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Notice

Integrated System Power Rates

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Information about this document as published in the Federal Register.

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AGENCY:

Southwestern Power Administration, DOE.

ACTION:

Notice of public review and comment.

SUMMARY:

The Administrator, Southwestern Power Administration (Southwestern), has prepared Current and Revised 2009 Power Repayment Studies which show the need for an increase in annual revenues to meet cost recovery criteria. Such increased revenues are needed primarily to cover increased investments and replacements in hydroelectric generating facilities and increased operation and maintenance expenses. The Administrator has developed proposed Integrated System rates, which are supported by a rate design study, to recover the required revenues. The June 2009 Revised Study indicates that the proposed rates would increase annual system revenues approximately 10.8 percent from $160,255,300 to $177,586,158.

DATES:

The consultation and comment period will begin on the date of publication of this Federal Register notice and will end November 23, 2009. Upon request, a combined Public Information and Comment Forum (Forum) will be held in Tulsa, Oklahoma at 9 a.m. on October 7, 2009.

ADDRESSES:

The Forum will be held in Southwestern's offices, Room 1460, Williams Center Tower I, One West Third Street, Tulsa, Oklahoma 74103.

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FOR FURTHER INFORMATION CONTACT:

Mr. James K. McDonald, Assistant Administrator, Office of Corporate Operations, Southwestern Power Administration, U.S. Department of Energy, One West Third Street, Tulsa, Oklahoma 74103, (918) 595-6690, jim.mcdonald@swpa.gov.

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SUPPLEMENTARY INFORMATION:

Originally established by Secretarial Order No. 1865 dated August 31, 1943, Southwestern is an agency within the U.S. Department of Energy created by the Department of Energy Organization Act, Public Law 95-91 (1977). Southwestern markets power from 24 multi-purpose reservoir projects with hydroelectric power facilities constructed and operated by the U.S. Army Corps of Engineers. These projects are located in the states of Arkansas, Missouri, Oklahoma, and Texas. Southwestern's marketing area includes these States plus Kansas and Louisiana. The costs associated with the hydropower facilities of 22 of the 24 projects are repaid via revenues received under the Integrated System rates, as are those associated with Southwestern's transmission facilities, which consist of 1,380 miles of high-voltage transmission lines, 24 substations, and 46 microwave and VHF radio sites. Costs associated with the Sam Rayburn and Robert D. Willis Dams, two Corps of Engineers projects that are isolated hydraulically, electrically, and financially from the Integrated System are repaid under separate rate schedules and are not addressed in this notice.

Following Department of Energy guidelines, Southwestern, prepared a Current Power Repayment Study (“Study”) using existing system rates. (The guidelines for preparation of power repayment studies are included in DOE Order No. RA 6120.2, entitled Power Marketing Administration Financial Reporting). The Study indicates that Southwestern's legal requirement to repay the investment in power generating and transmission facilities for power and energy marketed by Southwestern will not be met without an increase in revenues. The need for increased revenues is primarily due to increased investments and replacements in hydroelectric generating facilities for the U.S. Army's Corps of Engineers (Corps) and increased operations and maintenance costs for both Southwestern and the Corps. The Revised Power Repayment Study shows that additional annual revenues of $17,330,858 (a 10.8 percent increase) are needed to satisfy repayment criteria.

A Rate Design Study has also been completed which allocates the revenue requirement to the various system rate schedules for recovery, and provides for Start Printed Page 48528transmission service rates in general conformance with F.E.R.C. Order Nos. 888 and 888 (A-C). The proposed new rates would increase estimated annual revenues from $160,255,300 to $177,586,158 and would satisfy the present financial criteria for repayment of the project and transmission system investments within the required number of years. As indicated in the Integrated System Rate Design Study, this revenue would be developed primarily through increases in the charges for power sales capacity and energy and transmission services, to include some of the ancillary services for deliveries of both Federal and non-Federal power and associated energy from the transmission system of Southwestern.

