[Federal Register Volume 70, Number 245 (Thursday, December 22, 2005)]
[Notices]
[Pages 76069-76074]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-24352]


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DEPARTMENT OF THE INTERIOR

Bureau of Reclamation


Pick-Sloan Missouri Basin Program (P-SMBP), Eastern and Western 
Division Proposed Project Use Power Rate

AGENCY: Bureau of Reclamation, Interior.

[[Page 76070]]


ACTION: Approval of new rate for Pick-Sloan Missouri Basin Program, 
Eastern and Western Division Project Use Power

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SUMMARY: The Bureau of Reclamation (Reclamation) determined, after 
public input, that the proposed P-SMBP project use power rate of 12.55 
mills per kilowatt-hour (kWh) is approved and will become effective 30 
days after this notice is published.

DATES: Effective Date: The P-SMBP project use power rate of 12.55 
mills/kWh will become effective 30 days after this notice is published.
    Explanation of Public Comment Format: Reclamation, by Federal 
Register Notice (FRN) dated April 29, 2005, stated its intent to adjust 
the project use power rate with a 30-day written comment period which 
would end on June 6, 2005. Reclamation published another FRN on June 
26, 2005, that extended the comment period to July 31, 2005. A total of 
7 letters with written comments were received during the comment 
period. All booklets, studies, comments/letters that were utilized to 
develop the rate for project use power are available for inspection and 
copying at the Great Plains Regional Office, located at 316 North 26th 
Street, Billings, Montana 59101.

FOR FURTHER INFORMATION CONTACT: Mike Ferguson, Bureau of Reclamation, 
Great Plains Regional Office, at (406) 247-7705 or by e-mail at 
[email protected].

SUPPLEMENTARY INFORMATION: Power rates for the P-SMBP are established 
pursuant to the Reclamation Act of 1902 (43 U.S.C. 371 et seq.), as 
amended and supplemented by subsequent enactments, particularly section 
9(c) of the Reclamation Project Act of 1939 (43 U.S.C. 485h(c)) and the 
Flood Control Act of 1944 (58 Stat. 887).
    The project use power rate will be reviewed by Reclamation each 
time Western Area Power Administration (Western) adjusts the P-SMBP 
firm power rate. Western will conduct the necessary studies and will 
use the same Reclamation established methodology that was used to 
develop the 12.55 mills/kWh rate to calculate any new rate. The P-SMBP 
project use rate will be adjusted by Reclamation when Western adjusts 
the P-SMBP firm power rate.
    Project Use Power Rate Adjustment Comments: The following comments 
were received during the public comment period. Reclamation paraphrased 
and combined comments when it did not affect the meaning. Reclamation's 
response follows each comment.
    Comment: Would like to discuss 100-year average of OM&R from the 
Fiscal Year 2005 Proposed Project Use Power Rate Adjustment Project Use 
Power Study (PUPRS) with wheeling costs in P-SMBP.
    Response: The PUPRS is a 100-year study. The 100-year term is 
consistent with planning requirements and with the assumption that the 
projects will have a 100-year life (for example Buffalo Bill Dam in 
Wyoming is approaching 100-years now). However, in Western's Power 
Repayment Study (PRS) to establish the firm power rate, it is the 
critical maximum repayment requirement in a given year (known as the 
pinch point) that drives the rate solution. There is no such pinch 
point in a strictly operation, maintenance, and replacement (OM&R) 
based study since maintenance and replacement expenditures can and have 
been moved (deferred) over time. Therefore, we are looking at what the 
average revenue requirement will be to meet OM&R expenses over the 
project life. Furthermore, as in most rate studies, the first 5 years 
are based on projected OM&R requirements from actual budget documents. 
