[Federal Register Volume 63, Number 118 (Friday, June 19, 1998)]
[Notices]
[Pages 33649-33651]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-16341]
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DEPARTMENT OF ENERGY
Western Area Power Administration
Proposed Rate Formulas for Desert Southwest Customer Service
Region Transmission and Ancillary Services
AGENCY: Western Area Power Administration, DOE.
ACTION: Notice of proposed rate adjustments.
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SUMMARY: The Western Area Power Administration's (Western) Desert
Southwest Region (DSW) is initiating a rate adjustment process for
network integration transmission service for both the Parker-Davis
Project (P-DP) and the Pacific Northwest-Pacific Southwest Intertie
Project (Intertie) and for ancillary services from the P-DP, Boulder
Canyon Project (BCP), and part of the Colorado River Storage Project
(CRSP) located in DSW's Control Area. This action is necessary to bring
DSW into compliance with the intent of Federal Energy Regulatory
Commission (FERC) Order Nos. 888 and 888-A. To date, DSW has not
developed charges for the long term sales of the six ancillary services
defined by FERC, or for network integration transmission service.
The proposed rate and its impact are explained in greater detail in
a rate brochure which will be made available to all interested parties.
The proposed rate is scheduled to go into effect on November 1,
1998. This Federal Register notice initiates the formal process for the
proposed rate.
DATES: Submit comments on or before September 17, 1998.
The forum dates are:
1. Public Information Forum, June 30, 1998, 10 a.m. MST, Phoenix,
Arizona.
2. Public Comment Forum, July 30, 1998, 10 a.m. MST, Phoenix,
Arizona.
ADDRESSES: Written comments should be sent to Mr. J. Tyler Carlson,
Regional Manager, Desert Southwest Customer Service Region, Western
Area Power Administration, P.O. Box 6457, Phoenix, AZ 85005-6457.
Western should receive written comments by the end of the consultation
and comment period to be assured consideration. The public forums will
be held at the Desert Southwest Regional Office, 615 South 43rd Avenue,
Phoenix, Arizona.
FOR FURTHER INFORMATION CONTACT: Mr. Maher A. Nasir, Rates Team Lead,
Desert Southwest Customer Service Region, Western Area Power
Administration, P.O. Box 6457, Phoenix, AZ 85005-6457; telephone (602)
352-2768.
SUPPLEMENTARY INFORMATION:
Proposed Rate for Network Integration Transmission Service
The DSW will offer, subject to provisions in its Open Access
Transmission Service Tariff (OAT), Network Integration Transmission
Service (NTS) to eligible transmission customers. The customer must
obtain ancillary services for NTS pursuant to Western's OAT. The NTS
charge for Intertie and P-DP will be calculated independently. The
monthly charge for NTS is the product of the network transmission
customer's load-ratio share times one-twelfth of the annual revenue
requirement allocated to transmission. The customer's load-ratio share
is calculated on a rolling 12-month basis (12 CP). It is equal to the
network transmission customer's hourly load coincident with DSW's
monthly transmission system peak divided by the resultant value of
DSW's monthly transmission system peak minus the coincident peak (CP)
for all firm point-to-point transmission service plus firm point-to-
point reservations. Service for point-to-point transmission service can
be obtained through rate schedules PD-FT6 and INT-FT2.
The projected annual revenue requirement allocated to transmission
for Fiscal Year (FY) 1999 for P-DP is $23,001,589, and for Intertie the
projected annual revenue requirement is $21,943,150. The annual power
repayment study derives the revenue requirement to be recovered from
network and firm point-to-point transmission service. The annual
transmission costs included in the revenue requirement are operation
and maintenance expenses, administrative and general expenses, interest
expense, and principal expenses associated with transmission.
Proposed Rates For Ancillary Services
Western will provide ancillary services subject to provisions in
the OAT. The proposed rates are designed to recover only the costs
incurred for the service(s). The annual generation costs included in
the revenue requirement for Reactive Supply and Voltage Control,
Regulation and Frequency Response, and Spinning and Supplemental
Reserves are operation and maintenance expenses, administrative and
general expenses, interest expense, and principal expense associated
with providing ancillary services.
