[Federal Register Volume 60, Number 146 (Monday, July 31, 1995)]
[Notices]
[Pages 38995-38996]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-18736]
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DEPARTMENT OF ENERGY
Western Area Power Administration
Pacific Northwest-Pacific Southwest Intertie Project--Proposed
Firm and Nonfirm Transmission Service Rates for the Phoenix Area
AGENCY: Western Area Power Administration, DOE.
ACTION: Notice of Proposed Rates for Firm Transmission Service and
Nonfirm Transmission Service for the Pacific Northwest-Pacific
Southwest Intertie Project Rate Adjustment.
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SUMMARY: The Western Area Power Administration (Western) is proposing
two rates for firm transmission service and a rate for nonfirm
transmission service for the Pacific Northwest-Pacific Southwest
Intertie Project (AC Intertie).
The power repayment study indicates that the proposed rates for
firm and nonfirm transmission service are necessary because of
increases in operation and maintenance expenses, and the anticipated
decrease in current marketable capacity from the 500-kilovolt (kV)
transmission lines. The proposed rates for firm and nonfirm
transmission service will supersede the existing rates that became
effective August 1, 1993, and were extended on May 17, 1995 (60 FR
26433) until October 1, 1996. The proposed rates for firm and nonfirm
transmission service are to become effective January 1, 1996.
The existing firm transmission service rate for the 230/345-kV
transmission lines is $4.46 per kilowatt per year (kW/year) and the
existing nonfirm transmission service rate is 1.00 mills per
kilowatthour (mills/kWh).
The proposed firm transmission service rate for the 230/345-kV
transmission lines is $7.37/kW/year; the proposed rate for the 500-kV
transmission lines is $16.00/kW/year; and the proposed combined nonfirm
transmission service rate is 2.11 mills/kWh.
The Acting Assistant Secretary of Energy for Energy Efficiency and
Renewable Energy of the Department of Energy (DOE), approved the
existing rates on an interim basis for firm and nonfirm transmission
service on July 14, 1993. The Federal Energy Regulatory Commission
(FERC) confirmed and approved the rates on a final basis for firm and
nonfirm transmission service on March 24, 1994 (66 FERC para.62,180).
The existing rates were designed to recover all annual costs and
investment repayment of both the existing 230/345-kV lines and the new
500-kV lines. The existing rates for firm and nonfirm transmission
service were placed in effect on August 1, 1993, and consisted of a
two-step rate adjustment process. Step one of the firm transmission
service rate was approved to be in effect through September 30, 1995,
and step two of the existing rates was to become effective on October
1, 1995, and continue through July 31, 1998.
During the last AC Intertie rate adjustment process (WAPA-56), the
Colorado River Commission of Nevada, the Arizona Power Authority, the
Arizona Subcontractor Group, the Arizona Power Pooling Association,
Inc., and the Salt River Project Agricultural Improvement and Power
District filed a Motion to Intervene and Protest FERC confirmation and
approval of the AC Intertie rates described in Rate Order No. WAPA-56.
On December 28, 1993, Western filed a Stipulation Agreement signed by
Western and these customers in which the intervenors withdrew their
protests and Western agreed to re-examine the issues raised as well as
commence a new rate adjustment proceeding during fiscal year 1995.
Western has re-examined the issues raised during the last rate
adjustment process along with the current issues regarding the rate
impact from the additional capacity. Due to customer request, Western
has developed and is proposing two firm transmission service rates and
a nonfirm transmission service rate for the AC Intertie Project to
supersede step one of the existing rates which were extended for firm
and nonfirm transmission service. The major difference between step two
of the existing rates and the proposed rates is the separate marketing
and rate-setting design of the 500-kV system.
In response to additional AC Intertie customer requests, Western is
proposing a rate design for the firm transmission
[[Page 38996]]
service that consists of (1) a rate for the firm transmission service
from the existing 230/345-kV transmission lines and (2) a rate for the
firm transmission service of the 500-kV transmission lines. The firm
transmission service rate for the 500-kV transmission lines is designed
to recover all annual costs for repayment of the new investment. Based
upon its studies, Western expects that the marketable capacity used in
the rate calculation for the 500-kV transmission lines to be 668
megawatts (MW). Western is proposing a firm transmission service rate
of $7.37/kW/year for the 230/345-kV system and a firm transmission
service rate of $16.00/kW/year for the 500-kV system.