Beyond 5 years, the operation and maintenance is levelized and the 
replacements come from standard equipment life expectancy data.
    Comment: Question inclusion of wheeling costs in project use power 
rate especially when firm power customers get benefit of ultimate cost 
allocation and sub-allocation percentage.
    Response: Questions relating to relative benefits received by 
various project beneficiaries are not relevant to the current 
determination of the appropriate cost components of the project use 
power rate. Wheeling expenses paid by the government for the delivery 
of project use power are an appropriate cost to include in this cost 
based rate study.
    Comment: Should Reclamation and Western revisit wheeling costs 
associated with irrigation pumping when it exceeds construction of 
transmission line?
    Response: Possibly. However, the effect of revisiting wheeling 
costs is problematic. If wheeling rates are postage-stamp rates and the 
wheeling agent is charging everyone the same, it may not be possible to 
justify constructing a separate transmission line. Maybe the cost 
differential, if it exists, could be used in some formal way to 
demonstrate that the wheeling charges are unreasonable and should be 
lowered. It is doubtful that Reclamation would construct a parallel 
transmission line. Reclamation has no transmission line maintenance 
capability and would probably contract with the same coop that is now 
wheeling that power.
    Comment: Western recently issued a Federal Register Notice 
announcing a proposed power rate increase based on the FY2004 Rate 
Study. Why is the project use power rate based on a FY2003 PRS?
    Response: When Reclamation began the process for updating the OM&R 
rate basis for project use power, Western and Reclamation felt that it 
would be best to key it off of the most current rate-setting PRS that 
had been through the review process and had been accepted by Federal 
Energy Regulatory Commission. The 2004 PRS is just going through that 
process now. If and when the new rate is approved, we will do a new 
project use study that keys off of the 2004 PRS.
    Comment: Western held informal meetings with their customers in May 
2005. Is there any reason why Reclamation didn't have similar 
discussions with their contractors to discuss criteria and changes and 
study results?
    Response: All of the existing project use power contractors are 
notified of the upcoming rate increase and are allowed sufficient time 
to comment. Western has over 200 customers which have effective 
representation in a few larger organizations. Reclamation has a little 
over 30 contractors and they are widely scattered across the region. 
Project use power contractors will not see their rate increase unless 
their ability to pay for such an increase has gone up. Based on ongoing 
studies dealing with project payment capacity and ability to pay, we 
have not seen any evidence that the agricultural economy is improving. 
Absent such evidence, it seemed an unnecessary expense to hold such 
informal meetings. However, based on other comments and one informal 
meeting, Reclamation is evaluating such a process for future rate 
increases.
    Comment: Would like to understand the basis for statements one 
through five of the brochure and how they relate to the legislation 
authorizing the P-SMBP. Would like to discuss past practices and 
legislation history and what has changed.
    Response: Reclamation looked at increasing the project use rate 
periodically over time. In the late 1970's and thereafter, the OM&R 
costs of the system began to diverge from the original rate 
significantly. Also, project evaluation standards for reauthorization 
were now under Economic and Environmental Principles and Guidelines for 
Water and Related Land Resources Implementation Studies which required 
the use of appropriate

