[Federal Register Volume 81, Number 165 (Thursday, August 25, 2016)]
[Notices]
[Pages 58497-58510]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-20397]


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DEPARTMENT OF ENERGY

Western Area Power Administration


Desert Southwest Region Transmission, Transmission Losses, 
Unreserved Use Penalties, and Ancillary Services--Rate Order No. WAPA-
175

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of Final Formula Rates for Transmission and Ancillary 
Services.

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[[Page 58498]]

SUMMARY: The Deputy Secretary of Energy has confirmed and approved Rate 
Order No. WAPA-175 and Rate Schedules PD-NTS4 and INT-NTS4, placing 
formula rates for Network Integration Transmission Service (Network) on 
the Parker-Davis Project (P-DP) and Pacific Northwest-Pacific Southwest 
Intertie Project (Intertie) of the Western Area Power Administration 
(WAPA) into effect on an interim basis. The Deputy Secretary also 
confirmed and approved Rate Schedules DSW-TL1, DSW-UU1, DSW-SD4, DSW-
RS4, DSW-FR4, DSW-EI4, DSW-SPR4, DSW-SUR4, and DSW-GI2, placing formula 
rates for transmission losses, unreserved use penalties, and ancillary 
services from WAPA's Desert Southwest Region (DSW) and Western Area 
Lower Colorado Balancing Authority (WALC) into effect on an interim 
basis. The provisional formula rates will provide sufficient revenue to 
pay all annual costs, including interest expense, and repay applicable 
investments within the allowable periods.

DATES: Rate Schedules PD-NTS4, INT-NTS4, DSW-TL1, DSW-UU1, DSW-SD4, 
DSW-RS4, DSW-FR4, DSW-EI4, DSW-SPR4, DSW-SUR4, and DSW-GI2 are 
effective on the first day of the first full billing period beginning 
on or after October 1, 2016, and will remain in effect through 
September 30, 2021, pending approval by the Federal Energy Regulatory 
Commission (FERC) on a final basis or until superseded.

FOR FURTHER INFORMATION CONTACT: Mr. Ronald E. Moulton, Regional 
Manager, Desert Southwest Region, Western Area Power Administration, 
P.O. Box 6457, Phoenix, AZ 85005-6457, (602) 605-2453, or Mr. Scott 
Lund, Rates Manager, Desert Southwest Region, Western Area Power 
Administration, P.O. Box 6457, Phoenix, AZ 85005-6457, (602) 605-2442, 
email [email protected].

SUPPLEMENTARY INFORMATION: WAPA's DSW published a Federal Register 
notice on February 3, 2016 (81 FR 5741), announcing the proposed 
formula rates, initiating a public consultation and comment period, and 
setting forth the date and location of public information and comment 
forums. On February 4, 2016, customers and interested parties were 
provided a copy of the published notice. WAPA's DSW held both forums in 
Phoenix, Arizona, on March 30, 2016.
    The previous Rate Schedules PD-NTS3, INT-NTS3, DSW-SD3, DSW-RS3, 
DSW-FR3, DSW-EI3, DSW-SPR3, DSW-SUR3, and DSW-GI1 for Rate Order No. 
WAPA-151 were approved by FERC for a 5-year period through September 
30, 2016.\1\ Several of these rate schedules contain formula rates that 
were calculated each year to include the most recent financial, load, 
and schedule information, as applicable. The new rate schedules 
continue this approach.
---------------------------------------------------------------------------

    \1\ Rate Order No. WAPA-151 was approved by FERC on a final 
basis on March 5, 2012, in Docket No. EF11-14-000 (138 FERC ] 
62,198).
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Transmission Services

    Rate Schedules PD-NTS4 and INT-NTS4 for Network on the P-DP and 
Intertie are based on a revenue requirement that recovers the costs for 
providing transmission service. This includes the costs for scheduling, 
system control, and dispatch service needed to provide the transmission 
service.
    Rate Schedule DSW-TL1 for Transmission Losses is a new rate 
schedule that provides for the recovery of losses associated with 
transmission service. Previously, losses were addressed in the 
transmission service rate schedules for each project administered by 
WAPA's DSW.
    Rate Schedule DSW-UU1 for Unreserved Use Penalties is also a new 
rate schedule that provides for a penalty, in addition to the usual 
charge for transmission service, for the use of transmission capacity 
that has not been reserved or has been used in excess of the amount 
reserved. Previously, penalty provisions for unauthorized use were 
included in the transmission service rate schedules for each project 
administered by WAPA's DSW.

Ancillary Services

    DSW provides seven ancillary services pursuant to WAPA's Open 
Access Transmission Tariff (OATT). These services include: (1) 
Scheduling, System Control, and Dispatch (DSW-SD4); (2) Reactive Supply 
and Voltage Control (DSW-RS4); (3) Regulation and Frequency Response 
(DSW-FR4); (4) Energy Imbalance (DSW-EI4); (5) Spinning Reserve (DSW-
SPR4); (6) Supplemental Reserve (DSW-SUR4), and (7) Generator Imbalance 
(DSW-GI2).
    Changes were made to the formula rates for Regulation and Frequency 
Response, Energy Imbalance, and Generator Imbalance. The formula rate 
for Regulation and Frequency Response now includes the application of 
variable capacity multipliers to the installed capacity of variable 
energy resources. The formula rates for Energy Imbalance and Generator 
Imbalance now have the same bandwidth structure for on-peak and off-
peak hours. No changes were made to the formula rates for the other 
ancillary services. Minor editorial changes were made to rate schedule 
language to provide clarification and make them more uniform and 
consistent.
    By Delegation Order No. 00-037.00A, effective October 25, 2013, the 
Secretary of Energy delegated: (1) The authority to develop power and 
transmission rates to the Administrator of WAPA; (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. Federal rules (10 CFR part 903) govern 
Department of Energy procedures for public participation in power and 
transmission rate adjustments.
    Under Delegation Order Nos. 00-037.00A and 00-001.00F and in 
compliance with 10 CFR part 903 and 18 CFR part 300, I hereby confirm, 
approve, and place Rate Order No. WAPA-175, which provides the formula 
rates for DSW transmission, transmission losses, unreserved use 
penalties, and ancillary services into effect on an interim basis. The 
new Rate Schedules PD-NTS4, INT-NTS4, DSW-TL1, DSW-UU1, DSW-SD4, DSW-
RS4, DSW-FR4, DSW-EI4, DSW-SPR4, DSW-SUR4, and DSW-GI2 will be 
submitted promptly to FERC for confirmation and approval on a final 
basis.

    Dated: August 18, 2016.
Elizabeth Sherwood-Randall,
Deputy Secretary of Energy.

DEPARTMENT OF ENERGY

DEPUTY SECRETARY

    In the matter of: Western Area Power Administration, Desert 
Southwest Region, Rate Adjustment for Transmission Service, 
Transmission Losses, Unreserved Use Penalties, and Ancillary 
Services.

