[Federal Register Volume 76, Number 187 (Tuesday, September 27, 2011)]
[Notices]
[Pages 59682-59695]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-24787]


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DEPARTMENT OF ENERGY

Western Area Power Administration


Desert Southwest Customer Service Region--Western Area Lower 
Colorado Balancing Authority--Rate Order No. WAPA-151

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of Order Concerning Network Integration Transmission 
Service and Ancillary Services Formula Rates.

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SUMMARY: The Deputy Secretary of Energy has confirmed and approved Rate 
Order No. WAPA-151 and Rate Schedules PD-NTS3, INT-NTS3, DSW-SD3, DSW-
RS3, DSW-FR3, DSW-EI3, DSW-SPR3, DSW-SUR3, and DSW-GI1, placing the 
Western Area Power Administration's (Western) Desert Southwest Customer 
Service Region (DSWR) Parker-Davis Project (P-DP) Network Integration 
Transmission Service (NITS), the AC Intertie Project (Intertie) NITS, 
and the Western Area Lower Colorado (WALC) Balancing Authority 
Ancillary Services formula rates into effect on an interim basis. The 
Provisional Formula Rates will be in effect until the Federal Energy 
Regulatory Commission (FERC) confirms, approves, and places them into 
effect on a final basis or until they are replaced by other formula 
rates. The Provisional Formula Rates will provide sufficient revenue to 
pay all annual costs, including interest expense, and to repay power 
investment within the allowable periods.

DATES: Rate Schedules PD-NTS3, INT-NTS3, DSW-SD3, DSW-RS3, DSW-FR3, 
DSW-EI3, DSW-SPR3, DSW-SUR3, and DSW-GI1 will be placed into effect on 
an interim basis on the first day of the first full billing period 
beginning on or after October 1, 2011, and will remain in effect until 
FERC confirms, approves, and places the rate schedules into effect on a 
final basis for a 5-year period ending September 30, 2016, or until the 
rate schedules are superseded.

FOR FURTHER INFORMATION CONTACT: Mr. Jack Murray, Rates Manager, Desert 
Southwest Customer Service Region, Western Area Power Administration, 
P.O. Box 6457, Phoenix, AZ 85005-6457, (602) 605-2442, e-mail 
[email protected].

SUPPLEMENTARY INFORMATION: The Deputy Secretary of Energy approved Rate 
Schedules PD-NTS2, INT-NTS2, DSW-SD2, DSW-RS2, DSW-FR2, DSW-EI2, DSW-
SPR2, and DSW-SUR2 on June 26, 2006 (Rate Order No. WAPA-127, 71 FR 
36332).\1\ These rates became effective on July 1, 2006, with an 
expiration date of June 30, 2011. The rate schedules were extended 
temporarily through September 30, 2013, under Rate Order No. WAPA-
152.\2\
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    \1\ FERC confirmed and approved Rate Order No. WAPA-127 on 
November 21, 2006, in Docket No. EF06-5191. See United States 
Department of Energy, Western Area Power Administration, 117 FERC ] 
62,172.
    \2\ WAPA-152, Extension of Rate Order No. WAPA-127 through 
September 30, 2013. 76 FR 28767, May 18, 2011.
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Desert Southwest Customer Service Region Network Integration 
Transmission Service

    Rate Schedules PD-NTS3 and INT-NTS3 for P-DP and Intertie NITS are 
based on a revenue requirement that recovers the DSWR transmission 
system costs for facilities associated with providing all transmission 
services as well as the non-transmission facility costs allocated to 
transmission service.

[[Page 59683]]

WALC Ancillary Services

    Western will provide seven ancillary services pursuant to its 
Tariff. These are: (1) Scheduling, System Control, and Dispatch Service 
(DSW-SD3); (2) Reactive Supply and Voltage Control Service from 
Generation or Other Sources Service (VAR Support) (DSW-RS3); (3) 
Regulation and Frequency Response Service (Regulation) (DSW-FR3); (4) 
Energy Imbalance Service (DSW-EI3); (5) Spinning Reserve Service (DSW-
SPR3); (6) Supplemental Reserve Service (DSW-SUR3); and (7) Generator 
Imbalance Service (DSW-GI1). Rates for these services will be 
recalculated each year to incorporate the most recent financial and 
load information, and will be applicable to all NITS and WALC Ancillary 
Services customers.
    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 the Administrator of Western; (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 FERC. Existing Department of Energy 
procedures for public participation in power rate adjustments (10 CFR 
part 903) were published on September 18, 1985 (50 FR 37835).
    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-151, the proposed NITS and WALC Ancillary Services 
formula rates, into effect on an interim basis. By this Order, I am 
placing the rates into effect in less than 30 days to meet contract 
deadlines, to avoid financial difficulties and to provide a rate for a 
new service. The new Rate Schedules PD-NTS3, INT-NTS3, DSW-SD3, DSW-
RS3, DSW-FR3, DSW-EI3, DSW-SPR3, DSW-SUR3, and DSW-GI1 will be 
submitted promptly to FERC for confirmation and approval on a final 
basis.

    Dated: September 19, 2011.
Daniel B. Poneman,
Deputy Secretary.

Deputy Secretary

Rate Order No. WAPA-151

In the Matter of: Western Area Power Administration

    Rate Adjustment for the Desert Southwest Customer Service Region; 
Network Integration Transmission Service and Ancillary Services; Order 
Confirming, Approving, and Placing the Parker-Davis Project and AC 
Intertie Project Network Integration Transmission Service and Western 
Area Lower Colorado Ancillary Services Formula Rates Into Effect on an 
Interim Basis
    These Network Integration Transmission Service (NITS) and Western 
Area Lower Colorado (WALC) Ancillary Services formula rates are 
established pursuant to 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 (c) of the Reclamation Project Act of 1939 (43 
U.S.C. 485h(c)) and section 5 of the Flood Control Act of 1944 (16 
U.S.C. 825s); 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 the Administrator of Western; (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/terms and 
definitions apply:

------------------------------------------------------------------------
              Acronym/term                          Definition
------------------------------------------------------------------------
$/kW-month.............................  Dollars per kilowatt per month.
12-cp..................................  Rolling 12-month peak average
                                          of customers' loads in excess
                                          of Federal entitlement,
                                          coincident with the applicable
                                          transmission project's peak.
Administrator..........................  The Administrator of the
                                          Western Area Power
                                          Administration.
Area Control Error (ACE)...............  The instantaneous difference
                                          between a Balancing
                                          Authority's net actual and
                                          scheduled interchange, taking
                                          into account the effects of
                                          frequency bias and correction
                                          for meter error.
Ancillary Services.....................  Those services that are
                                          necessary to support the
                                          transmission of capacity and
                                          energy from resources to loads
                                          while maintaining reliable
                                          operation of the Transmission
                                          Service Provider's
                                          transmission system in
                                          accordance with good utility
                                          practice.
ATRR...................................  Annual Transmission Revenue
                                          Requirement.
Automatic Generation Control (AGC).....  Equipment that automatically
                                          adjusts generation in a
                                          Balancing Authority Area from
                                          a central location to maintain
                                          the Balancing Authority's
                                          interchange schedule plus
                                          frequency bias.
Balancing Authority (BA)...............  The responsible entity that
                                          integrates resource plans
                                          ahead of time, maintains load-
                                          interchange-generation balance
                                          within a Balancing Authority
                                          Area, and supports
                                          Interconnection frequency in
                                          real time.
Control Area...........................  The term used for a Balancing
                                          Authority in Western's Open
                                          Access Transmission Tariff.
CRSP...................................  Colorado River Storage Project.
DOE....................................  Department of Energy.
DSWR...................................  Desert Southwest Customer
                                          Service Region.
Energy Imbalance Service...............  The ancillary service in which
                                          the Balancing Authority
                                          corrects hourly for the
                                          difference between a
                                          customer's energy supply and
                                          energy usage.
EIS....................................  Environmental Impact Statement.

