01-19575. Integrated System Power Rate Schedules

AGENCY:

Southwestern Power Administration, DOE.

ACTION:

Notice of extension.

SUMMARY:

Pursuant to Delegation Order No. 0204-172, November 24, 1999, and pursuant to the implementation authorities in 10 CFR 903.22(h) and 903.23(a)(3), the Deputy Secretary of Energy has approved and placed into effect on an interim basis Rate Order No. SWPA-45 which extends the existing power rates for the Integrated System. This is an interim rate action effective October 1, 2001, extending for a period of one year through September 30, 2002.

FOR FURTHER INFORMATION CONTACT:

Mr. Forrest E. Reeves, Assistant Administrator, Office of Corporate Operations, Southwestern Power Administration, Department of Energy, One West Third Street, Tulsa, OK 74103, [phone], [e-mail].

SUPPLEMENTARY INFORMATION:

The current rate schedules for the Integrated System were confirmed and approved on a final basis by the Federal Energy Regulatory Commission (FERC) on April 29, 1998, for the period January 1, 1998, through September 30, 2001.

Title 10, Part 903 Subpart A, of the Code of Federal Regulations, “Procedures for Public Participation in Power and Transmission Rate Adjustments and Extensions” (Part 903) have been followed in connection with the proposed extension of the rate schedules. An opportunity for customers and other interested members of the public to review and comment on the proposed extension was announced by notice published in the Federal Register (66 FR 24131), May 11, 2001, with written comments due on or before June 11, 2001. In addition, Southwestern held informal meetings with numerous customers in which proposed changes were discussed. No written comments were received.

Information regarding extension of these rate schedules, including studies and other supporting material, is available for public review and comment in the offices of Southwestern Power Administration, Suite 1400, One West Third Street, Tulsa, Oklahoma 74103. 10 CFR 903.22(h) and 903.23(a)(3) provide implementation authority for such extension to the Deputy Secretary.

Dated: July 26, 2001.

Francis S. Blake,

Deputy Secretary.

Order Approving Extension of Power Rates on an Interim Basis

Pursuant to Sections 301(b) and 302(a) of the Department of Energy Organization Act, Public Law 95-91, the functions of the Secretary of the Interior and the Federal Power Commission under Section 5 of the Flood Control Act of 1944, 16 U.S.C. 825s, for the Southwestern Power Administration were transferred to and vested in the Secretary of Energy. By Delegation Order No. 0204-108, effective December 14, 1983, 48 FR 55664, the Secretary of Energy delegated to the Deputy Secretary of Energy on a non-exclusive basis the authority to confirm, approve and place power and transmission rates into effect on an interim basis, and delegated to the Federal Energy Regulatory Commission (FERC) on an exclusive basis the authority to confirm, approve and place in effect on a final basis, or to disapprove power and transmission rates. Amendment No. 1 to Delegation Order No. 0204-108, effective May 30, 1986, 51 FR 19744, revised the delegation of authority to confirm, approve and place into effect on an interim basis power and transmission rates by delegating such authority to the Under Secretary of Energy rather than the Deputy Secretary of Energy. This delegation was reassigned to the Deputy Secretary of Energy by Department of Energy (DOE) Notice 1110.29, dated October 27, 1988, and clarified by Secretary of Energy Notice SEN-10-89, dated August 3, 1989, and subsequent revisions. By Amendment No. 2 to Delegation Order No. 0204-108, effective August 23, 1991, 56 FR 41835, the Secretary of the Department of Energy revised Delegation Order No. 0204-108 to delegate to the Assistant Secretary, Conservation and Renewable Energy, the authority which was previously delegated to the Deputy Secretary in that Delegation Order. By Amendment No. 3 to Delegation Order No. 0204-108, effective November 10, 1993, the Secretary of Energy re-delegated to the Deputy Secretary of Energy, the authority to confirm, approve and place power and transmission rates of the Power Marketing Administrations into effect on an interim basis. By notice, dated April 15, 1999, the Secretary of Energy rescinded the authority of the Deputy Secretary of Energy under Delegation Order No. 0204-108. By Delegation Order No. 0204-172, effective November 24, 1999, the Secretary of Energy again provided interim rate approval authority to the Deputy Secretary of Energy.

This is an interim rate extension. 10 CFR 903.22(h) and 903.23(a)(3) provide implementation authority for such extension to the Deputy Secretary of Energy.

Background

Southwestern Power Administration (Southwestern) currently has marketing responsibility for 2.2 million kilowatts of power from 24 multiple-purpose reservoir projects with power facilities constructed and operated by the U.S. Army Corps of Engineers, generally in all or portions of the states of Arkansas, Kansas, Louisiana, Missouri, Oklahoma and Texas. The Integrated System, comprised of 22 of the projects, is interconnected through a transmission system presently consisting of 138-kV and 161-kV high-voltage transmission lines, 69-kV transmission lines, and numerous bulk power substations and switching stations. In addition, contractual transmission arrangements provide for integration of other projects into the system.

