[Federal Register Volume 61, Number 190 (Monday, September 30, 1996)]
[Notices]
[Pages 51104-51105]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-24983]


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DEPARTMENT OF ENERGY
Southwestern Power Administration


Robert D. Willis Power Rate-Order, Confirming, Approving and 
Placing Decreased Power Rate in Effect on an Interim Basis

AGENCY: Southwestern Power Administration, DOE.

ACTION: Notice of rate order.

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SUMMARY: The Deputy Secretary, acting under Amendment No. 3 to 
Delegation Order No. 0204-108, dated November 4, 1993, 58 FR 59716, has 
confirmed, approved and placed in effect on an interim basis Rate 
Schedule RDW-96. The rate schedule supersedes the existing Rate 
Schedule RDW-94.

EFFECTIVE DATES: Rate Order No. SWPA-33 specifies October 1, 1996, 
through September 30, 2000, as the effective period for the rate 
schedule.

FOR FURTHER INFORMATION CONTACT: Mr. George C. Grisaffe, Assistant 
Administrator, Administration and Rates, Southwestern Power 
Administration, Department of Energy, P.O. Box 1619, Tulsa, Oklahoma 
74101, (918) 595-6628.

SUPPLEMENTARY INFORMATION: Southwestern's Administrator has prepared 
the 1996 Current Power Repayment Study for the Robert D. Willis Project 
based on the annual power rate of $294,312. The study indicates that 
the power rate exceeds cost recovery criteria as specified in 
Department of Energy Order No. RA 6120.2 and Section 5 of the Flood 
Control Act of 1944. The Administrator prepared a 1996 Revised Power 
Repayment Study for the project which indicated that a reduction in 
annual revenue of $27,384, or 9.3 percent, is required effective 
October 1, 1996, to satisfy cost recovery criteria. In this regard, the 
Administrator has determined that the annual rate of $266,928 is the 
lowest possible rate to the customer consistent with sound business 
principles. The rate has been approved on an interim basis through 
September 30, 2000, or until confirmed and approved on a final basis by 
the Federal Energy Regulatory Commission.

    Issued in Washington, D. C., this 23rd day of September 1996.
Charles B. Curtis,
Deputy Secretary.
    In the matter of: Southwestern Power Administration--Robert D. 
Willis

[Rate Order No. SWPA-33]

Order Confirming, Approving and Placing Decreased Power Rate in Effect 
on an Interim Basis (September 23, 1996)

    Pursuant to Sections 302(a) and 301(b) of the Department of Energy 
Organization Act, Public Law 95-91, the functions of the Secretary of 
the Interior and the Federal Power Commission under Section 5 of the 
Flood Control Act of 1944, 16 U.S.C. 825s, for the Southwestern Power 
Administration (Southwestern) were transferred to and vested in the 
Secretary of Energy. By Delegation Order No. 0204-108, effective 
December 14, 1983, 48 FR 55664, the Secretary of Energy delegated to 
the Deputy Secretary of Energy on a nonexclusive basis the authority to 
confirm, approve and place into effect on an interim basis power and 
transmission rates, and delegated to the Federal Energy Regulatory 
Commission (FERC) on an exclusive basis the authority to confirm, 
approve and place in effect on a final basis, or to disapprove power 
and transmission rates. Amendment No. 1 to Delegation Order No. 0204-
108, effective May 30, 1986, 51 FR 19744, revised the delegation of 
authority to confirm, approve and place into effect on an interim basis 
power and transmission rates to the Under Secretary of Energy rather 
than the Deputy Secretary of Energy. This delegation was reassigned to 
the Deputy Secretary of Energy by Department of Energy (DOE) Notice 
1110.29, dated October 27, 1988, and clarified by Secretary of Energy 
Notice SEN-10-89, dated August 3, 1989, and subsequent revisions. By 
Amendment No. 2 to Delegation Order No. 0204-108, effective August 23, 
1991, 56 FR 41835, the Secretary of the Department of Energy revised 
Delegation Order No.

[[Page 51105]]

0204-108 to delegate to the Assistant Secretary, Conservation and 
Renewable Energy, the authority which was previously delegated to the 
Deputy Secretary in that Delegation Order. By Amendment No. 3 to 
Delegation Order No. 0204-108, effective November 10, 1993, 58 FR 
59717, the Secretary of Energy revised the delegation of authority to 
confirm, approve and place into effect on an interim basis power and 
transmission rates by delegating that authority to the Deputy Secretary 
of Energy. This rate order is issued by the Deputy Secretary pursuant 
to said Amendment to Delegation Order No. 0204-108.

