[Federal Register Volume 74, Number 119 (Tuesday, June 23, 2009)]
[Notices]
[Pages 29682-29685]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-14683]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF ENERGY

Western Area Power Administration


Amistad and Falcon Projects Rate Order No. WAPA-143

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of Order Concerning a Power Rate Formula.

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

SUMMARY: The Deputy Secretary of Energy confirmed and approved Rate 
Order No. WAPA-143 placing a power rate formula for the Amistad and 
Falcon Projects of the Western Area Power Administration (Western) into 
effect on an interim basis. The provisional power rate formula will be 
in effect on an interim basis until the Federal Energy Regulatory 
Commission (FERC) confirms, approves, and places it into effect on a 
final basis, or until the power rate formula is replaced by another 
power rate formula.

DATES: The provisional rate formula will be placed into effect on an 
interim basis on June 8, 2009, and will be in effect until the FERC 
confirms, approves, and places the provisional rate formula into effect 
on a final basis through June 7, 2014, or until superseded.

FOR FURTHER INFORMATION CONTACT: Mr. Bradley S. Warren, CRSP Manager, 
Colorado River Storage Project Management Center, Western Area Power 
Administration, 150 East Social Hall Avenue, Suite 300, Salt Lake City, 
UT 84111-1580, (801) 524-5493, e-mail [email protected], or Ms. Carol 
Loftin, Rates Manager, Colorado River Storage Project Management 
Center, Western Area Power Administration, 150 East Social Hall Avenue, 
Suite 300, Salt Lake City, UT 84111-1580, (801) 524-6380, e-mail 
[email protected].

SUPPLEMENTARY INFORMATION: The Amistad and Falcon Dams are features of 
international water storage projects located on the Rio Grande River 
between Texas and Mexico. Under the terms of Contract No. 7-07-50-P0890 
(Contract) dated August 9, 1977, Western marketed the power from these 
dams to two electric cooperatives, South Texas Electric Cooperative, 
Inc. (STEC or Customer), and Medina Electric Cooperative (MEC). Under 
an October 19, 1995, amendment to the Contract, MEC notified Western 
that it had transferred its generation and transmission facilities to 
STEC and would be a distribution cooperative served by STEC and 
requested that MEC's interest in the Contract be assigned to STEC. 
Western approved the Contract amendment. The power rate formula of the 
Contract was approved by the Federal Power Commission (FPC), 
predecessor to FERC, in Docket No. E-9566 on August 12, 1977 (59 FPC 
1653), for a 5-year period effective on the date of initial operation 
of the Amistad Power Plant, June 8, 1983.\1\
---------------------------------------------------------------------------

    \1\ A 5-year rate renewal of this same rate formula through June 
7, 1993, was approved by FERC on July 20, 1988, at 44 FERC ] 62,058. 
Subsequent 5-year renewals of the rate formula have been approved by 
FERC. The most recent approval was on January 31, 2005, in Docket 
No. EF04-5101-000, which approved the same rate formula through June 
7, 2009 (110 FERC ] 62,083).
---------------------------------------------------------------------------

    According to article 9(a) of the Contract, Western calculates the 
annual installment to be paid by the Customer, for the power generated 
at the Amistad and Falcon power plants on or before August 31 of the 
year preceding the fiscal year to which it pertains, and codifies this 
amount in a revised Exhibit A to the Contract. Each annual installment 
pays the annual amortized portion of the United States' investment in 
the Amistad and Falcon hydroelectric facilities with interest, and the 
associated operation, maintenance, and administrative costs. This 
repayment schedule is not dependent upon the power and energy made 
available for sale or the rate of generation each year.
    By Delegation Order No. 00-037.00, effective December 6, 2001, the 
Secretary of Energy delegated: (1) The authority to develop power and 
transmission rates to Western's Administrator, (2) the authority to 
confirm, approve, and place such rates into effect on an interim basis 
to the Deputy Secretary, and (3) the authority to confirm, approve, and 
place into effect on a final basis, to remand, or to disapprove such 
rates to FERC. Existing Department of Energy procedures for public 
participation in power rate adjustments (10 CFR 903) were published on 
September 18, 1985.

