[Federal Register Volume 62, Number 122 (Wednesday, June 25, 1997)]
[Notices]
[Pages 34255-34258]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-16644]
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DEPARTMENT OF ENERGY
Western Area Power Administration
Proposed Salt Lake City Area Integrated Projects Firm Power Rate
and Colorado River Storage Project Transmission and Ancillary Services
Rates Adjustments
AGENCY: Western Area Power Administration, DOE.
ACTION: Notice of proposed rate adjustments.
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SUMMARY: The Western Area Power Administration's (Western) Colorado
River Storage Project (CRSP) Customer Service Center (CSC) is proposing
rates (Proposed Rates) for long-term sales of Salt Lake City Area
Integrated Projects (SLCA/IP) firm power, CRSP transmission service,
and ancillary services. The current firm power rate expires November
30, 1999. The current firm transmission rate expires September 30,
1997, but is expected to be extended for 1 additional year, through
September 30, 1998, or until superseded by the proposed firm point-to-
point transmission rate. The proposed rates will provide sufficient
revenue to pay all annual costs, including operation, maintenance,
replacement, and interest expenses, and to repay investment and
irrigation assistance obligations within the required period. The rates
and their impacts are explained in greater detail in a rate brochure to
be provided to all interested parties. The proposed rates are scheduled
to go into effect on April 1, 1998. This Federal Register notice
initiates the formal process for the proposed rates.
DATES: The consultation and comment period will begin on the date of
publication of this Federal Register notice and will end September 23,
1997. The public information forums and public comment meeting dates
are:
1. Public information forum--August 1, 1997, 1 p.m., Salt Lake City,
Utah; Public comment forum--September 19, 1997, 1 p.m., Salt Lake
City, Utah.
2. Public information forum--August 5, 1997, 1 p.m., Golden,
Colorado; Public comment forum--September 16, 1997, 1 p.m., Golden,
Colorado.
3. Public information forum--August 6, 1997, 1 p.m., Albuquerque,
New Mexico; Public comment forum--September 17, 1997, 1 p.m.,
Albuquerque, New Mexico.
4. Public information forum--August 7, 1997, 1 p.m., Phoenix,
Arizona; Public comment forum--September 18, 1997, 1 p.m., Phoenix,
Arizona.
ADDRESSES:
1. Doubletree Hotel (Previously Red Lion), 255 South West Temple,
Salt Lake City, Utah.
2. Marriott Denver West, 1717 Denver West Boulevard, Golden,
Colorado.
3. Albuquerque Marriott, 2101 Louisiana Boulevard NE, Albuquerque,
New Mexico.
4. Western Area Power Administration, Desert Southwest Region, 615
South 43rd Avenue, Phoenix, Arizona.
Western must receive written comments by the end of the
consultation and comment period to be assured consideration. Oral
comments will be received at the public comment meetings. Written
comments are to be sent to: Mr. David Sabo, CRSP Manager, CRSP Customer
Service Center, Western Area Power Administration, P.O. Box 11606, Salt
Lake City, Utah, 84121-0606, or e-mail sabo@wapa.gov.
FOR FURTHER INFORMATION CONTACT: Carol Tafoya-Loftin, Rates Manager,
CRSP Customer Service Center, Western Area Power Administration, P.O.
Box 11606, Salt Lake City, Utah, 84121-0606, (801) 524-6380; e-mail:
tafoya@wapa.gov, or visit CRSP CSC's home page at: www.wapa.gov/crsp/
crsp.htm.
Proposed Rate for SLCA/IP Firm Power
SLCA/IP Firm Power Rate
The proposed rate for SLCA/IP firm power is designed to recover an
annual amount of revenue requirement that includes the repayment of
power investment, payment of interest, purchased power, operation,
maintenance and replacement expenses, and the repayment of irrigation
assistance costs, as required by law.
The Deputy Secretary of the Department of Energy (DOE) approved the
existing Rate Schedule SLIP-F5 for SLCA/IP firm power on October 25,
1994 (Rate Order No. WAPA-63). The Federal Energy Regulatory Commission
(FERC) confirmed and approved the rate schedule on April 1, 1996, in
FERC Docket No. EF95-5171-000. The existing Rate Schedule will expire
on November 30, 1999. Under Rate Schedule SLIP-F5, the energy rate is
8.9 mills/kWh, and the capacity rate is $3.83 per kW-month. The
composite rate (revenue requirements per kWh) is
[[Page 34256]]
20.17 mills/kWh. The proposed rate for SLCA/IP firm power is 8.20
mills/kWh for energy and $3.48 per kW-month for capacity. The proposed
composite rate is 17.75 mills/kWh. This firm power rate is to be
applied to all firm power customers, and is to become effective April
1, 1998.
