[Federal Register Volume 71, Number 249 (Thursday, December 28, 2006)]
[Notices]
[Pages 78187-78188]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-22269]


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DEPARTMENT OF ENERGY

Southwestern Power Administration


Robert D. Willis Hydropower Rate Schedules

AGENCY: Southwestern Power Administration, DOE.

ACTION: Notice of Rate Order.

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SUMMARY: Pursuant to Delegation Order Nos. 00-037.00, effective 
December 6, 2001, and 00-001.00B, effective July 28, 2005, the Deputy 
Secretary has approved and placed into effect on an interim basis Rate 
Order No. SWPA-57, which increases the power rate for the Robert 
Douglas Willis Hydropower Project (Willis) pursuant to the following 
Willis Rate Schedule:

    Rate Schedule RDW-06, Wholesale Rates for Hydro Power and Energy 
Sold to Sam Rayburn Municipal Power Agency (Contract No. DE--PM75-
85SW00117)
    The effective period for the rate schedule specified in Rate 
Order No. SWPA-57 is January 1, 2007, through September 30, 2010.


FOR FURTHER INFORMATION CONTACT: Mr. Forrest E. Reeves, Assistant 
Administrator, Office of Corporate Operations, Southwestern Power 
Administration, Department of Energy, One West Third Street, Tulsa, 
Oklahoma 74103, (918) 595-6696, [email protected].

SUPPLEMENTARY INFORMATION: The existing hydroelectric power rate for 
the Robert Douglas Willis project is $648,096 per year. The Federal 
Energy Regulatory Commission approved this rate on a final basis on 
June 21, 2006, for the period January 1, 2006, through September 30, 
2009. The 2006 Willis Power Repayment Studies indicate the need for an 
increase in the annual rate by $167,484 or 25.8 percent beginning 
January 1, 2007.
    The Administrator, Southwestern Power Administration (Southwestern) 
has followed Title 10, Part 903 Subpart A, of the Code of Federal 
Regulations, ``Procedures for Public Participation in Power and 
Transmission Rate Adjustments and Extensions'' in connection with the 
proposed rate schedule. On August 10, 2006, Southwestern published 
notice in the Federal Register (71 FR 45820), of a 60-day comment 
period, together with a combined Public Information and Comment Forum, 
to provide an opportunity for customers and other interested members of 
the public to review and comment on a proposed rate increase for the 
Willis project. The public forum was canceled when no one expressed an 
intention to participate. Written comments were accepted through 
October 10, 2006. One comment was received from Gillis & Angley, 
Counsellors at Law, on behalf of Sam Rayburn Municipal Power Agency and 
the Vinton Public Power Authority, which stated that they had no 
objection to the proposed rate adjustment.
    Information regarding this rate proposal, including studies and 
other supporting material, is available for public review and comment 
in the offices of Southwestern Power Administration, One West Third 
Street, Tulsa, Oklahoma 74103.
    Following review of Southwestern's proposal within the Department 
of Energy, I approved Rate Order No. SWPA-57, on an interim basis, 
which increases the existing Robert D. Willis rate to $815,580, per 
year, for the period January 1, 2007, through September 30, 2010.

    Dated: December 21, 2006.
Clay Sell,
Deputy Secretary.

United States of America Department of Energy, Deputy Secretary of 
Energy

In the Matter of: Southwestern Power Administration; Robert D. Willis 
Hydropower Project Rate

Rate Order No. SWPA-57

Order Confirming, Approving and Placing Increased Power Rate Schedule 
in Effect on an Interim Basis

    Pursuant to sections 302(a) and 301(b) of the Department of Energy 
Organization Act, Public Law 95-91, the functions of the Secretary of 
the Interior and the Federal Power Commission under section 5 of the 
Flood Control Act of 1944, 16 U.S.C. 825s, relating to the Southwestern 
Power Administration (Southwestern) were transferred to and vested in 
the Secretary of Energy. By Delegation Order No. 0204-108, effective 
December 14, 1983, the Secretary of Energy delegated to the 
Administrator of Southwestern the authority to develop power and 
transmission rates, delegated to the Deputy Secretary of the Department 
of Energy the authority to confirm,

[[Page 78188]]

approve, and place in effect such rates on an interim basis and 
delegated to the Federal Energy Regulatory Commission (FERC) the 
authority to confirm and approve on a final basis or to disapprove 
rates developed by the Administrator under the delegation. Delegation 
Order No. 0204-108, as amended, was rescinded and subsequently replaced 
by Delegation Orders 00-037.00 (December 6, 2001) and 00-001-00B (July 
28, 2005). The Deputy Secretary issued this rate order pursuant to said 
delegations.