Background

    Dam B (Town Bluff Dam), located on the Neches River in eastern 
Texas downstream from the Sam Rayburn Dam, was originally constructed 
in 1951 by the U.S. Army Corps of Engineers (Corps) and provides 
streamflow regulation of releases from the Sam Rayburn Dam. The Lower 
Neches Valley Authority contributed funds toward construction of both 
projects and makes established annual payments for the right to 
withdraw up to 2000 cubic feet of water per second from Town Bluff Dam 
for its own use. Power was legislatively authorized at the project, but 
installation of hydroelectric facilities was deferred until justified 
by economic conditions. A determination of feasibility was made in a 
1982 Corps study. In 1983 the Sam Rayburn Municipal Power Agency (SRMA) 
proposed to sponsor and finance the development of hydropower at Town 
Bluff Dam in return for the output of the project to be delivered to 
its member municipalities and participating member cooperatives of the 
Sam Rayburn Dam Electric Cooperative. Since the hydroelectric 
facilities at the Town Bluff Dam have been completed, the facilities 
have been renamed the Robert Douglas Willis Hydropower Project (Robert 
D. Willis).
    The Robert D. Willis rate is unique in that it excludes the costs 
associated with the hydropower design and construction performed by the 
Corps, because all funds for these costs were provided by SRMA. Under 
the Southwestern/SRMA power sales Contract No. DE-PM75-85SW00117, SRMA 
will continue to pay all annual operating and marketing costs, as well 
as expected capital replacement costs, through the rate paid to 
Southwestern, and will receive all power and energy produced at the 
project for a period of 50 years.

Discussion

    The 1996 Current Robert D. Willis PRS tests the adequacy of the 
existing rate based on the latest cost evaluation period extending from 
FY 1996 through FY 2000, to recover annual expenses for marketing, 
operation and maintenance, and to amortize additions to plant and major 
replacements of the generating facilities. Since the project's design 
and construction were financed in their entirety by SRMA, no component 
for amortization of the original investment of some $18 million is 
included in the rate determination. The Current PRS for the Robert D. 
Willis project, using the existing annual rate of $294,312, indicates 
that the legal requirements to repay all costs will be exceeded and a 
decrease in revenue is necessary. This decrease is primarily due to the 
remote operation of an additional project and the resulting three- way 
allocation of operation and maintenance cost among Sam Rayburn, 
Whitney, and Robert D. Willis projects. The three-way allocation caused 
a decrease in estimated costs for Robert D. Willis.
    The existing annual Robert D. Willis project power rate of $294,312 
was confirmed and approved on a final basis by the FERC on November 21, 
1994, for the period October 1, 1994, through September 30, 1998. The 
1996 Robert D. Willis Current Power Repayment Study (PRS) indicates 
that the present rate exceeds the cost recovery criteria for the 
isolated project. The current rate will overpay requirements by 
$9,083,051. The 1996 Robert D. Willis Revised PRS indicates that an 
annual rate of $266,928 will satisfy repayment criteria in accordance 
with Department of Energy Order No. RA 6120.2 and Section 5 of the 
Flood Control Act of 1944. The proposed decrease in revenue amounts to 
$27,384 or 9.3 percent annually to begin October 1, 1996. The proposed 
rate of $266,928 annually would satisfy the present repayment criteria.
    Pursuant to Title 10, Part 903, Subpart A of the Code of Federal 
Regulations (10 CFR 903), ``Procedures for Public Participation in 
Power and Transmission Rate Adjustments and Extensions'', 50 FR 37837, 
the Administrator, Southwestern, published notice in the Federal 
Register (61 FR 35209), on July 5, 1996, announcing a 30-day period for 
public review and comment. Southwestern held several informal meetings 
and a Public Information Forum on July 16, 1996, where Southwestern 
provided copies of supporting data for the 1996 Robert D. Willis PRS to 
interested parties. A letter was received on behalf of SRMA, indicating 
no opposition to the proposed rate decrease. Southwestern did not 
receive any request to convene a formal Public Comment Forum and, as a 
result, did not convene such a meeting. Information regarding this rate 
proposal, including studies, comments and other supporting material, is 
available for public review and comment in the offices of the 
Southwestern Power Administration, One West Third Street, Tulsa, 
Oklahoma 74101.

Administrator's Certification

    The 1996 Revised Robert D. Willis PRS indicates that the annual 
power rate of $266,928 will repay all costs of the project including 
amortization of additions to plant and major replacements of the 
generating facilities consistent with provisions of DOE Order No. RA 
6120.2. In accordance with Section 1 of Delegation Order No. 0204-108, 
as amended November 10, 1993, 58 FR 59717, and Section 5 of the Flood 
Control Act of 1944, the Administrator has determined that the proposed 
Robert D. Willis power rate is consistent with applicable law and is 
the lowest possible rate consistent with sound business principles.

Environment

    The environmental impact of the rate decrease proposal was 
evaluated in consideration of DOE's guidelines for implementing the 
procedural provisions of the National Environmental Policy Act and was 
determined to fall within the class of actions that are categorically 
excluded from the requirements of preparing either an Environmental 
Impact Statement or an Environmental Assessment.

Order

    In view of the foregoing and pursuant to the authority delegated to 
me by the Secretary of Energy, I hereby confirm, approve and place in 
effect on an interim basis, effective October 1, 1996, the proposed 
annual rate of $266,928 for the sale of power and energy from the 
Robert D. Willis project to the Sam Rayburn Municipal Power Agency, 
under Contract No. DE-PM75-85SW00117, as amended. The rate shall remain 
in effect on an interim basis through September 30, 2000, or until the 
FERC confirms and approves the rate on a final basis.

    Issued at Washington, DC, this 23rd day of September 1996.
Charles B. Curtis,
Deputy Secretary.
[FR Doc. 96-24983 Filed 9-27-96; 8:45 am]
BILLING CODE 6450-01-P