Rate Order No. WAPA-175

ORDER CONFIRMING, APPROVING, AND PLACING FORMULA RATES FOR TRANSMISSION 
SERVICE, TRANSMISSION LOSSES, UNRESERVED USE PENALTIES, AND ANCILLARY 
SERVICES INTO EFFECT ON AN INTERIM BASIS

    The formula rates set forth in this order 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 under the

[[Page 58499]]

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 projects involved.
    By Delegation Order No. 00[dash]037.00A, effective October 25, 
2013, the Secretary of Energy delegated: (1) the authority to develop 
power and transmission rates to the Administrator of the Western Area 
Power Administration (WAPA); (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). Federal rules 
(10 CFR part 903) govern DOE procedures for public participation in 
power and transmission rate adjustments.

Acronyms and Definitions

    As used in this Rate Order, the following acronyms and definitions 
apply:

------------------------------------------------------------------------
 
------------------------------------------------------------------------
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.
Balancing Authority (BA) Area  The collection of generation,
                                transmission, and loads within the
                                metered boundaries of the Balancing
                                Authority.
DOE..........................  United States Department of Energy.
DSW..........................  Desert Southwest Region.
FERC.........................  Federal Energy Regulatory Commission.
Kilowatt (kW)................  Electrical unit of capacity equal to
                                1,000 watts.
Megawatt (MW)................  Electrical unit of capacity equal to
                                1,000 kW or 1,000,000 watts.
Network......................  Network Integration Transmission Service.
OATT.........................  WAPA's revised Open Access Transmission
                                Tariff, effective May 13, 2013.
Open Access Same-Time          An electronic posting system that a
 Informaton System (OASIS).     service provider maintains for
                                transmission access data that allows
                                users to view information
                                simultaneously.
Transmission Service Provider  Any utility that owns, operates, or
 (TSP).                         controls facilities used to transmit
                                electric energy.
VAR..........................  Volt-Ampere Reactive, a unit by which
                                reactive power is expressed.
VER..........................  Variable energy resources.
WALC.........................  Western Area Lower Colorado Balancing
                                Authority.
WAPA.........................  Western Area Power Administration.
------------------------------------------------------------------------

Effective Date

    The provisional formula rates are effective on the first day of the 
first full billing period beginning on or after October 1, 2016, and 
will remain in effect through September 30, 2021, pending approval by 
FERC on a final basis or until superseded.

Public Notice and Comment

    WAPA 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. WAPA took the following 
steps to involve the public in the rate adjustment process:
    1. On July 2, 2015, WAPA notified DSW customers and interested 
parties by email of an informal meeting and posted this notice on its 
public website. On August 10, 2015, WAPA held an informal meeting to 
discuss DSW's rate proposals for transmission and ancillary services.
    2. WAPA published a Federal Register notice on February 3, 2016 (81 
FR 5741), announcing the proposed formula rates, initiating the 
90[dash]day public consultation and comment period, setting forth the 
date and location of public information and public comment forums, and 
outlining the procedures for public participation.
    3. On February 4, 2016, WAPA sent DSW customers and interested 
parties a copy of the notice.
    4. On March 30, 2016, WAPA held a public information forum in 
Phoenix, Arizona. WAPA's DSW representatives explained the need for the 
formula rate adjustment and proposed changes to the formula rates, 
answered questions, and provided presentation handouts.
    5. On March 30, 2016, following the public information forum, WAPA 
held a public comment forum in Phoenix, Arizona, to provide customers 
and interested parties an opportunity to comment for the record.
    6. WAPA established a public website to post information about this 
rate adjustment. The website is located at https://www.wapa.gov/regions/DSW/Rates/Pages/ancillary-rates.aspx.

Comments

    No oral comments were made at the public comment forum. WAPA 
received one written comment during the consultation and comment 
period. A written comment was received from Arizona Generation and 
Transmission Cooperatives, Benson, Arizona. The comment has been 
considered in preparing this Rate Order

Project Descriptions

    WAPA's DSW provides ancillary services through WALC, which 
encompasses the projects within its marketing area--Boulder Canyon 
Project (BCP), Parker-Davis Project (P-DP), Central Arizona Project 
(CAP), and the Pacific Northwest-Pacific Southwest Intertie Project 
(Intertie). Network is offered on the P-DP, CAP, and Intertie.

BCP

    Hoover Dam, authorized by the Boulder Canyon Project Act (45 Stat. 
1057, December 21, 1928), sits on the Colorado River along the Arizona-
Nevada border. Hoover Dam's 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 to deliver this power to southern Nevada, Arizona, and 
southern California.

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). Davis Dam's 
power plant has five generating units and an installed capacity of 
255,000 kW. Parker Dam's power plant has four generating units and an 
installed capacity of 120,000 kW. P-DP is operated in conjunction with 
the other Federal hydroelectric generation facilities in the Colorado 
River Basin. The project also includes 1,535 circuit miles of 
transmission lines in Arizona, southern Nevada, and along the Colorado 
River in California.

CAP

    Congress authorized CAP in 1968 to improve water resources in the 
Colorado River Basin (43 U.S.C. 1501). The

[[Page 58500]]

legislation also authorized Federal participation in the Navajo 
Generating Station, which has three coal-fired steam electric 
generating units with a combined capacity of 2,250,000 kW. The 24.3 
percent Federal share (546,750 kW) of the Navajo Generating Station is 
used to power the pumps that move Colorado River water through the CAP 
canals.

Intertie

    Intertie was authorized by Section 8 of the Pacific Northwest Power 
Marketing Act of August 31, 1964 (16 U.S.C. 837g). WAPA's portion of 
the Intertie consists of two parts, a northern portion and a southern 
portion. The northern portion is administered by WAPA's Sierra Nevada 
Region. The southern portion is administered by WAPA's DSW and consists 
of 865 circuit miles of extra high-voltage and 108 circuit miles of 
high-voltage transmission lines in Arizona, southern Nevada, and 
southern California.

Existing and Provisional Formula Rates

    The existing formula rates contained in Rate Schedules PD-NTS3, 
INT-NTS3, DSW-SD3, DSW-RS3, DSW-FR3, DSW-EI3, DSW-SPR3, DSW-SUR3, and 
DSW-GI1 expire on September 30, 2016. Several of these rate schedules 
contain formula rates that are calculated each fiscal year to include 
the most recent financial, load, and schedule information, as 
applicable. The new rate schedules continue with this approach.

Network

    The existing formula rates for Network on the P-DP and Intertie 
under Rate Schedules PD-NTS3 and INT-NTS3, respectively, are the 
following:
[GRAPHIC] [TIFF OMITTED] TN25AU16.028

    The provisional formula rates for Network on the P-DP and Intertie 
under Rate Schedules PD-NTS4 and INT-NTS4 remain the same without 
adjustment.

