[Federal Register Volume 60, Number 200 (Tuesday, October 17, 1995)]
[Notices]
[Pages 53785-53789]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-25687]
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DEPARTMENT OF ENERGY
Stampede Division, Washoe Project Notice of Rate Order No. WAPA-
67
AGENCY: Western Area Power Administration, DOE.
ACTION: Notice of rate order.
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[[Page 53786]]
SUMMARY: Notice is given of the confirmation and approval by the Deputy
Secretary of the Department of Energy (DOE) of Rate Order No. WAPA-67
and Rate Schedule SNF-4 placing the revised nonfirm energy rates for
energy from the Stampede Division, Washoe Project (Stampede) of the
Western Area Power Administration (Western) into effect on an interim
basis. These rates are the interim rates, called the provisional rates,
and they will remain in effect on an interim basis until the Federal
Energy Regulatory Commission (FERC) confirms, approves, and places them
into effect on a final basis or until they are replaced by other rates.
Western has executed agreements with the Sierra Pacific Power
Company (Sierra), the U.S. Department of the Interior, Fish and
Wildlife Service (FWS) and the U.S. Department of the Interior, Bureau
of Reclamation (Reclamation) to provide service to project use
facilities. The costs associated with such service will be
nonreimbursable, and will not be recovered through the power revenues.
The remaining reimbursable costs and the energy remaining after meeting
project use service are used to calculate the cost recovery rate. This
rate ensures payment of all reimbursable expenses and investments
within the required time frames. The cost recovery rate is above the
current market price for nonfirm energy.
Under Rate Schedule SNF-4, nonfirm energy that is available after
project use service has been met will be sold at a rate that is equal
to or higher than the Stampede Energy Exchange Account (SEEA) rate but
no greater than the cost recovery rate. Rate Schedule SNF-4 provides
the formulae to determine the SEEA and cost recovery rates for Stampede
nonfirm energy. These formulae are:
The SEEA rate will be 85 percent of the then-effective non-time
differentiated rate as provided in Sierra's California Quarterly
Short-Term Purchase Price Schedule for As-Available Purchases from
Qualifying Facilities with Capacities of 100 kilowatts or less.
The cost recovery rate is calculated by dividing the revenue
requirement needed to repay all reimbursable power costs by the
nonfirm energy remaining after meeting project use service.
A comparison of existing and provisional rates follows:
----------------------------------------------------------------------------------------------------------------
Existing rate as of July Provisional rate October Percentage of
1, 1994 1, 1995 change
----------------------------------------------------------------------------------------------------------------
Rate Schedule............................ SNF-3 SNF-4
Floor (SEEA) Rate (mills/kWh)............ 27.69 19.26* -30.44
Ceiling (Cost Recovery) Rate (mills/kWh). 67.39 80.44** 19.36
----------------------------------------------------------------------------------------------------------------
*The average SEEA rate for FY 1995.
**The estimated cost recovery rate for FY 1996 through FY 2000.
Under the existing rate schedule, Stampede nonfirm energy is sold
through an annual bidding process on a short-term nonfirm basis. A
floor and ceiling rate for the bidding process is calculated each year.
The floor rate is based on annual operation and maintenance expenses
plus two mills per kilowatthour, and the ceiling rate is the rate
required to repay annual expenses and investment within the required
time frames.
DATES: Rate Schedule SNF-4 will be placed into effect on an interim
basis on October 1, 1995, and will be in effect until FERC confirms,
approves, and places the rate schedule in effect on a final basis, or
until the rate schedule is superseded.
FOR FURTHER INFORMATION CONTACT:
Mr. James C. Feider, Area Manager, Sacramento Area Office, Western Area
Power Administration, 114 Parkshore Drive, Folsom, CA 95630, (916) 353-
4418
Mr. Joel Bladow, Assistant Administrator for Washington Liaison,
Western Area Power Administration, Room 8G-027, Forrestal Building,
1000 Independence Avenue SW., Washington, DC 20585-0001, (202) 586-
5581.
SUPPLEMENTARY INFORMATION: By Amendment No. 3 to Delegation Order No.
