[Federal Register Volume 60, Number 200 (Tuesday, October 17, 1995)]
[Notices]
[Pages 53785-53789]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-25687]



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DEPARTMENT OF ENERGY

Stampede Division, Washoe Project Notice of Rate Order No. WAPA-
67

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of rate order.

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[[Page 53786]]


SUMMARY: Notice is given of the confirmation and approval by the Deputy 
Secretary of the Department of Energy (DOE) of Rate Order No. WAPA-67 
and Rate Schedule SNF-4 placing the revised nonfirm energy rates for 
energy from the Stampede Division, Washoe Project (Stampede) of the 
Western Area Power Administration (Western) into effect on an interim 
basis. These rates are the interim rates, called the provisional rates, 
and they will remain in effect on an interim basis until the Federal 
Energy Regulatory Commission (FERC) confirms, approves, and places them 
into effect on a final basis or until they are replaced by other rates.
    Western has executed agreements with the Sierra Pacific Power 
Company (Sierra), the U.S. Department of the Interior, Fish and 
Wildlife Service (FWS) and the U.S. Department of the Interior, Bureau 
of Reclamation (Reclamation) to provide service to project use 
facilities. The costs associated with such service will be 
nonreimbursable, and will not be recovered through the power revenues. 
The remaining reimbursable costs and the energy remaining after meeting 
project use service are used to calculate the cost recovery rate. This 
rate ensures payment of all reimbursable expenses and investments 
within the required time frames. The cost recovery rate is above the 
current market price for nonfirm energy.
    Under Rate Schedule SNF-4, nonfirm energy that is available after 
project use service has been met will be sold at a rate that is equal 
to or higher than the Stampede Energy Exchange Account (SEEA) rate but 
no greater than the cost recovery rate. Rate Schedule SNF-4 provides 
the formulae to determine the SEEA and cost recovery rates for Stampede 
nonfirm energy. These formulae are:

    The SEEA rate will be 85 percent of the then-effective non-time 
differentiated rate as provided in Sierra's California Quarterly 
Short-Term Purchase Price Schedule for As-Available Purchases from 
Qualifying Facilities with Capacities of 100 kilowatts or less.
    The cost recovery rate is calculated by dividing the revenue 
requirement needed to repay all reimbursable power costs by the 
nonfirm energy remaining after meeting project use service.

    A comparison of existing and provisional rates follows:

----------------------------------------------------------------------------------------------------------------
                                            Existing rate as of July  Provisional rate October    Percentage of 
                                                    1, 1994                    1, 1995               change     
----------------------------------------------------------------------------------------------------------------
Rate Schedule............................  SNF-3                      SNF-4                                     
Floor (SEEA) Rate (mills/kWh)............  27.69                      19.26*                              -30.44
Ceiling (Cost Recovery) Rate (mills/kWh).  67.39                      80.44**                              19.36
----------------------------------------------------------------------------------------------------------------
*The average SEEA rate for FY 1995.                                                                             
**The estimated cost recovery rate for FY 1996 through FY 2000.                                                 

    Under the existing rate schedule, Stampede nonfirm energy is sold 
through an annual bidding process on a short-term nonfirm basis. A 
floor and ceiling rate for the bidding process is calculated each year. 
The floor rate is based on annual operation and maintenance expenses 
plus two mills per kilowatthour, and the ceiling rate is the rate 
required to repay annual expenses and investment within the required 
time frames.

DATES: Rate Schedule SNF-4 will be placed into effect on an interim 
basis on October 1, 1995, and will be in effect until FERC confirms, 
approves, and places the rate schedule in effect on a final basis, or 
until the rate schedule is superseded.

FOR FURTHER INFORMATION CONTACT:

Mr. James C. Feider, Area Manager, Sacramento Area Office, Western Area 
Power Administration, 114 Parkshore Drive, Folsom, CA 95630, (916) 353-
4418
Mr. Joel Bladow, Assistant Administrator for Washington Liaison, 
Western Area Power Administration, Room 8G-027, Forrestal Building, 
1000 Independence Avenue SW., Washington, DC 20585-0001, (202) 586-
5581.

