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Cumberland System of Projects

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Southeastern Power Administration, DOE.


Notice of proposed rates, public forum, and opportunities for public review and comment.


Southeastern Power Administration (Southeastern) proposes to revise existing schedules of rates and charges applicable to the sale of power from the Cumberland System of Projects effective for a 5-year period, October 1, 2008, through September 30, 2013. Additionally, opportunities will be available for interested persons to review the rates and supporting studies and to submit written comments. Southeastern will evaluate all comments received in this process.


Written comments are due on or before July 10, 2008. A public information and comment forum will be held at 10 a.m., May 22, 2008. Persons desiring to speak at the forum should notify Southeastern at least three (3) days before the forum is scheduled, so that a list of forum participants can be prepared. Others may speak if time permits.


The forum will be held at the Holiday Inn Express, 920 Broadway, Nashville, Tennessee 37203, phone (615) 244-0150. Written comments should be submitted to: Administrator, Southeastern Power Administration, Department of Energy, 1166 Athens Tech Road, Elberton, GA 30635-6711.

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J. W. Smith, Southeastern Power Administration, Department of Energy, 1166 Athens Tech Road, Elberton, Georgia 30635, (706) 213-3800.

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The Deputy Secretary of Energy confirmed and approved on an interim basis on February 20, 2008, Wholesale Power Rate Schedules CBR-1-F, CSI-1-F, CEK-1-F, CM-1-F, CC-1-G, CK-1-F, and CTV-1-F applicable to Cumberland System of Projects power for a period ending September 30, 2008. Final approval by the Federal Energy Regulatory Commission (FERC) is pending.

Discussion: The marketing policy for the Cumberland System of Projects provides peaking capacity, along with 1500 hours of energy annually with each kilowatt of capacity, to customers outside the Tennessee Valley Authority (TVA) transmission system. Due to restrictions on the operation of the Wolf Creek Project imposed by the U.S. Army Corps of Engineers as a precaution to prevent failure of the dam, Southeastern is not able to provide peaking capacity to these customers. Southeastern implemented an interim operating plan for the Cumberland System to provide these customers with energy that did not include capacity. Because previous rate schedules recovered all costs from capacity and excess energy, Southeastern developed the interim rate schedules to recover costs under the interim operating plan. The interim rate schedules were approved by the Administrator under the Administrator's authority to develop and place into effect on a final basis rates for short-term sales of capacity, energy, or transmission service effective February 25, 2007. On February 20, 2008, the Deputy Secretary of Energy approved an extension of the interim rate schedules for a period from February 25, 2008 to September 30, 2008. The rate schedules have been forwarded to FERC with a request for approval on a final basis. An updated study, dated February 2008, shows that existing rates are adequate to recover all costs required by present repayment criteria.

Southeastern is proposing to include $19.7 million of replacements per year from FY 2008 to FY 2028, for a total of $394 million. Including this $394 million, the existing rates are not adequate to recover all costs. A revised repayment study with a revenue increase of $6,036,000 over the current study demonstrates that rates would be adequate to meet repayment criteria. The total revenue requirement is $52,350,000. The additional revenue requirement amounts to a 13 percent increase in revenues.

Southeastern is including three rate alternatives per rate schedule. All of the rate alternatives have a revenue requirement of $52,350,000, which includes the $6,036,000 increase in revenue.

The first set includes the rates necessary to recover costs under the interim operating plan. These rates are based on energy. The rate is 13.29 mills per kilowatt-hour for all Cumberland energy. The customers will pay a ratable share of the transmission credit the Administrator of Southeastern Power Administration (Administrator) provides the Tennessee Valley Authority (TVA) as consideration for delivering capacity and energy for the account of the Administrator to points of delivery of Other Customers or interconnection points of delivery with other electric systems for the benefit of Other Customers, as agreed by contract between the Administrator and TVA. This rate will remain in effect as long as Southeastern is unable to provide capacity due to the Corps' imposed restrictions on the operation of the Wolf Creek Project.

The second rate alternative will recover cost from capacity and energy. This will be in effect once the Corps raises the lake level at the Wolf Creek Project. When the lake level rises and capacity is available, the capacity will be allocated to the customers.

The third rate alternative is based on the original Cumberland Marketing Policy. All costs are recovered from capacity and excess energy. The rates under this alternative are as follows:

Cumberland System Rates

Capacity$1.996 per kw/month.
Additional Energy11.048 mills per kwh.
Outside Preference Customers (Excluding Customers served through Carolina Power & Light Company):
Capacity$3.462 per kw/month.
Energy11.048 mills per kwh.
Customers Served through Carolina Power & Light Company, Western Division:
Capacity$3.940 per kw/month.
Transmission$1.1522 per kw/month.
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These rates will go into effect once the Corps lifts the restrictions on the operation of the Wolf Creek Dam and the interim operating plan becomes unnecessary.

The referenced repayment studies are available for examination at 1166 Athens Tech Road, Elberton, Georgia 30635-6711. The Proposed Rate Schedules CBR-1-G, CSI-1-G, CEK-1-G, CM-1-G, CC-1-H, CK-1-G, and CTV-1-G are also available.

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Dated: March 31, 2008.

Leon Jourolmon,

Acting Administrator.

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[FR Doc. E8-7761 Filed 4-10-08; 8:45 am]