[Federal Register Volume 78, Number 60 (Thursday, March 28, 2013)]
[Notices]
[Page 18976]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-07241]



[[Page 18976]]

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DEPARTMENT OF ENERGY

Southeastern Power Administration


Proposed Rate Extension and Opportunities for Public Review and 
Comment for the Cumberland System

AGENCY: Southeastern Power Administration, DOE.

ACTION: Notice of proposed rate extension.

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SUMMARY: Southeastern Power Administration (Southeastern) proposes to 
extend the existing schedules of rates and charges applicable to the 
sale of power from the Cumberland System effective for a two-year 
period, October 1, 2013, through September 30, 2015.

DATES: Written comments are due on or before April 29, 2013.

ADDRESSES: Written comments should be submitted to: Administrator, 
Southeastern Power Administration, U.S. Department of Energy, 1166 
Athens Tech Road, Elberton, Georgia, 30635-6711.

FOR FURTHER INFORMATION CONTACT: Virgil Hobbs, Assistant Administrator, 
Finance & Marketing, Southeastern Power Administration, U.S. Department 
of Energy, 1166 Athens Tech Road, Elberton, Georgia, 30635, (706) 213-
3800.

SUPPLEMENTARY INFORMATION: 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 Southeastern'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 the 
Federal Energy Regulatory Commission (FERC).
    By order issued December 22, 2011 (137 FERC ] 62,249), FERC 
confirmed and approved on a final basis Wholesale Power Rate Schedules 
CBR-1-H, CSI-1-H, CEK-1-H, CM-1-H, CC-1-I, CK-1-H, CTV-1-H, CTVI-1-A, 
and Replacement-3 (collectively, SEPA-55 Rate Schedules) for the period 
from October 1, 2011, through September 30, 2013. In accordance with 10 
CFR 903.23(a), Southeastern proposes to extend the SEPA-55 Rate 
Schedules without an adjustment.
    The SEPA-55 Rate Schedules are associated with the Cumberland 
System (System), which consists of nine projects in the Cumberland 
River Basin in Tennessee and Kentucky. Under normal operating 
conditions, the System provides 950 MW of capacity and 2,991,000 MWh of 
average annual energy to 25 preference entities that serve 210 
preference customers in Alabama, Georgia, Illinois, Kentucky, 
Mississippi, North Carolina, Tennessee and Virginia.
    At present, peaking operation cannot be supported from the System 
due to operating restrictions on the Wolf Creek and Center Hill 
Projects imposed by the U. S. Army Corps of Engineers (Corps). The 
operating restrictions will remain in effect until earthen embankment 
repairs are complete to prevent the failure of these two dams. 
Southeastern has implemented an Interim Operating Plan to provide 
energy without capacity to the customers while the Wolf Creek and 
Center Hill dam safety repairs are finalized. The Wolf Creek Dam work 
is expected to be completed in December 2013 and the Center Hill 
earthen dam repair is scheduled to be complete early in fiscal year 
2015.
    The existing rate schedules are predicated upon an August 2011 
repayment study and other supporting data. The current rate schedules 
exclude the dam safety repair costs discussed above. A repayment study 
prepared in January of 2013 shows existing rates are adequate to meet 
repayment criteria, excluding the dam safety costs. Southeastern is 
proposing to extend the existing rate schedules for two years. The 
extension of these rate schedules would extend the term to September 
30, 2015.
    The rate schedules Southeastern proposes to extend include three 
rate scenarios per rate schedule. Each of the rate scenarios has a 
revenue requirement of $59,600,000. The first rate scenario is 
currently in effect. In the event the other two rate scenarios go into 
effect during this proposed rate extension, they are described below.
    The first rate scenario includes the rates necessary to recover 
costs while the Interim Operating Plan is in effect. The rate is a flat 
17.69 mills per kilowatt-hour for all Cumberland energy. The customers 
pay a ratable share of the transmission credit provided to Tennessee 
Valley Authority (TVA) for delivery of capacity and energy for the 
benefit of other customers.
    The second rate scenario would go into effect if some portion (but 
not all) of the System capacity can be scheduled. This scenario 
recovers cost from capacity and energy and would be implemented once 
the Corps restores the lake levels at the Wolf Creek and Center Hill 
Projects. When the lake level rises and capacity is available, the 
capacity would be allocated to the customers. Southeastern cannot 
predict the rates under the second scenario absent a determination 
concerning how much of the partial System will be brought back online.
    The third rate scenario is based on the original Cumberland 
Marketing Policy and would go into effect once the Corps lifts all 
restrictions on the System. All costs are recovered from capacity and 
excess energy. Because the third rate scenario is more complicated than 
the first scenario, Southeastern provides the following table to 
explain how it would apply to the SEPA-55 Rate Schedules if it goes 
into effect:

Cumberland System Rates

Third Scenario--Return to Original Marketing Policy

    Inside TVA Preference Customers (Rate Schedules CTVI-1-A, CTV-1-H)
Capacity and Base Energy: $2.779 per kW/Month
Additional Energy: 10.358 mills per kWh
Transmission: Pass-through
    Outside TVA Preference Customers (Rate Schedules CBR-1-H, CSI-1-H, 
CM-1-H, CK-1-H)
Capacity and Base Energy: $4.245 per kW/Month
Additional Energy: 10.358 mills per kWh
    Customers Served through Carolina Power & Light Company (Rate
Capacity and Base Energy: $4.832 per kW/Month
Transmission: $1.4779 per kW/Month
    East Kentucky Power Cooperative (Rate Schedule CEK-1-H):
Capacity: $2.95 per kW/Month
Energy: 10.358 mills per kWh
    The referenced repayment study is available for examination at 1166 
Athens Tech Road, Elberton, Georgia, 30635-6711. Rate Schedules CBR-1-
H, CSI-1-H, CEK-1-H, CM-1-H, CC-1-I, CK-1-H, CTV-1-H, CTVI-1-A, and 
Replacement-3 are also available.
    After publication of this Notice and review of public comments, 
Southeastern will take further action on the proposed extension of 
rates consistent with 10 CFR part 903.

    Dated: March 19, 2013.
Kenneth E. Legg,
Administrator.
[FR Doc. 2013-07241 Filed 3-27-13; 8:45 am]
BILLING CODE 6450-01-P