[Federal Register Volume 90, Number 81 (Tuesday, April 29, 2025)]
[Notices]
[Pages 17783-17796]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-07350]


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DEPARTMENT OF ENERGY

Southwestern Power Administration


Integrated System--Rate Order No. SWPA-87

AGENCY: Southwestern Power Administration, DOE.

ACTION: Notice of rate order.

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SUMMARY: The Administrator of the Southwestern Power Administration 
(Southwestern) has confirmed, approved, and placed into effect on an 
interim basis Rate Order No. SWPA-87 (Rate Order), which provides the 
following Integrated System rate schedules: Wholesale Rates for Hydro 
Peaking Power (P-23), Wholesale Rates for Non-Federal Service (NFS-23), 
and Wholesale Rates for Excess Energy (EE-23). These new rate schedules 
replace the existing power rates under Rate Schedules P-13B, NFTS-13A, 
and EE-13 which expire on September 30, 2025. Rate Schedules P-23, NFS-
23, and EE-23 increase the annual wholesale power rate for the 
Integrated System by 22.8 percent.

DATES: The effective period for the rate schedules specified in Rate 
Order No. SWPA-87 is June 1, 2025, through September 30, 2027, pending 
confirmation and approval by the Federal Energy Regulatory Commission 
(FERC) on a final basis, or until superseded.

FOR FURTHER INFORMATION CONTACT: Ms. Fritha Ohlson, Senior Vice 
President and Chief Operating Officer, Office of Corporate Operations, 
(918) 595-6684, [email protected].

SUPPLEMENTARY INFORMATION: On January 9, 2014, FERC confirmed and 
approved Rate Schedules P-13, NFTS-13, and EE-13 under Rate Order No. 
SWPA-66 on a final basis through September 30, 2017. Subsequently, rate 
schedule NFTS-13 was renamed to NFTS-13A and rate schedule P-13 was 
renamed to P-13A and then later to P-13B, in each case with no revenue 
adjustment.\1\ Additionally, all three rate schedules have been 
extended with no revenue adjustment.\2\ Most recently, the Southwestern 
Administrator extended rate schedules P-13B, NFTS-13A, and EE-13, via 
Rate Order No. SWPA-85, through September 30, 2025.
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    \1\ Rate Order Nos. SWPA-71 (January 1, 2017), SWPA-73 (July 15, 
2017), SWPA-80 (July 15, 2023).
    \2\ Rate Order Nos. SWPA-72 (September 13, 2017), SWPA-74 
(September 22, 2019), SWPA-77 (August 30, 2021), SWPA-81 (September 
20, 2023).
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    Southwestern published a Federal Register notice (Proposed FRN) on 
November 12, 2024 (89 FR 88997), proposing to modify Integrated System 
rate schedules to meet the identified average annual revenue 
requirement of $237,821,129, an increase of $44,230,649 (22.8 percent). 
The Proposed FRN also initiated a 90-day public consultation and 
comment period and set the date of the public information and public 
comment forum to be December 18, 2024. No written comments were 
received and responses to outstanding comments or questions from the 
public information and public comment forum were posted on 
Southwestern's website.
    Following review of the proposal, Rate Order No. SWPA-87, which 
provides rate schedules for the Integrated System is hereby confirmed, 
approved, and placed into effect on an interim basis. Southwestern will 
submit Rate Order No. SWPA-87 to FERC for confirmation and approval on 
a final basis.

United States of America

Department of Energy

Administrator, Southwestern Power Administration

In the matter of: Southwestern Power Administration Integrated System 
Rate Schedules Rate Order No. SWPA-87

Order Confirming, Approving, and Placing Increased Power Rate Schedules 
in Effect on an Interim Basis (4/23/2025)

    Pursuant to Sections 301(b) and 302(a) of the Department of Energy 
Organization Act, 42 U.S.C. 7151(b) and 7152(a), 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. S1-
DEL-RATES-2016, effective November 19, 2016, the Secretary of Energy 
delegated: (1) the authority to develop power and transmission rates to 
Southwestern'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, or to remand or disapprove such 
rates, to the Federal Energy Regulatory Commission (FERC). By 
Delegation Order No. S1-DEL-S3-2024, effective August 30, 2024, the 
Secretary of Energy also delegated the authority to confirm, approve, 
and place such rates into effect on an interim basis to the Under 
Secretary for Infrastructure. By Redelegation Order No. S3-DEL-SWPA1-
2023, effective April 10, 2023, the Under Secretary for Infrastructure 
redelegated the authority to confirm, approve, and place such rates 
into effect on an interim basis to the Southwestern Administrator.

Background

    On September 30, 2013, in Rate Order No. SWPA-66, the Deputy 
Secretary of Energy placed into effect Southwestern's Integrated System 
rate schedules (P-13, NFTS-13, and EE-13) on an interim basis for the 
period October 1, 2013, to September 30, 2017. FERC confirmed and 
approved Southwestern's interim Integrated System rates on a final 
basis on January 9, 2014, for a period ending September 30, 2017.
    Southwestern re-designated Integrated System rate schedule ``NFTS-
13'' as ``NFTS-13A'' with no revenue adjustment to better align 
Southwestern's rate schedule with standard practices utilized by the 
Southwest Power Pool, Inc. In Rate Order No. SWPA-71, the Deputy 
Secretary of Energy placed into effect Southwestern's rate schedule 
NFTS-13A on an interim basis beginning January 1, 2017. FERC confirmed 
and approved NFTS-13A on a final basis on March 9, 2017.
    On September 13, 2017, in Rate Order No. SWPA-72, the Deputy 
Secretary of Energy extended all of Southwestern's Integrated System 
rate schedules (P-13, NTFS-13A, and EE-13) for two years, for the 
period of October 1, 2017, through September 30, 2019.
    Southwestern re-designated Integrated System rate schedule ``P-13'' 
as ``P-13A'' with no revenue adjustment to

[[Page 17784]]

incorporate a new section regarding requirements for the peaking energy 
schedule submission time. In Rate Order No. SWPA-73, the Assistant 
Secretary for Electricity placed into effect Southwestern's rate 
schedule for P-13A on an interim basis beginning July 1, 2019. FERC 
confirmed and approved P-13A on a final basis on August 29, 2019.
    On September 22, 2019, in Rate Order No. SWPA-74, the Assistant 
Secretary for Electricity extended all of Southwestern's Integrated 
System rate schedules (P-13A, NFTS-13A, and EE-13) for two years, for 
the period of October 1, 2019, through September 30, 2021.
    On August 30, 2021, in Rate Order No. SWPA-77, the Administrator, 
Southwestern, extended all of Southwestern's Integrated System rate 
schedules (P-13A, NFTS-13A, and EE-13) for two years, for the period of 
October 1, 2021, through September 30, 2023.
    Southwestern re-designated Integrated System rate schedule ``P-
13A'' as ``P-13B'' with no revenue adjustment to update the peaking 
energy schedule submission time requirements. In Rate Order No. SWPA-
80, the Administrator, Southwestern, placed into effect Southwestern's 
rate schedule for P-13B on an interim basis beginning July 15, 2023. 
FERC confirmed and approved P-13B on a final basis on February 2, 2024.
    On September 25, 2023, in Rate Order No. SWPA-81, the 
Administrator, Southwestern, temporarily extended all of Southwestern's 
Integrated System rate schedules (P-13B, NFTS-13A, and EE-13) for one 
year, for the period of October 1, 2023, through September 30, 2024.
    On September 13, 2024, in Rate Order No. SWPA-85, the 
Administrator, Southwestern, temporarily extended all of Southwestern's 
Integrated System rate schedules (P-13B, NFTS-13A, and EE-13) for one 
year, for the period of October 1, 2024, through September 30, 2025.

Discussion

    Southwestern's current Integrated System rate schedules (P-13B, 
NFTS-13A, and EE-13) are based on its 2013 Power Repayment Study (PRS). 
Each subsequent annual PRS from 2014 through 2022 indicated a need for 
a revenue adjustment within a plus or minus two percent range of the 
revenue estimate based on the current rate schedules. It is 
Southwestern's practice for the Administrator to defer, on a case-by-
case basis, revenue adjustments for the Integrated System within plus 
or minus two percent from the revenue estimate based on the current 
rate schedules. Therefore, the Administrator deferred revenue 
adjustments annually for the Integrated System annually through 2022. 
Southwestern prepared a 2023 Current PRS 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 operations and maintenance expenses, increased cost of 
replacements in the hydroelectric generating and transmission 
facilities, and an increased need for purchased power and wheeling. The 
2023 Revised PRS indicates the need for an increase in annual revenues 
of $44,230,649, or 22.8 percent, to accomplish repayment in the 
required number of years. Accordingly, Southwestern has prepared a Rate 
Design Study (RDS) and new proposed rate schedules (P-23, NFS-23, and 
EE-23) 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 part 903), ``Procedures for Public Participation in Power and 
Transmission Rate Adjustments and Extensions.'' Opportunities for 
public review and comment during a 90-day period on the proposed 
Integrated System power rate schedules were announced by a Federal 
Register notice published on November 12, 2024 (89 FR 88997), with 
written comments due February 10, 2025. A combined public information 
and comment forum was held virtually on December 18, 2024. Southwestern 
published the Federal Register notice, the proposed rate schedule, and 
the draft 2023 PRS on its website as well as a transcript of the public 
forum and responses to outstanding questions from the public forum for 
customers and interested parties to review and comment upon during the 
public comment period.
    Following the conclusion of the comment period on February 10, 
2025, Southwestern finalized the Power Repayment Studies and Rate 
Schedules P-23, NFS-23, and EE-23 to recover the increased revenue 
requirement of $44,230,649 which is the lowest possible rate needed to 
satisfy the repayment criteria set forth within the provisions of U.S. 
Department of Energy (DOE) Order No. RA 6120.2. This rate represents an 
annual increase of 22.8 percent. The Administrator made the decision to 
approve the rate proposal for implementation.
    Southwestern will continue to perform its Power Repayment Studies 
annually, and if the 2025 results should indicate the need for 
additional revenues, another rate adjustment proceeding will be 
conducted to implement the updated revenue requirements.

