[Federal Register Volume 69, Number 119 (Tuesday, June 22, 2004)]
[Notices]
[Pages 34667-34669]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-14081]


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DEPARTMENT OF ENERGY

Western Area Power Administration


Parker-Davis Project, Pacific Northwest-Pacific Southwest 
Intertie Project, and the Central Arizona Project

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of proposed rates.

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SUMMARY: The Western Area Power Administration (Western) is initiating 
a rate adjustment process for a firm transmission rate for Projects in 
the Desert Southwest Customer Service Region. The multi-system 
transmission rate (MSTR) will apply to three transmission systems: the 
Parker-Davis Project (P-DP), the Pacific Northwest-Pacific Southwest 
Intertie Project (Intertie), and the Central Arizona Project (CAP) for 
rate purposes. The proposed MSTR will provide sufficient revenue to pay 
all annual costs, including interest expense and repayment of required 
investment, within the allowable period for the three transmission 
systems. A detailed rate brochure that identifies the reasons for 
proposing a multi-system transmission rate is available on Western's 
Web site (http://www.wapa.gov/dsw/pwrmkt/MSTRP/MSTRP.htm). The proposed 
MSTR is scheduled to become effective on January 1, 2005, and will 
remain in effect through December 31, 2009. Publication of this Federal 
Register notice initiates the formal process for the proposed rate 
adjustment.

DATES: The consultation and comment period will begin today and will 
end September 20, 2004. Western representatives will explain the 
proposed MSTR at a public information forum on July 14, 2004, beginning 
at 10 a.m. MST, in Phoenix, AZ. Western will receive oral and written 
comments at a public comment forum on August 11, 2004, beginning at 10 
a.m. MST, in Phoenix, AZ.

ADDRESSES: Written comments should be sent to: Mr. J. Tyler Carlson, 
Regional

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Manager, Desert Southwest Customer Service Region, Western Area Power 
Administration, PO Box 6457, Phoenix, AZ 85005-6457, e-mail 
[email protected]. Western must receive written comments by the end of 
the consultation and comment period to ensure they are considered in 
Western's decision process. The public information forum and public 
comment forum will be held at: Desert Southwest Customer Service 
Regional Office, located at 615 South 43rd Avenue, Phoenix, Arizona.

FOR FURTHER INFORMATION CONTACT: Mr. Jack Murray, Rates Team Lead, 
Desert Southwest Customer Service Region, Western Area Power 
Administration, PO Box 6457, Phoenix, AZ 85005-6457, telephone (602) 
352-2442, e-mail: [email protected].

SUPPLEMENTARY INFORMATION: 

Proposed Multi-System Transmission Rate

    The proposed MSTR is designed to recover an annual revenue 
requirement that includes the annual transmission costs for P-DP, 
Intertie, and CAP, including investment repayment. The MSTR will be 
determined by the total transmission Revenue Requirements from each of 
the three projects divided by the total system reservations and 
estimates of network sales for the three projects. A stepped rate will 
be applied during the first 5 years to mitigate the cost shift to those 
customers who do not have concurrent service over two or more Projects 
(termed pancaked service). This stepped rate will be determined as 
follows: DSW will calculate a target rate to be achieved in the fifth 
year following the effective date of the MSTR. The single system 
transmission rate (SSTR) for each Project in the first 4 years will be 
the prior year rate increased/decreased each year by an amount equal to 
25 percent of the difference between the target rate and the rate in 
effect in the year prior to the MSTR effective date. In the fifth year, 
all projects will pay the target rate. The stepped rate is illustrated 
in Table 1. The total revenue collected during the 5 years will be 
adequate to meet all expenses of each Project during the 5-year period.

