[Federal Register Volume 64, Number 26 (Tuesday, February 9, 1999)]
[Notices]
[Pages 6342-6344]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-3115]


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DEPARTMENT OF ENERGY

Southwestern Power Administration


Integrated System Rate Schedules

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, effective November 10, 1993, has 
approved and placed into effect on an interim basis Rate Order No. 
SWPA-39 which provides the following Integrated System Rate Schedules:

Rate Schedule P-98B, Wholesale Rates for Hydro Peaking Power
Rate Schedule NFTS-98B, Wholesale Rates for Non-Federal Transmission 
Service

FOR FURTHER INFORMATION CONTACT: Forrest E. Reeves, Assistant 
Administrator, Office of Corporate Operations, Southwestern Power 
Administration, Department of Energy, PO Box 1619, Tulsa, Oklahoma 
74101-1619.

SUPPLEMENTARY INFORMATION: The FY 1998 Power Repayment Study indicated 
that rates prescribed by Rate Schedules P-98A, Wholesale Rates for 
Hydro Peaking Power, and NFTS-98, Wholesale Rates for Non-Federal 
Transmission Service, are sufficient to meet repayment criteria and do 
not require any adjustment. However, certain aspects of the terms and 
conditions set forth in the rate schedules need to be revised for 
clarification and to accommodate market conditions experienced this 
past year. The names of the rate schedules have been changed from P-98A 
and NFTS-98 to P-98B and NFTS-98B to reflect the fact that revisions 
have been made. Southwestern has followed Title 10, part 903, subpart A 
of the Code of Federal Regulations, ``Procedures for Public 
Participation in Power and Transmission Rate Adjustments,'' in 
connection with the minor rate schedule revisions being proposed. The 
public was advised by notice published in the Federal Register (63 FR 
63469), November 13, 1998, of proposed rate schedule changes and of the 
opportunity to provide written comments for a period of 30 days ending 
December 14, 1998. Accordingly, several informal meetings were held 
with customers and interested parties to discuss the proposed changes. 
One formal written comment was received which supports the proposed 
rate schedule changes.
    Rate Schedule P-98B applies to wholesale customers purchasing hydro 
peaking power and peaking energy from the Integrated System. This rate 
schedule is designed for the sale of Federal power and energy. 
Provisions in the rate schedule were revised to reflect minor 
corrections and modifications for the purpose of clarification and to 
address changes in specified terms and conditions of the rate schedule 
that were found to be insufficient to provide the desired results in 
light of recent market experiences. No rates for the sale of Federal 
power and energy were changed.
    The section discussing and listing the Power Customer-specific 
credit, which ended June 30, 1998, has been removed since it is no 
longer applicable. The existing rate schedule (P-98A) determined the 
rate for Real Power Losses based upon the cost of energy for 
Southwestern's marketing area during the previous Fiscal Year, as set 
forth in the most recently available Energy Information Administration 
(EIA) Publication. The EIA has recently ceased to compile this 
information, making it necessary for Southwestern to develop an 
alternative source upon which to base its rate for Real Power Losses. 
The basis for determining the rate to charge for Real Power Losses was 
therefore modified to use the average actual costs incurred by 
Southwestern for the purchase of energy to replace Real Power Losses 
during the most recent twelve-month period, as reflected in 
Southwestern's financial records. The rate for Real Power Losses will 
be posted on Southwestern's OASIS. Southwestern proposes to initially 
implement this rate effective January 1, 1999, and thereafter the rate 
will be reviewed and adjusted to become effective at the beginning of 
each Fiscal Year (October 1). The Energy Imbalance Service description 
has been modified to clarify that the Energy Imbalance Service 
bandwidth specified in Southwestern's Open Access Transmission Tariff 
does not apply to the deliveries of Hydro Peaking Power and associated 
energy. However, Power Customers who consume a capacity of Hydro 
Peaking Power greater than their Peak Contract Demand may be subject to 
a Capacity Overrun Penalty. As a result of this past summer's recent 
price escalation for power and the potential unauthorized use of 
Southwestern's system, Southwestern has revised the Capacity Overrun 
Penalty provision. It was determined that this penalty would need to be 
increased to provide a greater incentive to not overrun Southwestern's 
Integrated System capacity. The Capacity Overrun Penalty provision has 
been revised to assess a $0.10 per kilowatt penalty during the months 
of March, April, May, October, November, and December for each hour 
during which Hydro Peaking Power was provided at a rate greater than 
that to which the Power Customer is entitled. A penalty of $0.30 per 
kilowatt will likewise be assessed during the months of January, 
February, June, July, August, and September.
    Rate Schedule NFTS-98B applies to wholesale customers purchasing 
Non-Federal Point-to-Point and Network Transmission Service. Both the 
Real Power Losses and the Capacity Overrun Penalty sections have been 
revised in the same manner as in Rate Schedule P-98B, noted above. 
However, there is no change in the Energy Imbalance bandwidth under 
this rate schedule.
    Following review of Southwestern's proposal within the Department 
of Energy, I approved Rate Order No. SWPA-39 on an interim basis 
through September 30, 2001, or until confirmed and approved on a final 
basis by the Federal Energy Regulatory Commission.