[[Page 59684]]

 
FERC...................................  Federal Energy Regulatory
                                          Commission.
Firm Electric Service Contracts........  Contracts of the sale of long-
                                          term firm DSWR Federal energy
                                          and capacity, pursuant to the
                                          Post 1989 General Power
                                          Marketing and Allocation
                                          Criteria (Marketing Plan).
FRN....................................  Federal Register notice.
FY.....................................  Fiscal Year.
Generator Imbalance Service............  The ancillary service in which
                                          the Balancing Authority
                                          corrects hourly for the
                                          difference between a
                                          customer's actual generation
                                          and scheduled generation.
kW.....................................  Kilowatt. 1,000 watts.
kWh....................................  Kilowatt-hour; the common unit
                                          of electric energy, equal to 1
                                          kW produced or delivered for a
                                          period of 1 hour.
kW-month...............................  Kilowatt-month of electric
                                          energy, equal to 1 kW produced
                                          and delivered for 1 month.
kW-year................................  Kilowatt-year. A unit of
                                          electrical capacity demanded
                                          for 8,760 hours.
Load (Total)...........................  Network Service plus 12-month
                                          rolling average of monthly
                                          entitlements of Federal
                                          Customers plus reserved
                                          capacity for all long-term
                                          firm point-to-point
                                          transmission service.
Load-ratio share.......................  Network Transmission Customer's
                                          12-cp load coincident with
                                          applicable transmission
                                          project's peak, expressed as a
                                          ratio.
Load Serving Entity (LSE)..............  An entity within the Balancing
                                          Authority serving load.
Mill...................................  Unit of monetary value equal to
                                          .001 of U.S. dollar; i.e., one-
                                          tenth of a cent.
Mills/kWh..............................  Mills per kilowatt-hour.
Monthly Entitlements...................  Maximum capacity to be
                                          delivered each month under
                                          Firm Electric Service
                                          Contracts. Each monthly
                                          entitlement is a percentage of
                                          the seasonal contract-rate-of-
                                          delivery.
MW.....................................  Megawatt. Equal to 1,000 kW or
                                          1,000,000 watts.
MWH....................................  Megawatt-hour. Equal to
                                          1,000,000 watt-hours of
                                          electric energy.
NATRR..................................  Net Annual Transmission Revenue
                                          Requirement.
NEPA...................................  National Environmental Policy
                                          Act of 1969 (42 U.S.C. 4321,
                                          et seq.).
NERC...................................  North American Electric
                                          Reliability Corporation.
Network Integration Transmission         Firm Transmission Service for
 Service (NITS).                          the delivery of capacity and
                                          energy from designated network
                                          resources to designated
                                          network loads not using one
                                          specific path.
Open Access Same-Time Information        An electronic posting system
 System (OASIS).                          that the Transmission Service
                                          Provider maintains for
                                          transmission access data that
                                          allows all transmission
                                          customers to view the data
                                          simultaneously.
O&M....................................  Operation and Maintenance.
OM&R...................................  Operation, Maintenance, and
                                          Replacements.
Operating Reserve-Spinning Reserve       Generation capacity needed to
 Service.                                 serve load immediately in the
                                          event of a system contingency.
                                          Spinning Reserve Service may
                                          be provided by generating
                                          units that are on-line and
                                          loaded at less than maximum
                                          output.
Operating Reserve-Supplemental Reserve   Generation capacity needed to
 Service.                                 serve load in the event of a
                                          system contingency, which
                                          capacity is not available
                                          immediately to serve load but
                                          rather within a short period
                                          of time. Supplemental Reserve
                                          Service may be provided by
                                          generation units that are on-
                                          line but unloaded, by quick
                                          start generation, or by
                                          interruptible load.
Provisional Formula Rate...............  A formula rate which has been
                                          confirmed, approved, and
                                          placed into effect on an
                                          interim basis by the Deputy
                                          Secretary.
Rate Brochure..........................  A document explaining the
                                          rationale and background for
                                          the rate proposal contained in
                                          this Rate Order, dated
                                          February 22, 2011.
Reactive Supply and Voltage Control      The ancillary service under
 From Generation or Other Sources         which a Balancing Authority
 Service.                                 operates generation facilities
                                          under its control to produce
                                          or absorb reactive power to
                                          maintain voltages on all
                                          transmission facilities within
                                          acceptable limits.
Reclamation............................  United States Department of the
                                          Interior, Bureau of
                                          Reclamation.
Reclamation Law........................  A series of Federal laws,
                                          viewed as a whole that create
                                          the originating framework
                                          under which Western markets
                                          power.
Regulation and Frequency Response        The ancillary service under
 Service.                                 which a Balancing Authority
                                          maintains moment-by-moment
                                          load-interchange-generation
                                          balance with the Balancing
                                          Authority area, and supports
                                          interconnection frequency.
Revenue Requirement....................  The revenue required to recover
                                          annual expenses, such as O&M,
                                          purchased power, transmission
                                          service expenses, interest,
                                          deferred expenses, repayment
                                          of Federal investments, and
                                          other assigned costs.
RMR....................................  Rocky Mountain Customer Service
                                          Region.
Scheduling, System Control, and          The ancillary service under
 Dispatch Service.                        which a Balancing Authority
                                          sets up an arrangement for an
                                          energy interchange
                                          transaction.
Service Agreement......................  The initial agreement and any
                                          amendments or supplements
                                          entered into by the
                                          Transmission Customer and
                                          Western for service under the
                                          Tariff.

[[Page 59685]]

 
Sub-Balancing Authority (SBA)..........  An area within a Balancing
                                          Authority that has a boundary
                                          metering scheme and for which
                                          an Area Control Error can be
                                          measured.
Tariff.................................  Western Area Power
                                          Administration's revised Open
                                          Access Transmission Service
                                          Tariff, effective December 1,
                                          2009 (FERC Docket No. NJ10-1-
                                          000).
Transmission Customer..................  The DSWR customer taking
                                          network or point-to-point
                                          transmission service.
Transmission Provider..................  An entity that administers a
                                          transmission tariff and
                                          provides transmission service
                                          to Transmission Customers
                                          under applicable transmission
                                          service agreements.
WALC...................................  Western Area Lower Colorado
                                          Balancing Authority.
WECC...................................  Western Electricity
                                          Coordinating Council.
Western................................  Western Area Power
                                          Administration.
------------------------------------------------------------------------

Effective Date

    The Provisional Formula Rates will take effect on the first day of 
the first full billing period beginning on or after October 1, 2011, 
and will remain in effect until September 30, 2016, pending approval by 
FERC on a final basis.

Public Notice and Comment

    Western has followed the Procedures for Public Participation in 
Power and Transmission Rate Adjustments and Extensions, 10 CFR part 
903, in developing these formula rates and schedules. The steps Western 
took to involve interested parties in the rate process were:
    1. On September 22, 2010, Western held an informal public meeting 
with customers and interested parties to discuss DSWR's proposed rates 
for NITS and WALC Ancillary Services. Western posted all information 
presented at the informal public meeting, as well as answering 
questions asked at the meeting, on its Web site at http://www.wapa.gov/dsw/pwrmkt/ANCSRV/ANCSRV.htm.
    2. On February 15, 2011, DSWR published a Federal Register notice 
(76 FR 8730), officially announcing the proposed NITS and WALC 
Ancillary Services formula rates adjustment, initiating the public 
consultation and comment period, announcing the Public Information and 
Public Comment forums and outlining procedures for public 
participation.
    3. On February 16, 2011, Western mailed all DSWR transmission 
customers and interested parties a copy of the published Federal 
Register notice published on February 15, 2011,(76 FR 8730).
    4. On March 10, 2011, beginning at 1 p.m., Western held its Public 
Information Forum at the DSWR Office at 615 South 43rd Avenue, Phoenix, 
Arizona. Western representatives explained the need for the formula 
rates adjustment in detail and answered questions.
    5. On April 6, 2011, beginning at 1 p.m., Western held a Public 
Comment Forum at the DSWR Office, Phoenix, Arizona, to provide the 
public an opportunity to comment for the record. No comments were 
received at this forum.
    6. Western received three comment letters during the consultation 
and comment period, which ended May 16, 2011.
    All comments received have been considered in the preparation of 
this Rate Order.

Comments

    No oral comments were received.
    The following three organizations submitted written comments:
     Irrigation & Electrical Districts Association of Arizona, 
Phoenix, Arizona.
     Wellton-Mohawk Irrigation and Drainage District, Wellton, 
Arizona.
     Yuma County Water User's Association, Yuma, Arizona.