[[Page 76071]]

economic and financial measures of project feasibility. That means 
using the actual opportunity cost of power in the evaluation of new 
projects. It was appropriate at that time to begin a sustained effort 
to bring the project power charges into alignment with actual costs.
    For statements 1-3 of the brochure, these rules of application 
primarily stem from legal review which states that the Bureau of 
Reclamation can increase the rate to keep pace with OM&R of the power 
system but that such increases for existing contractors are subject to 
ability to pay. Congress did not intend to limit the pumping power rate 
to 2.5 mills. Rather, the 2.5 mill rate was intended to be the initial 
rate and subject to increases. The Flood Control Act of 1944 requires 
that increases in the rate be subject to the user's ability to pay. 
This application can result in different districts paying different 
rates as determined by their ability to pay.
    For statement 4 of the brochure, certain tribal interests elected 
not to do an ability-to-pay determination.
    For statement 5 of the brochure, see the introductory discussion.
    Comment: Would like to discuss repayment of power investment and 
assistance to irrigation as envisioned and incorporated in the Report 
on Financial Position Missouri River Basin Project dated December, 1963 
which was the basis for Oahe, Mid-State, and Garrison Unit 
authorizations in 1965 and 1966.
    Response: Reclamation, Western and the U.S. Army Corps of Engineers 
(Corps) are following the repayment rules set forth in the 1963 report. 
Nothing in those rules impacts the project use power rate. Rather, they 
primarily impact the repayment of irrigation costs that were beyond 
irrigation's ability to pay and assigned to power for repayment and 
when those costs will be repaid.
    Comments Regarding Contract Rate of Delivery (CROD): Would like to 
discuss rationale and authority for penalties for exceeding the CROD as 
it relates to project use pumping power? Second part of this question 
relates to billing for increased capacity and transmission charges 
incurred as a result of exceeding CROD.
    The rate adjustment study includes the establishment of severe 
penalties for exceeding the CROD. It seems unreasonable to establish a 
penalty to the irrigation use when it is first priority power and 
inappropriate to include this special condition in the rate setting 
exercise. It should be included as an individual contract item with the 
user rather than a general rate setting component.
    The rate adjustment study includes the establishment of penalties 
for exceeding the CROD. It does not seem appropriate that a rate study 
be used for this purpose. This subject seems to be a backlash from a 
recent incident. In our case, the CROD was exceeded for one month out 
of the 50 plus years that project use power has been delivered. This 
should be a power contract matter between Reclamation and the project 
use power recipient rather than an element of rate adjustment.
    Following our detailed review of the reason for including the 
penalty clause in the firm power contracts in the 1970's, we were 
encouraged to hear that it wasn't Reclamation's plan or intent to 
penalize the P-SMBP project use power pumpers with a rate of 10 times 
the project use power rate unless they haven't worked with Reclamation 
on possible changes in pumping needs caused by things like a change out 
of a pump. Before our discussion, it was hard to understand how the 
penalty clause would apply to project use pumping. The main purpose of 
the P-SMBP legislation was to develop irrigation and then have first 
use of the hydropower. All the firm power contracts have withdrawal 
clauses to cover project use pumping power needs.
    Response: Reclamation has and will continue to work with its 
irrigation contractors to set a CROD that accurately reflects the 
project use power demand requirements of the project. These rates of 
delivery are used to determine capacity and wheeling purchases. Rates 
are set to recover actual costs so when an irrigation district exceeds 
their CROD, it often requires purchasing additional capacity and 
wheeling on the spot market. These costs can be extremely high and will 
be passed on to the districts or power contractors. Irrigation 
districts should never exceed their CROD if they are operating within 
their water and electric service contracts. In order to ensure this, 
Reclamation believes a penalty is necessary. Section 9(c) of the 
Reclamation Project Act of 1939 and the Flood Control Act of 1944 
authorizes Reclamation to set electric power rates on Reclamation 
projects. In the specific case mentioned in comment 3 above, the CROD 
was exceeded following the district increasing the pump size without 
approval from Reclamation. This was in violation of the water service 
contract between the district and Reclamation. The district was 
notified that the larger pump would likely cause them to overrun their 
CROD. The rate schedule, MRB-P12, becomes part of each project use 
power contract when it becomes effective.
    Comment: Would like to know how Western and Reclamation plan to 
handle depletions on future irrigation? Would like to discuss effects 
on revenues and repayment?
    Response: Depletions are still being handled on the basis of 
ultimate development since that is our mandate under the ultimate 
development concept. To assume no depletions or different depletions 
assumes no ultimate development which has implications for cost 
allocations, National Environmental Policy Act, etc. At this time, the 
depletions are tied to the assumed irrigation development following the 
ultimate development concept.
    Comment: Would like to discuss original basis for sub-allocation 
and ultimate cost allocation concept in P-SMBP. Basis for changes in 
that seem to be occurring and the reason for changes.
    Response: The only present-day changes in the sub-allocation and 
ultimate cost allocation concepts were authorized by the Garrison 
Reformulation Act of 1986 where almost 900,000 acres of development 
were removed from the development total and the Act explicitly provided 
for the reallocation of costs associated with the deleted acreage.
    Comments regarding the Project Use Power Study: The project use 
power study seems to focus on a $500,000 wheeling charge and separates 
wheeling from other operation and maintenance costs. In 1999 the 
Commissioner of Reclamation confirmed that the project use power rate 
includes the delivery costs (wheeling) to the pumps. This should be 
stated in the report and be a basic premise of the study.
    The study seems to focus on non-federal wheeling costs as P-SMBP 
costs. In 1999 the Commissioner, after a considerable amount of study, 
confirmed that the project use power rate includes the delivery costs 
to the pumps. The report attempts to justify this but makes no mention 
of this confirmation. Instead, it focuses on a $500,000 wheeling cost 
and separates wheeling cost from other operation and maintenance costs. 
This is evident on page 5, in Appendix B, and on page 2 of Appendix F. 
Wheeling cost for project use power is listed as an assumption on page 
5.
    The study eludes in Appendix F that non-federal wheeling cost is a 
basis for adjusting the rate. A $500,000 cost is the only cost increase 
mentioned. This cost seems insignificant if compared to the total P-S 
Program cost that determines

