[Federal Register Volume 69, Number 3 (Tuesday, January 6, 2004)]
[Notices]
[Pages 644-649]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-204]


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DEPARTMENT OF ENERGY

Western Area Power Administration


Loveland Area Projects--Rate Order No. WAPA-105

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of rate order.

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SUMMARY: Notice is given of the confirmation and approval by the Deputy 
Secretary of the Department of Energy (DOE) of Rate Order No. WAPA-105 
and Rate Schedule L-F5 placing provisional rates for the Loveland Area 
Projects (LAP) firm electric service into effect on an interim basis 
effective February 1, 2004. The provisional rates will remain in effect 
on an interim basis until the Federal Energy Regulatory Commission 
(Commission) confirms, approves, and places them into effect on a final 
basis or until they are replaced by other rates. The provisional rates 
will provide sufficient revenue to pay all annual costs, including 
interest expenses, and repayment of required investment within the 
allowable period.

DATES: Rate Schedule L-F5 will be placed into effect on an interim 
basis on the first day of the first full billing period beginning on or 
after February 1, 2004, and will be in effect until the Commission 
confirms, approves, and places the provisional rates into effect on a 
final basis for 5 years ending December 31, 2008, or until superseded.

FOR FURTHER INFORMATION CONTACT: Mr. Ronald W. Steinbach, Power 
Marketing Manager, Rocky Mountain Customer Service Region, Western Area 
Power Administration, 5555 East Crossroads Boulevard, Loveland, CO 
80538-8986, telephone (970) 461-7322, e-mail [email protected].

SUPPLEMENTARY INFORMATION: The DOE Deputy Secretary approved Rate

[[Page 645]]

Schedule L-F4 for LAP firm electric service on an interim basis on 
January 6, 1994 (Rate Order No. WAPA-61, 59 FR 3339, January 21, 1994). 
The Commission confirmed and approved the rate schedule on a final 
basis on July 14, 1994, under Commission Docket No. EF94-5181-000 (68 
FERC 62,040). Rate Schedule L-F4 was approved for 5 years beginning 
February 1, 1994, ending January 31, 1999. Rate Order No. WAPA-82 (63 
FR 58033, October 29, 1998) extended the rates for 2 years, beginning 
February 1, 1999, through January 31, 2001. Rate Order No. WAPA-89 (65 
FR 44044, July 17, 2000) extended the rates again beginning February 1, 
2001, through September 30, 2003. Rate Order No. WAPA-103 (68 FR 33119, 
June 3, 2003) extended the rates a third time beginning October 1, 
2003, through March 31, 2004.
    Under Rate Schedule L-F4, the existing composite rate is 21.70 
mills per kilowatthour (mills/kWh). The energy rate is 10.85 mills/kWh 
and the capacity rate is $2.85 per kilowattmonth (kWmo). Under Rate 
Schedule L-F5, the first step of the provisional rates for LAP firm 
electric service will result in a composite rate of 23.44 mills/kWh. 
The energy rate will be 11.72 mills/kWh and the capacity rate will be 
$3.08 per kWmo. This will result in an increase of 8 percent effective 
February 1, 2004. The second step of the provisional rates for LAP firm 
electric service will result in a composite rate of 23.90 mills/kWh. 
The energy rate will be 11.95 mills/kWh and the capacity rate will be 
$3.14 per kWmo. This will result in an additional increase of 2 percent 
effective October 1, 2004.

