[Federal Register Volume 73, Number 203 (Monday, October 20, 2008)]
[Notices]
[Pages 62269-62275]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-24868]


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DEPARTMENT OF ENERGY

Southwestern Power Administration


Integrated System Rate Schedule Changes

AGENCY: Southwestern Power Administration, DOE.

ACTION: Notice of Proposed Changes to Southwestern Power Administration 
Rate Schedules and Opportunity for Public Review and Comment.

-----------------------------------------------------------------------

SUMMARY: The Administrator, Southwestern Power Administration 
(Southwestern), has determined that revisions to the Real Power Losses 
provisions within existing rate schedules P-06 and NFTS-06 are 
required. The Federal Energy Regulatory Commission (FERC) confirmed and 
approved such rates on February 27, 2007 in Docket No. EF07-4011-000 
(118 FERC ]62,162) for the period from October 1, 2006 through 
September 30, 2010. Since the proposed rate schedule revisions are 
limited only to Real Power Losses, the net result of the 2006 
Integrated System Power Repayment Studies, which was the basis for the 
existing rate schedules, will not be altered.
    Southwestern held several meetings during FY 2008 with customers to 
discuss the proposed rate schedule revisions and provide opportunity 
for input in the development of the final rate schedules. As a result 
of these informal meetings, it was determined that the revised rate 
schedule provisions can provide cost-savings and operational benefits 
to Southwestern's transmission customers and are consistent with (FERC) 
Order No. 888.

DATES: The consultation and comment period will begin on the date of 
publication of this Federal Register notice and will end November 19, 
2008.

FOR FURTHER INFORMATION CONTACT: Mr. James K. McDonald, Assistant 
Administrator, Office of Corporate Operations, Southwestern Power 
Administration, U.S. Department of Energy, One West Third Street, 
Tulsa, Oklahoma 74103, (918) 595-6690, [email protected].

SUPPLEMENTARY INFORMATION: The U.S. Department of Energy (DOE) was 
created by an Act of the U.S. Congress, Department of Energy 
Organization Act, Pub. L. 95-91, dated August 4, 1977. Southwestern's 
power marketing activities were transferred from the Department of 
Interior to the DOE, effective October 1, 1977. Guidelines for 
preparation of power repayment studies are included in DOE Order No. RA 
6120.2 entitled Power Marketing Administration Financial Reporting. 
Procedures for Public Participation in Power and Transmission Rate 
Adjustments of the Power Marketing Administrations are found at Title 
10, part 903, Subpart A of the Code of Federal Regulations (10 CFR 
903). Procedures for the confirmation and approval of rates for the 
Federal Power Marketing Administrations are found at Title 18, part 
300, Subpart L of the Code of Federal Regulations (18 CFR 300).
    Southwestern markets power from 24 multi-purpose reservoir 
projects, with hydroelectric power facilities constructed and operated 
by the U.S. Army Corps of Engineers. These projects are located in the 
states of Arkansas, Missouri, Oklahoma, and Texas. Southwestern's 
marketing area includes these states plus Kansas and Louisiana. The 
costs associated with the hydropower facilities of 22 of the 24 
projects are repaid via revenues received under the Integrated System 
rates, as are Southwestern's transmission facilities that consist of 
1,380 miles of high-voltage transmission lines, 24 substations, and 46 
microwave and VHF radio sites. Costs associated with the Robert D. 
Willis and Sam Rayburn Dams, two projects that are isolated 
hydraulically, electrically, and financially from the Integrated System 
are repaid by separate rate schedules.

Current and Proposed Real Power Losses Provisions

    The current P-06 and NFTS-06 rate schedules determine the annual 
rate for real power losses based upon the average of Southwestern's 
actual costs for the purchase of energy to replace real power losses 
during the previous Fiscal Year (October through September), as 
reflected in Southwestern's financial records. Customers have the 
option to either purchase losses from Southwestern or elect, on an 
annual basis, to self-provide their respective loss energy subject to 
certain conditions. Customers who purchase loss energy from 
Southwestern are assessed a monthly charge equal to the product of 
Southwestern's then-effective rate for Real Power Losses and a quantity 
of energy equal to four (4) percent of the total non-Federal energy 
transmitted by Southwestern on behalf of each such customer during that 
month.
    Beginning January 1, 2009, Southwestern is proposing to implement 
revised real power loss provisions, as specified in Southwestern's 
proposed P-06A and NFTS-06A rate schedules, which will require that all 
real power losses associated with deliveries of non-Federal energy 
transmitted by Southwestern must be scheduled and delivered (self-
supplied) to Southwestern by customers during the second month after 
such real power losses were incurred by Southwestern. Southwestern will 
determine the amount of real power losses associated with non-Federal 
energy transmitted on behalf of each customer in the same manner 
specified in the previous P-06 and NFTS-06 rate schedules and provide a 
written schedule setting forth the delivery rate and total quantity of 
real power loss energy to be delivered back to Southwestern. Should a 
customer fail to return the total quantity of real power loss energy to 
Southwestern, according to the schedule provided during the month in 
which such loss energy is due, the customer will be invoiced and 
obligated to purchase, at the rate stipulated in the P-06A and NFTS-06A 
rate schedules, the quantity of loss energy the customer failed to 
return to Southwestern.

