[Federal Register Volume 62, Number 42 (Tuesday, March 4, 1997)]
[Notices]
[Pages 9763-9766]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-5256]
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DEPARTMENT OF ENERGY
Western Area Power Administration; Proposed Rates for Central
Valley and California-Oregon Transmission Project
AGENCY: Western Area Power Administration, DOE.
ACTION: Notice of proposed rates.
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SUMMARY: The Western Area Power Administration (Western) is proposing
rates (Proposed Rates) for Central Valley Project (CVP) commercial firm
power, power scheduling service, CVP transmission, transmission of CVP
power by others, network transmission, California-Oregon Transmission
Project (COTP) transmission, and ancillary services. The current rates
expire April 30, 1998. The Proposed Rates will provide sufficient
revenue to pay all annual costs, including interest expense, and
repayment of required investment within the allowable period. The rate
impacts are detailed in a rate brochure to be provided to all
interested parties. The Proposed Rates are scheduled to go into effect
on October 1, 1997, to correspond with the start of the Federal fiscal
year, and will remain in effect through September 30, 2002. This
Federal Register notice initiates the formal process for the Proposed
Rates.
DATES: The consultation and comment period will begin from the date of
publication of this Federal Register notice and will end June 2, 1997.
A public information forum at which Western will present a detailed
explanation of the Proposed Rates is scheduled for March 25, 1997,
beginning at 9 a.m. PST, at the Sierra Nevada Region, Western Area
Power Administration, 114 Parkshore Drive, Folsom, CA 95630-4710. A
public comment forum at which Western will receive oral and written
comments is scheduled for April 22, 1997, beginning at 9 a.m. PDT, at
the same location. Western should receive written comments by the end
of the consultation and comment period to be assured consideration.
ADDRESSES: Written comments are to be sent to: James C. Feider,
Regional Manager, Sierra Nevada Region, Western Area Power
Administration, 114 Parkshore Drive, Folsom, CA 95630-4710.
FOR FURTHER INFORMATION CONTACT: Debbie Dietz, Rates Manager, Sierra
Nevada Region, Western Area Power Administration, 114 Parkshore Drive,
Folsom, CA 95630-4710, (916) 353-4453.
SUPPLEMENTARY INFORMATION: The Proposed Rates for CVP commercial firm
power are designed to recover an annual revenue requirement that
includes the investment repayment, interest, purchase power, and
operation and maintenance expense. A cost of service study allocates
the projected annual revenue requirement for commercial firm power
between capacity and energy. The capacity revenue requirement includes
100 percent of capacity purchase costs, 50 percent of the investment
repayment, interest expense, and power operation and maintenance
expense allocated to commercial power, and 100 percent of fixed
transmission expense. These annual costs are reduced by the projected
revenue from sales of CVP transmission to determine the capacity
[[Page 9764]]
revenue requirement. The energy revenue requirement includes 100
percent of energy purchase costs and 50 percent of the investment
repayment, interest expense, and power operation and maintenance
expense allocated to commercial power. These annual costs are reduced
by the projected revenue from sales of surplus power to determine the
energy revenue requirement. The resulting capacity/energy revenue
requirement split varies from 51 percent allocated to capacity in
fiscal year (FY) 1998 to 44 percent allocated to capacity in FY 2002.
The average capacity/energy revenue requirement split for the five-year
period is 47 percent to capacity and 53 percent to energy.
The Proposed Rates will also include an Annual Energy Rate
Alignment (AERA). The AERA will be applied to firm energy purchases
from Western at or above an average annual load factor of 80 percent.
The AERA is the difference between the estimated market purchase rate
used in the cost of service study for CVP commercial firm power and the
CVP energy rate. The billing for the AERA will occur at the end of each
fiscal year.
The Proposed Rates for CVP commercial firm power, applicable
revenue requirement split between capacity and energy, and the AERA are
provided in Table 1 below.
