E8-3108. Notice of Interim Approval

AGENCY:

Southeastern Power Administration, DOE.

ACTION:

Notice of rate extension.

SUMMARY:

The Deputy Secretary of Energy, confirmed and approved on an interim basis, 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. The rate schedules were approved on an interim basis through September 30, 2008. The new rates take effect on February 25, 2008, and are subject to confirmation and approval on a final basis by the Federal Energy Regulatory Commission.

DATES:

Approval of the rate schedules on an interim basis is effective February 25, 2008 through September 30, 2008.

FOR FURTHER INFORMATION CONTACT:

Leon Jourolmon, Assistant Administrator, Finance & Marketing, Southeastern Power Administration, Department of Energy, 1166 Athens Tech Road, Elberton, Georgia 30635-6711, [phone].

SUPPLEMENTARY INFORMATION:

On February 28, 2007, the Administrator of Southeastern Power Administration confirmed and approved Interim 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 for the period from February 25, 2007 to February 24, 2008. A copy of the February 28, 2007, Order is included in the Background Section. This order extends approval of these rate schedules to September 30, 2008.

Dated: February 5, 2008.

Clay Sell,

Deputy Secretary of Energy.

[Rate Order: No. SEPA-49]

In the Matter of:

Southeastern Power Administration Cumberland System Rates;

Order Confirming and Approving

Power Rates on an Interim Basis

Pursuant to Sections 302(a) and 301(b) of the Department of Energy Organization Act, Public Law 95-91, 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 Southeastern Power Administration (Southeastern) were transferred to and vested in the Secretary of Energy. By Delegation Order No. 0204-108, effective May 30, 1986, 51 FR 19744 (May 30, 1986), the Secretary of Energy delegated to Southeastern's Administrator the authority to develop power and transmission rates, delegated to the Under Secretary of Energy the authority to confirm, approve, and place in effect such rates on an interim basis, and delegated to the Federal Energy Regulatory Commission (FERC) the authority to confirm, approve, and place into effect on a final basis or to disapprove rates developed by the Administrator under the delegation. On December 6, 2001, the Secretary of Energy issued Delegation Order No. 00-037.00, granting the Deputy Secretary of Energy authority to confirm, approve, and place into effect Southeastern's rates on an interim basis. This rate order is issued by the Deputy Secretary pursuant to said notice.

Background

The Federal Energy Regulatory Commission issued an order approving Rate Schedules CBR-1-E, CSI-1-E, CEK-1-E, CM-1-E, CC-1-F, CK-1-E and SJ-1-B for the sale of power from the Cumberland System August 2, 2004 (108 FERC ¶ 62,113). These rates were approved for a period from October 1, 2003, to September 30, 2008. These rate schedules were predicated on a marketing policy that provides peaking capacity, along with 1500 hours of energy 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 has not been able to provide peaking capacity to these customers. An interim operating plan for the Cumberland System has provided these customers with energy that does not include capacity. Because the rate design incorporated in the existing rate schedules recovered all costs from capacity, new rate schedules were necessary to recover costs under the interim operating plan. Interim Wholesale Rate Schedules CBR-1-F, CSI-1-F, CEK-1-F, CM-1-F, CC-1-G, CK-1-F, and CTV-1-F were approved by the Administrator of Southeastern Power Administration on February 28, 2007 for a period ending February 24, 2008, unless the interim operating plan is revoked prior to such time.

Order for information purposes as signed by Southeastern's Administrator on February 28, 2007:

[Rate Order: No. SEPA-47] Southeastern Power Administration—Cumberland;

Order Confirming and Approving Power Rates for Short-Term Energy Sales on a Final Basis

Pursuant to Sections 302(a) and 301(b) of the Department of Energy Organization Act, Public Law 95-91, 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 Southeastern Power Administration (Southeastern), were transferred to and vested in the Secretary of Energy. By Delegation Order No. 00-037.00, effective December 6, 2001, the Secretary of Energy delegated to the Administrator the authority to develop and place into effect on a final basis rates for short-term sales of capacity, energy, or transmission service. Existing DOE procedures for public participation in power rate adjustments (10 CFR part 903) were published on September 18, 1985.

