[Federal Register Volume 77, Number 112 (Monday, June 11, 2012)]
[Notices]
[Pages 34381-34382]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-14110]


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DEPARTMENT OF ENERGY

Western Area Power Administration


Pacific Northwest-Pacific Southwest Intertie Project--Rate Order 
No. WAPA-157

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of proposed transmission service rates.

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SUMMARY: Western Area Power Administration (Western), a power marketing 
administration within the Department of Energy (DOE), is proposing an 
adjustment to the Pacific Northwest-Pacific Southwest Intertie Project 
(Intertie) transmission service rates. The current rates, under Rate 
Schedules INT-FT4 and INT-NFT3, expire September 30, 2012. The existing 
rates are being adjusted to provide sufficient revenue to cover all 
annual costs, including interest expense, and to repay capital 
investment obligations within the required period. Western will prepare 
and provide a brochure detailing information on the proposed rates. The 
proposed rates, under Rate Schedules INT-FT5 and INT-NFT4, are 
scheduled to become effective on October 1, 2012, and remain in effect 
through September 30, 2017. Publication of this Federal Register notice 
initiates the formal process for the proposed rate adjustment.

DATES: The consultation and comment period ends September 10, 2012. 
Western will present a detailed explanation of the proposed rates at a 
public information forum on June 28, 2012, at 1 p.m. MST in Phoenix, 
Arizona. Western will accept oral and written comments at a public 
comment forum on July 10, 2012, at 10 a.m. MST in Phoenix, Arizona. 
Western will also accept written comments any time during the 90 day 
consultation and comment period.

ADDRESSES: The public information forum and public comment forum will 
be held at Western's Desert Southwest Customer Service Regional Office, 
located at 615 South 43rd Avenue, Phoenix, AZ 85009-5313, on the dates 
cited above. Written comments should be sent to Darrick Moe, Regional 
Manager, Desert Southwest Customer Service Region, Western Area Power 
Administration, P.O. Box 6457, Phoenix, AZ 85005-6457, email 
[email protected]. Written comments may also be faxed to (602) 605-2490, 
attention: Jack Murray. Western will post information about the rate 
process on its Web site at http://www.wapa.gov/dsw/pwrmkt/Intertie/RateAdjust.htm. Western will also post official comments received via 
letter, fax, and email to this Web site. Written comments must be 
received by the end of the consultation and comment period to be 
considered in Western's decision process. As access to Western 
facilities is controlled, any U.S. citizen wishing to attend any 
meeting held at Western must present an official form of picture 
identification such as a U.S. driver's license, U.S. passport, U.S. 
Government ID, or U.S. Military ID at the time of the meeting. Foreign 
nationals should contact Western 30 days in advance of the meeting to 
obtain the necessary form for admittance to Western.

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, email 
[email protected].

SUPPLEMENTARY INFORMATION: Rate Schedules INT-FT4 and INT-NFT3 for Rate 
Order No. WAPA-130 were approved on an interim basis by the Deputy 
Secretary of Energy on September 28, 2007, for a 5-year period 
beginning on October 1, 2007, and ending September 30, 2012.\1\ The 
schedules received final approval from the Federal Energy Regulatory 
Commission (FERC) on March 18, 2008.\2\ Under Rate Schedule INT-FT4, 
the existing rate for long-term firm and short-term firm point-to-point 
transmission service is $15.24 per kilowatt year (kW-year). The 
proposed rate for long-term firm and short-term firm point-to-point 
transmission service under Rate Schedule INT-FT5 is $19.68/kW-year. 
Under Rate Schedule INT-NFT3, the existing rate for nonfirm point-to-
point transmission service is 1.74 mills per kilowatt hour (mills/kWh). 
The proposed rate for nonfirm point-to-point transmission service under 
Rate Schedule INT-NFT4 is 2.25 mills/kWh. The following table compares 
the existing and proposed rates for transmission service:
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    \1\ 72 FR 57563 (October 10, 2007)
    \2\ 122 FERC ] 62,236 (March 18, 2008)