Transmission Losses

    Rate Schedule DSW-TL1 is a new schedule that consolidates the 
provisions for transmission losses. This rate schedule will supersede 
the existing losses provisions in the separate transmission rate 
schedules for each project. The current loss percentages and their 
application remain unchanged.

Unreserved Use Penalties

    Rate Schedule DSW-UU1 is a new schedule that unifies and 
consolidates the penalty provisions for unreserved use. This rate 
schedule will supersede the existing unauthorized or unreserved use 
provisions in the separate transmission rate schedules for each 
project.

Scheduling, System Control, and Dispatch

    The existing formula rate for this service under Rate Schedule DSW-
SD3 is the following:
[GRAPHIC] [TIFF OMITTED] TN25AU16.029

    The provisional formula rate for this service under Rate Schedule 
DSW-SD4 remains the same without adjustment.

Reactive Supply and Voltage Control

    The existing formula rate for this service under Rate Schedule DSW-
RS3 is the following:
[GRAPHIC] [TIFF OMITTED] TN25AU16.030

    The provisional formula rate for this service under Rate Schedule 
DSW-RS4 remains the same without adjustment.

Regulation and Frequency Response

    The existing formula rate for this service under Rate Schedule DSW-
FR3 is the following:

[[Page 58501]]

[GRAPHIC] [TIFF OMITTED] TN25AU16.031

Energy Imbalance

    The existing formula rate for this service under Rate Schedule DSW-
EI3 is the following:

------------------------------------------------------------------------
            Deviation bands                        Settlements
------------------------------------------------------------------------
                              On-Peak Hours
------------------------------------------------------------------------
Deviations less than or equal to 1.5% (with a 4 MW minimum) of
 metered load.
Deviations greater than 1.5% up to 7.5% (or greater than   110% for under-deliveries (10%
 4 MW to 10 MW) of metered load.          penalty).
Deviations greater than 7.5% (or 10 MW) of metered load.   125% for under-deliveries (25%
                                          penalty).
------------------------------------------------------------------------
                             Off-Peak Hours
------------------------------------------------------------------------
Deviations less than or equal to +7.5%   60% for over-delivery (40%
 (with a 2 MW minimum) of metered load.   penalty).
Deviations less than or equal to -3.0%   110% for under-delivery (10%
 (with a 5 MW minimum) of metered load.   penalty).
------------------------------------------------------------------------

    The provisional formula rate for this service under Rate Schedule 
DSW-EI4 is the following

------------------------------------------------------------------------
            Deviation bands                        Settlements
------------------------------------------------------------------------
                              On-Peak Hours
------------------------------------------------------------------------
No Changes.............................  No Changes.
------------------------------------------------------------------------
                             Off-Peak Hours
------------------------------------------------------------------------
Deviations less than or equal to 1.5% (with a 4 MW minimum) of
 metered load.
Deviations greater than 1.5% up to 7.5% (or greater than   penalty), 110% for under-
 4 MW to 10 MW) of metered load.          deliveries (10% penalty).
Deviations greater than 7.5% (or 10 MW) of metered load.   penalty), 125% for under-
                                          deliveries (25% penalty).
------------------------------------------------------------------------


[[Page 58502]]

Operating Reserves--Spinning and Supplemental

    The existing formula rates for these services under Rate Schedules 
DSW-SPR3 and DSW-SUR3 are the following:
[GRAPHIC] [TIFF OMITTED] TN25AU16.037

    The provisional formula rates for these services under Rate 
Schedules DSW-SPR4 and DSW-SUR4 remain the same without adjustment.

Generator Imbalance

    The existing formula rate for this service under Rate Schedule DSW-
GI1 is the following:

------------------------------------------------------------------------
            Deviation bands                        Settlements
------------------------------------------------------------------------
                              On-Peak Hours
------------------------------------------------------------------------
Deviations less than or equal to 1.5% (with a 4 MW minimum) of
 metered generation.
Deviations greater than 1.5% up to 7.5% (or greater than   110%, for under-deliveries
 4 MW to 10 MW) of metered generation.    (10% penalty).
Deviations greater than 7.5% (or 10 MW) of metered         125%, for under-deliveries
 generation.                              (25% penalty).
------------------------------------------------------------------------
                             Off-Peak Hours
------------------------------------------------------------------------
Deviations less than or equal to +7.5%   60% for over-delivery (40%
 (with a 2 MW minimum) of metered         penalty).
 generation.
Deviations less than or equal to -3.0%   110% for under-delivery (10%
 (with a 5 MW minimum) of metered         penalty).
 generation.
------------------------------------------------------------------------

    The provisional formula rate for this service under Rate Schedule 
DSW-GI2 is the following:

------------------------------------------------------------------------
            Deviation bands                        Settlements
------------------------------------------------------------------------
                              On-Peak Hours
------------------------------------------------------------------------
No Changes.............................  No Changes.
------------------------------------------------------------------------
                             Off-Peak Hours
------------------------------------------------------------------------
Deviations less than or equal to 1.5%, (with a 4 MW minimum) of
 metered generation.
Deviations greater than 1.5% up to 7.5% (or greater than   penalty), 110% for under-
 4 MW to 10 MW) of metered generation.    deliveries (10% penalty).
Deviations greater than 7.5% (or 10 MW) of metered         penalty), 125% for under-
 generation.                              deliveries (25% penalty).
------------------------------------------------------------------------

Certification of Rates

    WAPA's Administrator certified that the provisional formula rates 
for Network, transmission losses, unreserved use penalties, and 
ancillary services under Rate Schedules PD-NTS4, INT-NTS4, DSW-TL1, 
DSW-UU1, DSW-SD4, DSW-RS4, DSW-FR4, DSW-EI4, DSW-SPR4, DSW-SUR4, and 
DSW-GI2 result in the lowest possible rates consistent with sound 
business principles. The provisional formula rates were developed 
following administrative policies and applicable laws.

Transmission Services Discussion

Network

    DSW offers Network to eligible customers, subject to the provisions 
in WAPA's OATT, from the P-DP, Intertie, and CAP transmission systems. 
This service includes the transmission of energy to points of delivery 
on the P-DP, Intertie, and CAP interconnected high-voltage systems, 
which includes transmission lines, substations, communication equipment 
and related facilities. The provisional formula rates only apply to 
Network from the P-DP and Intertie transmission systems. The formula 
rate for Network from the CAP transmission system was approved under 
Rate Order No. WAPA-172 and became effective on January 1, 2016.\2\ The 
formula rate for Network from CAP is identical to the provisional 
formula rates for P-DP and Intertie.
---------------------------------------------------------------------------

    \2\ Rate Order No. WAPA-172 was approved by the Deputy Secretary 
of Energy on December 21, 2015, (80 FR 81310, December 29, 2015) and 
filed with FERC.
---------------------------------------------------------------------------

    The monthly charge for Network is the product of the customer's 
load-ratio share and one-twelfth (\1/12\) of the annual revenue 
requirement for the appropriate transmission system. The load-ratio 
share is equal to the customer's hourly load coincident with

[[Page 58503]]

the monthly transmission system peak hour. The monthly transmission 
system peak hour occurs when the metered load for all network service 
customers is the greatest. The metered load and the transmission system 
load at the peak hour are averaged on a rolling 12-month basis (12-CP). 
No changes were made to the formula rates for Network.