P-06 and NFTS-06 Rate Schedule Revisions

    In developing the revised real power losses rate schedule 
provisions, the titles of the P-06 and NFTS-06 rate

[[Page 62270]]

schedules were changed to P-06A and NFTS-06A respectively to reflect 
the fact that revisions have been made. In addition to replacing the 
section entitled ``Rates for Real Power Losses'' within each rate 
schedule, minor corrections and modifications were incorporated to 
clarify and update any sections of the rate schedules containing 
references to real power losses. Redlined versions of rate schedules P-
06 and NFTS-06, which show revisions proposed by rate schedules P-06A 
and NFTS-06A, will be made available upon request. To request a copy, 
please contact Scott Carpenter ([email protected]) at 918-595-
6694 or Stephanie Bradley ([email protected]) at 918-595-6676. 
Southwestern will implement the revised P-06A and NFTS-06A rate 
schedule language and provisions upon the Deputy Secretary's interim 
approval.
    The Administrator has determined that written comments will provide 
adequate opportunity for public participation in the rate schedule 
revision process. Therefore, an opportunity is presented for interested 
parties to submit written comments on the proposed rate schedule 
changes. Written comments are due on or before November 19, 2008. 
Written comments should be submitted to Mr. James K. McDonald, 
Assistant Administrator, Office of Corporate Operations, Southwestern 
Power Administration, U.S. Department of Energy, One West Third Street, 
Tulsa, Oklahoma 74103, (918) 595-6690, [email protected].
    Following review and consideration of written comments, the 
Administrator will finalize and submit the proposed rate schedules to 
the Deputy Secretary of Energy for confirmation and approval on an 
interim basis, and subsequently to the FERC for confirmation and 
approval on a final basis. The FERC will allow the public an 
opportunity to provide written comments on the proposed rate schedule 
change before making a final decision.

    Dated: October 9, 2008.
Jon C. Worthington,
Administrator.

United States Department of Energy

Southwestern Power Administration

Rate Schedule NFTS-06A \1\; Wholesale Rates for Non-Federal 
Transmission/Interconnection Facilities Service
---------------------------------------------------------------------------

    \1\ Supersedes Rate Schedule NFTS-06.
---------------------------------------------------------------------------