Although the proposed composite rate reflects a decrease from the
existing composite rate, the net effect does not necessarily result in
an equivalent reduction in cost to the SLCA/IP firm power contractors.
Two primary factors account for this decrease. First, annual net
revenue requirements have reduced by $6.4 million. Second, due to
constraints at Glen Canyon Dam, as a result of the long-term Glen
Canyon Dam Operating Criteria, and generating constraints on other
SLCA/IP facilities, the contractor will normally be receiving less
Federally generated resource during on-peak hours. In order to receive
its full SLCA/IP resource allocation the contractor must purchase
replacement power from other sources through Western Replacement Power
(WRP) and/or Customer Displacement Power (CDP) as outlined in amended
contracts with Western. In addition to the actual costs of the
replacement power purchased on the open market, the contractor will pay
the incremental administrative costs that Western incurs for providing
this service. Due to the restrictions of the Federal hydro facilities
and resulting replacement resource costs, the total overall costs to
the contractors may in fact increase.
Lastly, the proposed firm power rate does not include pension
benefits from Civil Service Retirement System and health benefits,
which were included in the last rate adjustment. The inclusion of these
costs will depend upon the outcome of a final legal decision of
Western's authority to include these costs in the rate base. Should
these costs be included, it is anticipated that they will increase the
composite rate by .07 mills/kWh.
WRP and CDP Administrative Charges
The first year the WRP and CDP replacement options are effective,
April 1, 1998, through March 31, 1999, will be considered the base year
for cost determination. Estimated costs for charges will be used during
the base year. Prior to and during the base year, Western, in
consultation with Colorado River Energy Distributors Association
(CREDA) and other interested SLCA/IP firm power customers, will develop
a method for tracking actual incremental WRP and CDP administrative
costs. Subsequent years' charges will be based upon base year costs and
streamlining experiences.
Adjustment Clauses Associated With the Proposed Rates for SLCA/IP Firm
Power
Transformer Losses Adjustment
This provision contained in Rate Schedule SLIP-F5 will remain the
same under the proposed rates for SLCA/IP firm power.
Power Factor Adjustment
This provision contained in Rate Schedule SLIP-F5 will remain the
same under the proposed rates for SLCA/IP firm power.
Purchased Resources Adjustment
This provision contained in Rate Schedule SLIP-F5 will remain the
same under the proposed rates for SLCA/IP firm power; however, it will
be applicable only to those contractors who are not receiving service
under the amendment to the firm power sales contract effective April 1,
1997.
WRP Adjustment
Each contractor electing to receive WRP will pay for its share of
the incremental administrative costs Western incurs as a direct result
of providing this service to the firm SLCA/IP power contractor. The
contractor will also pay for its proportionate share of the costs of
the purchased replacement resource. These costs are not included in the
firm power base rate.
CDP Adjustment
Each contractor electing to receive CDP will pay for its share of
the incremental administrative costs Western incurs as a direct result
of providing this service to the contractor. This cost is not included
in the firm power base rate.
Proposed Rates for CRSP Transmission
The proposed rates for CRSP transmission service are based on a
revenue requirement that recovers: (i) The CRSP transmission system
investment and interest costs for facilities associated with providing
all transmission service; and (ii) the operation, maintenance, and
replacement costs allocated to transmission service. These revenue
requirements are offset by appropriate CRSP transmission system
revenues. The proposed rates are applicable to existing and future CRSP
point-to-point transmission service.
The rates for CRSP transmission service include the cost for
scheduling, system control, and dispatch service.
Firm Point-to-Point
The firm point-to-point rate is based on revenue requirements of a
5-year cost evaluation period. CRSP transmission related investments
are annualized. Transmission-related annual costs such as operation,
maintenance and replacements and interest costs to arrive at the total
annual transmission cost need to be recovered. The annual costs are
reduced by revenue credits such as non-firm wheeling revenues and phase
shifter revenues. The resultant net annual cost to be recovered is
divided by the capacity reservation needed to meet firm power and
transmission commitments in kW to derive a cost/kW-year. This is done
for 5 future years, the results averaged, and the cost/kW-year average
used as the firm point-to-point transmission rate. The proposed rate
for firm point-to-point CRSP transmission service is $2.07 per kW-month
for 1998, beginning April 1, 1998. This proposed rate may be adjusted
each year by a recalculation based on the formula below, as needed. The
rate formula is expected to be in effect until March 31, 2003.
