[Federal Register Volume 62, Number 182 (Friday, September 19, 1997)]
[Notices]
[Pages 49218-49221]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-24950]
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DEPARTMENT OF ENERGY
Western Area Power Administration
Transmission and Ancillary Services Rates, Loveland Area
Projects, Notice of Proposed Rate Adjustments
AGENCY: Western Area Power Administration, DOE.
ACTION: Notice of proposed rate adjustments.
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SUMMARY: The Western Area Power Administration (Western) is proposing
transmission service and ancillary service rate adjustments (proposed
rates) for the Loveland Area Projects (LAP). This action is necessary
because the existing transmission rate (1993) is no longer sufficient
to recover annual costs (including interest expense) and capital
requirements.
The Proposed Rates are scheduled to go into effect April 1, 1998.
Western requests approval of a rate methodology for each service. Once
approved, the rates will be adjusted on or about October 1 each year by
updating the revenue requirement and load data to the most currently
available. This Federal Register notice initiates the formal process
for the proposed rates.
The current firm transmission rate for LAP expires January 31,
1999, but will be superseded by this rate adjustment for new and
existing transmission service. Heretofore, there have been no rates for
the six ancillary services defined by Federal Energy Regulatory
Commission (FERC) Order 888. Please refer to Table 1 for a summary of
the Proposed Rates and their methodology.
DATES: The consultation and comment period will begin on the date of
publication of this Federal Register notice and will end December 18,
1997. Written comments should be received by Western by the end of the
comment period to be assured consideration. Western will present a
detailed explanation of the proposed rate at the public information
forum which will be held at the following date and time:
1. October 23, 1997--1 p.m. MDT, Denver, CO.
Western will receive written and oral comments at the public
comment forum which will be held at the following date and time:
2. November 18, 1997--1 p.m. MST, Denver, CO.
ADDRESSES: Western's public information forum will be held at the
following place:
1. Fairfield Inn, 6851 Tower Road, Denver, CO 80249, (303) 576-9640
Western's public comment forum will be held at the following place:
2. Fairfield Inn, 6851 Tower Road, Denver, CO 80249, (303) 576-9640
Written comments are to be sent to: Regional Manager, Rocky
Mountain Region (RMR), Western Area Power Administration, P.O. Box
3700, Loveland, Colorado 80539-3003 or faxed to the Regional Manager at
(970) 490-7213.
FOR FURTHER INFORMATION CONTACT: Daniel T. Payton, Rates Manager, RMR,
Western Area Power Administration, P.O. Box 3700, Loveland, CO 80539-
3003, (970) 490-7442, or e-mail (dpayton@wapa.gov).
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Proposed Rates for LAP Transmission
A. Proposed Revenue Requirement for Transmission Service
B. Network Transmission Service
C. Firm Point-to-Point Transmission Service
D. Non-Firm Point-to-Point Transmission Service
II. Proposed Rates for Ancillary Services
A. Proposed Rate for Scheduling, System Control, and Dispatch
Service
B. Proposed Rate for Reactive Supply and Voltage Control from
Generation Sources
C. Proposed Rate for Regulation and Frequency Response Service
D. Proposed Rate for Energy Imbalance Service
E. Proposed Rate for Operating Reserves: Spinning, Supplemental,
and Emergency Use
III. Table 1--Summary of LAP Proposed Service Rates
IV. Authorities
[[Page 49219]]
I. Proposed Rates for LAP Transmission
The RMR will offer network, firm point-to-point, and non-firm
point-to-point transmission service to all Transmission Customers. The
proposed rates will be applicable to existing and future transmission
service. As demonstrated in the rate methodology, Western will be
taking transmission service on the same basis as other Transmission
Customers. The cost of transmission service for serving Western's
Contract Rates of Delivery will continue to be included in the LAP firm
power rate, consistent with existing contracts. These contracts will
expire in the year 2024.
The RMR proposes to implement the LAP transmission rates in three
steps:
Step 1--April 1, 1998
The first step will be: the existing rate ($1.88/kW-Month) plus
one-third of the difference between the existing transmission rate
($1.88/kW-Mo) and the proposed rate. The revenue requirement for the
first step is based on FY 1996 financial data; the load is based on
1995 data.
Step 2--October 1, 1998
The second step will be: the existing rate ($1.88/kW-Month) plus
two-thirds of the difference between the existing rate and the
recalculated rate based on financial and load data for FY 1997 (October
1, 1996, to September 30, 1997).
Step 3--October 1, 1999
The third step will be: the recalculated rate based on financial
and load data for FY 1998 (October 1, 1997, to September 30, 1998).
The transmission rates will be recalculated and revised every year
effective October 1, based on the methodologies presented in the
following sections. Western will provide notice of changes in rates no
later than July 1 of each year.