Background

Power from the Cumberland System is presently sold under wholesale rate schedules CBR-1-E, CSI-1-E, CEK-1-E, CM-1-E, CC-1-F, CK-1-E, CTV-1-E, and SJ-1-B. These rate schedules were approved by FERC on August 2, 2004 (108 FERC 62113). The existing rate schedules are predicated on a marketing policy that provides peaking capacity, along with 1500 hours of energy 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 will not be able to provide peaking capacity to these customers. An interim operating plan for the Cumberland System will provide these customers with energy that does not include capacity. Because the rate design incorporated in the existing rate schedules recovers all costs from capacity, new rate schedules are necessary to recover costs under the interim operating plan. Interim wholesale 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 to replace the present rate schedules while the interim operating plan is in effect for the Cumberland System. Should the interim operating plan become unnecessary prior to September 30, 2008, rate schedules CBR-1-E, CSI-1-E, CEK-1-E, CM-1-E, CC-1-F, CK-1-E, CTV-1-E, and SJ-1-B will return to service.

Public Notice and Comment

Existing DOE procedures for public participation in power rate adjustments are documented in 10 CFR part 903. Section 903.1(c) exempts short term sales of capacity, energy, and transmission from public participation.

Discussion

The interim rate schedules are based upon a repayment study submitted to FERC October 7, 2003 in support of the existing rate schedules. An update of this repayment study submitted to the Deputy Secretary, Department of Energy, on March 28, 2006, demonstrated that rates were adequate to meet repayment criteria as required by existing law and DOE Procedure RA 6120.2. The Administrator hereby certifies that the rates are consistent with applicable law and that they are the lowest possible rates to customers consistent with sound business principles.

Environmental Impact

Southeastern has reviewed the possible environmental impacts of the rate adjustment under consideration and has concluded that, because the adjusted rates would not significantly affect the quality of the human environment within the meaning of the National Environmental Policy Act of 1969, the proposed action is not a major Federal action for which an Environmental Impact Statement is required.

Availability of Information

Information regarding these rates, including studies and other supporting materials, is available for public review in the offices of Southeastern Power Administration, 1166 Athens Tech Road, Elberton, Georgia 30635.

Order

In view of the foregoing and pursuant to the authority delegated to me by the Secretary of Energy, I hereby confirm and approve, on a final basis, effective February 25, 2007, attached Interim 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. The Interim Rate Schedules shall remain in effect through February 24, 2008, unless the interim operating plan is revoked prior to such time.

Public Notice and Comment

Notice of proposed rate extension was published in the Federal Register October 24, 2007, (72 FR 60356). Written comments were accepted on or before November 23, 2007. No written comments were received.

Discussion

System Repayment

An examination of Southeastern's revised system power repayment study, prepared in December 2007, for the Cumberland System, shows that with the proposed rates, all system power costs are paid within the 50-year repayment period required by existing law and DOE Order RA 6120.2. The Administrator of Southeastern has certified that the rates are consistent with applicable law and that they are the lowest possible rates to customers consistent with sound business principles.

Environmental Impact

Southeastern has reviewed the possible environmental impacts of the rate adjustment under consideration and has concluded that, because the adjusted rates would not significantly affect the quality of the human environment within the meaning of the National Environmental Policy Act of 1969, the proposed action is not a major Federal action for which preparation of an Environmental Impact Statement is required. (10 CFR part 1021, subpart D, app. B4.3)

Availability of Information

Information regarding these rates, including studies, and other supporting materials is available for public review in the offices of Southeastern Power Administration, 1166 Athens Tech Road, Elberton, Georgia 30635-6711.

Submission to the Federal Energy Regulatory Commission

The rates hereinafter confirmed and approved on an interim basis, together with supporting documents, will be submitted promptly to FERC for confirmation and approval on a final basis, ending no later than September 30, 2008.

Order

In view of the foregoing and pursuant to the authority delegated to me by the Secretary of Energy, I hereby confirm and approve on an interim basis, effective February 25, 2008, attached Interim 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. The rate schedules shall remain in effect on an interim basis through September 30, 2008, unless such period is extended or until FERC confirms and approves them or substitute rate schedules on a final basis.

Dated: February 5, 2008.

Clay Sell

Deputy Secretary of Energy.