On April 1, 1998, the Western Area Upper Colorado Control Area,
which includes the Salt Lake City Area Integrated Projects (SLCA/IP)
generation and most of the CRSP transmission system, was merged with
two other Control Areas: The Western Area Colorado Missouri, operated
by Western's Rocky Mountain Region, and the Western Area Lower Colorado
(WALC) Control Area, operated by DSW. As a result, regulation and
frequency response and reactive supply and voltage control ancillary
services will include certain SLCA/IP generation costs as well as DSW
generation costs.
Proposed Rate for Scheduling, System Control, and Dispatch Service
Scheduling, System Control and Dispatch ancillary service is
required to schedule the movement of power through, out of, within, or
into a Control Area. This ancillary service can be provided only by the
Control Area operator or transmission provider.
Scheduling, System Control and Dispatch ancillary service costs are
calculated as an annual cost of all personnel, capital costs (such as
the dispatch center building), and other related costs involved in
providing the service. The cost is divided by the number of schedules
per year to derive a rate per schedule per day. Up to five schedule
changes per transaction, per day will be allowed at no additional
charge.
The rates charged for the Scheduling, System Control and Dispatch
ancillary service are contingent on the type of service required. The
range of the service on a cost per schedule per day
[[Page 33650]]
is up to $34.10 for an existing schedule, which requires no Supervisory
Control and Data Acquisition (SCADA) programming or intra-bus transfer,
and up to $56.20 for a new schedule which requires both SCADA
programming and intra-bus transfer. Intermediate rates are available
for schedules requiring combinations of the two. This ancillary service
is included in the transmission customer's rate.
Proposed Rate for Reactive Supply and Voltage Control from Generation
Sources
In order to maintain transmission voltages on the transmission
provider's transmission facilities within acceptable limits, generation
facilities under the control of the Control Area operator are operated
to produce or absorb reactive power. Thus, Reactive Supply and Voltage
Control from generation sources service must be provided for each
transaction on the transmission provider's transmission facilities.
This ancillary service is required to be offered to the transmission
customer by the transmission provider in order to maintain transmission
voltages on the transmission provider's transmission facilities within
acceptable limits.
The rate for Reactive Supply and Voltage Control ancillary service
is calculated by combining the revenue requirements of P-DP, BCP, and
SLCA/IP. This total revenue requirement is then divided by the sum of
the long-term firm transmission reservations, yielding a rate of $0.08/
kilowattmonth (kWmo). The transmission customer is required to maintain
a power factor between 95 percent leading and 95 percent lagging. The
rate of $0.08/kWmo will be applied to all transmission customers taking
service under Western's OAT.
Proposed Rate for Regulation and Frequency Response Service
Regulation and Frequency Response service is necessary to provide
for the continuous balancing of resources, generation and interchange,
with load and for maintaining scheduled interconnection frequency at 60
cycles per second (60 Hz). The transmission provider must offer this
service when the transmission service is used to serve load within its
Control Area. The transmission customer must either purchase this
service from the transmission provider or make alternative comparable
arrangements to satisfy its regulation and frequency response service
obligation.
DSW will offer regulation from its own resources, if available. The
charge for this service from DSW resources is calculated based on P-DP,
BCP, and SLCA/IP data. The total annual revenue requirement of P-DP,
BCP, and SLCA/IP is divided by the nameplate plant capacities to derive
an average revenue requirement per kilowatt (kW) result. The resultant
average revenue requirement per kW is multiplied by the capacity used
to provide regulation service and then divided by the CP of the Control
Area load. This result is divided by 12 to derive a monthly rate of
$0.20/kWmo. If DSW cannot supply this service from its resources, it
will purchase the service on the market adding a 10 percent
administrative charge.
Proposed Rate for Energy Imbalance Service
Energy Imbalance service is provided when a difference occurs
between the scheduled and the actual delivery of energy to a load
located within a Control Area over a single hour. The transmission
provider must offer this service when the transmission service is used
to serve load within its Control Area. The transmission customer must
either purchase this service from the transmission provider or make
alternative comparable arrangements to satisfy its Energy Imbalance
service obligation.