Comments and Responses

    Southwestern did not receive any written comments during the 90-day 
public review and comment period. Southwestern did receive oral 
comments from Ms. Nicki Fuller of Southwestern Power Resources 
Association, Mr. James Striedel of GDS Associates, representing the 
Texas customers of Southwestern, Ms. Amanda Kenly of Associated 
Electric Cooperative, Inc., and Mr. David Yeager of the City of Duncan, 
Oklahoma, during Southwestern's December 18, 2024, public information 
and comment forum which are summarized below. The comments are also 
included verbatim as part of the transcript of the public comment forum 
which will be submitted to FERC along with other applicable documents 
for final confirmation and approval of Rate Schedules P-23, NFS-23, and 
EE-23.
    Ms. Fuller asked Southwestern to explain differences between the 
2022 and 2023 PRSs. Southwestern explained that the purchased power 
need increased due to long term generating unit outages and the 
associated cost increased due to increasing replacement capacity costs; 
the Corps' operations and maintenance costs increased due to 
implementation of a new method to estimate costs which better reflects 
actual operation and maintenance costs experienced; service charges 
increased due to a new Midcontinent Independent System Operator (MISO) 
transmission expense; and investment costs increased to reflect actual 
costs increases experienced for recent investments. In addition to the 
information provided during the forum Southwestern provided more 
information on the investment cost increases and project additions on 
its website after the forum.
    Mr. Striedel asked some general questions regarding the Integrated 
System rate. Southwestern clarified that there are 22 hydroelectric 
projects and Southwestern's transmission system included in the 
Integrated System, and 19 of those hydroelectric projects are operated 
as an interconnected system while the remaining three hydroelectric 
projects are isolated operationally but integrated financially. Mr. 
Striedel asked why the operationally isolated projects pay for 
transmission costs when they are not connected via transmission lines 
to the interconnected system projects. Southwestern explained that 
there are transmission costs associated with project investment as well 
as

[[Page 17785]]

project investment associated with transmission which means that some 
of the transmission service costs does directly benefit isolated 
projects. Additionally, the diversification of the Integrated System 
portfolio provides rate stability, particularly to operationally 
isolated hydroelectric projects.
    Ms. Kenly asked Southwestern to confirm that the annual cost for 
MISO transmission is perpetuated through the end of the 50-year PRS. 
Southwestern confirmed this in the affirmative. Ms. Kenly asked for 
additional information on the water assumptions in the 2023 PRS. 
Southwestern explained that inflow data from 1928 to 2022 is used to 
inform annual generation amounts in the resource analysis, and the 
average year for generation is used in the PRS as well as the 
associated RDS. Ms. Kenly then asked if the resource analysis included 
any assumed capacity uprates, retirements, or capacity reductions. 
Southwestern stated that long term outages within the first five years 
of the study are included in the analysis, but capacity uprates, 
capacity derates, and retirements are not included in the resource 
analysis unless they have already been realized. Southwestern provided 
detailed information on outage and capacity derates on its website 
after the forum. Finally, Ms. Kenly asked for an overview of the 
proposed rate structure. Southwestern provided a high-level overview of 
the 2023 RDS.
    Mr. Yeager asked if there was a list of project replacements (a 
subtotal of project investment) included in the PRS or RDS. 
Southwestern responded that there is information on project 
replacements in Appendix J of the PRS.

Availability of Information

    Information regarding the rate adjustment proceeding, including the 
Final 2023 PRS and Rate Proposal, for Rate Schedules P-23, NFS-23, and 
EE-23 is available for public review in the offices of Southwestern 
Power Administration, 6655 S Lewis Ave., Tulsa, Oklahoma 74136. Rate 
Schedules P-23, NFS-23, and EE-23 are available on Southwestern's 
website at www.energy.gov/swpa/rates-and-repayment.

Certification of Rates

    I have certified that the provisional rates under Rate Schedules P-
23, NFS-23, and EE-23 are the lowest possible rates consistent with 
sound business principles. The rates were developed following 
administrative policies and applicable laws.

Ratemaking Procedure Requirements

Environmental Compliance

    Southwestern has determined that this action fits within the 
following categorical exclusions listed in appendix B to subpart D of 
10 CFR 1021.410: B4.3 (Electric power marketing rate changes). 
Categorically excluded projects and activities do not require 
preparation of either an environmental impact statement or an 
environmental assessment. A copy of the categorical exclusion 
determination is available on Southwestern's website at https://www.energy.gov/swpa/southwestern-power-administration.

Determination Under Executive Order 12866

    Southwestern 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 Federal Energy Regulatory Commission

    Rate Schedules P-23, NFS-23, and EE-23 herein confirmed, approved, 
and placed into effect on an interim basis, together with supporting 
documents, will be submitted to the FERC for confirmation and final 
approval.

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 June 1, 2025, the Integrated 
System Rate Schedule P-23, Wholesale Rates for Hydro Peaking Power; 
Rate Schedule NFS-23, Wholesale Rates for Non-Federal Service; and Rate 
Schedule EE-23, Wholesale Rates for Excess Energy. The rate schedules 
shall remain in effect on an interim basis through September 30, 2027, 
or until the FERC confirms and approves the rates on a final basis, or 
until they are superseded by a subsequent rate.

Signing Authority

    This document of the Department of Energy was signed on April 23, 
2025, by Michael S. Wech, Administrator for Southwestern Power 
Administration, pursuant to delegated authority from the Secretary of 
Energy. That document, with the original signature and date, is 
maintained by DOE. For administrative purposes only, and in compliance 
with requirements of the Office of the Federal Register, the 
undersigned DOE Federal Register Liaison Officer has been authorized to 
sign and submit the document in electronic format for publication, as 
an official document of DOE. This administrative process in no way 
alters the legal effect of this document upon publication in the 
Federal Register.

    Signed in Washington, DC, on April 24, 2025.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.

Rate Schedule P-23

(Supersedes Rate Schedule P-13B) Effective June 1, 2025

United States Department of Energy

Southwestern Power Administration

Rate Schedule P-23

Wholesale Rates for Hydro Peaking Power

Effective

    During the period June 1, 2025, through September 30, 2027, in 
accordance with interim approval from Rate Order No. SWPA-87 issued by 
the Administrator on April 23, 2025, and pursuant to final approval by 
the Federal Energy Regulatory Commission.

Available

    In the marketing area of Southwestern Power Administration 
(Southwestern), described generally as the States of Arkansas, Kansas, 
Louisiana, Missouri, Oklahoma, and Texas.

Applicable

    To wholesale Customers which have contractual rights from 
Southwestern to purchase Hydro Peaking Power and associated energy 
(Peaking Energy and Supplemental Peaking Energy).

Character and Conditions of Service

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

1. Definitions of Terms

1.1. Ancillary Services
    The services necessary to support the transmission of capacity and 
energy from resources to loads while maintaining reliable operation of 
the System of Southwestern in accordance with good utility practice, 
which include the following:
1.1.1. Scheduling, System Control, and Dispatch Service
    Is provided by Southwestern as Balancing Authority Area operator 
and is in regard to interchange and load-match scheduling and related 
system control and dispatch functions.

[[Page 17786]]

1.1.2. Reactive Supply and Voltage Control From Generation Sources 
Service
    Is provided at generation and transmission facilities in the System 
of Southwestern to produce or absorb reactive power and to maintain 
transmission voltages within specific limits.
1.1.3. Regulation and Frequency Response Service
    Is the continuous balancing of generation and interchange resources 
accomplished by raising or lowering the output of on-line generation as 
necessary to follow the moment-by-moment changes in load and to 
maintain frequency within a Balancing Authority Area.
1.1.4. Spinning Operating Reserve Service
    Maintains generating units on-line, but loaded at less than maximum 
output, which may be used to service load immediately when disturbance 
conditions are experienced due to a sudden loss of generation or load.
1.1.5. Supplemental Operating Reserve Service
    Provides an additional amount of operating reserve sufficient to 
reduce Area Control Error to zero within 10 minutes following loss of 
generating capacity which would result from the most severe single 
contingency.
1.1.6. Energy Imbalance Service
    Corrects for differences over a period of time between schedules 
and actual hourly deliveries of energy to a load. Energy delivered or 
received within the authorized bandwidth for this service is accounted 
for as an inadvertent flow and is returned to the providing party by 
the receiving party in accordance with standard utility practice or a 
contractual arrangement between the parties.
1.2. Customer
    The entity which is utilizing and/or purchasing Federal Power and 
Federal Energy and services from Southwestern pursuant to this Rate 
Schedule.
1.3. Demand Period
    The period of time used to determine maximum integrated rates of 
delivery for the purpose of power accounting which is the 60-minute 
period that begins with the change of hour.
1.4. Federal Power and Energy
    The power and energy provided from the System of Southwestern.
1.5. Hydro Peaking Power
    The Federal Power that Southwestern sells and makes available to 
the Customers through their respective Power Sales Contracts in 
accordance with this Rate Schedule.
1.6. Peaking Billing Demand
    The quantity equal to the Peaking Contract Demand for any month 
unless otherwise provided by the Customer's Power Sales Contract.
1.7. Peaking Contract Demand
    The maximum rate in kilowatts at which Southwestern is obligated to 
deliver Federal Energy associated with Hydro Peaking Power as set forth 
in the Customer's Power Sales Contract.
1.8. Peaking Energy
    The Federal Energy associated with Hydro Peaking Power that 
Southwestern sells and makes available to the Customer in accordance 
with the terms and conditions of the Customer's Power Sales Contract.
1.9. Peaking Energy Schedule Submission Time
    The time by which Southwestern requires the Customer to submit 
Peaking Energy schedules to Southwestern as provided for in this Rate 
Schedule and in accordance with the terms and conditions of the 
Customer's Power Sales Contract.
1.10. Power Sales Contract
    The Customer's contract with Southwestern for the sale of Federal 
Power and Federal Energy.
1.11. Supplemental Peaking Energy
    The Federal Energy associated with Hydro Peaking Power that 
Southwestern sells and makes available to the Customer if determined by 
Southwestern to be available and that is in addition to the quantity of 
Peaking Energy purchased by the Customer in accordance with the terms 
and conditions of the Customer's Power Sales Contract.
1.12. System of Southwestern
    The transmission and related facilities owned by Southwestern, and/
or the generation, transmission, and related facilities owned by 
others, the capacity of which, by contract, is available to and 
utilized by Southwestern to satisfy its contractual obligations to the 
Customer.
1.13. Uncontrollable Force
    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, act 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.

