[Federal Register Volume 59, Number 132 (Tuesday, July 12, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-16844]
[[Page Unknown]]
[Federal Register: July 12, 1994]
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DEPARTMENT OF ENERGY
Western Area Power Administration
Provo River Project--Proposed Rate Methodology of Annual Charges
AGENCY: Western Area Power Administration, DOE.
ACTION: Notice of Proposed Provo River Project Rate Methodology of
Annual Charges.
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SUMMARY: The Western Area Power Administration (Western) is proposing a
methodology to determine annual charges to accompany the independent
marketing of Provo River Project (PRP) resources. A previous proposal
to integrate this project and its resources with Western's Salt Lake
City Area/Integrated Projects (Integrated Projects) was not supported
by customers. To date, PRP's resources have been sold to the Colorado
River Storage Project (CRSP) at a rate to cover project costs. Western
proposes that capacity and energy produced by the PRP be marketed to
those members of two Western customers, Intermountain Consumers Power
Association (ICPA) and Utah Municipal Power Agency (UMPA), located in
the area of the Provo River drainage, in Utah and Wasatch Counties in
Utah. Power will be allocated to these two customers proportional to
the electrical sales of their members who meet the criteria for
receiving it. These customers will pay all of the annual expenses of
the PRP, including an amount to be used to assist the Provo River Water
Users Association's (Water Users) timely repayment of the original
Federal investment in the PRP. In return, these customers will receive
all of the total marketable output of the PRP.
The proposed rate methodology constitutes a minor rate adjustment
as defined by the procedures for public participation in general rate
adjustments covered in 10 CFR 903.2(f). The PRP annual sales are less
than 100 million kilowatthours and installed capacity is less than
20,000 kilowatts. A 30-day comment period will begin with the
publication of this Federal Register notice and end 30 days thereafter.
After review of public comments, Western will recommend a proposed rate
methodology for establishing the annual charge to be approved on an
interim basis by the Deputy Secretary of DOE. The proposed rate
methodology will be sent to the Federal Energy Regulatory Commission
for approval on a final basis. The proposed rate methodology for
marketing capacity and energy is expected to become effective November
1, 1994, and it will remain in effect until October 31, 1999, unless
superseded by another rate action.
At present there is no existing PRP rate. Energy has been sold to
the CRSP at an amount that meets the PRP's annual revenue requirements
for expenses and repayment obligations.
The following table shows the investment repayment status:
Cost Evaluation Period
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Estimated
Estimated paid Estimated paid unpaid balance
Total through FY from FY 1995- at the end of
1994 99 FY 1999
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Project & Additions............................. $1,070,952 $1,070,952 $0 $0
Replacements through 1994....................... 521,989 85,593 62,340 374,056
Projected Replacements 1995-1999................ 98,385 N/A 8,918 89,467
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Total..................................... 1,691,326 1,156,545 71,258 463,523
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DATES: The consultation and comment period will begin with publication
of this notice in the Federal Register and will end August 11, 1994.
Written comments should be received by Western by the end of the
consultation and comment period to be assured consideration and should
be sent to the address below.
A related notice appears in today's Federal Register.
FOR FURTHER INFORMATION CONTACT: Acting Area Manager, Salt Lake City
Area Office, Western Area Power Administration, P.O. Box 11606, Salt
Lake City, UT 84147-0606, (801) 524-5493.
Background Information
Construction of the PRP was begun in May 1938, with the powerplant
completed in 1958. It has a present generating capacity of 5 megawatts
of power. The Water Users, a corporation of stockholders owning
prorated water entitlements, executed contract No. Ilr-874 in 1936,
with the Federal Government to construct and repay project facilities.
Contract No. Ilr-1082, dated December 20, 1938, established a contract
among several entities to compensate the Utah Power and Light Company
with PRP power in exchange for power foregone at its powerplant. Only
energy excess to project purposes has been available for Federal
marketing. Since 1963, CRSP has needed additional energy and has
purchased the available PRP energy at an amount established annually
for the PRP to cover its costs, including operation, maintenance, and
replacement costs and repayment expenses. These expenses have included
$1.623 million of irrigation assistance to the Water Users. PRP's
original power investment has been repaid.
In December 1993, Western proposed to change the way it marketed
power and energy produced by PRP in response to customer interest in
its available resources. The part of the proposal that suggested
inclusion of the PRP in the Integrated Projects was not supported by
customers for various reasons, thereby requiring Western to modify its
original proposal to one which will market PRP's power and energy
independent of the Integrated Projects. Two Western customers, ICPA and
UMPA, pursued acquiring the available PRP capacity and energy. The
members of these customers are located in the PRP drainage area in Utah
and Wasatch Counties. Western proposes that these customers receive all
of the total marketable output, with the power allocated proportionally
to their eligible members' energy sales. ICPA and UMPA would pay all of
the annual expenses of the project. An amount to meet the repayment
assistance to the Water Users would be recovered under separate
agreement.
Proposed Methodology
If Western adopts the proposal, Western will prepare a power
repayment study (PRS) annually for PRP to establish the revenue needed
to meet annual costs, including operation, maintenance, and replacement
repayment costs and interest. Budgeted estimates of these future costs
will be used in the PRS. The power assistance to the Water Users will
not be included in the PRS but will, instead, be paid under a separate
arrangement among the Bureau of Reclamation, Western, ICPA, UMPA, and
the Water Users which will provide for equal annual installments of
$102,285.71 over 14 years.
If the proposed methodology is adopted and PRP energy is no longer
sold to the CRSP, it will be necessary to collect the PRP's share of
transmission costs in Utah under contract No. 2436 with PacifiCorp.
Assigning proportional shares of Western's Tier 1 and Tier 2 costs will
result in an annual transmission expense of approximately $30,348. This
amount also will be included as an annual expense of the PRP. The
annual revenue requirement of the PRP, as determined by the PRS, will
then be prorated between ICPA and UMPA and divided by 12 for monthly
billing to the customers. The rate methodology used to determine the
annual revenue requirement will be recalculated each year during the 5-
year period that the methodology is proposed to be in effect.
SUPPLEMENTARY INFORMATION: The PRP rate methodology is established
pursuant to the Department of Energy Organization Act (42 U.S.C. 7101
et seq.) and the Reclamation Act of 1902, 32 U.S.C. Sec. 388 et seq.,
as amended and supplemented by subsequent enactments, particularly
Sec. 9(c) of the Reclamation Project Act of 1939, 43 U.S.C.
Sec. 485h(c).
By Amendment No. 3 to Delegation Order No. 0204-108, published
November 10, 1993 (58 FR 58716), 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 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 Federal Energy Regulatory Commission.
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, memorandums, and other
documents made or kept by Western for the purpose of developing the
proposed rate methodology for capacity and energy are and will be made
available for inspection and copying at the Salt Lake City Area Office
located at 257 East 200 South, Salt Lake City, Utah.
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 PRP rate proposal is 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 PRP
capacity and energy rate methodology is of limited applicability, no
flexibility analysis is required.
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.
Environmental Evaluation
In compliance with the National Environmental Policy Act of 1969,
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 has determined that this action is categorically excluded from
the preparation of an environmental assessment or an environmental
impact statement.
Issued in Golden, Colorado, June 24, 1994.
William H. Clagett,
Administrator.
[FR Doc. 94-16844 Filed 7-11-94; 8:45 am]
BILLING CODE 6450-01-P
