[Federal Register Volume 73, Number 184 (Monday, September 22, 2008)]
[Notices]
[Pages 54573-54584]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-22097]


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DEPARTMENT OF ENERGY


Notice of Interim Approval

AGENCY: Southeastern Power Administration, DOE.

ACTION: Notice of Interim Approval for Southeastern Power 
Administration Cumberland System.

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SUMMARY: The Deputy Secretary of Energy confirmed and approved, on an 
interim basis, Rate Schedules CBR-1-G, CSI-1-G, CEK-1-G, CM-1-G, CC-1-
H, CK-1-G, CTV-1-G, and Replacement-3. The rates were approved on an 
interim basis through September 30, 2013. The new rates take effect on 
October 1, 2008, and are subject to confirmation and approval on a 
final basis by the Federal Energy Regulatory Commission (``FERC'').

DATES: Approval of the rate schedules on an interim basis is effective 
October 1, 2008, through September 30, 2013.

FOR FURTHER INFORMATION CONTACT: Leon Jourolmon, Assistant

[[Page 54574]]

Administrator, Finance & Marketing, Southeastern Power Administration, 
Department of Energy, 1166 Athens Tech Road, Elberton, Georgia 30635-
6711, (706) 213-3800.

SUPPLEMENTARY INFORMATION: On August 19, 2008, FERC confirmed and 
approved Interim Wholesale Power Rate Schedules CBR-1-F, CSI-1-F, CEK-
1-F, CM-1-F, CC-1-G, CK-1-F, and CTV-1-F for the period from February 
25, 2008 to September 30, 2008.

    Dated: September 12, 2008.
Jeffrey F. Kupfer,
Acting Deputy Secretary.

DEPARTMENT OF ENERGY DEPUTY SECRETARY

    In the Matter of: Southeastern Power Administration
    Cumberland System Rates

[Rate Order No. SEPA-50]

Order Confirming and Approving Power Rates 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 Southeastern 
Power Administration (``Southeastern'' or ``SEPA'') were transferred to 
and vested in the Secretary of Energy. By Delegation Order No. 00-
037.00, effective December 6, 2001, the Secretary of Energy delegated 
to Southeastern's Administrator the authority to develop power and 
transmission rates, and delegated to the Deputy Secretary of Energy the 
authority to confirm, approve, and place in effect such rates on an 
interim basis, and delegated to the Federal Energy Regulatory 
Commission (``FERC'') the authority to confirm, approve, and place into 
effect on a final basis or to disapprove rates developed by the 
Administrator under the delegation. This rate order is issued by the 
Deputy Secretary pursuant to said notice.

Background

    The FERC issued an order approving Rate Schedules CBR-1-F, CSI-1-F, 
CEK-1-F, CM-1-F, CC-1-G, CK-1-F, and CTV-1-F on a final basis for the 
sale of power from the Cumberland System August 19, 2008 (124 FERC ] 
62,139).
    The power marketing policy provides peaking capacity, along with 
1500 hours of energy with each kilowatt of capacity, to customers 
outside the Tennessee Valley Authority (``TVA'') transmission system. 
Due to restrictions on the operations of the Wolf Creek and Center Hill 
Projects imposed by the U.S. Army Corps of Engineers (``Corps'') as a 
precaution to prevent failure of the dam, Southeastern has not been 
able to provide peaking capacity to these customers. An interim 
operating plan for the Cumberland System provides these customers with 
energy that does not include capacity.

Public Notice and Comment

    Notice of a proposed rate adjustment was published in the Federal 
Register April 11, 2008 (73 FR 19832). The notice advised interested 
parties of a public information and comment forum to be held in 
Nashville, Tennessee on May 22, 2008. Written comments were accepted on 
or before July 10, 2008. Written comments were received from six 
sources pursuant to this notice.
    Comment 1: There is concern * * * whether the amounts included for 
Corps Operation and Maintenance (``O&M'') expense are appropriate 
forecasts in light of potential budget cuts in Corps appropriations in 
Fiscal Year 2009.
    The Southeastern Federal Power Customers, Inc. (``SeFPC'' or 
``Customers'') has frequently questioned whether the amounts for Corps 
O&M and at times renewals and replacements, in a proposed rate are 
appropriate when Congress appears poised to reduce the funding levels 
for these precise activities. In particular, the Customers have not 
wanted to pay more in rates than what the Corps will receive from 
Congress for O&M and renewals and replacement activity. Therefore, the 
Customers encourage SEPA to examine closely the proposed O&M 
projections to ensure that they appropriately align with anticipated 
appropriations.
    Response 1: The Corps provides O&M estimates to Southeastern 
annually. The customers have an opportunity to review the Corps' 
estimated and actual costs annually through the O&M committee of the 
SeFPC. Southeastern believes that the estimates are the best available.
    Comment 2: * * * the SeFPC suggests that SEPA develop a 
consultation and related true-up process for implementing a rate in the 
event that capacity is made available. Under the consultation and true-
up process suggested * * * SEPA would consult with preference customers 
regarding available capacity to market to all existing customers of the 
Cumberland River Basin projects. The consultation could involve a 
meeting or conference call or some other communication depending upon 
the immediacy of the available capacity. During this conference with 
the customers, SEPA would explain how it intends to market the capacity 
and how it would recover the necessary revenues. At or around this 
time, the customers could suggest how the marketing of the capacity 
could be adjusted, including offering comments as suitable on the 
appropriate pricing for capacity and energy. SEPA would consider the 
input from the customers and make modifications as deemed appropriate 
for the implementation of the interim rate for capacity and energy 
sales.
    To remain true to the proposed rate, the Customers recommend that 
SEPA evaluate the sales of capacity and energy on an ongoing, yet 
practical, basis to determine whether the capacity and energy delivered 
was consistent with the projections used to develop the rates under 
rate Alternative Two. In the event that there is a significant 
deviation in the amount of delivered capacity and energy from the 
projections used to prepare the rate, SEPA would again consult with the 
customers. As appropriate, SEPA would change the interim rate for the 
capacity and energy sales to ensure that the delivery of the benefits 
of the projects remains consistent with the underlying marketing plan 
for the Cumberland System of Projects.
    Response 2: Southeastern will consult with Cumberland System 
customers on any marketing arrangements and rate design matters 
involved in the rates under Alternative Two. The consultation could 
include meetings, conference calls, or some other communications 
depending on the immediacy of the available capacity. Southeastern will 
consider the input from the customers and make modifications 
Southeastern deems appropriate for the implementation of the interim 
rate for capacity and energy sales.
    Southeastern does not believe a true-up mechanism is appropriate or 
necessary for the rates that may be established under Alternative Two. 
Southeastern evaluates and monitors all sales of capacity and energy on 
an ongoing, continuous basis and makes changes when Southeastern 
determines they are appropriate.
    Comment 3: South Mississippi Electric Power Association (``SMEPA'') 
encourages SEPA to examine closely the proposed rate increase and keep 
it to the absolute minimum required to satisfy SEPA revenue 
requirements.
    Response 3: Under the Flood Control Act of 1944 (``Act''), 
Southeastern is required to market power at the lowest possible rates 
consistent with sound business principles. The Administrator