Provisional Rates for LAP Firm Electric Service

    The provisional rates for LAP firm electric service are designed to 
recover an annual revenue requirement that includes investment 
repayment, interest, purchased power, operation and maintenance 
expenses (O&M), and other annual expenses. The annual revenue 
requirement for firm electric service is allocated equally between 
capacity and energy.
    The provisional rates for LAP firm electric service are developed 
under the DOE Organization Act (42 U.S.C. 7101-7352), through which the 
power marketing functions of the Secretary of the Interior and the 
Bureau of Reclamation under the Reclamation Act of 1902 (ch. 1093, 32 
Stat. 388), as amended and supplemented by subsequent laws, 
particularly section 9(c) of the Reclamation Project Act of 1939 (43 
U.S.C. 485h(c)), and other acts specifically applicable to the project 
involved, were transferred to and vested in the Secretary of Energy 
(Secretary).
    By Delegation Order No. 00-037.00, effective December 6, 2001, the 
Secretary delegated (1) The authority to develop power and transmission 
rates on a nonexclusive basis to the Administrator of the Western Area 
Power Administration (Western); (2) the authority to confirm, approve, 
and place such rates into effect on an interim basis to the Deputy 
Secretary; and (3) the authority to confirm, approve, and place into 
effect on a final basis, to remand, or to disapprove such rates to the 
Commission. Existing DOE procedures for public participation in power 
rate adjustments are located at 10 CFR 903, effective on September 18, 
1985 (50 FR 37835).
    The Procedures for Public Participation in Power and Transmission 
Rate Adjustments and Extensions, 10 CFR 903, have been followed by 
Western in developing these provisional rates.
    Rate Order No. WAPA-105, confirming, approving, and placing the 
proposed LAP firm electric service rates into effect on an interim 
basis, is issued. The new Rate Schedule L-F5 will be submitted promptly 
to the Commission for confirmation and approval on a final basis.

    Dated: December 24, 2003.
Kyle E. McSlarrow,
Deputy Secretary.

Order Confirming, Approving, and Placing the Loveland Area Projects 
Firm Electric Service Rates Into Effect on an Interim Basis

    These rates are developed under the DOE Organization Act (42 
U.S.C. 7101-7352), through which the power marketing functions of 
the Secretary of the Interior and the Bureau of Reclamation under 
the Reclamation Act of 1902 (ch. 1093, 32 Stat. 388), as amended and 
supplemented by subsequent laws, particularly section 9(c) of the 
Reclamation Project Act of 1939 (43 U.S.C. 485h(c)), and other acts 
specifically applicable to the project involved, were transferred to 
and vested in the Secretary.
    By Delegation Order No. 00-037.00, effective December 6, 2001, 
the Secretary delegated (1) The authority to develop 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 Deputy Secretary; and (3) the 
authority to confirm, approve, and place into effect on a final 
basis, to remand, or to disapprove such rates to the Commission. 
Existing DOE procedures for public participation in power rate 
adjustments are found at 10 CFR 903. Procedures for approving Power 
Marketing Administration rates by the Commission are found at 18 CFR 
300.

Acronyms and Definitions

    As used in this rate order, the following acronyms and 
definitions apply:
    Administrator: The Administrator of Western Area Power 
Administration.
    Capacity: The electric capability of a generator, transformer, 
transmission circuit, or other equipment. It is expressed in kW.
    Capacity Rate: The rate which sets forth the charges for 
capacity. It is expressed in dollars per kWmo.
    Composite Rate: The rate for commercial firm power and is the 
total annual revenue requirement for capacity and energy divided by 
the total annual firm energy sales under contract. It is expressed 
in mills/kWh and used for comparison purposes.
    Criteria: The Post-1989 General Power Marketing and Allocation 
Criteria for the sale of energy with capacity from the Pick-Sloan 
Missouri Basin Program--Western Division and the Fryingpan-Arkansas 
Project.
    Customer: An entity with a contract for and receiving firm 
electric service from Western's Rocky Mountain Region.
    DOE Order RA 6120.2: An order outlining power marketing 
administration financial reporting and rate-making procedures.
    Energy: That which does or is capable of doing work. It is 
measured in terms of the work it is capable of doing over a period 
of time. It is expressed in kWh.
    Energy Rate: The rate which sets forth the charges for energy. 
It is expressed in mills per kWh and applied to each kWh delivered 
to each customer.
    Firm: A type of product and/or service that is available at the 
time requested by the customer.
    FY: Fiscal year; October 1 to September 30.
    kW: Kilowatt--the electrical unit of capacity that equals 1,000 
watts.
    kWmo: Kilowattmonth--the electrical unit of the monthly amount 
of capacity.
    kWh: Kilowatthour--the electrical unit of energy that equals 
1,000 watts in 1 hour.
    kilowattyear: Kilowattyear--the electrical unit of the yearly 
amount of capacity.
    L-F4: Loveland Area Projects existing firm electric service rate 
schedule (expires March 31, 2004, or until superseded).
    L-F5: Loveland Area Projects provisional firm electric service 
rate schedule (effective February 1, 2004).
    M&I: Municipal and industrial water development.
    mills/kWh: Mills per kilowatthour--the unit of charge for energy 
(equals one tenth of a cent or one thousandth of a dollar).
    Power: Capacity and energy.
    Preference: The requirements of Reclamation Law which provide 
that preference in the sale of Federal power shall be given to 
municipalities and other public corporations or agencies and also to 
cooperatives and other nonprofit organizations financed in whole or 
in part by loans made under the Rural Electrification Act of 1936 
(Reclamation Project Act of 1939, section 9(c), 43 U.S.C. 485h(c)).
    Provisional Rates: Rate schedules which have been confirmed, 
approved, and placed into effect on an interim basis by the Deputy 
Secretary of DOE.
    Rate Brochure: A document prepared for public distribution 
explaining the rationale

