[Federal Register Volume 59, Number 52 (Thursday, March 17, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-6259]
[[Page Unknown]]
[Federal Register: March 17, 1994]
-----------------------------------------------------------------------
DEPARTMENT OF ENERGY
Alaska Power Administration
Snettisham Surplus Power Marketing Plan
AGENCY: Alaska Power Administration, Department of Energy.
ACTION: Final surplus power marketing plan and call for application for
power.
-----------------------------------------------------------------------
SUMMARY: The final marketing plan for the sale of surplus energy from
the Snettisham Project is published herein together with a discussion
of the issues raised during the public comment process. Alaska Power
Administration (APA) published the Draft Surplus Power Marketing Plan
on January 7, 1994 (59 FR 1013), to start the process to establish
allocations of surplus energy and surplus energy sales contracts for
the Snettisham Project. The Marketing Plan is fully compatible with the
Department of Energy's legislative proposal for APA divestiture which
is currently undergoing Congressional consideration.
DATES: Applications for an allocation of surplus energy must be
received in APA's Headquarters Office by the close of business on May
6, 1994. See section II for further details.
ADDRESSES: Applications for an allocation of surplus energy should be
submitted to Mr. Michael Deihl, Alaska Power Administration, 2770
Sherwood Lane, Suite #2B, Juneau, AK 99801.
FOR FURTHER INFORMATION CONTACT: Mr. Scott Willis, Alaska Power
Administration, P.O. Box 020889, Juneau, AK 99802-0889, (907) 586-6963.
SUPPLEMENTARY INFORMATION:
Draft Surplus Marketing Plan--Snettisham Project
I. Background
APA published the Draft Surplus Power Marketing Plan in the Federal
Register on January 7, 1994 (FR 59 1013). A public information and
comment forum was held January 18, 1994. Written comments were accepted
until February 7, 1994. Two written comments were received. A
discussion of the comments is presented in section III.
APA has considered the comments received and is publishing herein
the Final Surplus Power Marketing Plan. This Federal Register notice
also formally invites requests for allocation of surplus energy in
accordance with the plan. Based on the provisions of the Plan, APA will
then allocate surplus energy and sign contracts with customers
receiving allocations.
An Environmental Assessment was prepared for these power marketing
activities and a Finding of No Significant Impact was issued by the
Department of Energy.
II. Application Procedures
APA formally invites requests for allocations of surplus energy
from the Snettisham Project from qualified applicants. Applicants
should advise APA's Administrator in writing of their requests. Written
requests must be received at the APA Headquarters Office at 2770
Sherwood Lane, Suite #2B, Juneau, AK 99801, by the close of business on
May 6, 1994. Applicants must identify the amount of energy desired.
III. Discussion of Public Comments and Summary of Revisions
APA received two written comments on the Draft Surplus Power
Marketing Plan. The points raised in the comments are discussed below.
1. Comment: As originally proposed, a ``major industrial load''
would have been one which was not currently a firm customer of AEL&P,
does not conduct utility type operations, and which has the capability
to meet its own energy requirement in the absence of Snettisham energy.
Both commentators objected to the definition excluding a potential
major industrial load, such as a mine, simply because it is presently a
firm customer of AEL&P for a small amount of firm energy used at an
office facility. They proposed that the definition be changed so as not
to preclude such loads.
One commentator suggested that the definition be strengthened as to
the requirement for being able to meet its own energy requirement. They
pointed out that a qualified load should be able to meet its own
baseload energy requirement rather than its peak requirements or its
requirement during intermittent curtailment of Snettisham energy.
Discussion: APA believes these suggestions clarify the intent of
the marketing plan. As revised, a major industrial load is one which
does not conduct utility-type operations and whose major load is not
currently served as a firm load by AEL&P. The major industrial load
must also have the capability to meet its own baseload energy
requirement in the long-term absence of Snettisham energy.
2. Comment: One commentator felt that there was apparently a
conflict between the provision in section C that ``entities receiving
an allocation of Snettisham resources will be offered an electric
service contract . . .'' and the provision in section B.3. that
``allocations will be made to AEL&P.'' They asked for clarification as
to whether a major industrial load would enter into a contract with
APA, with AEL&P, or with both.
Discussion: Potential surplus energy customers are encouraged to
work directly with AEL&P. In this case, AEL&P will make the request,
the allocation will be to AEL&P, and the contract will be between APA
and AEL&P. The major industrial customer and AEL&P will presumably have
their own contractual arrangements. As indicated in the plan, if
service through AEL&P is demonstrated to be infeasible, then APA will
consider an allocation and contract directly with the major industrial
customer.
3. Comment: The contracts for surplus energy should not only
include assurance that the allocation will continue after divestiture
with APA, but that the rates charged for energy will continue also.