[[Page 76072]]

the rate, and we question whether it should be a reason for rate 
adjustment.
    Response: Wheeling costs are annual expenses paid by the government 
for delivery of project use power. Reclamation and Western treat them 
as such in their rate studies. The current study appropriately includes 
those costs as one of the many expenses in the study.
    Comment: The study infers in Appendix F that the action to adjust 
the rate is due to dramatic increases in non-federal wheeling costs to 
irrigation projects. This increase seems to be $500,000 and is 
insignificant compared to the total P-S Program costs that determine 
the power rate. We question whether costs are part of the P-S total 
annual costs and should not be portrayed as the basis for adjusting the 
rate.
    Response: Appendix F of the study is a general background on 
project use power on P-SMBP. Historical information on wheeling is 
included in that section. The reason for the rate increase is stated on 
the first page of the study: ``The major factor contributing to the 
need for an upward rate adjustment is increased OM&R expenses on the P-
SMBP system.''
    Comment: The study includes the establishment of a new rule 
concerning application of ability-to-pay for new irrigation 
development. The purpose of P-SMBP has not changed; why is there a new 
classification made for new irrigation in this rate setting process?
    Response: The study creates a new minimum level for ``ability to 
pay''. Most P-SMBP contractors pay 2.5 mills/kWh for project use power 
based on the original project use power rate. This rate was never 
intended to stay at this level in perpetuity but was intended to 
increase to recover costs. As new irrigation is developed it is sound 
business practice to consider current O&M costs when determining the 
feasibility of that development. The rule is not new as it coincides 
with the original intent of periodically increasing the project use 
power rate to recover cost and the same philosophy was applied to the 
last rate increase.
    Comments regarding wheeling: Several specific study parameters 
deserve discussion. For example, while non-federal wheeling to 
irrigation may not be a significant impact to overall rate adjustment, 
the specific manner in which these costs (one of numerous costs) are 
counted, does have an impact. It is important that the commitment to 
delivery be reinforced through a study of transmission procedure and at 
least cost analysis in order to remain consistent with the intent of 
the enabling P-SMBP legislation.
    As indicated at our meeting, we are still concerned about the 
wheeling costs being included in the project use pumping power rate 
especially when 15.8% of the total power investment is set aside for 
project use pumping. It seems like the power investment set aside in an 
interest-free account for irrigation should be used to build the 
transmission to the project pumps as originally planned in the P-SMBP 
legislation. We think this is especially true when the cost of wheeling 
to the pumps exceeds the cost of constructing the transmission 
facilities to serve the pumps. From a purely economic standpoint, the 
government should at least renegotiate the wheeling arrangements or 
construct the transmission facilities.
    Response: We assume that the first comment is asking if it is more 
economical for the Federal government to construct distribution lines 
to some P-SMBP irrigation district pumps rather than pay wheeling 
charges. The initial cost of constructing the distribution lines is, in 
some cases, lower than the annual wheeling charge. However, after the 
line is constructed, the government would maintain the line, through a 
contract. Also, the cost of purchasing rights-of-way may further 
increase the initial construction cost. Reclamation agrees that 
extraordinarily high wheeling charges should be investigated. The 15.8% 
of construction costs ``set aside'' represent a cost obligation for 
already constructed features to be repaid in the future, not a 
revolving fund for future construction.
    Comment: It appears that cost analysis continues to be based on the 
assumption that flood irrigation is the norm. Considering the shift 
from flood to sprinkler irrigation over the last twenty years, it may 
be appropriate that analysis reflect such change. It is also reasonable 
to assume that new development will be completed consistent with these 
technologies.
    Response: Reclamation delivers project use power for gravity 
irrigation unless project specific legislation states otherwise.
    Comment: New development should be an important premise with 
regards to rate adjustment analysis. It is a contention of the Upper 
Missouri States that the promise and intent of the P-SMBP legislation 
is far from being met. While it is off the direct subject of a power 
rate adjustment it is appropriate at this point to reinforce our 
commitment to further P-SMBP development and suggest that it is a 
priority. It is also our position that P-SMBP development not be 
restricted to federal project status and that P-SMBP project use power 
be made available to non-federal projects.
    Response: Reclamation agrees that the development envisioned under 
P-SMBP has not occurred. Reclamation also supports further development 
when it is economically feasible under current Federal feasibility 
standards. Current legislation does not provide for delivery of P-SMBP 
project use power to private irrigation districts.
    Comment: Page 2 of Appendix F discusses only wheeling cost and the 
ability to pay adjustment. It would be appropriate to discuss other 
costs that are included and also excluded in the project use power 
rate. In other words the study reflects that there is insecurity in the 
irrigation wheeling responsibility. We hope that this enigma can be 
overcome.
    Response: Appendix F is intended to give the reader a background on 
project use power on P-SMBP. The treatment of ability to pay and 
wheeling costs are key to understanding this. The other costs included 
in the project use power rate are shown in appendixes A and B.
    Comment: It is interesting to note the assumptions used for the 
FY2003 Rate Setting PRS by Western. We understand from our discussions 
that Western continues to use the Corps Main Stem Reservoir, Series 8-
83, dated April 1984 adjusted for the Garrison Diversion Unit 
Reformulation Act of 1986. By continuing to assume the massive 
depletions for irrigation that were used in the 1984 Study, the long-
term power generation and revenues are substantially understated. 
Probably a more realistic approach would be to project generation and 
revenues at the 2010 levels to the end of the PRS. It would be 
interesting to see how this might affect the need for the rate 
increase. For example, the power revenues go from $312 million in 2010 
to $272 million in 2100 a reduction of $40 million per year. This is 
basically due to huge depletions for future irrigation. The statement 
was made that no changes could be made in the depletions or cost 
allocations because of the McGovern Amendment, which was a part of the 
1977 DOE Act. It was pointed out that Reclamation and Western had made 
changes in the early 1980's regarding the future power developments and 
sub-allocation percentages without Congressional Approval.
    Response: Aside from the reductions in depletions and costs 
stemming from the Garrison Diversion Unit Reformulation Act of 1986, 
Reclamation, Western and the Corps are