[[Page 54575]]

has certified that the proposed rates satisfy this requirement of the 
Act.
    Comment 4: East Kentucky Power Cooperative (``EKPC'') submits that 
SEPA is not purchasing firm transmission service for the 70 MW at the 
Laurel Dam facility; therefore, EKPC should not have to pay a firm TVA 
transmission service charge for that capacity.
    Response 4: By contract, under normal operating conditions, EKPC 
will receive 170 MW from the Cumberland projects. Delivery of EKPC's 
allocation is not limited to the operations of any Cumberland project. 
The output of the Laurel Project, which is in EKPC's control area, is 
supplemented by energy and capacity from the Cumberland Projects in 
TVA's control area. Southeastern believes it is appropriate to continue 
to recover the TVA transmission charge from EKPC's full allocation.
    Comment 5: It is TVA's understanding that there were certain errors 
in the financial information set forth in Exhibit 5 of SEPA's rate 
change support materials. Those errors in turn resulted in errors in 
the calculation of the published proposed rate changes for TVA and for 
SEPA's other Cumberland System customers. It is TVA's understanding 
that SEPA is aware of those errors and intends to correct them.
    Accordingly, TVA's forbearance of raising objections to the 
proposed rate changes is based on TVA's expectation that these 
corrections will be made such that the new rates to be paid by all 
SEPA's Cumberland System customers will be increased by approximately 
the same 4.9 per centum consistent with SEPA's own policies for such 
rate changes regarding the Cumberland System of Projects.
    Response 5: Southeastern has corrected certain errors in the rate 
design of the proposed rates under Alternative Three. After correcting 
the errors, the rate adjustment is about five percent (5%) for all 
Cumberland customers except those in Carolina Power & Light, Western 
Division (``CP&L''). The CP&L area customers' increase is less because 
the CP&L transmission rate has not changed.
    Comment 6: The purpose for the proposed rate changes cannot be 
achieved unless the Corps, SEPA, and the Cumberland System customers 
reach agreement upon and implement Memorandums of Agreement (``MOAs'') 
sufficient to cover each and all of Fiscal Years 2008 through 2028 and 
related Sub-agreements. Accordingly, TVA's forbearance of raising 
objections to the proposed rate changes is based on TVA's expectation 
that MOAs and related Sub-agreements * * * will be executed and 
appropriately implemented.
    The Tennessee Valley Public Power Association (``TVPPA'') 
respectfully recommends that unless and until the United States Army 
Corps of Engineers (``USACE''), the Southeastern Power Administration 
(``SEPA'') and the Cumberland System Customers of SEPA have reached an 
agreement with a specific understanding as to amount and duration for 
rehabilitation and replacement work on the USACE hydroelectric projects 
on the Cumberland System, that the rate increase should not be 
implemented.
    Response 6: Southeastern is required to include estimates of 
replacements and additions in the repayment study to support the 
proposed rate schedules. Southeastern believes the estimates of 
replacements and additions included in this rate adjustment are the 
best available. Southeastern believes this rate adjustment would be 
necessary independent of the implementation of MOAs and related Sub-
agreements.

Discussion

System Repayment

    An examination of Southeastern's revised system power repayment 
study, prepared in July 2008, for the Cumberland System, shows that 
with the proposed rates, all system power costs are paid within the 50-
year repayment period required by existing law and DOE Order RA 6120.2. 
The Administrator of Southeastern has certified that the rates are 
consistent with applicable law and that they are the lowest possible 
rates to customers consistent with sound business principles.

Environmental Impact

    Southeastern has reviewed the possible environmental impacts of the 
rate adjustment under consideration and has concluded that, because the 
adjusted rates would not significantly affect the quality of the human 
environment within the meaning of the National Environmental Policy Act 
of 1969, the proposed action is not a major Federal action for which 
preparation of an Environmental Impact Statement is required.

Availability of Information

    Information regarding these rates, including studies, and other 
supporting materials, is available for public review in the offices of 
Southeastern Power Administration, 1166 Athens Tech Road, Elberton, 
Georgia 30635-6711.

Submission to the Federal Energy Regulatory Commission

    The rates hereinafter confirmed and approved on an interim basis, 
together with supporting documents, will be submitted promptly to FERC 
for confirmation and approval on a final basis, ending no later than 
September 30, 2013.

Order

    In view of the foregoing and pursuant to the authority delegated to 
me by the Secretary of Energy, I hereby confirm and approve on an 
interim basis, effective October 1, 2008, attached Wholesale Power Rate 
Schedules CBR-1-G, CSI-1-G, CEK-1-G, CM-1-G, CC-1-H, CK-1-G, CTV-1-G, 
and Replacement-3. The rate schedules shall remain in effect on an 
interim basis through September 30, 2013, unless such period is 
extended or until FERC confirms and approves them or substitute rate 
schedules on a final basis.

    Dated: September 12, 2008.
Jeffrey F. Kupfer,
Acting Deputy Secretary.

Wholesale Power Rate Schedule CBR-1-G

Availability

    This rate schedule shall be available to Big Rivers Electric 
Corporation and includes the City of Henderson, Kentucky, (hereinafter 
called the Customer).

Applicability

    This rate schedule shall be applicable to electric capacity and 
energy available from the Dale Hollow, Center Hill, Wolf Creek, 
Cheatham, Old Hickory, Barkley, J. Percy Priest and Cordell Hull 
Projects (all of such projects being hereinafter called collectively 
the ``Cumberland Projects'') and sold in wholesale quantities.

Character of Service

    The electric capacity and energy supplied hereunder will be three-
phase alternating current at a nominal frequency of sixty hertz. The 
power shall be delivered at nominal voltages of 13,800 volts and 
161,000 volts to the transmission system of Big Rivers Electric 
Corporation.

Points of Delivery

    Capacity and energy delivered to the Customer will be delivered at 
points of interconnection of the Customer at the Barkley Project 
Switchyard, at a delivery point in the vicinity of the Paradise steam 
plant and at such other points of delivery as may hereafter be

[[Page 54576]]

agreed upon by the Government and TVA.

Billing Month

    The billing month for power sold under this schedule shall end at 
2400 hours CDT or CST, whichever is currently effective, on the last 
day of each calendar month.

Conditions of Service

    The customer shall at its own expense provide, install, and 
maintain on its side of each delivery point the equipment necessary to 
protect and control its own system. In so doing, the installation, 
adjustment, and setting of all such control and protective equipment at 
or near the point of delivery shall be coordinated with that which is 
installed by and at the expense of TVA on its side of the delivery 
point.
    Southeastern is including three rate alternatives. All of the rate 
alternatives have a revenue requirement of $50,400,000.