Background

    Dam B (Town Bluff Dam), located on the Neches River in eastern 
Texas downstream from the Sam Rayburn Dam, was originally constructed 
in 1951 by the U.S. Army Corps of Engineers (Corps) and provides 
streamflow regulation of releases from the Sam Rayburn Dam. The Lower 
Neches Valley Authority contributed funds toward construction of both 
projects and makes established annual payments for the right to 
withdraw up to 2000 cubic feet of water per second from Town Bluff Dam 
for its own use. Power was legislatively authorized at the project, but 
installation of hydroelectric facilities was deferred until justified 
by economic conditions. A determination of feasibility was made in a 
1982 Corps study. In 1983, the Sam Rayburn Municipal Power Agency 
(SRMPA) proposed to sponsor and finance the development at Town Bluff 
Dam in return for the output of the project to be delivered to its 
member municipalities and participating member cooperatives of the Sam 
Rayburn Dam Electric Cooperative. Since the hydroelectric facilities at 
the Town Bluff Dam have been completed, the facilities have been 
renamed the Robert Douglas Willis Hydropower Project (Willis).
    The Willis rate is unique in that it excludes the costs associated 
with the hydropower design and construction performed by the Corps, 
because all funds for these costs were provided by SRMPA. Under the 
Southwestern/SRMPA power sales Contract No. DE-PM75-85SW00117, SRMPA 
will continue to pay all annual operating and marketing costs, as well 
as expected capital replacement costs, through the rate paid to 
Southwestern, and will receive all power and energy produced at the 
project for a period of 50 years.
    In the FERC Docket No. EF06-4081-000, issued June 21, 2006, for the 
period January 1, 2006, through September 30, 2009, the FERC confirmed 
and approved the current annual Willis rate of $648,096.

Discussion

    Southwestern's 2006 Current Power Repayment Study (PRS) indicates 
that the existing annual power rate of $648,096 does not represent the 
lowest possible rate needed to meet cost recovery criteria. The 
increased revenue requirement is due to an increase in the U. S. Army 
Corps of Engineers (Corps) projected future replacement investment. The 
Revised PRS indicates that an increase in annual revenues of $167,484 
beginning January 1, 2007, is sufficient to accomplish repayment of the 
Federal investment in the required number of years. Accordingly, 
Southwestern developed a proposed rate schedule based on that increased 
revenue requirement.
    Title 10, Part 903, Subpart A of the Code of Federal Regulations, 
``Procedures for Public Participation in Power and Transmission Rate 
Adjustments and Extensions,'' has been followed in connection with the 
proposed rate adjustment. More specifically, opportunities for public 
review and comment during a 60-day period on the proposed Willis power 
rate were announced by a Federal Register (71 FR 45820) notice 
published on August 10, 2006. A combined Public Information and Comment 
Forum was scheduled for September 14, 2006, in Tulsa, Oklahoma. The 
forum was canceled as no one expressed an intent to participate. 
Written comments were due by October 10, 2006. Southwestern provided 
the Federal Register notice, together with requested supporting data, 
to the customer and interested parties for review and comment during 
the formal period of public participation. In addition, prior to the 
formal 60-day public participation process, Southwestern discussed with 
the customer representatives the preliminary information on the 
proposed rate adjustment. Only one formal comment was received during 
the public process. That comment, on behalf of SRMPA and the Vinton 
Public Power Authority, expressed no objection to the final proposed 
rate.
    Upon conclusion of the comment period in October 2006, Southwestern 
finalized the PRS and rate schedule for the proposed annual rate of 
$815,580 which is the lowest possible rate needed to satisfy repayment 
criteria. This rate represents an annual increase of 25.8 percent.

Availability Of Information

    Information regarding this rate increase, including studies and 
other supporting material, is available for public review and comment 
in the offices of Southwestern Power Administration, One West Third 
Street, Tulsa, Oklahoma 74103.

Comments And Responses

    Southwestern received one written comment in which the customer 
representative expressed no objection to the proposed rate adjustment.

Other Issues

    There were no other issues raised during the informal meeting or 
during the formal public participation period.

Administrator's Certification

    The 2006 Revised Willis PRS indicates that the annual power rate of 
$815,580 will repay all costs of the project, including amortization of 
the power investment consistent with provisions of the Department of 
Energy (DOE) Order No. RA 6120.2. In accordance with Delegation Order 
Nos. 00-037.00 (December 6, 2001) and 00-001.00B (July 28, 2005), and 
section 5 of the Flood Control Act of 1944, the Administrator has 
determined that the proposed Willis power rate is consistent with 
applicable law and the lowest possible rate consistent with sound 
business principles.

Environment

    The environmental impact of the rate increase proposal was 
evaluated in consideration of DOE's guidelines for implementing the 
procedural provisions of the National Environmental Policy Act, 10 CFR 
part 1021, and was determined to fall within the class of actions that 
are categorically excluded from the requirements of preparing either an 
Environmental Impact Statement or an Environmental Assessment.

Order

    In view of the foregoing and pursuant to the authority delegated to 
me, I hereby confirm, approve and place in effect on an interim basis, 
for the period January 1, 2007, through September 30, 2010, the annual 
Robert Douglas Willis Hydropower Rate of $815,580 for the sale of power 
and energy from Robert Douglas Willis project to the Sam Rayburn 
Municipal Power Agency, under Contract No. DE-PM75-85SW00117, as 
amended. This rate shall remain in effect on an interim basis through 
September 30, 2010, or until the FERC confirms and approves the rate on 
a final basis.

    Dated: 12/21/06.
Clay Sell,
Deputy Secretary.
 [FR Doc. E6-22269 Filed 12-27-06; 8:45 am]
BILLING CODE 6450-01-P