[Federal Register Volume 64, Number 193 (Wednesday, October 6, 1999)]
[Notices]
[Pages 54292-54293]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-26029]


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DEPARTMENT OF ENERGY

Southwestern Power Administration


Robert Douglas Willis Hydropower Project Power Rate

AGENCY: Southwestern Power Administration, DOE.

ACTION: Notice of power rate increase.

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SUMMARY: The Secretary of Energy, pursuant to Sections 301(b) and 
302(a) of the Department of Energy Organization Act (Pub. L. 95-91) and 
section 5 of the Flood Control Act of 1944 (16 U.S.C. 825s) has 
approved and placed into effect on an interim basis Rate Order No. 
SWPA-41.

SUPPLEMENTARY INFORMATION: Southwestern Power Administration 
(Southwestern) currently has marketing responsibility for 2.2 million 
kilowatts of power from 24 multiple-purpose reservoir projects, with 
power facilities constructed and operated by the U.S. Army Corps of 
Engineers, generally in all or portions of the states of Arkansas, 
Kansas, Louisiana, Missouri, Oklahoma and Texas. The Integrated System, 
comprised of 22 of the projects, is interconnected through a 
transmission system presently consisting of 138-kV and 161-kV high-
voltage transmission lines, 69-kV transmission lines, and numerous bulk 
power substations and switching stations. In addition, contractual 
transmission arrangements provide for integration of other projects 
into the system.
    The remaining two projects, Sam Rayburn and Robert Douglas Willis, 
are isolated hydraulically and electrically from the Southwestern 
transmission system, and their power is marketed under separate 
contracts through which the customer purchases the entire power output 
of the project at the dam. A separate Power Repayment Study (PRS) is 
prepared for each isolated project.
    The existing rate schedule for the Robert Douglas Willis Hydropower 
Project was confirmed and approved on a final basis by the Federal 
Energy Regulatory Commission (FERC) on April 28, 1998, for the period 
January 1, 1998, through September 30, 2001. The FY 1999 Robert Douglas 
Willis Hydropower Project PRS indicates the need for a rate adjustment 
of $35,004 annually, or 11.6 percent.
    Pursuant to implementing authority in sections 301(b) and 302(a) of 
the Department of Energy Organization Act (Pub. L. 95-91) and section 5 
of the Flood Control Act of 1944 (16 U.S.C. 825s), the Secretary of 
Energy may approve the rate on an interim basis. The Administrator, 
Southwestern, published notice in the Federal Register on July 12, 
1999, 64 FR 37529, announcing a 30-day period for public review and 
comment concerning the proposed interim rate. Written comments were 
accepted through August 11, 1999. In a letter dated August 10, 1999, a 
Sam Rayburn Municipal Power Agency (SRMPA) representative stated that 
SRMPA has no objection to the proposed rate extension. No other 
comments were received.
    Information regarding this rate proposal, including studies and 
other supporting material, is available for public review and comment 
in the offices of Southwestern Power Administration, Suite 1400, One 
West Third Street, Tulsa, Oklahoma 74103.
    Following review of Southwestern's proposal within the Department 
of Energy, I hereby approve on an interim basis, Rate Order No. SWPA-
41, which increases the existing Robert Douglas Willis Hydropower 
Project Rate for the sale of power and energy to $337,932 per year for 
the period October 1, 1999, through September 30, 2003.

    Dated: September 15, 1999.
Bill Richardson,
Secretary.

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

October 1, 1999.

[Rate Order No. SWPA-41]

    In the matter of: Southwestern Power Administration--Robert D. 
Willis

    Pursuant to Sections 301(b) and 302(a) 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 
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 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. By notice dated April 15, 1999, the Secretary of Energy 
rescinded the authority of the Deputy Secretary of Energy under 
Delegation Order 0104-108. This rate order is issued by the Secretary 
of Energy pursuant to Section 642 of the Department of Energy 
Organization Act.
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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 
(SRMPA) proposed to sponsor and finance the development of hydropower 
at Town

[[Page 54293]]

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 SRMPA. Under 
the Southwestern/SRMPA power sales Contract No. DE-PM75-85SW00117, 
SRMPA 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 1999 Current Robert D. Willis Power Repayment Study (PRS) tests 
the adequacy of the existing rate based on the evaluation period 
extending from FY 1999 through FY 2003, 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 
SRMPA, 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 
$302,928, indicates that the legal requirements to repay all costs will 
not be met and an increase in revenue is necessary.
    The additional revenue needed is, in part, a result of the increase 
in replacement costs required to be recovered. In addition, the Corps 
had projected a significant increase in its estimates of large 
maintenance items included in the operations and maintenance (O&M) 
costs for the Robert D. Willis project.
    The existing annual Robert D. Willis project power rate of $302,928 
was confirmed and approved on a final basis by the FERC on April 28, 
1998, for the period January 1, 1998, through September 30, 2001. The 
1999 Robert D. Willis Current Power Repayment Study (PRS) indicates 
that the present rate does not meet the cost recovery criteria for the 
isolated project. Over the entire repayment period the current rate 
will underpay requirements by $9,840,156. The 1999 Robert D. Willis 
Revised PRS indicates that an annual rate of $337,932 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 
increase in revenue amounts to $35,004 or 11.6 percent annually to 
begin October 1, 1999.
    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 (64 FR 37529), on July 12, 1999, announcing a 30-day period 
for public review and comment. Southwestern held informal meetings and 
a Public Information Forum on July 20, 1999, where Southwestern 
provided copies of supporting data for the 1999 Robert D. Willis PRS to 
interested parties. A letter was received on behalf of SRMPA, 
indicating no opposition to the proposed rate increase. 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 74103.

Administrator's Certification

    The 1999 Revised Robert D. Willis PRS indicates that the annual 
power rate of $337,932 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 increase 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 authority vested in me, I 
hereby confirm, approve and place in effect on an interim basis, 
effective October 1, 1999, the proposed annual rate of $337,932 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, 2003, or until the FERC confirms and approves the rate on 
a final basis.

    Dated: September 15,1999.
Bill Richardson,
Secretary.
[FR Doc. 99-26029 Filed 10-5-99; 8:45 am]
BILLING CODE 6450-01-P