0204-108, published November 10, 1993 (58 FR 59716), the Secretary of
Energy (Secretary) delegated (1) the authority to develop long-term
power and transmission rates on a nonexclusive basis to the
Administrator of Western; (2) the authority to confirm, approve, and
place such rates into effect on an interim basis to the Deputy
Secretary; and (3) the authority to confirm, approve, and place into
effect on a final basis, to remand, or to disapprove such rates to
FERC. Existing DOE procedures for public participation in power rate
adjustments are contained in 10 CFR Part 903.
These power rates were developed pursuant to section 302(a) of the
DOE Organization Act, 42 U.S.C. 7152(a), through which the power
marketing functions of the Secretary of the Interior and Reclamation
under the Reclamation Act of 1902, 43 U.S.C. 371 et seq., as amended
and supplemented by subsequent enactments, particularly section 9(c) of
the Reclamation Project Act of 1939, 43 U.S.C. Sec. 485h(c), and other
acts specifically applicable to the project involved, were transferred
to and vested in the Secretary.
Under Western's contract with Sierra, all Stampede nonfirm energy
is debited to the SEEA, at the SEEA rate. The cost of project use
service is then credited to the SEEA. Power remaining after meeting
project use service will be offered to other entities, giving priority
to preference customers, through an annual bidding process. Bids will
be accepted only if the bid rate is equal to or higher than the SEEA
rate, and less than the cost recovery rate. If no bid meets this
criteria, the nonfirm energy will be deemed sold to Sierra at the SEEA
rate.
If the SEEA arrangements with Sierra are terminated, Western will
offer all available nonfirm energy for sale at the cost recovery rate,
or the highest rate bid that is below the cost recovery rate.
Stampede power costs associated with providing project use service
are nonreimbursable pursuant to Public Law 84-858 (70 Stat. 777) and
Public Law 101-618 (104 Stat. 3289) and are not recovered through power
revenues. The amount of the annual nonreimbursable costs is calculated
by multiplying the total annual power costs by a ratio of the cost of
providing project use service to the revenues from Stampede generation
as recorded in the SEEA. The remaining reimbursable costs and energy
remaining after project use service has been provided are used to
calculate the cost recovery rate. The power repayment study and other
analyses indicate the revised cost
[[Page 53787]]
recovery rate provides sufficient revenue to pay all reimbursable
annual costs including interest expense, plus repayment of required
investment within the allowable time period.
Rate Order No. WAPA-67 confirming, approving, and placing the
proposed Stampede rate adjustment into effect on an interim basis, is
issued, and the new Rate Schedule SNF-4 will be submitted promptly to
FERC for confirmation and approval on a final basis.
Issued in Washington, DC, September 29, 1995.
Charles B. Curtis,
Deputy Secretary.
Department of Energy Deputy Secretary
In the matter of: Western Area Power Administration Rate
Adjustment for Stampede Division, Washoe Project.
[Rate Order No. WAPA-67]
Order Confirming, Approving and Placing the Stampede Division, Washoe
Project Nonfirm Power Rates Into Effect on an Interim Basis
October 1, 1995.
These power rates were developed pursuant to section 302(a) of the
Department of Energy (DOE) Organization Act, 42 U.S.C. 7152(a), through
which the power marketing functions of the Secretary of the Interior
and the Bureau of Reclamation (Reclamation) under the Reclamation Act
of 1902, 43 U.S.C. 371 et seq., as amended and supplemented by
subsequent enactments, particularly section 9(c) of the Reclamation
Project Act of 1939, 43 U.S.C. 485h(c), and other acts specifically
applicable to the project involved, were transferred to and vested in
the Secretary of Energy (Secretary).
By Amendment No. 3 to Delegation Order No. 0204-108, published
November 10, 1993 (58 FR 59716), the Secretary delegated (1) the
authority to develop long-term power and transmission rates on a
nonexclusive basis to the Administrator of the Western Area Power
Administration (Western); (2) the authority to confirm, approve, and
place such rates into effect on an interim basis to the Deputy
Secretary; and (3) the authority to confirm, approve, and place into
effect on a final basis, to remand, or to disapprove such rates to the
Federal Energy Regulatory Commission (FERC). Existing DOE procedures
for public participation in power rate adjustments are contained in 10
CFR Part 903.
