[Federal Register Volume 64, Number 90 (Tuesday, May 11, 1999)]
[Notices]
[Pages 25320-25323]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-11866]
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DEPARTMENT OF ENERGY
Western Area Power Administration
Amistad and Falcon Projects Rate Order No. WAPA-85
AGENCY: Western Area Power Administration, DOE.
ACTION: Notice of a rate order.
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SUMMARY: Notice is given of the confirmation and approval by the
Secretary of the Department of Energy (DOE) of Rate Order No. WAPA-85
placing a rate formula extension into effect on an interim basis
beginning on June 8, 1999, for power marketed by the Western Area Power
Administration (Western) from the Amistad and Falcon Projects under
Contract No. 7-07-50-P0890 (Contract). The rate formula will remain in
effect on an interim basis until the Federal Energy Regulatory
Commission (FERC) confirms, approves, and places it into effect on a
final basis or until it is replaced by another rate formula.
DATES: The provisional rate formula extension will be placed into
effect on an interim basis on June 8, 1999, and will be in effect until
FERC confirms, approves, and places the provisional rate formula
extension in effect on a final basis for a 5-year period ending June 7,
2004.
FOR FURTHER INFORMATION CONTACT: Ms. Carol Loftin, Rates Manager,
Colorado River Storage Project, Customer Service Center, Western Area
Power Administration, 257 East 200 South, Suite 475, Salt Lake City, UT
84111.
SUPPLEMENTARY INFORMATION: The Amistad and Falcon Dams are features of
international water storage projects located on the Rio Grande River
between Texas and Mexico. Western markets the power from these dams
under the terms of the Contract dated August 9, 1977, and amended on
April 10, 1986. The rate formula of that Contract was approved by the
Federal Power Commission, predecessor to FERC, for a 5-year period
beginning June 8, 1983, in Docket No. E-9566 on August 12, 1977. A 5-
year rate extension approving this same methodology through June 7,
1993, was ordered by FERC on July 20, 1988, in 44 FERC para. 62,058. A
subsequent 5-year rate extension approving this same methodology
through June 7, 1998, was ordered by FERC on September 29, 1993, in 64
FERC para. 62,225. Rate Order WAPA-81, which extended the rate formula
through June 7, 1999, was published in the Federal Register (63 FR
27278) on May 18, 1998.
According to article 9(a) of the Contract, Western calculates the
annual installment to be paid by the South Texas Electric Cooperative,
Inc. (STEC), and the Medina Electric Cooperative, Inc. (MEC), for the
power generated at the Amistad and Falcon Powerplants on or before
August 31 of the year preceding the fiscal year to which it pertains.
Each annual installment pays the annual amortized portion of the
United States' investment in the Falcon and Amistad hydroelectric
facilities with interest, and the associated operation, maintenance,
and administrative costs. This repayment schedule is not dependent upon
the power and energy made available for sale or the rate of generation
each year. Western will continue to provide STEC/MEC with a revised
Exhibit A by August 31 of each year using the same methodology.
[[Page 25321]]
By Amendment No. 3 to Delegation Order No. 0204-108, published
November 10, 1993 (58 FR 59716), the Secretary of Energy 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 Secretary of Energy; and (3) the authority to confirm,
approve, and place into effect on a final basis, to remand, or to
disapprove such rates to FERC.
By subsequent Order effective April 15, 1999, the Secretary
rescinded all delegation of authority to the Deputy Secretary, whether
contained in Delegation Orders, Departmental Directives, or elsewhere,
concerning the Department's Power Marketing Administrations, including,
but not limited to, authority delegated or affirmed in Delegation Order
No. 0204-108, as amended. Existing DOE procedures for public
participation in power rate adjustments are located at 10 CFR part 903,
effective on September 18, 1985 (50 FR 37835). DOE procedures have been
followed by Western in the development of these provisional rates.
Rate Order No. WAPA-85, confirming, approving, and placing the
proposed Amistad and Falcon firm power rate formula extension into
effect on an interim basis, is issued, and the extension will be
promptly submitted to FERC for confirmation and approval on a final
basis.
Dated: April 29, 1999.
Bill Richardson,
Secretary.
Order Confirming, Approving, and Placing a Rate Formula Extension
for Amistad and Falcon Projects Into Effect on an Interim Basis
June 8, 1999.
This power rate formula is established 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, section 9(c) of the Reclamation
Act of 1939, 43 U.S.C. 485h(c), and acts specifically applicable to the
Falcon Project and the Amistad Project, 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 to the
Administrator of the Western Area Power Administration (Western); (2)
the authority to confirm, approve, and place in effect such rates on an
interim basis to the Secretary of Energy; and (3) the authority to
confirm, approve, and place into effect on a final basis, to remand, or
to disapprove those rates to the Federal Energy Regulatory Commission
(FERC). By subsequent Order effective April 15, 1999, the Secretary
rescinded all delegation of authority to the Deputy Secretary, whether
contained in Delegation Orders, Departmental Directives, or elsewhere,
concerning the Department's Power Marketing Administrations, including,
but not limited to, authority delegated or affirmed in Delegation Order
No. 0204-108, as amended. Existing DOE procedures for public
participation in power rate adjustments are found at 10 CFR part 903.
