[Federal Register Volume 69, Number 85 (Monday, May 3, 2004)]
[Notices]
[Pages 24151-24153]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-9967]


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DEPARTMENT OF ENERGY

Western Area Power Administration


Amistad and Falcon Projects Rate Order No. WAPA-111

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of order concerning a power rate formula.

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SUMMARY: The Deputy Secretary of the Department of Energy (DOE) 
confirmed and approved Rate Order No. WAPA-111 placing a power rate 
formula for the Amistad and Falcon Projects of the Western Area Power 
Administration (Western) into effect on an interim basis. The 
provisional power rate formula will remain in effect on an interim 
basis until the Federal Energy Regulatory Commission (Commission) 
confirms, approves, and places it into effect on a final basis, or 
until the power rate formula is replaced by another power rate formula.

DATES: The provisional rate formula extension will be placed into 
effect on an interim basis on June 8, 2004, and will be in effect until 
the Commission confirms, approves, and places the provisional rate 
formula extension into effect on a final basis for a 5-year period 
ending June 7, 2009, or until superseded.

FOR FURTHER INFORMATION CONTACT: Mr. Bradley S. Warren, CRSP Manager, 
Colorado River Storage Project Management Center, Western Area Power 
Administration, P.O. Box 11606, Salt Lake City, UT 84147-0606, (801) 
524-5493, e-mail [email protected], or Ms. Carol Loftin, Rates Manager, 
Colorado River Storage Project Management Center, Western Area Power 
Administration, P.O. Box 11606, Salt Lake City, UT 84147-0606, 
telephone (801) 524-6380, e-mail [email protected].

SUPPLEMENTARY INFORMATION: The Amistad and Falcon Dams are features of 
international water storage projects located on the Rio Grande River 
between Texas and Mexico. Western markets the power from these dams 
under the terms of Contract No. 7-07-50-P0890 (Contract) dated August 
9, 1977, and amended on April 10, 1986. The rate formula of that 
Contract was approved by the Federal Power Commission (FPC), 
predecessor to the Commission, for a 5-year period beginning with the 
date of initial operation of Amistad Power Plant, in Docket No. E-9566 
on August 12, 1977. A 5-year rate extension approving this same rate 
formula through June 7, 1993, was ordered by the Commission on July 20, 
1988, in 44 FERC 62,058. Subsequent 5-year renewals of the rate formula 
have been approved by the Commission. The most recent approval was on 
January 21, 2000, in Docket No. EF-99-5101-000, which approved the same 
power rate formula through June 7, 2004.
    According to article 9(a) of the Contract, Western calculates the 
annual installment to be paid by the South Texas Electric Cooperative, 
Inc. (STEC), and the Medina Electric Cooperative, Inc. (MEC), for the 
power generated at the Amistad and Falcon power plants on or before 
August 31 of the year preceding the fiscal year to which it pertains. 
Each annual installment pays the annual amortized portion of the United 
States' investment in the Amistad and Falcon hydroelectric facilities 
with interest, and the associated operation, maintenance, and 
administrative costs. This repayment schedule is not dependent upon the 
power and energy made available for sale or the rate of generation each 
year. Western will continue to provide STEC/MEC with a revised Exhibit 
A by August 31 of each year using the same methodology.
    By Delegation Order No. 00-037.00, effective December 6, 2001, the 
Secretary of Energy delegated: (1) The authority to develop power and 
transmission rates to Western's Administrator; (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 (10 CFR 903) were published on 
September 18, 1985 (50 FR 37835).
    Pursuant to Delegation Order Nos. 00-037.00 and 00-001.00A, 10 CFR 
part 903, and 18 CFR part 300, I hereby confirm, approve, and place 
Rate Order No. WAPA-111 into effect on an interim basis. The extension 
of the rate formula will be promptly submitted to the Commission for 
confirmation and approval on a final basis.

    Dated: April 20, 2004.
Kyle E. McSlarrow,
Deputy Secretary.

Order Confirming, Approving, and Placing a Rate Formula Extension for 
Amistad and Falcon Projects Into Effect on an Interim Basis

    The Western Area Power Administration (Western) developed this 
power rate formula under the Department of Energy Organization Act (42 
U.S.C. 7152). This Act transferred 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 enactments, particularly section 9(c) of the 
Reclamation Act of 1939, (43 U.S.C. 485h(c)), and other Acts 
specifically applicable to the Amistad Project and the Falcon Project, 
to the Secretary.
    By Delegation Order No. 00-037.00, effective December 6, 2001, the 
Secretary of Energy delegated: (1) The authority to develop power and 
transmission rates to Western's Administrator; (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 (10 CFR 903) were published on 
September 18, 1985 (50 FR 37835).