                                                  Table 1.--Comparison of SSTR to MSTR for Rate Period
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                                              P-DP                     CAP               IP 230/345-kV            IP 500-kV             Multi-System
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FY 2004............................  $1.08 /kW-Mo..........  $0.82 /kW-Mo..........  $1.00 /kW-Mo.........  $1.44 /kW-Mo.........  n/a
FY 2005............................  1.11 /kW-Mo...........  0.82 /kW-Mo...........  1.00 /kW-Mo..........  1.44 /kW-Mo..........  n/a
FY 2006............................  1.12 /kW-Mo...........  0.90 /kW-Mo...........  1.04 /kW-Mo..........  1.37 /kW-Mo..........  n/a
FY 2007............................  1.13 /kW-Mo...........  0.99 /kW-Mo...........  1.08 /kW-Mo..........  1.30 /kW-Mo..........  n/a
FY 2008............................  1.14 /kW-Mo...........  1.07 /kW-Mo...........  1.11 /kW-Mo..........  1.22 /kW-Mo..........  n/a
FY 2009............................  1.15 /kW-Mo...........  1.15 /kW-Mo...........  1.15 /kW-Mo..........  1.15 /kW-Mo..........  1.15 /kW-Mo
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    The rate will be effective on January 1, 2005, and will remain in 
effect through December 31, 2009. Schedules will be updated every 
fiscal year on October 1, to reflect current financial and load data. 
The target rate may be changed as a result of the yearly update to 
ensure revenues collected over the 5 year period will be adequate to 
meet all expenses for each project. The MSTR will supersede each 
Project's SSTR. Revenue derived from the MSTR will be allocated to the 
Projects based on each individual Project's percentage of the MSTR 
revenue requirement.
    Firm Electric Service (FES) and Priority Use Power (PUP) customers 
who take service under existing marketing plans will continue to 
receive a bundled product which includes an appropriate transmission 
component charge. The FES or PUP customers that choose to take 
advantage of the broader MSTR transmission service will pay the MSTR. 
In the near term and in accordance with the existing contractual 
commitments, FES and PUP customers that continue to take limited 
service delivery solely on the P-DP system will receive a credit for 
the difference between the MSTR and the transmission component of the 
P-DP bundled Power rate.

Procedural Requirements

    Western will hold both a public information forum and a public 
comment forum. After a review of public comments, possible amendments 
or adjustments, Western will recommend the Deputy Secretary of Energy 
approve the proposed MSTR on an interim basis. The proposed MSTR is 
being established pursuant to the DOE Organization Act, (42 U.S.C. 
7152); 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 
that specifically apply to the P-DP, Intertie, and CAP transmission 
projects.
    By Delegation Order No. 00'037.00 approved December 6, 2001, the 
Secretary of Energy delegated: (1) The authority to develop power and 
transmission rates on a nonexclusive basis to Western's Administrator; 
(2) the authority to confirm, approve, and place such rates into effect 
on an interim basis to the Deputy Secretary of Energy; and (3) the 
authority to confirm, approve, and place into effect on a final basis, 
to remand, or to disapprove such rates to the Federal Energy Regulatory 
Commission. Existing DOE procedures for public participation in power 
rate adjustments (10 CFR 903) were published on September 18, 1985 (50 
FR 37835).

Availability of Information

    All brochures, studies, comments, letters, memorandums, or other 
documents that Western initiates or uses to develop the proposed MSTR, 
are available for inspection and copying at the Desert Southwest 
Customer Service Regional Office, located at 615 South 43rd Avenue, 
Phoenix, Arizona. Many of these documents and supporting information 
are also available on the DSW Web site at: http://www.wapa.gov/dsw/pwrmkt/MSTRP/MSTRP.htm.

Regulatory Procedure Requirements

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. 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.

Environmental Compliance

    In compliance with the National Environmental Policy Act of 1969

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(NEPA) (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 
preparing 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; accordingly, no clearance by the Office of 
Management and Budget is required.

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.

    Dated: June 7, 2004.
Michael S. Hacskaylo,
Administrator.
[FR Doc. 04-14081 Filed 6-21-04; 8:45 am]
BILLING CODE 6450-01-P