Acronyms and Definitions
As used in this rate order, the following acronyms and definitions
apply:
DOE: U.S. Department of Energy
DOE Order RA 6120.2: A Department of Energy order dealing with power
marketing administration financial reporting.
FERC: Federal Energy Regulatory Commission
FWS: U.S. Department of the Interior, Fish and Wildlife Service
FY: Fiscal Year
kW: Kilowatt
kWh: Kilowatthour
mills/kWh: Mills per kilowatthour
PRS: Power repayment study
Reclamation: U.S. Department of the Interior, Bureau of Reclamation
SEEA: Stampede Energy Exchange Account
Sierra: Sierra Pacific Power Company
Stampede: Stampede Division, Washoe Project
Western: U.S. Department of Energy, Western Area Power Administration
Effective Date
The rates will become effective on an interim basis on October 1,
1995, and will be in effect pending FERC's approval of them or
substitute rates on a final basis for a 5-year period, or until
superseded.
Public Notice and Comment
The Procedures for Public Participation in Power and Transmission
Rate Adjustments and Extensions, 10 CFR Part 903, have been followed by
Western in the development of these nonfirm power rates. Stampede is a
power system which normally has annual sales less that 100 million kWh
and an installed capacity of less than 20,000 kW; therefore this rate
adjustment constitutes a minor rate adjustment as defined by 10 CFR
Part 903.2(f). Since this is a minor rate adjustment, no public
meetings were scheduled; however, Western accepted comments from
interested parties.
The following summarizes the steps Western took to allow
involvement of interested parties in the rate process:
1. A Federal Register notice was published on June 5, 1995 (60 FR
29586), officially announcing the proposed nonfirm power rate
adjustment, initiating the public consultation and comment period.
2. On June 14, 1995 a letter was mailed from Western's Sacramento
Area Office to all interested parties announcing the publication of the
Federal Register notice on June 5, 1995.
3. On June 15, 1995 a rate adjustment brochure was available to all
interested parties upon request.
4. The comment period ended on July 5, 1995; no comments or
requests for information were received during the comment period.
Project History
The Stampede Dam was authorized under the Washoe Project Act of
August 1, 1956 (70 Stat. 775). Power facilities were not constructed
when Stampede Dam was built because the power function was determined
not economically justified at the time. A re-evaluation of a powerplant
at Stampede was conducted and published in a special Reclamation
report, Adding Powerplants at Existing Federal Dams in California, in
July 1976. Reclamation recommended construction of the Stampede
powerplant, and construction was completed in 1987. Since 1988, energy
produced at the Stampede powerplant has been sold to the highest bidder
on a short-term nonfirm basis, as the preference entity, defined in the
marketing plan for Stampede power, has been unable to contract for
transmission from Stampede to their point of delivery. In addition, the
Stampede floor and ceiling rates calculated in accordance with the
existing rate schedule has been higher than the market rate for nonfirm
energy.
FWS facilities at Stampede were authorized by the Washoe Project
Act of August 1, 1956 (70 Stat. 775). Lahonton Fish Hatchery and the
Marble Bluff Fish Facility were designated as project use facilities by
Reclamation, but Western has been unable to provide project use service
because transmission service was not available. On April 1, 1994
Western executed Contract No. 94-SAO-00010 with Sierra which
established the SEEA and provides Western the mechanism necessary to
provide project use power to FWS. Western entered into an agreement
with FWS for project use service on June 29, 1994. Subsequently, on
December 19, 1994, Western and Reclamation entered into Letter of
Agreement No. 94-SAO-00036 which provides the method to determine the
percentage of the annual costs of Stampede operation, maintenance,
interest expense and capital cost repayment associated with providing
project use service to be nonreimbursable. Nonreimbursable costs are
not recovered through power revenues. The nonreimbursable costs are
based on the ratio of the annual cost of project use service to the
total annual revenue recorded in the SEEA from Stampede nonfirm energy.