Project Description

    DSWR provides Ancillary Services under the WALC. It encompasses all 
the power systems located in the DSWR marketing area; Boulder Canyon 
Project (BCP), Parker-Davis Project (P-DP), Central Arizona Project 
(CAP), Colorado River Storage Project (CRSP), and the Pacific 
Northwest-Pacific Southwest Intertie Project (AC Intertie), as well as 
the transmission facilities of the Salt Lake City Area Integrated 
Projects of the CRSP. NITS is provided on the P-DP and the AC Intertie.

P-DP

    P-DP was formed by consolidating two projects, Davis Dam and Parker 
Dam, under terms of the Act of May 28, 1954 (68 Stat. 143). P-DP is 
operated in conjunction with the other Federal hydro generation 
projects in the Colorado River Basin. The project includes 1,541 
circuit-miles of high-voltage transmission lines in Arizona, southern 
Nevada, and along the Colorado River in California. Power generated 
from the P-DP is marketed to customers in Nevada, Arizona, and 
California. The current methodologies to calculate rates for firm 
electric and transmission service have been in effect since October 1, 
2008.

AC Intertie

    The AC Intertie was authorized by Section 8 of the Pacific 
Northwest Power Marketing Act of August 31, 1964 (16 U.S.C. 837g). 
Western's portion of the AC Intertie consists of two parts, a northern 
portion and a southern portion. The southern portion is administered by 
Western's DSWR and is treated as a separate, stand alone project for 
repayment and operational purposes. It consists of a 238-mile, 345-kV 
line from Mead Substation (Nevada) to Liberty Substation (Arizona), a 
19-mile, 230-kV line from Liberty to Westwing Substation (Arizona), a 
22-mile, 230-kV line from Westwing to Pinnacle Peak Substation 
(Arizona), and two segments that came on line in April 1996; the 260-
mile Mead-Phoenix 500-kV AC Transmission Line between Marketplace 
Substation (Nevada) and Perkins Substation (Arizona), and the 202-mile 
Mead-Adelanto 500-kV AC transmission line between Marketplace and the 
existing Adelanto Switching Substation in southern California. The rate 
schedules for firm and non-firm transmission services were placed into 
effect on October 1, 2007, and expire on September 30, 2012, unless 
superseded with new rate schedules.

BCP

    Hoover Dam, authorized by the Boulder Canyon Project Act (45 Stat. 
1057, December 21, 1928), sits on the Colorado River along the Arizona 
and Nevada border. Hoover Power Plant has 19 generating units (two for 
plant use) and an installed capacity of 2,078,800 kW (4,800 kW for 
plant use). High-voltage transmission lines and substations make it 
possible for consumers in southern Nevada,

[[Page 59686]]

Arizona, and southern California to receive power from the BCP. BCP 
electric service rates are adjusted annually using an existing rate 
formula established on April 19, 1996.

CAP

    The CAP is one of three related water development projects that 
make up the Colorado River Basin Project. Congress authorized CAP in 
1968 to improve water resources in the Colorado River Basin (43 U.S.C. 
1501). The legislation also authorized Federal participation in the 
Navajo Generating Station, which has three coal-fired steam electric 
generating units for a combined capacity of approximately 2,250,000 kW. 
The current rate methodology for CAP firm and non-firm transmission 
service went into effect on January 1, 2001, and was extended through 
December 31, 2012.

CRSP

    CRSP was authorized by the Colorado River Storage Project Act, ch. 
203, 70 Stat. 105, on April 11, 1956. The project provides water-use 
developments for states in the Upper Basin (Colorado, New Mexico, Utah, 
and Wyoming) while still maintaining water deliveries to the states of 
the Lower Basin (Arizona, California, and Nevada) as required by the 
Colorado River Compact Act of 1922. The CRSP hydroelectric facility 
providing Ancillary Services for WALC is the Glen Canyon power plant on 
the Colorado River.

Network Integration Transmission Service

    The formula rates for NITS were initially placed into effect by 
Rate Order No. WAPA-127 on November 21, 2006, and were effective 
through June 30, 2011. These formula rates were then extended by Rate 
Order No. WAPA-152 through September 30, 2013. The formula rates being 
placed into effect by Rate Order No. WAPA-151 will be effective on 
October 1, 2011, and will remain in effect until September 30, 2015, or 
until superseded. The formula rate for CAP is being offered under a 
separate Rate Order No. WAPA-124. The formula rate methodology will 
remain identical to those for P-DP and AC Intertie.
    The formula rates for NITS for P-DP and AC Intertie are described 
in Rate Schedules PD-NTS3 and INT-NTS3. These formula rates will remain 
project-specific under Rate Order No. WAPA-151. The rates will 
subsequently be recalculated every year, effective October 1, based on 
the approved formula and updated financial and load data. DSWR will 
provide official notice of changes in rates to customers prior to 
October 1 of each year.

WALC Ancillary Services

    The formula rates for WALC Ancillary Service were initially placed 
into effect by Rate Order No. WAPA-127 on July 1, 2006, and were 
effective through June 30, 2011.\3\ These rate schedules were then 
extended by Rate Order No. WAPA-152 through September 30, 2013.\4\ The 
rate schedules being placed into effect by Rate Order No. WAPA-151 will 
be effective on October 1, 2011, and will remain in effect until 
September 30, 2016, or until superseded.
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    \3\ See 71 FR 36322 (June 26, 2006). FERC confirmed and approved 
these rates on November 21, 2006 (117 FERC ] 62,172).
    \4\ WAPA-152, Extension of Rate Order No. WAPA-127 through 
September 30, 2013. 76 FR 28767, May 18, 2011.
---------------------------------------------------------------------------

    Western will offer seven ancillary services pursuant to its Tariff. 
The seven ancillary services are: (1) Scheduling, system control, and 
dispatch service; (2) reactive supply and voltage control service; (3) 
regulation and frequency response service; (4) energy imbalance 
service; (5) spinning reserve service; (6) supplemental reserve 
service; and (7) generator imbalance service. The formula rates for 
ancillary services are designed to recover only the costs incurred for 
providing the service(s). The formula rates for ancillary services are 
described in Rate Schedules DSW-SD3, DSW-RS3, DSW-FR3, DSW-EI3, DSW-
SPR3, DSW-SUR3, and DSW-GI1. The rates will subsequently be 
recalculated every year, effective October 1, based on the approved 
formula and updated financial and load data. DSWR will provide official 
notice of changes in rates to customers prior to October 1 of each 
year.

Comparison of Existing and Provisional Formula Rates for Network 
Integration Transmission Service and WALC Ancillary Services

    The following table displays a comparison of existing rates and 
provisional rates for FY 2012. These rates will be recalculated 
annually based on updated financial and load data.

                      Formula Rate Comparison Table
------------------------------------------------------------------------
                                Existing formula     Provisional formula
                                 rates effective       rates effective
      Class of service        October 1, 2010  (FY  October 1, 2011  (FY
                                      2011)                 2012)
------------------------------------------------------------------------
Network Integration           Customer's Load       Customer's Load
 Transmission Service:         Ratio Share times     Ratio Share times
                               one-twelfth of the    one-twelfth of the
                               Annual Transmission   Annual Transmission
                               Revenue Requirement.  Revenue
                                                     Requirement.
    P-DP....................  $37,912,005.........  $38,572,394.
    AC Intertie.............  $27,476,836.........  $27,906,604.
Scheduling, System Control,   $26.85/tag Maximum    $30.33/Schedule
 and Dispatch Services DSW-    cost per tag.         Maximum cost per
 SD3.                                                Schedule.
Reactive Supply and Voltage   $0.058/kW-month.....  $0.063/kW-month.
 Control from Generation
 Sources Services DSW-RS3.
Regulation and Frequency      0.2481 Mills/kWh      $0.2327/kW-month
 Response Service DSW-FR3.     (Energy based).       (Capacity based).
Energy Imbalance Service:
    DSW-EI3.................
    On-Peak Hours...........  +/- 0 to 1.5%; Min:   +/- 0 to 1.5%; Min:
                               0 to 5 MW.            0 to 4 MW.
    Energy within Bandwidth.  100% return.........  100% return.
On-Peak Hours...............  ....................  +/- 1.5% to 7.5%;
                                                     Min: 4 to 10 MW
Energy outside Bandwidth
 Deliveries:
    Under...................  110% return.........  110% return.
    Over....................  90% return..........  90% return.
On-Peak Hours...............  N/A.................  >+/-7.5%, Min:
                                                     >10MW.