SUPPLEMENTARY INFORMATION: By Amendment No. 3 to Delegation Order No. 
0204-108, published November 10, 1993 (58 FR 59716), the Secretary of 
Energy (Secretary) 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 
FERC. Existing DOE procedures for public participation in power rate 
adjustments are contained in 10 CFR Part 903.
    These power rates were developed pursuant to section 302(a) of the 
DOE Organization Act, 42 U.S.C. 7152(a), through which the power 
marketing functions of the Secretary of the Interior and Reclamation 
under 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 Project Act of 1939, 43 U.S.C. Sec. 485h(c), and other 
acts specifically applicable to the project involved, were transferred 
to and vested in the Secretary.
    Under Western's contract with Sierra, all Stampede nonfirm energy 
is debited to the SEEA, at the SEEA rate. The cost of project use 
service is then credited to the SEEA. Power remaining after meeting 
project use service will be offered to other entities, giving priority 
to preference customers, through an annual bidding process. Bids will 
be accepted only if the bid rate is equal to or higher than the SEEA 
rate, and less than the cost recovery rate. If no bid meets this 
criteria, the nonfirm energy will be deemed sold to Sierra at the SEEA 
rate.
    If the SEEA arrangements with Sierra are terminated, Western will 
offer all available nonfirm energy for sale at the cost recovery rate, 
or the highest rate bid that is below the cost recovery rate.
    Stampede power costs associated with providing project use service 
are nonreimbursable pursuant to Public Law 84-858 (70 Stat. 777) and 
Public Law 101-618 (104 Stat. 3289) and are not recovered through power 
revenues. The amount of the annual nonreimbursable costs is calculated 
by multiplying the total annual power costs by a ratio of the cost of 
providing project use service to the revenues from Stampede generation 
as recorded in the SEEA. The remaining reimbursable costs and energy 
remaining after project use service has been provided are used to 
calculate the cost recovery rate. The power repayment study and other 
analyses indicate the revised cost 

[[Page 53787]]
recovery rate provides sufficient revenue to pay all reimbursable 
annual costs including interest expense, plus repayment of required 
investment within the allowable time period.
    Rate Order No. WAPA-67 confirming, approving, and placing the 
proposed Stampede rate adjustment into effect on an interim basis, is 
issued, and the new Rate Schedule SNF-4 will be submitted promptly to 
FERC for confirmation and approval on a final basis.

    Issued in Washington, DC, September 29, 1995.
Charles B. Curtis,
Deputy Secretary.

Department of Energy Deputy Secretary

    In the matter of: Western Area Power Administration Rate 
Adjustment for Stampede Division, Washoe Project.

[Rate Order No. WAPA-67]

Order Confirming, Approving and Placing the Stampede Division, Washoe 
Project Nonfirm Power Rates Into Effect on an Interim Basis

October 1, 1995.
    These power rates were developed pursuant to section 302(a) of the 
Department of Energy (DOE) Organization Act, 42 U.S.C. 7152(a), through 
which the power marketing functions of the Secretary of the Interior 
and the Bureau of Reclamation (Reclamation) under 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 
Project Act of 1939, 43 U.S.C. 485h(c), and other acts specifically 
applicable to the project involved, were transferred to and vested in 
the Secretary of Energy (Secretary).
    By Amendment No. 3 to Delegation Order No. 0204-108, published 
November 10, 1993 (58 FR 59716), the Secretary delegated (1) the 
authority to develop long-term power and transmission rates on a 
nonexclusive basis to the Administrator of the Western Area Power 
Administration (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 (FERC). Existing DOE procedures 
for public participation in power rate adjustments are contained in 10 
CFR Part 903.

