[Federal Register Volume 79, Number 237 (Wednesday, December 10, 2014)]
[Notices]
[Pages 73294-73296]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-28915]


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DEPARTMENT OF ENERGY

Southwestern Power Administration


Robert D. Willis Hydropower Power Rate

AGENCY: Southwestern Power Administration, DOE.

ACTION: Notice of Rate Order.

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SUMMARY: Pursuant to Delegation Order Nos. 00-037.00A, effective 
October 25, 2013, and 00-001.0OE, effective June 6, 2013, the Deputy 
Secretary has approved and placed into effect on an interim basis Rate 
Order No. SWPA-68, which increases the power rate for the Robert D. 
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-68 is January 1, 2015, through September 30, 2018.

FOR FURTHER INFORMATION CONTACT: Mr. Marshall Boyken, Acting Vice 
President, Chief Operating Office, Southwestern Power Administration, 
Department of Energy, Williams Center Tower I, One West Third Street, 
Tulsa, Oklahoma 74103, (918) 595-6646, [email protected].

SUPPLEMENTARY INFORMATION: Rate Order No. SWPA-68, 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-14, 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-12, Wholesale Rates for Hydro Power and Energy 
Sold to Sam Rayburn Municipal Power Agency (Contract No. DE-PM75-
85SW00117) (superseded by RDW-14)

Southwestern Power Administration's (Southwestern) Administrator has 
determined, based on the 2014 Willis Current Power Repayment Study, 
that the existing power rate will not satisfy cost recovery criteria 
specified in DOE Order No. RA 6120.2 and Section 5 of the Flood Control 
Act of 1944. The finalized 2014 Willis Power Repayment Studies indicate 
that an increase in annual revenue of $109,164, or 10.2 percent, 
beginning January 1, 2015, will satisfy cost recovery criteria for the 
Willis project. The proposed Willis rate schedule would ultimately 
increase annual revenues from $1,072,323 to $1,181,496, 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 with one half (5.1 percent) beginning 
January 1, 2015, and the remaining one half (5.1 percent) beginning on 
October 1, 2015.
    The Administrator has followed title 10, part 903 subpart A, of the 
Code of Federal Regulations (10 CFR part 903), ``Procedures for Public 
Participation in Power and Transmission Rate Adjustments and 
Extensions'' in connection with the proposed rate schedule. On 
September 4, 2014, Southwestern published a notice in the Federal 
Register, (79 FR 52646), of the proposed power 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 power rate increase with written 
comments due by October 20, 2014. Southwestern did not hold the 
combined Public Information and Comment Forum (Forum) because 
Southwestern did not receive any requests to hold the Forum. One 
comment was received from Gillis, Borchardt & Barthel LLP, on behalf of 
the Vinton Public Power Authority and the Sam Rayburn Generation and 
Transmission Cooperative which stated they had no objection to the 
proposed rate adjustment.
    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-68, on an interim basis, which ultimately increases 
the existing revenue requirement for the Willis power rate to 
$1,181,496 per year for the period January 1, 2015 through September 
30, 2018.

    Dated: December 4, 2014.
Elizabeth Sherwood-Randall,
Deputy Secretary.
UNITED STATES OF AMERICA
DEPARTMENT OF ENERGY
DEPUTY SECRETARY OF ENERGY
Rate Order No. SWPA-68

In the matter of:

Southwestern Power Administration
Robert D. Willis Hydropower Project Power Rate
ORDER CONFIRMING, APPROVING AND PLACING INCREASED POWER RATE SCHEDULE 
IN EFFECT ON AN INTERIM BASIS
    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. 00-037.00A, 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.

[[Page 73295]]

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 power 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 power 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. EF13-1-000 issued on April 29, 2013, 
(143 FERC ]62,067) effective for the period October 1, 2012, through 
September 30, 2016.