[[Page 59687]]

 
Deliveries:
    Under...................  ....................  125% return.
    Over....................  ....................  75% return.
Off-Peak Hours..............  +1.5% to -3%........  +7.5% to -3%.
Deliveries:
    Under...................  Min: 5 MW...........  Min: 5 MW.
    Over....................  Min: 2 MW...........  Min: 2 MW.
Energy within Bandwidth       100% return.........  100% return.
 Energy outside Bandwidth.
Deliveries:
    Under...................  110% return.........  110% return.
    Over....................  60% return..........  60% return.
Generator Imbalance Service:
    DSW-GI1
On-Peak Hours...............  N/A.................  +/- 0 to 1.5%; Min:
                                                     0 to 4 MW.
Energy within Bandwidth.....  ....................  100% return.
On-Peak Hours Energy outside  ....................  +/- 1.5% to 7.5%;
 bandwidth.                                          Min: 4 to 10 MW.
Deliveries..................  N/A.
    Under...................  ....................  110% return.
    Over....................  ....................  90% return.
On-Peak Hours...............  ....................  > +/- 7.5%, Min: >
                                                     10 MW
Deliveries..................  N/A.
    Under...................  ....................  125% return.
    Over....................  ....................  75% return.
Off-Peak Hours..............  N/A.................  +7.5% to -3%.
Deliveries:
    Under...................  ....................  Min: 5 MW.
    Over....................  ....................  Min: 2 MW.
Energy within Bandwidth.....  ....................  100% return.
Energy outside Bandwidth
Deliveries:
    Under...................  ....................  110% return.
Over........................  ....................  60% return.
Operating Reserves:
    Spinning Service DSW-     None available on     None available on
     SPR3 and Supplemental     long-term basis;      long-term basis;
     Service DSW-SUR3.         market price, if      market price, if
                               available, on short-  available, on short-
                               term basis, or on     term basis, or on
                               request. Western      request. Western
                               will procure at       will procure at
                               cost plus 10%         cost plus 10%
                               administrative        administrative
                               charge.               charge.
------------------------------------------------------------------------

Certification of Rates

    Western's Administrator certified that the Provisional Formula 
Rates for NITS and WALC Ancillary Services under Rate Schedules PD-
NTS3, INT-NTS3, DSW-SD3, DSW-RS3, DSW-FR3, DSW-EI3, DSW-SPR3, DSW-SUR3, 
and DSW-GI1 are the lowest possible rates consistent with sound 
business principles. The Provisional Formula Rates were developed 
following administrative policies and applicable laws.

Network Integration Transmission Service Discussion

    The monthly charge for NITS will be as follows:
    [GRAPHIC] [TIFF OMITTED] TN27SE11.022
    

The customer's load-ratio share is the ratio of its network load to the 
Project's Transmission System Total Load at the Project's system peak. 
This is calculated on a rolling 12-month basis (12 coincident peak 
average or 12-cp).

Network Integration Transmission Service Comments

    DSWR received three comment letters during the Public Consultation 
and Comment Period. No comments provided related specifically to NITS. 
The commenters requested an extension to the public comment period, and 
Western responds to these comments later in this document.

WALC Ancillary Services Discussion

    Pursuant to Western's Tariff, WALC will offer seven Ancillary 
Services. Two of these services, Scheduling, System Control and 
Dispatch (SSCD) Service and Reactive Supply and Voltage Control (VAR 
Support) from Generation or Other Sources Service, are services that 
the Transmission Provider is required to provide (or offer to arrange

[[Page 59688]]

with the Balancing Authority operator) and the Transmission Customer is 
required to purchase.
    The other five Ancillary Services, Regulation and Frequency 
Response (Regulation) Service, Energy Imbalance (EI) Service, Operating 
Reserves--Spinning Reserve and Operating Reserve--Supplemental Reserve 
Service, Generator Imbalance (GI) Service, are services that the 
Transmission Provider is required to offer to provide to the 
Transmission Customer. The Transmission Customer is required to acquire 
these Ancillary Services, either from the Transmission Provider, from a 
third party, or by self-supply.

Formula Rate for Scheduling, System Control, and Dispatch Service

    The formula for SSCD Service is as follows:
    [GRAPHIC] [TIFF OMITTED] TN27SE11.023
    
    Western's annual revenue requirement (numerator) for SSCD Service 
primarily consists of costs for scheduling and will not include costs 
for system control and dispatch. Those costs are contained in other 
rates. The denominator is the yearly total of daily schedules. This is 
a change from the current methodology in that WALC previously counted 
tags at the time of creation and any subsequent modifications where 
WALC is listed as a Transmission Provider and as a Balancing Authority.
    Under Schedule 1 of Western's Tariff, ``this service can be 
provided only by the operator of the Control Area in which the 
transmission facilities used for transmission service are located.'' In 
cases where the Transmission Provider directly provides the service as 
the Control Area operator, the costs for this service are included in 
the respective Federal transmission rate. In cases where the 
Transmission Provider on the schedule is not the control area operator 
and the entities are not taking transmission service over the Federal 
transmission system in WALC, unless other arrangements are made with 
WALC, the SSCD rate will be applicable.

Formula Rate for Reactive Supply and Voltage Support Control Service 
From Generation or Other Sources Service

    The formula for VAR Support Service is as follows:
    [GRAPHIC] [TIFF OMITTED] TN27SE11.024
    
    Western's total annual revenue requirement (numerator) for VAR 
Support Service captures the percentage of annual generation costs that 
are used for this service. That percentage is based on the nameplate 
power factor for the generating units. The annual generation costs are 
multiplied by the complement of the power factor. The denominator is a 
measure of the loads requiring this service. Western uses long-term 
firm transmission reservation data for both CRSP and P-DP, and 
subtracts for those customers that provide VAR Support Service to the 
Balancing Authority. There is no change to the rate formula 
methodology.

[[Page 59689]]

Formula Rate for Regulation and Frequency Response Service

    The formula for Regulation Service will have two different 
applications:
    1. Load-based Assessment. The formula is as follows:
    [GRAPHIC] [TIFF OMITTED] TN27SE11.025
    
    Western's annual revenue requirement (numerator) for Regulation 
Service captures the plant, operation and maintenance (O&M) costs, 
purchases of a regulation product, and purchases of power in support of 
the units' ability to regulate. The load (denominator) applies to all 
entities' auxiliary load (total less Federal entitlements, including 
behind the meter generation rating, or if available, hourly data if 
generation is synchronized to the system), plus the nameplate capacity 
of intermittent resources serving load in the WALC. Application of 
Regulation Service to intermittent resources serving load inside WALC 
is a change from the current methodology. Western retains the existing 
requirement for providing regulation service for non-conforming loads. 
A non-conforming load is defined as a single plant or site with a 
regulation capacity requirement of 5 MWs or greater on a recurring 
basis and 10 percent or greater of its average load. Regulation Service 
for non-conforming loads, as determined by Western, will continue to be 
delineated in a Service Agreement and charged an amount that includes 
the cost to procure the service and the additional amount required to 
monitor and supply the service. The denominator is a change from the 
existing formula rate methodology in that it was energy-based rather 
than capacity (load)-based.
1. Self-Provision Using Automatic Generation Control Assessment
    Western allows entities with automatic or manual generation control 
to self-provide for all or a portion of their loads. Typically, 
entities with generation control are known as Sub-Balancing Authorities 
(SBA) and should meet all of the following criteria:
    a. Have a well-defined boundary, with WALC-approved revenue-quality 
metering, accurate as defined by North American Electric Reliability 
Corporation (NERC), to include MW flow data availability at 6-second or 
smaller intervals.
    b. Have Automatic Generation Control capability.
    c. Demonstrate Regulation Service capability as determined by 
Western.
    d. Execute a contract with the WALC BA to:
    i. Provide all requested data to the WALC BA.
    ii. Meet SBA Error Criteria as described below.
    Self-provision is to be measured by use of the entity's 1-minute 
average Area Control Error (ACE) to determine the amount of self-
provision. The assessment is calculated every hour and the value of ACE 
is used to calculate the Regulation Service charges as follows:
    a. If the entity's 1-minute average ACE is <= 0.5 percent of the 
entity's hourly average load, no Regulation Service charges are 
assessed by WALC.
    b. If the entity's 1-minute average ACE is >= 1.5 percent of the 
entity's hourly average load, WALC assesses Regulation Service charges 
to the entity's entire load, using the Load-based rate.
    c. If the entity's 1-minute average ACE is > 0.5 percent of the 
entity's hourly average load, but < 1.5 percent of the entity's hourly 
average load, WALC assesses Regulation Service charges based on linear 
interpolation of zero charge and full charge, using the Load-based 
rate.
    d. Western will monitor the entity's self-provision on a regular 
basis. If Western determines that the entity has not been self-
regulating, Western will, upon notification, employ the load-based 
assessment methodology described in No. 1 above.

