decrease from the existing 
step two rate of $8.01/kW/year. The non-firm transmission rate 
represents an increase of 39 percent from the existing non-firm 
transmission service rate.
    Since the proposed rates constitute a major rate adjustment for 
transmission service, as defined by the procedures for public 
participation in general rate adjustments, as cited below, both a 
public information forum and a public comment forum will be held. After 
review of public comments, Western will recommend the final proposed AC 
Intertie rates to the Deputy Secretary of the Department of Energy 
(Deputy Secretary). If approved by the Deputy Secretary, the 
provisional rates would remain in effect on an interim basis until 
confirmed and approved as final rates by FERC.

DATES: The consultation and comment period will begin with the 
publication of this notice in the Federal Register and will end not 
less than 90 days later, or October 17, 1995, whichever occurs later. A 
public information forum will be held at 1 p.m. on August 24, 1995, at 
Western's Phoenix Area Office, 615 South 43rd Avenue, Phoenix Arizona. 
A public comment forum at which Western will receive oral and written 
comments will be held at 1 p.m. on September 18, 1995, also at 
Western's Phoenix Area Office.
    Written comments regarding the proposed rates should be received by 
the end of the consultation and comment period to be assured 
consideration and should be sent to the address below.

ADDRESSES: For Further Information Contact: Mr. J. Tyler Carlson, Area 
Manager, Phoenix Area Office, Western Area Power Administration, P.O. 
Box 6457, Phoenix, AZ 85005, (602) 352-2521.

SUPPLEMENTARY INFORMATION: Transmission rates for the AC Intertie are 
established pursuant to the Department of Energy Organization Act (42 
U.S.C. 7101 et seq.); and the Reclamation Act of 1902 (43 U.S.C. 371 et 
seq.), as amended and supplemented by subsequent enactments, 
particularly section 9(c) of the Reclamation Act of 1939 (43 U.S.C. 
485h(c)), and section 8 of the Act of August 31, 1964 (16 U.S.C. 837g).
    By Amendment No. 3 to Delegation Order No. 0204-108, published 
November 10, 1993 (58 FR 59716), the Secretary of DOE 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 in 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 FERC. Existing DOE procedures for public participation in 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 rates for transmission service are and will be available for 
inspection and copying at the Phoenix Area Office, located at 615 South 
43rd Avenue, Phoenix, AZ 85005.

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 the Office of Management and Budget is required.

Environmental Evaluation

    In compliance with the National Environmental Policy Act (NEPA) of 
1969, 42 U.S.C. 4321 et seq.; Council On Environmental Quality (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, July 18, 1995.
J.M. Shafer,
Administrator.
[FR Doc. 95-18736 Filed 7-28-95; 8:45 am]
BILLING CODE 6450-01-P