[[Page 29683]]

    Under Delegation Order Nos. 00-037.00 and 00-001.00C, 10 CFR part 
903, and 18 CFR part 300, I hereby confirm, approve, and place Rate 
Order No. WAPA-143 into effect on an interim basis. The rate formula 
will be promptly submitted to FERC for confirmation and approval on a 
final basis.

    Dated: Jun 15, 2009.
Daniel B. Poneman,
Deputy Secretary.

Department Of Energy

Secretary

    Rate Order No. WAPA-143.

In the Matter of: Western Area Power Administration Power Rate Formula 
Adjustment for the Amistad and Falcon Projects: Order Confirming, 
Approving, and Placing the Power Rate Formula for Amistad and Falcon 
Projects Into Effect on an Interim Basis

    This renewal of this power rate formula for the Amistad and Falcon 
Projects of the Western Area Power Administration (Western) was 
established in accordance with section 302 of the Department of Energy 
(DOE) Organization Act (42 U.S.C. 7152). This Act transferred to and 
vested in the Secretary of Energy the power marketing functions of the 
Secretary of the Department of the Interior and the Bureau of 
Reclamation (Reclamation) under the Reclamation Act of 1902 (ch. 1093, 
32 Stat. 388), as amended and supplemented by subsequent laws, 
particularly section 9(c) of the Reclamation Act of 1939 (43 U.S.C. 
485h(c)), and other acts that specifically apply to the project 
involved.
    By Delegation Order No. 00-037.00, effective December 6, 2001, the 
Secretary of Energy delegated: (1) The authority to develop power and 
transmission rates to Western's Administrator, (2) the authority to 
confirm, approve, and place such rates into effect on an interim basis 
to the Deputy Secretary of Energy, and (3) the authority to confirm, 
approve, and place into effect on a final basis, to remand, or to 
disapprove such rates to the Federal Energy Regulatory Commission 
(FERC). Existing DOE procedures for public participation in power rate 
adjustments (10 CFR part 903) were published on September 18, 1985.

Acronyms and Definitions

    As used in this Rate Order, the following acronyms and definitions 
apply:

Contract: Contract No. 7-07-50-P0890 dated August 9, 1977, and 
amended on October 19, 2005, between Western and South Texas 
Electric Cooperative.
Customer: South Texas Electric Cooperative, Inc.
DOE: Department of Energy.
DOE Order RA 6120.2: An order outlining power marketing 
administration financial reporting and ratemaking procedures.
FERC: Federal Energy Regulatory Commission.
FPC: Federal Power Commission--Predecessor to FERC.
FY: Fiscal year is the period from October 1 to September 30.
MEC: Medina Electric Cooperative.
NEPA: National Environmental Policy Act of 1969 (42 U.S.C. 4321, et 
seq.).
O&M: Operation and maintenance.
PRS: Power repayment study.
Reclamation: United States Department of Interior, Bureau of 
Reclamation.
Secretary: Secretary of Energy.
STEC: South Texas Electric Cooperative, Inc.
U.S. Section: United States Section of the International Boundary 
and Water Commission.
Western: United States Department of Energy, Western Area Power 
Administration.

Effective Date

    The power rate formula will take effect June 8, 2009, and will 
remain in effect until June 7, 2014, pending approval by FERC on a 
final basis.

Public Notice and Comment

    Subsection 903.23(a) of 10 CFR 903 does not require either a 
consultation and comment period, or public information or comment 
forums for rate extensions. Western considers this rate order a rate 
extension since the power rate formula is not changing; rather it is 
going through the course of a 5-year renewal. Western's sole customer 
under this rate extension, South Texas Electric Cooperative, Inc. 
(Customer or STEC), expressed its desire to continue using the power 
rate formula through an e-mail dated December 8, 2008. In addition, on 
April 2, 2009, Western met with the Customer in Nursery, Texas, where 
Western notified it of Western's intent to continue the power rate 
formula. Western also discussed the number of years covered in the 
annual installments, operation and maintenance funding, answered 
questions, and received comments and suggestions. The Customer 
expressed support for a renewal of the power rate formula.