2. Wholesale Rates, Terms, and Conditions for Hydro Peaking Power, 
Peaking Energy, Supplemental Peaking Energy, and Associated Services

    Unless otherwise specified, this Section 2 is applicable to all 
sales under the Customer's Power Sales Contract.
2.1. Hydro Peaking Power Rates, Terms, and Conditions
2.1.1. Monthly Capacity Charge for Hydro Peaking Power
    $5.30 per kilowatt of Peaking Billing Demand.
2.1.2. Services Associated with Capacity Charge for Hydro Peaking Power
    The capacity charge for Hydro Peaking Power includes such 
transmission services as are necessary to integrate Southwestern's 
resources in order to reliably deliver Hydro Peaking Power and 
associated energy to the Customer. This capacity charge also includes 
two Ancillary Services charges: Scheduling, System Control, and 
Dispatch Service; and Reactive Supply and Voltage Control from 
Generation Sources Service.
2.1.3. Secondary Transmission Service under Capacity Associated with 
Hydro Peaking Power
    Customers may utilize the transmission capacity associated with 
Peaking Contract Demand for the transmission of non-Federal energy, on 
a non-firm, as-available basis, at no additional charge for such 
transmission service or associated Ancillary Services, under the 
following terms and conditions:
2.1.3.1. The sum of the capacity, for any hour, which is used for 
Peaking Energy, Supplemental Peaking Energy, and Secondary Transmission 
Service, may not exceed the Peaking Contract Demand;
2.1.3.2. The non-Federal energy transmitted under such secondary 
service is delivered to the Customer's point of delivery for Hydro 
Peaking Power;
    2.1.3.3. The Customer commits to provide Real Power Losses 
associated with such deliveries of non-Federal energy; and
    2.1.3.4. Sufficient transfer capability exists between the point of 
receipt into

[[Page 17787]]

the System of Southwestern of such non-Federal energy and the 
Customer's point of delivery for Hydro Peaking Power for the time 
period that such secondary transmission service is requested.
2.1.4. Adjustment for Reduction in Service
    If, during any month, the Peaking Contract Demand associated with a 
Power Sales Contract in which Southwestern has the obligation to 
provide 1,200 kilowatt-hours of Peaking Energy per kilowatt of Peaking 
Contract Demand is reduced by Southwestern for a period or periods of 
not less than two consecutive hours by reason of an outage caused by 
either an Uncontrollable Force or by the installation, maintenance, 
replacement or malfunction of generation, transmission and/or related 
facilities on the System of Southwestern, or insufficient pool levels, 
the Customer's capacity charges for such month will be reduced for each 
such reduction in service by an amount computed under the formula:

R = (C x K x H) / S

with the factors defined as follows:

R = The dollar amount of reduction in the monthly total capacity 
charges for a particular reduction of not less than two consecutive 
hours during any month, except that the total amount of any such 
reduction shall not exceed the product of the Customer's capacity 
charges associated with Hydro Peaking Power times the Peaking 
Billing Demand.
C = The Customer's capacity charges associated with Hydro Peaking 
Power for the Peaking Billing Demand for such month.
K = The reduction in kilowatts in Peaking Billing Demand for a 
particular event.
H = The number of hours duration of such particular reduction.
S = The number of hours that Peaking Energy is scheduled during such 
month, but not less than 60 hours times the Peaking Contract Demand.

    Such reduction in charges shall fulfill Southwestern's obligation 
to deliver Hydro Peaking Power and Peaking Energy.
2.2. Peaking Energy and Supplemental Peaking Energy Rates, Terms, and 
Conditions
2.2.1. Peaking Energy Charge
    $0.0128 per kilowatt-hour of Peaking Energy delivered plus the 
Purchased Power & Wheeling Adder as defined in Section 2.2.3 of this 
Rate Schedule.
2.2.2. Supplemental Energy Charge
    $0.0128 per kilowatt-hour of Supplemental Peaking Energy delivered.
2.2.3. Purchased Power & Wheeling Adder
    A purchased power and wheeling adder of $0.0087 per kilowatt-hour 
of Peaking Energy delivered, as adjusted by the Administrator, 
Southwestern, in accordance with the procedure within this Rate 
Schedule.
2.2.3.1. Applicability of Purchased Power & Wheeling Adder
    The Purchased Power & Wheeling Adder shall apply to sales of 
Peaking Energy. The Purchased Power & Wheeling Adder shall not apply to 
sales of Supplemental Peaking Energy or sales to any Customer which, by 
contract, has assumed the obligation to supply energy to fulfill the 
minimum of 1,200 kilowatt-hours of Peaking Energy per kilowatt of 
Peaking Contract Demand during a contract year (hereinafter ``Contract 
Support Arrangements'').
2.2.3.2. Procedure for Determining Net Purchased Power & Wheeling Adder 
Adjustment
    Not more than twice annually, the Purchased Power & Wheeling Adder 
of $0.0087 (8.7 mills) per kilowatt-hour of Peaking Energy, as noted in 
this Rate Schedule, may be adjusted by the Administrator, Southwestern, 
by an amount up to a total of $0.0087 (8.7 mills) per 
kilowatt-hour per year, as calculated by the following formula:

ADJ = (PURCH - EST + DIF) / SALES

with the factors defined as follows:

ADJ = The dollar per kilowatt-hour amount of the total adjustment, 
plus or minus, to be applied to the net Purchased Power & Wheeling 
Adder, rounded to the nearest $0.0001 per kilowatt-hour, provided 
that the total ADJ to be applied in any year shall not vary from the 
then-effective ADJ by more than $0.0087 per kilowatt-hour;
PURCH = The actual total dollar cost of Southwestern's System Direct 
Purchases as accounted for in the financial records of the 
Southwestern Federal Power System for the period;
EST = The estimated net dollar cost ($19,571,000 per year) of 
Southwestern's System Direct Purchases used as the basis for the 
Purchased Power & Wheeling Adder of $0.0087 per kilowatt-hour of 
Peaking Energy;
DIF = The accumulated remainder of the difference in the actual and 
estimated total dollar cost of Southwestern's System Direct 
Purchases since the effective date of the currently approved 
Purchased Power & Wheeling Adder set forth in this Rate Schedule, 
which remainder is not projected for recovery through the ADJ in any 
previous periods;
SALES = The annual Total Peaking Energy sales projected to be 
delivered (2,241,300,000 kWh per year) from the System of 
Southwestern, which total was used as the basis for the $0.0087 per 
kilowatt-hour Purchased Power & Wheeling Adder.

2.3. Transformation Service Rates, Terms, and Conditions
2.3.1. Monthly Capacity Charge for Transformation Service
    $0.86 per kilowatt will be assessed for capacity used to deliver 
energy at any point of delivery at which Southwestern provides 
transformation service for deliveries at voltages of 69 kilovolts or 
less from higher voltage facilities.
2.3.2. Applicability of Capacity Charge for Transformation Service
    Unless otherwise specified by contract, for any particular month, a 
charge for transformation service will be assessed on the greater of 
(1) that month's highest metered demand, or (2) the highest metered 
demand recorded during the previous 11 months, at any point of 
delivery. For the purpose of this Rate Schedule, the highest metered 
demand will be based on all deliveries, of both Federal and non-Federal 
energy, from the System of Southwestern, at such point during such 
month.
2.4. Ancillary Services Rates, Terms, and Conditions
2.4.1. Capacity Charges for Ancillary Services
2.4.1.1. Regulation and Frequency Response Service
    Monthly rate of $0.0208 per kilowatt of Peaking Billing Demand plus 
the Regulation Purchased Adder as defined in Section 2.4.5 of this Rate 
Schedule.
2.4.1.2. Spinning Operating Reserve Service
    Monthly rate of $0.0208 per kilowatt of Peaking Billing Demand.
    Daily rate of $0.00095 per kilowatt for non-Federal generation 
inside Southwestern's Balancing Authority Area.
2.4.1.3. Supplemental Operating Reserve Service
    Monthly rate of $0.0208 per kilowatt of Peaking Billing Demand.
    Daily rate of $0.00095 per kilowatt for non-Federal generation 
inside Southwestern's Balancing Authority Area.
2.4.1.4. Energy Imbalance Service
    $0.0 per kilowatt for all reservation periods.
2.4.2. Availability of Ancillary Services
    Regulation and Frequency Response Service is available only for 
deliveries of power and energy to load within

[[Page 17788]]