Rate Alternative 1--Interim Operating Plan

    The final marketing policy for the Cumberland System was published 
in the Federal Register August 5, 1993 (58 FR 41762). The marketing 
policy for the Cumberland System of Projects provides peaking capacity, 
along with 1500 hours of energy annually with each kilowatt of 
capacity, to customers outside the Tennessee Valley Authority (TVA) 
transmission system. Due to restrictions on the operation of the Wolf 
Creek Project and the Center Hill Project imposed by the U.S. Army 
Corps of Engineers as a precaution to prevent failure of the dams, 
Southeastern is not able to provide peaking capacity to these 
customers. Southeastern implemented an Interim Operating Plan for the 
Cumberland System to provide these customers with energy that did not 
include capacity. The rates under Alternative 1 will remain in effect 
for the duration of the Interim Operating Plan.

Monthly Rate

    The monthly rate for capacity and energy sold under this rate 
schedule shall be:

Demand Charge

    None.

Energy Charge

    12.67 mills per kilowatt-hour.

Transmission

    The Customer will pay a ratable percent listed below of the credit 
the Administrator of Southeastern Power Administration (Administrator) 
provides to the Tennessee Valley Authority (TVA) as consideration for 
delivering capacity and energy for the account of the Administrator to 
points of delivery of Other Customers or interconnection points of 
delivery with other electric systems for the benefit of Other 
Customers, as agreed by contract between the Administrator and TVA.

Big Rivers Electric Corporation--32.660%
City of Henderson, Kentucky--2.202%

Energy To Be Furnished by the Government

    The Customer will receive a ratable share of the energy made 
available by the Nashville District of the U.S. Army Corps of 
Engineers.

Rate Alternative 2--Cost Recovered From Capacity and Energy

    This rate alternative will be implemented if a portion of the 
Cumberland Capacity can be scheduled, though not all the capacity in 
the published marketing policy can be scheduled. The revenue 
requirement under this alternative is $50,400,000, the same as the 
revenue requirement in Alternatives 1 and 3. The rate alternative 2 
will receive revenues from capacity that can be scheduled and the 
remainder from energy, at charges that will be determined at the time. 
Under alternative 2, the cost of the TVA transmission credit will be 
passed to customers outside the TVA System. This rate alternative will 
be in effect when the Corps modifies operation of the Wolf Creek 
Project and the Center Hill Project to allow some of the capacity 
scheduled. When the lake level rises and capacity is available, the 
capacity will be allocated on an interim basis to the customers.

Rate Alternative 3--Original Cumberland Marketing Policy

    The third rate alternative will go into effect once the Corps lifts 
all restrictions on the operation of the Wolf Creek Dam and Center Hill 
Dam and Southeastern returns to operations that support the published 
marketing policy.

Monthly Rate

    The monthly rate for capacity and energy sold under this rate 
schedule shall be:

Demand Charge

    $3.538 per kilowatt/month of total contract demand.

Energy Charge

    None.

Energy To Be Furnished by the Government

    The Government shall make available each contract year to the 
customer from the Projects through the customer's interconnections with 
TVA and the customer will schedule and accept an allocation of 1500 
kilowatt-hours of energy delivered at the TVA border for each kilowatt 
of contract demand. A contract year is defined as the 12 months 
beginning July 1 and ending at midnight June 30 of the following 
calendar year. The energy made available for a contract year shall be 
scheduled monthly such that the maximum amount scheduled in any month 
shall not exceed 240 hours per kilowatt of the customer's contract 
demand and the minimum amount scheduled in any month shall not be less 
than 60 hours per kilowatt of the customer's contract demand. The 
customer may request and the Government may approve energy scheduled 
for a month greater than 240 hours per kilowatt of the customer's 
contract demand; provided, that the combined schedule of all SEPA 
customers outside TVA and served by TVA does not exceed 240 hours per 
kilowatt of the total contract demands of these customers.

Service Interruption

    When delivery of capacity is interrupted or reduced due to 
conditions on the Administrator's system beyond his control, the 
Administrator will continue to make available the portion of his 
declaration of energy that can be generated with the capacity 
available.
    For such interruption or reduction due to conditions on the 
Administrator's system which have not been arranged for and agreed to 
in advance, the demand charge for capacity made available will be 
reduced as to the kilowatts of such capacity which have been 
interrupted or reduced in accordance with the following formula:

[[Page 54577]]

[GRAPHIC] [TIFF OMITTED] TN22SE08.000

Wholesale Power Rate Schedule CSI-1-G

Availability

    This rate schedule shall be available to Southern Illinois Power 
Cooperative (hereinafter the Customer).

Applicability

    This rate schedule shall be applicable to electric capacity and 
energy available from the Dale Hollow, Center Hill, Wolf Creek, 
Cheatham, Old Hickory, Barkley, J. Percy Priest and Cordell Hull 
Projects (all of such projects being hereinafter called collectively 
the ``Cumberland Projects'') and sold in wholesale quantities.

Character of Service

    The electric capacity and energy supplied hereunder will be three-
phase alternating current at a nominal frequency of sixty hertz. The 
power shall be delivered at nominal voltages of 13,800 volts and 
161,000 volts to the transmission system of Big Rivers Electric 
Corporation.

Points of Delivery

    Capacity and energy delivered to the Customer will be delivered at 
points of interconnection of the Customer at the Barkley Project 
Switchyard, at a delivery point in the vicinity of the Paradise steam 
plant and at such other points of delivery as may hereafter be agreed 
upon by the Government and TVA.

Billing Month

    The billing month for power sold under this schedule shall end at 
2400 hours CDT or CST, whichever is currently effective, on the last 
day of each calendar month.
    Southeastern is including three rate alternatives. All of the rate 
alternatives have a revenue requirement of $50,400,000.

Rate Alternative 1--Interim Operating Plan

    The final marketing policy for the Cumberland System was published 
in the Federal Register August 5, 1993 (58 FR 41762). The marketing 
policy for the Cumberland System of Projects provides peaking capacity, 
along with 1500 hours of energy annually with each kilowatt of 
capacity, to customers outside the Tennessee Valley Authority (TVA) 
transmission system. Due to restrictions on the operation of the Wolf 
Creek Project and the Center Hill Project imposed by the U.S. Army 
Corps of Engineers as a precaution to prevent failure of the dams, 
Southeastern is not able to provide peaking capacity to these 
customers. Southeastern implemented an Interim Operating Plan for the 
Cumberland System to provide these customers with energy that did not 
include capacity. The rates under Alternative 1 will remain in effect 
for the duration of the Interim Operating Plan.

Monthly Rate

    The monthly rate for capacity and energy sold under this rate 
schedule shall be:

Demand Charge

    None.

Energy Charge

    12.67 mills per kilowatt-hour.