The cost/kW-year is calculated using the following formula:
[GRAPHIC] [TIFF OMITTED] TN25JN97.000
Non Firm Point-to-Point Rate
The proposed rate for non firm point-to-point CRSP transmission
service is a kWh rate based on market conditions but never higher than
the firm point-to point rate. This rate will remain in effect
concurrently with the firm point-to-point rate.
Network Transmission Service Rate
The proposed rate for network transmission, if offered by CRSP CSC,
would be consistent with the CRSP CSC
[[Page 34257]]
Tariff Equivalent Package, and the rate methodology in FERC Order 888.
Western is not currently providing network transmission on its CRSP
transmission system and only has available transmission capacity on
isolated portions of the CRSP transmission system.
Proposed Rates for Ancillary Services
Western will provide ancillary services, subject to availability,
as described below and as listed in Table 1. The proposed rates are
designed to recover only the costs incurred for providing the
service(s).
It is anticipated that in June 1998, the Western Area Upper
Colorado (WAUC) control area, within which most of the CRSP
transmission system lies, currently operated by the CRSP CSC, will be
merged into two other control areas, the Western Area Colorado Missouri
(WACM) control area operated by Western's Rocky Mountain Region (RMR)
and the Western Area Lower Colorado (WALC) control area operated by
Western's Desert Southwest Region (DSWR).
Proposed Rate for Scheduling, System Control, and Dispatch Service
Scheduling, system control, and dispatch costs are accumulated as
an annual cost of all personnel and other related costs involved in
providing the service for the CRSP CSC. That cost is divided by the
number of yearly schedules performed to derive a rate per schedule. Up
to five schedule changes per transaction per day are allowed at no
extra charge.
The proposed rate will be applied to all schedules which must be
pre-scheduled and/or real-time dispatched within or out of the WACM
control area and do not pertain to a SLCA/IP firm electric service or
CRSP transmission schedule.
The rate for the WAUC control area is $21.35 per schedule per day
and will be in effect only until the WAUC control area merges. At that
time, the tariffs developed by Western's RMR and DSWR Regions as
operators of the WACM and WALC control areas, respectively, will apply.
Proposed Rate for Reactive Supply and Voltage Control
Applicable tariffs are being developed by Western's RMR and DSWR
Regions as operators of the WACM and WALC control areas, respectively,
in which CRSP transmission facilities reside. This ancillary service is
not included in any CRSP CSC transmission service rate, and the CRSP
transmission customer will be required to purchase this service from
RMR and/or DSWR.
Proposed Rate for Regulation and Frequency Response Service
The CRSP CSC may obtain regulation on the open market for the
customer and pass through the cost, with an added 10 percent
administrative charge, if regulation is unavailable from SLCA/IP
facilities. If the CRSP CSC has regulation available for sale, based on
hydrological conditions, it will charge the SLCA/IP firm power capacity
rate currently in effect. The transmission customer serving loads
within the transmission provider's control area is required to acquire
this ancillary service either from Western, from a third party, or by
self supply.
Proposed Rate for Energy Imbalance Service
The energy imbalance tariff will be based on a 2.5
percent deadband, with a maximum of five deviations outside the band
per month. Net deviations within the deadband limits will be
accumulated through the time period. Energy imbalance will be settled
on a seasonal basis, either in cash or energy return as mutually agreed
upon. Energy returns will be returned in like hours, onpeak for onpeak
and offpeak for offpeak. Cash settlements will be based on SLCA/IP's
average like-hour purchase costs during the season. Positive or
negative excursions outside the deadband greater than the five times
per month maximum will be assessed a penalty charge of 100 mills/kWh.
This rate will not apply under system emergency conditions. This
ancillary service is not included in any CRSP CSC transmission service
rate. The transmission customer serving loads within the transmission
provider's control area is required to acquire this ancillary service
either from Western, from a third party, or by self supply.
Proposed Rate for Operating Reserve--Spinning Reserve Service
It is unlikely that spinning reserves will be available from SLCA/
IP resources. If spinning reserves are unavailable from SLCA/IP
resources, the CRSP CSC may obtain spinning reserves on the open market
for the customer and pass through the cost, with an added 10 percent
administrative charge.
