[Federal Register Volume 77, Number 204 (Monday, October 22, 2012)]
[Notices]
[Pages 64506-64508]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-25905]


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DEPARTMENT OF ENERGY

Southwestern Power Administration


Robert D. Willis Hydropower Rate

AGENCY: Southwestern Power Administration, DOE.

ACTION: Notice of Rate Order.

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SUMMARY: Pursuant to Delegation Order Nos. 00-037.00, effective 
December 6, 2001, and 00-001.00D, effective January 22, 2010, the 
Deputy Secretary has approved and placed into effect on an interim 
basis Rate Order No. SWPA-64, which increases the power rate for the 
Robert Douglas Willis Hydropower Project (Willis) pursuant to the 
Willis Rate Schedule which supersedes the existing rate schedule.

DATES: The effective period for the rate schedule specified in Rate 
Order No. SWPA-64 is October 1, 2012, through September 30, 2016.

FOR FURTHER INFORMATION CONTACT: Mr. James K. McDonald, Assistant 
Administrator, Southwestern Power Administration, Department of Energy, 
Williams Center Tower I, One West Third Street, Tulsa, Oklahoma 74103, 
(918) 595-6690, [email protected]

SUPPLEMENTARY INFORMATION: Rate Order No. SWPA-64, which has been 
approved and placed into effect on an interim basis, increases the 
power rate for the Willis Project pursuant to the following Rate 
Schedule:

    Rate Schedule RDW-12, Wholesale Rates for Hydro Power and Energy 
Sold to Sam Rayburn Municipal Power Agency (Contract No. DE-PM75-
85SW00117).

    The rate schedule supersedes the existing rate schedule shown 
below:

    Rate Schedule RDW-08, Wholesale Rates for Hydro Power and Energy 
Sold to Sam Rayburn Municipal Power Agency (Contract No. DE-PM75-
85SW00117) (superseded by RDW-12).

    Southwestern Power Administration's (Southwestern) Administrator 
has determined, based on the 2012 Willis Current Power Repayment Study, 
that existing rates will not satisfy cost recovery criteria specified 
in Department of Energy Order No. RA 6120.2 and Section 5 of the Flood 
Control Act of 1944. The finalized 2012 Willis Power Repayment Studies 
(PRSs) indicate that an increase in annual revenue of $142,944, or 15.4 
percent, beginning October 1, 2012, will satisfy cost recovery criteria 
for the Willis project. The proposed Willis rate schedule would 
increase annual revenues from $929,388 to $1,072,332, to recover 
increased U.S. Army's Corps of Engineers (Corps) investments and 
replacements in the hydroelectric generating facility and increased 
operations and maintenance costs.
    The Administrator has followed Title 10, Part 903 Subpart A, of the 
Code of Federal Regulations, ``Procedures for Public Participation in 
Power and Transmission Rate Adjustments and Extensions'' in connection 
with the proposed rate schedule. On July 10, 2012, Southwestern 
published notice in the Federal Register, (77 FR 40609), of the 
proposed rate increase for the Willis project. Southwestern provided a 
30-day comment period as an opportunity for customers and other 
interested members of the public to review and comment on the proposed 
rate increase.

[[Page 64507]]

Southwestern did not hold the combined Public Information and Comment 
Forum (Forum) because Southwestern did not receive any requests to hold 
the Forum. Two comments were received, one from Brickfield Burchette 
Ritts and Stone, PC, on behalf of the Sam Rayburn G&T Electric 
Cooperative, Inc., which stated they had no objection to the proposed 
rate adjustment. The other comment, on behalf of the Vinton Public 
Power Authority, also stated no objection to the increased rate 
proposal.
    Information regarding this rate proposal, including studies and 
other supporting material, is available for public review and comment 
in the offices of Southwestern Power Administration, Williams Center 
Tower I, One West Third Street, Tulsa, Oklahoma 74103. Following review 
of Southwestern's proposal within the Department of Energy, I approved, 
Rate Order No. SWPA-64, on an interim basis, which increases the 
existing Robert Douglas Willis rate to $1,072,332 per year for the 
period October 1, 2012 through September 30, 2016.

    Dated: October 15, 2012.
Daniel Poneman,
Deputy Secretary.

UNITED STATES OF AMERICA DEPARTMENT OF ENERGY

DEPUTY SECRETARY OF ENERGY

    In the matter of: Southwestern Power Administration Robert D. 
Willis Hydropower Project Rate )

Rate Order No. SWPA-64

ORDER CONFIRMING, APPROVING AND PLACING INCREASED POWER RATE SCHEDULE 
IN EFFECT ON AN INTERIM BASIS (October 15, 2012)

    Pursuant to Sections 302(a) and 301(b) of the Department of 
Energy Organization Act, Public Law 95-91, the functions of the 
Secretary of the Interior and the Federal Power Commission under 
Section 5 of the Flood Control Act of 1944, 16 U.S.C. 825s, relating 
to the Southwestern Power Administration (Southwestern) were 
transferred to and vested in the Secretary of Energy. By Delegation 
Order No. 00-037.00, the Secretary of Energy delegated to the 
Administrator of Southwestern the authority to develop power and 
transmission rates, delegated to the Deputy Secretary of the 
Department of Energy the authority to confirm, approve, and place in 
effect such rates on an interim basis and delegated to the Federal 
Energy Regulatory Commission (FERC) the authority to confirm and 
approve on a final basis or to disapprove rates developed by the 
Administrator under the delegation. The Deputy Secretary issued this 
interim rate order pursuant to that delegation.

