[Federal Register Volume 74, Number 183 (Wednesday, September 23, 2009)]
[Notices]
[Pages 48527-48529]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-22925]


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DEPARTMENT OF ENERGY

Southwestern Power Administration


Integrated System Power Rates

AGENCY: Southwestern Power Administration, DOE.

ACTION: Notice of public review and comment.

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SUMMARY: The Administrator, Southwestern Power Administration 
(Southwestern), has prepared Current and Revised 2009 Power Repayment 
Studies which show the need for an increase in annual revenues to meet 
cost recovery criteria. Such increased revenues are needed primarily to 
cover increased investments and replacements in hydroelectric 
generating facilities and increased operation and maintenance expenses. 
The Administrator has developed proposed Integrated System rates, which 
are supported by a rate design study, to recover the required revenues. 
The June 2009 Revised Study indicates that the proposed rates would 
increase annual system revenues approximately 10.8 percent from 
$160,255,300 to $177,586,158.

DATES: The consultation and comment period will begin on the date of 
publication of this Federal Register notice and will end November 23, 
2009. Upon request, a combined Public Information and Comment Forum 
(Forum) will be held in Tulsa, Oklahoma at 9 a.m. on October 7, 2009.

ADDRESSES: The Forum will be held in Southwestern's offices, Room 1460, 
Williams Center Tower I, One West Third Street, Tulsa, Oklahoma 74103.

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: Originally established by Secretarial Order 
No. 1865 dated August 31, 1943, Southwestern is an agency within the 
U.S. Department of Energy created by the Department of Energy 
Organization Act, Public Law 95-91 (1977). 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 those associated 
with Southwestern's transmission facilities, which consist of 1,380 
miles of high-voltage transmission lines, 24 substations, and 46 
microwave and VHF radio sites. Costs associated with the Sam Rayburn 
and Robert D. Willis Dams, two Corps of Engineers projects that are 
isolated hydraulically, electrically, and financially from the 
Integrated System are repaid under separate rate schedules and are not 
addressed in this notice.
    Following Department of Energy guidelines, Southwestern, prepared a 
Current Power Repayment Study (``Study'') using existing system rates. 
(The guidelines for preparation of power repayment studies are included 
in DOE Order No. RA 6120.2, entitled Power Marketing Administration 
Financial Reporting). The Study indicates that Southwestern's legal 
requirement to repay the investment in power generating and 
transmission facilities for power and energy marketed by Southwestern 
will not be met without an increase in revenues. The need for increased 
revenues is primarily due to increased investments and replacements in 
hydroelectric generating facilities for the U.S. Army's Corps of 
Engineers (Corps) and increased operations and maintenance costs for 
both Southwestern and the Corps. The Revised Power Repayment Study 
shows that additional annual revenues of $17,330,858 (a 10.8 percent 
increase) are needed to satisfy repayment criteria.
    A Rate Design Study has also been completed which allocates the 
revenue requirement to the various system rate schedules for recovery, 
and provides for

[[Page 48528]]