Transmission Charge

    The Customer will pay 5.138 percent of the credit the Administrator 
of Southeastern Power Administration (Administrator) provides to the 
Tennessee Valley Authority (TVA) as consideration for delivering 
capacity and energy for the account of the Administrator to points of 
delivery of Other Customers or interconnection points of delivery with 
other electric systems for the benefit of Other Customers, as agreed by 
contract between the Administrator and TVA.

Energy To Be Furnished by the Government

    The Customer will receive a ratable share of the energy made 
available by the Nashville District of the U.S. Army Corps of 
Engineers.

Rate Alternative 2--Cost Recovered From Capacity and Energy

    This rate alternative will be implemented if a portion of the 
Cumberland Capacity can be scheduled, though not all the capacity in 
the published marketing policy can be scheduled. The revenue 
requirement under this alternative is $50,400,000, the same as the 
revenue requirement in Alternatives 1 and 3. The rate alternative 2 
will receive revenues from capacity that can be scheduled and the 
remainder from energy, at charges that will be determined at the time. 
Under alternative 2, the cost of the TVA transmission credit will be 
passed to customers outside the TVA System. This rate alternative will 
be in effect when the Corps modifies operation of the Wolf Creek 
Project and the Center Hill Project to allow some of the capacity 
scheduled. When the lake level rises and capacity is available, the 
capacity will be allocated on an interim basis to the customers.

Rate Alternative 3--Original Cumberland Marketing Policy

    The third rate alternative will go into effect once the Corps lifts 
all restrictions on the operation of the Wolf Creek Dam and Center Hill 
Dam and Southeastern returns to operations that support the published 
marketing policy.

Monthly Rate

    The monthly rate for capacity and energy sold under this rate 
schedule shall be:

Demand Charge

    $3.538 per kilowatt/month of total contract demand.

Energy Charge

    None.

Energy To Be Furnished by the Government

    The Government shall make available each contract year to the 
customer from the Projects through the customer's interconnections with 
TVA and the customer will schedule and accept an allocation of 1500 
kilowatt-hours of energy delivered at the TVA border for each kilowatt 
of contract demand. A contract year is defined as the 12 months 
beginning July 1 and ending at midnight June 30 of the following 
calendar year. The energy made available for a contract year shall be 
scheduled monthly such that the maximum amount scheduled in any month 
shall not exceed 240 hours per kilowatt of the customer's contract 
demand and the minimum amount scheduled in any month shall not be less 
than 60 hours per kilowatt of the customer's contract demand. The 
customer may request and the Government may approve energy scheduled 
for a month greater than 240 hours per kilowatt of the customer's 
contract demand; provided, that the combined schedule of all SEPA 
customers outside TVA and served by TVA does not exceed 240 hours per 
kilowatt of the total contract demands of these customers.

[[Page 54578]]

Service Interruption

    When delivery of capacity is interrupted or reduced due to 
conditions on the Administrator's system beyond his control, the 
Administrator will continue to make available the portion of his 
declaration of energy that can be generated with the capacity 
available.
    For such interruption or reduction due to conditions on the 
Administrator's system which have not been arranged for and agreed to 
in advance, the demand charge for capacity made available will be 
reduced as to the kilowatts of such capacity which have been 
interrupted or reduced in accordance with the following formula:
[GRAPHIC] [TIFF OMITTED] TN22SE08.001

Wholesale Power Rate Schedule CEK-1-G

Availability

    This rate schedule shall be available to East Kentucky Power 
Cooperative (hereinafter called the Customer).

Applicability

    This rate schedule shall be applicable to electric capacity and 
energy available from the Dale Hollow, Center Hill, Wolf Creek, 
Cheatham, Old Hickory, Barkley, J. Percy Priest and Cordell Hull 
Projects (all of such projects being hereinafter called collectively 
the ``Cumberland Projects'') and power available from the Laurel 
Project and sold in wholesale quantities.

Character of Service

    The electric capacity and energy supplied hereunder will be three-
phase alternating current at a nominal frequency of sixty hertz. The 
power shall be delivered at nominal voltages of 161,000 volts to the 
transmission systems of the Customer.

Points of Delivery

    The points of delivery will be the 161,000 volt bus of the Wolf 
Creek Power Plant and the 161,000 volt bus of the Laurel Project. Other 
points of delivery may be as agreed upon.

Billing Month

    The billing month for power sold under this schedule shall end at 
2400 hours CDT or CST, whichever is currently effective, on the last 
day of each calendar month.

Conditions of Service

    The customer shall at its own expense provide, install, and 
maintain on its side of each delivery point the equipment necessary to 
protect and control its own system. In so doing, the installation, 
adjustment and setting of all such control and protective equipment at 
or near the point of delivery shall be coordinated with that which is 
installed by and at the expense of TVA on its side of the delivery 
point.
    Southeastern is including three rate alternatives. All of the rate 
alternatives have a revenue requirement of $50,400,000.

Rate Alternative 1--Interim Operating Plan

    The final marketing policy for the Cumberland System was published 
in the Federal Register August 5, 1993 (58 FR 41762). The marketing 
policy for the Cumberland System of Projects provides peaking capacity, 
along with 1500 hours of energy annually with each kilowatt of 
capacity, to customers outside the Tennessee Valley Authority (TVA) 
transmission system. Due to restrictions on the operation of the Wolf 
Creek Project and the Center Hill Project imposed by the U. S. Army 
Corps of Engineers as a precaution to prevent failure of the dams, 
Southeastern is not able to provide peaking capacity to these 
customers. Southeastern implemented an Interim Operating Plan for the 
Cumberland System to provide these customers with energy that did not 
include capacity. The rates under Alternative 1 will remain in effect 
for the duration of the Interim Operating Plan.

Monthly Rate

    The monthly rate for capacity and energy sold under this rate 
schedule shall be:

Demand Charge

    None.

Energy Charge

    12.67 mills per kilowatt-hour.

Transmission Charge

    The Customer will pay 31.192 percent of the credit the 
Administrator of Southeastern Power Administration (Administrator) 
provides to the Tennessee Valley Authority (TVA) as consideration for 
delivering capacity and energy for the account of the Administrator to 
points of delivery of Other Customers or interconnection points of 
delivery with other electric systems for the benefit of Other 
Customers, as agreed by contract between the Administrator and TVA.

Energy To Be Furnished by the Government

    The Customer will receive a ratable share of the energy made 
available by the Nashville District of the U.S. Army Corps of 
Engineers.

Rate Alternative 2--Cost Recovered from Capacity and Energy

    This rate alternative will be implemented if a portion of the 
Cumberland Capacity can be scheduled, though not all the capacity in 
the published marketing policy can be scheduled. The revenue 
requirement under this alternative is $50,400,000, the same as the 
revenue requirement in Alternatives 1 and 3. The rate alternative 2 
will receive revenues from capacity that can be scheduled and the 
remainder from energy, at charges that will be determined at the time. 
Under alternative 2, the cost of the TVA transmission credit will be 
passed to customers outside the TVA System. This rate alternative will 
be in effect when the Corps modifies operation of the Wolf Creek 
Project and the Center Hill Project to allow some of the capacity 
scheduled. When the lake level rises and capacity is available, the 
capacity will be allocated on an interim basis to the customers.