Western is also proposing a nonfirm transmission service rate of
2.11 mills/kWh for both the 230/345-kV and 500-kV system that will
supersede the existing nonfirm transmission service rate of 1.00 mills/
kWh. The non-firm transmission service rate combines the rate of 1.40
mills/kWh for the 230/345-kV system and a rate of 3.04 mills/kWh for
the 500-kV system for a combined rate of 2.11 mills/kWh.
The following table displays the existing rates, the step two of
the previously approved rates, the proposed AC Intertie 230/345-kV
transmission system rates, and the proposed 500-kV transmission system
rates:
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Existing rates 230/345-kV Existing rates step two Proposed rates 230/345-kV Proposed rates 500-
Type of service system extended through 10/ 230/345/ 500-kV system 07/ system 01/01/1996 through kV system 01/01/1996
01/1996 31/98 09/30/2000 through 09/30/2000
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Firm Transmission Service..................... $4.46/kW/year............. $8.01/kW/year............. $7.37/kW/year............. $16.00/kW/year.
Combined Nonfirm Transmission Service......... 1.00 mills/kWh............ 1.52 mills/kWh............ 2.11 mills/kWh............ 2.11 mills/kWh.
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The proposed rates for the 500-kV transmission lines are based on
investments, an estimated marketable capacity, and a percentage
distribution of the projected expenses and revenues. The final
marketable capacity that will be contracted is not yet determined.
Should there be contracts for more than the estimated marketable
capacity of 668 MW, Western would foresee an increase in firm revenue,
thereby, providing for a decrease to the proposed rate of $16.00/kW/
year. Conversely, if less than the estimated capacity is contracted,
Western would increase the proposed rate of $16.00/kW/year to ensure
that the revenue requirement is satisfied. The proposed rate for the
230/345 kV system represents an 8.68 percent decrease from the existing
step two rate of $8.01/kW/year. The non-firm transmission rate
represents an increase of 39 percent from the existing non-firm
transmission service rate.
Since the proposed rates constitute a major rate adjustment for
transmission service, 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 final proposed AC
Intertie rates to the Deputy Secretary of the Department of Energy
(Deputy Secretary). If approved by the Deputy Secretary, the
provisional rates would remain in effect on an interim basis until
confirmed and approved as final rates by FERC.
DATES: The consultation and comment period will begin with the
publication of this notice in the Federal Register and will end not
less than 90 days later, or October 17, 1995, whichever occurs later. A
public information forum will be held at 1 p.m. on August 24, 1995, at
Western's Phoenix Area Office, 615 South 43rd Avenue, Phoenix Arizona.
A public comment forum at which Western will receive oral and written
comments will be held at 1 p.m. on September 18, 1995, also at
Western's Phoenix Area Office.
Written comments regarding the proposed rates should be received by
the end of the consultation and comment period to be assured
consideration and should be sent to the address below.
ADDRESSES: For Further Information Contact: Mr. J. Tyler Carlson, Area
Manager, Phoenix Area Office, Western Area Power Administration, P.O.
Box 6457, Phoenix, AZ 85005, (602) 352-2521.
SUPPLEMENTARY INFORMATION: Transmission rates for the AC Intertie 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 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 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 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 FERC. Existing DOE procedures for public participation in 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 rates for transmission service are and will be available for
inspection and copying at the Phoenix Area Office, located at 615 South
43rd Avenue, Phoenix, AZ 85005.
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 the Office of Management and Budget is required.
Environmental Evaluation
In compliance with the National Environmental Policy Act (NEPA) of
1969, 42 U.S.C. 4321 et seq.; Council On Environmental Quality (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, July 18, 1995.
J.M. Shafer,
Administrator.
[FR Doc. 95-18736 Filed 7-28-95; 8:45 am]
BILLING CODE 6450-01-P
