[Federal Register Volume 66, Number 70 (Wednesday, April 11, 2001)]
[Notices]
[Pages 18770-18773]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-8900]


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DEPARTMENT OF ENERGY

Southwestern Power Administration


Integrated System Power Rate Schedules

AGENCY: Southwestern Power Administration, DOE

ACTION: Notice of rate order.

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SUMMARY: The Secretary of Department of Energy has approved and placed 
into effect on an interim basis Rate Order No. SWPA-44, which provides 
the Integrated System Rate Schedules P-98D, Wholesale Rates for Hydro 
Peaking

[[Page 18771]]

Power and Rate Schedule NFTS-98D, Wholesale Rate for Non-Federal 
Transmission/Interconnection.

FOR FURTHER INFORMATION CONTACT: Mr. Forrest E. Reeves, Assistant 
Administrator, Office of Corporate Operations, Southwestern Power 
Administration, Department of Energy, P.O. Box 1619, Tulsa, OK 74101, 
(918) 595-6696, [email protected].

SUPPLEMENTARY INFORMATION: In May 2000, Southwestern Power 
Administration (Southwestern) completed its annual review of the 
adequacy of the current rate schedules for the Integrated System and 
finalized its FY 2000 Power Repayment (PRS). The FY 2000 Power 
Repayment for the Integrated System indicates that rates prescribed by 
Rate Schedules P-98C, Wholesale Rates for Hydro Peaking Power, and 
NFTS-98C, Wholesale Rates for Non-Federal Transmission Service, are 
sufficient to meet repayment criteria. However, certain aspects of the 
terms and conditions set forth in the rate schedules need to be 
revised. Southwestern proposes to: (1) Revise the Limitations for 
Energy Imbalance Service provision to better clarify the hours and 
circumstances in which energy within the authorized bandwidth is to be 
returned to Southwestern, (2) to change the Power Factor Penalty to 
charge on an hourly basis to more accurately reflect the actual taking 
of reactive kilovolt amperes (VARS) from the system of Southwestern, 
(3) to add a new provision to provide for an Interconnection Facilities 
Service Charge to recover costs incurred for the use of Southwestern's 
transmission system, and (4) to make modifications to enhance clarity 
within the rate schedules. 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 changed from P-98C and NFTS-98C 
to P-98D and NFTS-98D, respectively, 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 revisions to the rate schedules. An 
opportunity for customers and other interested members of the public to 
review and comment on the proposed Rate Schedules P-98D and NFTS-98D 
was announced by notice published in the Federal Register (66 FR 9316), 
February 7, 2001, with written comments due on or before March 9, 2001. 
In addition, Southwestern held informal meetings with numerous 
customers in which proposed changes were discussed. No written comments 
were received.
    Information regarding these rate schedule changes, including 
revised schedules 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.

Order

    In view of the foregoing and under the authority vested in me as 
the Secretary of Energy, I hereby confirm and approve Rate Order No. 
SWPA-44 on an interim basis, through September 30, 2001, or until 
confirmed and approved on a final basis by the Federal Energy 
Regulatory Commission.

    Dated: April 3, 2001.
Spencer Abraham,
Secretary.

Department of Energy, Secretary of Energy

[Rate Order No. SWPA-44]

    In the matter of: Southwestern Power Administration Integrated 
System Rates; Order Confirming, Approving and Placing Revised Power 
Rate Schedules In Effect on an Interim Basis

    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 by delegating such authority to the Under 
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 delegated 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, the Secretary of Energy re-delegated to 
the Deputy Secretary of Energy, the authority to confirm, approve and 
place into effect on an interim basis power and transmission rates of 
the Power Marketing Administrations. By notice, dated April 15, 1999, 
the Secretary of Energy rescinded the authority of the Deputy Secretary 
of Energy under Delegation Order No. 0204-108. By Delegation Order No. 
0204-172, effective November 11, 1999, the Secretary of Energy again 
provided interim rate approval authority to the Deputy Secretary of 
Energy. Because there is no Deputy Secretary at the present time, the 
Secretary of Energy has exercised his authority to confirm, approve, 
and place into effect on an interim basis the rates in Southwestern 
Rate Order No. SWPA-44.

Background

    In May 2000, Southwestern Power Administration (Southwestern) 
completed its annual review of the adequacy of the current rate 
schedules for the Integrated System and finalized its FY 2000 Power 
Repayment Studies (PRS). The FY 2000 Power Repayment Studies for the 
Integrated System indicates that rates prescribed by rate schedules P-
98C, Wholesale Rates for Hydro Peaking Power, and NFTS-98C, Wholesale 
Rates for Non-Federal Transmission Service, are sufficient to meet 
repayment criteria. However, certain aspects of the terms and 
conditions set forth in the rate schedules need to be revised. 
Southwestern proposes to: (1) Revise the Limitations for Energy 
Imbalance Service provision to better clarify the hours and 
circumstances in which energy within the authorized bandwidth is to be 
returned to Southwestern, (2) to change the Power Factor Penalty to 
charge on an hourly basis to more accurately reflect the actual taking 
reactive kilovolt amperes (VARs) from the system of Southwestern, (3) 
to add a new provision to provide for an

[[Page 18772]]

Interconnection Facilities Service Charge to recover costs incurred for 
the use of Southwestern's transmission system, and (4) to make 
modifications to enhance clarity within the rate schedules. 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 changed 
from P-98C and NFTS-98C to P-98D and NFTS-98D, respectively, 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 revisions to the rate schedules. An 
opportunity for customers and other interested members of the public to 
review and comment on the proposed Rate Schedules P-98D and NFTS-98D 
was announced by notice published in the Federal Register (66 FR 9316), 
February 7, 2001, with written comments due on or before March 9, 2001. 
In addition, Southwestern held informal meetings with numerous 
customers in which proposed changes were discussed. No written comments 
were received.