Discussion: The contracts will contain language to assure that the
allocation continues, but will not contain language which binds the new
owner to a given rate structure. The existing purchase agreement for
Snettisham was negotiated to assure only that allocations would
continue, but that the new owner would set their own rates. The
contracts will not ``guarantee'' rates for APA, but will allow APA to
adjust rates within its own procedures and guidelines. This has been
clarified in the final plan.
4. Comment: The allocation reservation fee should be refundable to
the extent that allocated energy is not made available for taking
during the year.
Discussion: This has been clarified in the final plan.
5. Comment: APA should not allocate energy among competing
applicants by dividing it equally, but should be made some other way,
such as proportionate to the size of the requests, or by benefit to the
local economy, etc.
Discussion: There are any number of ways to allocate a limited
resource. APA expects that if there are competing requests for
allocation, they will all be in excess of the resource available and
they will all be based on estimates of future loads rather than
historic use. For this reason APA will divide the resource equally as
explained in the plan.
IV. Final Surplus Power Marketing Plan
A. Conditions for Allocation
Allocations of surplus energy will be made in accordance with the
provisions of the Marketing Plan. These provisions include:
1. No energy will be allocated for export outside the Juneau market
area (that is, the AEL&P service territory) without firm plans and
commitment to finance and build the necessary transmission facilities.
2. In allocating surplus energy, APA will give preference to public
bodies and cooperatives who conduct utility-type operations.
3. Surplus energy not allocated to preference customers may be
available to serve major industrial loads. For this marketing plan, a
major industrial load is one which does not conduct utility-type
operations and whose major load is not currently served as a firm load
by AEL&P. The major industrial load must also have the capability to
meet its own baseload energy requirement in the long-term absence of
Snettisham energy. Major industrial loads are encouraged to work
directly with AEL&P so that AEL&P can request an allocation to serve
their needs. In this case, allocations will be made to AEL&P. APA will
consider requests for direct service of major industrial loads only if
it is demonstrated that service through the utility is infeasible.
B. Contract Provisions
Entities receiving an allocation of Snettisham resources will be
offered an electric service contract which will include the following
provisions:
1. Contracts will be for a period of 20 years or less beginning at
contract execution. Contracts for less than 20 years may include an
option to extend the period up to a total length of 20 years. Contracts
will be compatible with the proposed APA divestiture. Contracts will
contain language guaranteeing the continuation of the allocation after
divestiture.
2. Surplus energy will be marketed at the Snettisham firm rate. The
rate is presently 3.21 cents/kwh and is subject to periodic review and
adjustment.
3. The contractor will be required to sign a contract within 270
days of APA's letter granting an allocation.
4. In order to reserve the allocation, the contractor will be
required to deposit 10% of the expected cost of the following year's
energy with APA. If the allocated energy is taken during the year, the
deposit will be credited toward the cost of the energy. To the extent
that energy is available for delivery, if the allocation is not
completely taken the deposit is non-refundable. In any year, energy
reserved in this way but not taken by the contractor may be marketed by
APA. In any case, an applicant must be ready, willing, and able to take
initial delivery of power by January 1, 1997 or the allocation will be
withdrawn and the energy reallocated.
5. If the contractor has not committed to a 20-year contract, the
contractor will be required to pay a one-time, non-refundable payment
within 30 days after contract execution. This payment will be based on
3% of the average estimated annual energy delivery during the years
between the end of the contract period and the 20-year period times
each year less than 20 years.
C. Amount Available for Allocation
Firm energy output (energy available 9 years out of 10) from the
Snettisham Project is estimated at 275 gwh/year. Secondary energy is
estimated to vary from 0 to 100 gwh/year and average around 50 gwh/
year. This invitation is for requests for allocation for energy that is
surplus to the needs of the Juneau community. An estimate of that need
is shown in the table below. Applicants must be aware that these are
only estimates and that the amount of energy required by the community
may vary from these projections. In the event that there are competing
requests from qualified applicants, the surplus energy will be divided
equally among the applicants up to their maximum request.
------------------------------------------------------------------------
Estimated Estimated
Water community energy surplus: year requirement available
------------------------------------------------------------------------
1994.......................................... 232 93
1995.......................................... 242 83
1996.......................................... 250 75
1997.......................................... 255 70
1998.......................................... 258 67
1999.......................................... 259 66
2000.......................................... 260 65
2001.......................................... 263 62
2002.......................................... 264 61
2003.......................................... 266 59
2004.......................................... 267 58
2005.......................................... 270 55
2006.......................................... 271 54
2007.......................................... 274 51
2008.......................................... 275 50
2009.......................................... 277 48
2010.......................................... 278 47
2011.......................................... 281 44
2012.......................................... 282 43
2013.......................................... 285 40
------------------------------------------------------------------------
Issued at Juneau, Alaska; February 24, 1994.
Lloyd A. Linke,
Director, Power Division.
[FR Doc. 94-6259 Filed 03-16-94; 8:45 am]
BILLING CODE 6450-01-P