    Effective: During the period January 1, 2009, through September 30, 
2010, in accordance with Federal Energy Regulatory Commission order 
issued------------, Docket No. ------------.
    Available: In the region where Southwestern Power Administration 
(Southwestern) owns and operates high-voltage transmission lines and 
related facilities, and/or has contractual rights to such transmission 
facilities owned by others (System of Southwestern).
    Applicable: To Customers which have executed Service Agreements 
with Southwestern for the transmission of non-Federal power and energy 
over the System of Southwestern or for its use for interconnections. 
Southwestern will provide services over those portions of the System of 
Southwestern in which the Administrator, Southwestern, in his or her 
sole judgment, has determined that uncommitted transmission and 
transformation capacities in the System of Southwestern are and will be 
available in excess of the capacities required to market Federal power 
and energy pursuant to Section 5 of the Flood Control Act of 1944 (58 
Stat. 887,890; 16 U.S.C. 825s).
    Character and Conditions of Service: Service will be provided as 3-
phase, alternating current, at approximately 60 Hertz, and at the 
voltage level of the point(s) specified by Service Agreement or 
Transmission Service Transaction.
    Definitions of Terms:
    A ``Customer'' is the entity which is utilizing and/or purchasing 
services from Southwestern pursuant to this rate schedule.
    A ``Service Agreement'' is a contract executed between a Customer 
and Southwestern for the transmission of non-Federal power and energy 
over the System of Southwestern or for interconnections. Service 
Agreements include:
    ``Firm Transmission Service Agreements'' that provide for reserved 
transmission capacity on a firm basis, for a particular point-to-point 
delivery path.
    ``Non-Firm Transmission Service Agreements'' that provide for the 
Customer to request transmission service on a non-firm basis.
    ``Network Transmission Service Agreements'' that provide for the 
Customer to request firm transmission service for the delivery of 
capacity and energy from the Customer's network resources to the 
Customer's network load, for a period of one year or more.
    ``Interconnection Agreements'' that provide for the use of the 
System of Southwestern and recognize the exchange of mutual benefits 
for such use or provide for application of a charge for Interconnection 
Facilities Service.
    A ``Service Request'' is made under a Transmission Service 
Agreement through the Southwest Power Pool, Inc. (SPP) Open Access 
Same-Time Information System (OASIS) for reservation of transmission 
capacity over a particular point-to-point delivery path for a 
particular period. When a Service Request is approved by SPP, it 
becomes a ``Transmission Service Transaction.'' The Customer must 
submit hourly schedules for actual service in addition to the Service 
Request.
    ``Firm Point-to-Point Transmission Service'' is transmission 
service reserved on a firm basis between specific points of receipt and 
delivery pursuant to either a Firm Transmission Agreement or to a 
Transmission Service Transaction. ``Non-Firm Point-to-Point 
Transmission Service'' is transmission service reserved on a non-firm 
basis for specific points of receipt and delivery pursuant to a 
Transmission Service Transaction. ``Network Integration Transmission 
Service'' is transmission service provided under Part III of 
Southwestern's Open Access Transmission Service Tariff which provides 
the Customer with firm transmission service for the delivery of 
capacity and energy from the Customer's resources to the Customer's 
load.
    ``Secondary Transmission Service'' is associated with Firm Point-
to-Point Transmission Service and Network Integration Transmission 
Service. For Firm Point-to-Point Transmission Service, it consists of 
transmission service provided on an as-available, non-firm basis, 
scheduled within the limits of a particular capacity reservation for 
transmission service, and scheduled from points of receipt, or to 
points of delivery, other than those designated in a Long-Term Firm 
Transmission Agreement or a Transmission Service Transaction for Firm 
Point-to-Point Transmission Service. For Network Integration 
Transmission Service, Secondary Transmission Service consists of 
transmission service provided on an as-available, non-firm basis, from 
resources other than the Network Resources designated in a Network 
Transmission Service Agreement, to meet the Customer's Network Load. 
The charges for Secondary Transmission Service, other than Ancillary 
Services, are included in the applicable capacity charges for Firm 
Point-to-Point Transmission Service and Network Integration 
Transmission Service.

[[Page 62271]]

    The ``Demand Period'' used to determine a maximum integrated rate 
of delivery for the purposes of power accounting is the 60-minute 
period which begins with the change of hour. The term ``Peak Demand'' 
means the highest rate of delivery, in kilowatts, for any Demand Period 
during a particular month, at any particular point of delivery or 
interconnection.
    For the purposes of this rate schedule, the term ``Point of 
Delivery'' is used to mean either a single physical point to which 
electric power and energy are delivered from the System of 
Southwestern, or a specified set of delivery points which together form 
a single, electrically integrated load. Peak Demand for such set of 
points is computed as the coincidental highest rate of delivery among 
the specified points rather than as the sum of peak demands for each 
individual physical point.
    ``Ancillary Services'' are those services necessary to support the 
transmission of capacity and energy from resources to loads while 
maintaining reliable operation of the System of Southwestern in 
accordance with good utility practice. Ancillary Services include:
    ``Scheduling, System Control, and Dispatch Service'' is provided by 
Southwestern as Control Area operator and is in regard to interchange 
and load-match scheduling and related system control and dispatch 
functions.
    ``Reactive Supply and Voltage Control from Generation Sources 
Service'' is provided at transmission facilities in the System of 
Southwestern to produce or absorb reactive power and to maintain 
transmission voltages within specific limits.
    ``Regulation and Frequency Response Service'' is the continuous 
balancing of generation and interchange resources accomplished by 
raising or lowering the output of on-line generation as necessary to 
follow the moment-by-moment changes in load and to maintain frequency 
within a Control Area.
    ``Spinning Operating Reserve Service'' maintains generating units 
on-line, but loaded at less than maximum output, which may be used to 
service load immediately when disturbance conditions are experienced 
due to a sudden loss of generation or load.
    ``Supplemental Operating Reserve Service'' provides an additional 
amount of operating reserve sufficient to reduce Area Control Error to 
zero within 10 minutes following loss of generating capacity which 
would result from the most severe single contingency.
    ``Energy Imbalance Service'' corrects for differences over a period 
of time between schedules and actual hourly deliveries of energy to a 
load.
    ``Interconnection Facilities Service'' provides for the use of the 
System of Southwestern to deliver energy and/or provide system support 
at an interconnection.
    Rates for Firm Point-to-Point Transmission Service:
    Capacity Charges for Firm Transmission Service:

------------------------------------------------------------------------
                       10/1/2006-9/30/2008        10/1/2008-9/30/2010
------------------------------------------------------------------------
Monthly...........  $0.90 per kilowatt of      $0.95 per kilowatt of
                     transmission capacity      transmission capacity
                     reserved in increments     reserved in increments
                     of one month of service    of one month of service
                     or invoiced in             or invoiced in
                     accordance with a longer   accordance with a longer
                     term agreement.            term agreement.
Weekly............  $0.225 per kilowatt of     $0.238 per kilowatt of
                     transmission capacity      transmission capacity
                     reserved in increments     reserved in increments
                     of one week of service.    of one week of service.
Daily.............  $0.0409 per kilowatt of    $0.0432 per kilowatt of
                     transmission capacity      transmission capacity
                     reserved in increments     reserved in increments
                     of one day of service.     of one day of service.
------------------------------------------------------------------------

    Service Associated with Capacity Charges for Firm Point-to-Point 
Transmission Service: The capacity charge for firm transmission service 
includes Secondary Transmission Service, but does not include charges 
for Ancillary Services associated with actual schedules.
    Application of Capacity Charges for Firm Point-to-Point 
Transmission Service: Capacity charges for firm transmission service 
are applied to quantities reserved by contract under a Firm 
Transmission Agreement or in accordance with a Transmission Service 
Transaction.
    Customers, unless otherwise specified by contract, will be charged 
on the greatest of (1) The Peak Demand at any particular point of 
delivery during a particular month, rounded up to the nearest whole 
megawatt, or (2) the highest Peak Demand recorded at such point of 
delivery during any of the previous 11 months, rounded up to the 
nearest whole megawatt, or (3) the capacity reserved by contract; which 
amount shall be considered such Customer's reserved capacity. Secondary 
Transmission Service for such Customers shall be limited during any 
month to the most recent Peak Demand on which a particular Customer is 
billed or to the capacity reserved by contract, whichever is greater.
    Rates for Non-Firm Point-to-Point Transmission Service:
    Capacity Charges for Non-Firm Transmission Service:
    Monthly: 80 percent of the firm monthly charge of transmission 
capacity reserved in increments of one month of service.
    Weekly: 80 percent of the firm monthly charge divided by 4 of 
transmission capacity reserved in increments of one week of service.
    Daily: 80 percent of the firm monthly charge divided by 22 of 
transmission capacity reserved in increments of one day of service.
    Hourly: 80 percent of the firm monthly charge divided by 352 of 
transmission capacity reserved in increments of one hour of service.
    Application of Charges for Non-Firm Point-to-Point Transmission 
Service: Capacity charges for Non-Firm Transmission Service are applied 
to quantities reserved under a Transmission Service Transaction, and do 
not include charges for Ancillary Services.
    Rates for Network Integration Transmission Service:
    Annual Revenue Requirement for Network Integration Service:

------------------------------------------------------------------------
            10/1/2006-9/30/2008                  10/1/2008-9/30/2010
------------------------------------------------------------------------
$9,155,900................................  $9,431,500
------------------------------------------------------------------------

    Monthly Revenue Requirement for Network Integration Service:

------------------------------------------------------------------------
            10/1/2006-9/30/2008                  10/1/2008-9/30/2010
------------------------------------------------------------------------
$762,992..................................  $785,958
------------------------------------------------------------------------

    Net Capacity Available for Network Integration Service:

------------------------------------------------------------------------
            10/1/2006-9/30/2008                  10/1/2008-9/30/2010
------------------------------------------------------------------------
845,000 kilowatts.........................  828,000 kilowatts.
------------------------------------------------------------------------

    Capacity Charge for Network Integration Transmission Service:

[[Page 62272]]



------------------------------------------------------------------------
            10/1/2006-9/30/2008                  10/1/2008-9/30/2010
------------------------------------------------------------------------
$0.90 per kilowatt of Network Load          $0.95 per kilowatt of
 ($762,992/845,000 kilowatts).               Network Load ($785,958/
                                             828,000 kilowatts).
------------------------------------------------------------------------

    Application of Charge for Network Integration Transmission Service: 
Network Integration Transmission Service is available only for 
deliveries of non-Federal power and energy, and is applied to the 
Customer utilizing such service exclusive of any deliveries of Federal 
power and energy. The capacity on which charges for any particular 
Customer utilizing this service is determined on the greatest of (1) 
the Peak Demand at any particular point of delivery during a particular 
month, rounded up to the nearest whole megawatt, or (2) the highest 
Peak Demand recorded at such point of delivery during any of the 
previous 11 months, rounded up to the nearest whole megawatt.
    For those Customers taking Network Integration Transmission Service 
who are also taking delivery of Federal Power and Energy, the Peak 
Demand shall be determined by subtracting the energy scheduled for 
delivery of Federal Power and Energy for any hour from the metered 
demand for such hour.
    Secondary transmission Service for such Customers shall be limited 
during any month to the most recent Peak Demand on which a particular 
Customer is billed. Charges for Ancillary Services shall also be 
assessed.
Real Power Losses
    Customers are required to self-provide all Real Power Losses for 
non-Federal energy transmitted by Southwestern on behalf of such 
Customers under the provisions detailed below.
    Real Power Losses are computed as four (4) percent of the total 
amount of non-Federal energy transmitted by Southwestern. The 
Customer's Monthly Real Power Losses are computed each month on a 
megawatthour basis as follows:

