[Federal Register Volume 69, Number 108 (Friday, June 4, 2004)]
[Notices]
[Pages 31608-31610]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-12714]


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DEPARTMENT OF ENERGY

Southwestern Power Administration


Integrated System Power Rates

AGENCY: Southwestern Power Administration, DOE.

ACTION: Notice of public review and comment.

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SUMMARY: The Administrator, Southwestern Power Administration 
(Southwestern), has prepared Current and Revised FY 2004 Power 
Repayment Studies which show the need for an increase in annual 
revenues to meet cost recovery criteria. Such increased revenues are 
needed primarily to cover increased investments and replacements in 
hydroelectric generating and high-voltage transmission facilities and 
increased operation and maintenance expenses. The Administrator has 
developed proposed Integrated System rates, which are supported by a 
rate design study, to recover the required revenues. Beginning January 
1, 2005, and thereafter, the proposed rates would increase annual 
system revenues approximately 8 percent from $114,973,800 to 
$124,012,497.

DATES: The consultation and comment period will begin on the date of 
publication of this Federal Register notice and will end September 2, 
2004.
    1. Public Information Forum--June 29, 2004, 9 a.m., Tulsa, OK
    2. Public Comment Forum--July 27, 2004, 9 a.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.

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: Established by Secretarial Order No. 1865 
dated August 31, 1943, Southwestern is an agency within the U.S. 
Department of Energy which was created by an Act of the U.S. Congress, 
entitled the Department of Energy Organization Act, Pub.L. 95-91, dated 
August 4, 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 
those of 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 Operations and Maintenance (O&M) power-related 
expenses for the U.S. Army's Corps of Engineers and increased 
investments in the hydroelectric generating facilities. The Revised 
Power Repayment Study shows that additional annual revenues of 
$9,038,697, (an 8 percent increase),

[[Page 31609]]

beginning January 1, 2005, 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 general conformance with 
FERC Order No. 888. The proposed new rates would increase estimated 
annual revenues from $114,973,800 to $124,012,497 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 
energy 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 
is also an increased charge 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 
kilowatt hour (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-02    Rate Schedule P-04
                              (System Peaking)      (System Peaking)
Capacity
    Grid or 138-161kV.......  $2.72/kW/Mo + up to   $2.73/kW/Mo + up to
                               $0.0112/kW/Mo         $0.0112/kW/Mo
                               (ancillary            ancillary services)
                               services) for         for generation
                               generation within     within control
                               control area:         area:
                              Regulatory Ancillary  Regulation Ancillary
                               Services +$0.06/kW/   Services +$0.07/kW/
                               Mo for deliveries     Mo for deliveries
                               within control        within control
                               area, + Reserve       area, + Reserve
                               Ancillary Services:   Ancillary Services:
                               up to $0.0112/kW/Mo   up to: $0.0154/kW/
                               for generation in     Mo for generation
                               control area          in control area.
    69 kV...................  Transformation        Transformation
                               Service               Service+
                              + $0.28/kW/Mo         + $0.30/kW/Mo
                              (applied to usage,    (applied to usage,
                               not reservation)      not reservation)
Energy......................  $0.005/kWh of         $0.0082/kWh of
                               Peaking Energy +      Peaking Energy +
                               $0.005/kWh of         $0.005/kWh of
                               Supplemental          Supplemental
                               Peaking Energy + a    Peaking Energy + a
                               Purchased Power       Purchased Power
                               Adder of $0.0025 of   Adder of $0.0028 of
                               Peaking Energy        Peaking Energy
                               (         (
                               0.0011 annually at    0.0011 annually at
                               Administrator's       Administrator's
                               discretion)           discretion).
     TRANSMISSION RATES        Rate Schedule NFTS-   Rate Schedule NFTS-
                                        02                    04
                              (Transmission)        (Transmission)
Capacity (Firm Reservation
 with energy)
    Grid or 138-161 kV......  $0.73/kW/Mo           $0.84/kW/Mo.
                              $0.183/kW/Week        $0.210/kW/Week.
                              $0.0332/kW/Day        $0.0382/kW/Day.
                              + Required Ancillary  + Required Ancillary
                               Services:             Services:
                              $0.08/kW/Mo, or       $0.08/kW/Mo, or
                               $0.021/kW/Week, or    $0.021/kW/Week, or
                               $0.0037/kW/Day        $0.0037/kW/Day.
                              + Reserve Ancillary   + Reserve Ancillary
                               Services:             Services:
                              up to: $0.0112/kW/    up to: $0.0154/kW/
                               mo, or $0.0028/kW/    Mo, or $0.0038/kW/
                               Week, or $0.0005/kW/  week, or $0.0007/kW/
                               day, for generation   day, for generation
                               in control area       in control area
                              + Regulation & Freq   + Regulation & Freq
                               Response Ancillary    Response Ancillary
                               Service               Service
                              up to: $0.06/kW/Mo,   up to: $0.07/kW/Mo,
                               or $0.015/kW/Week,    or $0.018/kW/Week,
                               or $0.0027/kW/Day,    or $0.0032/kW/Day,
                               for deliveries        for deliveries
                               within control area   within control
                                                     area.
    69 kV and below.........  Transformation        Transformation
                               Service + $0.28/kW/   Service + $0.30/kW/
                               Mo no separate        Mo no separate
                               charge (applied on    charge (applied on
                               usage, not            usage, not
                               reservation.)         reservation) Weekly
                               Weekly and daily      and daily rates not
                               rates not applied     applied.
Capacity Non-firm with        no separate capacity  no separate capacity
 energy):.                     charge, 80% of firm   charge, 80% of firm
                               monthly charge        monthly charge
                               divided by 4 for      divided by 4 for
                               weekly rate,          weekly rate,
                               divided by 22 for     divided by 22 for
                               daily rate, and       daily rate, and
                               divided by 352 for    divided by 352 for
                               hourly rate           hourly rate.
Network Service.............  $0.73/kW/Mo of        $0.84/kW/Mo of
                               Network Load +        Network Load +
                               Required Ancillary    Required Ancillary
                               Services:             Services:
                              $0.08/kW/Mo, or       $0.08/kW/Mo, and/or
                              + Reserve Ancillary   + Reserve Ancillary
                               Services: up to:      Services: up to:
                               $0.00112/kW/Mo, for   $0.00154/kW/Mo, for
                               generation in         generation in
                               control area          control area
                              + Regulation & Freq   + Regulation & Freq
                               Response Ancillary    Response Ancillary
                               Service up to:        Service up to:
                               $0.06/kW/Mo, for      $0.07/kW/Mo, for
                               deliveries within     deliveries within
                               control area          control area.
                               Rate Schedule EE-02   Rate Schedule EE-04
                              (Excess Energy)       (Excess Energy)