Discussion

    Rate Schedule P-98D applies to wholesale customers purchasing 
Federal Hydro Peaking Power and Peaking Energy from the Integrated 
System. Rate Schedule NFTS-98D applies to wholesale customers 
purchasing Non-Federal Point-to-Point and Network Integration 
Transmission Service. Provisions in the rate schedules are being 
revised to reflect minor corrections and modifications for the purpose 
of clarification and to address specific issues that have arisen 
relative to industry restructuring since the last rate schedule 
approval. Southwestern has clarified the Energy Imbalance Service 
provision to specify the hours and circumstances in which energy within 
the authorized bandwidth is to be returned to the providing party, and 
has revised the Power Factor Penalty to charge on an hourly basis to 
more accurately reflect the actual taking of reactive kilovolt amperes 
(VARS) from the system of Southwestern. In addition, Southwestern is 
adding a new provision for an Interconnection Facilities Service 
Charge. This charge will be applicable to interconnection requests for 
which Southwestern does not otherwise receive benefits or compensation 
for the use of Federal facilities. At this time, Southwestern does not 
anticipate any substantive change in revenues as a result of these 
changes which would impact revenue requirements. Southwestern does not 
forecast for penalties and currently has no contractual arrangements to 
which the Interconnection Facilities Service Charge would be applied.
    Southwestern has revised language in the NFTS-98D rate schedule 
under the provision for Limitations for Energy Imbalance Service to 
clarify the hours and conditions in which the use of energy within the 
authorized bandwidth is to be returned to Southwestern. Energy within 
the authorized bandwidth for this service is accounted for as an 
inadvertent flow. The current language specifies that the energy is to 
be returned ``in like hours and similar circumstances.'' The lack of 
clarification of this language has provided an opportunity for 
transmission customers to use the bandwidth during high-value on-peak 
demand periods and to return the energy during low-value off-peak 
demand times. The hours and circumstances in which energy is returned 
become very important, particularly during summer peak periods when the 
value of energy is high and the capability of Southwestern to provide 
such energy from its during those times is typically low. The revised 
provision provides for a separate inadvertent monthly accumulation for 
each hour. Each month, any hourly month-end balance that exceeds 12 
MWHs will be subject to a penalty. It is anticipated that this process 
will allow for the use of the authorized bandwidth and yet provide for 
a method to return the energy within the bandwidth in like hours and 
within a reasonable time frame.
    Southwestern has revised the Power Factor Penalty provision in both 
the P-98D and NFTS-98D rate schedules to charge for all Demand Periods 
(the 60-minute period which begins with the change of hour) of a month 
which contribute to a power factor of less than 95 percent lagging. 
Currently, this penalty is based on the customer's peak demand in 
kilowatts at the point of delivery for the month in which a low power 
factor was calculated. This change will allow Southwestern to better 
align the penalty with the reactive kilovolt amperes (VARS) taken from 
the system of Southwestern. This penalty will provide an incentive for 
customers to look for the cause of their low power factor and take 
necessary actions to correct the problem.
    Southwestern has added a new provision, Interconnection Facilities 
Service Charge, to the NFTS-98D to provide compensation to Southwestern 
for the use of the Federal transmission system for those 
interconnections that do not provide any other compensating benefit. 
Historically, Southwestern has secured compensating benefits for the 
use of its facilities to provide an interconnection on its transmission 
system. The electric industry's transitioning toward a regionally-
operated transmission grid, the uncertainty that surrounds many of the 
impacts on Southwestern, and the need for a mechanism to recover the 
cost for the use of the System of Southwestern wherein the Federal 
government receives no compensating benefit, have contributed to the 
need to establish a charge for interconnections. Pursuant to the Flood 
Control Act of 1944, Southwestern must recover its costs for the use of 
its system.

Comments and Responses

    Southwestern has received no formal written comments regarding 
these Rate Schedule changes.

Other Issues

    There were no other issues raised during the informal meetings or 
during the formal public participation period. However, during the 
public participation period, Southwestern re-examined the penalty 
language included in the Power Factor Penalty provision of the Federal 
Register (26 FR 9316) proposal, dated February 7, 2001, and its 
applicability based on data that has since become available. 
Southwestern determined that the formula was too complex and appeared 
to create a penalty that was unreasonably high. Based on this analysis, 
Southwestern also determined that the penalty could be simplified by 
making it similar to the original language, while revising the formula 
to charge on an hourly Demand basis when the power factor was below 95 
percent lagging. This revised formula will still allow Southwestern to 
better align the penalty with the VARS taken from the System of 
Southwestern and provide an incentive for customers to look for the 
cause of their low power factor and take necessary actions to provide 
an appropriate power factor on their own transmission systems.

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

[[Page 18773]]

Flood Control Act of 1944, the Administrator has determined that the 
proposed Integrated 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 Integrated 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 pursuant to the 
procedural provisions of the National Environmental Policy Act, 10 CFR 
1021.

Order

    In view of the foregoing and under the authority vested in me as 
the Secretary of Energy, I hereby confirm, approve and place in effect 
on an interim basis, effective April 1, 2001, the Southwestern 
Integrated System Rate Schedules P-98D and NFTS-98D, 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; April 3, 2001.
Spencer Abraham,
Secretary. 
[FR Doc. 01-8900 Filed 4-10-01; 8:45 am]
BILLING CODE 6450-01-P