Alternative Arrangements

    1. Exporting Intermittent Resource Requirement: An entity that 
exports the output from an intermittent generator to another balancing 
authority will be required to dynamically meter or dynamically schedule 
that resource out of WALC to another balancing authority unless 
arrangements, satisfactory to Western, are made for that entity to 
acquire this service from a third-party or self-supply (as outlined 
below). An intermittent generator is one that is volatile and variable 
due to factors beyond direct operational control and, therefore, is not 
dispatchable.
    2. Self- or Third-party Supply: Western may allow an entity to 
supply some or all of its required regulation or contract with a third 
party to do so, even without well-defined boundary metering. This 
entity must have revenue quality metering at every load and generation 
point, and accuracy as defined by NERC, to include MW flow data 
availability at 6-second or smaller intervals. WALC will evaluate the 
entity's metering, telecommunications and regulating resource, as well 
as the required level of regulation, and determine whether the entity 
qualifies to self-supply under this provision. If approved, the entity 
is required to enter into a separate contract with Western, which will 
specify the terms of the self-supply agreement.

[[Page 59690]]

Formula Rate for Energy Imbalance Service

    WALC provides EI Service using a bandwidth and penalty structure 
with three deviation bands as follows:
    1. On-peak hours +/- 0 percent to 1.5 percent of metered load (0 to 
4 MW minimum) with no penalty within bandwidth.
    2. On-peak hours +/- 1.5 percent to 7.5 percent of metered load (4 
to 10 MW minimum) with 110 percent return for under-deliveries and 90 
percent return for over-deliveries.
    3. On-peak hours >7.5 percent of metered load (>10 MW minimum) with 
125 percent return for under-deliveries and 75 percent for over-
deliveries.
    Due to Balancing Authority operating constraints in the off-peak 
hours, WALC will continue to treat on-peak and off-peak hour imbalances 
differently. For off-peak hour imbalances, WALC is proposing to 
continue using the following bandwidth structure in those hours but 
with an expanded bandwidth for over-delivery:
    Off-peak hours 7.5 percent to -3 percent of metered load (2 MW 
minimum for over-deliveries; 5 MW minimum for under-deliveries) with 
110 percent return for under-delivery, 60 percent return for over-
delivery.
    For off-peak hour imbalances, WALC is proposing an imbalance and 
penalty structure very similar to the existing structure.

Formula Rates for Operating Reserves--Spinning and Supplemental 
Services

    WALC has no long-term Reserves available for sale. At a customer's 
request, WALC may attempt to purchase and pass through the cost of 
Reserves, plus 10 percent administrative costs. This represents no 
change to the existing methodology.

Formula Rates for Generator Imbalance Service

    WALC has not had a separate rate schedule or provided this service 
in the past. The formula rate for GI Service will be identical to that 
of EI Service, with the following exceptions:
    1. Bandwidths will be calculated as a percentage of metered 
generation, since there is no load.
    2. Intermittent resources are exempt from the outer bandwidth. All 
deviations greater than 1.5 percent of metered generation in the on-
peak hours will be subject only to a 10 percent penalty.
    In any hour, WALC may charge a customer a penalty for either GI 
Service under Rate Schedule DSW-GI1 or EI Service under Rate Schedule 
DSW-EI3, but not both, unless the imbalances aggravate rather than 
offset each other.

Comments

    DSWR received three comment letters during the Public Consultation 
and Comment Period. The comment expressed in these letters has been 
paraphrased where appropriate, without compromising the meaning of the 
comment.
    Comment: All three commenters requested a 30-day extension to the 
public consultation and comment period ending May 16, 2011.
    Response: Western recognizes the request for an extension to the 
comment period. In order to make the rates effective October 1, 
however, Western must issue the order confirming, approving and placing 
the rates into effect on an interim basis. Western provided 
opportunities for the customers and interested parties to participate 
and comment within the 90-day consultation and comment period. Prior to 
initiation of the formal comment period, Western also held informal 
discussions with customers and interested parties, providing for 
initial consultation and comments beginning in September 2010. Western 
believes that these comment opportunities were sufficient, and the 
requesters did not provide sufficient justification of the need for an 
extension.

Availability of Information

    All brochures, studies, comments, letters, memorandums and other 
documents that Western used to develop the Provisional Formula Rates 
are available for inspection and copying at the Desert Southwest 
Customer Service Region Office, located at 615 South 43rd Avenue, 
Phoenix, Arizona or on its Web site at http://www.wapa.gov/dsw/pwrmkt/
ancsrv/ancsrv.htm.

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 preparing an environmental assessment or an 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 the FERC

    The Provisional Formula Rates herein confirmed, approved, and 
placed into effect on an interim basis, together with supporting 
documents, will be submitted to FERC for confirmation and final 
approval.

Order

    In view of the foregoing and under the authority delegated to me, I 
confirm and approve on an interim basis, effective on the first full 
billing period on or after October 1, 2011, formula rates for Network 
Integration Transmission Service and WALC Balancing Authority Ancillary 
Services under Rate Schedules PD-NTS3, INT-NTS3, DSW-SD3, DSW-RS3, DSW-
FR3, DSW-EI3, DSW-SPR3, DSW-SUR3, and DSW-GI1. By this Order, I am 
placing the rates into effect in less than 30 days to meet contract 
deadlines, to avoid financial difficulties and to provide a rate for a 
new service. These rate schedules shall remain in effect on an interim 
basis, pending FERC's confirmation and approval of them or substitute 
formula rates on a final basis through September 30, 2016.

    Dated: September 19, 2011.

Daniel B. Poneman,
Deputy Secretary.

Network Integration Transmission Service on the Parker-Davis Project

Effective

    The first day of the first full billing period beginning on or 
after October 1, 2011, through September 30, 2016.

Available

    In the area served by the Parker-Davis Project (P-DP) transmission 
facilities.

Applicable

    To Network Integration Transmission Service (Network Service) 
customers where capacity and energy are supplied to the P-DP 
transmission system from designated resources, transmitted subject to 
the availability of the transmission capacity, and delivered, less 
losses, to designated points of delivery on the P-DP system specified 
in the network service agreement.

Character and Conditions of Service

    Alternating current at 60 hertz, three-phase, delivered and metered 
at the voltages and points of delivery established by the network 
service agreement.

[[Page 59691]]

Monthly Rate

    Network Service Charge: Each contractor shall be billed an amount 
based on the contractor's load ratio share times one-twelfth of the P-
DP annual revenue requirement. The load ratio share will be determined 
by the contractor's coincidental peak load averaged with the 
coincidental peak loads of the previous 11 months divided by the 
average P-DP system peak for the same time period.

Revenue Requirement

    The projected annual revenue requirement allocated to transmission 
for FY 2012 for the P-DP is $38,572,394. Based on updated financial and 
load data, a recalculated revenue requirement will go into effect on 
October 1 of each year during the effective rate schedule period.

Adjustment for Ancillary Services

    Network Service is offered under Western's Open Access Transmission 
Tariff, and contractors are responsible for all ancillary services set 
forth in the applicable rate schedules specified in the customer's 
network service agreement.

Adjustment for Losses

    Capacity and energy losses incurred in connection with the 
transmission and delivery of power and energy under this rate schedule 
shall be supplied by the customer in accordance with the network 
service agreement.