BACKGROUND

    The Robert Douglas Willis Hydropower Project (Willis) (aka: Dam 
B and later Town Bluff Dam), located on the Neches River in eastern 
Texas downstream from the Sam Rayburn Dam, was originally 
constructed in 1951 by the U.S. Army Corps of Engineers (Corps) and 
provides stream flow regulation of releases from the Sam Rayburn 
Dam. The Lower Neches Valley Authority contributed funds toward 
construction of both projects and makes established annual payments 
for the right to withdraw up to 2000 cubic feet of water per second 
from the Willis project for its own use. Power was legislatively 
authorized at the project, but installation of hydroelectric 
facilities was deferred until justified by economic conditions. A 
determination of feasibility was made in a 1982 Corps study. In 
1983, the Sam Rayburn Municipal Power Agency (SRMPA) proposed to 
sponsor and finance the development of hydropower at the Willis 
project in return for the output of the project to be delivered to 
its member municipalities and participating member cooperatives of 
the Sam Rayburn Dam Electric Cooperative.
    The Willis rate excludes the costs associated with the 
hydropower design and construction performed by the Corps, because 
all funds for these costs were provided by SRMPA. Under the 
Southwestern/SRMPA power sales Contract No. DE-PM75-85SW00117, SRMPA 
will continue to pay all annual operating and maintenance costs, as 
well as expected capital replacement costs, through the rate paid to 
Southwestern, and will receive all power and energy produced at the 
project for a period of 50 years.
    FERC confirmation and approval of the current Willis rate 
schedule was provided in FERC Docket No. EF08-4081-000 issued on 
April 27, 2009, (127 FERC ] 62,072) effective for the period October 
1, 2008, through September 30, 2012.

DISCUSSION

    Southwestern prepared a 2012 Current Power Repayment Study (PRS) 
which indicated that the existing rate would not satisfy present 
financial criteria regarding repayment of investment within a 50-
year period due to increased U.S. Army Corps of Engineers (Corps) 
investments, replacements and operations and maintenance expenses in 
the hydroelectric generating facilities. The Revised PRS indicated 
the need for a 15.4 percent revenue increase. These preliminary 
results which presented the basis for the proposed revenue increase 
were provided to the customers for their review prior to the formal 
process.
    The final 2012 Revised PRS indicates that an increase in annual 
revenues of $142,944 (15.4 percent) is necessary beginning October 
1, 2012, to accomplish repayment in the required number of years. 
Accordingly, Southwestern has prepared a proposed rate schedule 
based on the additional revenue requirement to ensure repayment.
    Southwestern conducted the rate adjustment proceeding in 
accordance with Title 10, Part 903, Subpart A of the Code of Federal 
Regulations, ``Procedures for Public Participation in Power and 
Transmission Rate Adjustments and Extensions.'' More specifically, 
opportunities for public review and comment during a 30-day period 
on the proposed Willis power rate were announced by a Federal 
Register notice published on July 10, 2012 (77 FR 40609). The 
combined Public Information and Comment Forum scheduled for July 31, 
2012, in Tulsa, Oklahoma was canceled because Southwestern did not 
receive any requests that the forum be held. Southwestern provided 
the Federal Register notice, together with any requested supporting 
data, to the customer and interested parties for review and comment 
during the public comment period. In response to concerns by 
Southwestern's customers during an informal participation process 
prior to the formal participation process, Southwestern is 
increasing revenue in two steps over a two-year period. Since our 
current rates are sufficient to recover all average operation and 
maintenance expenses during the next two years, our ability to meet 
both annual and long-term repayment criteria is satisfied by 
increasing revenues in steps over the period.
    The first step of the rate increase, beginning October 1, 2012, 
would incorporate one half of the required revenue or 7.7 percent 
($71,472). The second step of the rate increase, beginning October 
1, 2013, and ending on September 30, 2016, would incorporate the 
remaining one half of the revenue requirement ($71,472 or 7.7 
percent). Southwestern will continue to perform its Power Repayment 
Studies annually, and if the 2013 results should indicate the need 
for additional revenues, another rate filing will be conducted and 
updated revenue requirements implemented for FY 2013 and thereafter.
    Following the conclusion of the comment period on August 9, 
2012, Southwestern finalized the PRS and rate schedule for the 
proposed annual rate of $1,072,332 which is the lowest possible rate 
needed to satisfy repayment criteria. This rate represents an annual 
increase of 15.4 percent. The Administrator made the decision to 
submit the rate proposal for interim approval and implementation.