Filing requirements and procedures for approving power marketing
administration rates by FERC are found at 18 CFR part 300.
Acronyms and Definitions
As used in this rate order, the following acronyms and definitions
apply:
DOE: Department of Energy.
DOE Order RA 6120.2: An order dealing with power marketing
administration financial reporting used in determining revenue
requirements for rate development.
FPC: Federal Power Commission.
FY: Fiscal year; October 1 to September 30.
kWh: Kilowatthour.
MEC: Medina Electric Cooperative, Inc.
Mills/kWh: Mills per kilowatthour.
NEPA: National Environmental Policy Act of 1969.
O&M: Operation and maintenance.
PRS: Power repayment study.
Reclamation: Bureau of Reclamation, U.S. Department of the Interior.
STEC: South Texas Electric Cooperative, Inc.
U.S. Section: U.S. Section of the International Boundary and Water
Commission.
Western: Western Area Power Administration, U.S. Department of Energy.
Effective Date
This extension will become effective on an interim basis on June 8,
1999, and will be in effect pending FERC's approval of this or a
substitute rate formula on a final basis for a 5-year period through
June 7, 2004, or until superseded.
Public Notice and Comment
Paragraph 903.23(a) of 10 CFR part 903 for rate extensions does not
require either a consultation and comment period, or public information
or comment forums. On August 20, 1998, Western met with the customers,
MEC and STEC, in Corpus Christi, Texas, and notified them of Western's
intent to extend the rate formula. Western also discussed the number of
years covered in the annual installments, operation and maintenance
funding, answered questions, and received comments and suggestions. The
customers expressed support for the rate formula extension.
Project History
The Amistad and Falcon Dams are features of international water
storage projects located on the Rio Grande River between Texas and
Mexico. Western markets the power from these dams under the terms of
Contract No. 7-07-50-P0890 (Contract), dated August 9, 1977, and
amended on April 10, 1986.
On August 12, 1977, in Docket No. E-9566, the FPC approved for a 5-
year period the rate formula contained in the Contract, between
Reclamation and the two electric cooperatives, to become effective on
the date of initial operation of Amistad Powerplant (June 8, 1983).
STEC and MEC agreed to purchase the output of the Amistad and Falcon
Powerplants for a 50-year period, beginning when initial electric
service became available from Amistad. The cooperatives agreed to take
all Amistad and Falcon power and to pay the United States the
following:
The amount of each annual installment shall be the sum of:
(1) A fixed annual payment of $313,178 as a contribution to the
amortization of the United States investment in the Falcon
hydroelectric facilities and in the penstocks at Amistad Dam. The
annual payment shown above will be adjusted at the time this
contract becomes effective; plus
(2) An amount necessary to repay in equal annual installments
amortized over a fifty-year period, the United States actual total
investment costs, with interest, for hydroelectric power
installation at Amistad Dam, not including penstocks, to be under
the jurisdiction of the Section, including the costs of engineering
plans, supervision, administration of construction, and interest
during construction * * * and
(3) The annual operation, maintenance, replacement, and
administration costs of the Section and the administration costs of
the Bureau related directly or indirectly to the United States power
facilities at Amistad Dam and at Falcon Dam, provided that such
costs shall be based on prudent and businesslike management
practices and in accordance with established electric industry
operation and maintenance practices * * *.
[[Page 25322]]
The power marketing functions of Reclamation were transferred to
Western on October 1, 1977, and Western became responsible for the
administration of the above Contract.
Western, STEC, and MEC executed Supplement No. 1 to the Contract on
April 10, 1986, to clarify the method for determining the annual
installment consistent with DOE Order No. RA 6120.2. Those
clarifications address repayment of Falcon hydroelectric facilities
within the remaining period, establish interest during construction at
7 percent, capitalize major replacements and additions at current
interest rates, and specify the actual date of initial service as June
8, 1983.
Supplement No. 1 requires that the amount of each annual
installment be established in advance by the contracting officer in
consultation with the U.S. Section and submitted to the cooperatives as
Exhibit A on or before August 31 of the year preceding the appropriate
fiscal year in accordance with the following:
The amount of each annual installment shall be the sum of:
(1) An annual repayment installment including interest, to
amortize within the remaining period, the unpaid United States
investment in the Falcon hydroelectric facilities and in the
penstocks at Amistad Dam; plus
(2) An annual installment to amortize over a fifty-year period,
the United States actual total investment costs with interest, for
hydroelectric power facilities, not including penstocks, at Amistad
Dam to be under the jurisdiction of the U.S. Section, including the
costs of engineering plans, supervision, administration of
construction, and interest during construction * * * and
(3) The annual operation, maintenance, replacement, and
administration costs of the U.S. Section and the administration
costs of Western related directly or indirectly to the United States
power facilities at Amistad Dam and at Falcon Dam, provided that
such costs shall be based on prudent and businesslike management
practices and in accordance with established electric industry
operation and maintenance practices * * *.