                                    Comparison of Existing and Proposed Rates
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                                                                                                       Percent
           Transmission service                   Existing rates               Proposed rates           change
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Firm Point-to-Point......................  $15.24/kW-year.............  $19.68/kW-year.............         29.1
Nonfirm Point-to-Point...................  1.74 mills/kWh.............  2.25 mills/kWh.............         29.3
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The proposed rates are expected to become effective October 1, 2012, 
and remain in effect through September 30, 2017. The proposed rates are 
designed to recover an annual revenue requirement that includes 
operation and maintenance, purchase power, purchase of transmission 
capacity, interest, other expenses, and capital investment repayment.

    The rate increase results primarily from lower-than-projected sales 
of 500-kilovolt (kV) transmission service and higher-than-projected 
costs for purchased power that have occurred since the existing rates 
were established. The existing rates were based on projected sales of 
500-kV transmission service increasing each year during the 5-year 
evaluation period. The actual demand for transmission capacity was less 
than expected and the projected sales did not materialize. As a result, 
the revenue derived from the sales of 500-kV transmission service over 
the 5-year

[[Page 34382]]

evaluation period has been much lower than planned. The proposed rates 
include a significant reduction in the sales forecast for 500-kV 
transmission service over the next 5-year evaluation period, which is a 
major factor of the rate increase.
    Another factor of the rate increase is when the existing rates were 
developed, purchase power was handled at the power system level and the 
Intertie had no purchase power costs to recover. Since then, Western's 
Balancing Authority (BA) in the Desert Southwest Customer Service 
Region has initiated power purchases for reliability purposes and the 
associated costs are distributed to the applicable transmission systems 
within the BA, including the Intertie transmission system. These annual 
purchase power costs are subject to recovery and inclusion in the 
proposed rates.

Legal Authority

    Since the proposed rates constitute a major rate adjustment as 
defined by 10 CFR part 903, Western will hold both a public information 
forum and public comment forum. After review of public comments, 
Western will take further action on the proposed rates consistent with 
10 CFR part 903.
    Western is establishing transmission service rates for the Intertie 
under the DOE Organization Act (42 U.S.C. 7152); the Reclamation Act of 
1902 (ch. 1093, 32 Stat. 388), as amended and supplemented by 
subsequent laws, particularly section 9(c) of the Reclamation Project 
Act of 1939 (43 U.S.C. 485h(c)); and other acts that specifically apply 
to the project involved.
    By Delegation Order No. 00-037.00, effective December 6, 2001, the 
Secretary of Energy delegated: (1) The authority to develop power and 
transmission rates to Western's Administrator; (2) the authority to 
confirm, approve, and place such rates into effect on an interim basis 
to the Deputy Secretary of Energy; and (3) the authority to confirm, 
approve, and place into effect on a final basis, to remand, or to 
disapprove such rates to FERC. Existing DOE procedures for public 
participation in power and transmission rate adjustments (10 CFR part 
903) were published on September 18, 1985 (50 FR 87835).

Availability of Information

    All brochures, studies, comments, letters, memorandums, or other 
documents that Western initiates or uses to develop the proposed rates 
are available for inspection and copying at the Desert Southwest 
Customer Service Regional Office, Western Area Power Administration, 
615 South 43rd Avenue Phoenix, Arizona 85009-5313. Many of these 
documents and supporting information are also available on Western's 
Web site at http://www.wapa.gov/dsw/pwrmkt/Intertie/RateAdjust.htm.

Ratemaking Procedure Requirements

Environmental Compliance

    Western will evaluate this action for compliance with the National 
Environmental Policy Act (NEPA) of 1969 (42 U.S.C. 4321-4347), the 
Council on Environmental Quality Regulations (40 CFR parts 1500-1508), 
and DOE NEPA Regulations (10 CFR part 1021).

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.

    Dated: June 4, 2012.
Anthony H. Montoya,
Acting Administrator.
[FR Doc. 2012-14110 Filed 6-8-12; 8:45 am]
BILLING CODE 6450-01-P