Acronyms and Definitions

    As used in this rate order, the following acronyms and definitions 
apply:

DOE: U.S. Department of Energy
DOE Order RA 6120.2: A Department of Energy order dealing with power 
marketing administration financial reporting.
FERC: Federal Energy Regulatory Commission
FWS: U.S. Department of the Interior, Fish and Wildlife Service
FY: Fiscal Year
kW: Kilowatt
kWh: Kilowatthour
mills/kWh: Mills per kilowatthour
PRS: Power repayment study
Reclamation: U.S. Department of the Interior, Bureau of Reclamation
SEEA: Stampede Energy Exchange Account
Sierra: Sierra Pacific Power Company
Stampede: Stampede Division, Washoe Project
Western: U.S. Department of Energy, Western Area Power Administration

Effective Date

    The rates will become effective on an interim basis on October 1, 
1995, and will be in effect pending FERC's approval of them or 
substitute rates on a final basis for a 5-year period, or until 
superseded.

Public Notice and Comment

    The Procedures for Public Participation in Power and Transmission 
Rate Adjustments and Extensions, 10 CFR Part 903, have been followed by 
Western in the development of these nonfirm power rates. Stampede is a 
power system which normally has annual sales less that 100 million kWh 
and an installed capacity of less than 20,000 kW; therefore this rate 
adjustment constitutes a minor rate adjustment as defined by 10 CFR 
Part 903.2(f). Since this is a minor rate adjustment, no public 
meetings were scheduled; however, Western accepted comments from 
interested parties.
    The following summarizes the steps Western took to allow 
involvement of interested parties in the rate process:
    1. A Federal Register notice was published on June 5, 1995 (60 FR 
29586), officially announcing the proposed nonfirm power rate 
adjustment, initiating the public consultation and comment period.
    2. On June 14, 1995 a letter was mailed from Western's Sacramento 
Area Office to all interested parties announcing the publication of the 
Federal Register notice on June 5, 1995.
    3. On June 15, 1995 a rate adjustment brochure was available to all 
interested parties upon request.
    4. The comment period ended on July 5, 1995; no comments or 
requests for information were received during the comment period.

Project History

    The Stampede Dam was authorized under the Washoe Project Act of 
August 1, 1956 (70 Stat. 775). Power facilities were not constructed 
when Stampede Dam was built because the power function was determined 
not economically justified at the time. A re-evaluation of a powerplant 
at Stampede was conducted and published in a special Reclamation 
report, Adding Powerplants at Existing Federal Dams in California, in 
July 1976. Reclamation recommended construction of the Stampede 
powerplant, and construction was completed in 1987. Since 1988, energy 
produced at the Stampede powerplant has been sold to the highest bidder 
on a short-term nonfirm basis, as the preference entity, defined in the 
marketing plan for Stampede power, has been unable to contract for 
transmission from Stampede to their point of delivery. In addition, the 
Stampede floor and ceiling rates calculated in accordance with the 
existing rate schedule has been higher than the market rate for nonfirm 
energy.
    FWS facilities at Stampede were authorized by the Washoe Project 
Act of August 1, 1956 (70 Stat. 775). Lahonton Fish Hatchery and the 
Marble Bluff Fish Facility were designated as project use facilities by 
Reclamation, but Western has been unable to provide project use service 
because transmission service was not available. On April 1, 1994 
Western executed Contract No. 94-SAO-00010 with Sierra which 
established the SEEA and provides Western the mechanism necessary to 
provide project use power to FWS. Western entered into an agreement 
with FWS for project use service on June 29, 1994. Subsequently, on 
December 19, 1994, Western and Reclamation entered into Letter of 
Agreement No. 94-SAO-00036 which provides the method to determine the 
percentage of the annual costs of Stampede operation, maintenance, 
interest expense and capital cost repayment associated with providing 
project use service to be nonreimbursable. Nonreimbursable costs are 
not recovered through power revenues. The nonreimbursable costs are 
based on the ratio of the annual cost of project use service to the 
total annual revenue recorded in the SEEA from Stampede nonfirm energy. 
This percentage has been applied to all current and future year costs 
in the Stampede PRS.