Transmission Losses

    WALC provides transmission losses to TSPs within its BA Area. 
Capacity and energy losses occur when a TSP delivers electricity over 
its transmission facilities for a customer. Losses are assessed for 
transactions on transmission facilities within WALC.
    A single loss percentage for WALC was developed in 2004 and applied 
to the P-DP, Intertie, and CAP transmission systems. The loss 
provisions contained in the transmission service rate schedules for 
each project have been consolidated into a new single rate schedule. No 
changes were made to the existing loss percentage or application. The 
transmission loss percentage currently in effect is posted on WALC's 
OASIS.

Unreserved Use Penalties

    Unreserved use occurs when a customer uses transmission service it 
has not reserved or uses transmission service in excess of its reserved 
capacity. Unreserved use may also include a customer's failure to 
curtail transmission when requested.
    The penalty provisions for unreserved use in the transmission 
service rate schedules for each project have been unified and 
consolidated into a new single rate schedule. The penalty for a 
customer that engages in unreserved use is two times the maximum 
allowable firm point-to-point transmission rate for the service at 
issue, assessed as follows:
    (1) The penalty for one instance in a single hour is based on the 
daily short-term rate;
    (2) The penalty for more than one instance for any given duration 
(e.g., daily) increases to the next longest duration (e.g., weekly).
    A transmission customer is also required to pay for all ancillary 
services provided and associated with the unreserved use. The customer 
must pay for ancillary services based on the amount of transmission 
service it used and did not reserve.

Ancillary Services Discussion

    In accordance with WAPA's OATT, ancillary services are needed with 
transmission service to maintain reliability inside and among the BA 
Areas affected by the transmission service. WAPA's DSW currently 
provides seven ancillary services under the OATT: (1) Scheduling, 
System Control and Dispatch; (2) Reactive Supply and Voltage Control; 
(3) Regulation and Frequency Response; (4) Energy Imbalance; (5) 
Spinning Reserve; (6) Supplemental Reserve; and (7) Generator 
Imbalance. The provisional formula rates for these services are 
designed to recover the costs incurred for providing each of the 
services.
    The first two ancillary services are defined by FERC as services 
that the TSP is required to provide directly, or indirectly by making 
arrangements with the BA, and the transmission customer is required to 
purchase. The remaining five ancillary services are services that the 
TSP (or the BA who performs the function for the TSP) must offer when 
transmission is used to serve load within the TSP's BA. The 
transmission customer must purchase these ancillary services from the 
TSP, acquire the services from a third party, or self-supply the 
services.

Scheduling, System Control, and Dispatch

    This service is required to schedule the movement of power through, 
out of, within, or into a BA Area and must be provided by the BA in 
which the facilities used for transmission are located. WALC will 
provide this service for all transmission customers within its BA Area.
    The charge per schedule per day is calculated by dividing the 
annual costs associated with scheduling (numerator) by the number of 
schedules per year (denominator). The numerator includes the costs of 
transmission scheduling personnel, facilities, equipment, software, and 
other related costs involved in providing the service. The denominator 
is the yearly total of daily tags that result in a schedule, excluding 
schedules that return energy in kind. No changes were made to this 
formula rate.

Reactive Supply and Voltage Control

    This service is required to maintain transmission voltages on DSW's 
transmission facilities within acceptable limits, using generation 
facilities and non-generation resources capable of producing (or 
absorbing) reactive power. This service must be provided for each 
transaction on the transmission facilities within the BA by the TSP (or 
the BA who performs this function for the TSP). WALC will perform this 
service for DSW's transmission system within its BA Area.
    The rate is calculated by dividing the annual revenue requirement 
for the service (numerator) by the transactions requiring the service 
(denominator). The numerator consists of the annual revenue requirement 
for generation multiplied by the percentage of resource capacity used 
for providing the service. That percentage is based on the nameplate 
power factor (one minus the power factor) for the generating units 
supplying service within WALC. The denominator consists of the 
transmission capacity of customers taking this service. No changes were 
made to this formula rate.

Regulation and Frequency Response

    This service is necessary to provide for the continuous balancing 
of resources, generation and interchange with load, as well as for 
maintaining scheduled interconnection frequency at sixty cycles per 
second. The obligation to maintain this balance between resources and 
load lies with the TSP (or the BA who performs this function for the 
TSP). DSW (via WALC) must offer this service when transmission is used 
to serve load within its BA Area.
    The rate is calculated by dividing the annual revenue requirement 
for the service (numerator) by the sum of the load within WALC that 
requires the service and the generating capacity associated with 
variable energy resources (denominator). The numerator includes the 
annual costs associated with plant-in-service, operation and 
maintenance, purchases of regulation products, purchases of power to 
support WALC's ability to regulate, and other related costs involved in 
providing the service. The denominator consists of the load within WALC 
that requires this service plus the product of the installed nameplate 
capacity of solar and wind generators serving load within WALC and the 
applicable capacity multipliers.
    The denominator has been changed to include the application of 
capacity multipliers. Although variable energy resources have not yet 
impacted WALC, including the multipliers will allow the formula rate to 
more accurately recover potential future costs from customers by 
following cost causation principles. WAPA's DSW will set the 
multipliers at a value of one until variable energy resources begin to 
adversely impact WALC's regulation needs.

Energy Imbalance

    This service is provided when differences occur between the 
scheduled and the actual delivery of energy to a load located within 
the BA Area over a single hour. DSW (via WALC) must offer this service 
when transmission is used to serve load within its BA Area.

[[Page 58504]]

    The charges for this service are based on a graduated bandwidth 
structure. The size of the deviation and whether the deviation occurs 
in on-peak or off-peak hours determines settlement. No changes were 
made to the deviation bands and settlements for on-peak hours. The 
bandwidth structure for off-peak hours was changed to consist of three 
deviation bands, similar to the on-peak structure. This aligns with 
FERC Order 890 guidelines with appropriate penalty adjustments for WALC 
operating conditions.

Spinning Reserve

    This service is needed to serve load immediately in the event of a 
system contingency and may be provided by generating units that are on-
line and loaded at less than maximum output. DSW (via WALC) must offer 
this service when transmission is used to serve load within its BA 
Area.
    WALC has no resources available to provide this service. DSW may 
obtain the service on a pass-through cost basis at market price plus an 
administrative fee. No changes were made to this formula rate.