Southwestern's Balancing Authority Area and for deliveries of all Hydro 
Peaking Power and associated energy from and within Southwestern's 
Balancing Authority Area. Spinning Operating Reserve Service and 
Supplemental Operating Reserve Service are available only for 
deliveries of non-Federal power and energy generated by resources 
located within Southwestern's Balancing Authority Area and for 
deliveries of all Hydro Peaking Power and associated energy from and 
within Southwestern's Balancing Authority Area. Energy Imbalance 
Service is available only for deliveries of power and energy to load 
within Southwestern's Balancing Authority Area. Where available, such 
Ancillary Services must be taken from Southwestern; unless, 
arrangements are made in accordance with Section 2.4.4 of this Rate 
Schedule.
2.4.3. Applicability of Charges for Ancillary Services
    For any month, the charges for Ancillary Services for deliveries of 
Hydro Peaking Power shall be based on the Peaking Billing Demand.
    The daily charge for Spinning Operating Reserve Service and 
Supplemental Operating Reserve Service for non-Federal generation 
inside Southwestern's Balancing Authority Area shall be applied to the 
greater of Southwestern's previous day's estimate of the peak, or the 
actual peak, in kilowatts, of the internal non-Federal generation.
2.4.4. Provision of Ancillary Services by Others
    Customers for which Ancillary Services are made available as 
specified above, must inform Southwestern by written notice of the 
Ancillary Services which they do not intend to take and purchase from 
Southwestern, and of their election to provide all or part of such 
Ancillary Services from their own resources or from a third party.
    Subject to Southwestern's approval of the ability of such resources 
or third parties to meet Southwestern's technical and operational 
requirements for provision of such Ancillary Services, the Customer may 
change the Ancillary Services which it takes from Southwestern and/or 
from other sources at the beginning of any month upon the greater of 60 
days' notice or upon completion of any necessary equipment 
modifications necessary to accommodate such change; Provided, That, if 
the Customer chooses not to take Regulation and Frequency Response 
Service for deliveries of power and energy to load within 
Southwestern's Balancing Authority Area, which includes the associated 
Regulation Purchased Adder, the Customer must pursue these services 
from a different host Balancing Authority; thereby moving all metered 
loads and resources from Southwestern's Balancing Authority Area to the 
Balancing Authority Area of the new host Balancing Authority. Until 
such time as that meter reconfiguration is accomplished, the Customer 
will be charged for the Regulation and Frequency Response Service and 
applicable Adder then in effect. The Customer must notify Southwestern 
by July 1 of this choice, to be effective the subsequent calendar year.
2.4.5. Regulation Purchased Adder
    The Regulation Purchased Adder during the time period of January 1 
through December 31 of the current calendar year is based on the 
average annual use of energy from storage, based on Southwestern's 
studies, for Regulation and Frequency Response Service and 
Southwestern's estimated purchased power price for the corresponding 
year from the most currently approved Power Repayment Studies.
2.4.5.1. Applicability of Regulation Purchased Adder
    The replacement value of the estimated annual use of energy from 
storage for Regulation and Frequency Response Service shall be 
recovered by Customers located within Southwestern's Balancing 
Authority Area on a non-coincident peak ratio share basis, divided into 
twelve equal monthly payments, in accordance with the formula in 
Section 2.4.5.2.
    If the Regulation Purchased Adder is determined and applied under 
Southwestern's Rate Schedule NFS-23, then it shall not be applied here.
2.4.5.2. Procedure for Determining Regulation Purchased Adder
    Unless otherwise specified by contract, the Regulation Purchased 
Adder for an individual Customer shall be based on the following 
formula rate, calculated to include the replacement value of the 
estimated annual use of energy from storage by Southwestern for 
Regulation and Frequency Response Service.

RPA = The Regulation Purchased Adder for an individual Customer per 
month, which is as follows:

[(L Customer / L Total) x RP Total ] / 
12

with the factors defined as follows:

L Customer = The sum in MW of the following three factors:
    (1) The Customer's highest metered load plus generation used to 
serve the Customer's load that is accounted for through a reduction 
in the Customer's metered load (referred to as `generation behind 
the meter') during the previous calendar year, and
    (2) The Customer's highest rate of Scheduled Exports \1\ during 
the previous calendar year, and
---------------------------------------------------------------------------

    \1\ Scheduled Exports and Scheduled Imports are transactions, 
such as sales and purchases respectively, which are in addition to a 
Customer's metered load that contribute to Southwestern's Balancing 
Authority Area need for regulation.
---------------------------------------------------------------------------

    (3) The Customer's highest rate of Scheduled Imports\1\ during 
the previous calendar year.
L Total = The sum of all L Customer factors for all Customers that 
were inside Southwestern's Balancing Authority Area at the beginning 
of the previous calendar year in MW.
RP Total = The ``net'' cost in dollars and cents based on 
Southwestern's estimated purchased power price for the corresponding 
year from the most currently approved Power Repayment Studies 
multiplied by the average annual use of energy from storage, as 
provided for in the table in Section 2.4.5, to support 
Southwestern's ability to regulate within its Balancing Authority 
Area. The ``net'' cost in dollars and cents shall be adjusted by 
subtracting the product of the quantity of such average annual use 
of energy from storage in MWh and Southwestern's highest rate in 
dollars per MWh for Supplemental Peaking Energy during the previous 
calendar year.

    For Customers that have aggregated their load, resources, and 
scheduling into a single node by contract within Southwestern's 
Balancing Authority Area, the individual Customer's respective 
Regulation Purchased Adder shall be that Customer's ratio share of the 
Regulation Purchased Adder established for the node. Such ratio share 
shall be determined for the Customer on a non-coincident basis and 
shall be calculated for the Customer from their highest metered load 
plus generation behind the meter.
2.4.6. Energy Imbalance Service Limitations
    Energy Imbalance Service primarily applies to deliveries of power 
and energy which are required to satisfy a Customer's load. As Hydro 
Peaking Power and associated energy are limited by contract, the Energy 
Imbalance Service bandwidth specified for Non-Federal Transmission 
Service does not apply to deliveries of Hydro Peaking Power, and 
therefore Energy Imbalance Service is not charged on such deliveries. 
Customers who consume a capacity of Hydro Peaking Power greater than 
their Peaking Contract Demand

[[Page 17789]]

may be subject to a Capacity Overrun Penalty.

3. Hydro Peaking Power Penalties, Terms, and Conditions

3.1. Capacity Overrun Penalty
3.1.1. Penalty Charge for Capacity Overrun
    For each hour during which Hydro Peaking Power was provided at a 
rate greater than that to which the Customer is entitled, the Customer 
will be charged a Capacity Overrun Penalty at the following rates:

------------------------------------------------------------------------
     Months associated with charge              Rate per kilowatt
------------------------------------------------------------------------
March, April, May, October, November,    The greater of:
 December.                               $0.15
                                         -or-
                                         (Applicable Day-Ahead (DA)
                                          Locational Marginal Price
                                          (LMP) (per megawatt-hour)) /
                                          1000.
January, February, June, July, August,   The greater of:
 September.                              $0.30
                                         -or-
                                         (Applicable DA LMP (per
                                          megawatt-hour)) / 1000.
------------------------------------------------------------------------

    For each hour of overrun, the Applicable DA LMP is defined as 
follows:
    For Customers that schedule their Federal Power into the SPP 
Integrated Marketplace: Applicable DA LMP = DA LMP at the SPP SPA 
Location.
    For Customers that schedule their Federal Power into the MISO 
Energy and Operating Reserve Market: Applicable DA LMP = DA LMP at the 
MISO SPA Location.
    For Customers that do not schedule their Federal Power into either 
the SPP Integrated Marketplace or the MISO Energy and Operating Reserve 
Market:

Applicable DA LMP = The greater of: DA LMP at the SPP SPA Location -or- 
DA LMP at the MISO SPA Location.
3.1.2. Applicability of Capacity Overrun Penalty
    Customers which have loads within Southwestern's Balancing 
Authority Area are obligated by contract to provide resources, over and 
above the Hydro Peaking Power and associated energy purchased from 
Southwestern, sufficient to meet their loads. A Capacity Overrun 
Penalty shall be applied only when the formulas provided in Customers' 
respective Power Sales Contracts indicate an overrun on Hydro Peaking 
Power, and investigation determines that all resources, both firm and 
non-firm, which were available at the time of the apparent overrun were 
insufficient to meet the Customer's load.
3.2. Energy Overrun Penalty
3.2.1. Penalty Charge for Energy Overrun
    The Customer shall be assessed a penalty charge for each kilowatt-
hour of overrun in the overrun period (month or contract year), at a 
per kilowatt-hour rate determined as the greater of:
    $0.1276 -or-
    The Applicable DA LMP Average.
    The Applicable DA LMP Average is defined as follows:

    Applicable DA LMP Average = Average (1st highest Applicable DA 
LMP, . . ., Nth highest Applicable DA LMP).
    N = (Total kilowatt-hours of overrun) / (Customer Peaking 
Contract Demand (kilowatts)) rounded up to the nearest whole number.
    Applicable DA LMP = (Applicable DA LMP for each Overrun Period 
Hour Interval (per megawatt-hour)) / 1000.
    Overrun Period Hour Interval = An hour interval in which the 
Customer scheduled and received Peaking Energy during the overrun 
period.

    For each Overrun Period Hour Interval, the Applicable DA LMP is 
defined as follows:
    For Customers that schedule their Federal Power into the SPP 
Integrated Marketplace: Applicable DA LMP = DA LMP at the SPP SPA 
Location.
    For Customers that schedule their Federal Power into the MISO 
Energy and Operating Reserve Market: Applicable DA LMP = DA LMP at the 
MISO SPA Location.
    For Customers that do not schedule their Federal Power into either 
the SPP Integrated Marketplace or the MISO Energy and Operating Reserve 
Market: Applicable DA LMP = The greater of: DA LMP at the SPP SPA 
Location
    -or-
    DA LMP at the MISO SPA Location.
3.2.2. Applicability of Energy Overrun Penalty
    By contract, the Customer is subject to limitations on the maximum 
amounts of Peaking Energy which may be scheduled under the Customer's 
Power Sales Contract. When the Customer schedules an amount in excess 
of such maximum amounts, such Customer is subject to the Energy Overrun 
Penalty.
3.3. Power Factor Penalty
3.3.1. Requirements Related to Power Factor
    Any Customer served from facilities owned by or available by 
contract to Southwestern will be required to maintain a power factor of 
not less than 95 percent and will be subject to the following 
provisions.
3.3.2. Determination of Power Factor
    The power factor will be determined for all Demand Periods and 
shall be calculated under the formula:
[GRAPHIC] [TIFF OMITTED] TN29AP25.000

with the factors defined as follows:

PF = The power factor for any Demand Period of the month.
kWh = The total quantity of energy which is delivered during such 
Demand Period to the point of delivery or interconnection in 
accordance with Section 3.3.4.
rkVAh = The total quantity of reactive kilovolt-ampere-hours (kVARs) 
delivered during such Demand Period to the point of delivery or 
interconnection in accordance with Section 3.3.4.
3.3.3. Penalty Charge for Power Factor
    The Customer shall be assessed a penalty for all Demand Periods of 
a month where the power factor is less than 95 percent lagging. For any 
Demand Period during a particular month such penalty shall be in 
accordance with the following formula:

C = D x (0.95 - LPF) x $0.15
with the factors defined as follows:

C = The charge in dollars to be assessed for any particular Demand 
Period of such month that the determination of power factor ``PF'' 
is calculated to be less than 95 percent lagging.
D = The Customer's demand in kilowatts at the point of delivery for 
such Demand Period in which a low power factor was calculated.
LPF = The lagging power factor, if any, determined by the formula 
``PF'' for such Demand Period.