[[Page 646]]

and background of the rate proposal contained in this rate order and 
dated June 2003.
    Reclamation Law: A series of Federal laws. Viewed as a whole, 
these laws create the originating framework in which Western markets 
power.
    Revenue Requirement: The revenue required to recover operation 
and maintenance expenses, purchased power and transmission service 
expenses, interest, deferred expenses, repayment of Federal 
investments, and other assigned costs.
    Tiered Rate: Pick-Sloan Missouri Basin Program--Eastern Division 
rate applied to energy in excess of 60% load factor.

Effective Date

    The provisional rates will become effective on an interim basis 
on the first day of the first full billing period beginning on or 
after February 1, 2004, and will be in effect pending the 
Commission's approval of them or substitute rates on a final basis 
for 5 years ending December 31, 2008, or until superseded.

Public Notice and Comment

    The Procedures for Public Participation in Power and 
Transmission Rate Adjustments and Extensions, 10 CFR 903, have been 
followed by Western in developing these rates. The following 
summarizes the steps Western took to ensure involvement of 
interested parties in the rate process:
    1. The proposed rate adjustment was initiated on March 25, 2003, 
when letters announcing informal meetings to discuss the proposed 
firm electric service rate adjustment were mailed to all LAP 
preference customers and interested parties. These informational 
meetings were held on April 14, 2003, in Denver, CO, and on April 
15, 2003, in Lincoln, NE. At these informal meetings, Western 
explained the rationale for the rate adjustment, presented rate 
designs and methodologies, and answered questions.
    2. On June 6, 2003, letters were mailed to all LAP preference 
customers and interested parties announcing the upcoming publication 
of a Federal Register notice (FRN) for proposed LAP rates and 
announcing dates and times for public information and public comment 
forums.
    3. An FRN was published on June 13, 2003 (68 FR 35401), 
officially announcing proposed LAP rates, initiating the public 
consultation and comment period, and announcing the public 
information and public comment forums.
    4. On June 19, 2003, letters were mailed to all LAP preference 
customers and interested parties transmitting a copy of the FRN 
published on June 13, 2003 (68 FR 35401) initiating the public rate 
process.
    5. The public information forums were held on July 14, 2003, 
beginning at 1 p.m. MDT, in Denver, CO, and again on July 15, 2003, 
beginning at 9 a.m. CDT, in Lincoln, NE. Western provided detailed 
explanations of the proposed LAP rates, provided a list of issues 
that could change the proposed rates, and answered questions. A rate 
brochure detailing the proposed rates was provided at the forums.
    6. The public comment forum was held on August 6, 2003, 
beginning at 1 p.m. MDT, in Denver, CO. Western gave the public an 
opportunity to comment for the record. No oral comments were made 
and no written comments were received during the comment forum.
    7. Four comment letters were received during the consultation 
and comment period. The consultation and comment period ended 
September 11, 2003. All formally submitted comments have been 
considered in preparing this rate order.
    8. Western's Rocky Mountain Region provided a Web site with all 
of the letters, time frames, dates and locations of forums, 
documents discussed at the information meetings, Federal Register 
notices and all other information regarding this rate process for 
customer access.

Project Descriptions

Loveland Area Projects

    The Post-1989 General Power Marketing and Allocation Criteria 
(Criteria), published in the Federal Register on January 31, 1986 
(51 FR 4012), integrated the resources of the Pick-Sloan Missouri 
Basin Program--Western Division (P-SMBP--WD) and the Fryingpan-
Arkansas Project (Fry-Ark). This operational and contractual 
integration, known as LAP, allowed an increase in marketable 
resource, simplified contract administration, and established a 
blended rate for LAP power sales.
    However, the P-SMBP--WD and Fry-Ark retain separate financial 
status. For this reason, separate Power Repayment Studies (PRS) are 
prepared annually for each project. These PRSs are used to determine 
the ability of the power rate to generate sufficient revenue to 
repay project investment and costs during each project's prescribed 
repayment period. The revenue requirement of the Fry-Ark PRS is 
combined with the P-SMBP--WD revenue requirement derived from the 
Pick-Sloan Missouri Basin Program (P-SMBP) PRS, to develop one rate 
for LAP firm electric sales.