Modifications

    The Desert Southwest Customer Service Region may modify the charges 
for Network Service upon written notice to the transmission customer. 
Any change to the charges to the transmission customer for Network 
Service shall be included in a revision to this rate schedule 
promulgated under applicable Federal laws, regulations, and policies, 
and made part of the applicable network service agreement.

Network Integration Transmission Service on the Pacific Northwest-
Pacific Southwest Intertie Project

Effective

    The first day of the first full billing period beginning on or 
after October 1, 2011, through September 30, 2016.

Available

    Within the marketing area serviced by the Pacific Northwest-Pacific 
Southwest Intertie Project (Intertie) transmission facilities.

Applicable

    To Network Integration Transmission Service (Network Service) 
customers where capacity and energy are supplied to the Intertie from 
designated resources, transmitted subject to the availability of the 
transmission capacity, and delivered, less losses, to designated points 
of delivery on the Intertie system specified in the network service 
agreement.

Character and Conditions of Service

    Alternating current at 60 hertz, three-phase, delivered and metered 
at the voltages and points of delivery established by the network 
service agreement.

Monthly Rate

    Network Service Charge: Each contractor shall be billed an amount 
based on the contractor's load ratio share times one-twelfth of the 
Intertie annual revenue requirement. The load ratio share will be 
determined by the contractor's coincidental peak load averaged with the 
coincidental peak loads of the previous 11 months divided by the 
average Intertie system peak for the same time period.

Revenue Requirement

    The projected annual revenue requirement allocated to transmission 
for FY 2012 for the Intertie is $27,906,604. Based on updated financial 
and load data, a recalculated revenue requirement will go into effect 
on October 1 of each year during the effective rate schedule period.

Adjustments for Ancillary Services

    Network Service is offered under the Open Access Transmission 
Tariff and contractors are responsible for all ancillary services set 
forth in the applicable rate schedules specified in the customer's 
network service agreement.

Adjustments for Losses

    Capacity and energy losses incurred in connection with the 
transmission and delivery of power and energy under this rate schedule 
shall be supplied by the customer in accordance with the network 
service agreement.

Modifications

    The Desert Southwest Customer Service Region may modify the charges 
for Network Service upon written notice to the transmission customer. 
Any change to the charges to the transmission customer for Network 
Service shall be included in a revision to this rate schedule 
promulgated under applicable Federal laws, regulations, and policies 
and made part of the applicable network service agreement.

Scheduling, System Control, and Dispatch Service

Effective

    The first day of the first full billing period beginning on or 
after October 1, 2011, through September 30, 2016.

Available

    In the area served by the Western Area Lower Colorado (WALC) 
Balancing Authority (BA).

Applicable

    Unless other arrangements are made with WALC, to transactions with 
entities not taking transmission service over the Federal transmission 
system in WALC, where WALC is listed as the Transmission Provider. For 
entities taking transmission service from Western in the WALC BA, the 
Scheduling, System Control, and Dispatch Service (Scheduling Service) 
charge is included in the transmission rate.

Character of Service

    Scheduling Service is required to schedule the movement of power 
through, out of, within, or into the WALC BA.

Formula Rate

    The charges for Scheduling Service are to be based on the following 
formula rate where the Rate per Schedule equals:
[GRAPHIC] [TIFF OMITTED] TN27SE11.026

    The numerator captures the personnel costs associated with 
providing Scheduling Service, as well as related costs, including 
annual capital costs associated with providing Scheduling Service. The 
denominator captures the

[[Page 59692]]

total number of daily schedules per year.

Rate:

    The rate charged for Scheduling Service is $30.33 per Schedule. 
This rate is based on FY 2010 financial and load data, and will be in 
effect October 1, 2011, through September 30, 2012. Based on updated 
financial and load data, a recalculated rate will go into effect on 
October 1 of each year during the effective rate period.
    The Desert Southwest Customer Service Region's charge for 
Scheduling Service may be modified upon written notice to the customer, 
and any change to the charges for the service shall be included in a 
revision to this rate schedule promulgated under applicable Federal 
laws, regulations, and policies and made part of the applicable service 
agreement.

Reactive Supply and Voltage Control From Generation Sources Service

Effective

    The first day of the first full billing period beginning on or 
after October 1, 2011, through September 30, 2016.

Available

    In the area served by the Western Area Lower Colorado (WALC) 
Balancing Authority (BA).

Applicable

    To all customers in the WALC BA taking transmission service under 
Western's Open Access Transmission Tariff. The customer must purchase 
this service from WALC, unless the entity has a separate generation 
agreement to supply Reactive Supply and Voltage Control from Generation 
Sources Service (Voltage Support Service) to WALC.

Character of Service

    Voltage Support Service is needed to maintain transmission voltages 
on all transmission facilities within acceptable limits. To accomplish 
this, generation facilities under the control of the WALC BA are 
operated to produce or absorb reactive power.

Formula Rate

    The charges for Voltage Support Service are based on the following 
formula rate:
[GRAPHIC] [TIFF OMITTED] TN27SE11.027

    The revenue requirement for the service is the sum of the service 
for each generation project in WALC, determined by multiplying the 
generation revenue requirement by one minus the power factor for the 
supplying plants.
    The load requiring Voltage Support Service equals long-term firm 
transmission reservation data for both P-DP and that portion of 
Colorado River Storage Project (CRSP) located in WALC, and subtracts 
for those reservations by entities with generation agreements to supply 
Voltage Support Service to WALC.

Rate

    The rate to be in effect October 1, 2011, through September 30, 
2012, is:

Monthly: $0.063/kW-month.
Weekly: $0.015/kW-week.
Daily: $0.0021/kW-day.
Hourly: $0.0870 mills/kWh.

    This rate is based on the above formula and on FY 2010 financial 
and load data, and will be adjusted annually as new data becomes 
available and will go into effect October 1 of each year. The Desert 
Southwest Customer Service Region (DSWR) charges for Voltage Support 
Service may be modified upon written notice to the customer. Any change 
to the charges for Voltage Support Service shall be included in a 
revision to the rate schedule promulgated under applicable Federal 
laws, regulations, and policies and made part of the applicable service 
agreement. DSWR shall charge the customer in accordance with the rate 
then in effect.

Regulation And Frequency Response Service

Effective

    The first day of the first full billing period beginning on or 
after October 1, 2011, through September 30, 2016.

Applicable

    Regulation and Frequency Response Service (Regulation Service) is 
necessary to provide for the continuous balancing of resources, 
generation and interchange with load, and for maintaining scheduled 
interconnection frequency at 60 cycles per second (60 Hz). Regulation 
Service is accomplished by committing on-line generation whose output 
is raised or lowered as necessary, predominantly through the use of 
automatic generation control equipment, to follow the moment-by-moment 
changes in load. The obligation to maintain this balance between 
resources and load lies with the Western Area Lower Colorado (WALC) 
Balancing Authority (BA) operator. Customers (Federal transmission 
customers and customers on others' transmission systems within WALC) 
with conforming loads must purchase this service from WALC or make 
alternative comparable arrangements to satisfy their Regulation Service 
obligations. Customers with non-conforming loads will be charged 
differently as stated below. A non-conforming load is defined as a 
single plant or site with a regulation capacity requirement of 5 
megawatts (MW) or greater on a recurring basis and whose capacity 
requirement is equal to 10 percent or greater of its average load.
    The charges for Regulation Service are outlined below.

Types

    There are two different applications of this Formula Rate:
    1. Load-based Assessment: The rate for the load-based assessment is 
reflected in the ``Formula Rate'' section and is applied to entities 
that take regulation service from the WALC BA. This load-based rate is 
assessed on an entity's auxiliary load (total metered load less Federal 
entitlements, including behind the meter generation rating, or if 
available, hourly data if generation is synchronized to the system) and 
is also applied to the installed nameplate capacity of all intermittent 
generators within WALC.
    2. Self-Provision Assessment: Western allows entities with 
automatic or manual generation control to self-provide for all or a 
portion of their loads. Typically, entities with generation control are 
known as Sub-Balancing Authorities (SBA) and should meet all of the 
following criteria:
    a. Have a well-defined boundary, with WALC-approved revenue-quality 
metering, accurate as defined by NERC, to include MW flow data 
availability at 6-second or smaller intervals.
    b. Have Automatic Generation Control capability.
    c. Demonstrate Regulation Service capability.
    d. Execute a contract with the WALC BA to:
    i. Provide all requested data to the WALC BA.