ML = .04 x NFE

with the factors defined as follows:

ML = The total monthly loss energy, rounded to the nearest 
megawatthour, to be scheduled by a Customer for receipt by 
Southwestern for Real Power Losses associated with non-Federal 
energy transmitted on behalf of such Customer; and
NFE = The amount of non-Federal energy that was transmitted by 
Southwestern on behalf of a Customer during a particular month.

    The Customer must schedule or cause to be scheduled to 
Southwestern, Real Power Losses for which it is responsible subject to 
the following conditions:
    (1) The Customer shall schedule and deliver Real Power Losses back 
to Southwestern during the second month after they were incurred by 
Southwestern in the transmission of the Customer's non-Federal power 
and energy over the System of Southwestern.
    (2) On or before the twentieth day of each month, Southwestern 
shall determine the amount of non-Federal loss energy it provided on 
behalf of the Customer during the previous month and provide a written 
schedule to the Customer setting forth hour-by-hour the quantities of 
non-Federal energy to be delivered to Southwestern as losses during the 
next month.
    (3) Real Power Losses not delivered to Southwestern by the 
Customer, according to the schedule provided, during the month in which 
such losses are due shall be billed by Southwestern to the Customer to 
adjust the end-of-month loss energy balance to 0 megawatthours and the 
Customer shall be obliged to purchase such energy at the following 
rates:

------------------------------------------------------------------------
                                                              Rate per
               Months associated with charge                kilowatthour
------------------------------------------------------------------------
March, April, May, October, November, December............         $0.15
January, February, June, July, August, September..........         $0.30
------------------------------------------------------------------------

    (6) Real Power Losses delivered to Southwestern by the Customer in 
excess of the losses due during the month shall be purchased by 
Southwestern from the Customer at a rate per megawatthour equal to 
Southwestern's rate per megawatthour for Supplemental Peaking Energy, 
as set forth in Southwestern's then-effective Rate Schedule for hydro 
peaking power to adjust such hourly end-of-month loss energy balance to 
0 megawatthours.
    Monthly Capacity Charges for Transformation Service: A charge of 
$0.30 per kilowatt will be assessed for capacity used to deliver energy 
at any point of delivery at which Southwestern provides transformation 
for deliveries at voltages of 69 kilovolts or less from higher voltage 
facilities.
    Application of Capacity Charges for Transformation Service: For any 
particular month, charges for transformation service will be assessed 
on the greater of (1) that month's actual Peak Demand, or (2) the 
highest Peak Demand recorded during the previous 11 months. For the 
purpose of this rate schedule, the Peak Demand will be based on all 
deliveries, of both Federal and non-Federal energy, from the System of 
Southwestern, at such point during such month.
    Rates for Ancillary Services:
    Capacity Charges for Ancillary Services Associated With 
Transmission Services:
    (a) Scheduling, System Control, and Dispatch Service:

------------------------------------------------------------------------
                       10/1/2006-9/30/2008        10/1/2008-9/30/2010
------------------------------------------------------------------------
Monthly:..........  $0.06 per kilowatt of      $0.06 per kilowatt of
                     transmission capacity      transmission capacity
                     reserved in increments     reserved in increments
                     of one month of service    of one month of service
                     or invoiced in             or invoiced in
                     accordance with a Long-    accordance with a Long-
                     Term Firm Transmission     Term Firm Transmission
                     Agreement or Network       Agreement or Network
                     Transmission Service       Transmission Service
                     Agreement.                 Agreement.
Weekly:...........  $0.015 per kilowatt of     $0.015 per kilowatt of
                     transmission capacity      transmission capacity
                     reserved in increments     reserved in increments
                     of one week of service.    of one week of service.
Daily:............  $0.0027 per kilowatt of    $0.0027 per kilowatt of
                     transmission capacity      transmission capacity
                     reserved in increments     reserved in increments
                     of one day of service.     of one day of service.
Hourly:...........  $0.00017 per kilowatt of   $0.00017 per kilowatt of
                     energy delivered as non-   energy delivered as non-
                     firm transmission          firm transmission
                     service.                   service.
------------------------------------------------------------------------

    (b) Reactive Supply and Voltage Control from Generation Sources 
Service:

[[Page 62273]]