Interim Wholesale Power Rate Schedule CBR-1-F

Availability

This rate schedule shall be available to Big Rivers Electric Corporation and includes the City of Henderson, Kentucky (hereinafter called the Customer).

Applicability

This rate schedule shall be applicable to electric capacity and energy available from the Dale Hollow, Center Hill, Wolf Creek, Cheatham, Old Hickory, Barkley, J. Percy Priest and Cordell Hull Projects (all of such projects being hereinafter called collectively the “Cumberland Projects”) and sold in wholesale quantities.

Character of Service

The electric capacity and energy supplied hereunder will be three-phase alternating current at a nominal frequency of sixty hertz. The power shall be delivered at nominal voltages of 13,800 volts and 161,000 volts to the transmission system of Big Rivers Electric Corporation.

Points of Delivery

Capacity and energy delivered to the Customer will be delivered at points of interconnection of the Customer at the Barkley Project Switchyard, at a delivery point in the vicinity of the Paradise steam plant and at such other points of delivery as may hereafter be agreed upon by the Government and TVA.

Monthly Rate

The monthly rate for capacity and energy sold under this rate schedule shall be:

Demand Charge

None.

Energy Charge

12.16 mills per kilowatt-hour.

Transmission

The Customer will pay a ratable percent listed below of the credit the Administrator of Southeastern Power Administration (Administrator) provides to 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.

	Percent
Big Rivers Electric Corporation	32.660
City of Henderson, Kentucky	2.202

Energy To Be Furnished by the Government

The Customer will receive a ratable share of the energy made available by the Nashville District of the U. S. Army Corps of Engineers.

Billing Month

The billing month for power sold under this schedule shall end at 2400 hours CDT or CST, whichever is currently effective, on the last day of each calendar month.

Conditions of Service

The customer shall at its own expense provide, install, and maintain on its side of each delivery point the equipment necessary to protect and control its own system. In so doing, the installation, adjustment, and setting of all such control and protective equipment at or near the point of delivery shall be coordinated with that which is installed by and at the expense of TVA on its side of the delivery point.

Interim Wholesale Power Rate Schedule CSI-1-F

Availability

This rate schedule shall be available to Southern Illinois Power Cooperative (hereinafter the Customer).

Applicability

This rate schedule shall be applicable to electric capacity and energy available from the Dale Hollow, Center Hill, Wolf Creek, Cheatham, Old Hickory, Barkley, J. Percy Priest and Cordell Hull Projects (all of such projects being hereinafter called collectively the “Cumberland Projects”) and sold in wholesale quantities.

Character of Service

The electric capacity and energy supplied hereunder will be three-phase alternating current at a nominal frequency of sixty hertz. The power shall be delivered at nominal voltages of 13,800 volts and 161,000 volts to the transmission system of Big Rivers Electric Corporation.

Points of Delivery

Capacity and energy delivered to the Customer will be delivered at points of interconnection of the Customer at the Barkley Project Switchyard, at a delivery point in the vicinity of the Paradise steam plant and at such other points of delivery as may hereafter be agreed upon by the Government and TVA.

Monthly Rate

The monthly rate for capacity and energy sold under this rate schedule shall be:

Demand Charge

None.

Energy Charge

12.16 mills per kilowatt-hour.

Transmission Charge

The Customer will pay 5.138 percent of the credit the Administrator of Southeastern Power Administration (Administrator) provides to 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.

Energy To Be Furnished by the Government

The Customer will receive a ratable share of the energy made available by the Nashville District of the U. S. Army Corps of Engineers.

Billing Month

The billing month for power sold under this schedule shall end at 2400 hours CDT or CST, whichever is currently effective, on the last day of each calendar month.

Interim Wholesale Power Rate Schedule CEK-1-F

Availability

This rate schedule shall be available to East Kentucky Power Cooperative (hereinafter called the Customer).

Applicability

This rate schedule shall be applicable to electric capacity and energy available from the Dale Hollow, Center Hill, Wolf Creek, Cheatham, Old Hickory, Barkley, J. Percy Priest and Cordell Hull Projects (all of such projects being hereinafter called collectively the “Cumberland Projects”) and power available from the Laurel Project and sold in wholesale quantities.