Rate Alternative 3--Original Cumberland Marketing Policy

    The third rate alternative will go into effect once the Corps lifts 
all restrictions on the operation of the Wolf Creek Dam and Center Hill 
Dam and Southeastern returns to operations that support the published 
marketing policy.

Monthly Rate

    The monthly rate for capacity and energy sold under this rate 
schedule shall be:

Demand Charge

    $2.364 per kilowatt/month of total contract demand.

[[Page 54579]]

Energy Charge

    9.392 mills per kilowatt-hour.

Energy To Be Furnished by the Government

    The Government shall make available each contract year to the 
customer from the Projects through the customer's interconnections with 
TVA and the customer will schedule and accept an allocation of 1500 
kilowatt-hours of energy delivered at the TVA border for each kilowatt 
of contract demand plus 369 kilowatt-hours of energy delivered for each 
kilowatt of contract demand to supplement energy available at the 
Laurel Project. A contract year is defined as the 12 months beginning 
July 1 and ending at midnight June 30 of the following calendar year. 
The energy made available for a contract year shall be scheduled 
monthly such that the maximum amount scheduled in any month shall not 
exceed 240 hours per kilowatt of the customer's contract demand and the 
minimum amount scheduled in any month shall not be less than 60 hours 
per kilowatt of the customer's contract demand. The customer may 
request and the Government may approve energy scheduled for a month 
greater than 240 hours per kilowatt of the customer's contract demand; 
provided, that the combined schedule of all SEPA customers outside TVA 
and served by TVA does not exceed 240 hours per kilowatt of the total 
contract demands of these customers.

Service Interruption

    When delivery of capacity is interrupted or reduced due to 
conditions on the Administrator's system beyond his control, the 
Administrator will continue to make available the portion of his 
declaration of energy that can be generated with the capacity 
available.
    For such interruption or reduction due to conditions on the 
Administrator's system which have not been arranged for and agreed to 
in advance, the demand charge for capacity made available will be 
reduced as to the kilowatts of such capacity which have been 
interrupted or reduced in accordance with the following formula:
[GRAPHIC] [TIFF OMITTED] TN22SE08.002

Wholesale Power Rate Schedule CM-1-G

Availability

    This rate schedule shall be available to the South Mississippi 
Electric Power Association, Municipal Energy Agency of Mississippi, and 
Mississippi Delta Energy Agency (hereinafter called the Customers).

Applicability

    This rate schedule shall be applicable to electric capacity and 
energy available from the Dale Hollow, Center Hill, Wolf Creek, 
Cheatham, Old Hickory, Barkley, J. Percy Priest and Cordell Hull 
Projects (all of such projects being hereinafter called collectively 
the ``Cumberland Projects'') and sold in wholesale quantities.

Character of Service

    The electric capacity and energy supplied hereunder will be three-
phase alternating current at a nominal frequency of sixty hertz. The 
power shall be delivered at nominal voltages of 161,000 volts to the 
transmission systems of Mississippi Power and Light.

Points of Delivery

    The points of delivery will be at interconnection points of the 
Tennessee Valley Authority system and the Mississippi Power and Light 
system. Other points of delivery may be as agreed upon.

Billing Month

    The billing month for power sold under this schedule shall end at 
2400 hours CDT or CST, whichever is currently effective on the last day 
of each calendar month.
    Southeastern is including three rate alternatives. All of the rate 
alternatives have a revenue requirement of $50,400,000.

Rate Alternative 1--Interim Operating Plan

    The final marketing policy for the Cumberland System was published 
in the Federal Register August 5, 1993 (58 FR 41762). The marketing 
policy for the Cumberland System of Projects provides peaking capacity, 
along with 1500 hours of energy annually with each kilowatt of 
capacity, to customers outside the Tennessee Valley Authority (TVA) 
transmission system. Due to restrictions on the operation of the Wolf 
Creek Project and the Center Hill Project imposed by the U.S. Army 
Corps of Engineers as a precaution to prevent failure of the dams, 
Southeastern is not able to provide peaking capacity to these 
customers. Southeastern implemented an Interim Operating Plan for the 
Cumberland System to provide these customers with energy that did not 
include capacity. The rates under Alternative 1 will remain in effect 
for the duration of the Interim Operating Plan.

Monthly Rate

    The monthly rate for capacity and energy sold under this rate 
schedule shall be:

Demand Charge

    None.

Energy Charge

    12.67 mills per kilowatt-hour.

Transmission Charge

    The Customer will pay a ratable percent listed below of the credit 
the Administrator of Southeastern Power Administration (Administrator) 
provides to the Tennessee Valley Authority (TVA) as consideration for 
delivering capacity and energy for the account of the Administrator to 
points of delivery of Other Customers or interconnection points of 
delivery with other electric systems for the benefit of Other 
Customers, as agreed by contract between the Administrator and TVA.

Mississippi Delta Energy Agency--2.058%
Municipal Energy Agency of Mississippi--3.447%
South Mississippi EPA--9.358%

Energy To Be Furnished by the Government

    The Customer will receive a ratable share of the energy made 
available by the Nashville District of the U.S. Army Corps of 
Engineers.

Rate Alternative 2--Cost Recovered From Capacity and Energy

    This rate alternative will be implemented if a portion of the 
Cumberland Capacity can be scheduled, though not all the capacity in 
the published marketing policy can be scheduled. The revenue 
requirement under this alternative is $50,400,000, the same as the 
revenue requirement in Alternatives 1 and 3. The rate alternative 2 
will receive revenues from

[[Page 54580]]

capacity that can be scheduled and the remainder from energy, at 
charges that will be determined at the time. Under alternative 2, the 
cost of the TVA transmission credit will be passed to customers outside 
the TVA System. This rate alternative will be in effect when the Corps 
modifies operation of the Wolf Creek Project and the Center Hill 
Project to allow some of the capacity scheduled. When the lake level 
rises and capacity is available, the capacity will be allocated on an 
interim basis to the customers.

Rate Alternative 3--Original Cumberland Marketing Policy

    The third rate alternative will go into effect once the Corps lifts 
all restrictions on the operation of the Wolf Creek Dam and Center Hill 
Dam and Southeastern returns to operations that support the published 
marketing policy.

Monthly Rate

    The monthly rate for capacity and energy sold under this rate 
schedule shall be:

Demand Charge

    $3.538 per kilowatt/month of total contract demand.

Energy Charge

    None.