The billing procedures contained in Supplement No. 1 require
Western to submit bills to the cooperatives for each monthly payment on
the annual installment on or before the tenth day of the month for
which such payment is due. Payments are due and payable by the
cooperatives on the first day of the following month. Western divides
the calculated annual installment by 12 and bills the customer monthly
for this amount.
The rate formula of that Contract was approved by the FPC,
predecessor to FERC, for a 5-year period beginning June 8, 1983, in
Docket No. E-9566 on August 12, 1977. A 5-year rate extension approving
the rate formula, as amended by Supplement No. 1, through June 7, 1993,
was ordered by FERC on July 20, 1988, in 44 FERC para. 62,058. A
subsequent 5-year rate extension approving this same rate formula
through June 7, 1998, was ordered by FERC on September 29, 1993, in 64
FERC para. 62,225. Rate Order No. WAPA-81, which extended the rate
formula through June 7, 1999, was published in the Federal Register (63
FR 27278) on May 18, 1998. FERC approval is now sought for another 5-
year extension through June 7, 2004, of this same rate formula.
Power Repayment Studies
Electric service Contract No. 7-07-50-P0890, dated August 9, 1977,
and Supplement No. 1 thereto require that Western calculate the annual
installment to be paid by STEC and MEC for the power generated at the
Falcon and Amistad Powerplants, by consultation with the U.S. Section,
and submit it to STEC and MEC in the form of a contract exhibit on or
before August 31 of the year preceding the FY to which it pertains.
Previously, the annual installment was calculated using data from 3
years. The previous FY reflected actual figures; the current year in
which the annual installment is being calculated reflected updated
estimates; and the first future year for which the annual installment
is being calculated reflects projected estimates. The previous FY
actual data is a final calculation for that year and normally does not
change in future calculations. Annual installments have been prepared
each year, and this 3-year methodology has been followed since the
Contract became effective in 1983.
In an effort to streamline and simplify the rate installment
computation process and in agreement with STEC, MEC, and the U.S.
Section, Western is calculating the annual installment based on 2
years' data. The calculation includes the projected costs of the rate
installment year (future fiscal year) and an adjustment from the last
historic fiscal year. The adjustment is the surplus or deficit that
occurs in the last historic year when actual costs and repayment
obligations are subtracted from actual revenues. This surplus or
deficit is combined with the projected rate installment year costs to
arrive at the rate installment.
Statement of Revenue and Related Expenses
The following table provides a summary of revenues and expenses for
the current 5-year rate formula and the actual revenues and expenses
for the same period.
Amistad/Falcon Comparison of 6-year Revenues and Expenses--FY 1993-1998
[$1,000]
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Item Projected Actual Difference
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Total Revenues................ 20,445 20,572 127R
Revenues Distribution:
O&M........................... 4,972 5,266 294
Interest...................... 13,893 13,634 (259)
Repayment..................... 1,580 1,947 367
(Deficit)/Surplus............. ............ (275) (275)
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Total Revenue Distribution 20,445 20,572 127
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[[Page 25323]]
The following table provides a summary of the projected revenues
and expenses during the provisional rate period.
Amistad/Falcon 6-year Projections\1\ Revenues and Expenses
[$1,000]
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FY 1999-
2004
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Total Revenues............................................... 20,550
Revenue Distribution:
O&M.......................................................... 4,912
Interest..................................................... 13,022
Investment Repayment......................................... 2,616
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Total...................................................... 20,550
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\1\ Although this rate process seeks approval for a 5-year period (FY
2000-2004), 6 years of data (including FY 1999) are shown in the above
table because FY 1999 data is an estimate.
Environmental Compliance
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 Regulations (10 CFR part 1021),
Western has determined that this action is categorically excluded from
the preparation of an environmental assessment or environmental impact
statement.
Determination under Executive Order 12866
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 formula extension is available for
public review in the Colorado River Storage Project Customer Service
Center, Western Area Power Administration, 257 East 200 South, Suite
475, Salt Lake City, Utah, and in the Power Marketing Liaison Office,
Room 8G-027, 1000 Independence Avenue SW., Washington, D.C.
Submission to Federal Energy Regulatory Commission
The rate formula extension 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 vested in me
as the Secretary of Energy, I confirm and approve and place into effect
on an interim basis an extension of the rate formula provisions
contained in Contract No. 7-07-50-P0890 and Supplement No. 1 to that
Contract effective on June 8, 1999. The rate formula provisions shall
remain in effect on an interim basis, pending Federal Energy Regulatory
Commission confirmation and approval of this or a substitute rate on a
final basis or until superseded, through June 7, 2004.
Dated: April 29, 1999.
Bill Richardson,
Secretary.
[FR Doc. 99-11866 Filed 5-10-99; 8:45 am]
BILLING CODE 6450-01-P