[[Page 59693]]

    ii. Meet SBA Error Criteria as described below.
    Self-provision is measured by use of the entity's 1-minute average 
Area Control Error (ACE) to determine the amount of self-provision. The 
assessment is calculated every hour, and the value of ACE is used to 
calculate the Regulation Service charges as follows:
    a. If the entity's 1-minute average ACE is <= 0.5 percent of the 
entity's hourly average load, no Regulation Service charges is assessed 
by WALC.
    b. If the entity's 1-minute average ACE is >= 1.5 percent of the 
entity's hourly average load, WALC assesses Regulation Service charges 
to the entity's entire load, using the load-based rate.
    c. If the entity's 1-minute average ACE is > 0.5 percent of the 
entity's hourly average load, but < 1.5 percent of the entity's hourly 
average load, WALC assesses Regulation Service charges based on linear 
interpolation of zero charge and full charge, using the load-based 
rate.
    d. Western monitors the entity's self-provision on a regular basis. 
If Western determines that the entity has not been attempting to self-
regulate, Western will, upon notification, employ the load-based 
assessment methodology described in No. 1 above.

Alternative Arrangements

    Exporting Intermittent Resource Requirement: An entity that exports 
the output from an intermittent generator to another balancing 
authority will be required to dynamically meter or dynamically schedule 
that resource out of WALC to another balancing authority unless 
arrangements, satisfactory to Western, are made for that entity to 
acquire this service from a third-party or self-supply (as outlined 
below). An intermittent generator is one that is volatile and variable 
due to factors beyond direct operational control and, therefore, is not 
dispatchable.
    Other Self- or Third-party Supply: Western may allow an entity to 
supply some or all of its required regulation or contract with a third 
party to do so, even without well-defined boundary metering. This 
entity must have revenue quality metering at every load and generation 
point, accuracy as defined by NERC, to include MW flow data 
availability at 6-second (or smaller) intervals. WALC will evaluate the 
entity's metering, telecommunications, and regulating resource, as well 
as the required level of regulation, and determine whether the entity 
qualifies to Self-supply under this provision. If approved, the entity 
is required to enter into a separate contract with Western, which will 
specify the terms of the self-supply agreement.

Formula Rate
[GRAPHIC] [TIFF OMITTED] TN27SE11.028

Rates

Load-Based Rate
    The rate to be in effect October 1, 2011, through September 30, 
2012, for Nos. 1 and 2, as described above in the ``Types'' section of 
this rate schedule is:

Monthly: $0.2327/kW-month.
Weekly: $0.0536974/kW-week.
Daily: $0.0076500/kW-day.
Hourly: $0.0003188/kWh.

    This rate is based on the above formula and will be revised 
annually based on updated financial and load data. The above Load-Base 
Rate applies to conforming loads. Regulation Service for non-conforming 
loads, as determined by Western, must be delineated in a service 
agreement, and charged an amount that includes the cost to procure the 
service and the additional amount required to monitor and supply this 
service.
    WALC charges for Regulation Service may be modified upon written 
notice to customers. Any change to the Regulation Service charges will 
be listed in a revision to this rate schedule issued under applicable 
Federal laws, regulations, and policies and made part of the applicable 
service agreement. Western will charge customers under the rate then in 
effect.

Energy Imbalance Service

Effective

    The first day of the first full billing period beginning on or 
after October 1, 2011, through September 30, 2016.

Available

    In the area served by the Western Area Lower Colorado (WALC) 
Balancing Authority (BA).

Applicable

    To all customers receiving Energy Imbalance Service from the Desert 
Southwest Customer Service Region (DSWR) for the WALC.

Character of Service

    Provided when a difference occurs between the scheduled and the 
actual delivery of energy to a load located within the WALC BA. The 
transmission customer (Federal transmission customers and customers on 
non-Western transmission systems within WALC BA) must either obtain 
this service from WALC, or make alternative comparable arrangements to 
satisfy its Energy Imbalance Service obligation. Western may charge a 
transmission customer a penalty for either hourly energy imbalances 
under this Schedule DSW-EI3 or hourly generator imbalances under Rate 
Schedule DSW-GI1 for imbalances occurring during the same hour, but not 
both, unless the imbalances aggravate rather than offset each other.

Formula Rate

    WALC has established a multi-tiered deviation bandwidth, based on 
the size of deviation and whether the deviation occurs in the on-peak 
or off-peak hours. For on-peak hours the deviation bands are as 
follows:
    1. Deviations of plus or minus 1.5 percent of metered load, with a 
minimum of 0 to 4 MW, either over or under-delivery.
    2. Deviations of plus or minus 1.5 to 7.5 percent of a customer's 
metered load, with a minimum of 4 to 10 MW, either over or under-
delivery.
    3. Deviations of greater than plus or minus 7.5 percent of metered 
load, with a minimum of greater than 10 MW, either over or under-
delivery.
    For off-peak deviations the deviation band is 7.5 percent to a 
negative 3 percent of metered load, with a minimum of 5 MW for under-
deliveries and 2 MW for over-deliveries. Normally, there are four 
scenarios for Energy Imbalance Service. They are: (1) Over-delivery 
within the bandwidth; (2) under-delivery within the bandwidth; (3) 
over-delivery outside the bandwidth;

[[Page 59694]]

and (4) under-delivery outside the bandwidth. There are different 
penalties and bandwidths imbalances that occur during on-peak and off-
peak hours. During periods of BA operating constraints, Western 
reserves the right to eliminate credits for over-deliveries.

Within the Bandwidth

    For Energy Imbalance within the bandwidth for both on-peak and off-
peak, settlement between the existing customer and Western will be 100 
percent of the energy imbalance. In lieu of financial settlement, equal 
to 100 percent of a weighted index price (described below), Western, at 
its discretion, may accept settlement in energy.

Outside the Bandwidth

    For that portion of the customer's energy imbalance that is outside 
the bandwidth during on-peak hours, the settlement will be as follows:
    1. For deviations of plus or minus 0 to 7.5 percent of metered 
load, with a 0 to 10 MW minimum, the settlement is 110 percent of the 
energy imbalance for under-deliveries and 90 percent of the energy 
imbalance for over-deliveries.
    2. For deviations of greater than plus or minus 7.5 percent of 
metered load, with a minimum exceeding 10 MW, settlement is 125 percent 
of the energy imbalance for under-deliveries and 75 percent for over-
deliveries.
    In lieu of financial settlement, Western may, at its discretion 
accept settlement in energy. Financial settlement will be equal to a 
weighted index price (described below). For on-peak deviations 
described above, settlement will be 110 percent of the weighted index 
price for under-deliveries, and 90 percent in the first tier. For on-
peak deviations in the second tier, financial settlement will be equal 
to 125 percent of the weighted index price for under-deliveries and 75 
percent of the weighted index price for over-deliveries. For deviations 
in the off-peak, settlements will be 110 percent of the weighted index 
price for under-deliveries, and 60 percent of the weighted index price 
for over-deliveries. For financial settlement of transactions, the 
index used to calculate the settlement will be the Dow Jones Palo Verde 
average monthly index or an index identified on Western's Open Access 
Same-time Information System at the beginning of each fiscal year. 
Settlement for the hourly deviations will occur on a monthly basis. The 
Energy Imbalance Service compensation may be modified upon written 
notice to the customer. Any change to the customer compensation for 
Energy Imbalance Service shall be included in a revision to this 
schedule promulgated pursuant to applicable Federal laws, regulations, 
and policies and made part of the applicable service agreement. The 
DSWR shall charge the customer in accordance with the rate then in 
effect.

Operating Reserve--Spinning Reserve Service

Effective

    The first day of the first full billing period beginning on or 
after October 1, 2011, through September 30, 2016.

Available

    In the area served by the Western Area Lower Colorado (WALC) 
Balancing Authority (BA).

Applicable

    To all customers receiving spinning reserve service from the Desert 
Southwest Customer Service Region (DSWR) for the WALC BA.

Character of Service

    Spinning reserve service (Spinning Service) is needed to serve load 
immediately in the event of a system contingency. Spinning Service may 
be provided by generating units that are on-line and loaded at less 
than maximum output. The transmission customer must either purchase 
this service from the Western WALC BA, or make alternative comparable 
arrangements, satisfactory to Western, to meet its Spinning Service 
requirements.

