E7-20950. Cumberland System of Projects

AGENCY:

Southeastern Power Administration, DOE.

ACTION:

Notice of proposed rate extension and opportunities for public review and comment.

SUMMARY:

Southeastern Power Administration (Southeastern) proposes to extend existing schedules of rates and charges applicable to the sale of power from the Cumberland System of Projects to be effective for approximately a seven-month period, from February 25, 2008 to September 30, 2008. 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.

DATES:

Written comments are due on or before November 23, 2007.

ADDRESSES:

Written comments should be submitted to: Administrator, Southeastern Power Administration, Department of Energy, 1166 Athens Tech Road, Elberton, GA 30635-6711.

FOR FURTHER INFORMATION CONTACT:

Leon Jourolmon, Assistant Administrator, Finance & Marketing, Southeastern Power Administration, Department of Energy, 1166 Athens Tech Road, Elberton, Georgia 30635, [phone].

SUPPLEMENTARY INFORMATION:

The Administrator, by order issued February 28, 2007, confirmed and approved on a final basis 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 February 24, 2008.

Discussion: The marketing policy for the Cumberland System of Projects provides peaking capacity, along with 1500 hours of energy annually to some customers and 1800 hours of energy annually to other customers with each kilowatt of capacity, to customers outside the Tennessee Valley Authority (TVA) marketing area (Outside Customers). TVA also was allocated capacity but receives any energy not allocated to Outside Customers. The rates approved by the Federal Energy Regulatory Commission (the Commission) were designed to have a capacity charge that included 1500 hours of energy. In addition, the rates have an excess energy charge for energy in excess of the 1500 hours per kilowatt annually. 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 a failure of the dam, Southeastern is not able to provide peaking capacity to these customers. Southeastern has implemented an interim operating plan for the Cumberland System to provide these customers with energy that does not include schedulable capacity. Because the rate design incorporated in the previous rate schedules recovered all costs from capacity and excess energy, the interim rate schedules are necessary to recover costs under the interim operating plan.

The interim rate schedules superceded rate schedules approved on a final basis by the Commission on August 2, 2004 (108 FERC ¶62,113). These rates were approved for a period from October 1, 2003 to September 30, 2008. The interim rate schedules were approved by the Administrator on a final basis, under his authority to develop and place into effect rates for short-term sales of capacity, energy, or transmission service.

The existing interim rate schedules are based on a repayment study submitted to the Deputy Secretary on March 28, 2006. An updated study submitted to the Deputy Secretary on September 10, 2007, demonstrates that rates are adequate to meet repayment criteria as required by existing law and DOE Order RA 6120.2. Southeastern is proposing to extend the existing interim rate schedules for the period from February 25, 2008 to September 30, 2008.

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

Dated: October 15, 2007.

Jon C. Worthington,

Administrator.