[Federal Register Volume 67, Number 98 (Tuesday, May 21, 2002)]
[Notices]
[Pages 35802-35805]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-12683]


-----------------------------------------------------------------------

DEPARTMENT OF ENERGY

Southwestern Power Administration


Integrated System Power Rates

AGENCY: Southwestern Power Administration, DOE.

ACTION: Notice of public review and comment.

-----------------------------------------------------------------------

SUMMARY: The Administrator, Southwestern Power Administration 
(Southwestern), has prepared Current and Revised FY 2002 Power 
Repayment Studies which show the need for an increase in annual 
revenues to meet cost recovery criteria. Such increased

[[Page 35803]]

revenues are needed primarily to cover increased investments and 
replacements in hydroelectric generating and high-voltage transmission 
facilities, increased operation and maintenance expenses and increased 
transmission service expenses. The Administrator has developed proposed 
Integrated System rates, which are supported by a rate design study, to 
recover the required revenues. Beginning October 1, 2002, and 
thereafter, the proposed rates would increase annual system revenues 
approximately 5.6 percent from $109,463,500 to $115,602,003, which 
includes an increase in the purchased power adder.

DATES: The consultation and comment period will begin on the date of 
publication of this Federal Register notice and will end August 19, 
2002.
    1. Public Information Forum-June 6, 2002, 1 p.m.,Tulsa, OK.
    2. Public Comment Forum-July 10, 2002, 1 p.m.,Tulsa, OK.

ADDRESSES: The forums will be held in Southwestern's offices, Room 
1402, Williams Center Tower I, One West Third Street, Tulsa, Oklahoma 
74103. Ten copies of the written comments together with a diskette in 
MS Word or Corel Word Perfect, regarding the proposed rate change 
should be submitted to the Administrator, Southwestern Power 
Administration, U.S. Department of Energy, One West Third Street, 
Tulsa, Oklahoma, 74103.

FOR FURTHER INFORMATION CONTACT: Mr. Forrest E. Reeves, Assistant 
Administrator, Office of Corporate Operations, Southwestern Power 
Administration, U.S. Department of Energy, One West Third Street, 
Tulsa, Oklahoma 74103, (918) 595-6696, [email protected].

SUPPLEMENTARY INFORMATION: The U.S. Department of Energy was created by 
an Act of the U.S. Congress, Department of Energy Organization Act, 
Pub. L. 95-91, dated August 4, 1977, and Southwestern's power 
marketing activities were transferred from the Department of Interior 
to the Department of Energy, effective October 1, 1977. Guidelines for 
preparation of power repayment studies are included in DOE Order No. RA 
6120.2, Power Marketing Administration Financial Reporting. Procedures 
for Public Participation in Power and Transmission Rate Adjustments of 
the Power Marketing Administrations are found at title 10, part 903, 
subpart A of the Code of Federal Regulations (10 CFR 903).
    Southwestern markets power from 24 multi-purpose reservoir projects 
with hydroelectric power facilities constructed and operated by the 
U.S. Army Corps of Engineers. These projects are located in the states 
of Arkansas, Missouri, Oklahoma, and Texas. Southwestern's marketing 
area includes these States plus Kansas and Louisiana. The costs 
associated with the hydropower facilities of 22 of the 24 projects are 
repaid via revenues received under the Integrated System rates, as are 
Southwestern's transmission facilities which consist of 1,380 miles of 
high-voltage transmission lines, 24 substations, and 46 microwave and 
VHF radio sites. Costs associated with the Sam Rayburn and Robert D. 
Willis Dams, two Corps of Engineers projects that are isolated 
hydraulically, electrically, and financially from the Integrated System 
are repaid under separate rate schedules and are not addressed in this 
notice.
    Following Department of Energy guidelines, the Administrator, 
Southwestern, prepared a Current Power Repayment study using existing 
system rates. The Study indicates that Southwestern's legal requirement 
to repay the investment in power generating and transmission facilities 
for power and energy marketed by Southwestern will not be met without 
an increase in revenues. The need for increased revenues is primarily 
due to increased investments and replacements in hydroelectric 
generating and high-voltage transmission facilities, increased 
operation and maintenance expenses and increased transmission services 
expenses. The Revised Power Repayment Study shows that additional 
annual revenues of $5,542,676, (a 5.1 percent increase), beginning 
October 1, 2002, are needed to satisfy repayment criteria.
    A Rate Design Study has also been completed which allocates the 
revenue requirement to the various system rate schedules for recovery, 
and provides for transmission service rates in conformance with FERC 
Order No. 888 (Promoting Wholesale Competition Through Open Access Non-
Discriminatory Transmission Services by Public Utilities). The proposed 
new rates would increase estimated annual revenues from $109,463,500 to 
$115,602,003 and would satisfy the present financial criteria for 
repayment of the project and transmission system investments within the 
required number of years. As indicated in the Integrated System Rate 
Design Study, this revenue would be developed primarily through 
increases in the charges for generation and transmission services, to 
include some of the ancillary services for deliveries of both Federal 
and non-Federal power and associated energy from the transmission 
system of Southwestern. There are also increased charges for 
transformation services for deliveries at voltages of 69 kV (kilovolt) 
or less.
    A second component of the Integrated System rates for power and 
energy, the purchased power adder, produces revenues which are 
segregated to cover the cost of power purchased to meet contractual 
obligations. The purchased power adder is established to reflect what 
is expected to be needed by Southwestern to meet purchased power needs 
on an average annual basis. It has been increased from the existing 
rate to reflect the projected power costs based on present market 
rates. The Administrator's authority to adjust the purchased power 
adder annually at his/her discretion, plus or minus $0.0011 per 
kilowatthour (kWh), will remain the same.
    Below is a general comparison of the existing and proposed system 
rates:

----------------------------------------------------------------------------------------------------------------
                                               Existing rates                       Proposed rates
----------------------------------------------------------------------------------------------------------------
GENERATION RATES                        Rate Schedule P-98D            Rate Schedule P-02
                                        (System Peaking)                     (System Peaking)
  
Capacity:
    Grid or 138-161kV...........  $2.56/kW/Mo + up to $0.0146/kW/Mo    $2.72/kW/Mo + up to $0.0112/kW/Mo
                                         (ancillary services) for             (ancillary services) for
                                         generation within control area:      generation within control area:
                                        Regulation Ancillary Services +      Regulation Ancillary Services +
                                         $0.04/kW/Mo for deliveries within    $0.06/kW/Mo for deliveries within
                                         control area                         control area
    69 kV.............................  Transformation Service               Transformation Service
                                        + $0.25/kW/Mo (applied to usage,     + $0.28/kW/Mo (applied to usage,
                                         not reservation)                     not reservation)

[[Page 35804]]

 
    Energy............................  $0.0048/kWh of Peaking Energy and    $0.0050/kWh ofr Peaking Energy and
                                         Supplemental Peaking Energy + a      Supplemental Peaking Energy + a
                                         Purchased Power Adder of $0.0011     Purchase Power Adder or $0.0025 of
                                         of Peaking Energy (ï¿½ 0.0011   Peaking Energy (ï¿½ 0.0011
                                         annually at Administrator's          annually at Administrator's
                                         discretion).                         discretion).
TRANSMISSION RATES                      Rate Schedule NFTS-98D         Rate Schedule NFTS-02
                                        (Transmission)                       (Transmission)
Capacity-Firm Reservation with energy)
    Grid of 138-161 kV..........
                                    $0.69/W/Mo                           $0.73/kW/Mo
                                    $0.173/kW/Week                       $0.183/kW/Week
                                    $0.0314/kW/Day                       $0.0332/kW/Day
                                    + Required Ancillary Services:       + Required Ancillary Services:
                                    $0.06/kw/Mo, or                      $0.08/kW/Mo, or
                                    $0.016/kW/Week, or                   $0.021/kW/Week, or
                                    $0.0028/kW/Day                       $0.0037/kW/Day
                                    + Reserve Ancillary Services:        + Reserve Ancillary Services:
                                    up to: $0.00146/kW/Mo, or            up to: $0.00112/kW/Mo, or
                                    $0.00366/kW/Week, or                 $0.0028/kW/Week, or
                                    $0.00066kW/Day,                      $0.00050/kW/Day,
                                    for generation in control area       for generation in control area
                                    + Regulation & Freq Response     + Regulation & Freq Response
                                    Ancillary Service                    Ancillary Service
                                    up to: $0.04/kW/Mo, or               up to: $0.06/kW/Mo, or
69 kV and below.......................  $0.010/kW/Week, or                   $0.015/kW/Week, or
                                    $0.0018/kW/Day, for deliveries       $0.0027/kW/Day, for deliveries
                                         within control area                  within control area
Capacity (Non-firm with energy):......
                                    Transformation Service               Transformation Service
                                    + 40.25/kW/Mo                        + $0.28/KW/Mo
                                    no separate charge (applied on       no separate charge (applied on
                                         usage, not reservation). Weekly      usage, not reservation). Weekly
                                         and daily rates not applied.         and daily rates not applied.
 