The Energy Imbalance Service rate will be a penalty-type rate which
DSW reserves the right to apply against deviations outside a 3 percent
bandwidth ( 1.5 percent deviations), with a 2 MW deviation
minimum. Negative excursions (under deliveries) greater than 1.5
percent and occurring more than five times per month will be assessed a
penalty charge of 100 mills/kilowatthour (kWh); e.g., the sixth time an
under delivery occurs within a month, the 100 mills/kWh charge will be
applied to the difference between the total excursion and 1.5 percent.
Any positive excursion (over delivery) will be credited to the
customer within thirty days for 50 percent of the market value of the
over delivery, provided the over deliveries do not impinge upon WALC
Control Area operations. For example, during times of high water or
operating constraints, DSW reserves the right to eliminate credits for
over deliveries. The market value determinant will be the average
monthly non-firm price from Western merchants operating within the WALC
Control Area.
Proposed Rate for Operating Reserves: Spinning Reserve Service
Spinning Reserve service is needed to serve load immediately in the
event of a system contingency. Spinning Reserve service may be provided
by generating units that are on-line and loaded at less than maximum
output. The transmission provider must offer this service when the
transmission service is used to serve load within its Control Area. The
transmission customer must purchase this ancillary service either from
DSW or make alternative comparable arrangements to satisfy its Spinning
Reserve service obligation. The transmission customer will be
responsible for the transmission service to get these reserves to their
destination.
These reserves will not be available from DSW resources on a long-
term basis. If Spinning Reserves are unavailable from WALC resources,
Western may obtain the reserves on the open market for the customer and
pass through the cost, with an added 10 percent administrative charge.
Proposed Rate for Operating Reserves: Supplemental Reserve Service
Supplemental Reserve service is needed to serve load in the event
of a system contingency; however, it is not available immediately to
serve load, but rather within a short period of time. Supplemental
Reserve service may be provided by generating units that are on-line
and unloaded, by quick-start generation or by interruptible load. The
transmission provider must offer this service when the transmission
service is used to serve load within its Control Area. The transmission
customer must purchase this ancillary service either from DSW or make
alternative comparable arrangements to satisfy its Supplemental Reserve
service obligation. The transmission customer will be responsible for
the transmission service to get these reserves to their destination.
These reserves will not be available from DSW resources on a long-
term basis. If Supplemental Reserves are unavailable from WALC
resources, Western may obtain the reserves on the open market for the
customer and pass through the cost, with an added 10 percent
administrative charge.
Authorities
Since the proposed rates constitute a major rate adjustment as
defined in 10 CFR 903.2, both a public information forum and a public
comment forum will be held. After review of public comments, Western
will recommend the proposed rates or revised proposed rates for
approval on an interim basis by the Deputy Secretary of Department of
Energy (DOE).
The proposed Project transmission and ancillary service rates are
being established pursuant to the Department
[[Page 33651]]
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 section 8 of
the Act of August 31, 1964, (16 U.S.C. 837g).
By Amendment No. 3 to Delegation Order No. 0204-108, published
November 10, 1993 (58 FR 59716), the Secretary of Energy 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 in 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).
Regulatory Procedure Requirements
Regulatory Flexibility Analysis
The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, requires
Federal agencies to perform a regulatory flexibility analysis if a
proposed rule is likely to have a significant economic impact on a
substantial number of small entities. Western has determined that this
action relates to rates or services offered by Western, and therefore
is not a rule within the purview of the act.
Environmental Compliance
In compliance with the National Environmental Policy Act of 1969
(NEPA), 42 U.S.C. 4321, et seq.; Council On Environmental Quality
Regulations, 40 CFR Parts 1500-1508; and DOE NEPA Regulations, 10 CFR
Part 1021, Western conducts environmental evaluations of the proposed
rates and develops the appropriate level of documentation.
Determination Under Executive Order 12866
Western has an exemption from centralized regulatory review under
Executive Order 12866; accordingly, no clearance of this notice by the
Office of Management and Budget is required.
Availability of Information
All brochures, studies, comments, letters, memorandums, and other
documents made or kept by Western for the purpose of developing the
proposed rates will be made available for inspection and copying at
Western's Desert Southwest Regional Office at 615 South 43rd Avenue in
Phoenix, Arizona.
Dated: June 8, 1998.
Michael S. Hacskaylo,
Administrator.
[FR Doc. 98-16341 Filed 6-18-98; 8:45 am]
BILLING CODE 6450-01-P