Energy To Be Furnished by the Government

    The Government shall make available each contract year to the 
Customer from the Projects through the Customer's interconnections with 
TVA and the Customer will schedule and accept an allocation of 1500 
kilowatt-hours of energy delivered at the TVA border for each kilowatt 
of contract demand. A contract year is defined as the 12 months 
beginning July 1 and ending at midnight June 30 of the following 
calendar year. The energy made available for a contract year shall be 
scheduled monthly such that the maximum amount scheduled in any month 
shall not exceed 240 hours per kilowatt of the Customer's contract 
demand and the minimum amount scheduled in any month shall not be less 
than 60 hours per kilowatt of the Customer's contract demand. The 
Customer may request and the Government may approve energy scheduled 
for a month greater than 240 hours per kilowatt of the Customer's 
contract demand; provided, that the combined schedule of all SEPA 
Customers outside TVA and served by TVA does not exceed 240 hours per 
kilowatt of the total contract demands of these Customers.
    In the event that any portion of the capacity allocated to the 
Customers is not initially delivered to the Customers as of the 
beginning of a full contract year, the 1500 kilowatt hours shall be 
reduced 1/12 for each month of that year prior to initial delivery of 
such capacity.

Service Interruption

    When delivery of capacity is interrupted or reduced due to 
conditions on the Administrator's system beyond his control, the 
Administrator will continue to make available the portion of his 
declaration of energy that can be generated with the capacity 
available.
    For such interruption or reduction due to conditions on the 
Administrator's system which have not been arranged for and agreed to 
in advance, the demand charge for capacity made available will be 
reduced as to the kilowatts of such capacity which have been 
interrupted or reduced in accordance with the following formula:
[GRAPHIC] [TIFF OMITTED] TN22SE08.003

Wholesale Power Rate Schedule CC-1-H

Availability

    This rate schedule shall be available to public bodies and 
cooperatives served through the facilities of Carolina Power & Light 
Company, Western Division (hereinafter called the Customers).

Applicability

    This rate schedule shall be applicable to electric capacity and 
energy available from the Dale Hollow, Center Hill, Wolf Creek, 
Cheatham, Old Hickory, Barkley, J. Percy Priest and Cordell Hull 
Projects (all of such projects being hereinafter called collectively 
the ``Cumberland Projects'') and sold in wholesale quantities.

Character of Service

    The electric capacity and energy supplied hereunder will be three-
phase alternating current at a nominal frequency of sixty hertz. The 
power shall be delivered at nominal voltages of 161,000 volts to the 
transmission system of Carolina Power & Light Company, Western 
Division.

Points of Delivery

    The points of delivery will be at interconnecting points of the 
Tennessee Valley Authority system and the Carolina Power & Light 
Company, Western Division system. Other points of delivery may be as 
agreed upon.

Billing Month

    The billing month for power sold under this schedule shall end at 
2400 hours CDT or CST, whichever is currently effective, on the last 
day of each calendar month.
    Southeastern is including three rate alternatives. All of the rate 
alternatives have a revenue requirement of $50,400,000.

Rate Alternative 1--Interim Operating Plan

    The final marketing policy for the Cumberland System was published 
in the Federal Register August 5, 1993 (58 FR 41762). The marketing 
policy for the Cumberland System of Projects provides peaking capacity, 
along with 1500 hours of energy annually with each kilowatt of 
capacity, to customers outside the Tennessee Valley Authority (TVA) 
transmission system. Due to restrictions on the operation of the Wolf 
Creek Project and the Center Hill Project imposed by the U.S. Army 
Corps of Engineers as a precaution to prevent failure of the dams, 
Southeastern is not able to provide peaking capacity to these 
customers. Southeastern implemented an Interim Operating Plan for the 
Cumberland System to provide these customers with energy that did not 
include capacity. The rates under Alternative 1 will remain in effect 
for the duration of the Interim Operating Plan.

Monthly Rate

    The monthly rate for capacity and energy sold under this rate 
schedule shall be:

Demand Charge

    None.

Energy Charge

    12.67 mills per kilowatt-hour.

[[Page 54581]]

TVA Transmission Charge

    The Customer will pay a ratable percent listed below of the credit 
the Administrator of Southeastern Power Administration (Administrator) 
provides to the Tennessee Valley Authority (TVA) as consideration for 
delivering capacity and energy for the account of the Administrator to 
points of delivery of Other Customers or interconnection points of 
delivery with other electric systems for the benefit of Other 
Customers, as agreed by contract between the Administrator and TVA.

French Broad EMC--1.713%
Haywood EMC--0.501%
Town of Waynesville--0.355%

CP&L Transmission Charge

    The Customer will pay a ratable percent listed below of the charge 
for transmission service furnished by Carolina Power & Light Company, 
Western Division.

French Broad EMC--66.667%
Haywood EMC--19.512%
Town of Waynesville--13.821%

Energy To Be Furnished by the Government

    The Government will sell to the customer and the customer will 
purchase from the Government energy each billing month equivalent to a 
percentage specified by contract of the energy made available to 
Carolina Power & Light Company (less applicable losses). The Customer's 
contract demand and accompanying energy allocation will be divided pro 
rata among its individual delivery points served from the Carolina 
Power & Light Company's Western Division transmission system.

Rate Alternative 2--Cost Recovered From Capacity and Energy

    This rate alternative will be implemented if a portion of the 
Cumberland Capacity can be scheduled, though not all the capacity in 
the published marketing policy can be scheduled. The revenue 
requirement under this alternative is $50,400,000, the same as the 
revenue requirement in Alternatives 1 and 3. The rate alternative 2 
will receive revenues from capacity that can be scheduled and the 
remainder from energy, at charges that will be determined at the time. 
Under alternative 2, the cost of the TVA transmission credit will be 
passed to customers outside the TVA System. This rate alternative will 
be in effect when the Corps modifies operation of the Wolf Creek 
Project and the Center Hill Project to allow some of the capacity 
scheduled. When the lake level rises and capacity is available, the 
capacity will be allocated on an interim basis to the customers.

 Rate Alternative 3--Original Cumberland Marketing Policy

    The third rate alternative will go into effect once the Corps lifts 
all restrictions on the operation of the Wolf Creek Dam and Center Hill 
Dam and Southeastern returns to operations that support the published 
marketing policy.

Monthly Rate

    The monthly rate for capacity and energy sold under this rate 
schedule shall be:

Demand Charge

    $4.027 per kilowatt/month of total contract demand.

Energy Charge

    None.

CP&L Transmission Charge

    $1.1022 per kilowatt/month of total contract demand.
    The CP&L transmission rate is subject to annual adjustment on April 
1 of each year and will be computed subject to the formula in Appendix 
A attached to the Government-Carolina Power & Light Company contract.

Energy To Be Furnished by the Government

    The Government will sell to the customer and the customer will 
purchase from the Government energy each billing month equivalent to a 
percentage specified by contract of the energy made available to 
Carolina Power & Light Company (less six percent (6%) losses). The 
Customer's contract demand and accompanying energy allocation will be 
divided pro rata among its individual delivery points served from the 
Carolina Power & Light Company's Western Division transmission system.

