[Federal Register Volume 76, Number 152 (Monday, August 8, 2011)]
[Notices]
[Pages 48159-48161]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-20022]



[[Page 48159]]

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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 2011 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 costs associated with compliance requirements of the 
North American Electric Reliability Corporation and to cover increased 
investments and replacements in hydroelectric generating facilities. 
The Administrator has developed proposed Integrated System rates, which 
are supported by a rate design study, to recover the required revenues. 
The June 2011 Revised Study indicates that the proposed rates would 
increase annual system revenues approximately 5.4 percent from 
$177,191,800 to $186,761,225 effective November 1, 2011 through 
September 30, 2015.

DATES: The consultation and comment period will begin on the date of 
publication of this Federal Register notice and will end on October 7, 
2011. If requested, a combined Public Information and Comment Forum 
(Forum) will be held in Tulsa, Oklahoma at 9 a.m. on August 16, 2011.

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, dated August 4, 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 (Corps). 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 of Southwestern's transmission facilities, which 
consist of 1,380 miles of high-voltage transmission lines, 25 
substations, and 46 microwave and VHF radio sites. Costs associated 
with the Sam Rayburn and Robert D. Willis Dams, two Corps 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, the Administrator, 
Southwestern, prepared a Current Power Repayment Study using existing 
system rates. 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 costs associated with compliance requirements of the 
North American Electric Reliability Corporation and to cover increased 
investments and replacements in hydroelectric generating facilities for 
the Corps. The Revised Power Repayment Study shows that additional 
annual revenues of $9,569,425 (a 5.4 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 transmission service rates in general conformance with 
FERC Order No. 888.\1\ The proposed new rates would increase estimated 
annual revenues from $177,191,800 to $186,761,225 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, including some of 
the ancillary services for deliveries of both Federal and non-Federal 
power and associated energy from the transmission system of 
Southwestern.
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    \1\ Promoting Wholesale Competition Through Open Access Non-
discriminatory Transmission Services by Public Utilities; Recovery 
of Stranded Costs by Public Utilities and Transmitting Utilities, 
Order No. 888, 61 FR 21,540 (5/10/1996), FERC Stats. & Regs. ] 
31,036 (1996), order on reh'g, Order No. 888-A, 62 FR 12,274 (3/14/
1997), FERC Stats. & Regs. ] 31,048 (1997), order on reh'g, Order 
No. 888-B, 81 FERC ] 61,248 (1997), order on reh'g, Order No. 888-C, 
82 FERC ] 61,046 (1998), aff'd in relevant part sub nom. 
Transmission Access Policy Study Group v. FERC, 225 F.3d 667 (D.C. 
Cir. 2000), aff'd sub nom. New York v. FERC, 535 U.S. 1 (2002).
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    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. The PPA rate will decrease slightly to reflect the 
incorporation of the White River Minimum Flows legislation as applied 
to our projected power needs. The Administrator's authority to adjust 
the PPA at his discretion with the Purchased Power Adder Adjustment 
(PPAA) will remain in force.\2\ The PPAA is limited to two adjustments 
per year not to exceed a total of  6.2 mills per 
kilowatthour per year. The PPA will decrease to $0.0062 per 
kilowatthour and the PPAA will remain at zero effective November 1, 
2011.
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    \2\ See 133 FERC ] 62,005 (2010).
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    A revision to the component for Regulation Purchased Adder service 
has been proposed to the existing rate schedules to include a 
refinement of current procedures for calculating the prorated share of 
the costs for supplying regulation service to those customers inside 
the Balancing Authority Area. This revision to the 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

[[Page 48160]]

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:

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                                                 Existing Rates                        Proposed Rates
          GENERATION RATES           ---------------------------------------------------------------------------
                                       Rate Schedule P-09 (System Peaking)   Rate Schedule P-11 (System Peaking)
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                                Capacity                   $4.06/kW/Mo                           $4.29/kW/Mo
               Grid or 138-161kV
     Required Ancillary Services                           $0.11/kW/Mo                           $0.13/kW/Mo
              (generation in BA)
     Regulation & Freq. Response                           $0.09/kW/Mo                           $0.09/kW/Mo
              (generation in BA)
      Regulation Purchased Adder      prorata share of total energy cost    prorata share of total energy cost
           (load within SWPA BA)                                            (includes refinement to procedure)
      Reserve Ancillary Services                         $0.0184/kW/Mo                         $0.0224/kW/Mo
           Purchased Power Adder                           $0.0067/kWh                           $0.0062/kWh
Administrator's Discretionary Adder   $0.0067/kWh annually      $0.0062/kWh annually
                 Adjustment Limit
          Transformation Service                           $0.42/kW/Mo                           $0.42/kW/Mo
     69 kV(applied to usage, not
                     reservation)
                          Energy                           $0.0086/kWh                           $0.0091/kWh
                  Peaking Energy
     Supplemental Peaking Energy                           $0.0086/kWh                           $0.0091/kWh
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                                                         Rate Schedule                         Rate Schedule
                                                               NFTS-09                               NFTS-11
              TRANSMISSION RATES                        (Transmission)                        (Transmission)
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                                Capacity (Firm Reservation $1.18/kW/Mo                           $1.28/kW/Mo
       energy) Grid or 138-161 kV                       $0.295/kW/Week                        $0.320/kW/Week
                                                        $0.0536/kW/Day                        $0.0582/kW/Day
     Required Ancillary Services                       $0.11/kW/Mo, or                       $0.13/kW/Mo, or
              (generation in BA)                    $0.028/kW/Week, or                    $0.033/kW/Week, or
                                                         $0.005/kW/Day                         $0.006/kW/Day
      Reserve Ancillary Services                     $0.0184/kW/Mo, or                     $0.0224/kW/Mo, or
               (generation in BA)                  $0.0046/kW/Week, or                   $0.0056/kW/Week, or
                                                       $0.00084/kW/Day                      $0.00102/kW/Day,
      Regulation & Freq Response                       $0.09/kW/Mo, or                       $0.09/kW/Mo, or
          (deliveries within BA)                    $0.023/kW/Week, or                    $0.023/kW/Week, or
                                                        $0.0041/kW/Day                        $0.0041/kW/Day
Transformation Service 69 kV and                           $0.42/kW/Mo                           $0.42/kW/Mo
     below (applied on usage, not
 reservation) Weekly and daily rates
                      not applied
                                Capaci80% of firm monthly charge divided    80% of firm monthly charge divided
                                      by 4 for weekly rate, divided by 22   by 4 for weekly rate, divided by 22
                                      for daily rate, and divided by 352    for daily rate, and divided by 352
                                                       for hourly rate                       for hourly rate
                 Network Service                           $1.18/kW/Mo                           $1.28/kW/Mo
     Required Ancillary Services                           $0.11/kW/Mo                           $0.13/kW/Mo
      Reserve Ancillary Services                        $0.00184/kW/Mo                        $0.00224/kW/Mo
              (generation in BA)
      Regulation & Freq Response                           $0.09/kW/Mo                           $0.09/kW/Mo
          (deliveries within BA)
                                                   Rate Schedule EE-09                   Rate Schedule EE-11
                              EXCESS ENERGY RATES      (Excess Energy)                       (Excess Energy)
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                          Energy                           $0.0086/kWh                           $0.0091/kWh
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    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; 
phone: (918) 595-6690; e-mail: [email protected].
    A Public Information and Comment Forum is tentatively scheduled for 
August 30, 2011, 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. 
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, email or facsimile transmission (918-
595-6656) by August 22, 2011, 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

[[Page 48161]]

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 
and all documents introduced will be available for review at 
Southwestern's offices (see ADDRESSES) during normal business hours. 
Copies of the transcript and all documents introduced may also be 
obtained, for a fee, from the transcribing service. A copy of all 
written comments or an electronic copy in MS Word on the proposed 
Integrated System Rates is due on or before October 7, 2011. 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. 
The Commission will allow the public an opportunity to provide written 
comments on the proposed rate increase before making a final decision.

    Dated: July 28, 2011.
Jon C. Worthington,
Administrator.
[FR Doc. 2011-20022 Filed 8-5-11; 8:45 am]
BILLING CODE 6450-01-P