Character of Service

The electric capacity and energy supplied hereunder will be three-phase alternating current at a nominal frequency of sixty hertz. The power shall be delivered at nominal voltages of 161,000 volts to the transmission systems of the Customer.

Points of Delivery

The points of delivery will be the 161,000 volt bus of the Wolf Creek Power Plant and the 161,000 volt bus of the Laurel Project. Other points of delivery may be as agreed upon.

Monthly Rate

The monthly rate for capacity and energy sold under this rate schedule shall be:

Demand Charge

None.

Energy Charge

12.16 mills per kilowatt-hour.

Transmission Charge

The Customer will pay 31.192 percent of the credit the Administrator of Southeastern Power Administration (Administrator) provides to 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.

Energy To Be Furnished by the Government

The Customer will receive a ratable share of the energy made available by the Nashville District of the U. S. Army Corps of Engineers.

Billing Month

The billing month for power sold under this schedule shall end at 2400 hours CDT or CST, whichever is currently effective, on the last day of each calendar month.

Conditions of Service

The customer shall at its own expense provide, install, and maintain on its side of each delivery point the equipment necessary to protect and control its own system. In so doing, the installation, adjustment and setting of all such control and protective equipment at or near the point of delivery shall be coordinated with that which is installed by and at the expense of TVA on its side of the delivery point.

Interim Wholesale Power Rate Schedule CM-1-F

Availability

This rate schedule shall be available to the South Mississippi Electric Power Association, Municipal Energy Agency of Mississippi, and Mississippi Delta Energy Agency (hereinafter called the Customers).

Applicability

This rate schedule shall be applicable to electric capacity and energy available from the Dale Hollow, Center Hill, Wolf Creek, Cheatham, Old Hickory, Barkley, J. Percy Priest and Cordell Hull Projects (all of such projects being hereinafter called collectively the “Cumberland Projects”) and sold in wholesale quantities.

Character of Service

The electric capacity and energy supplied hereunder will be three-phase alternating current at a nominal frequency of sixty hertz. The power shall be delivered at nominal voltages of 161,000 volts to the transmission systems of Mississippi Power and Light.

Points of Delivery

The points of delivery will be at interconnection points of the Tennessee Valley Authority system and the Mississippi Power and Light system. Other points of delivery may be as agreed upon.

Monthly Rate

The monthly rate for capacity and energy sold under this rate schedule shall be:

Demand Charge

None.

Energy Charge

12.16 mills per kilowatt-hour.

Transmission Charge

The Customer will pay a ratable percent listed below of the credit the Administrator of Southeastern Power Administration (Administrator) provides to 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.

	Percent
Mississippi Delta Energy Agency	2.058
Municipal Energy Agency of Mississippi	3.447
South Mississippi EPA	9.358

Energy To Be Furnished by the Government

The Customer will receive a ratable share of the energy made available by the Nashville District of the U. S. Army Corps of Engineers.

Billing Month

The billing month for power sold under this schedule shall end at 2400 hours CDT or CST, whichever is currently effective on the last day of each calendar month.

Interim Wholesale Power Rate Schedule CC-1-G

Availability

This rate schedule shall be available to public bodies and cooperatives served through the facilities of Carolina Power & Light Company, Western Division (hereinafter called the Customers).

Applicability

This rate schedule shall be applicable to electric capacity and energy available from the Dale Hollow, Center Hill, Wolf Creek, Cheatham, Old Hickory, Barkley, J. Percy Priest and Cordell Hull Projects (all of such projects being hereinafter called collectively the “Cumberland Projects”) and sold in wholesale quantities.

Character of Service

The electric capacity and energy supplied hereunder will be three-phase alternating current at a nominal frequency of sixty hertz. The power shall be delivered at nominal voltages of 161,000 volts to the transmission system of Carolina Power & Light Company, Western Division.

Points of Delivery

The points of delivery will be at interconnecting points of the Tennessee Valley Authority system and the Carolina Power & Light Company, Western Division system. Other points of delivery may be as agreed upon.

Monthly Rate

The monthly rate for capacity and energy sold under this rate schedule shall be:

Demand Charge

None.

Energy Charge

12.94 mills per kilowatt-hour.

TVA Transmission Charge

The Customer will pay a ratable percent listed below of the credit the Administrator of Southeastern Power Administration (Administrator) provides to 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.