    If C is negative, then C = zero (0).
3.3.4. Applicability of Power Factor Penalty
    The Power Factor Penalty is applicable to radial interconnections 
with the System of Southwestern. The total Power Factor Penalty for any 
month shall be the sum of all charges ``C'' for all Demand Periods of 
such month. No penalty is assessed for leading power factor. 
Southwestern, in its sole judgment and at its sole option, may 
determine whether power factor calculations should be applied to (i) a 
single physical point of delivery, (ii) a combination of physical 
points of delivery where a Customer has a single, electrically 
integrated load, (iii) or interconnections. The general criteria for 
such decision shall be that, given the configuration of the Customer's 
and Southwestern's systems, Southwestern will determine, in its sole 
judgment and at its sole option, whether the power factor calculation 
more accurately

[[Page 17790]]

assesses the detrimental impact on Southwestern's system when the above 
formula is calculated for a single physical point of delivery, a 
combination of physical points of delivery, or for an interconnection 
as specified by an Interconnection Agreement.
    Southwestern, at its sole option, may reduce or waive Power Factor 
Penalties when, in Southwestern's sole judgment, low power factor 
conditions were not detrimental to the System of Southwestern due to 
particular loading and voltage conditions at the time the power factor 
dropped below 95 percent lagging.

4. Hydro Peaking Power Miscellaneous Rates, Terms, and Conditions

4.1. Real Power Losses
    Customers are required to self-provide all Real Power Losses for 
non-Federal energy transmitted by Southwestern on behalf of such 
Customers under the provisions detailed below.
    Real Power Losses are computed as four (4) percent of the total 
amount of non-Federal energy transmitted by Southwestern. The 
Customer's monthly Real Power Losses are computed each month on a 
megawatt-hour basis as follows:

ML = 0.04 x NFE
with the factors defined as follows:

ML = The total monthly loss energy, rounded to the nearest megawatt-
hour, to be scheduled by a Customer for receipt by Southwestern for 
Real Power Losses associated with non-Federal energy transmitted on 
behalf of such Customer; and
NFE = The amount of non-Federal energy that was transmitted by 
Southwestern on behalf of a Customer during a particular month.

    The Customer must schedule or cause to be scheduled to 
Southwestern, Real Power Losses for which it is responsible subject to 
the following conditions:
    4.1.1. The Customer shall schedule and deliver Real Power Losses 
back to Southwestern during the second month after they were incurred 
by Southwestern in the transmission of the Customer's non-Federal power 
and energy over the System of Southwestern unless such Customer has 
accounted for Real Power Losses as part of a metering arrangement with 
Southwestern.
    4.1.2. On or before the twentieth day of each month, Southwestern 
shall determine the amount of non-Federal loss energy it provided on 
behalf of the Customer during the previous month and provide a written 
schedule to the Customer setting forth hour-by-hour the quantities of 
non-Federal energy to be delivered to Southwestern as losses during the 
next month.
    4.1.3. Real Power Losses not delivered to Southwestern by the 
Customer, according to the schedule provided, during the month in which 
such losses are due shall be billed by Southwestern to the Customer to 
adjust the end-of-month loss energy balance to zero (0) megawatt-hours 
and the Customer shall be obliged to purchase such energy at the 
following rates:

------------------------------------------------------------------------
                                                             Rate per
              Months associated with charge                kilowatt-hour
------------------------------------------------------------------------
March, April, May, October, November, December..........           $0.15
January, February, June, July, August, September........           $0.30
------------------------------------------------------------------------

    4.1.4. Real Power Losses delivered to Southwestern by the Customer 
in excess of the losses due during the month shall be purchased by 
Southwestern from the Customer at a rate per megawatt-hour equal to 
Southwestern's rate per megawatt-hour for Supplemental Peaking Energy, 
as set forth in Southwestern's then-effective Rate Schedule for Hydro 
Peaking Power to adjust such hourly end-of-month loss energy balance to 
zero (0) megawatt-hours.
4.2. Peaking Energy Schedule Submission Time
    Southwestern's Peaking Energy Schedule Submission Time is on or 
before 8:30 a.m. Central Prevailing Time (CPT), as adjusted by the 
Administrator, Southwestern, in accordance with Section 4.2.2 in this 
Rate Schedule, of the day preceding the day for the delivery of Peaking 
Energy. The Peaking Energy Schedule Submission Time supersedes the 
Peaking Energy schedule submission time provided in the Customer's 
Power Sales Contract, pursuant to Section 4.2.1 of this Rate Schedule. 
Reductions to Peaking Energy schedules may be made in accordance with 
Section 4.2.3 of this Rate Schedule.
4.2.1. Applicability of Peaking Energy Schedule Submission Time
    The Peaking Energy Schedule Submission Time shall apply to the 
scheduling of Peaking Energy. The Peaking Energy Schedule Submission 
Time shall not apply to the scheduling of Supplemental Peaking Energy 
or to Contract Support Arrangements.
4.2.2. Procedure for Adjusting the Peaking Energy Schedule Submission 
Time
    Not more than once annually, the Peaking Energy Schedule Submission 
Time of 8:30 a.m. CPT, as noted in Section 4.2 of this Rate Schedule, 
may be adjusted by the Administrator, Southwestern, to a time no 
earlier than 8:00 a.m. CPT and no later than 9:00 a.m. CPT.
4.2.2.1. Determination of Need to Adjust the Peaking Energy Schedule 
Submission Time
    The Administrator, Southwestern, will make a determination on the 
need to adjust the Peaking Energy Schedule Submission Time based on 
Southwestern's studies involving financial analysis, regional energy 
market conditions, and/or operational considerations.
4.2.2.2. Notification of Peaking Energy Schedule Submission Time 
Adjustment
    The Administrator, Southwestern, will notify customers of the 
determination to adjust the Peaking Energy Schedule Submission Time in 
writing no later than 30 calendar days prior to the effective date of 
the Peaking Energy Schedule Submission Time adjustment.

Rate Schedule NFS-23

(Supersedes Rate Schedule NFTS-13A)

Effective June 1, 2025

UNITED STATES DEPARTMENT OF ENERGY

SOUTHWESTERN POWER ADMINISTRATION

RATE SCHEDULE NFS-23

WHOLESALE RATES FOR NON-FEDERAL SERVICE

Effective

    During the period June 1, 2025, through September 30, 2027, in 
accordance with interim approval from Rate Order No. SWPA-87 issued by 
the Administrator on April 23, 2025, and pursuant to final approval by 
the Federal Energy Regulatory Commission.

Available

    In the region of the System of Southwestern.

Applicable

    To Customers which have executed Service Agreements with 
Southwestern for the transmission of non-Federal power and energy over 
the System of Southwestern or for its use for interconnections. 
Southwestern will provide services over those portions of the System of 
Southwestern in which the Administrator, Southwestern, in his or her 
sole judgment, has determined that uncommitted transmission and 
transformation capacities in the System of Southwestern are and will be

[[Page 17791]]

available in excess of the capacities required to market Federal power 
and energy pursuant to Section 5 of the Flood Control Act of 1944 (58 
Stat. 887,890; 16 U.S.C. 825s).