Table 1.--Proposed Commercial Firm Power Rates
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Total Capacity/
Effective period composte Capacity Energy energy AERA (mills/
(mills/kWh) ($/kW-mo) (mills/kWh) split kWh)
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10/01/97 to 09/30/98........................... 20.64 5.00 10.11 51/49 3.06
10/01/98 to 09/30/99........................... 19.59 4.57 9.98 49/51 3.65
10/01/99 to 09/30/00........................... 19.59 4.51 10.10 49/51 4.01
10/01/00 to 09/30/01........................... 18.59 3.95 10.30 45/55 4.30
10/01/01 to 09/30/02........................... 20.09 4.15 11.35 44/56 3.76
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The Deputy Secretary of the Department of Energy (DOE), approved
the existing Rate Schedule CV-F8 for CVP commercial firm power on
September 19, 1995 (Rate Order No. WAPA-72, 60 FR 52671, October 10,
1995), and the Federal Energy Regulatory Commission (FERC) confirmed
and approved the rate schedule on March 14, 1996, under FERC Docket No.
EF95-5012-000 (74 FERC para. 62,136). The existing Rate Schedule CV-F8
became effective on October 1, 1995, for the period ending April 30,
1998. Under Rate Schedule CV-F8, the composite rate on October 1, 1997,
is 26.50 mills per kilowatt-hour (mills/kWh), the base energy rate is
16.93 mills/kWh, the tier energy rate is 26.48 mills/kWh, and the
capacity rate is $4.58 per kilowatt-month (kW-mo). The Proposed Rates
for CVP commercial firm power will result in an overall composite rate
decrease of approximately 22 percent on October 1, 1997, when compared
with the current CVP commercial firm power rates under Rate Schedule
CV-F8. Table 2 provides a comparison of the current rates in Rate
Schedule CV-F8 and the Proposed Rates along with the percentage change
in the rates.
Table 2.--Comparison of Current and Proposed Rates
[Percentage Change in Commercial Firm Power Rates]
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Total Base
Effective period composite Percent Capacity Percent energy Percent
(mills/kWh) change ($/kW-mo) change (mills/kWh) change
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Current Rate Schedule
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Existing 10/01/97 and thereafter.. 26.50 ........... 4.58 ........... 16.93 ...........
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Proposed Rates
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10/01/97 to 09/30/98.............. 20.64 -22 5.00 +9 10.11 -40
10/01/98 to 09/30/99.............. 19.59 -26 4.57 ........... 9.98 -41
10/01/99 to 09/30/00.............. 19.59 -26 4.51 -2 10.10 -40
10/01/00 to 09/30/01.............. 18.59 -30 3.95 -14 10.30 -39
10/01/01 to 09/30/02.............. 20.09 -24 4.15 -9 11.35 -33
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Adjustment Clauses Associated With the Proposed Rates for CVP
Commercial Firm Power
Power Factor Adjustment
This provision contained in Rate Schedule CV-F8, will remain the
same under the Proposed Rates for CVP commercial firm power.
Low Voltage Loss Adjustment
This provision contained in Rate Schedule CV-F8, will remain the
same under the Proposed Rates for CVP commercial firm power.
Revenue Adjustment
The methodology for the Revenue Adjustment contained in Rate
Schedule CV-F8, will remain the same under the Proposed Rates for CVP
commercial firm power.
Proposed Rate for Power Scheduling Service
The Proposed Rate for power scheduling service is $73.80 per hour
and is based on an estimated time to provide the service. Power
scheduling service provides for the scheduling of resources to meet
loads and reserve requirements.
[[Page 9765]]
Proposed Rates for CVP Transmission
The Proposed Rate for firm CVP transmission service is $0.48 per
kW-mo., an 11.6 percent increase from the existing rate of $0.43 per
kW-mo. currently under Rate Schedule CV-FT2. The Proposed Rate for non-
firm CVP transmission service is 1.00 mill/kWh, an 18.7 percent
reduction in the existing 1.23 mills/kWh rate. Service of firm or non-
firm transmission for one year or less may be at rates lower than the
Proposed Rates.
The Proposed Rates for CVP transmission service are based on a
revenue requirement that recovers: (i) The CVP transmission system
costs for facilities associated with providing all transmission
service; and (ii) the non-facilities costs allocated to transmission
service. These rates include the cost for scheduling, system control
and dispatch service, and reactive supply and voltage control
associated with the transmission service. The Proposed Rates are
applicable to existing CVP firm transmission service and future point-
to-point transmission service.