[[Page 31610]]

 
Energy......................  $0.005/kWh + $0.0021/ $0.005/kWh + $0.0024/
                               kWh (transmission)    kWh (transmission)
                               + required            + required
                               ancillary services    ancillary services
                               $0.00023/kWh +        $0.00023/kWh +
                               $0.00004/kWh          $0.00004/kWh
                               (ancillary service)   (ancillary service)
                               for generation in     for generation in
                               control area +        control area +
                               $0.00013/kWh          $0.0002/kWh
                               (ancillary service)   (ancillary service)
                               for deliveries in     for deliveries in
                               control area          control area.
------------------------------------------------------------------------

    Opportunity is presented for Southwestern's 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 on June 29, 2004, to 
explain to the public the proposed rates and supporting studies. The 
proceeding will be transcribed. A chairman, who will be responsible for 
orderly procedure, will conduct the Forum. 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.
    Persons interested in attending the Public Information Forum should 
indicate in writing (address cited above) by letter or facsimile 
transmission (918-595-6656) by June 22, 2004, their intent to appear at 
such Forum. If no one so indicates his or her intent to attend, no such 
Forum will be held.
    A Public Comment Forum is scheduled on July 27, 2004, 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. A chairman, who will be responsible 
for orderly procedure, will conduct the Forum. 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 (address cited 
above) or facsimile transmission (918-595-6656) by July 20, 2004, their 
intent to appear at such Forum. If no one so indicates his or her 
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 seven (7) calendar 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, for a fee, from the transcribing service. Copies of 
all documents introduced will also be available from the transcribing 
service upon request for a fee. Ten copies of all written comments, 
together with a diskette or compact disk in MS Word, on the proposed 
Integrated System Rates are due on or before September 2, 2004. 
Comments should be submitted to Forrest E. Reeves, Assistant 
Administrator, Southwestern, at the above-mentioned address for 
Southwestern's offices.
    Following review of the oral and written comments and the 
information gathered in the course of the proceedings, the 
Administrator will submit the finalized Integrated System Rate 
Proposal, Power Repayment Studies, and Rate Design Study in support of 
the proposed rates to the Deputy Secretary of Energy for confirmation 
and approval on an interim basis, and subsequently to the Federal 
Energy Regulatory Commission (Commission) for confirmation and approval 
on a final basis. The Commission 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 21st day of May 2004.
Michael A. Deihl,
Administrator.
[FR Doc. 04-12714 Filed 6-3-04; 8:45 am]
BILLING CODE 6450-01-P