If the CRSP CSC has spinning reserves available for sale from SLCA/
IP resources, it will charge the SLCA/IP firm power capacity rate
currently in effect. Energy taken with the spinning reserve capacity
will be settled on a seasonal basis, either in cash or energy as
mutually agreed upon. Energy returns will be returned in like hours,
onpeak for onpeak and offpeak for offpeak, unless otherwise mutually
agreed. Cash settlements will be based on SLCA/IP's average like-hour
purchase costs during the season.
This ancillary service is not included in any CRSP CSC transmission
service rate. The transmission customer serving loads within the
transmission provider's control area is required to acquire this
ancillary service either from Western, from a third party, or by self
supply.
Proposed Rate for Operating Reserve--Supplemental Reserve Service
It is unlikely that supplemental reserves will be available from
the SLCA/IP resources. If supplemental reserves are unavailable from
SLCA/IP resources, the CRSP CSC may obtain supplemental reserves on the
open market for the customer, and pass through the cost, with an added
10 percent administrative charge.
If the CRSP CSC has supplemental reserves available for sale from
SLCA/IP resources, it may charge the SLCA/IP firm power capacity rate
currently in effect. Energy taken with the supplemental reserve
capacity will be settled on a seasonal basis, either in cash or energy
as mutually agreed upon. Energy returns will be returned in like hours,
onpeak for onpeak and offpeak for offpeak, unless otherwise mutually
agreed. Cash settlements will be based on SLCA/IP's average like-hour
purchase costs during the season.
This ancillary service is not included in any CRSP CSC transmission
service rate. The transmission customer serving loads within the
transmission provider's control area is required to acquire this
ancillary service either from Western, from a third party, or by self
supply.
Table 1.--Proposed Ancillary Service Rates
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Type of ancillary service Rate
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Scheduling, System Control and WAUC control area--$21.35/
Dispatch--is required to schedule the schedule/day (until merged).
movement of power through, out of, After consolidation, the WALC
within, or into a control area. and/or WACM charges will
apply.
[[Page 34258]]
Reactive Supply and Voltage Control--is DSWR and/or RMR Tariff.
reactive power support provided from
generation facilities that is
necessary to maintain transmission
voltages within acceptable limits of
the system.
Regulation and Frequency Control--is Market price plus 10 percent
providing generation to match administrative charge or, if
resources and loads on a real-time available, current firm power
continuous basis. capacity rate.
Energy Imbalance Service--is provided Deviations are accumulated at
when a difference occurs between the the end of the season and are
scheduled and actual delivery of to be exchanged with like
energy to a load or from a generation hours of energy or charged at
resource within a control area over a the average purchase rate,
single month. plus a penalty of 100 mills/
kWh.
Spinning Reserve Service--is providing Market price plus 10 percent
capacity that is available the first administrative charge or, if
10 minutes to serve load and is available, current firm power
synchronized with the power system. capacity rate.
Supplemental Reserve Service--is Market price plus 10 percent
providing capacity that is not administrative charge or, if
synchronized, but can be available to available, current firm power
serve loads within 10 minutes. capacity rate.
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Since the proposed rates constitute a major rate adjustment as
defined at 10 CFR Sec. 903.2, both public information forums and public
comment forums 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 DOE.
The proposed SLCA/IP firm power, CRSP transmission, and ancillary
service rates are being 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 other acts specifically
applicable to the projects involved.
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 are found at 10 CFR part 903.
Availability of Information
All brochures, studies, comments, letters, memoranda, and other
documents made or kept by Western for developing the proposed rates are
and will be made available for inspection and copying at the CRSP
Customer Service Center, at 257 East 200 South, Suite 475, Salt Lake
City, Utah 84111.
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 by 5 U.S.C. 553 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. In this instance,
the initiation of the SLCA/IP firm power rate, CRSP transmission rate
and ancillary service rate adjustments are related to nonregulatory
services provided by Western at a particular rate. Under 5 U.S.C.
601(2), rules of particular applicability relating to rates or services
are not considered rules within the meaning of the act. Since the SLCA/
IP firm power rate, CRSP transmission rates and ancillary service rates
are of limited applicability, no flexibility analysis is required.
Environmental Evaluation
In compliance with the National Environmental Policy Act (NEPA) of
1969 (42 U.S.C. 4321 et seq.), the Council on Environmental Quality
Regulations (40 CFR parts 1500 through 1508); and the DOE NEPA
Regulations (10 CFR part 1021), Western has determined that this action
is categorically excluded from the preparation of an environmental
assessment or an environmental impact statement.
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, and 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.
Dated: June 13, 1997.
J.M. Shafer,
Administrator.
[FR Doc. 97-16644 Filed 6-24-97; 8:45 am]
BILLING CODE 6450-01-P
