[Federal Register Volume 70, Number 115 (Thursday, June 16, 2005)]
[Notices]
[Pages 35080-35082]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-11884]


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DEPARTMENT OF ENERGY

Western Area Power Administration


Pick-Sloan Missouri Basin Program--Eastern Division-Rate Order 
No. WAPA-126

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of proposed power rates.

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SUMMARY: The Western Area Power Administration (Western) is proposing 
revised rates for Pick-Sloan Missouri Basin Program--Eastern Division 
(P-SMBP--ED) firm electric and firm peaking power service. Current 
rates, under Rate Schedules P-SED-F7 and P-SED-FP7, extend through 
December 31, 2008. The proposed rates will provide sufficient revenue 
to pay all annual costs, including interest expense, and repayment of 
required investment within the allowable period. Western will prepare a 
brochure that provides detailed information on the rates to all 
interested parties. The proposed rates, under Rate Schedules P-SED-F8 
and P-SED-FP8, are scheduled to go into effect on January 1, 2006, and 
will remain in effect through December 31, 2010. Publication of this 
Federal Register notice begins the formal process for the proposed 
rates.

DATES: The consultation and comment period begins today and will end 
September 14, 2005. Western will present a detailed explanation of the 
proposed rates at public information forums. Public information forum 
dates are:
    1. July 19, 2005, 10 a.m. MDT, Denver, CO.
    2. July 20, 2005, 8 a.m. CDT, Lincoln, NE.
    3. July 20, 2005, 2 p.m. CDT, Sioux Falls, SD.
    4. July 21, 2005, 9 a.m. CDT, Fargo, ND.
    Western will accept oral and written comments at public comment 
forums. Public comment forums will be held on the following dates:
    1. August 16, 2005, 9 a.m. MDT, Denver, CO.
    2. August 17, 2005, 9 a.m. CDT, Sioux Falls, SD.
    Western will accept written comments any time during the 
consultation and comment period.

ADDRESSES: Send written comments to Robert J. Harris, Regional Manager, 
Upper Great Plains Region, Western Area Power Administration, 2900 4th 
Avenue North, Billings, MT 59101-1266, e-mail [email protected]. 
Western will post information about the rate process on its Web site at 
http://www.wapa.gov/ugp/rates/2006FirmRateAdj. Western will post 
official comments received via letter and e-mail to its Web site after 
the close of the comment period. Western must receive written comments 
by the end of the consultation and comment period to ensure they are 
considered in Western's decision process.
    Public information forum locations are:
    1. Denver--Radisson Stapleton Plaza, 3333 Quebec Street, Denver, 
CO.
    2. Lincoln--Peru State College Center, 1111 O Street, Lincoln, NE.
    3. Sioux Falls--Sheraton Hotel and Convention Center, 1211 West 
Avenue North, Sioux Falls, SD.
    4. Fargo--Doublewood Inn, 3333 13th Avenue South, Fargo, ND.
    Public comment forum locations are:
    1. Denver--Radisson Stapleton Plaza, 3333 Quebec Street, Denver, 
CO.
    2. Sioux Falls--Sheraton Hotel and Convention Center, 1211 West 
Avenue North, Sioux Falls, SD.

FOR FURTHER INFORMATION CONTACT: Mr. Jon R. Horst, Rates Manager, Upper

[[Page 35081]]

Great Plains Region, Western Area Power Administration, 2900 4th Avenue 
North, Billings, MT 59101-1266, telephone (406) 247-7444, e-mail 
[email protected].

SUPPLEMENTARY INFORMATION: Proposed rates for P-SMBP--ED firm electric 
and firm peaking service are designed to recover an annual revenue 
requirement that includes investment repayment, interest, purchase 
power, operation and maintenance expense, and other expenses. The 
projected annual revenue requirement for firm electric service is 
allocated equally between capacity and energy.
    The Deputy Secretary of Energy approved Rate Schedules P-SED-F7 and 
P-SED-FP7 for P-SMBP--ED firm electric and firm peaking service on 
December 24, 2003 (Rate Order No. WAPA-110, 69 FR 649, January 6, 
2004), and the Federal Energy Regulatory Commission (Commission) 
confirmed and approved the rate schedules on December 23, 2004, under 
FERC Docket No. EF04-5031-000 (109 FERC 62,234). Approval for Rate 
Schedules P-SED-F7 and P-FED-FP7 covered 5 years beginning on February 
1, 2004, ending on December 31, 2008.
    Under Rate Schedule P-SED-F7, the second step of the composite rate 
effective on October 1, 2004, is 16.51 mills per kilowatthour (mills/
kWh), the energy rate is 9.62 mills/kWh, and the capacity rate is $3.72 
per kilowattmonth (kWmonth). Under Rate Schedule P-SED-F8, Western is 
proposing a two-step rate adjustment. Under a two-step method, the 
rates for P-SMBP--ED firm electric service will result in an overall 
composite rate increase of about 11.9 percent effective January 1, 
2006, an additional 5.8 percent effective January 1, 2007, with a total 
compounded increase of about 18.4 percent. The proposed Firm Capacity 
and Firm Peaking Capacity rates will increase about 12.9 percent 
effective on January 1, 2006, an additional 6.0 percent effective 
January 1, 2007, with a total compounded increase of about 19.6 
percent. Proposed rates for P-SMBP--ED firm electric and firm peaking 
service are listed in Table 1.