Project Description

    The Amistad and Falcon Dams are features of international water 
storage projects located on the Rio Grande River between Texas and 
Mexico. Western markets the power from these dams under the terms of 
Contract No. 7-07-50-P0890 (Contract), dated August 9, 1977.
    On August 12, 1977, in Docket No. E-9566, the Federal Power 
Commission (FPC) approved for a 5-year period the power rate formula 
contained in the Contract between Reclamation, and two electric 
cooperatives, STEC and Medina Electric Cooperative (MEC), to become 
effective on the date of initial operation of Amistad Power Plant (59 
FPC 1653). The effective date of the FPC order was June 8, 1983. STEC 
and MEC agreed to purchase all of the output of the Amistad and Falcon 
Power Plants and to pay the United States an annual installment as 
discussed in the Contract for a 50-year period, beginning when electric 
service initially became available from Amistad.
    On October 1, 1977, the power marketing functions of Reclamation 
were transferred to Western and Western became responsible for the 
administration of the Contract. Western, STEC and MEC executed 
Supplement No. 1 to the Contract on April 10, 1986, to clarify the 
method for determining the annual installment consistent with DOE Order 
No. RA 6120.2. Those clarifications address repayment of Falcon 
hydroelectric facilities within the remaining period, establish 
interest during construction at seven (7) percent, discuss 
capitalization of major replacements and additions at current interest 
rates, and specify the actual date of initial service as June 8, 1983.
    Under an October 19, 1995, amendment to the Contract, MEC notified 
Western that it had transferred its generation and transmission 
facilities to STEC and would be a distribution cooperative served by 
STEC and requested that MEC's interest in the Contract be assigned to 
STEC. Western approved the Contract amendment.
    Supplement No. 1 required the amount of each annual installment be 
established in advance by the contracting officer in consultation with 
the U.S. Section and submitted to STEC as Exhibit A on or before August 
31 of the year preceding the appropriate FY in accordance with the 
following:
    The amount of each annual installment shall be the sum of:

    (1) An annual repayment installment including interest, to 
amortize within the remaining period, the unpaid United States 
investment in the Falcon hydroelectric facilities and in the 
penstocks at Amistad Dam; plus
    (2) An annual installment to amortize over a 50-year period, the 
United States actual total investment costs with interest, for 
hydroelectric power facilities, not including penstocks, at Amistad 
Dam to be under the jurisdiction of the U.S. Section, including the 
costs of engineering plans, supervision, administration of 
construction, and interest during construction * * * and
    (3) The annual operation, maintenance, replacement, and 
administration costs of the

[[Page 29684]]

U.S. Section and the administration costs of Western related 
directly or indirectly to the United States power facilities at 
Amistad Dam and at Falcon Dam, provided that such costs shall be 
based on prudent and businesslike management practices and in 
accordance with established electric industry operation and 
maintenance practices * * *

    The billing procedures contained in Supplement No. 1 require 
Western to submit an invoice to the Customer for each monthly payment 
toward the annual installment on or before the tenth day of the month 
for which such payment is due. Payments are due and payable by the 
Customer on the first day of the following month. Western divides the 
calculated annual installment by twelve and bills the Customer monthly 
for this amount.
    As detailed above, the rate formula of the Contract was approved by 
the FPC, for a 5-year period beginning June 8, 1983, and subsequent 5-
year renewals of the power rate formula have been approved by FERC 
through June 7, 2009.\1\ Consequently, FERC's approval is now sought 
for an additional 5-year period. The effective dates are scheduled to 
be June 8, 2009, through June 7, 2014.
---------------------------------------------------------------------------

    \1\A 5-year rate renewal of this same rate formula through June 
7, 1993, was approved by FERC on July 20, 1988, at 44 FERC Sec.  
62,058. Subsequent 5-year renewals of the rate formula have been 
approved by FERC. The most recent approval was on January 31, 2005, 
in Docket No. EF04-5101-000, which approved the same rate formula 
through June 7, 2009 (110 FERC 62,083).
---------------------------------------------------------------------------

Power Repayment Studies

    The Contract requires that Western calculate the annual installment 
to be paid by the Customer for the power generated at the Amistad and 
Falcon Power Plants, in consultation with the United States Section of 
the International Boundary and Water Commission (U.S. Section), and 
submit it to the Customer in the form of a contract exhibit on or 
before August 31 of the year preceding the FY to which it pertains.
    Western calculates the annual installment based on 2 years of data. 
The calculation includes the projected costs of the rate installment 
year (future FY) and an adjustment from the last historic FY. The 
adjustment is the surplus or deficit that occurs in the last historic 
FY when actual costs and repayment obligations are subtracted from 
actual revenues. This surplus or deficit is combined with the projected 
rate installment year costs to arrive at the rate installment.