Pick-Sloan Missouri Basin Program--Western Division

    The initial stages of the Missouri River Basin Project were 
authorized by section 9 of the Flood Control Act of December 22, 
1944 (Pub. L. 78-534, 58 Stat. 877, 891). The Missouri River Basin 
Project, later renamed the Pick-Sloan Missouri Basin Program to 
honor its two principal authors, has been under construction since 
1944. The P-SMBP encompasses a comprehensive program of flood 
control, navigation improvement, irrigation, municipal and 
industrial (M&I) water development, and hydroelectric production for 
the entire Missouri River Basin. Multipurpose projects have been 
developed on the Missouri River and its tributaries in Colorado, 
Montana, Nebraska, North Dakota, South Dakota and Wyoming.
    The Colorado-Big Thompson, Kendrick, Riverton and Shoshone 
projects were administratively combined with P-SMBP in 1954, 
followed by the North Platte Project in 1959. These projects are 
known as the ``Integrated Projects'' of the P-SMBP. The Riverton 
Project was reauthorized as a unit of the P-SMBP in 1970.
    The P-SMBP--WD and the Integrated Projects include 19 
powerplants. There are six powerplants in the P-SMBP--WD: Glendo, 
Kortes, and Fremont Canyon powerplants on the North Platte River; 
Boysen and Pilot Butte on the Wind River; and Yellowtail powerplant 
on the Big Horn River.
    In the Colorado-Big Thompson Project, there are also six 
powerplants. Green Mountain powerplant on the Blue River is on the 
West Slope of the Rocky Mountains. Marys Lake, Estes, Pole Hill, 
Flatiron and Big Thompson powerplants are on the East Slope of the 
Continental Divide.
    The Kendrick Project has two power production facilities: Alcova 
and Seminoe powerplants. Power production facilities in the Shoshone 
Project are Shoshone, Buffalo Bill, Heart Mountain and Spirit 
Mountain powerplants. The only production facility in the North 
Platte Project is the Guernsey powerplant.

Fryingpan-Arkansas Project

    The Fry-Ark is a transmountain diversion development in 
southeastern Colorado authorized by the Act of Congress on August 
16, 1962 (Pub. L. 87-590, 76 Stat. 389, as amended by Title XI of 
the Act of Congress on October 27, 1974 (Pub. L. 93-493, 88 Stat. 
1486, 1497). The Fry-Ark diverts water from the Fryingpan River and 
other tributaries of the Roaring Fork River in the Colorado River 
Basin on the West Slope of the Rocky Mountains to the Arkansas River 
on the East Slope of the Continental Divide. The water diverted from 
the West Slope, together with regulated Arkansas River water, 
provide supplemental irrigation and M&I water supplies and produce 
hydroelectric power. Flood control, fish and wildlife enhancement 
and recreation are other important purposes of Fry-Ark. The only 
generating facility in Fry-Ark is the Mt. Elbert Pumped-Storage 
Powerplant on the East Slope of the Rocky Mountains.

Power Repayment Studies

    PRSs are prepared each fiscal year to determine if power 
revenues will be sufficient to pay, within the prescribed time 
periods, all costs assigned to the LAP power function. Repayment 
criteria are based on law, policies, DOE Order RA 6120.2 and 
authorizing legislation.

Existing and Provisional Rates

    Existing and provisional rates for LAP firm electric service are 
designed to recover an annual revenue requirement that includes the 
investment repayment, interest, purchased power, and O&M expenses. 
The provisional rates reflect increased purchased power expenses due 
to the extended poor water conditions experienced in the region as 
well as costs associated with increased O&M expenses. The 
provisional rates will be implemented in two steps. The first step 
is to become effective on the first day of the first full billing 
period beginning on or after February 1, 2004. The second step is to 
become effective on the first day of the first full billing period 
beginning on or after October 1, 2004. Under Rate Schedule L-F5, the 
provisional rates for LAP firm electric service will result in an 
overall composite rate increase of approximately 10 percent. A