[[Page 76073]]

still constrained to follow the ultimate development concept in rate 
setting. The primary driver of the P-SMBP firm rate is construction 
repayment which is due on critical dates and near-term generation which 
is currently being affected by drought. Construction repayment is not a 
factor in the project use power rate.
    Comment: Based on the PUPRS and discussions, we had a feeling that 
Reclamation was getting away from the ability to pay concept. We hope 
this is not the case. Congressional Directives in the Flood Control Act 
of 1944 and subsequent P-SMBP legislation were to develop irrigation in 
the Basin to stop the out migration of people. This would compensate 
the states for the rich farmlands that were flooded by the reservoirs.
    Response: Reclamation is not getting away from the ability to pay 
concept.
    Comment: As discussed at the meeting, we expressed a concern that 
the repayment criteria and payout dates established in the 1963 report 
on Financial Position Missouri River Basin Project were not being 
followed on repayment of the June 30, 1964 power investment which was 
completed or under construction on that date. As pointed out this has 
an adverse effect on repayment of the interest-free power investment.
    Response: The rules adopted in the 1963 report are being followed. 
All projects completed or under construction as of June 30, 1964 were 
to have their irrigation aid repaid as soon as practically possible 
after the completion of firm power repayment. All projects authorized 
after that date are to have their irrigation aid paid within 50 years 
plus up to a 10-year development period but only after the pre-1964 
project aid was paid. Since firm power investments have continually 
been made, the pre-1964 project repayment was continually pushed out. 
However, with the completion of North Loup Block 1 with an irrigation 
aid repayment date of 2046, all prior irrigation aid and the irrigation 
aid for the first block of North Loup is due in 2046. Reclamation does 
not believe that repayment of irrigation aid 60 years in the future 
without interest constitutes an adverse impact.
    Comment: We would like to see Reclamation hold an annual meeting 
with the P-SMBP project use power pumpers to discuss project use power 
rates and other items of interest to the group.
    Response: Reclamation will take this into consideration based on 
other written comments and comments at an informal meeting held with 
some of the project use power contractors.
    Comment: In making its calculations, Reclamation is spreading the 
wheeling costs associated with delivery of project use power across all 
P-SMBP generation. Wheeling costs of project use power are a component 
only of irrigation sales, not all power sales. Wheeling costs 
associated with project use power are not relevant to P-SMBP generation 
serving P-SMBP firm power customers of Western. By spreading these 
costs across all P-SMBP generation, Reclamation is understating the 
real cost of project use power. At the time Reclamation made its 
unilateral decision to include third party wheeling costs as part of 
power's aid-to-irrigation, Mid-West objected to Reclamation's decision. 
Mid-West continues to disagree with Reclamation's legal analysis of the 
issue. Mid-West also continues to object to the Reclamation's 
unilateral action without a public process fully airing the issue. Mid-
West understands that applying wheeling costs for project use power 
only to generation association with project use power would raise the 
project use power rate above Reclamation's current proposal. 
Nevertheless, Reclamation should adopt the methodology that properly 
classifies wheeling of project use power as a component of irrigation 
sales, not all P-SMBP sales.
    Response: The rate includes all wheeling costs including those for 
firm power delivery as well as project use power delivery. The firm 
power wheeling costs are much more than the project use power wheeling 
costs.
    Comment: Reclamation's proposed rate adjustment is based upon the 
Western's 2003 PRS. That PRS is no longer the rate-setting PRS. The 
2004 PRS has indicated the need for another rate increase for P-SMBP 
firm power customers. Rather than initiating a new process for 