Supplemental Reserve

    This service is needed to serve load in the event of a system 
contingency. It is not available immediately to serve load but is 
generally available within a short period of time after a system 
contingency event. DSW (via WALC) must offer this service when 
transmission is used to serve load within its BA Area.
    WALC has no resources available to provide this service. DSW may 
obtain the service on a pass-through cost basis at market price plus an 
administrative fee. No changes were made to this formula rate.

Generator Imbalance

    This service is provided when differences occur between the output 
of a generator located within the BA Area and a delivery schedule from 
that generator to another BA Area or a load within the TSP's BA Area 
over a single hour. DSW (via WALC) must offer this service, to the 
extent it is physically feasible to do so from its resources or from 
resources available to it, when transmission is used to deliver energy 
from a generator located within its BA Area.
    The charges for this service are based on a graduated bandwidth 
structure. The size of the deviation and whether the deviation occurs 
in on-peak or off-peak hours determines settlement. No changes were 
made to the deviation bands and settlements for on-peak hours. The 
bandwidth structure for off-peak hours was changed to consist of three 
deviation bands, similar to the on-peak structure. This aligns with 
FERC Order 890 guidelines with appropriate penalty adjustments for WALC 
operating conditions.

Comments

    WAPA's DSW received one comment during the public consultation and 
comment period. The comment has been paraphrased where appropriate, 
without compromising the meaning of the comment.
    Comment: Customer supports the rates as developed but requests that 
WAPA clarify the obligation to update service agreements in line with 
the terms of WAPA's OATT. The customer also asks that WAPA clarify that 
the new rates and changes to underlying rate formulas constitute a 
change in formula, indicate to the Deputy Secretary what changes are 
required to the applicable service agreements, and notify WAPA's 
customers when the Deputy Secretary approves the rates on an interim 
basis.
    Response: Although WAPA believes its process is sufficiently clear, 
WAPA will consider clarifying the manner in which it updates service 
agreements as currently set forth in WAPA's OATT. However, review of 
WAPA's OATT language is outside the scope of this rate adjustment 
process. WAPA identifies in the Federal Register notice the new rate 
schedules and the changes that were made to the formula rates for 
ancillary services. WAPA will notify DSW customers when the Deputy 
Secretary approves the formula rates on an interim basis.

Availability of Information

    All brochures, studies, comments, letters, memorandums and other 
documents used by WAPA's DSW to develop the provisional formula rates 
are available for inspection and copying at the Desert Southwest 
Regional Office, Western Area Power Administration, 615 South 43rd 
Avenue, Phoenix, Arizona. Many of these documents are available on 
WAPA's DSW website at: https://www.wapa.gov/regions/DSW/Rates/Pages/ancillary-rates.aspx.

RATEMAKING PROCEDURE REQUIREMENTS

Environmental Compliance

    In compliance with the National Environmental Policy Act (NEPA) of 
1969, 42 U.S.C. 4321-4347; the Council on Environmental Quality 
Regulations for implementing NEPA (40 CFR parts 1500-1508); and DOE 
NEPA Implementing Procedures and Guidelines (10 CFR part 1021), WAPA 
has determined that this action is categorically excluded from 
preparing an environmental assessment or an environmental impact 
statement.

Determination Under Executive Order 12866

    WAPA 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 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, the formula rates under Rate 
Schedules PD-NTS4, INT-NTS4, DSW-TL1, DSW-UU1, DSW-SD4, DSW-RS4, DSW-
FR4, DSW-EI4, DSW-SPR4, DSW-SUR4, and DSW-GI2. These rate schedules are 
effective the first full billing period on or after October 1, 2016, 
and will remain in effect through September 30, 2021, pending FERC's 
confirmation and approval of them or substitute formula rates on a 
final basis.

    Dated: August 18, 2016.

Elizabeth Sherwood-Randall,

Deputy Secretary of Energy.

Rate Schedule PDP-NTS4

ATTACHMENT H to Tariff

(Supersedes Schedule PDP-NTS3)

UNITED STATES DEPARTMENT OF ENERGY

WESTERN AREA POWER ADMINISTRATION

DESERT SOUTHWEST REGION

Parker-Davis Project

NETWORK INTEGRATION TRANSMISSION SERVICE

Effective

    The first day of the first full billing period beginning on or 
after October 1, 2016, and will remain in effect through September 30, 
2021, or until superseded.

Applicable

    Transmission customers will compensate the Parker-Davis Project 
each month for Network Integration Transmission Service (Network) under 
the applicable Network Agreement and the formula rate described herein.

[[Page 58505]]

Formula Rate
[GRAPHIC] [TIFF OMITTED] TN25AU16.032

    Based on the formula rate, the Annual Transmission Revenue 
Requirement (ATRR) will be calculated for each fiscal year using 
updated financial data. The ATRR will be effective on October 1st of 
each year and posted on Western Area Lower Colorado Balancing 
Authority's website.

Rate Schedule INT-NTS4

ATTACHMENT H to Tariff

(Supersedes Schedule INT-NTS3)

UNITED STATES DEPARTMENT OF ENERGY

WESTERN AREA POWER ADMINISTRATION

DESERT SOUTHWEST REGION

Pacific Northwest-Pacific Southwest Intertie Project

NETWORK INTEGRATION TRANSMISSION SERVICE

Effective

    The first day of the first full billing period beginning on or 
after October 1, 2016, and will remain in effect through September 30, 
2021, or until superseded.

Applicable

    Transmission customers will compensate the Pacific Northwest-
Pacific Southwest Intertie Project each month for Network Integration 
Transmission Service (Network) under the applicable Network Agreement 
and the formula rate described herein.

Formula Rate
[GRAPHIC] [TIFF OMITTED] TN25AU16.033

    Based on the formula rate, the Annual Transmission Revenue 
Requirement (ATRR) will be calculated for each fiscal year using 
updated financial data. The ATRR will be effective on October 1st of 
each year and posted on Western Area Lower Colorado Balancing 
Authority's website.

Rate Schedule DSW-TL1

UNITED STATES DEPARTMENT OF ENERGY

WESTERN AREA POWER ADMINISTRATION

DESERT SOUTHWEST REGION

Western Area Lower Colorado Balancing Authority

TRANSMISSION LOSSES SERVICE

Effective

    The first day of the first full billing period beginning on or 
after October 1, 2016, and will remain in effect through September 30, 
2021, or until superseded.

Applicable

    Capacity and energy losses occur when a Transmission Service 
Provider (TSP) delivers electricity over its transmission facilities 
for a transmission customer. The Western Area Lower Colorado Balancing 
Authority (WALC) provides this service to TSPs within its Balancing 
Authority Area. Transmission losses (losses) are assessed for 
transactions on transmission facilities within WALC, unless separate 
agreements specify the terms for losses. The losses applicable to 
Federal TSPs will be passed directly to transmission customers. The 
transmission customer must either purchase this service from WALC or 
make alternative comparable arrangements to satisfy their obligations 
for losses.