[[Page 647]]

comparison of the existing and provisional rates for LAP firm 
electric service follows:

                     Comparison of Existing and Provisional Rates LAP Firm Electric Service
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                                                                First step  provisional        Second step
                                                                  rates and  percent      provisional rates and
       Firm electric service              Existing  rates       change, effective Feb.       percent change,
                                                                        1, 2004           effective Oct 1, 2004
----------------------------------------------------------------------------------------------------------------
Rate Schedule......................  L-F4                      L-F5                      L-F5
Composite Rate (mills/kWh).........  21.70                     23.44 (8%)                23.90 (2%)
Firm Capacity ($/kWmo).............  $2.85                     $3.08 (8.1%)              $3.14 (1.9%)
Firm Energy (mills/kWh)............  10.85                     11.72 (8%)                11.95 (2%)
----------------------------------------------------------------------------------------------------------------

Certificate of Rate

    Western's Administrator has certified that the LAP firm electric 
service rates under Rate Schedule L-F5 are the lowest possible rates 
consistent with sound business principles. The provisional rates 
were developed following administrative policies and applicable 
laws.

Discussion

    According to Reclamation Law, Western must establish power rates 
sufficient to recover operation, maintenance, and purchased power 
expenses, and repay the Federal Government's investment in 
generation and transmission facilities. Rates must also be set to 
cover interest expenses on the unpaid balance of facilities' 
investments, replacements and additions, and certain non-power costs 
in excess of the irrigation users' ability to repay.
    The Criteria were published in the Federal Register on January 
31, 1986 (51 FR 4012). The Criteria operationally and contractually 
integrated the resources of the P-SMBP--WD and Fry-Ark. The 
integrated resources are referred to as LAP. A blended rate was 
established for the sale of LAP power. The P-SMBP--WD piece of the 
revenue requirements for the LAP firm electric service rates was 
developed from the revenue requirement calculated in the P-SMBP FY 
2003 Rate-Setting PRS. The P-SMBP--WD revenue requirement increased 
approximately 14 percent due to increased purchased power costs due 
to extended poor water as well as costs associated with increased 
O&M expenses. The adjustment to the P-SMBP revenue requirement is a 
separate formal rate process which is documented in Rate Order No. 
WAPA-110. Rate Order No. WAPA-110 is also scheduled to go into 
effect on the first day of the first full billing period beginning 
on or after February 1, 2004. The revenue requirements for P-SMBP--
WD are as follows:

               Summary of P-SMBP--WD Revenue Requirements
------------------------------------------------------------------------
                                                      P-SMBP--WD revenue
                                                         requirement
------------------------------------------------------------------------
Proposed Increase--First Step (February 1, 2004):
    Present Revenue Requirement (15.80 mills/kWh x           $31,410,400
     1,988,000,000 kWh)............................
    Proposed First Step Increase (1.79 mills/kWh x             3,558,520
     1,988,000,000 kWh)............................
    Proposed Revenue Requirement--First Increment             34,968,920
     (17.59 mills/kWh x 1,988,000,000 kWh).........
Proposed Increase--Second Step (October 1, 2004):
    Revenue Requirement--First Increment (17.59              $34,968,920
     mills/kWh x 1,988,000,000 kWh)................
    Proposed Second Step Increase (.47 mills/kWh x               934,360
     1,988,000,000 kWh)............................
    Proposed Revenue Requirement--Second Increment            35,903,280
     (18.06 mills/kWh x 1,988,000,000 kWh).........
------------------------------------------------------------------------

    The Fry-Ark piece of the revenue requirements for the LAP firm 
electric service rates was developed from the revenue requirement 
calculated in the Fry-Ark FY 2003 Rate-Setting PRS, which has been 
updated to reflect the most current information. The Fry-Ark revenue 
requirement contains two components. The project has an average 
annual energy generation of 52 gigawatthours from flow-through 
water. The remaining revenue requirement is derived from the firm 
capacity component. This is the procedure used in the study to 
account for the Fry-Ark portion of the energy marketed by LAP. The 
Fry-Ark Ratesetting PRS indicates that the existing annual revenue 
requirement of $12,855,560 meets all requirements for annual 
expenses and capital repayment. Therefore, no increase is necessary.
    A table comparing the LAP existing revenue requirement to the 
proposed revenue requirements is shown below:

                                       Summary of LAP Revenue Requirements
----------------------------------------------------------------------------------------------------------------
                                                                              First Step          Second Step
                                                           Existing         (February 2004)     (October 2004)
----------------------------------------------------------------------------------------------------------------
P-SMBP--WD..........................................         $31,410,400         $34,968,920         $35,903,280
Fry-Ark.............................................          12,855,560          12,855,560          12,855,560
                                                     -----------------------------------------------------------
    Total LAP.......................................          44,265,960          47,824,480          48,758,840
----------------------------------------------------------------------------------------------------------------


[[Page 648]]

Statement of Revenue and Related Expenses

    The following table provides a summary of Fry-Ark revenues and 
expenses for the 5-year proposed rate approval period:

       Fryingpan-Arkansas Project Comparison of 5-Year Rate Approval Period Revenues and Expenses ($1,000)
----------------------------------------------------------------------------------------------------------------
                                                       Existing rate PRS    Provisional PRS
                                                        (FY 2004-2008)      (FY 2004-2008)        Difference
----------------------------------------------------------------------------------------------------------------
Total Revenues......................................              68,208              69,065                 857
Revenue Distribution:
    Operations and Maintenance......................              17,248              20,607               3,359
    Purchased Power and Transmission................              13,180              19,894               6,714
    Interest........................................              28,323              21,247             (7,076)
    Investment Repayment............................                 256               7,317               7,061
    Capitalized Expenses............................               9,201                   0             (9,201)
                                                     -----------------------------------------------------------
        Total.......................................              68,208              69,065                 857
----------------------------------------------------------------------------------------------------------------

    The summary of P-SMBP--WD revenues and expenses for the 5-year 
proposed rate approval period is included in the P-SMBP Statement of 
Revenue and Related Expenses that is part of Rate Order No. WAPA-
110.

Basis for Rate Development

    The P-SMBP PRS calculates the composite rate in mills/kWh for 
future firm power (capacity and energy) sales. In the Fry-Ark PRS, 
the study calculates the capacity rate in dollars per kilowattyear. 
The rate is adjusted until sufficient revenues are generated to meet 
the cost-recovery requirement.
    The proposed LAP firm power service rate is designed to recover 
50 percent of the revenue requirement from the capacity rate and 50 
percent from the energy rate. The capacity rate is calculated by 
dividing 50 percent of the total annual revenue requirement by the 
number of billing units (kWmo) in a year. The energy rate is 
calculated by dividing 50 percent of the total annual revenue 
requirement by the annual energy sales under contract.
    The existing rates for LAP firm electric service in Rate 
Schedule L-F4 expire March 31, 2004. The provisional rates will 
provide sufficient revenue to pay all annual costs, including 
interest expense, and repayment of required investment within the 
allowable period. The provisional rates are scheduled to go into 
effect on February 1, 2004, subject to final approval by the 
Commission, and will remain in effect through December 31, 2008.

Comments

    During the public consultation and comment period, Western 
received four written comments pertaining to this rate adjustment. 
There were no comments during the August 6, 2003, public comment 
forum. All comments received by the end of the public consultation 
and comment period, September 11, 2003, were reviewed and considered 
in preparing this rate order. Written comments were received from: 
Loveland Area Customer Association, Kansas Electric Power 
Cooperative, Inc., Kansas Tri-State Generation and Transmission 
Association, Inc., Colorado Mni Sose Intertribal Water Rights 
Coalition, South Dakota.
    The comments received dealt with controlling purchased power 
costs, the two-step rate proposal, and the tiered rate of the P-
SMBP--ED. Comments that apply to P-SMBP only are being answered in 
the Rate Order No. WAPA-110. Comments and responses applicable to 
LAP, paraphrased for brevity, are discussed below.
    Comment: Western received three comments in support of 
implementing the two-step rate adjustment.
    Response: The two-step rate adjustment proposal meets all 
repayment requirements according to DOE Order RA 6120.2, and since 
the majority of the customers support the two-step rate adjustment, 
Western will implement the first step of the two-step rate 
adjustment on February 1, 2004, and the second step of the two-step 
rate adjustment on October 1, 2004.
    Comment: One commenter suggested that Western decrease its 
purchased power costs by not purchasing power to meet Western's 
commitment to the tribal customers in drought years. Instead, the 
commenter suggests that Western pay the Tribes a lump sum in the 
amount of the benefit they would have received from their power 
allocation.
    Response: Paying the Tribes in lieu of purchasing power to 
support delivery of Tribal allocations is outside the scope of this 
rate process. Western has the obligation under its existing LAP 
marketing plan and contracts to deliver firm power to customers.