[[Page 53788]]


Power Repayment Studies

    A PRS is prepared each year to determine if power revenues will be 
sufficient to pay, within the prescribed time periods, all reimbursable 
costs assigned to the power function. Repayment criteria are based on 
law, policies, and authorizing legislation. DOE Order RA 6120.2, 
section 12b, requires that:

    In addition to the recovery of the above costs (operation and 
maintenance and interest expenses) on a year-by-year basis, the 
expected revenues are at least sufficient to recover (1) each dollar 
of power investment at Federal hydroelectric generating plants 
within 50 years after they become revenue producing, except as 
otherwise provided by law; (2) each annual increment of Federal 
transmission investment within the average service life of such 
transmission facilities or within a maximum of 50 years, whichever 
is less; plus, (3) the cost of each replacement of a unit of 
property of a Federal power system within its expected service life 
up to a maximum of 50 years.

Existing and Provisional Rates

    A comparison of the existing and provisional rates follows:

                                  Comparison of Existing and Provisional Rates                                  
----------------------------------------------------------------------------------------------------------------
                                                                                                      Percentage
                                Existing rate as of July 1, 1994   Provisional rate October 1, 1995   of change 
----------------------------------------------------------------------------------------------------------------
Rate Schedule................  SNF-3............................  SNF-4............................  ...........
Floor (SEEA) Rate (mills/kWh)  27.69............................  19.26*...........................       -30.44
Ceiling (Cost Recovery) Rate   67.39............................  80.44**..........................        19.36
 (mills/kWh).                                                                                                   
----------------------------------------------------------------------------------------------------------------
*The average SEEA rate for FY 1995.                                                                             
**The estimated cost recovery rate for FY 1996 through FY 2000.                                                 

    The formula for the SEEA rate is:
    The SEEA rate will be 85 percent of the then-effective non-time-
differentiated rate as provided in Sierra's California Quarterly Short-
Term Purchase Price Schedule for As- Available Purchases from 
Qualifying Facilities with Capacities of 100 kW or less.
    The formula for the cost recovery rate is:
    The cost recovery rate is calculated by dividing the revenue 
requirement needed to repay all reimbursable power costs by the nonfirm 
energy remaining after meeting project use service.
    Under the existing rate schedule, Stampede nonfirm energy is sold 
through an annual bidding process on a short-term nonfirm basis. A 
floor and ceiling rate for the bidding process is calculated each year. 
The floor rate is based on annual operation and maintenance expenses 
plus two mills per kilowatthour, and the ceiling rate is the rate 
required to repay annual expenses and investment within the required 
time frames.

Certification of Rate

    Western's Administrator has certified that the Stampede nonfirm 
power rates placed into effect on an interim basis herein are the 
lowest possible rates consistent with sound business principles. The 
rates have been developed in accordance with administrative policies 
and applicable laws.

Discussion

    Sierra has agreed to purchase all Stampede generation at the SEEA 
rate. The dollar value from these sales are debited to the SEEA. Bills 
for project use service at Lahonton Fish Hatchery and Marble Bluff Fish 
Facility are then credited to the SEEA. During April of each year, any 
balance in the SEEA may be converted to an energy amount and offered to 
other entities, with priority given to preference customers.
    The energy remaining after meeting project use service is 
calculated by dividing the dollar balance in the SEEA by 85 percent of 
the then-effective time-differentiated rate as provided in Sierra's 
California Quarterly Short-Term Purchase Price Schedule for As-
Available purchases from Qualifying Facilities with Capacities of 100 
kW or less. Power remaining after meeting project use service will be 
offered to interested parties and preference customers through an 
annual bidding process. Bids will be accepted only if the bid rate is 
equal to or higher than the SEEA rate and less than the cost recovery 
rate. If no bid meets this criteria, the nonfirm energy will be deemed 
sold to Sierra at the SEEA rate. If the SEEA arrangements with Sierra 
are terminated, Western will offer all available nonfirm energy for 
sale at the cost recovery rate, or the highest rate bid that is below 
the cost recovery rate.
    Western prepared a PRS which identified power related costs for the 
study period. A percentage equal to the ratio of the estimated cost for 
project use service to the estimated revenue from Stampede generation 
recorded in the SEEA was applied to the power costs to determine the 
amount of nonreimbursable cost. The remaining reimbursable cost and the 
estimated energy remaining after meeting project use service were used 
to determine the cost recovery rate necessary for repayment of 
Stampede. The cost recovery rate was designed to allow repayment of the 
reimbursable portion of the plant investment, operation and maintenance 
expenses, capitalized deficits, interest expenses, and replacements 
based on the nonfirm energy available for sale after project use 
service has been met.