Formula Rate

    The loss percentage currently in effect is posted on WALC's website 
and may be changed from time to time. Financial settlement for losses 
will occur on a monthly basis, unless determined by WALC. Proxy prices 
used to determine financial settlement will be derived from the Palo 
Verde electricity price indexes, or similar alternative, for on-peak 
and off-peak. This pricing information is posted on WALC's website.

Rate Schedule DSW-UU1

SCHEDULE 10 to OATT

UNITED STATES DEPARTMENT OF ENERGY

WESTERN AREA POWER ADMINISTRATION

DESERT SOUTHWEST REGION

Central Arizona Project

Pacific Northwest-Pacific Southwest Intertie Project

Parker-Davis Project

UNRESERVED USE PENALTIES

Effective

    The first day of the first full billing period beginning on or 
after October 1, 2016, and will remain in effect through September 30, 
2021, or until superseded.

Applicable

    Unreserved use occurs when a customer uses transmission service it 
has not reserved or uses transmission service in excess of its reserved 
capacity. Unreserved use may also include a transmission customer's 
failure to curtail transmission when requested. The transmission 
customer shall compensate the Federal

[[Page 58506]]

Transmission Service Providers (TSP) each month for any unreserved use 
of the transmission system.

Penalty Rate

    The charge for a transmission customer that engages in unreserved 
use is two times the maximum allowable firm point-to-point transmission 
rate for the service at issue, assessed as follows:
    (1) The penalty for one instance in a single hour is based on the 
daily rate;
    (2) The penalty for more than one instance for any given duration 
(e.g., daily) increases to the next longest duration (e.g., weekly).
    A transmission customer that exceeds its reserved capacity at any 
point of receipt or point of delivery, or a customer that uses 
transmission service at a point of receipt or point of delivery that it 
has not reserved, is required to pay for all ancillary services 
provided by the Federal TSP and associated with the unreserved use. The 
customer will pay for ancillary services based on the amount of 
transmission service it used and did not reserve.

Rate Schedule DSW-SD4

SCHEDULE 1 to OATT

(Supersedes Schedule DSW-SD3)

UNITED STATES DEPARTMENT OF ENERGY

WESTERN AREA POWER ADMINISTRATION

Desert Southwest Region and

Western Area Lower Colorado Balancing Authority

SCHEDULING, SYSTEM CONTROL, AND DISPATCH SERVICE

Effective

    The first day of the first full billing period beginning on or 
after October 1, 2016, and will remain in effect through September 30, 
2021, or until superseded.

Applicable

    Scheduling, System Control, and Dispatch Service is required to 
schedule the movement of power through, out of, within, or into the 
Balancing Authority Area (BA Area). This service can be provided only 
by the operator in which the transmission facilities used for 
transmission service are located. The Western Area Lower Colorado 
Balancing Authority (WALC) performs this service for all Transmission 
Service Providers (TSPs) within its BA Area. The transmission customer 
must purchase this service, unless other arrangements are made with 
WALC.
    The charge will be applied to all schedules, except for schedules 
that return energy in kind to WALC. WALC will accept any number of 
scheduling changes during the day without additional charge. The charge 
will be allocated equally among all TSPs, both Federal and non-Federal, 
listed on schedules inside its BA Area. The Federal transmission 
segments of the schedule are exempt from invoicing since the costs for 
these segments are included in applicable transmission service rates.

Formula Rate
[GRAPHIC] [TIFF OMITTED] TN25AU16.034

    The charge per schedule per day is calculated by dividing the 
annual costs associated with scheduling (numerator) by the number of 
schedules per year (denominator). The numerator is the annual cost of 
transmission scheduling personnel, facilities, equipment, software, and 
other related costs involved in providing the service. The denominator 
is the yearly total of daily tags which result in a schedule, excluding 
schedules that return energy in kind.
    Based on the formula rate, the charge will be calculated each 
fiscal year using updated financial and schedule data. The charge will 
be effective on October 1st of each year and posted on WALC's website.

Rate Schedule DSW-RS4

SCHEDULE 2 to OATT

(Supersedes Schedule DSW-RS3)

UNITED STATES DEPARTMENT OF ENERGY

WESTERN AREA POWER ADMINISTRATION

Desert Southwest Region and

Western Area Lower Colorado Balancing Authority

REACTIVE SUPPLY AND VOLTAGE CONTROL FROM GENERATION SOURCES OR OTHER 
SOURCES SERVICE

Effective

    The first day of the first full billing period beginning on or 
after October 1, 2016, and will remain in effect through September 30, 
2021, or until superseded.

Applicable

    In order to maintain transmission voltages on the transmission 
facilities within acceptable limits, generation facilities and non-
generation resources capable of providing Reactive Supply and Voltage 
Control (VAR Support Service) are operated to produce (or absorb) 
reactive power. This service must be provided for each transaction on 
the transmission facilities within the Balancing Authority (BA) by the 
Transmission Service Provider (TSP) or the BA who performs this 
function for the TSP.
    VAR Support Service will be provided by the Western Area Lower 
Colorado Balancing Authority (WALC). Customers of a Federal TSP must 
purchase this service from WALC unless the transmission customer has 
generating resources capable of providing VARs directly to the Federal 
TSP and has executed a contract stipulating all the provisions of their 
self-supply. If WALC provides VAR Support Service on behalf of any non-
Federal TSP, this service will be assessed on either the non-Federal 
TSP's reserved capacity or the scheduled quantity of the non-Federal 
TSP's customers.

Formula Rate

[[Page 58507]]

[GRAPHIC] [TIFF OMITTED] TN25AU16.035

    The numerator consists of the annual revenue requirement for 
generation multiplied by the percentage of resource capacity used for 
providing VAR Support Service. That percentage is based on the 
nameplate power factor (one minus the power factor) for the generating 
units supplying the service within WALC. The denominator consists of 
the transmission transactions within WALC that require this service.
    Based on the formula rate, the charge will be calculated each 
fiscal year using updated financial and reservation data. The charge 
will be effective on October 1st of each year and will be posted on 
WALC's website.

Rate Schedule DSW-FR4

SCHEDULE 3 to OATT

(Supersedes Schedule DSW-FR3)

UNITED STATES DEPARTMENT OF ENERGY

WESTERN AREA POWER ADMINISTRATION

Desert Southwest Region and

Western Area Lower Colorado Balancing Authority

REGULATION AND FREQUENCY RESPONSE SERVICE

Effective

    The first day of the first full billing period beginning on or 
after October 1, 2016, and will remain in effect through September 30, 
2021, or until superseded.