adjusting the project use power rate or lagging behind in establishing 
the project use power rate, Mid-West asks Reclamation to incorporate 
data from the 2004 PRS to recalculate what the project use power rate 
should be in this proceeding.
    Response: Reclamation started the analysis of this project use 
power rate increase following Western's 2003 PRS. Reclamation in 
consultation with Western made the decision to complete the rate 
adjustment using the 2003 PRS. Once Western makes another rate 
increase, Reclamation will revisit the project use power rate to 
determine if another rate adjustment is necessary.
    Comment: Reclamation notes in PUPRS that the application of the new 
project use rate may be mitigated by application of the ``ability-to-
pay'' test to P-SMBP irrigation projects. Reclamation goes on to state 
that ``[A]bility-to-pay studies will be conducted periodically 
[emphasis added] * * *.'' Mid-West believes that these studies should 
be conducted on a regular basis--every five years.
    Response: Reclamation has a process for 5-year rate reviews on its 
water contracts. If a district has increased ability to pay at that 
time, the first priority for that ability is to increase the project 
use power pumping rate paid by that district up to the full ability to 
pay.
    Comment: Mid-West agrees with Reclamation that the new project use 
power rate will be the ``floor'' for new irrigation development under 
the P-SMBP, and that the ``ability-to-pay'' test will not result in a 
project use power rate lower than that noted in these proceedings.
    Response: No response required.
    Comment: Mid-West commends Reclamation for establishing penalties 
for exceeding the CROD. This will help ensure proper application of the 
project use power rate.
    Response: No response required.
    National Environmental Policy Act (NEPA): In compliance with NEPA, 
Reclamation has determined that this action is categorically excluded 
from the preparation of an Environmental Assessment or Environmental 
Impact Statement.
    Power Rate Schedules: The existing rate schedule MRB-P11 placed 
into effect on March 22, 2002, will be replaced by rate schedule MRB-
P12. Rate Schedule MRP-P12 is as follows:
    Effective: 30 days after being published in FRN.
    Affected Parties: All current Pick-Sloan Missouri Basin Program 
project use power recipients.
    Location: In the areas generally described as central and eastern 
Montana, North and South Dakota, Nebraska, eastern Colorado, Wyoming, 
Kansas, western Iowa, and western Minnesota.
    Applicable: For use in the operation of congressionally authorized 
irrigation and drainage pumping plants on irrigation projects for power 
service supplied through metering at specified points of delivery.
    Character and Conditions of Service: Alternating current, 60 hertz, 
three phase, delivered and metered at the point identified in the 
contract upon demand during the summer irrigation season.
    Availability: Available at 60 hertz at the pumping plant upon 
demand during the summer irrigation season.
    Monthly Rate:

[[Page 76074]]

    Demand Charge: None.
    Energy Charge: 12.55 mills per kilowatt-hour for all energy use; 
subject to ability-to-pay but not less than 2.5 mills per kilowatt-
hour.
    Seasonal Minimum Bill: $2.75 per kilowatt of the maximum 30-minute 
integrated demand established during service months of each year 
specified in the contract.
    Adjustments:
    For Power Factor: The customer will normally be required to 
maintain a power factor at a point of delivery of not less than 95 
percent lagging or leading.
    Penalties for Exceeding the Contract Rate of Delivery (CROD): 
Energy usage in excess of the CROD will be billed at a rate 10 times 
the current project use power rate. This will be calculated on a 
prorated basis. The customer will also be billed for any increased 
capacity and transmission charges incurred as a result of exceeding the 
CROD.
    Approval of Project Use Power Rate by Commissioner of Bureau of 
Reclamation: The Commissioner approved the rate of 12.55 mills/kWh by 
memorandum dated December 5, 2005.

    Dated: December 16, 2005.
Michael J. Ryan,
Regional Director.
[FR Doc. 05-24352 Filed 12-21-05; 8:45 am]
BILLING CODE 4310-MN-P