Wholesale Power Rate Schedule CK-1-G

Availability

    This rate schedule shall be available to public bodies served 
through the facilities of Kentucky Utilities Company (hereinafter 
called the Customers.)

Applicability

    This rate schedule shall be applicable to electric capacity and 
energy available from the Dale Hollow, Center Hill, Wolf Creek, 
Cheatham, Old Hickory, Barkley, J. Percy Priest and Cordell Hull 
Projects (all of such projects being hereinafter called collectively 
the ``Cumberland Projects'') and sold in wholesale quantities.

Character of Service

    The electric capacity and energy supplied hereunder will be three-
phase alternating current at a nominal frequency of sixty hertz. The 
power shall be delivered at nominal voltages of 161,000 volts to the 
transmission systems of Kentucky Utilities Company.

Points of Delivery

    The points of delivery will be at interconnecting points between 
the Tennessee Valley Authority system and the Kentucky Utilities 
Company system. Other points of delivery may be as agreed upon.

Billing Month

    The billing month for power sold under this schedule shall end at 
2400 hours CDT or CST, whichever is currently effective on the last day 
of each calendar month.
    Southeastern is including three rate alternatives. All of the rate 
alternatives have a revenue requirement of $50,400,000.

Rate Alternative 1--Interim Operating Plan

    The final marketing policy for the Cumberland System was published 
in the Federal Register August 5, 1993 (58 FR 41762). The marketing 
policy for the Cumberland System of Projects provides peaking capacity, 
along with 1500 hours of energy annually with each kilowatt of 
capacity, to customers outside the Tennessee Valley Authority (TVA) 
transmission system. Due to restrictions on the operation of the Wolf 
Creek Project and the Center Hill Project imposed by the U.S. Army 
Corps of Engineers as a precaution to prevent failure of the dams, 
Southeastern is not able to provide peaking capacity to these 
customers. Southeastern implemented an Interim Operating Plan for the 
Cumberland System to provide these customers with energy that did not 
include capacity. The rates under Alternative 1 will remain in effect 
for the duration of the Interim Operating Plan.

Monthly Rate

    The monthly rate for capacity and energy sold under this rate 
schedule shall be:

Demand Charge

    None.

Energy Charge

    12.67 mills per kilowatt-hour.

[[Page 54582]]

Transmission Charge

    The Customer will pay a ratable percent listed below of the credit 
the Administrator of Southeastern Power Administration (Administrator) 
provides to the Tennessee Valley Authority (TVA) as consideration for 
delivering capacity and energy for the account of the Administrator to 
points of delivery of Other Customers or interconnection points of 
delivery with other electric systems for the benefit of Other 
Customers, as agreed by contract between the Administrator and TVA.

City of Barbourville....................................          0.404%
City of Bardstown.......................................          0.412%
City of Bardwell........................................          0.099%
City of Benham..........................................          0.046%
City of Corbin..........................................          0.477%
City of Falmouth........................................          0.108%
City of Frankfort.......................................          2.866%
City of Madisonville....................................          1.432%
City of Nicholasville...................................          0.469%
City of Owensboro.......................................          4.587%
City of Paris...........................................          0.250%
City of Providence......................................          0.226%
 

Energy To Be Furnished by the Government

    The Customer will receive a ratable share of the energy made 
available by the Nashville District of the U.S. Army Corps of 
Engineers.

Rate Alternative 2--Cost Recovered From Capacity and Energy

    This rate alternative will be implemented if a portion of the 
Cumberland Capacity can be scheduled, though not all the capacity in 
the published marketing policy can be scheduled. The revenue 
requirement under this alternative is $50,400,000, the same as the 
revenue requirement in Alternatives 1 and 3. The rate alternative 2 
will receive revenues from capacity that can be scheduled and the 
remainder from energy, at charges that will be determined at the time. 
Under alternative 2, the cost of the TVA transmission credit will be 
passed to customers outside the TVA System. This rate alternative will 
be in effect when the Corps modifies operation of the Wolf Creek 
Project and the Center Hill Project to allow some of the capacity 
scheduled. When the lake level rises and capacity is available, the 
capacity will be allocated on an interim basis to the customers.

Rate Alternative 3--Original Cumberland Marketing Policy

    The third rate alternative will go into effect once the Corps lifts 
all restrictions on the operation of the Wolf Creek Dam and Center Hill 
Dam and Southeastern returns to operations that support the published 
marketing policy.

Monthly Rate

    The monthly rate for capacity and energy sold under this rate 
schedule shall be:

Demand Charge

    $3.538 per kilowatt/month of total contract demand

Energy Charge

    None.

Additional Energy Charge

    9.392 mills per kilowatt-hour.

Energy To Be Furnished by the Government

    The Government shall make available each contract year to the 
Customer from the Projects and the Customer will accept an allocation 
of 1500 kilowatt-hours of energy for each kilowatt of contract demand. 
A contract year is defined as the 12 months beginning July 1 and ending 
at midnight June 30 of the following calendar year. The energy made 
available for a contract year shall be scheduled monthly such that the 
maximum amount scheduled in any month shall not exceed 240 hours per 
kilowatt of the Customer's contract demand and the minimum amount 
scheduled in any month shall not be less than 60 hours per kilowatt of 
the Customer's contract demand. The Customer may request and the 
Government may approve energy scheduled for a month greater than 240 
hours per kilowatt of the Customer's contract demand; provided, that 
the combined schedule of all SEPA Customers outside TVA and served by 
TVA does not exceed 240 hours per kilowatt of the total contract 
demands of these Customers.
    In the event that any portion of the capacity allocated to the 
Customers is not initially delivered to the Customers as of the 
beginning of a full contract year, the 1500 kilowatt hours shall be 
reduced \1/12\ for each month of that year prior to initial delivery of 
such capacity.
    For billing purposes, each kilowatt of capacity will include 1500 
kilowatt-hours energy per year. Customers will pay for additional 
energy at the additional energy rate.

Wholesale Power Rate Schedule CTV-1-G

Availability

    This rate schedule shall be available to the Tennessee Valley 
Authority (hereinafter called TVA).

Applicability

    This rate schedule shall be applicable to electric capacity and 
energy generated at the Dale Hollow, Center Hill, Wolf Creek, Old 
Hickory, Cheatham, Barkley, J. Percy Priest, and Cordell Hull Projects 
(all of such projects being hereafter called collectively the 
``Cumberland Projects'') and the Laurel Project sold under agreement 
between the Department of Energy and TVA.

Character of Service

    The electric capacity and energy supplied hereunder will be three-
phase alternating current at a frequency of approximately 60 Hertz at 
the outgoing terminals of the Cumberland Projects' switchyards.

Billing Month

    The billing month for capacity and energy sold under this schedule 
shall end at 2400 hours CDT or CST, whichever is currently effective, 
on the last day of each calendar month.

Contract Year

    For purposes of this rate schedule, a contract year shall be as in 
Section 13.1 of the Southeastern Power Administration--Tennessee Valley 
Authority Contract.