A second component of the Integrated System rates for power and energy, the Purchased Power Adder (PPA), produces revenues which are segregated to cover the cost of power purchased to meet contractual obligations. The PPA is established to reflect what is expected to be needed by Southwestern to meet purchased power needs on an average annual basis. Southwestern proposes that the PPA rate will remain the same. This rate reflects present market rates as applied to our projected power needs. Also, the Administrator's authority to adjust the PPA at his or her discretion with the Purchased Power Adder Adjustment (PPAA) will remain the same which limits the adjustments to two per year not to exceed ± 6.7 mills per kilowatthour per year. The Administrator will use this discretion to reduce the current PPAA (4.5 mills per kilowatthour) to zero effective January 1, 2010. The Administrator will also have (with this discretion) another opportunity to implement a change to the PPAA up to the limit of ± 6.7 mills per kilowatthour per year to ensure recovery of purchased power costs. (The Administrator's discretionary authority to adjust the PPA with the PPAA, no more than twice annually, not to exceed ± 6.7 mills per kilowatthour per year, was approved by the Federal Energy Regulatory Commission in the United States Department of Energy—Southwestern Power Administration (Integrated System) 118 F.E.R.C. ¶ 62,162 (2007)).

A new component for regulation service has been proposed to the existing rate schedules to include an adder for the requirement of supplying regulation service to those customers inside the Balancing Authority Area. This Regulation Purchased Adder is being proposed so that all users of regulation service within the Balancing Authority Area are appropriately assessed for their consumption of the service that is purchased to supplement the Federal resource used to support the Balancing Authority's requirement to regulate for loads. A copy of the proposed Regulation Purchased Adder language contained within the proposed Rate Schedules can be requested from Mr. James K. McDonald at the address listed above.

Below is a general comparison of the existing and proposed system rates:

Existing ratesProposed rates
Generation ratesRate Schedule P-06A (System Peaking)Rate Schedule P-09 (System Peaking)
Capacity:
Grid or 138-161kV$3.51/kW/Mo$4.06/kW/Mo.
Required Ancillary Services (generation in control area)$0.10/kW/Mo$0.11/kW/Mo.
Regulation & Freq. Response (generation in control area)$0.09/kW/Mo$0.09/kW/Mo.
Regulation Purchased Adder (load within SWPA BA)prorata share of total energy cost.
Reserve Ancillary Services (generation in control area)$0.0184/kW/Mo$0.0184/Kw/Mo.
Transformation Service 69 kV (applied to usage, not reservation$0.30/kW/Mo$0.42/kW/Mo.
Energy:
Peaking Energy$0.0082/kW/Mo$0.0086/kW/Mo.
Supplemental Peaking Energy$0.0082/kW/Mo$0.0086/kW/Mo.
Purchased Power Adder$0.0067$0.0067.
Administrator's Discretionary Adder Adjustment Limit±$0.0067 annually±$0.0067 annually.
Transmission ratesRate Schedule NFTS-06A (Transmission)Rate Schedule NFTS-09 (Transmission)
Capacity (Firm Reservation with energy):
Grid or 138-161 kV$0.095/kW/Mo, $0.238/kW/Week, $0.432/kW/Day$1.18/kW/Mo, $0.295/kW/Week, $0.0536/kW/Day.
Required Ancillary Services (generation in control area)$0.10/kW/Mo, or $0.025/kW/Week, or $0.0045/kW/Day$0.11/kW/Mo, or $0.028/kW/Week, or $0.005/kW/Day.
Reserve Ancillary Services (generation in control area)$0.0184/kW/Mo, or $0.0046/kW/Week, or $0.00084/kW/Day$0.0184/kW/Mo, or $0.0046/kW/Week, or $0.00084/kW/Day.
Regulation & Freq Response (deliveries within control area)$0.09/kW/Mo, or $0.023/kW/Week, or $0.0041/kW/Day$0.09/kW/Mo, or $0.023/kW/Week, or $0.0041/kW/Day.
Transformation Service 69 kV and below (applied on usage, not reservation) Weekly and daily rates not applied$0.03/kW/Mo$0.42/kW/Mo.
Capacity (Non-firm with energy)No capacity charge, 80% of firm monthly charge divided by 4 for weekly rate, divided by 22 for daily rate, and divided by 352 for hourly rateNo capacity charge, 80% of firm monthly charge divided by 4 for weekly rate, divided by 22 for daily rate, and divided by 352 for hourly rate.
Network Service$0.95/kW/Mo$1.18/kW/Mo.
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Required Ancillary Services$0.10/kW/Mo$0.11/kW/Mo.
Reserve Ancillary Services (generation in control area)$0.00184/kW/Mo$0.00184/kW/Mo.
Regulation & Freq Response (deliveries within control area)$0.09/kW/Mo$0.09/kW/Mo.
Excess energy ratesRate Schedule EE-06 (Excess Energy)Rate Schedule EE-09 (Excess Energy)
Energy$0.0082/kWh$0.0086/kW/h.

