[Federal Register Volume 68, Number 206 (Friday, October 24, 2003)]
[Notices]
[Pages 60979-60980]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-26897]


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DEPARTMENT OF ENERGY

Southwestern Power Administration


Robert Douglas Willis Power Rate Schedule

AGENCY: Southwestern Power Administration, DOE.

ACTION: Notice of rate order.

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SUMMARY: Pursuant to Delegation Order No. 00-037.00 and 00-001-00A, 
effective December 6, 2001 and September 17, 2002, respectively, the 
Deputy Secretary of Energy has approved and placed into effect on an 
interim basis Rate Order No. SWPA-50 which increases the power rate for 
the Robert Douglas Willis Hydropower (Robert D. Willis) Project 
pursuant to the following Robert D. Willis Rate Schedule: Rate Schedule 
RDW-03, Wholesale Rates for Hydro Power and Energy Sold to Sam Rayburn 
Municipal Power Agency (Contract No. DE-PM75-85SW00117).

FOR FURTHER INFORMATION CONTACT: Mr. Forrest E. Reeves, Assistant 
Administrator, Office of Corporate Operations, Southwestern Power 
Administration, Department of Energy, One West Third Street, Tulsa, OK 
74103-3519, (918) 595-6696, [email protected].

SUPPLEMENTARY INFORMATION: The existing hydroelectric power rate for 
the Robert D. Willis project is $353,700 per year. The Federal Energy 
Regulatory Commission approved this rate on a final basis on October 
22, 2001, for the period ending September 30, 2005. The FY 2003 Robert 
D. Willis Power Repayment Studies indicates the need for an increase in 
the annual rate by $99,952 or 28.1 percent beginning November 1, 2003.
    The Administrator of Southwestern Power Administration 
(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 and Extensions'' in connection with 
the proposed rate schedule. On June 24, 2003, Southwestern published 
notice in the Federal Register, 68 FR 37483, of a 60-day comment 
period, together with a Public Information Forum and a Public Comment 
Forum, to provide an opportunity for customers and other interested 
members of the public to review and comment on a proposed rate increase 
for the Robert D. Willis project. Both public forums were canceled when 
no one expressed an intention to participate. Written comments were 
accepted through August 25, 2003. The only comment received was from 
Gillis & Angley, Counsellors at Law, on behalf of Sam Rayburn Municipal 
Power Agency (SRMPA), which stated that SRMPA (the sole hydropower 
customer) had no objection to the proposed rate adjustment.
    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 approved Rate Order No. SWPA-50, which increases the 
existing Robert D. Willis rate to $452,952 per year for the period 
November 1, 2003, through September 30, 2007.

    Dated: October 10, 2003.
Kyle E. McSlarrow,
Deputy Secretary.

Department of Energy

Deputy Secretary of Energy

    In the matter of: Southwestern Power Administration, Robert Douglas 
Willis Hydropower Project; Rate Order No. SWPA-50.

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

    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, relating to the Southwestern 
Power Administration (Southwestern) were transferred to and vested in 
the Secretary of Energy. By Delegation Order No. 00-037.00 (December 6, 
2001), the Secretary of Energy delegated to the Administrator of 
Southeastern the authority to develop power and transmission rates, and 
delegated to the Deputy Secretary of the Department of Energy the 
authority to confirm, approve, and place in effect such rates on an 
interim basis and delegated to the Federal Energy Regulatory Commission 
(FERC) the authority to confirm and approve on a final basis or to 
disapprove rates developed by the Administrator under the delegation. 
This rate order is issued by the Deputy Secretary pursuant to said 
delegation, and pursuant to Delegation Order No. 00-001-00A, effective 
September 17, 2002.

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

[[Page 60980]]

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 at 
Town 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.
    The existing rate for the Robert D. Willis project was approved by 
FERC on October 22, 2001, for the period October 1, 2001, through 
September 30, 2005.

Discussion

    The 2003 current Robert D. Willis power repayment study (PRS) tests 
the adequacy of the existing rate, based on the latest cost evaluation 
period extending from FY 2003 through FY 2007, to cover annual expenses 
for marketing, operation and maintenance, and to amortize additions to 
plant and major replacements of the generating facilities. The current 
PRS for the Robert D. Willis project, using the existing annual rate of 
$353,700, indicates that the legal requirements to repay all costs will 
not be met without additional revenue. This shortfall is primarily a 
result of increased operations and maintenance expenses estimated by 
the Corps. The revised PRS shows that an additional $99,252 (28.1 
percent) annually is needed to satisfy repayment criteria. Accordingly, 
Southwestern developed a rate schedule with a proposed annual rate of 
$452,952 that would satisfy repayment criteria.
    Pursuant to Title 10, Part 903, Subpart A of the Code of Federal 
Regulations (10 CFR 903.21), ``Procedures for Public Participation in 
Power and Transmission Rate Adjustments and Extensions,'' 50 FR 37837, 
the Administrator, published notice in the Federal Register on June 24, 
2003, 68 FR 37483, announcing a 60-day period for public review and 
comment concerning the proposed minor rate adjustment increase. 
Southwestern provided notice of the Federal Register, together with 
supporting data, to the customer and interested parties for review and 
comment during the formal period of public participation. In addition, 
prior to the formal 60-day public participation process, Southwestern 
met with the customer representative to discuss with them preliminary 
information on the proposed rate adjustment. Subsequent to discussions 
with the customer regarding the initial PRS findings, Southwestern 
again questioned the Corps regarding the large increase in the 
operations and maintenance expense estimates. This questioning led to 
the Corps revising their expense estimates downward, and thereby 
changing the preliminary results from the initial 35 percent rate 
increase as stated in the Federal Register to a 28.1 percent rate 
increase. As no requests were received to convene either of the public 
forums, neither was held. Only one formal comment was received during 
the public process. That comment, on behalf of the sole customer SRMPA, 
expressed no objection to the final proposed rate.
    Upon conclusion of the comment period, Southwestern finalized the 
PRS and rate schedule for the proposed annual rate of $452,952 which is 
the lowest possible rate needed to satisfy repayment criteria. This 
rate represents an increase of 28.1 percent over the existing rate.
    Information regarding this rate increase, including studies and 
other supporting material, is available for public review and comment 
in the offices of Southwestern Power Administration, One West Third 
Street, Tulsa, Oklahoma 74103-3519.

Comments and Responses

    Southwestern received one written comment in which the customer 
representative expressed no objection to the proposed rate adjustment.

Other Issues

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

Administrator's Certification

    The FY 2003 revised Robert D. Willis PRS indicates that the annual 
power rate of $452,952 will repay all costs of the project, including 
amortization of additions to plant and major replacements of the 
generating facilities consistent with provisions of the Department of 
Energy (DOE) Order No. RA 6120.2. In accordance with Delegation Order 
No. 00-037.00, December 6, 2001, 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 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, 10 CFR 
1021, 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 the authority delegated to 
me by the Secretary of Energy, I hereby confirm, approve and place in 
effect on an interim basis, for the period November 1, 2003, through 
September 30, 2007, the annual Robert D. Willis rate of $452,952 for 
the sale of power and energy from Robert D. Willis project to the Sam 
Rayburn Municipal Power Agency, under Contract No. DE-PM75-85SW00117, 
as amended. This rate shall remain in effect on an interim basis 
through September 30, 2007, or until the FERC confirms and approves the 
rate on a final basis.

    Dated: October 10, 2003.
Kyle E. McSlarrow,
Deputy Secretary.
[FR Doc. 03-26897 Filed 10-23-03; 8:45 am]
BILLING CODE 6450-01-P