Power Factor

    TVA shall take capacity and energy from the Department of Energy at 
such power factor as will best serve TVA's system from time to time; 
provided, that TVA shall not impose a power factor of less than .85 
lagging on the Department of Energy's facilities which requires 
operation contrary to good operating practice or results in overload or 
impairment of such facilities.
    Southeastern is including three rate alternatives. All of the rate 
alternatives have a revenue requirement of $50,400,000.

Rate Alternative 1--Interim Operating Plan

    The final marketing policy for the Cumberland System was published 
in the Federal Register August 5, 1993 (58 FR 41762). The marketing 
policy for the Cumberland System of Projects provides peaking capacity, 
along with 1500 hours of energy annually with each kilowatt of 
capacity, to customers outside the Tennessee Valley Authority (TVA) 
transmission system. Due to restrictions on the operation of the Wolf 
Creek Project and the Center Hill Project imposed by the U. S. Army 
Corps of Engineers as a precaution to prevent failure of the dams, 
Southeastern is not able to provide peaking capacity to these 
customers. Southeastern implemented an Interim Operating Plan for the 
Cumberland System to provide

[[Page 54583]]

these customers with energy that did not include capacity. The rates 
under Alternative 1 will remain in effect for the duration of the 
Interim Operating Plan.

Monthly Rates

    The monthly rate for capacity and energy sold under this rate 
schedule shall be:

Demand Charge

    None.

Energy Charge

    12.67 mills per kilowatt-hour.

Energy To Be Made Available

    The Customer will receive a ratable share of the energy made 
available by the Nashville District of the U.S. Army Corps of 
Engineers.

Rate Alternative 2--Cost Recovered From Capacity and Energy

    This rate alternative will be implemented if a portion of the 
Cumberland Capacity can be scheduled, though not all the capacity in 
the published marketing policy can be scheduled. The revenue 
requirement under this alternative is $50,400,000, the same as the 
revenue requirement in Alternatives 1 and 3. The rate alternative 2 
will receive revenues from capacity that can be scheduled and the 
remainder from energy, at charges that will be determined at the time. 
Under alternative 2, the cost of the TVA transmission credit will be 
passed to customers outside the TVA System. This rate alternative will 
be in effect when the Corps modifies operation of the Wolf Creek 
Project and the Center Hill Project to allow some of the capacity 
scheduled. When the lake level rises and capacity is available, the 
capacity will be allocated on an interim basis to the customers.

Rate Alternative 3--Original Cumberland Marketing Policy

    The third rate alternative will go into effect once the Corps lifts 
all restrictions on the operation of the Wolf Creek Dam and Center Hill 
Dam and Southeastern returns to operations that support the published 
marketing policy.

Monthly Rate

    The monthly rate for capacity and energy sold under this rate 
schedule shall be:

Demand Charge

    $2.072 per kilowatt/month of total contract demand.

Energy Charge

    None.

Additional Energy Charge

    9.392 mills per kilowatt-hour.

Energy To Be Made Available

    The Department of Energy shall determine the energy that is 
available from the projects for declaration in the billing month.
    To meet the energy requirements of the Department of Energy's 
customers outside the TVA area (hereinafter called Other Customers), 
768,000 megawatt-hours of net energy shall be available annually 
(including 36,900 megawatt-hours of annual net energy to supplement 
energy available at Laurel Project). The energy requirement of the 
Other Customers shall be available annually, divided monthly such that 
the maximum available in any month shall not exceed 240 hours per 
kilowatt of total Other Customers contract demand, and the minimum 
amount available in any month shall not be less than 60 hours per 
kilowatt of total Other Customers demand.
    In the event that any portion of the capacity allocated to Other 
Customers is not initially delivered to the Other Customers as of the 
beginning of a full contract year, (July through June), the 1500 hours, 
plus any such additional energy required as discussed above, shall be 
reduced \1/12\ for each month of that year prior to initial delivery of 
such capacity.
    The energy scheduled by TVA for use within the TVA System in any 
billing month shall be the total energy delivered to TVA less (1) an 
adjustment for fast or slow meters, if any, (2) an adjustment for 
Barkley-Kentucky Canal of 15,000 megawatt-hours of energy each month 
which is delivered to TVA under the agreement from the Cumberland 
Projects without charge to TVA, (3) the energy scheduled by the 
Department of Energy in said month for the Other Customers plus losses 
of two (2) percent, and (4) station service energy furnished by TVA.
    Each kilowatt of capacity will include 1500 kilowatt-hours of 
energy per year, which is defined as base energy. Energy received in 
excess of 1500 kilowatt-hours per kilowatt will be subject to an 
additional energy charge identified in the monthly rates section of 
this rate schedule.

Service Interruption

    When delivery of capacity to TVA is interrupted or reduced due to 
conditions on the Department of Energy's system that are beyond its 
control, the Department of Energy will continue to make available the 
portion of its declaration of energy that can be generated with the 
capacity available.
    For such interruption or reduction (exclusive of any restrictions 
provided in the agreement) due to conditions on the Department of 
Energy's system which have not been arranged for and agreed to in 
advance, the demand charge for scheduled capacity made available to TVA 
will be reduced as to the kilowatts of such scheduled capacity which 
have been so interrupted or reduced for each day in accordance with the 
following formula:
[GRAPHIC] [TIFF OMITTED] TN22SE08.004

Wholesale Rate Schedule Replacement--3

Availability

    This rate schedule shall be available to public bodies and 
cooperatives ( any one of whom is hereinafter called the Customer) in 
Virginia, North Carolina, Tennessee, Georgia, Alabama, Mississippi, 
Kentucky and southern Illinois to whom power is provided pursuant to 
contracts between the Government and the customer from the Dale Hollow, 
Center Hill, Wolf Creek, Cheatham, Old Hickory, Barkley, J. Percy 
Priest, Cordell Hull, and Laurel Projects (all of such projects being 
hereinafter called collectively the ``Cumberland Projects'').

Applicability

    This rate schedule shall be applicable to the sale of wholesale 
energy purchased to meet contract minimum energy sold under appropriate 
contracts between the Government and the Customer.

[[Page 54584]]

Character of Service

    The energy supplied hereunder will be delivered at the delivery 
points provided for under appropriate contracts between the Government 
and the Customer.

Monthly Charge

    The rate for replacement energy will be a formulary capacity charge 
based on the monthly cost to the Government to purchase replacement 
energy necessary to support capacity in the Cumberland System divided 
by the capacity available from the Cumberland System, which is 950,000 
kilowatts in the published power marketing policy. The capacity rate 
will be adjusted for any capacity retained by the Customer's 
transmission facilitator.

Conditions of Service

    The customer shall at its own expense provide, install, and 
maintain on its side of each delivery point the equipment necessary to 
protect and control its own system.

[FR Doc. E8-22097 Filed 9-19-08; 8:45 am]
BILLING CODE 6450-01-P