Opportunity is presented for Southwestern's customers and other interested parties to receive copies of the Integrated System Studies. If you desire a copy of the Integrated System Power Repayment Studies and Rate Design Study Data Package, submit your request to Mr. James K. McDonald, Assistant Administrator, Office of Corporate Operations, Southwestern Power Administration, One West Third, Tulsa, OK 74103 or (918) 595-6690, jim.mcdonald@swpa.gov.

Procedures for Public Participation in Power and Transmission Rate Adjustments of the Power Marketing Administrations are found at title 10, part 903, subpart A of the Code of Federal Regulations (10 CFR 903). A Public Information and Comment Forum is tentatively scheduled for October 7, 2009, to explain to the public the proposed rates and supporting studies and to allow for comment. A chairman, who will be responsible for orderly procedure, will conduct the Forum if a Forum is requested. Questions concerning the rates, studies, and information presented at the Forum will be answered, to the extent possible, at the Forum. Questions not answered at the Forum will be answered in writing, except that questions involving voluminous data contained in Southwestern's records may best be answered by consultation and review of pertinent records at Southwestern's offices.

Persons desiring to attend the Forum should indicate in writing (address cited above) by letter, e-mail or facsimile transmission (918-595-6656) by October 1, 2009, their intent to appear at such Forum. If no one so indicates his or her intent to attend, no such Forum will be held. Persons interested in speaking at the Forum should submit a request to Mr. James K. McDonald, Assistant Administrator, Southwestern, at least seven (7) calendar days prior to the Forum so that a list of forum participants can be developed. The chairman may allow others to speak if time permits.

A transcript of the Forum will be made. Copies of the transcript may be obtained, for a fee, from the transcribing service. Copies of all documents introduced will also be available from the transcribing service upon request for a fee. If you desire a copy of the transcript or any documents introduced, submit your request to Mr. James K. McDonald, Assistant Administrator, Office of Corporate Operations, Southwestern Power Administration, One West Third, Tulsa, OK 74103 or (918) 595-6690, jim.mcdonald@swpa.gov.

A copy of all written comments or an electronic copy in MS Word on the proposed Integrated System Rates is due on or before November 23, 2009. Comments should be submitted to Mr. James K. McDonald, Assistant Administrator, Southwestern, at the above-mentioned address for Southwestern's offices.

Following review of the oral and written comments and the information gathered in the course of the proceeding, the Administrator will submit the finalized Integrated System Rate Proposal, Power Repayment Studies, and Rate Design Study in support of the proposed rates to the Deputy Secretary of Energy for confirmation and approval on an interim basis, and subsequently to the Federal Energy Regulatory Commission (Commission) for confirmation and approval on a final basis. (Procedures for the confirmation and approval of rates for the Federal Power Marketing Administrations are found at title 18, part 300, subpart L of the Code of Federal Regulations (18 CFR 300).) The Commission will allow the public an opportunity to provide written comments on the proposed rate increase before making a final decision.

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Dated: September 17, 2009.

Michael Brairton,

Deputy Assistant Administrator.

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[FR Doc. E9-22925 Filed 9-22-09; 8:45 am]

BILLING CODE 6450-01-P