Acronyms and Definitions

    As used in this rate order, the following acronyms and definitions 
apply:

    Commission: Federal Energy Regulatory Commission.
    Contract: Contract No. 7-07-50-P0890 dated August 9, 1977, and 
amended on

[[Page 24152]]

April 10, 1986, between Western, STEC, and MEC, for firm power.
    Customers: STEC and MEC.
    DOE: Department of Energy.
    DOE Order RA 6120.2: An order dealing with power marketing 
administration financial reporting used in determining revenue 
requirements for rate development.
    FPC: Federal Power Commission.
    FY: Fiscal year; October 1 to September 30.
    kWh: Kilowatthour.
    MEC: Medina Electric Cooperative, Inc.
    Mills/kWh: Mills per kilowatthour.
    NEPA: National Environmental Policy Act of 1969 (42 U.S.C. 4321, et 
seq.).
    O&M: Operation and maintenance.
    PRS: Power repayment study.
    Reclamation: Bureau of Reclamation, U.S. Department of the 
Interior.
    Secretary: Secretary of Energy.
    STEC: South Texas Electric Cooperative, Inc.
    U.S. Section: U.S. Section of the International Boundary and Water 
Commission.
    Western: Western Area Power Administration, U.S. Department of 
Energy.

Effective Date

    This power rate formula will become effective on an interim basis 
on June 8, 2004, and will be in effect pending the Commission's 
approval of this or a substitute rate formula on a final basis for a 5-
year period through June 7, 2009, or until superseded.

Public Notice and Comment

    Paragraph 903.23(a) of 10 CFR 903 does not require either a 
consultation and comment period, or public information or comment 
forums for rate extensions. The Customers have expressed their desire 
to continue using the rate formula through correspondence and letters 
of concurrence dated December 9, 2003. In addition, on March 17, 2004, 
Western met with the Customers in San Antonio, Texas, where Western 
notified them of its intent to continue the power rate formula. Western 
also discussed the number of years covered in the annual installments, 
operation and maintenance funding, answered questions, and received 
comments and suggestions. The customers expressed support to continue 
the power rate formula.

Project Description

    The Amistad and Falcon Dams are features of international water 
storage projects located on the Rio Grande River between Texas and 
Mexico. Western markets the power from these dams under the terms of 
the Contract.
    On August 12, 1977, in Docket No. E-9566, the FPC approved for a 5-
year period the rate formula contained in the Contract between 
Reclamation and the two electric cooperatives, to become effective on 
the date of initial operation of Amistad Power Plant (June 8, 1983). 
The Customers agreed to purchase the output of the Amistad and Falcon 
Power Plants for a 50-year period, beginning when initial electric 
service became available from Amistad. The cooperatives agreed to take 
all Amistad and Falcon power and to pay the United States an annual 
installment as discussed in the Contract.
    The power marketing functions of Reclamation were transferred to 
Western on October 1, 1977, and Western became responsible for the 
administration of the above Contract.
    Western and the Customers executed Supplement No. 1 to the Contract 
on April 10, 1986, to clarify the method for determining the annual 
installment consistent with DOE Order No. RA 6120.2. Those 
clarifications address repayment of Falcon hydroelectric facilities 
within the remaining period, establish interest during construction at 
7 percent, capitalize major replacements and additions at current 
interest rates, and specify the actual date of initial service as June 
8, 1983.
    Supplement No. 1 requires the amount of each annual installment be 
established in advance by the contracting officer in consultation with 
the U.S. Section and submitted to the cooperatives as Exhibit A on or 
before August 31 of the year preceding the appropriate fiscal year in 
accordance with the following:
    The amount of each annual installment shall be the sum of:

    (1) An annual repayment installment including interest, to 
amortize within the remaining period, the unpaid United States 
investment in the Falcon hydroelectric facilities and in the 
penstocks at Amistad Dam; plus
    (2) An annual installment to amortize over a 50-year period, the 
United States actual total investment costs with interest, for 
hydroelectric power facilities, not including penstocks, at Amistad 
Dam to be under the jurisdiction of the U.S. Section, including the 
costs of engineering plans, supervision, administration of 
construction, and interest during construction * * * and
    (3) The annual operation, maintenance, replacement, and 
administration costs of the U.S. Section and the administration 
costs of Western related directly or indirectly to the United States 
power facilities at Amistad Dam and at Falcon Dam, provided that 
such costs shall be based on prudent and businesslike management 
practices and in accordance with established electric industry 
operation and maintenance practices * * *.