Environmental Compliance

    Following the National Environmental Policy Act (NEPA) of 1969, 
42 U.S.C. 4321, et seq.; Council on Environmental Quality 
Regulations, 40 CFR 1500-1508; and DOE NEPA Regulations, 10 CFR 
1021, Western has determined that this action is categorically 
excluded from preparation of an environmental assessment or an 
environmental impact statement.

Determination Under Executive Order 12866

    Western has an exemption from centralized regulatory review 
under Executive Order 12866; so no clearance of this notice by the 
Office of Management and Budget is required.

Regulatory Flexibility Analysis

    The Regulatory Flexibility Act of 1980 (5 U.S.C. 601, et seq.) 
requires Federal agencies to perform a regulatory flexibility 
analysis if a final rule is likely to have a significant economic 
impact on a substantial number of small entities and there is a 
legal requirement to issue a general notice of proposed rulemaking. 
Western determined that this action does not require a regulatory 
flexibility analysis since it is a rulemaking involving rates or 
services for public property.

Small Business Regulatory Enforcement Fairness Act

    Western determined that this rule is exempt from congressional 
notification requirements under 5 U.S.C. 801 because the action is a 
rulemaking relating to rates or services and involves matters of 
procedure.

Availability of Information

    Information regarding this rate adjustment, including PRSs, 
comments, letters, memorandums, and other supporting material made 
or kept by Western for the purpose of developing the provisional 
rates, is available for public review in the Office of the Power 
Marketing Manager, Rocky Mountain Customer Service Regional Office, 
Western Area Power Administration, 5555 East Crossroads Boulevard, 
Loveland, Colorado, and in the Power Marketing Liaison Office, Room 
8G-027, 1000 Independence Avenue SW., Washington, DC.

Submission to the Federal Energy Regulatory Commission

    The rates herein confirmed, approved, and placed into effect on 
an interim basis, together with supporting documents, will be 
submitted to the Commission for confirmation and approval on a final 
basis.

Order

    In view of the foregoing and by the authority delegated to me by 
the Secretary, I confirm and approve on an interim basis, effective 
February 1, 2004, Rate Schedule L-F5 for LAP of Western. The rate 
schedule shall remain in effect on an interim basis, pending the 
Commission's confirmation and approval of them or substitute rates 
on a final basis through December 31, 2008.


[[Page 649]]


    Dated: December 24, 2003.

Kyle E. McSlarrow,
Deputy Secretary.

Loveland Area Projects, Colorado, Kansas, Nebraska, Wyoming; Schedule 
of Rates for Firm Electric Service

    Effective:
    First Step: Beginning on the first day of the first full billing 
period on or after February 1, 2004, through September 30, 2004.
    Second Step: Beginning on the first day of the first full 
billing period on or after October 1, 2004, through December 31, 
2008.
    Available:
    Within the marketing area served by the Loveland Area Projects.
    Applicable:
    To the wholesale power customers for firm power service supplied 
through one meter at one point of delivery, or as otherwise 
established by contract.
    Character:
    Alternating current, 60 hertz, three phase, delivered and 
metered at the voltages and points established by contract.
    Monthly Rates:
    First Step:
    Demand Charge: $3.08 per kilowatt (kW) of billing demand.
    Energy Charge: 11.72 mills per kilowatthour (kWh) of use.
    Billing Demand: Unless otherwise specified by contract, the 
billing demand will be the seasonal contract rate of delivery.
    Second Step:
    Demand Charge: $3.14 per kilowatt (kW) of billing demand.
    Energy Charge: 11.95 mills per kilowatthour (kWh) of use.
    Billing Demand: Unless otherwise specified by contract, the 
billing demand will be the seasonal contract rate of delivery.
    Adjustments:
    For Transformer Losses: If delivery is made at transmission 
voltage but metered on the low-voltage side of the substation, the 
meter readings will be increased to compensate for transformer 
losses as provided for in the contract.
    For Power Factor: None. The customer will be required to 
maintain a power factor at all points of measurement between 95-
percent lagging and 95-percent leading.

[FR Doc. 04-204 Filed 1-5-04; 8:45 am]
BILLING CODE 6450-01-P