Statement of Revenue and Related Expenses

    The following table provides a summary of revenue and expense data 
through the 5-year proposed rate approval period.

   Stampede Division, Washoe Project, 5-Year Rate Period, Revenues and  
                                Expenses                                
------------------------------------------------------------------------
                                                              Rate case 
                                                                 PRS    
                                                            reimbursable
                                                             revenue and
                                                              expenses  
                                                             1996-2000* 
------------------------------------------------------------------------
Revenues..................................................    $1,357,713
Expenses:                                                               
  O&M.....................................................      $324,749
  Interest................................................       900,120
  Capitalized Expenses....................................       132,844
                                                           -------------
      Total...............................................    $1,357,713
------------------------------------------------------------------------
*Data reflects costs remaining to be repaid through power revenues after
  applying nonreimbursable percentage.                                  

Comments

    During the 30-day comment period, Western did not receive any 
written comments either requesting information or commenting on the 
rate adjustment.

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 

[[Page 53789]]
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. A categorical 
exclusion was issued on May 1, 1995.

Executive Order 12866

    DOE has determined that this rate action is not a significant 
regulatory action because it does not meet the criteria of Executive 
Order 12866, 58 CFR 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.

Availability of Information

    Information regarding this rate adjustment, including PRSs, 
letters, memorandums, and other supporting material made or kept by 
Western for the purpose of developing the nonfirm energy rate, is 
available for public review in the Sacramento Area Office, Western Area 
Power Administration, Office of the Assistant Area Manager for Power 
Marketing, 114 Parkshore Drive, Folsom, California 95630; and Western 
Area Power Administration, Office of the Assistant Administrator for 
Washington Liaison, Room 8G-027 Forrestal Building, 1000 Independence 
Avenue SW., Washington, DC 20585.

Submission to Federal Energy Regulatory Commission

    The rates herein confirmed, approved, and placed into effect on an 
interim basis, together with supporting documents, will be submitted to 
FERC for confirmation and approval on a final basis.

Order

    In view of the foregoing and pursuant to the authority delegated to 
me by the Secretary of Energy, I confirm and approve on an interim 
basis, effective October 1, 1995, Rate Schedule SNF-4 for the Stampede 
Division, Washoe Project. The rate schedule shall remain in effect on 
an interim basis, pending FERC confirmation and approval or a 
substitute rate on a final basis, through September 30, 2000.

    Issued in Washington, DC, September 29, 1995.
Charles B. Curtis,
Deputy Secretary.
Rate Schedule SNF-4
(Supersedes Schedule SNF-3)

United States Department of Energy, Western Area Power Administration, 
Stampede Division, Washoe Project

Schedule of Rate for Nonfirm Energy

    Effective: October 1, 1995, through September 30, 2000.
    Available: Within the marketing area served by the Sacramento Area 
Office.
    Applicable: This rate is applicable to sales of nonfirm energy in 
excess of project use service. Sales shall be subject to terms and 
conditions among the respective entities specified at the time of sale.
    Rate: The rate for nonfirm energy sales from Stampede will be equal 
to or greater than the Stampede Energy Exchange Account (SEEA) rate and 
less than the cost recovery rate. The SEEA rate is 85 percent of the 
then-effective non-time-differentiated rate as provided in the Sierra 
Pacific Power Company's California Quarterly Short-Term Purchase Price 
Schedule for As-Available Purchases from Qualifying Facilities with 
Capacities of 100 kilowatts or less.
    The cost recovery rate is calculated by dividing the revenue 
requirement needed to repay all annual reimbursable power costs by the 
nonfirm energy remaining after providing project use service.

[FR Doc. 95-25687 Filed 10-16-95; 8:45 am]
BILLING CODE 6450-01-P