    The billing procedures contained in Supplement No. 1 require 
Western to submit bills to the cooperatives for each monthly payment on 
the annual installment on or before the tenth day of the month for 
which such payment is due. Payments are due and payable by the 
cooperatives on the first day of the following month. Western divides 
the calculated annual installment by 12 and bills the customer monthly 
for this amount.
    The rate formula of that Contract was approved by the FPC, for a 5-
year period beginning with the date of initial operations of Amistad 
Power Plant, and subsequent 5-year renewals of the rate formula have 
been approved by the Commission through June 2004.
    Consequently, Commission approval is now sought for an additional 
5-year period. The effective date is scheduled to be June 8, 2004, 
through June 7, 2009.

Power Repayment Studies

    The Contract requires that Western calculate the annual installment 
to be paid by the customers for the power generated at the Amistad and 
Falcon Power Plants, in consultation with the U.S. Section, and submit 
it to STEC and MEC in the form of a contract exhibit on or before 
August 31 of the year preceding the FY to which it pertains.
    Western calculates the annual installment based on 2 years of data. 
The calculation includes the projected costs of the rate installment 
year (future fiscal year) and an adjustment from the last historic 
fiscal year. The adjustment is the surplus or deficit that occurs in 
the last historic year when actual costs and repayment obligations are 
subtracted from actual revenues. This surplus or deficit is combined 
with the projected rate installment year costs to arrive at the rate 
installment.

Statement of Revenue and Related Expenses

    The following table provides a summary of revenues and expenses for 
the current 6-year rate formula and the actual revenues and expenses 
for the same period.

[[Page 24153]]



               Amistad/Falcon.--Comparison of 6-year Revenues and Expenses, FY 1999-2004 ($1,000)
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                                                                  Projected from  Actual from FY
                              Item                                  FY 1998 PRS    2003 PRS \1\     Difference
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Total Revenues..................................................          20,550         26,057           5,507
Revenues Distribution:
    O&M.........................................................           4,912         11,839           6,927
    Interest....................................................          13,022         10,558          (2,464)
    Repayment...................................................           2,616          4,268           1,652
    (Deficit)/Surplus...........................................  ..............           (608)           (608)
                                                                 -----------------
        Total Revenue Distribution..............................          20,550         26,057          5,507
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\1\ FY 2004 is estimated but still included in this chart as actual data, since it is the basis of the FY04
  installment.

    The following table provides a summary of the projected revenues 
and expenses during the provisional rate formula period.

 Amistad/Falcon.--6-year Projections \1\ Revenues and Expenses ($1,000)
------------------------------------------------------------------------
                                                           FY 2004-2009
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Total Revenues..........................................          28,825
Revenue Distribution:
  O&M...................................................          14,479
  Interest..............................................          11,629
  Investment Repayment..................................           2,717
                                                         ---------------
      Total.............................................         28,825
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\1\ Although this rate process seeks approval for a 5-year period (FY
  2005-2009), 6 years of data are shown in the above table because FY
  2004 data is estimated.

Environmental Compliance

    In compliance with 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 
the preparation of an environmental assessment or environmental impact 
statement.

Determination Under Executive Order 12866

    Western has an exemption from centralized regulatory review under 
Executive Order 12866; accordingly, 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 has 
determined that this action does not require a regulatory flexibility 
analysis since it is a rulemaking of particular applicability involving 
rates or services applicable to public property.

Small Business Regulatory Enforcement Fairness Act

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

Availability of Information

    Information regarding this rate formula extension is available for 
public review in the Colorado River Storage Project Management Center, 
Western Area Power Administration, 150 East Social Hall Avenue, Suite 
300, Salt Lake City, UT 84111. Some of these documents are also 
available at http://www.wapa.gov/crsp/rateanal.htm under CRSP Rate 
Adjustment documents for the Amistad and Falcon Projects section.

Submission to Federal Energy Regulatory Commission

    The rate formula extension 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 pursuant to the authority delegated to 
me, I confirm and approve and place into effect on an interim basis a 
renewal of the rate formula provisions contained in the Contract and 
supplemented. The rate formula has been in effect since June 8, 1999. 
The rate formula provisions shall remain in effect on an interim basis, 
pending the Commission's confirmation and approval of this or a 
substitute rate formula on a final basis through June 7, 2009.

    Dated: April 20, 2004.
Kyle E. McSlarrow,
Deputy Secretary.
[FR Doc. 04-9967 Filed 4-30-04; 8:45 am]
BILLING CODE 6450-01-P