Proposed Rate for Transmission of CVP Power by Others
Transmission service costs incurred by Western in the delivery of
CVP power over a third party's transmission system to a CVP customer,
will be directly passed through to that CVP customer. Rates under this
schedule are proposed to be automatically adjusted as third party
transmission costs are adjusted.
Proposed Rate for Network Transmission
The Proposed Rate for network transmission service, if offered by
Western, is the product of the network customer's load ratio share
times one-twelfth (\1/12\) of the annual network transmission revenue
requirement. The load ratio share is based on the network customer's
hourly load coincident with Western's monthly CVP transmission system
peak minus coincident peak for all firm CVP (including reserved
capacity) point-to-point transmission service. The Proposed Rate for
network transmission service is based on a revenue requirement that
recovers: (i) The CVP transmission system costs for facilities
associated with providing all transmission service; and (ii) the non-
facilities costs allocated to transmission service. These rates include
the cost for scheduling, system control and dispatch service, and
reactive supply and voltage control needed to provide the transmission
service.
Proposed Rates for COTP Transmission
The Proposed Rates for firm transmission service for Western's
share of the California-Oregon Transmission Project (COTP) are $1.66
per kW-mo. for FY 1998 and $1.12 per kW-mo. for FY 1999 through FY
2002. These Proposed Rates for firm COTP transmission service result in
18.2 percent (FY 1998) and 44.8 percent (FY 1999 through FY 2002)
reductions in the existing rate of $2.03 per kW-mo. The Proposed Rates
for non-firm COTP transmission service are 2.28 mills/kWh for FY 1998
and 1.54 mills/kWh for FY 1999 through FY 2002. These Proposed Rates
for non-firm COTP transmission service result in 18.0 percent (FY 1998)
and 44.6 percent (FY 1999 through FY 2002) reductions in the existing
rate of 2.78 mills/kWh. Service of firm or non-firm transmission for
one year or less may be at rates lower than the Proposed Rates.
The Proposed Rates for COTP transmission service are based on a
revenue requirement that recovers the costs associated with: (i)
Western's participation in the COTP; (ii) the offering of this service;
and (iii) scheduling, system control and dispatch service, and reactive
supply and voltage control needed to provide the transmission service.
The Proposed Rates are applicable to existing COTP transmission service
and future point-to-point transmission service.
Proposed Rates for Ancillary Services
Western will provide ancillary services, subject to availability,
at the Proposed Rates listed in Table 3. The Proposed Rates are
designed to recover only the costs incurred by Western for providing
the service(s). Sales of ancillary services of one year or less may be
at rates lower than the Proposed Rates.
Table 3.--Proposed CVP Ancillary Services Rates
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Ancillary service type Rate
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Transmission Scheduling, System Control and Dispatch Included in appropriate transmission rates.
Service--is required to schedule the movement of power
through, out of, within, or into a control area
Reactive Supply and Voltage Control--is reactive power Included in appropriate transmission rates.
support provided from generation facilities that is
necessary to maintain transmission voltages within
acceptable limits of the system
Regulation and Frequency Response Service--providing Monthly: $1.39 per kW-mo.
generation to match resources and loads on a real-time Weekly: $0.3192 per kW-week.
continuous basis. Daily: $0.0456 per kW-day.
Energy Imbalance Service--is provided when a difference Within Limits of Deviation Band:
occurs between the scheduled and actual delivery of Accumulated deviations are to be corrected or
energy to a load or from a generation resource within eliminated within 30 days. Any net deviations that are
a control area over a single month accumulated at the end of the month (positive or
negative) are to be exchanged with like hours of
energy or charged at the composite rate for CVP
commercial firm power, then in effect.
Hourly Deviation (MW) is the net scheduled amount of Outside Limits of Deviation Band:
energy for the hour minus the hourly net metered (I) Positive Deviations--no charge, lost to the system.
(actual delivered) amount.