------------------------------------------------------------------------
                       10/1/2006-9/30/2008        10/1/2008-9/30/2010
------------------------------------------------------------------------
Monthly:..........  $0.03 per kilowatt of      $0.04 per kilowatt of
                     transmission capacity      transmission capacity
                     reserved in increments     reserved in increments
                     of one month of service    of one month of service
                     or invoiced in             or invoiced in
                     accordance with a Long-    accordance with a Long-
                     Term Firm Transmission     Term Firm Transmission
                     Agreement or Network       Agreement or Network
                     Transmission Service       Transmission Service
                     Agreement.                 Agreement.
Weekly:...........  $0.008 per kilowatt of     $0.010 per kilowatt of
                     transmission capacity      transmission capacity
                     reserved in increments     reserved in increments
                     of one week of service.    of one week of service.
Daily:............  $0.0014 per kilowatt of    $0.0018 per kilowatt of
                     transmission capacity      transmission capacity
                     reserved in increments     reserved in increments
                     of one day of service.     of one day of service.
Hourly:...........  $0.00009 per kilowatt of   $0.00011 per kilowatt of
                     energy delivered as non-   energy delivered as non-
                     firm transmission          firm transmission
                     service.                   service.
------------------------------------------------------------------------

    (c) Regulation and Frequency Response Service:

------------------------------------------------------------------------
                       10/1/2006-9/30/2008        10/1/2008-9/30/2010
------------------------------------------------------------------------
Monthly:..........  $0.08 per kilowatt of      $0.09 per kilowatt of
                     transmission capacity      transmission capacity
                     reserved in increments     reserved in increments
                     of one month of service    of one month of service
                     or invoiced in             or invoiced in
                     accordance with a Long-    accordance with a Long-
                     Term Firm Transmission     Term Firm Transmission
                     Agreement or Network       Agreement or Network
                     Transmission Service       Transmission Service
                     Agreement.                 Agreement.
Weekly:...........  $0.020 per kilowatt of     $0.023 per kilowatt of
                     transmission capacity      transmission capacity
                     reserved in increments     reserved in increments
                     of one week of service.    of one week of service.
Daily:............  $0.0036 per kilowatt of    $0.0041 per kilowatt of
                     transmission capacity      transmission capacity
                     reserved in increments     reserved in increments
                     of one day of service.     of one day of service.
Hourly:...........  $0.00023 per kilowatt of   $0.00026 per kilowatt of
                     energy delivered as non-   energy delivered as non-
                     firm transmission          firm transmission
                     service.                   service.
------------------------------------------------------------------------

    (d) Spinning Operating Reserve Service:

------------------------------------------------------------------------
                       10/1/2006-9/30/2008        10/1/2008-9/30/2010
------------------------------------------------------------------------
Monthly:..........  $0.0079 per kilowatt of    $0.0092 per kilowatt of
                     transmission capacity      transmission capacity
                     reserved in increments     reserved in increments
                     of one month of service    of one month of service
                     or invoiced in             or invoiced in
                     accordance with a Long-    accordance with a Long-
                     Term Firm Transmission     Term Firm Transmission
                     Agreement or Network       Agreement or Network
                     Transmission Service       Transmission Service
                     Agreement.                 Agreement.
Weekly:...........  $0.00198 per kilowatt of   $0.0023 per kilowatt of
                     transmission capacity      transmission capacity
                     reserved in increments     reserved in increments
                     of one week of service.    of one week of service.
Daily:............  $0.00036 per kilowatt of   $0.00042 per kilowatt of
                     transmission capacity      transmission capacity
                     reserved in increments     reserved in increments
                     of one day of service.     of one day of service.
Hourly:...........  $0.00002 per kilowatt of   $0.00003 per kilowatt of
                     energy delivered as non-   energy delivered as non-
                     firm transmission          firm transmission
                     service.                   service.
------------------------------------------------------------------------

    (e) Supplemental Operating Reserve Service:

------------------------------------------------------------------------
                       10/1/2006-9/30/2008        10/1/2008-9/30/2010
------------------------------------------------------------------------
Monthly:..........  $0.0079 per kilowatt of    $0.0092 per kilowatt of
                     transmission capacity      transmission capacity
                     reserved in increments     reserved in increments
                     of one month of service    of one month of service
                     or invoiced in             or invoiced in
                     accordance with a Long-    accordance with a Long-
                     Term Firm Transmission     Term Firm Transmission
                     Agreement or Network       Agreement or Network
                     Transmission Service       Transmission Service
                     Agreement.                 Agreement.
Weekly:...........  $0.00198 per kilowatt of   $0.0023 per kilowatt of
                     transmission capacity      transmission capacity
                     reserved in increments     reserved in increments
                     of one week of service.    of one week of service.
Daily:............  $0.00036 per kilowatt of   $0.00042 per kilowatt of
                     transmission capacity      transmission capacity
                     reserved in increments     reserved in increments
                     of one day of service.     of one day of service.
Hourly:...........  $0.00002 per kilowatt of   $0.00003 per kilowatt of
                     energy delivered as non-   energy delivered as non-
                     firm transmission          firm transmission
                     service.                   service.
------------------------------------------------------------------------