    Dated: January 27, 1999.
Ernest J. Moniz,
Acting Deputy Secretary.

Order Confirming, Approving and Placing Revised Power Rate 
Schedules in Effect on an Interim Basis

[Rate Order No. SWPA-39]

January 1, 1999.
    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 non-exclusive basis the authority 
to confirm, approve and place into effect on an interim basis power and

[[Page 6343]]

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. 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. 
It is also made pursuant to the authorities as implemented in 10 CFR 
903.

Background

    In November 1997, Southwestern Power Administration (Southwestern) 
completed its review of the adequacy of the current rate schedules for 
the Integrated System and finalized its FY 1997 Power Repayment Studies 
(PRSs). The studies indicated that the proposed rates as shown in Rate 
Schedules P-98A and NFTS-98 would meet cost recovery criteria for the 
Integrated System projects. Federal Energy Regulatory Commission (FERC) 
confirmation and approval of the following Integrated System.
    (System) rate schedules was provided in FERC Docket No. EF98-4011-
000 issued April 29, 1998, for the period January 1, 1998, through 
September 30, 2001:

Rate Schedule P-98A, Wholesale Rates for Hydro Peaking Power
Rate Schedule NFTS-98, Wholesale Rates for Point-to-Point and Network 
Transmission Service
Rate Schedule EE-98, Wholesale Rate for Excess Energy

    Based on operations under the approved Rate Schedules, the 
Administrator, Southwestern, has determined that minor revisions to the 
terms and conditions within existing rate schedules P-98A and NFTS-98 
are required. Since the proposed changes to the rate schedules are 
associated with the terms and conditions of service, the net results of 
the 1997 Integrated System Power Repayment Studies, which was the basis 
for the existing rate schedules, will not be altered. The designations 
of the aforementioned rate schedules have been revised from P-98A and 
NFTS-98 to P-98B and NFTS-98B to reflect the fact that revisions have 
been made.
    Title 10, Part 903 Subpart A, of the Code of Federal Regulations, 
``Procedures for Public Participation in Power and Transmission Rate 
Adjustments and Extensions'' (Part 903) have been followed in 
connection with the proposed Rate Schedules P-98B and NFTS-98B. An 
opportunity for customers and other interested members of the public to 
review and comment on the proposed Rate Schedules P-98B and NFTS-98B 
was announced by notice published in the Federal Register November 13, 
1998 (63 FR 63469), with written comments due by December 14, 1998. In 
addition, Southwestern held informal meetings with customers to discuss 
proposed changes and to provide opportunity for input in the 
development of these changes. There was one written comment received 
which supports the proposed changes.