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 sixty cycles per second (60 Hz). The 
obligation to maintain this balance between resources and load lies 
with the Transmission Service Provider (TSP) or the Balancing Authority 
(BA) who performs this function for the TSP. The Western Area Lower 
Colorado Balancing Authority (WALC) performs this function for the 
Federal TSPs and must offer this service when transmission is used to 
serve load within its Balancing Authority Area (BA Area). Non-Federal 
TSPs and customers of Federal TSPs must purchase Regulation Service 
from WALC or make alternative comparable arrangements to satisfy their 
regulation obligations.

Formula Rate
[GRAPHIC] [TIFF OMITTED] TN25AU16.036

    The numerator includes the annual costs associated with plant-in-
service, operation and maintenance, purchase of regulation products, 
purchases of power to support WALC's ability to regulate, and other 
related costs involved in providing the service. The denominator 
consists of the load within WALC that requires this service plus the 
product of the installed nameplate capacity of solar and wind 
generators serving load within WALC and the applicable capacity 
multipliers.
    Based on the formula rate, the charge will be calculated each 
fiscal year using updated financial and load data. The charge will be 
effective on October 1st of each year and will be posted on WALC's 
website.

Types of Assessments

    There are two different applications of this formula rate:
    1) A load-based assessment which is applicable to load within WALC 
(total metered load less Federal power allocation, including behind the 
meter generation rating, or if available, hourly data if generation is 
synchronized) and the installed nameplate capacity of all intermittent 
resources serving load within WALC.
    2) A self-provision assessment which allows entities with Automatic 
Generation Control (AGC) to self-provide for all or a portion of their 
loads. Entities with AGC are known as Sub-Balancing Authorities (SBA) 
and must meet all of the following criteria: (a) have a well-defined 
boundary, with WALC-approved revenue-quality metering, accurate as 
defined by the North American Electric Reliability Corporation (NERC), 
to include Megawatt (MW) flow data availability at 6-second or smaller 
intervals; (b) have AGC responsive unit(s); (c) demonstrate Regulation 
Service capability; and (d) execute a contract with WALC, provide all 
requested data, and meet the SBA error criteria 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 
ACE is used to calculate the Regulation Service charges every hour as 
follows:
    1) If the entity's 1-minute average ACE for the hour is less than 
or equal to 0.5 percent of its hourly average load, no charge is 
assessed for that hour.
    2) If the entity's 1-minute average ACE for the hour is greater 
than or equal to 1.5 percent of the entity's hourly average load, WALC 
assess charges using the hourly load-based assessment applied to the 
entity's peak load for that month.

[[Page 58508]]

    3) If the entity's 1-minute average ACE for the hour is greater 
than 0.5 percent but less than 1.5 percent of its hourly average load, 
WALC assesses charges based on linear interpolation of no charge and 
full charge, using the hourly load-based assessment applied to the 
entity's peak load for that month.

WALC monitors the entity's self-provision on a regular basis. If WALC 
determines that the entity has not been attempting to self-regulate, 
WALC will, upon notification, employ the load-based assessment 
methodology described above.

Alternative Arrangements

    Exporting Intermittent Resource Requirement: An entity that exports 
the output from an intermittent generator to another BA Area will be 
required to dynamically meter or dynamically schedule that resource out 
of WALC to another BA unless arrangements, satisfactory to WALC, are 
made for that entity to acquire this service from a third-party or 
self-supply (as outlined below). An intermittent generator is one whose 
output is volatile and variable due to factors beyond direct 
operational control and, therefore, is not dispatchable.
    Self- or Third-party Supply: WALC may allow an entity to supply 
some or all of its required regulation, or contract with a third party. 
This entity must have revenue quality metering at every load and 
generation point, with 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, to determine 
whether the entity qualifies to self-supply under this provision. If 
approved, the entity is required to enter into a separate agreement 
with WALC which will specify the terms of self-supply.

Customer Accommodation

    For entities unwilling to take Regulation Service, self-provide as 
described above, or obtain the service from a third party, WALC will 
assist the entity in dynamically metering its loads/resources to 
another BA. Until such time meter configuration is accomplished, the 
entity will be responsible for charges assessed under this schedule.

Rate Schedule DSW-EI4

SCHEDULE 4 to OATT

(Supersedes Schedule DSW-EI3)

UNITED STATES DEPARTMENT OF ENERGY

WESTERN AREA POWER ADMINISTRATION

Desert Southwest Region and Western Area Lower Colorado Balancing 
Authority

ENERGY IMBALANCE SERVICE

Effective

    The first day of the first full billing period beginning on or 
after October 1, 2016, and will remain in effect through September 30, 
2021, or until superseded.

Applicable

    Energy Imbalance Service is provided when there is a difference 
between the scheduled and actual delivery of energy to a load located 
within a Balancing Authority Area (BA Area) over a single hour. The 
Transmission Service Provider (TSP) or the Balancing Authority (BA) who 
performs this function for the TSP must offer this service when 
transmission is used to serve load within its BA Area.
    The Western Area Lower Colorado Balancing Authority (WALC) performs 
this function for the Federal TSP. Customers of a Federal TSP must 
purchase this service from WALC or make alternative comparable 
arrangements to satisfy their Energy Imbalance obligations. Non-Federal 
TSPs must have separate agreements with WALC that specify the terms of 
Energy Imbalance Service. WALC may charge a transmission customer for 
either energy imbalances under this schedule or generator imbalances 
under Schedule 9 for imbalances occurring during the same hour, but not 
both unless the imbalances aggravate rather than offset each other.

Formula Rate

    Charges for energy imbalances are based on the deviation bands as 
follows:
    1. For deviations within 1.5 percent (with a minimum of 
4 MW) of the metered load, the settlement for on-peak and off-peak 
hours is 100 percent.
    2. For deviations greater than 1.5 up to 7.5 percent 
(or greater than 4 MW up to 10 MW) of the metered load, the settlement 
for on-peak hours is 110 percent for under-delivery and 90 percent for 
over-delivery, and the settlement for off-peak hours is 110 percent for 
under-delivery and 75 percent for over-delivery.
    3. For deviations greater than 7.5 percent (or 10 MW) 
of the metered load, the settlement for on-peak hours is 125 percent 
for under-delivery and 75 percent for over-delivery, and the settlement 
for off-peak hours is 125 percent for under-delivery and 60 percent for 
over-delivery.

The deviation bands will be applied hourly and any energy imbalances 
that occur as a result of the transmission customer's scheduled 
transactions will be netted on a monthly basis and settled financially 
at the end of the month. For purposes of this schedule, the proxy 
prices used to determine financial settlement will be derived from the 
Palo Verde electricity price indexes, or similar alternative, for on-
peak and off-peak. WALC may accept settlement in energy in lieu of 
financial settlement.
    During periods of BA operating constraints, WALC reserves the right 
to eliminate credits for over-delivery. The cost to WALC of any penalty 
assessed by a regulatory authority due to a violation of operating 
standards resulting from under or over-delivery of energy may be passed 
through to customers.