Character and Conditions of Service

    Three-phase, alternating current, delivered at approximately 60 
Hertz, at the nominal voltage(s), at the point(s) specified by Service 
Agreement or Transmission Service Transaction.
1. Definitions of Terms
1.1. Ancillary Services
    The services necessary to support the transmission of capacity and 
energy from resources to loads while maintaining reliable operation of 
the System of Southwestern in accordance with good utility practice, 
which include the following:
1.1.1. Scheduling, System Control, and Dispatch Service
    Is provided by Southwestern as Balancing Authority Area operator 
and is in regard to interchange and load-match scheduling and related 
system control and dispatch functions.
1.1.2. Reactive Supply and Voltage Control from Generation Sources 
Service
    Is provided at generation and transmission facilities in the System 
of Southwestern to produce or absorb reactive power and to maintain 
transmission voltages within specific limits.
1.1.3. Regulation and Frequency Response Service
    Is the continuous balancing of generation and interchange resources 
accomplished by raising or lowering the output of on-line generation as 
necessary to follow the moment-by-moment changes in load and to 
maintain frequency within a Balancing Authority Area.
1.1.4. Spinning Operating Reserve Service
    Maintains generating units on-line, but loaded at less than maximum 
output, which may be used to service load immediately when disturbance 
conditions are experienced due to a sudden loss of generation or load.
1.1.5. Supplemental Operating Reserve Service
    Provides an additional amount of operating reserve sufficient to 
reduce Area Control Error to zero within 10 minutes following loss of 
generating capacity which would result from the most severe single 
contingency.
1.1.6. Energy Imbalance Service
    Corrects for differences over a period of time between schedules 
and actual hourly deliveries of energy to a load. Energy delivered or 
received within the authorized bandwidth for this service is accounted 
for as an inadvertent flow and is returned to the providing party by 
the receiving party in accordance with standard utility practice or a 
contractual arrangement between the parties.
1.2. Customer
    The entity which is utilizing and/or purchasing services from 
Southwestern pursuant to this Rate Schedule.
1.3. Demand Period
    The period of time used to determine maximum integrated rates of 
delivery for the purpose of power accounting which is the 60-minute 
period that begins with the change of hour.
1.4. Firm Point-to-Point Transmission Service
    Transmission service reserved on a firm basis between specific 
points of receipt and delivery pursuant to either a Firm Transmission 
Service Agreement or to a Transmission Service Transaction.
1.5. Interconnection Facilities Service
    A service that provides for the use of the System of Southwestern 
to deliver energy and/or provide system support at an interconnection.
1.6. Network Integration Transmission Service
    Transmission service provided under Part III of Southwestern's Open 
Access Transmission Service Tariff which provides the Customer with 
firm transmission service for the delivery of capacity and energy from 
the Customer's resources to the Customer's load.
1.7. Non-Firm Point-to-Point Transmission Service
    Transmission service reserved on a non-firm basis between specific 
points of receipt and delivery pursuant to a Transmission Service 
Transaction.
1.8. Point of Delivery
    Either a single physical point to which electric power and energy 
are delivered from the System of Southwestern, or a specified set of 
delivery points which together form a single, electrically integrated 
load.
1.9. Secondary Transmission Service
    Service that is associated with Firm Point-to-Point Transmission 
Service and Network Integration Transmission Service. For Firm Point-
to-Point Transmission Service, it consists of transmission service 
provided on an as-available, non-firm basis, scheduled within the 
limits of a particular capacity reservation for transmission service, 
and scheduled from points of receipt, or to points of delivery, other 
than those designated in a Long-Term Firm Transmission Service 
Agreement or a Transmission Service Transaction for Firm Point-to-Point 
Transmission Service. For Network Integration Transmission Service, 
Secondary Transmission Service consists of transmission service 
provided on an as-available, non-firm basis, from resources other than 
the network resources designated in a Network Transmission Service 
Agreement, to meet the Customer's network load. The charges for 
Secondary Transmission Service, other than Ancillary Services, are 
included in the applicable capacity charges for Firm Point-to-Point 
Transmission Service and Network Integration Transmission Service.
1.10. Service Agreement
    A contract executed between a Customer and Southwestern for the 
transmission of non-Federal power and energy over the System of 
Southwestern or for interconnections which include the following:
1.10.1. Firm Transmission Service Agreement
    Provides for reserved transmission capacity on a firm basis, for a 
particular point-to-point delivery path.
1.10.2. Interconnection Agreement
    Provides for the use of the System of Southwestern and recognizes 
the exchange of mutual benefits for such use or provides for 
application of a charge for Interconnection Facilities Service.
1.10.3. Network Transmission Service Agreement
    Provides for the Customer to request firm transmission service for 
the delivery of capacity and energy from the Customer's network 
resources to the Customer's network load, for a period of one year or 
more.
1.10.4. Non-Firm Transmission Service Agreement
    Provides for the Customer to request transmission service on a non-
firm basis.
1.11. Service Request
    The request made under a Transmission Service Agreement

[[Page 17792]]

through the Southwest Power Pool, Inc. (hereinafter ``SPP'') Open 
Access Same-Time Information System (hereinafter ``OASIS'') for 
reservation of transmission capacity over a particular point-to-point 
delivery path for a particular period. The Customer must submit hourly 
schedules for actual service in addition to the Service Request.
1.12. System of Southwestern
    The transmission and related facilities owned by Southwestern, and/
or the generation, transmission, and related facilities owned by 
others, the capacity of which, by contract, is available to and 
utilized by Southwestern to satisfy its contractual obligations to the 
Customer.
1.13. Transmission Service Transaction
    A Service Request that has been approved by SPP.
1.14. Uncontrollable Force
    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, act 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.
2. Wholesale Rates, Terms, and Conditions for Firm Point-to-Point 
Transmission Service, Non-Firm Point-to-Point Transmission Service, 
Network Integration Transmission Service, and Interconnection 
Facilities Service
2.1. Firm Point-to-Point Transmission Service Rates, Terms, and 
Conditions
2.1.1. Capacity Charge for Firm Point-to-Point Transmission Service

------------------------------------------------------------------------
             Service increment                     Capacity charge
------------------------------------------------------------------------
Monthly...................................  $1.15 per kilowatt.
Weekly....................................  0.288 per kilowatt.
Daily.....................................  0.0523 per kilowatt.
------------------------------------------------------------------------

2.1.2. Services Associated With Capacity Charge for Firm Point-to-Point 
Transmission Service
    The capacity charge for Firm Point-to-Point Transmission Service 
includes Secondary Transmission Service but does not include charges 
for Ancillary Services associated with actual schedules.
2.1.3. Applicability of Capacity Charge for Firm Point-to-Point 
Transmission Service
    Capacity charges for Firm Point-to-Point Transmission Service are 
applied to quantities reserved by contract under a Firm Transmission 
Service Agreement or in accordance with a Transmission Service 
Transaction.
    A Customer, unless otherwise specified by contract, will be 
assessed capacity charges on the greatest of:
    (1) the highest metered demand at any particular Point of Delivery 
during a particular month, rounded up to the nearest whole megawatt, or
    (2) the highest metered demand recorded at such Point of Delivery 
during any of the previous 11 months, rounded up to the nearest whole 
megawatt, or
    (3) the capacity reserved by contract; which shall be considered 
such Customer's reserved capacity.
    Secondary Transmission Service for such Customer shall be limited 
during any month to the most recent metered demand on which that 
Customer is billed or to the capacity reserved by contract, whichever 
is greater.
2.2. Non-Firm Point-to-Point Transmission Service Rates, Terms, and 
Conditions
2.2.1. Capacity Charge for Non-Firm Point-to-Point Transmission Service

------------------------------------------------------------------------
             Service increment                     Capacity charge
------------------------------------------------------------------------
Monthly...................................  $0.92 per kilowatt.
Weekly....................................  0.230 per kilowatt.
Daily.....................................  0.0418 per kilowatt.
Hourly....................................  0.00261 per kilowatt.
------------------------------------------------------------------------

2.2.2. Applicability of Charges for Non-Firm Point-to-Point 
Transmission Service
    Capacity charges for Non-Firm Point-to-Point Transmission Service 
are applied to quantities reserved under a Transmission Service 
Transaction, and do not include charges for Ancillary Services.
2.3. Network Integration Transmission Service Rates, Terms, and 
Conditions
2.3.1. Annual Revenue Requirement for Network Integration Transmission 
Service
    $10,869,400.
2.3.2. Monthly Revenue Requirement for Network Integration Transmission 
Service
    $905,800.
2.3.3. Net Capacity Available for Network Integration Transmission 
Service
    787,800 kilowatts.
2.3.4. Monthly Capacity Charge for Network Integration Transmission 
Service
    $1.15 per kilowatt of Network Load (charge derived from $905,800 / 
787,800 kilowatts).
2.3.5. Applicability of Charges for Network Integration Transmission 
Service
    Network Integration Transmission Service is available only for 
deliveries of non-Federal power and energy, and is applied to the 
Customer utilizing such service exclusive of any deliveries of Federal 
power and energy. The capacity on which charges for any particular 
Customer utilizing this service is determined on the greatest of (1) 
the highest metered demand at any particular point of delivery during a 
particular month, rounded up to the nearest whole megawatt, or (2) the 
highest metered demand recorded at such point of delivery during any of 
the previous 11 months, rounded up to the nearest whole megawatt.
    For a Customer taking Network Integration Transmission Service who 
is also taking delivery of Federal Power and Energy, the highest 
metered demand shall be determined by subtracting the energy scheduled 
for delivery of Federal Power and Energy for any hour from the metered 
demand for such hour.
    Secondary transmission Service for a Customer shall be limited 
during any month to the most recent highest metered demand on which 
such Customer is billed. Charges for Ancillary Services shall also be 
assessed.
2.3.6. Procedure for Determining SPP Open Access Transmission Tariff 
Network Integration Transmission Service Annual Revenue Requirement
    The SPP Open Access Transmission Tariff Network Integration 
Transmission Service Annual Revenue Requirement shall be based on the 
following formula which shall be calculated when a Customer transitions 
from a Service Agreement to an agreement for Network Integration 
Transmission Service under the SPP Open Access Transmission Tariff.

SPP NITS ARR = Southwestern's SPP Network Integration Transmission 
Service Annual Revenue Requirement, which is as follows:

[[Page 17793]]

(SPP NITS Capacity/Southwestern NITS Capacity) x Southwestern NITS ARR
with the factors defined as follows:

SPP NITS Capacity = The capacity on the System of Southwestern 
utilized for SPP Network Integration Transmission Service which 
shall be based on the currently approved Power Repayment Studies.
Southwestern NITS Capacity = Net Capacity Available for Network 
Integration Transmission Service on the System of Southwestern as 
specified in Section 2.3.3.
Southwestern NITS ARR = Southwestern's Annual Revenue Requirement 
for Network Integration Transmission Service as specified in Section 
2.3.1.
2.4. Interconnection Facilities Service Rates, Terms, and Conditions
2.4.1. Monthly Capacity Charge for Interconnection Facilities Service
    $1.15 per kilowatt.
2.4.2. Applicability of Capacity Charge for Interconnection Facilities 
Service
    Any Customer that requests an interconnection from Southwestern 
which, in Southwestern's sole judgment and at its sole option, does not 
provide commensurate benefits or compensation to Southwestern for the 
use of its facilities shall be assessed a capacity charge for 
Interconnection Facilities Service. For any month, charges for 
Interconnection Facilities Service shall be assessed on the greater of 
(1) that month's actual highest metered demand, or (2) the highest 
metered demand recorded during the previous eleven months, as metered 
at the interconnection. The use of Interconnection Facilities Service 
will be subject to power factor provisions as specified in this Rate 
Schedule. The interconnection customer shall also schedule and deliver 
Real Power Losses pursuant to the provisions of this Rate Schedule 
based on metered flow through the interconnection where Interconnection 
Facilities Services is assessed.
2.5. Transformation Service Rates, Terms, and Conditions
2.5.1. Monthly Capacity Charge for Transformation Service
    $0.86 per kilowatt will be assessed for capacity used to deliver 
energy at any point of delivery at which Southwestern provides 
transformation service for deliveries at voltages of 69 kilovolts or 
less from higher voltage facilities.
2.5.2. Applicability of Capacity Charge for Transformation Service
    Unless otherwise specified by contract, for any particular month, a 
charge for transformation service will be assessed on the greater of 
(1) that month's highest metered demand, or (2) the highest metered 
demand recorded during the previous 11 months, at any point of 
delivery. For the purpose of this Rate Schedule, the highest metered 
demand will be based on all deliveries, of both Federal and non-Federal 
energy, from the System of Southwestern, at such point during such 
month.
2.6. Ancillary Services Rates, Terms, and Conditions
2.6.1. Capacity Charges for Ancillary Services
    Ancillary service charges are per kilowatt of transmission capacity 
reserved in increments of service or invoiced in accordance with a 
Long-Term Firm Transmission Service Agreement or Network Transmission 
Service Agreement. One ancillary service, Reactive Supply and Voltage 
Control from Generation Sources Service, is invoiced for 
Interconnection Facilities Service per kilowatt of capacity.
2.6.1.1. Scheduling, System Control, and Dispatch Service

------------------------------------------------------------------------
             Service increment                     Capacity charge
------------------------------------------------------------------------
Monthly...................................  $0.17 per kilowatt
Weekly....................................  0.043 per kilowatt
Daily.....................................  0.0077 per kilowatt
Hourly....................................  0.00048 per kilowatt
------------------------------------------------------------------------

2.6.1.2. Reactive Supply and Voltage Control From Generation Sources 
Service

------------------------------------------------------------------------
             Service increment                     Capacity charge
------------------------------------------------------------------------
Monthly...................................  $0.10 per kilowatt
Weekly....................................  0.025 per kilowatt
Daily.....................................  0.0045 per kilowatt
Hourly....................................  0.00028 per kilowatt
------------------------------------------------------------------------

2.6.1.3. Regulation and Frequency Response Service

------------------------------------------------------------------------
             Service increment                     Capacity charge
------------------------------------------------------------------------
Monthly...................................  $0.0208 per kilowatt \1\
Weekly....................................  0.0052 per kilowatt \1\
Daily.....................................  0.00095 per kilowatt \1\
Hourly....................................  0.00006 per kilowatt \1\
------------------------------------------------------------------------
1 Plus the Regulation Purchased Adder as defined in Section 2.6.5 of
  this Rate Schedule.

2.6.1.4. Spinning Operating Reserve Service

------------------------------------------------------------------------
             Service increment                     Capacity charge
------------------------------------------------------------------------
Monthly...................................  $0.0208 per kilowatt
Weekly....................................  0.0052 per kilowatt
Daily.....................................  0.00095 per kilowatt
Hourly....................................  0.00006 per kilowatt
------------------------------------------------------------------------

2.6.1.5. Supplemental Operating Reserve Service

------------------------------------------------------------------------
             Service increment                     Capacity charge
------------------------------------------------------------------------
Monthly...................................  $0.0208 per kilowatt
Weekly....................................  0.0052 per kilowatt
Daily.....................................  0.00095 per kilowatt
Hourly....................................  0.00006 per kilowatt
------------------------------------------------------------------------

2.6.1.6. Energy Imbalance Service
    $0.0 per kilowatt for all reservation periods.
2.6.2. Availability of Ancillary Services
    Scheduling, System Control, and Dispatch Service and Reactive 
Supply and Voltage Control from Generation Sources Service are 
available for all transmission services in and from the System of 
Southwestern and shall be provided by Southwestern. Reactive Supply and 
Voltage Control from Generation Sources Service is also provided for 
Interconnection Facilities Service.
    Regulation and Frequency Response Service and Energy Imbalance 
Service are available only for deliveries of power and energy to load 
within Southwestern's Balancing Authority Area, and shall be provided 
by Southwestern, unless, subject to Southwestern's approval, they are 
provided by others.
    Spinning Operating Reserve Service and Supplemental Operating 
Reserve Service are available only for deliveries of power and energy 
generated by resources located within Southwestern's Balancing 
Authority Area and shall be provided by Southwestern, unless, subject 
to Southwestern's approval, they are provided by others.
2.6.3. Applicability of Charges for Ancillary Services
    Charges for all Ancillary Services are applied to the transmission 
capacity reserved or network transmission service taken by the Customer 
in accordance with the rates listed above when such services are 
provided by Southwestern. Reactive Supply and Voltage Control from 
Generation Sources Service is applied to the Interconnection Facilities 
Service capacity.
    The charges for Ancillary Services are considered to include 
Ancillary

[[Page 17794]]

Services for any Secondary Transmission Service, except in cases where 
Ancillary Services identified in Sections 2.6.1.3 through 2.6.1.6 of 
this Rate Schedule are applicable to a Transmission Service Transaction 
of Secondary Transmission Service, but are not applicable to the 
transmission capacity reserved under which Secondary Transmission 
Service is provided. When charges for Ancillary Services are applicable 
to Secondary Transmission Service, the charge for the Ancillary Service 
shall be the hourly rate applied to all energy transmitted utilizing 
the Secondary Transmission Service.
2.6.4. Provision of Ancillary Services by Others
    Customers for which Ancillary Services identified in Sections 
2.6.1.3 through 2.6.1.6 of this Rate Schedule are made available as 
specified above must inform Southwestern by written notice of the 
Ancillary Services which they do not intend to take and purchase from 
Southwestern, and of their election to provide all or part of such 
Ancillary Services from their own resources or from a third party. Such 
notice requirements also apply to requests for Southwestern to provide 
Ancillary Services when such services are available as specified above.
    Subject to Southwestern's approval of the ability of such resources 
or third parties to meet Southwestern's technical and operational 
requirements for provision of such Ancillary Services, the Customer may 
change the Ancillary Services which it takes from Southwestern and/or 
from other sources at the beginning of any month upon the greater of 60 
days written notice or upon the completion of any necessary equipment 
modifications necessary to accommodate such change; Provided, That, if 
the Customer chooses not to take Regulation and Frequency Response 
Service, which includes the associated Regulation Purchased Adder, the 
Customer must pursue these services from a different host Balancing 
Authority; thereby moving all metered loads and resources from 
Southwestern's Balancing Authority Area to the Balancing Authority Area 
of the new host Balancing Authority. Until such time as that meter 
reconfiguration is accomplished, the Customer will be charged for the 
Regulation and Frequency Response Service and applicable Adder then in 
effect. The Customer must notify Southwestern by July 1 of this choice, 
to be effective the subsequent calendar year.
2.6.5. Regulation Purchased Adder
    The Regulation Purchased Adder during the time period of January 1 
through December 31 of the current calendar year is based on the 
average annual use of energy from storage for Regulation and Frequency 
Response Service, based on Southwestern's studies, and Southwestern's 
estimated purchased power price for the corresponding year from the 
most currently approved Power Repayment Studies.
2.6.5.1. Applicability of Regulation Purchased Adder
    The replacement value of the estimated annual use of energy from 
storage for Regulation and Frequency Response Service shall be 
recovered by Customers located within Southwestern's Balancing 
Authority Area on a non-coincident peak ratio share basis, divided into 
twelve equal monthly payments, in accordance with the formula in 
Section 2.6.5.2.
    If the Regulation Purchased Adder is determined and applied under 
Southwestern's Rate Schedule P-23, then it shall not be applied here.
2.6.5.2. Procedure for Determining Regulation Purchased Adder
    Unless otherwise specified by contract, the Regulation Purchased 
Adder for an individual Customer shall be based on the following 
formula rate, calculated to include the replacement value of the 
estimated annual use of energy from storage by Southwestern for 
Regulation and Frequency Response Service.
RPA = The Regulation Purchased Adder for an individual Customer per 
month, which is as follows:
[(L Customer / L Total) x RP Total ] / 
12

with the factors defined as follows:

L Customer = The sum in MW of the following three factors:
(1) The Customer's highest metered load plus generation used to 
serve the Customer's load that is accounted for through a reduction 
in the Customer's metered load (referred to as `generation behind 
the meter') during the previous calendar year, and
(2) The Customer's highest rate of Scheduled Exports \1\ during the 
previous calendar year, and
(3) The Customer's highest rate of Scheduled Imports \1\ during the 
previous calendar year.
---------------------------------------------------------------------------

    \1\ Scheduled Exports and Scheduled Imports are transactions, 
such as sales and purchases respectively, which are in addition to a 
Customer's metered load that contribute to Southwestern's Balancing 
Authority Area need for regulation.
---------------------------------------------------------------------------

    L Total = The sum of all L Customer factors for all Customers 
that were inside Southwestern's Balancing Authority Area at the 
beginning of the previous calendar year in MW.
    RP Total = The ``net'' cost in dollars and cents based on 
Southwestern's estimated purchased power price for the corresponding 
year from the most currently approved Power Repayment Studies 
multiplied by the average annual use of energy from storage, as 
provided for in the table in Section 2.6.5, to support 
Southwestern's ability to regulate within its Balancing Authority 
Area. The ``net'' cost in dollars and cents shall be adjusted by 
subtracting the product of the quantity of such average annual use 
of energy from storage in MWh and Southwestern's highest rate in 
dollars per MWh for Supplemental Peaking Energy during the previous 
calendar year.