    (f) Energy Imbalance Service: $0.0 per kilowatt for all periods of 
reservation.
    Availability of Ancillary Services: Ancillary Services (a) and (b) 
are available for all transmission services in and from the System of 
Southwestern and shall be provided by Southwestern. Ancillary Services 
(c) and (f) listed above are available only for deliveries of power and 
energy serving load within Southwestern's Control Area and shall be 
provided by Southwestern, unless, subject to Southwestern's approval, 
they are provided by others. Ancillary Services (d) and (e) are 
available only for deliveries of power and energy generated by 
resources located within Southwestern's Control Area and shall

[[Page 62274]]

be provided by Southwestern, unless, subject to Southwestern's 
approval, they are provided by others.
    Application of Ancillary Services Charges: Charges for all 
Ancillary Services are applied to the reserved or network transmission 
service taken by the Customer in accordance with the rates listed above 
when such services are provided by Southwestern.
    The charges for Ancillary Services are considered to include 
Ancillary Services for any Secondary Transmission Service, except in 
cases where Ancillary Services (c) through (f) are applicable to a 
Secondary Transmission Service transaction, but are not applicable to 
the firm capacity reservation under which Secondary Transmission 
Service is provided. When charges for Ancillary Services are applicable 
to Secondary Transmission Service, the charge for the Ancillary Service 
shall be the hourly rate applied to all energy transmitted utilizing 
the Secondary Transmission Service.
    Provision of Ancillary Services by Others: Customers for which 
Ancillary Services (c) through (f) are made available as specified 
above must inform Southwestern by written notice of the Ancillary 
Services which they do not intend to take and purchase from 
Southwestern, and their election to provide all or part of such 
Ancillary Services from their own resources or a third party.
    Subject to Southwestern's approval of the ability of such resources 
or third parties to meet Southwestern's technical requirements for 
provision of such Ancillary Services, the customer may change the 
Ancillary Services which it takes from Southwestern and/or from other 
sources at the beginning of any month upon the greater of 60 days 
written notice or upon the completion of any necessary equipment 
modifications necessary to accommodate such change. Such notice 
requirements also apply to requests for Southwestern to provide 
Ancillary Services when such services are available as specified above.
    Limitations on Energy Imbalance Service: Energy Imbalance Service 
is authorized for use only within a bandwidth of  1.5 
percent of the actual requirements of the load at a particular point of 
delivery, for any hour, compared to the resources scheduled to meet 
such load during such hour. Deviations which are greater than  1.5 percent, but which are less than  2,000 
kilowatts, are considered to be within the authorized bandwidth. 
Deviations outside the authorized bandwidth are subject to a Capacity 
Overrun Penalty.
    Energy delivered or received within the authorized bandwidth for 
this service is accounted for as an inadvertent flow and will be netted 
against flows in the future. The inadvertent flow in any given hour 
will only be offset with the flows in the corresponding hour of a day 
in the same category. The two categories of days are weekdays and 
weekend days/North American Electric Reliability Council holidays. This 
process will result in a separate inadvertent accumulation for each 
hour of the two categories of days. The hourly accumulations in the 
current month will be added to the hourly inadvertent balances from the 
previous month, resulting in a month-end balance for each hour.
    The Customer is required to adjust the scheduling of resources in 
such a way as to reduce the accumulation towards zero. It is recognized 
that the inadvertent hourly flows can be both negative and positive, 
and that offsetting flows should deter a significant accumulation of 
inadvertent. In the event any hourly month-end balance exceeds 12 MWHs, 
the excess will be subject to the Application of Capacity Overrun 
Penalty or the Unauthorized Use of Energy Imbalance Service by 
Overscheduling of Resources provisions, depending on the direction of 
the accumulation.
    Application of Capacity Overrun Penalty: Customers who receive 
deliveries within Southwestern's Control Area are obligated to provide 
resources sufficient to meet their loads. Such obligation is not 
related to the amount of transmission capacity that such Customers may 
have reserved for transmission service to a particular load. Customers 
whose resources are scheduled by Southwestern are not subject to this 
provision. In the event that a Customer under schedules its resources 
to meet its load, resulting in a difference between resources and 
actual metered load (adjusted for transformer losses as applicable) 
outside the authorized bandwidth for Energy Imbalance Service for any 
hour, then such Customer is subject to the following penalty:
Capacity Overrun Penalty
    For each hour during which energy flows outside the authorized 
bandwidth, the Customer will be obliged to purchase such energy at the 
following rates:

------------------------------------------------------------------------
                                                               Rate per
               Months associated with charge                   kilowatt
------------------------------------------------------------------------
March, April, May, October, November, December.............        $0.15
January, February, June, July, August, September...........        $0.30
------------------------------------------------------------------------

    Unauthorized Use of Energy Imbalance Service by Overscheduling of 
Resources: In the event that a Customer schedules greater resources 
than are needed to meet its load, such that energy flows at rates 
beyond the authorized bandwidth for the use of Energy Imbalance 
Service, Southwestern retains such energy at no cost to Southwestern 
and with no obligation to return such energy. Customers whose resources 
are scheduled by Southwestern are not subject to this provision.
    Application of Charge for Interconnection Facilities Service: Any 
Customer that requests an interconnection from Southwestern which, in 
Southwestern's sole judgment and at its sole option, does not provide 
commensurate benefits or compensation to Southwestern for the use of 
its facilities shall be assessed a capacity charge for Interconnection 
Facilities Service. For any month, charges for Interconnection 
Facilities Service shall be assessed on the greater of (1) that month's 
actual Peak Demand, or (2) the highest Peak Demand recorded during the 
previous eleven months, as metered at the interconnection. The use of 
Interconnection Facilities Service will be subject to power factor 
provisions as specified in this rate schedule. The interconnection 
customer shall also schedule and deliver Real Power Losses pursuant to 
the provisions of this Rate Schedule based on metered flow through the 
interconnection where Interconnection Facilities Services is assessed.
    Rate for Interconnection Facilities Service: The monthly capacity 
charge for Interconnection Facilities Service:

 
------------------------------------------------------------------------
            10/1/2006-9/30/2008                  10/1/2008-9/30/2010
------------------------------------------------------------------------
$0.90 per kilowatt........................  $0.95 per kilowatt
------------------------------------------------------------------------

    Requirements Related to Power Factor: Any Customer served from 
facilities owned by or available by contract to Southwestern will be 
required to maintain a power factor of not less than 95 percent and 
will be subject to the following provisions.
    Determination of Power Factor: The power factor will be determined 
for all Demand Periods and shall be calculated under the formula:

[[Page 62275]]

[GRAPHIC] [TIFF OMITTED] TN20OC08.004


with the factors defined as follows:

PF = the power factor for any Demand Period of the month.
kWh = the total quantity of energy which is delivered during such 
Demand Period to the point of delivery or interconnection.
rkVAh = the total quantity of reactive kilovolt-ampere-hours (kvars) 
delivered during such Demand Period to the point of delivery or 
interconnection.

    Power Factor Penalty and Assessment: The Customer shall be assessed 
a penalty for all Demand Periods of a month where the power factor is 
less than 95 percent lagging. For any Demand Period during a particular 
month such penalty shall be in accordance with the following formula:

C = D x (.95-LPF) x $0.10

with the factors defined as follows:

C = The charge in dollars to be assessed for any particular Demand 
Period of such month that the Determination of Power Factor ``PF'' 
is calculated to be less than 95 percent lagging.
D = The Customer's demand in kilowatts at the point of delivery for 
such Demand Period in which a low power factor was calculated.
LPF = The lagging power factor, if any, determined by the formula 
``PF'' for such Demand Period.
If C is negative, then C = zero (0).

    Application of Power Factor Penalty: The Power Factor Penalty is 
applicable to radial interconnections with the System of Southwestern. 
The total Power Factor Penalty for any month shall be the sum of all 
charges ``C'' for all Demand Periods of such month. No penalty is 
assessed for leading power factor. Southwestern, in its sole judgment 
and at its sole option, may determine whether power factor calculations 
should be applied to a single physical point of delivery or to multiple 
physical points of delivery where a Customer has a single, electrically 
integrated load served through multiple points or interconnections. The 
general criteria for such decision shall be that, given the 
configuration of the Customer's and Southwestern's systems, 
Southwestern will determine, in its sole judgment and at its sole 
option, whether the power factor calculation more accurately assesses 
the detrimental impact on Southwestern's system when the above formula 
is calculated for a single physical point of delivery or for a 
combination of physical points or for an interconnection as specified 
by an Interconnection Agreement.
    Southwestern, at its sole option, may reduce or waive power factor 
penalties when, in Southwestern's sole judgment, low power factor 
conditions were not detrimental to the System of Southwestern due to 
particular loading and voltage conditions at the time the power factor 
dropped below 95 percent lagging.

 [FR Doc. E8-24868 Filed 10-17-08; 8:45 am]
BILLING CODE 6450-01-P