[Federal Register Volume 70, Number 157 (Tuesday, August 16, 2005)]
[Notices]
[Pages 48121-48123]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-16190]


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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 2005 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, 2006, and 
thereafter, the proposed rates would increase annual system revenues 
approximately 7.1 percent from $124,552,200 to $133,342,029.

DATES: The consultation and comment period will begin on the date of 
publication of this Federal Register notice and will end November 14, 
2005.
    1. Public Information Forum--August 30, 2005, 9 a.m., Tulsa, OK.
    2. Public Comment Forum--September 29, 2005, 9 a.m., Tulsa, OK.

ADDRESSES: The forums will be held in Southwestern's offices, Room 
1460, Williams Center Tower I, One West Third Street, Tulsa, Oklahoma 
74103.

[[Page 48122]]


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: Originally 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 entitled 
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 part 903). 
Procedures for the confirmation and approval of rates for the Federal 
Power Marketing Administrations are found at title 18, part 300, 
subpart L of the Code of Federal Regulations (18 CFR part 300).
    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. Southwestern's 
operations and maintenance expenses have also increased from the 
previous power repayment studies. The Revised Power Repayment Study 
shows that additional annual revenues of $8,789,829, (a 7.1 percent 
increase), beginning January 1, 2006, 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 Nos. 888 (A-C). The proposed new rates would increase 
estimated annual revenues from $124,552,200 to $133,342,029 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 power 
sales capacity and 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.
    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 discretion 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-04   Rate Schedule P-05
                              (System Peaking)....  (System Peaking)
-----------------------------
Capacity:
Grid or 138-161kV...........  $2.73/kW/Mo + $0.08/  $3.03/kW/Mo + $0.09/
                               kW/Mo (ancillary      kW/Mo (ancillary
                               services) for         services) for
                               generation within     generation within
                               control area:         control area:
                               Regulation            Regulation
                               Ancillary Services    Ancillary Services
                               +$0.07/kW/Mo for      +$0.08/kW/Mo for
                               deliveries within     deliveries within
                               control area +        control area +
                               Reserve Ancillary     Reserve Ancillary
                               Services: up to:      Services: up to:
                               $0.0154/kW/Mo for     $0.0158/kW/Mo for
                               generation in         generation in
                               control area.         control area.
                             -----------------------
                                        Transformation Service
                             -----------------------
69 kV.......................  + $0.30/kW/Mo         + $0.30/kW/Mo
                               (applied to usage,    (applied to usage,
                               not reservation).     not reservation)
                              $0.008/kWh of         $0.0082/kWh of
                               Peaking Energy +.     Peaking Energy +
Energy......................  $0.0051/kWh of        $0.0055/kWh of
                               Supplemental          Supplemental
                               Peaking Energy + a    Peaking Energy + a
                               Purchased Power       Purchased Power
                               Adder of $0.0028 of   Adder of $0.0029 of
                               Peaking Energy        Peaking Energy
                               ($0.0011         minus>$0.0011
                               annually at           annually at
                               Administrator's       Administrator's
                               discretion).          discretion)
-----------------------------
     Transmission Rates        Rate Schedule NFTS-   Rate Schedule NFTS-
                                        04                    05
                              (Transmission)......  (Transmission)
-----------------------------
Capacity (Firm Reservation
 with energy):

[[Page 48123]]

 
Grid or 138-161 kV..........  $0.85/kW/Mo $0.2125/  $0.90/kW/Mo $0.225/
                               kW/Week $0.0386/kW/   kW/Week $0.0409/kW/
                               Day + Required        Day + Required
                               Ancillary Services:   Ancillary Services:
                               $0.08/kW/Mo, or       $0.09/kW/Mo, or
                               $0.021/kW/Week, or    $0.023/kW/Week, or
                               $0.0037/kW/Day +      $0.0041/kW/Day +
                               Reserve Ancillary     Reserve Ancillary
                               Services: up to:      Services: up to:
                               $0.0154/kW/Mo, or     $0.0158/kW/Mo, or
                               $0.0038/kW/Week, or   $0.00395/kW/week,
                               $0.0007/kW/day, for   or $0.00072/kW/day,
                               generation in         for generation in
                               control area +        control area +
                               Regulation & Freq.    Regulation & Freq.
                               Response Ancillary    Response Ancillary
                               Service: up to:       Service: up to:
                               $0.07/kW/Mo, or       $0.08/kW/Mo, or
                               $0.018/kW/Week, or    $0.020/kW/Week, or
                               $0.0032/kW/Day, for   $0.0036/kW/Day, for
                               deliveries within     deliveries within
                               control area.         control area.
                             -----------------------
                                        Transformation Service
                             -----------------------
69 kV and below.............  + $0.30/kW/Mo no      + $0.30/kW/Mo no
                               separate charge       separate charge
                               (applied on usage,    (applied on usage,
                               not reservation)      not reservation)
                               Weekly and daily      Weekly and daily
                               rates not applied.    rates not 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.............  $0.85/kW/Mo of        $0.90/kW/Mo of
                               Network Load +        Network Load +
                               Required Ancillary    Required Ancillary
                               Services: $0.08/kW/   Services: $0.09/kW/
                               Mo, and/or +          Mo, and/or +
                               Reserve Ancillary     Reserve Ancillary
                               Services: up to:      Services: up to:
                               $0.00154/kW/Mo, for   $0.00158/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:
                               $0.07/kW/Mo, for      $0.08/kW/Mo, for
                               deliveries within     deliveries within
                               control area.         control area.
-----------------------------
                               Rate Schedule EE-04   Rate Schedule EE-05
                              (Excess Energy).....  (Excess Energy)
Energy......................  $0.0051/kWh.........  $0.0055/kWh.
------------------------------------------------------------------------

    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 August 30, 2005, 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, email or facsimile 
transmission (918-595-6656) by August 22, 2005, 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 September 29, 2005, 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 (address cited above) by 
letter, e-mail or facsimile transmission (918-595-6656) by September 
20, 2005, 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 November 14, 2005. 
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.

    Dated: August 5, 2005.
Michael A. Deihl,
Administrator.
[FR Doc. 05-16190 Filed 8-15-05; 8:45 am]
BILLING CODE 6450-01-P