2011-12189. Desert Southwest Customer Service Region-Rate Order No. WAPA-152

AGENCY:

Western Area Power Administration, DOE.

ACTION:

Notice of Rate Order Temporarily Extending Network Integration Transmission Service (NITS).

SUMMARY:

This action is to temporarily extend the existing NITS formula rates for the Parker-Davis Project (P-DP), and the Pacific Northwest/Pacific Southwest Intertie Project (Intertie) and Ancillary Services Rates for Western Area Lower Colorado (WALC) Balancing Authority through September 30, 2013. The existing NITS and Ancillary Services formula rates expire on June 30, 2011.

FOR FURTHER INFORMATION CONTACT:

Mr. Darrick Moe, Regional Manager, Desert Southwest Customer Service Region, Western Area Power Administration, P.O. Box 6457, Phoenix, AZ 85005-6457, [phone], e-mail [e-mail], or Mr. Jack Murray, Rates Manager, Desert Southwest Customer Service Region, Western Area Power Administration, P.O. Box 6457, Phoenix, AZ 85005-6457, [phone], e-mail [e-mail].

SUPPLEMENTARY INFORMATION:

By Delegation Order No. 00-037.00, effective December 6, 2001, the Secretary of Energy delegated: (1) The authority to develop power and transmission rates 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 of Energy; 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).

The existing formula rates, approved under Rate Order No. WAPA-127 ^[1] became effective on July 1, 2006, and were approved through June 30, 2011. The existing rate formula methodology collects annual revenue sufficient to recover annual expenses, including interest and capital requirements, thus ensuring repayment of the project costs within the cost recovery criteria set forth in DOE Order RA 6120.2. Western also made the decision that the Desert Southwest and Rocky Mountain Regional Offices would work together in an attempt to make their Ancillary Service rate formulas consistent to the extent possible as a result of the operations consolidation of the two Regions. As a result, pursuant to 10 CFR 903.23(b), Western is temporarily extending the existing NITS formula rates for P-DP and Intertie, and WALC Ancillary Services formula rates, through September 30, 2013, unless the rate schedules are superseded prior to that date. This extension will provide the time Western needs to complete the informal and formal processes associated with the new rate formulas.

DOE regulations at 10 CFR 903.23(b) do not require Western to provide for a consultation and comment period or hold public information and comment forums. Following review of Western's proposal with DOE, I hereby approve Rate Order No. WAPA-152, which temporarily extends the existing NITS and Ancillary Services rate schedules PD-NTS2, INT-NTS2 and DSW-SD2, DSW-RS2, DSW-FR2, DSW-EI2, DSW-SPR2, DSW-SUR2 through September 30, 2013.

Dated: May 6, 2011.

Daniel B. Poneman,

Deputy Secretary.

Department of Energy Deputy Secretary

In the Matter of: Western Area Power Administration, Rate Extension for Desert Southwest Region Network Integration Transmission Service and WALC Ancillary Services Formula Rates.

Order Confirming and Approving a Temporary Extension of the Network Integration Transmission Service and Ancillary Services Formula Rates

Section 302 of the Department of Energy (DOE) Organization Act (42 U.S.C. 7152) transferred to and vested in the Deputy Secretary of Energy the power marketing functions of the Secretary of the Department of the Interior and the Bureau of Reclamation under the Reclamation Act of 1902 (ch. 1093, 32 Stat. 388), as amended and supplemented by subsequent laws, particularly section 9(c) of the Reclamation Project Act of 1939 (43 U.S.C. 485h(c)), and other Acts that specifically apply to the project involved.

By Delegation Order No. 00-037.00, effective December 6, 2001, the Secretary of Energy delegated (1) the authority to develop power and transmission rates 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 of Energy; 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). This rate extension is issued pursuant to the Delegation Order and DOE rate extension procedures at 10 CFR 903.23(b).

Background

Under Rate Order No. WAPA-127 the existing formula rates were approved for 5 years effective July 1, 2006, through September 30, 2011. On June 30, 2011, the Network Integration Transmission Service (NITS) and Ancillary Services Rate Schedules will expire. Western is temporarily extending the NITS and Ancillary Services formula rates and rate schedules through September 30, 2013.

Discussion

Western is temporarily extending the existing P-DP and Intertie NITS and Ancillary Services formula rates for Western Area Lower Colorado (WALC) Balancing Authority pursuant to 10 CFR 903.23(b). The existing rate formula methodologies collect annual revenue sufficient to recover annual expenses (including interest) and capital requirements, thus ensuring repayment of the projects costs within the cost recovery criteria set forth in DOE Order RA 6120.2. Western has made the decision that the Desert Southwest and Rocky Mountain Region Regional Offices would work together in an attempt to make their Ancillary Services rate formulas consistent to the extent possible as a result of the operations consolidation of the two regions. Western is providing for this extension to allow for the evaluation of new rate requirements for Ancillary Services mandated under Western's Open Access Transmission Tariff and FERC Order No. 890 and adjustments to the formula rates. For these reasons, Western is temporarily extending the existing rate schedules PD-NTS2, INT-NTS2 and DSW-SD2, DSW-RS2, DSW-FR2, DSW-EI2, DSW-SPR2, DSW-SUR2 for NITS and Ancillary Services through September 30, 2013.

DOE regulations at 10 CFR 903.23(b) do not require Western to provide for a consultation and comment period or hold public information and comment forums and no such consultation and comment period or forums were provided for or held.

Order

In view of the above and under the authority delegated to me, I hereby extend for a period effective July 1, 2011, through September 30, 2013, the existing rate schedules PD-NTS2, INT-NTS2 and DSW-SD2, DSW-RS2, DSW-FR2, DSW-EI2, DSW-SPR2, DSW-SUR2 for NITS and WALC Ancillary Services.

Dated: May 6, 2011.

Daniel B. Poneman,

Deputy Secretary.

Footnotes

1.  FERC confirmed and approved Rate Order No. WAPA-127 on November 21, 2006, in Docket No. EF06-5191-000. See United States Department of Energy, Western Area Power Administration, 117 FERC ¶ 62,172 (2006).