Rate Schedule DSW-SPR4

SCHEDULE 5 to OATT

(Supersedes Schedule DSW-SPR3)

UNITED STATES DEPARTMENT OF ENERGY

WESTERN AREA POWER ADMINISTRATION

Desert Southwest Region and Western Area Lower Colorado Balancing 
Authority

OPERATING RESERVE--SPINNING RESERVE SERVICE

Effective

    The first day of the first full billing period beginning on or 
after October 1, 2016, and will remain in effect through September 30, 
2021, or until superseded.

Applicable

    Spinning Reserve Service is needed to serve load immediately in the 
event of a system contingency and may be provided by generating units 
that are on-line and loaded at less than maximum output. The 
Transmission Service Provider (TSP) or the Balancing Authority (BA) who 
performs this function for the TSP must offer this service when 
transmission is used to serve load within its BA Area.
    The Western Area Lower Colorado Balancing Authority (WALC) performs 
this function for the Federal TSP. Customers of a Federal TSP must

[[Page 58509]]

purchase this service from WALC or make alternative arrangements to 
satisfy their Spinning Reserve obligations.

Formula Rate
[GRAPHIC] [TIFF OMITTED] TN25AU16.038

    WALC has no Spinning Reserves available for sale. Upon request, 
WALC will purchase at market price and pass-through the cost plus an 
administrative fee that covers the cost of procuring and supplying 
Spinning Reserves. The customer will be responsible for providing the 
transmission needed to deliver the Spinning Reserves purchased.

Rate Schedule DSW-SUR4

SCHEDULE 6 to OATT

(Supersedes Schedule DSW-SPR3

UNITED STATES DEPARTMENT OF ENERGY

WESTERN AREA POWER ADMINISTRATION

Desert Southwest Region and Western Area Lower Colorado Balancing 
Authority

OPERATING RESERVE--SUPPLEMENTAL RESERVE SERVICE

Effective

    The first day of the first full billing period beginning on or 
after October 1, 2016, and will remain in effect through September 30, 
2021, or until superseded.

Applicable

    Supplemental Reserve Service is needed to serve load in the event 
of a system contingency. It is not available immediately to serve load 
but is generally available within a short period of time after a system 
contingency event. This service may be provided by generating units 
that are on-line but unloaded, by quick-start generation, or by 
interruptible load. The Transmission Service Provider (TSP) or the 
Balancing Authority (BA) who performs this function for the TSP must 
offer this service when transmission is used to serve load within its 
BA Area.
    The Western Area Lower Colorado Balancing Authority (WALC) performs 
this function for the Federal TSP. Customers of a Federal TSP must 
purchase this service from WALC or make alternative arrangements to 
satisfy their Supplemental Reserve obligations.

Formula Rate

------------------------------------------------------------------------
 
-------------------------------------------------------------------
Cost of Service = Market Price + Administrative Fee
------------------------------------------------------------------------

    WALC has no Supplemental Reserves for sale. Upon request, WALC will 
purchase at market price and pass-through the cost plus an 
administrative fee that covers the cost of procuring and supplying 
Supplemental Reserves. The customer will be responsible for providing 
the transmission needed to deliver.

Rate Schedule DSW-GI2

SCHEDULE 9 to OATT

(Supersedes Schedule DSW-GI1)

UNITED STATES DEPARTMENT OF ENERGY

WESTERN AREA POWER ADMINISTRATION

Desert Southwest Region and Western Area Lower Colorado Balancing 
Authority

GENERATOR IMBALANCE SERVICE

Effective

    The first day of the first full billing period beginning on or 
after October 1, 2016, and will remain in effect through September 30, 
2021, or until superseded.

Applicable

    Generator Imbalance Service is provided when a difference occurs 
between the output of a generator located in the Balancing Authority 
Area (BA Area) and the delivery schedule from that generator to another 
BA Area or a load within the Transmission Service Provider's (TSP) BA 
Area over a single hour. The TSP or the Balancing Authority (BA) who 
performs this function for the TSP must offer this service, to the 
extent it is physically feasible to do so from its resources or from 
resources available to it, when transmission is used to deliver energy 
from a generator located within its BA Area.
    The Western Area Lower Colorado Balancing Authority (WALC) performs 
this function for the Federal TSP. Customers of a Federal TSP must 
purchase this service from WALC or make alternative comparable 
arrangements to satisfy their Generator Imbalance obligations. Non-
Federal TSPs must have separate agreements with WALC that specify the 
terms of Generator Imbalance Service. An intermittent resource serving 
load outside WALC will be required to dynamically schedule or 
dynamically meter their generation to another BA Area unless 
arrangements, satisfactory to WALC, are made to acquire this service 
from a third-party. An intermittent resource, for the limited purpose 
of this schedule, 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.
    WALC may charge a transmission customer for either generator 
imbalances under this schedule or energy imbalances under Schedule 4 
for imbalances occurring during the same hour, but not both unless the 
imbalances aggravate rather than offset each other.

Formula Rate

    Charges for generator imbalances are based on the deviation bands 
as follows:
    1. For deviations within 1.5 percent (with a minimum of 
4 MW) of the metered generation, the settlement for on-peak and off-
peak hours is 100 percent.
    2. For deviations greater than 1.5 up to 7.5 percent 
(or greater than 4 MW up to 10 MW) of the metered generation, the 
settlement for on-peak hours is 110 percent for under-delivery and 90 
percent for over-delivery, and the settlement for off-peak hours is 110 
percent for under-delivery and 75 percent for over-delivery.
    3. For deviations greater than 7.5 percent (or 10 MW) 
of the metered generation, the settlement for on-peak hours is 125 
percent for under-delivery and 75 percent for over-delivery, and the 
settlement for off-peak hours is 125 percent for under-delivery and 60 
percent for over-delivery. An intermittent resource will be exempt from 
this deviation band but will be subject to the settlement provisions in 
the second deviation band for all deviations greater than 7.5 percent (or 10 MW).
    The deviation bands will be applied hourly and any generator 
imbalances that occur as a result of the transmission customer's 
scheduled transactions will be netted on a monthly basis and settled 
financially at the end of the month. For purposes of this schedule, the 
proxy prices used to determine financial settlement will be derived 
from the Palo Verde electricity price indexes, or

[[Page 58510]]

similar alternative, for on-peak and off-peak. WALC may accept 
settlement in energy in lieu of financial settlement.
    During periods of BA operating constraints, WALC reserves the right 
to eliminate credits for over-delivery. The cost to WALC of any penalty 
assessed by a regulatory authority due to a violation of operating 
standards resulting from under or over-delivery of energy may be passed 
through to customers.

[FR Doc. 2016-20397 Filed 8-24-16; 8:45 am]
 BILLING CODE 6450-01-P