Formula Rate

    Spinning Service will not be available from DSWR resources on a 
long-term basis. If a customer cannot self-supply or purchase this 
service from another provider, Western may obtain the Spinning Service 
on a pass-through cost basis at market price, plus a charge that covers 
the cost of procuring and supplying the service. The transmission 
customer will be responsible for the transmission service to get 
Spinning Service to the designated point of delivery.
    Cost for Spinning Service = market price + cost to procure service. 
The Operating Reserve-Spinning Reserve Service compensation may be 
modified upon written notice to the customer. Any change to the 
customer compensation for Spinning Reserve Service shall be included in 
a revision to this schedule promulgated pursuant to applicable Federal 
laws, regulations, and policies and made part of the applicable service 
agreement. The DSWR shall charge the customer in accordance with the 
rate then in effect.

Operating Reserve--Supplemental Reserve Service

Effective

    The first day of the first full billing period beginning on or 
after October 1, 2011, through September 30, 2016.

Available

    In the area served by the Western Area Lower Colorado (WALC) 
Balancing Authority (BA).

Applicable

    To all customers receiving supplemental reserve service from the 
Desert Southwest Customer Service Region (DSWR) for the WALC BA.

Character of Service

    Supplemental reserve service (Supplemental Service) is needed to 
serve load in the event of a system contingency; however, it is not 
available immediately to serve load. Supplemental Service may be 
provided by generating units that can be synchronized to the system 
within 10 minutes and loaded within 30 minutes. The transmission 
customer must either purchase this service from the Western WALC BA, or 
make alternative comparable arrangements, satisfactory to Western, to 
meet its Supplemental Service requirements.

Formula Rate

    Supplemental Service will not be available from DSWR resources on a 
long-term basis. If a customer cannot self-supply or purchase this 
service from another provider; Western may obtain the Supplemental 
Service on a pass-through cost basis at market price, plus a charge 
that covers the cost of procuring and supplying the service. The 
transmission customer will be responsible for the transmission service 
to get Supplemental Service to the designated point of delivery.
    Cost for Supplemental Service = market price + cost to procure 
service. The Operating Reserve-Supplemental Reserve Service 
compensation may be modified upon written notice to the customer. Any 
change to the customer compensation for Supplemental Reserve Service 
shall be included in a revision to this schedule promulgated pursuant 
to applicable Federal laws, regulations, and policies and made part of 
the applicable service agreement. The DSWR shall charge the customer in 
accordance with the rate then in effect.

[[Page 59695]]

Generator Imbalance Service

Effective

    The first day of the first full billing period beginning on or 
after October 1, 2011, through September 30, 2016.

Available

    In the area served by the Western Area Lower Colorado (WALC) 
Balancing
    Authority (BA).

Applicable

    To all customers receiving Generator Imbalance Service from the 
Desert Southwest Customer Service Region (DSWR) for the WALC.

Character of Service

    Generator Imbalance Service is provided when a difference occurs 
between the output of a generator located within the Transmission 
Provider's BA and a delivery schedule from that generator to (1) 
Another BA, or (2) a load within the Transmission Provider's BA over a 
single hour. Western will offer this service, to the extent it is 
feasible to do so from its own resources or from resources available to 
it, when Transmission Service is used to deliver energy from a 
generator located with its BA. The transmission customer (Federal 
transmission customers and customers on non-Western transmission 
systems within WALC) must either obtain this service from Western, or 
make alternative comparable arrangements, which may include use of non-
generation resources capable of providing this service, satisfactory to 
Western, to meet their Generator Imbalance Service obligation. Western 
may charge a transmission customer a penalty for either hourly 
generator imbalances under this Schedule DSW-GI1 or hourly energy 
imbalances under Rate Schedule DSW-EI3 for imbalances occurring during 
the same, but not both, unless the imbalances aggravate rather than 
offset each other.
    Intermittent generators serving load outside WALC will be required 
to dynamically schedule or dynamically meter their generation to 
another BA unless arrangements, satisfactory to Western, are made for 
that entity to acquire this service from a third-party. An intermittent 
resource, for the limited purpose of these rate schedules is an 
electric generator that is not dispatchable and cannot store its fuel 
source, and therefore, cannot respond to changes in demand or respond 
to transmission security constraints.

Formula Rate

    WALC has established a multi-tiered deviation bandwidth, based on 
the size of deviation and whether the deviation occurs in the on-peak 
or off-peak hours. The magnitude of all deviations will be based on 
metered generation. For on-peak hours the deviation bands are as 
follows:
    1. Deviations of plus or minus 1.5 percent of the scheduled 
transaction, with a minimum of 0 to 4 MW;
    2. Deviations of plus or minus 1.5 to 7.5 percent of the scheduled 
transaction, with a minimum 4 to 10 MW; and
    3. Deviations of greater than plus or minus 7.5 percent of the 
scheduled transaction with a minimum of greater than 10 MW.
    For off-peak deviations the deviation band is 7.5 percent to a 
negative 3 percent of the scheduled transaction, with a minimum of 5 MW 
for under-scheduling and 2 MW for over-scheduling. Normally, there are 
four scenarios for Generator Imbalance Service. They are: (1) Over-
generation within the bandwidth; (2) under-generation within the 
bandwidth; (3) over-generation outside the bandwidth; and (4) under-
generation outside the bandwidth. There are different penalties and 
bandwidths for imbalances that occur during on-peak and off-peak hours. 
During periods of BA operating constraints, Western reserves the right 
to eliminate credits for over deliveries. Additionally, parties who 
over or under-deliver may share in potential penalty costs assessed 
against Western for operation outside of established utility 
guidelines.

Within the Bandwidth

    For Generator Imbalance within the bandwidth for both on-peak and 
off-peak, settlement will be 100 percent of the imbalance. In lieu of 
financial settlement, equal to 100 percent of a weighted index price 
(described below), Western, at its discretion, may accept settlement in 
energy.

Outside the Bandwidth

    For that portion of the customer's generator imbalance that is 
outside the bandwidth during on-peak hours, the settlement will be as 
follows:
    1. For deviations of plus or minus 0 to 7.5 percent of a scheduled 
transaction, with a 0 to 10 MW minimum, the settlement is 110 percent 
of the imbalance for under-generation and 90 percent of the energy 
imbalance for over-generation.
    2. For deviations of greater than plus or minus 7.5 percent of a 
scheduled transaction, with a minimum exceeding 10 MW, settlement is 
125 percent of the imbalance for under-generation and 75 percent for 
over-generation.
    In lieu of financial settlement, Western may, at its discretion 
accept settlement in energy. Financial settlement will be equal to a 
weighted index price (described below). For on-peak deviations 
described above, settlement will be 110 percent of the weighted index 
price for under-generation and 90 percent for over-generation in the 
first tier. For on-peak deviations in the second tier, financial 
settlement will be equal to 125 percent of the weighted index price for 
under-generation and 75 percent of the weighted index price for over-
generation. For deviations in the off-peak, settlement will be 110 
percent of the weighted index price for under-deliveries and 60 percent 
of the weighted index price for over-deliveries.
    As an exception, an intermittent resource will be exempt from the 
outer deviation band. All deviations greater that 1.5 percent of 
metered generation in the on-peak hours will be subject to a 10 percent 
penalty. An intermittent resource, for the limited purpose of these 
rate schedules, is an electric generator that is not dispatchable and 
cannot store its fuel source, and therefore, cannot respond to changes 
in demand or respond to transmission security constraints.
    For financial settlement of transactions, the index used to 
calculate the settlement will be the Dow Jones Palo Verde average 
monthly index or an index identified on the Open Access Same-time 
Information System at the beginning of each fiscal year. Settlement for 
the hourly deviations will occur on a monthly basis.
    The generator imbalance service compensation may be modified upon 
written notice to the customer. Any change to the customer compensation 
for Generator Imbalance Service shall be included in a revision to this 
schedule promulgated pursuant to applicable Federal laws, regulations, 
and policies and made part of the applicable service agreement. The 
DSWR shall charge the customer in accordance with the rate then in 
effect.

[FR Doc. 2011-24787 Filed 9-26-11; 8:45 am]
BILLING CODE 6450-01-P