transmission service rates in general conformance with F.E.R.C. Order 
Nos. 888 and 888 (A-C). The proposed new rates would increase estimated 
annual revenues from $160,255,300 to $177,586,158 and would satisfy the 
present financial criteria for repayment of the project and 
transmission system investments within the required number of years. As 
indicated in the Integrated System Rate Design Study, this revenue 
would be developed primarily through increases in the charges for power 
sales capacity and energy and transmission services, to include some of 
the ancillary services for deliveries of both Federal and non-Federal 
power and associated energy from the transmission system of 
Southwestern.
    A second component of the Integrated System rates for power and 
energy, the Purchased Power Adder (PPA), produces revenues which are 
segregated to cover the cost of power purchased to meet contractual 
obligations. The PPA is established to reflect what is expected to be 
needed by Southwestern to meet purchased power needs on an average 
annual basis. Southwestern proposes that the PPA rate will remain the 
same. This rate reflects present market rates as applied to our 
projected power needs. Also, the Administrator's authority to adjust 
the PPA at his or her discretion with the Purchased Power Adder 
Adjustment (PPAA) will remain the same which limits the adjustments to 
two per year not to exceed  6.7 mills per kilowatthour per 
year. The Administrator will use this discretion to reduce the current 
PPAA (4.5 mills per kilowatthour) to zero effective January 1, 2010. 
The Administrator will also have (with this discretion) another 
opportunity to implement a change to the PPAA up to the limit of  6.7 mills per kilowatthour per year to ensure recovery of 
purchased power costs. (The Administrator's discretionary authority to 
adjust the PPA with the PPAA, no more than twice annually, not to 
exceed  6.7 mills per kilowatthour per year, was approved 
by the Federal Energy Regulatory Commission in the United States 
Department of Energy--Southwestern Power Administration (Integrated 
System) 118 F.E.R.C.  62,162 (2007)).
    A new component for regulation service has been proposed to the 
existing rate schedules to include an adder for the requirement of 
supplying regulation service to those customers inside the Balancing 
Authority Area. This Regulation Purchased Adder is being proposed so 
that all users of regulation service within the Balancing Authority 
Area are appropriately assessed for their consumption of the service 
that is purchased to supplement the Federal resource used to support 
the Balancing Authority's requirement to regulate for loads. A copy of 
the proposed Regulation Purchased Adder language contained within the 
proposed Rate Schedules can be requested from Mr. James K. McDonald at 
the address listed above.
    Below is a general comparison of the existing and proposed system 
rates:

------------------------------------------------------------------------
                                    Existing rates      Proposed rates
------------------------------------------------------------------------
        Generation rates           Rate Schedule P-   Rate Schedule P-09
                                          06A         (System Peaking)
                                  (System Peaking)..
------------------------------------------------------------------------
Capacity:
    Grid or 138-161kV...........  $3.51/kW/Mo.......  $4.06/kW/Mo.
    Required Ancillary Services   $0.10/kW/Mo.......  $0.11/kW/Mo.
     (generation in control
     area).
    Regulation & Freq. Response   $0.09/kW/Mo.......  $0.09/kW/Mo.
     (generation in control
     area).
    Regulation Purchased Adder    ..................  prorata share of
     (load within SWPA BA).                            total energy
                                                       cost.
    Reserve Ancillary Services    $0.0184/kW/Mo.....  $0.0184/Kw/Mo.
     (generation in control
     area).
    Transformation Service 69 kV  $0.30/kW/Mo.......  $0.42/kW/Mo.
     (applied to usage, not
     reservation.
Energy:
    Peaking Energy..............  $0.0082/kW/Mo.....  $0.0086/kW/Mo.
    Supplemental Peaking Energy.  $0.0082/kW/Mo.....  $0.0086/kW/Mo.
Purchased Power Adder...........  $0.0067...........  $0.0067.
Administrator's Discretionary     $0.0067       minus>$0.0067
                                   annually.           annually.
------------------------------------------------------------------------
       Transmission rates            Rate Schedule       Rate Schedule
                                  NFTS-06A..........  NFTS-09
                                  (Transmission)....  (Transmission)
------------------------------------------------------------------------
Capacity (Firm Reservation with
 energy):
    Grid or 138-161 kV..........  $0.095/kW/Mo,       $1.18/kW/Mo,
                                   $0.238/kW/Week,     $0.295/kW/Week,
                                   $0.432/kW/Day.      $0.0536/kW/Day.
    Required Ancillary Services   $0.10/kW/Mo, or     $0.11/kW/Mo, or
     (generation in control        $0.025/kW/Week,     $0.028/kW/Week,
     area).                        or $0.0045/kW/Day.  or $0.005/kW/Day.
    Reserve Ancillary Services    $0.0184/kW/Mo, or   $0.0184/kW/Mo, or
     (generation in control        $0.0046/kW/Week,    $0.0046/kW/Week,
     area).                        or $0.00084/kW/     or $0.00084/kW/
                                   Day.                Day.
    Regulation & Freq Response    $0.09/kW/Mo, or     $0.09/kW/Mo, or
     (deliveries within control    $0.023/kW/Week,     $0.023/kW/Week,
     area).                        or $0.0041/kW/Day.  or $0.0041/kW/
                                                       Day.
    Transformation Service 69 kV  $0.03/kW/Mo.......  $0.42/kW/Mo.
     and below (applied on
     usage, not reservation)
     Weekly and daily rates not
     applied.
Capacity (Non-firm with energy).  No capacity         No capacity
                                   charge, 80% of      charge, 80% of
                                   firm monthly        firm monthly
                                   charge divided by   charge divided by
                                   4 for weekly        4 for weekly
                                   rate, divided by    rate, divided by
                                   22 for daily        22 for daily
                                   rate, and divided   rate, and divided
                                   by 352 for hourly   by 352 for hourly
                                   rate.               rate.
Network Service.................  $0.95/kW/Mo.......  $1.18/kW/Mo.