The remaining two projects, Sam Rayburn Dam and Robert Douglas Willis, are isolated hydrologically and electrically from the Southwestern transmission system, and their power is marketed under separate contracts through which the customer purchases the entire power output of the project at the dam. A separate Power Repayment Study (PRS) is prepared for each isolated project.

The current rate schedules for the Integrated System were confirmed and approved on a final basis by the Federal Energy Regulatory Commission (FERC) on April 29, 1998, for the period January 1, 1998, through September 30, 2001. Since initial FERC approval, specific provisions within rate schedules P-98A and NFTS-98 have been revised to address issues that have arisen from restructuring of the electric industry. Rate Schedules were designated 98B, 98C, and 98D with each revision. All subsequent revisions of the Integrated System rate schedules through 98C have been approved by FERC. Rate schedules P-98D and NFTS-98D are currently under FERC review for final approval. These revisions had no impacts on the initially established revenue requirements for Southwestern's Integrated System. In addition, no change was made to the expiration date, September 30, 2001. Consequently, the net result of the revenue requirements projected in the FY 1997 Integrated System Power Repayment Studies which provided the basis for the existing rate schedules, is not changed. The FY 2001 Integrated System PRS indicates the need for a rate adjustment of $1,938,809 annually, or 1.8 percent.

Pursuant to 10 CFR 903, the Administrator, Southwestern, published notice in the Federal Register on May 11, 2001, 66 FR 24132, announcing a 30-day period for public review and comment concerning the proposed interim rate extension. In addition, an informal meeting was held with customer representatives in April 2001 in which the proposed extension was discussed. Written comments were accepted through June 11, 2001. No written comments were received.

Discussion

The existing Integrated System rates are based on the FY 1997 PRS. PRSs have been completed on the Integrated System each year since approval of the existing rates. Rate changes identified by the PRSs since that period have indicated the need for minimal rate increases or decreases. Since the revenue changes reflected by the PRSs were within the plus-or-minus two percent Rate Adjustment Threshold established by Southwestern's Administrator on June 23, 1987, these rate adjustments were deferred in the best interest of the government and provided for the next year's PRS to determine the appropriate level of revenues needed for the next rate period.

The FY 2001 PRS indicates the need for an annual revenue increase of $1,968,809 (1.8 percent). As has been the case since the existing rates were approved, the FY 2001 rate adjustment falls within Southwestern's plus-or-minus two percent Rate Adjustment Threshold and would normally be deferred with no rate filing necessary. However, the existing rates expire on September 30, 2001. Consequently, Southwestern proposes to extend the existing rates for a one-year period ending September 30, 2002, on an interim basis under the implementation authorities noted in 10 CFR 903.22(h) and 903.23(a)(3).

Southwestern continues to make significant progress toward repayment of the Federal investment in the Integrated System. Through FY 2000, cumulative amortization for the Integrated System was $465,190,979, which represents approximately 43 percent of the $1,083,643,907 Federal investment in the Integrated System.

Comments and Responses

Southwestern has received no formal written comments regarding the extension of the Integrated System rate schedules.

Information regarding this rate extension, including studies and other supporting material, is available for public review and comment in the offices of Southwestern Power Administration, One West Third Street, Tulsa, Oklahoma 74103.

Administrator's Certification

The revised rate schedules will repay all costs of the Integrated System including amortization of the power investment consistent with the provisions of Department of Energy Order No. RA 6120.2. In accordance with Section 1 of Delegation Order No. 0204-108, as amended November 10, 1993, 58 FR 59717, and Section 5 of the Flood Control Act of 1944, the Administrator has determined that the existing Integrated System Rate Schedules are the lowest possible rates consistent with sound business principles, and their extension is consistent with applicable law.

Environment

No additional evaluation of the environmental impact of the extension of the existing rate schedules was conducted since no change has been made to the currently-approved Integrated System rates which were determined to fall within the class of actions that are categorically excluded from the requirements of preparing either an Environmental Impact Statement or an Environmental Assessment pursuant to the procedural provisions of the National Environmental Policy Act, 10 CFR 1021.

Order

In view of the foregoing and pursuant to the authority delegated to me in 10 CFR 903, I hereby extend on an interim basis, for the period of one year, effective October 1, 2001, the current Integrated System wholesale rates for Hydro Peaking Power, Non-Federal Transmission/Interconnection Facilities Service and Excess Energy.

Dated: July 26, 2001.

Francis S. Blake,

Deputy Secretary.