This percentage has been applied to all current and future year costs
in the Stampede PRS.
[[Page 53788]]
Power Repayment Studies
A PRS is prepared each year to determine if power revenues will be
sufficient to pay, within the prescribed time periods, all reimbursable
costs assigned to the power function. Repayment criteria are based on
law, policies, and authorizing legislation. DOE Order RA 6120.2,
section 12b, requires that:
In addition to the recovery of the above costs (operation and
maintenance and interest expenses) on a year-by-year basis, the
expected revenues are at least sufficient to recover (1) each dollar
of power investment at Federal hydroelectric generating plants
within 50 years after they become revenue producing, except as
otherwise provided by law; (2) each annual increment of Federal
transmission investment within the average service life of such
transmission facilities or within a maximum of 50 years, whichever
is less; plus, (3) the cost of each replacement of a unit of
property of a Federal power system within its expected service life
up to a maximum of 50 years.
Existing and Provisional Rates
A comparison of the existing and provisional rates follows:
Comparison of Existing and Provisional Rates
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Percentage
Existing rate as of July 1, 1994 Provisional rate October 1, 1995 of change
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Rate Schedule................ SNF-3............................ SNF-4............................ ...........
Floor (SEEA) Rate (mills/kWh) 27.69............................ 19.26*........................... -30.44
Ceiling (Cost Recovery) Rate 67.39............................ 80.44**.......................... 19.36
(mills/kWh).
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*The average SEEA rate for FY 1995.
**The estimated cost recovery rate for FY 1996 through FY 2000.
The formula for the SEEA rate is:
The SEEA rate will be 85 percent of the then-effective non-time-
differentiated rate as provided in Sierra's California Quarterly Short-
Term Purchase Price Schedule for As- Available Purchases from
Qualifying Facilities with Capacities of 100 kW or less.
The formula for the cost recovery rate is:
The cost recovery rate is calculated by dividing the revenue
requirement needed to repay all reimbursable power costs by the nonfirm
energy remaining after meeting project use service.
Under the existing rate schedule, Stampede nonfirm energy is sold
through an annual bidding process on a short-term nonfirm basis. A
floor and ceiling rate for the bidding process is calculated each year.
The floor rate is based on annual operation and maintenance expenses
plus two mills per kilowatthour, and the ceiling rate is the rate
required to repay annual expenses and investment within the required
time frames.
Certification of Rate
Western's Administrator has certified that the Stampede nonfirm
power rates placed into effect on an interim basis herein are the
lowest possible rates consistent with sound business principles. The
rates have been developed in accordance with administrative policies
and applicable laws.
Discussion
Sierra has agreed to purchase all Stampede generation at the SEEA
rate. The dollar value from these sales are debited to the SEEA. Bills
for project use service at Lahonton Fish Hatchery and Marble Bluff Fish
Facility are then credited to the SEEA. During April of each year, any
balance in the SEEA may be converted to an energy amount and offered to
other entities, with priority given to preference customers.
The energy remaining after meeting project use service is
calculated by dividing the dollar balance in the SEEA by 85 percent of
the then-effective time-differentiated rate as provided in Sierra's
California Quarterly Short-Term Purchase Price Schedule for As-
Available purchases from Qualifying Facilities with Capacities of 100
kW or less. Power remaining after meeting project use service will be
offered to interested parties and preference customers through an
annual bidding process. Bids will be accepted only if the bid rate is
equal to or higher than the SEEA rate and less than the cost recovery
rate. If no bid meets this criteria, the nonfirm energy will be deemed
sold to Sierra at the SEEA rate. If the SEEA arrangements with Sierra
are terminated, Western will offer all available nonfirm energy for
sale at the cost recovery rate, or the highest rate bid that is below
the cost recovery rate.
Western prepared a PRS which identified power related costs for the
study period. A percentage equal to the ratio of the estimated cost for
project use service to the estimated revenue from Stampede generation
recorded in the SEEA was applied to the power costs to determine the
amount of nonreimbursable cost. The remaining reimbursable cost and the
estimated energy remaining after meeting project use service were used
to determine the cost recovery rate necessary for repayment of
Stampede. The cost recovery rate was designed to allow repayment of the
reimbursable portion of the plant investment, operation and maintenance
expenses, capitalized deficits, interest expenses, and replacements
based on the nonfirm energy available for sale after project use
service has been met.