Network Service.......................  no separate capacity charge
                                    $0.55/kW/Mo, or                      no separate capacity charge
                                    $0.138/kW/Week, or                   80% of firm monthly charge
                                    $0.0251/kW/Day, or                   divided by 4 for weekly rate,
                                    $0.00157/kWh, delivered              divided by 22 for daily rate and
                                                                             divided by 352 for hourly rate.
 
                                    $0.72/kW/Mo of Network Load          $0.73/kW/Mo of Network Load
                                    + Required Ancillary Services:       + Required Ancillary Services:
                                    $0.06/kW/Mo, or                      $0.08/kW/Mo, or
                                    + Reserve Ancillary Services:        + Reserve Ancillary Services:
                                    up to: $0.00146/kW/Mo,               up to: $0.00112/kW/Mo, for
                                    for generation in control area       generation in control area +
                                    + Regulation & Freq Response
  
                                    Rate Schedule EE-98            Rate Schedule EE-02
                                        (Excess Energy)                      (Excess Energy)
Energy................................  $0.0048/Wh +                         $0.0050/kWh +
                                    $0.0018/kWh (transmission) +         $0.0021/kWh (transmission) +
                                    Required ancillary services          Required ancillary services
                                    $0.00018/kWh +                       $0.00023/kWh +
                                    $0.00018/kWh (anciullary service)    $0.00004/kWh (ancillary service)
                                    for generation in control area +     for generation in control area +
                                    $0.00011/kWh (ancillary service)     .000017/kWh (ancillary service) +
                                    + for deliveries in control area:    for deliveries in control area:
----------------------------------------------------------------------------------------------------------------

    Opportunity is presented for Southwestern customers and other 
interested parties to receive copies of the Integrated System Studies. 
If you desire a copy of the Integrated System Power Repayment Studies 
and Rate Design Study Data Package, submit your request to Mr. Forrest 
E. Reeves, Assistant Administrator, Office of Corporate Operations, 
Southwestern Power Administration, One West Third, Tulsa, OK 74103 
(918) 595-6696.
    A Public Information Forum is scheduled to be held on June 6, 2002, 
to explain to customers and the public the proposed rates and 
supporting studies. The proceeding will be transcribed. The Forum will 
be conducted by a chairman who will be responsible for orderly 
procedure. Questions concerning the rates, studies, and information 
presented at the Forum will be answered, to the extent possible, at the 
Forum. Questions not answered at the Forum will be answered in writing, 
except that questions involving voluminous data contained in 
Southwestern's records may best be answered by consultation and review 
of pertinent records at Southwestern's offices.

[[Page 35805]]

    Persons interested in attending the Public Information Forum should 
indicate in writing by letter or facsimile transmission 
(918-595-6656) by May 31, 2002, their intent to appear at 
such Forum. If no one so indicates their intent to attend, no such 
Forum will be held.
    A Public Comment Forum is scheduled to be held on July 10, 2002, at 
which interested persons may submit written comments or make oral 
presentations of their views and comments related to the rate proposal. 
The proceeding will be transcribed. The Forum will be conducted by a 
chairman who will be responsible for orderly procedure. Southwestern's 
representatives will be present, and they and the chairman may ask 
questions of the speakers. Persons interested in attending the Public 
Comment Forum should indicate in writing by letter or facsimile 
transmission (918-595-6656) by July 3, 2002, their intent 
to appear at such Forum. If no one so indicates their intent to attend, 
no such Forum will be held. Persons interested in speaking at the Forum 
should submit a request to Mr. Forrest E. Reeves, Assistant 
Administrator, Southwestern, at least five (5) days prior to the Forum 
so that a list of speakers can be developed. The chairman may allow 
others to speak if time permits.
    A transcript of each Forum will be made. Copies of the transcripts 
may be obtained from the transcribing service. Copies of all documents 
introduced will be available from Southwestern upon request for a fee.
    Following review of the oral and written comments and the 
information gathered in the course of the proceedings, the 
Administrator will submit the amended Integrated System Rate Proposal, 
Power Repayment Studies, and Rate Design Study in support of the 
proposed rates to the Secretary of Energy for confirmation and approval 
on an interim basis, and subsequently to the Federal Energy Regulatory 
Commission (FERC) for confirmation and approval on a final basis. The 
FERC will allow the public an opportunity to provide written comments 
on the proposed rate increase before making a final decision.

    Issued in Tulsa, Oklahoma, this 6th day of May 2002.
Michael A. Deihl,
Administrator.
[FR Doc. 02-12683 Filed 5-20-02; 8:45 am]
BILLING CODE 6450-01-P