                Table 1.--Two Step Proposal--Firm Electric Service Revenue Requirement and Rates
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                                                      First step rates    Percent   Second step rates   Percent
     Firm electric service         Existing rates       Jan. 1, 2006       change      Jan. 1, 2007      change
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P-SMBP-ED Revenue Requirement..  $160.1 million....  $179.4 million....       12.1  $189.9 million...        5.9
P-SMBP-ED Composite Rate.......  16.51 mills/kWh...  18.47 mills/kWh...       11.9  19.54 mills/kWh..        5.8
Firm Capacity..................  $3.72/kWmonth.....  $4.20/kWmonth.....       12.9  $4.45/kWmonth....        6.0
Firm Energy....................  9.62 mills/kWh....  10.69 mills/kWh...       11.1  11.29 mills/kWh..        5.6
Tiered 60 Percent Load Factor..  5.21 mills/kWh....  5.21 mills/kWh....        0.0  5.21 mills/kWh...        0.0
Firm Peaking Capacity..........  $3.72/kWmonth.....  $4.20/kWmonth.....       12.9  $4.45/kWmonth....        6.0
Firm Peaking Energy \1\........  9.62 mills/kWh....  10.69 mills/kWh...       11.1  11.29 mills/kWh..       5.6
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\1\ Firm Peaking Energy is normally returned. This rate will be assessed in the event Firm Peaking Energy is not
  returned.

    During informal information discussions, Western received requests 
from the Firm Peaking customers and others to reconsider the Firm 
Peaking rate design. Concern was expressed by the Firm Peaking 
customers and others in informal discussions for this rate adjustment 
as well as in past rate processes on assignment of costs associated 
with the drought. Firm Peaking customers and others have suggested some 
alternatives for consideration by Western. In response to those 
suggestions, Western prepared an alternative proposal, the Firm Peaking 
Capacity Design Alternative, for consideration and comment in this 
public process.
    Although the two-step rate adjustment in Table 1 is the option 
being proposed, maintaining equity among products and rates is in 
Western's interest. Therefore, Western is soliciting comments on equity 
among products and comments with supporting information for or against 
the Firm Peaking Capacity Design Alternative. In this alternative, the 
Firm Peaking Capacity rate is 13.9 percent less than the Firm Power 
Capacity rate. The impact on the Firm Power revenue requirement is 
approximately a 1-percent increase. The comparative changes in the 
rates between the proposed two-step rate adjustment and the Firm 
Peaking Capacity Design Alternative are described here: The Firm 
Capacity rate would increase from 12.9 percent to 16.1 percent in the 
first step and the second step would be an additional 6.0 percent in 
both proposals. The Firm Energy rate would remain the same with an 
11.1-percent increase in the first step and a 5.6-percent increase in 
the second step. The proposed rates provided under this alternative are 
included in Table 2.

                          Table 2.--Proposed--Firm Peaking Capacity Design Alternative
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                                                      First step rates    Percent   Second step rates   Percent
     Firm electric service         Existing rates       Jan. 1, 2006       change      Jan. 1, 2007      change
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P-SMBP--ED Revenue Requirement.  $160.1 million....  $179.4 million....       12.1  $189.9 million...        5.9
P-SMBP--ED Composite Rate......  16.51 mills/kWh...  18.71 mills/kWh...       13.3  19.79 mills/kWh..        5.8
Firm Capacity..................  $3.72/kWmonth.....  $4.32/kWmonth.....       16.1  $4.58/kWmonth....        6.0
Firm Energy....................  9.62 mills/kWh....  10.69 mills/kWh...       11.1  11.29 mills/kWh..        5.6
Tiered > Percent Load Factor...  5.21 mills/kWh....  5.21 mills/kWh....        0.0  5.21 mills/kWh...        0.0
Firm Peaking Capacity..........  $3.72/kWmonth.....  $3.72/kWmonth.....          0  $3.94/kWmonth....        5.9
Firm Peaking Energy 1..........  9.62 mills/kWh....  10.69 mills/kWh...       11.1  11.29 mills/kWh..       5.6
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1 Firm Peaking Energy is normally returned. This rate will be assessed in the event Firm Peaking Energy is not
  returned.


[[Page 35082]]

Legal Authority

    Since the proposed rates constitute a major rate adjustment as 
defined by 10 CFR part 903, Western will hold both public information 
forum and public comment forums. After review of public comments, and 
possible amendments or adjustments, Western will recommend the Deputy 
Secretary of Energy approve the proposed rates on an interim basis.
    Western is establishing the firm electric service rates for P-
SMBP--ED under the Department of Energy 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 projects involved.
    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 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 Commission. Existing Department of Energy 
(DOE) procedures for public participation in power rate adjustments (10 
CFR part 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 rates 
are available for inspection and copying at the Upper Great Plains 
Regional Office, located at 2900 4th Avenue North, Billings, MT. Many 
of these documents and supporting information are also available on its 
Web site under the ``2006 Firm Rate Adjustment'' section located at 
http://www.wapa.gov/ugp/rates/2006FirmRateAdj.

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 
(NEPA) (42 U.S.C. 4321, et seq.); Council on Environmental Quality 
Regulations (40 CFR parts 1500-1508); and DOE NEPA Regulations (10 CFR 
part 1021), Western has determined 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 of this notice 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 8, 2005.
Michael S. Hacskaylo,
Administrator.
[FR Doc. 05-11884 Filed 6-15-05; 8:45 am]
BILLING CODE 6450-01-P