Statement of Revenue and Related Expenses
The following table provides a summary of revenue and expense data
through the 5-year proposed rate approval period.
Stampede Division, Washoe Project, 5-Year Rate Period, Revenues and
Expenses
------------------------------------------------------------------------
Rate case
PRS
reimbursable
revenue and
expenses
1996-2000*
------------------------------------------------------------------------
Revenues.................................................. $1,357,713
Expenses:
O&M..................................................... $324,749
Interest................................................ 900,120
Capitalized Expenses.................................... 132,844
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Total............................................... $1,357,713
------------------------------------------------------------------------
*Data reflects costs remaining to be repaid through power revenues after
applying nonreimbursable percentage.
Comments
During the 30-day comment period, Western did not receive any
written comments either requesting information or commenting on the
rate adjustment.
Environmental Evaluation
In compliance with the National Environmental Policy Act of 1969,
42 U.S.C. 4321 et seq.; Council on Environmental Quality Regulations
(40 CFR Parts 1500-1508); and DOE NEPA
[[Page 53789]]
Regulations (10 CFR Part 1021), Western has determined that this action
is categorically excluded from the preparation of an environmental
assessment or an environmental impact statement. A categorical
exclusion was issued on May 1, 1995.
Executive Order 12866
DOE has determined that this rate action is not a significant
regulatory action because it does not meet the criteria of Executive
Order 12866, 58 CFR 51735. Western 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.
Availability of Information
Information regarding this rate adjustment, including PRSs,
letters, memorandums, and other supporting material made or kept by
Western for the purpose of developing the nonfirm energy rate, is
available for public review in the Sacramento Area Office, Western Area
Power Administration, Office of the Assistant Area Manager for Power
Marketing, 114 Parkshore Drive, Folsom, California 95630; and Western
Area Power Administration, Office of the Assistant Administrator for
Washington Liaison, Room 8G-027 Forrestal Building, 1000 Independence
Avenue SW., Washington, DC 20585.
Submission to Federal Energy Regulatory Commission
The rates herein confirmed, approved, and placed into effect on an
interim basis, together with supporting documents, will be submitted to
FERC for confirmation and approval on a final basis.
Order
In view of the foregoing and pursuant to the authority delegated to
me by the Secretary of Energy, I confirm and approve on an interim
basis, effective October 1, 1995, Rate Schedule SNF-4 for the Stampede
Division, Washoe Project. The rate schedule shall remain in effect on
an interim basis, pending FERC confirmation and approval or a
substitute rate on a final basis, through September 30, 2000.
Issued in Washington, DC, September 29, 1995.
Charles B. Curtis,
Deputy Secretary.
Rate Schedule SNF-4
(Supersedes Schedule SNF-3)
United States Department of Energy, Western Area Power Administration,
Stampede Division, Washoe Project
Schedule of Rate for Nonfirm Energy
Effective: October 1, 1995, through September 30, 2000.
Available: Within the marketing area served by the Sacramento Area
Office.
Applicable: This rate is applicable to sales of nonfirm energy in
excess of project use service. Sales shall be subject to terms and
conditions among the respective entities specified at the time of sale.
Rate: The rate for nonfirm energy sales from Stampede will be equal
to or greater than the Stampede Energy Exchange Account (SEEA) rate and
less than the cost recovery rate. The SEEA rate is 85 percent of the
then-effective non-time-differentiated rate as provided in the Sierra
Pacific Power Company's California Quarterly Short-Term Purchase Price
Schedule for As-Available Purchases from Qualifying Facilities with
Capacities of 100 kilowatts or less.
The cost recovery rate is calculated by dividing the revenue
requirement needed to repay all annual reimbursable power costs by the
nonfirm energy remaining after providing project use service.
[FR Doc. 95-25687 Filed 10-16-95; 8:45 am]
BILLING CODE 6450-01-P