COMMENTS AND RESPONSES

    Southwestern received two comments during the public comment 
period. Both comments, one on behalf of the Sam Rayburn G&T Electric 
Cooperative, Inc., the other on behalf of the Vinton Public Power 
Authority, expressed no objection to the final proposed rate.

AVAILABILITY OF INFORMATION

    Information regarding this rate increase, including studies, 
comments and other supporting material, is available for public 
review and comment in the offices of Southwestern Power 
Administration, One West Third Street, Tulsa, OK 74103.

ADMINISTRATION'S CERTIFICATION

    The 2012 Willis Revised PRS indicates that the increased power 
rate of $1,072,332 will repay all costs of the project including 
amortization of the power investment consistent with the provisions 
of Department of Energy Order No. RA 6120.2. In accordance with 
Delegation Order No. 00-

[[Page 64508]]

037.00 (December 6, 2001), and Section 5 of the Flood Control Act of 
1944, the Administrator has determined that the proposed System 
rates are consistent with applicable law and the lowest possible 
rates consistent with sound business principles.

ENVIRONMENT

    The environmental impact of the rate increase proposal was 
evaluated in consideration of DOE's guidelines for implementing the 
procedural provisions of the National Environmental Policy Act and 
was determined to fall within the class of actions that are 
categorically excluded from the requirements of preparing either an 
Environmental Impact Statement or an Environmental Assessment.

ORDER

    In view of the foregoing and pursuant to the authority delegated 
to me by the Secretary of Energy, I hereby confirm, approve and 
place in effect on an interim basis, effective October 1, 2012 
through September 30, 2016, the annual Robert Douglas Willis 
Hydropower rate of $1,072,332 for the sale of power and energy from 
the Robert Douglas Willis project to the Sam Rayburn Municipal Power 
Agency, under Contract No. DE-PM75-85SW00117, as amended. This rate 
shall remain in effect on an interim basis through September 30, 
2016, or until the FERC confirms and approves the rate on a final 
basis.

Dated: October 15, 2012.

Daniel Poneman,

Deputy Secretary.

UNITED STATES DEPARTMENT OF ENERGY

SOUTHWESTERN POWER ADMINISTRATION

RATE SCHEDULE RDW-12 \1\
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    \1\ Supersedes Rate Schedule RDW-08
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WHOLESALE RATES FOR HYDRO POWER AND ENERGY SOLD TO SAM RAYBURN 
MUNICIPAL POWER AGENCY

(CONTRACT NO. DE-PM75-85SW00117)

Effective:

    During the period October 1, 2012, through September 30, 2016, 
in accordance with interim approval from Rate Order No. SWPA-64 
issued by the Deputy Secretary of Energy on October 15, 2012 and 
pursuant to final approval by the Federal Energy Regulatory 
Commission.

Applicable:

    To the power and energy purchased by Sam Rayburn Municipal Power 
Agency (SRMPA) from the Southwestern Power Administration 
(Southwestern) under the terms and conditions of the Power Sales 
Contract dated June 28, 1985, as amended, for the sale of all Hydro 
Power and Energy generated at the Robert Douglas Willis Hydropower 
Project (Robert D. Willis) (formerly designated as Town Bluff).

Character and Conditions of Service:

    Three-phase, alternating current, delivered at approximately 60 
Hertz, at the nominal voltage, at the point of delivery, and in such 
quantities as are specified by contract.

1. Wholesale Rates, Terms, and Conditions for Hydro Power and Energy

    1.1 These rates shall be applicable regardless of the quantity 
of Hydro Power and Energy available or delivered to SRMPA; provided, 
however, that if an Uncontrollable Force prevents utilization of 
both of the project's power generating units for an entire billing 
period, and if during such billing period water releases were being 
made which otherwise would have been used to generate Hydro Power 
and Energy, then Southwestern shall, upon request by SRMPA, suspend 
billing for subsequent billing periods, until such time as at least 
one of the project's generating units is again available.
    1.2 The term ``Uncontrollable Force,'' as used herein, shall 
mean any force which is not within the control of the party 
affected, including, but not limited to, failure of water supply, 
failure of facilities, flood, earthquake, storm, lightning, fire, 
epidemic, riot, civil disturbance, labor disturbance, sabotage, war, 
acts of war, terrorist acts, or restraint by court of general 
jurisdiction, which by exercise of due diligence and foresight such 
party could not reasonably have been expected to avoid.

1.3 Hydro Power Rates, Terms, and Conditions

1.3.1 Monthly Charge for the Period of October 1, 2012 through 
September 30, 2013

    $83,405 per month ($1,000,860 per year) for Robert D. Willis 
Hydro Power and Energy purchased by SRMPA from October 1, 2012, 
through September 30, 2013.

1.3.2 Monthly Charge for the Period of October 1, 2013 through 
September 30, 2016

    $89,361 per month ($1,072,332 per year) for Robert D. Willis 
Hydro Power and Energy purchased by SRMPA from October 1, 2013, 
through September 30, 2016.

[FR Doc. 2012-25905 Filed 10-19-12; 8:45 am]
BILLING CODE 6450-01-P