    For Customers that have aggregated their load, resources, and 
scheduling into a single node by contract within Southwestern's 
Balancing Authority Area, the individual Customer's respective 
Regulation Purchased Adder shall be that Customer's ratio share of the 
Regulation Purchased Adder established for the node. Such ratio share 
shall be determined for the Customer on a non-coincident basis and 
shall be calculated for the Customer from their highest metered load 
plus generation behind the meter.
2.6.6. Energy Imbalance Service Limitations
    Energy Imbalance Service is authorized for use only within a 
bandwidth of  1.5 percent of the actual requirements of the 
load at a particular point of delivery, for any hour, compared to the 
resources scheduled to meet such load during such hour. Deviations 
which are greater than  1.5 percent, but which are less 
than  2,000 kilowatts, are considered to be within the 
authorized bandwidth. Deviations outside the authorized bandwidth are 
subject to a Capacity Overrun Penalty.
    Energy delivered or received within the authorized bandwidth for 
this service is accounted for as an inadvertent flow and will be netted 
against flows in the future. The inadvertent flow in any given hour 
will only be offset with the flows in the corresponding hour of a day 
in the same category. Unless otherwise specified by contract, the two 
categories of days are weekdays and weekend days/North American 
Electric Reliability Corporation holidays, and this process will result 
in a separate inadvertent accumulation for each hour of the two 
categories of days. The hourly accumulations in the current month will 
be added to the hourly inadvertent balances from the previous month, 
resulting in a month-end balance for each hour.

[[Page 17795]]

    The Customer is required to adjust the scheduling of resources in 
such a way as to reduce the accumulation towards zero. It is recognized 
that the inadvertent hourly flows can be both negative and positive, 
and that offsetting flows should deter a significant accumulation of 
inadvertent. Unless otherwise specified by contract, in the event any 
hourly month-end balance exceeds 12 MWhs, the excess will be subject to 
Section 3.1 or Section 3.2 of this Rate Schedule, depending on the 
direction of the accumulation.
3. Non-Federal Transmission/Interconnection Facilities Service 
Penalties, Terms, and Conditions
3.1. Capacity Overrun Penalty
3.1.1. Penalty Charge for Capacity Overrun
    For each hour during which energy flows outside the authorized 
bandwidth, the Customer will be obliged to purchase such energy at the 
following rates:

------------------------------------------------------------------------
       Months associated with charge              Rate per kilowatt
------------------------------------------------------------------------
March, April, May, October, November,       $0.15
 December.
January, February, June, July, August,      0.30
 September.
------------------------------------------------------------------------

3.1.2. Applicability of Capacity Overrun Penalty
    Customers who receive deliveries within Southwestern's Balancing 
Authority Area are obligated to provide resources sufficient to meet 
their loads. Such obligation is not related to the amount of 
transmission capacity that such Customers may have reserved for 
transmission service to a particular load. In the event that a Customer 
underschedules its resources to serve its load, resulting in a 
difference between resources and actual metered load (adjusted for 
transformer losses as applicable) outside the authorized bandwidth for 
Energy Imbalance Service for any hour, then such Customer is subject to 
the Capacity Overrun Penalty.
3.2. Unauthorized Use of Energy Imbalance Service by Overscheduling of 
Resources
    In the event that a Customer schedules greater resources than are 
needed to serve its load, such that energy flows at rates beyond the 
authorized bandwidth for the use of Energy Imbalance Service, 
Southwestern retains such energy at no cost to Southwestern and with no 
obligation to return such energy.
3.3. Power Factor Penalty
3.3.1. Requirements Related to Power Factor
    Any Customer served from facilities owned by or available by 
contract to Southwestern will be required to maintain a power factor of 
not less than 95 percent and will be subject to the following 
provisions.
3.3.2. Determination of Power Factor
    The power factor will be determined for all Demand Periods and 
shall be calculated under the formula:
[GRAPHIC] [TIFF OMITTED] TN29AP25.001

with the factors defined as follows:

PF = The power factor for any Demand Period of the month.
kWh = The total quantity of energy which is delivered during such 
Demand Period to the point of delivery or interconnection in 
accordance with Section 3.3.4.
    rkVAh = The total quantity of reactive kilovolt-ampere-hours 
(kVARs) delivered during such Demand Period to the point of delivery 
or interconnection in accordance with Section 3.3.4.
3.3.3. Penalty Charge for Power Factor
    The Customer shall be assessed a penalty for all Demand Periods of 
a month where the power factor is less than 95 percent lagging. For any 
Demand Period during a particular month such penalty shall be in 
accordance with the following formula:

C = D x (0.95--LPF) x $0.15
with the factors defined as follows:

C = The charge in dollars to be assessed for any particular Demand 
Period of such month that the determination of power factor ``PF'' 
is calculated to be less than 95 percent lagging.
D = The Customer's demand in kilowatts at the point of delivery for 
such Demand Period in which a low power factor was calculated.
LPF = The lagging power factor, if any, determined by the formula 
``PF'' for such Demand Period.

    If C is negative, then C = zero (0).
3.3.4. Applicability of Power Factor Penalty
    The Power Factor Penalty is applicable to radial interconnections 
with the System of Southwestern. The total Power Factor Penalty for any 
month shall be the sum of all charges ``C'' for all Demand Periods of 
such month. No penalty is assessed for leading power factor. 
Southwestern, in its sole judgment and at its sole option, may 
determine whether power factor calculations should be applied to (i) a 
single physical point of delivery, (ii) a combination of physical 
points of delivery where a Customer has a single, electrically 
integrated load, (iii) or interconnections. The general criteria for 
such decision shall be that, given the configuration of the Customer's 
and Southwestern's systems, Southwestern will determine, in its sole 
judgment and at its sole option, whether the power factor calculation 
more accurately assesses the detrimental impact on Southwestern's 
system when the above formula is calculated for a single physical point 
of delivery, a combination of physical points of delivery, or for an 
interconnection as specified by an Interconnection Agreement.
    Southwestern, at its sole option, may reduce or waive Power Factor 
Penalties when, in Southwestern's sole judgment, low power factor 
conditions were not detrimental to the System of Southwestern due to 
particular loading and voltage conditions at the time the power factor 
dropped below 95 percent lagging.
4. Non-Federal Transmission/Interconnection Facilities Service 
Miscellaneous Rates, Terms, and Conditions
4.1. Real Power Losses
    Customers are required to self-provide all Real Power Losses for 
non-Federal energy transmitted by Southwestern on behalf of such 
Customers under the provisions detailed below.
    Real Power Losses are computed as four (4) percent of the total 
amount of non-Federal energy transmitted by Southwestern. The 
Customer's monthly Real Power Losses are computed each month on a 
megawatt-hour basis as follows:

ML = 0.04 x NFE

with the factors defined as follows:

ML = The total monthly loss energy, rounded to the nearest megawatt-
hour, to be scheduled by a Customer for receipt by Southwestern for 
Real Power Losses associated with non-Federal energy transmitted on 
behalf of such Customer; and
NFE = The amount of non-Federal energy that was transmitted by 
Southwestern on behalf of a Customer during a particular month.

    The Customer must schedule or cause to be scheduled to 
Southwestern, Real Power Losses for which it is responsible subject to 
the following conditions:
    4.1.1. The Customer shall schedule and deliver Real Power Losses 
back to Southwestern during the second month after they were incurred 
by Southwestern in the transmission of the Customer's non-Federal power 
and energy over the System of Southwestern

[[Page 17796]]

unless such Customer has accounted for Real Power Losses as part of a 
metering arrangement with Southwestern.
    4.1.2. On or before the twentieth day of each month, Southwestern 
shall determine the amount of non-Federal loss energy it provided on 
behalf of the Customer during the previous month and provide a written 
schedule to the Customer setting forth hour-by-hour the quantities of 
non-Federal energy to be delivered to Southwestern as losses during the 
next month.
    4.1.3. Real Power Losses not delivered to Southwestern by the 
Customer, according to the schedule provided, during the month in which 
such losses are due shall be billed by Southwestern to the Customer to 
adjust the end-of-month loss energy balance to zero (0) megawatt-hours 
and the Customer shall be obliged to purchase such energy at the 
following rates:

------------------------------------------------------------------------
       Months associated with charge           Rate per kilowatt-hour
------------------------------------------------------------------------
March, April, May, October, November,       $0.15
 December.
January, February, June, July, August,      0.30
 September.
------------------------------------------------------------------------

    4.1.4. Real Power Losses delivered to Southwestern by the Customer 
in excess of the losses due during the month shall be purchased by 
Southwestern from the Customer at a rate per megawatt-hour equal to 
Southwestern's rate per megawatt-hour for Supplemental Peaking Energy, 
as set forth in Southwestern's then-effective Rate Schedule for Hydro 
Peaking Power to adjust such hourly end-of-month loss energy balance to 
zero (0) megawatt-hours.

Rate Schedule EE-23
(Supersedes Rate Schedule EE-13)
Effective June 1, 2025

UNITED STATES DEPARTMENT OF ENERGY

SOUTHWESTERN POWER ADMINISTRATION

RATE SCHEDULE EE-23

WHOLESALE RATES FOR EXCESS ENERGY

Effective:

    During the period June 1, 2025, through September 30, 2027, in 
accordance with interim approval from Rate Order No. SWPA-87 issued by 
the Administrator on April 23, 2025, and pursuant to final approval by 
the Federal Energy Regulatory Commission.

Available:

    In the marketing area of Southwestern Power Administration 
(Southwestern), described generally as the States of Arkansas, Kansas, 
Louisiana, Missouri, Oklahoma, and Texas, furnished at such times and 
in such amounts as Southwestern determines to be available.

Applicable:

    To entities which, by contract, may purchase Excess Energy from 
Southwestern.

Character and Conditions of Service:

    Three-phase, alternating current, delivered at approximately 60 
Hertz, at the nominal voltage(s) and at the point(s) of delivery 
specified by contract.

Formula Rate:

    The charge for Excess Energy will be determined at the time of sale 
based on market rates, plus administrative costs. Transmission service 
for the delivery of Excess Energy shall be the sole responsibility of 
such customer purchasing Excess Energy.

[FR Doc. 2025-07350 Filed 4-28-25; 8:45 am]
BILLING CODE 6450-01-P