[[Page 48529]]

 
    Required Ancillary Services.  $0.10/kW/Mo.......  $0.11/kW/Mo.
    Reserve Ancillary Services    $0.00184/kW/Mo....  $0.00184/kW/Mo.
     (generation in control
     area).
    Regulation & Freq Response    $0.09/kW/Mo.......  $0.09/kW/Mo.
     (deliveries within control
     area).
------------------------------------------------------------------------
       Excess energy rates           Rate Schedule       Rate Schedule
                                  EE-06.............  EE-09
                                  (Excess Energy)...  (Excess Energy)
------------------------------------------------------------------------
Energy..........................  $0.0082/kWh.......  $0.0086/kW/h.
------------------------------------------------------------------------

    Opportunity is presented for Southwestern's customers and other 
interested parties to receive copies of the Integrated System Studies. 
If you desire a copy of the Integrated System Power Repayment Studies 
and Rate Design Study Data Package, submit your request to Mr. James K. 
McDonald, Assistant Administrator, Office of Corporate Operations, 
Southwestern Power Administration, One West Third, Tulsa, OK 74103 or 
(918) 595-6690, [email protected].
    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). A Public Information and Comment Forum is tentatively scheduled 
for October 7, 2009, to explain to the public the proposed rates and 
supporting studies and to allow for comment. A chairman, who will be 
responsible for orderly procedure, will conduct the Forum if a Forum is 
requested. Questions concerning the rates, studies, and information 
presented at the Forum will be answered, to the extent possible, at the 
Forum. Questions not answered at the Forum will be answered in writing, 
except that questions involving voluminous data contained in 
Southwestern's records may best be answered by consultation and review 
of pertinent records at Southwestern's offices.
    Persons desiring to attend the Forum should indicate in writing 
(address cited above) by letter, e-mail or facsimile transmission (918-
595-6656) by October 1, 2009, their intent to appear at such Forum. If 
no one so indicates his or her intent to attend, no such Forum will be 
held. Persons interested in speaking at the Forum should submit a 
request to Mr. James K. McDonald, Assistant Administrator, 
Southwestern, at least seven (7) calendar days prior to the Forum so 
that a list of forum participants can be developed. The chairman may 
allow others to speak if time permits.
    A transcript of the Forum will be made. Copies of the transcript 
may be obtained, for a fee, from the transcribing service. Copies of 
all documents introduced will also be available from the transcribing 
service upon request for a fee. If you desire a copy of the transcript 
or any documents introduced, submit your request to Mr. James K. 
McDonald, Assistant Administrator, Office of Corporate Operations, 
Southwestern Power Administration, One West Third, Tulsa, OK 74103 or 
(918) 595-6690, [email protected].
    A copy of all written comments or an electronic copy in MS Word on 
the proposed Integrated System Rates is due on or before November 23, 
2009. Comments should be submitted to Mr. James K. McDonald, Assistant 
Administrator, Southwestern, at the above-mentioned address for 
Southwestern's offices.
    Following review of the oral and written comments and the 
information gathered in the course of the proceeding, the Administrator 
will submit the finalized Integrated System Rate Proposal, Power 
Repayment Studies, and Rate Design Study in support of the proposed 
rates to the Deputy Secretary of Energy for confirmation and approval 
on an interim basis, and subsequently to the Federal Energy Regulatory 
Commission (Commission) for confirmation and approval on a final basis. 
(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).) The 
Commission will allow the public an opportunity to provide written 
comments on the proposed rate increase before making a final decision.

    Dated: September 17, 2009.
Michael Brairton,
Deputy Assistant Administrator.
[FR Doc. E9-22925 Filed 9-22-09; 8:45 am]
BILLING CODE 6450-01-P