Discussion

    Rate Schedule P-98B applies to wholesale customers purchasing hydro 
peaking power and peaking energy from the Integrated System. This rate 
schedule is designed for the sale of Federal power and energy. 
Provisions in the rate schedule were revised to reflect minor 
corrections and modifications for the purpose of clarification and to 
address changes in specified terms and conditions of the rate schedule 
that were found to be insufficient to provide the desired results in 
light of recent market experiences. No rates for the sale of Federal 
power and energy were changed.
    The section, Energy Credit, addressing and listing the Power 
Customer-specific credits, which ended June 30, 1998, has been removed 
since it is no longer applicable. Further changes were made to the 
terms and conditions of Real Power Losses, Energy Imbalance Service, 
and the Capacity Overrun Penalty and are addressed in detail below.
    The existing rate schedule (P-98A) determined the rate for Real 
Power Losses based upon the cost of energy for Southwestern's marketing 
area during the previous Fiscal Year, as set forth in the most recently 
available Energy Information Administration (EIA) Publication. The EIA 
has recently ceased to compile this information, making it necessary 
for Southwestern to develop an alternative source upon which to base 
its rate for Real Power Losses. The basis for determining the rate to 
charge for Real Power Losses was therefore modified to use the average 
actual costs incurred by Southwestern for the purchase of energy to 
replace Real Power Losses during the most recent twelve-month period, 
as reflected in Southwestern's financial records. The rate for Real 
Power Losses will be posted on Southwestern's OASIS. Southwestern 
proposes to initially implement this rate January 1, 1999, and 
thereafter the rate will be reviewed and adjusted to become effective 
at the beginning of each Fiscal Year (October 1).
    The Energy Imbalance Service description has been modified to 
clarify that the Energy Imbalance Service bandwidth specified in 
Southwestern's Open Access Transmission Tariff does not apply to the 
deliveries of Hydro Peaking Power and associated energy. However, Power 
Customers who consume a capacity of Hydro Peaking Power greater than 
their Peak Contract Demand may be subject to a Capacity Overrun 
Penalty.
    The Capacity Overrun provision set forth in the existing rate 
schedule assesses a penalty of $0.05 per kilowatthour for any energy 
which flows outside the authorized bandwidth from a range of 1 to 2,000 
kilowatts and a penalty of $0.10 per kilowatthour for any energy which 
flows outside the authorized bandwidth from 2,001 kilowatts or greater. 
As a result of this past summer's recent price escalation for power and 
the potential unauthorized use of Southwestern's system, Southwestern 
has revised the Capacity Overrun Penalty provision. It was determined 
that this penalty would need to be increased to provide a greater 
incentive to not overrun Southwestern's system capacity. The Capacity 
Overrun Penalty provision has been revised to assess a $0.10 per 
kilowatt penalty during the months of March, April, May, October, 
November, and December for each hour during which Hydro Peaking Power 
was provided at a rate greater than that to which the Power

[[Page 6344]]

Customer is entitled. A penalty of $0.30 per kilowatt will likewise be 
assessed during the months of January, February, June, July, August, 
and September.
    Rate Schedule NFTS-98B applies to wholesale customers purchasing 
Non-Federal Point-to-Point and Network Transmission Service. Both the 
Real Power Losses and the Capacity Overrun Penalty sections have been 
revised in the same manner as in Rate Schedule P-98B, noted above. 
However, there is no change in the Energy Imbalance bandwidth under 
this rate schedule.

Comments and Responses

    Southwestern has received one formal written comment from customers 
which supports the Rate Schedule changes.

Other Issues

    There were no other issues raised during the informal meetings or 
during the formal public participation period.

Availability of Information

    Information regarding this rate proposal including studies, 
comments and other supporting material, is available for public review 
and comment in the offices of Southwestern Power Administration, One 
West Third Street, Tulsa, OK 74101.

Administrator's Certification

    The revised rate schedules will repay all costs of the Integrated 
System including amortization of the power investment consistent with 
the provisions of Department of Energy 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 System Rate 
Schedules are consistent with applicable law and the lowest possible 
rates consistent with sound business principles.

Environment

    No additional evaluation of the environmental impact of the 
proposed rate schedule changes was conducted since no change has been 
made to the currently-approved System rates which were 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 January 1, 1999, the Southwestern 
Integrated System Rate Schedules P-98B and NFTS-98B which shall remain 
in effect on an interim basis through September 30, 2001, or until the 
FERC confirms and approves the rates on a final basis.

    Dated: January 27, 1999.
Ernest J. Moniz,
Acting Deputy Secretary.
[FR Doc. 99-3115 Filed 2-8-99; 8:45 am]
BILLING CODE 6450-01-P