DISCUSSION

    Southwestern prepared a 2014 Current Power Repayment Study which 
indicated that the existing power rate would not satisfy present 
financial criteria regarding repayment of investment within a 50-year 
period due to increased Corps investments, replacements and operations 
and maintenance expenses in the hydroelectric generating facilities. 
The Revised Power Repayment Study indicated the need for a 10.2 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 2014 Revised Power Repayment Study indicates that an 
increase in annual revenues of $109,164 (10.2 percent) is necessary 
beginning January 1, 2015, 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 
(10 CFR 903), ``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 September 4, 2014 (79 FR 52646), with written 
comments due October 20, 2014. The combined Public Information and 
Comment Forum scheduled for October 8, 2014, in Tulsa, Oklahoma was not 
held because Southwestern did not receive any requests to hold the 
forum. Southwestern provided the Federal Register notice, to the 
customer and interested parties for review and comment during the 
public comment period. In response to concerns by Southwestern's 
customers during their review of the preliminary results of the 2014 
Power Repayment Studies prior to the formal public participation 
process, Southwestern is increasing revenue in two steps over a ten 
month period. Since our current power rate is sufficient to recover all 
average operation and maintenance expenses during the next ten months, 
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 January 1, 2015, 
would incorporate one half of the required revenue increase ($54,582 or 
5.1 percent). The second step of the rate increase, beginning October 
1, 2015, and ending on September 30, 2018, would incorporate the 
remaining one half of the revenue increase requirement ($54,582 or 5.1 
percent). Southwestern will continue to perform its Power Repayment 
Studies annually, and if the 2015 results should indicate the need for 
additional revenues, another rate filing will be conducted and updated 
revenue requirements implemented for Fiscal Year 2016 and thereafter.
    Following the conclusion of the comment period on October 20, 2014, 
Southwestern finalized the Power Repayment Studies and rate schedule 
for the proposed annual revenue requirement of $1,181,496 which is the 
lowest possible rate needed to satisfy repayment criteria. This rate 
represents an increase to the annual revenue requirement of 10.2 
percent. The Administrator made the decision to submit the rate 
proposal for interim approval and implementation.

COMMENTS AND RESPONSES

    Southwestern received one comment during the public comment period. 
The comment on behalf of the Vinton Public Power Authority and the Sam 
Rayburn Generation and Transmission Cooperative expressed no objection 
to the proposed rate increase.

AVAILABILITY OF INFORMATION

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

ADMINISTRATION'S CERTIFICATION

    The 2014 Willis Revised Power Repayment Study indicates that the 
increased revenue requirement of $1,181,496 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. 00-037.00A (October 25, 2013), and 
Section 5 of the Flood Control Act of 1944, the Administrator has 
determined that the proposed Willis power rate is consistent with 
applicable law and is the lowest possible rate to the customer 
consistent with sound business principles.

ENVIRONMENT

    The environmental impact of the power rate increase proposal was 
evaluated in consideration of the Department of Energy'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

[[Page 73296]]

interim basis, effective January 1, 2015 through September 30, 2018, 
the Willis power rate designed to collect $1,181,496 annually for the 
sale of power and energy from the 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, 2018, or until the FERC confirms and approves the rate on 
a final basis.

Dated: December 4, 2014

Elizabeth Sherwood-Randall
Deputy Secretary

UNITED STATES DEPARTMENT OF ENERGY

SOUTHWESTERN POWER ADMINISTRATION

RATE SCHEDULE RDW-14 \1\
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    \1\ Supersedes Rate Schedule RDW-12
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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 January 1, 2015, through September 30, 2018, in 
accordance with interim approval from Rate Order No. SWPA-68 issued by 
the Deputy Secretary of Energy on December 4, 2014 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 January 1, 2015 through 
September 30, 2015

    $83,405 per month ($1,000,860 per year) for Robert D. Willis Hydro 
Power and Energy purchased by SRMPA from January 1, 2015, through 
September 30, 2015.
    1.3.2. Monthly Charge for the Period of October 1, 2015 through 
September 30, 2018

    $98,458 per month ($1,181,496 per year) for Robert D. Willis Hydro 
Power and Energy purchased by SRMPA from October 1, 2015, through 
September 30, 2018.

[FR Doc. 2014-28915 Filed 12-9-14; 8:45 am]
BILLING CODE 6450-01-P