Statement of Revenue and Related Expenses

    The following table provides a summary of revenues and expenses for 
the current power rate formula and the actual revenues and expenses for 
the same period.

                     Amistad/Falcon Comparison of 6-Year Revenues and Expenses FY 2004-2009
                                                     ($000)
----------------------------------------------------------------------------------------------------------------
                                                                  Projected from  \1\Actual from
                              Item                                  FY 2004 PRS     FY 2008 PRS     Difference
----------------------------------------------------------------------------------------------------------------
Total Revenues..................................................          28,825          29,702             877
Revenues Distribution:
    O&M.........................................................          14,479          14,273           (206)
    Interest....................................................          11,629          11,743             114
    Repayment...................................................           2,717           2,775              58
     (Deficit)/Surplus..........................................  ..............             911             911
    Total Revenue Distribution..................................          28,825          29,702             877
----------------------------------------------------------------------------------------------------------------
\1\ Although this rate process seeks approval for a 5-year period (FY 2009-2014), 6 years of data are shown in
  the above table due to FY 2009 data being an estimate, and is used for the current 2009 rate installment.

    The following table provides a summary of the projected revenues 
and expenses during the provisional power rate formula period.

       Amistad/Falcon 6-Year Projections\1\ Revenues and Expenses
                                 ($000)
------------------------------------------------------------------------
                                                           FY 2009-2014
------------------------------------------------------------------------
Total Revenues..........................................          28,789
Revenue Distribution:
    O&M.................................................          14,080
    Interest............................................          11,035
    Investment Repayment................................           3,674
      Total.............................................          28,789
------------------------------------------------------------------------
\1\ Although this rate process seeks approval for a 5-year period (FY
  2009-2014), 6 years of data are shown in the above table due to FY
  2009 data being an estimate, and is used for the current 2009 rate
  installment.

Availability of Information

    Information regarding this power rate formula renewal, including a 
PRS, letters, e-mail, and other supporting material made or kept by 
Western and used to develop the power rate formula, is available for 
public review at the Colorado River Storage Project Management Center, 
Western Area Power Administration, 150 East Social Hall Avenue, Suite 
300, Salt Lake City, UT 84111. Some of these documents are available at 
http://www.wapa.gov/crsp/ratescrsp/adjustments.htm under CRSP Rate 
Adjustment documents for the Amistad and Falcon Projects section.

Ratemaking Procedure Requirements

Environmental Compliance

    In compliance with the National Environmental Policy Act (NEPA) of 
1969 (42 U.S.C. 4321, et seq.); Council on Environmental Quality 
Regulations (40 CFR parts 1500-1508); and DOE NEPA Regulations (10 CFR 
part 1021), Western has determined that this action is categorically 
excluded from the preparation of an environmental assessment or 
environmental impact statement.

Determination Under Executive Order 12866

    Western has an exemption from centralized regulatory review under 
Executive Order 12866; accordingly, no clearance of this notice by the 
Office of Management and Budget is required.

Submission to Federal Energy Regulatory Commission

    The interim rate formula renewal herein confirmed, approved, and 
placed into effect on an interim basis, together with supporting 
documents, will be submitted to FERC for confirmation and approval on a 
final basis.

Order

    In view of the foregoing and under the authority delegated to me, I 
confirm and approve and place into effect on an

[[Page 29685]]

interim basis a renewal of the rate formula, effective June 8, 2009. 
The rate formula shall remain in effect on an interim basis, pending 
FERC's confirmation and approval of this or a substitute rate formula 
on a final basis through June 7, 2014.

    Dated: June 15, 2009.
Daniel B. Poneman.
Deputy Secretary.
[FR Doc. E9-14683 Filed 6-22-09; 8:45 am]
BILLING CODE 6450-01-P