	Percent
French Broad EMC	1.713
Haywood EMC	0.501
Town of Waynesville	0.355

CP&L Transmission Charge

The Customer will way a ratable percent listed below of the charge for transmission service furnished by Carolina Power & Light Company, Western Division.

	Percent
French Broad EMC	66.667
Haywood EMC	19.512
Town of Waynesville	13.821

Energy To Be Furnished by the Government

The Government will sell to the customer and the customer will purchase from the Government energy each billing month equivalent to a percentage specified by contract of the energy made available to Carolina Power & Light Company (less applicable losses). The Customer's contract demand and accompanying energy allocation will be divided pro rata among its individual delivery points served from the Carolina Power & Light Company's, Western Division transmission system.

Billing Month

The billing month for power sold under this schedule shall end at 2400 hours CDT or CST, whichever is currently effective, on the last day of each calendar month.

Interim Wholesale Power Rate Schedule CK-1-F

Availability

This rate schedule shall be available to public bodies served through the facilities of Kentucky Utilities Company, (hereinafter called the Customers.)

Applicability

This rate schedule shall be applicable to electric capacity and energy available from the Dale Hollow, Center Hill, Wolf Creek, Cheatham, Old Hickory, Barkley, J. Percy Priest and Cordell Hull Projects (all of such projects being hereinafter called collectively the “Cumberland Projects”) and sold in wholesale quantities.

Character of Service

The electric capacity and energy supplied hereunder will be three-phase alternating current at a nominal frequency of sixty hertz. The power shall be delivered at nominal voltages of 161,000 volts to the transmission systems of Kentucky Utilities Company.

Points of Delivery

The points of delivery will be at interconnecting points between the Tennessee Valley Authority system and the Kentucky Utilities Company system. Other points of delivery may be as agreed upon.

Monthly Rate

The monthly rate for capacity and energy sold under this rate schedule shall be:

Demand Charge

None.

Energy Charge

12.16 mills per kilowatt-hour.

Transmission Charge

The Customer will pay a ratable percent listed below of the credit the Administrator of Southeastern Power Administration (Administrator) provides to 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.

	Percent
City of Barbourville	0.404
City of Bardstown	0.412
City of Bardwell	0.099
City of Benham	0.046
City of Corbin	0.477
City of Falmouth	0.108
City of Frankfort	2.866
City of Madisonville	1.432
City of Nicholasville	0.469
City of Owensboro	4.587
City of Paris	0.250
City of Providence	0.226

Energy To Be Furnished by the Government

The Customer will receive a ratable share of the energy made available by the Nashville District of the U.S. Army Corps of Engineers.

Billing Month

The billing month for power sold under this schedule shall end at 2400 hours CDT or CST, whichever is currently effective on the last day of each calendar month.

Interim Wholesale Power Rate Schedule CTV-1-F

Availability

This rate schedule shall be available to the Tennessee Valley Authority (hereinafter called TVA).

Applicability

This rate schedule shall be applicable to electric capacity and energy generated at the Dale Hollow, Center Hill, Wolf Creek, Old Hickory, Cheatham, Barkley, J. Percy Priest, and Cordell Hull Projects (all of such projects being hereafter called collectively the “Cumberland Projects”) and the Laurel Project sold under agreement between the Department of Energy and TVA.

Character of Service

The electric capacity and energy supplied hereunder will be three-phase alternating current at a frequency of approximately 60 Hertz at the outgoing terminals of the Cumberland Projects' switchyards.

Monthly Rates

The monthly rate for capacity and energy sold under this rate schedule shall be:

Demand Charge

None.

Energy Charge

11.92 mills per kilowatt-hour.

Energy To Be Made Available

The Customer will receive a ratable share of the energy made available by the Nashville District of the U.S. Army Corps of Engineers.

Billing Month

The billing month for capacity and energy sold under this schedule shall end at 2400 hours CDT or CST, whichever is currently effective, on the last day of each calendar month.

Power Factor

TVA shall take capacity and energy from the Department of Energy at such power factor as will best serve TVA's system from time to time; provided, that TVA shall not impose a power factor of less than .85 lagging on the Department of Energy's facilities which requires operation contrary to good operating practice or results in overload or impairment of such facilities.