(ii) Negative Deviations--during on-peak hours, the
greater of 3 times the Proposed Rates for CVP
commercial firm power or any additional cost incurred.
During off-peak hours, the greater of the Proposed
Rates for CVP commercial firm power or any additional
cost incurred.
Spinning Reserve Service--is providing capacity that is Monthly: $1.14 per kW-mo. plus adder.
available the first ten minutes to take load and is Weekly: $0.2688 per kW-wk. plus adder.
synchronized with the power system Daily: $0.0384 per kW-day plus adder.
Hourly: $0.0016 per kWh plus adder.
Adder for purchasing energy to motor unit will be at
market purchase rate.
[[Page 9766]]
Supplemental Reserve Service--is providing capacity Monthly: $1.14 per kW-mo.
that is not synchronized, but can be available to Weekly: $0.2688 per kW-wk.
serve loads within ten minutes Daily: $0.0384 per kW-day.
Hourly: $0.0016 per kWh.
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Since the Proposed Rates constitute a major rate adjustment as
defined by the procedures for public participation in general rate
adjustments, as cited below, both a public information forum and a
public comment forum will be held. After review of public comments,
Western will recommend the Proposed Rates (and as amended) for approval
on an interim basis by the Deputy Secretary of DOE.
Power and transmission rates for the CVP are established pursuant
to the Department of Energy Organization Act (42 U.S.C. 7101 et seq.)
and 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 Acts of
Congress approved August 26, 1937 (50 Stat. 844, 850); August 12, 1955
(69 Stat. 719); and October 23, 1962 (76 Stat. 1173, 1191), and Acts
amendatory or supplementary thereof.
By Amendment No. 3 to Delegation Order No. 0204-108, published
November 10, 1993 (58 FR 59716), the Secretary of DOE 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 the FERC. Existing DOE procedures for public
participation in power rate adjustments (10 CFR Part 903) became
effective on September 18, 1985 (50 FR 37835).
Availability of Information
All brochures, studies, comments, letters, memoranda, or other
documents made or kept by Western for developing the Proposed Rates,
are and will be made available for inspection and copying at the Sierra
Nevada Region Office, located at 114 Parkshore Drive, Folsom,
California 95630-4710.
Regulatory Procedure Requirements
Regulatory Flexibility Analysis
Pursuant to the Regulatory Flexibility Act of 1980 (5 U.S.C. 601,
et seq.), each agency, when required to publish a proposed rule, is
further required to prepare and make available for public comment an
initial regulatory flexibility analysis to describe the impact of the
proposed rule on small entities. Western has determined that (1) this
rulemaking relates to services offered by the Sierra Nevada Region and
therefore is not a rule within the purview of the Act, and (2) the
proposed rates for the services offered by the Sierra Nevada Region
would not cause an adverse economic impact to such entities. The
requirements of this Act can be waived if the head of the agency
certifies that the rule will not, if promulgated, have a significant
economic impact on a substantial number of small entities. By his
execution of this Federal Register notice, Western's Administrator
certifies that no significant economic impact on a substantial number
of small entities will occur.
Environmental Compliance
Pursuant to the National Environmental Policy Act of 1969 (42
U.S.C. 4321 et seq.); the Council on Environmental Quality Regulations
for implementing NEPA (40 CFR Parts 1500 through 1508); and the DOE
NEPA Implementing Procedures and Guidelines (10 CFR Part 1021), Western
conducts environmental evaluations of the proposed rates and develops
the appropriate level of environmental documentation.
Review Under the Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1980, 44 U.S.C.
3501-3520, Western has received approval from the Office of Management
and Budget for the collection of customer information in this rule,
under control number 1910-1200.
Determination Under Executive Order 12866
DOE has determined that this is not a significant regulatory action
because it does not meet the criteria of Executive Order 12866, 58 FR
51735. Western has an exemption from centralized regulatory review
under Executive Order 12866; accordingly, no clearance of this notice
by Office of Management and Budget is required.
Issued at Golden, Colorado, February 20, 1997.
J.M. Shafer,
Administrator.
[FR Doc. 97-5256 Filed 3-4-97; 8:45 am]
BILLING CODE 6450-01-P