I.A. Proposed Revenue Requirement for Transmission Service
An annual fixed charge methodology was used to determine the
revenue requirement to be recovered from network, firm, and non-firm
transmission service. The annual transmission costs included are
operation and maintenance expenses, administrative and general
expenses, interest expense, and depreciation expense.
I.B. Network Transmission Service
The monthly charge for network transmission service is the product
of the Transmission Customer's load-ratio share times one-twelfth of
the annual transmission revenue requirement. The current revenue
requirement is $43,554,579.
The customer's load-ratio share is the ratio of a network
customer's network load to Western's LAP transmission system total
load, calculated on a rolling 12-month basis (12 coincident peak (12-
cp)). The network customer's monthly network load is its hourly load
coincident with Western's LAP transmission system monthly transmission
system peak. The LAP transmission system total load is the monthly
system peak minus the coincidental peak usage of all firm point-to-
point transmission service customers, plus the reserved capacity for
all firm point-to-point transmission service customers. The 12-cp for
the LAP transmission system is 1,118,245 kW, based on 1995 data.
I.C. Firm Point-to-Point Transmission Service
The rate for firm point-to-point transmission service is the annual
revenue requirement for transmission divided by the 12-cp monthly peak
of the LAP transmission system. The current estimate is $3.25/kW-Month
($43,554,579 / 1,118,245 kW / 12 months). Western may discount these
rates to promote short-term firm sales.
I.D. Non-Firm Point-to-Point Transmission Service
Non-firm transmission service is available for periods ranging from
1 hour to 1 month. The rate for non-firm transmission service may be
discounted based upon market conditions, but never higher than the firm
point-to-point rate, converted to energy equivalent at 100% load
factor. The current maximum rate is 4.45 mills/kWh ($3.25/kW-Month/730
hours).
II. Proposed Rates for Ancillary Services
Western will provide ancillary services, subject to availability,
as described in Table 1 of this notice. The proposed rates are designed
to recover only the costs incurred for the service(s). The ancillary
services, as defined by FERC, are control area-based rates.
It is anticipated that in June 1998, the Western Area Lower
Missouri (WALM) control area will be merged with a portion of the
existing Western Area Upper Colorado (WAUC) control area operated by
Western's Colorado River Storage Project Customer Service Center, to
form the Western Area Colorado Missouri (WACM) control area which will
be operated by Western's RMR. The following ancillary service rate
calculations are for the WACM control area, effective June 1998.
An annual fixed charge methodology was used to determine the
revenue requirement to be recovered by each ancillary service. The
annual generation costs included are operation and maintenance
expenses, administrative and general expenses, interest expense, and
depreciation expense.
II.A. Proposed Rate for Scheduling, System Control, and Dispatch
Service
Scheduling, system control, and dispatch costs are calculated as an
annual cost of all personnel and other related costs involved in
providing the service for RMR customers. That cost is divided by the
number of schedules per year to derive a rate per schedule per day.
The rate for the WACM control area is $25.71 per schedule per day
and will be in effect in June 1998.
II.B. Proposed Rate for Reactive Supply and Voltage Control From
Generation Sources
RMR's Reactive Supply and Voltage Response Service costs are
calculated as an annual cost of Bureau of Reclamation generation plant
investment for both LAP and Salt Lake City Area-Integrated Projects
(SLCA-IP), and applying to that cost the percentage of the generation
resource required to provide reactive support in the control area to
yield an annual cost. That annual cost is then divided by the 12-cp
average of the total load that requires VAR support in the control
area, yielding a rate for the combined WACM control area effective June
1998 of $0.12/kW-Month (or .27 mills/kWh for non-firm service, based on
a 60 percent annual load factor).
II.C. Proposed Rate for Regulation and Frequency Response Service
Western's Regulation and Frequency Response Service rate is
determined by considering the annual revenue requirement of Bureau of
Reclamation regulating plants for both LAP and SLCA-IP, and dividing
that by the load requiring regulation in the WACM control area
(exclusive of those known loads that provide their own automatic
generation control). The resulting rate for the WACM control area
effective June 1998 is $0.15/kW-Month (or .34 mills/kWh for non-firm
service, based on 60 percent annual load factor).
II.D. Proposed Rate for Energy Imbalance Service
The Energy Imbalance Service rate will be applied against
deviations outside a 3 percent bandwidth ( 1.5
[[Page 49220]]
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/kWh; e.g., the sixth time an under delivery occurs
within a month, the 100 mills/kWh charge will be applied.
Any positive excursion (over delivery) will be credited to the
customer for 50 percent of the market value of the over delivery within
30 days.
II.E. Proposed Rate for Operating Reserves: Spinning, Supplemental, and
Emergency Use
It is unlikely that reserves will be available from WACM resources
on a long-term basis.
If Western has Spinning or Supplemental Reserves available for
short-term sale from WACM resources, Western will charge the LAP or the
SLCA-IP firm power capacity rate in effect at the time of the sale. The
current LAP firm power capacity rate is $2.85/kW-Month. The proposed
SLCA-IP firm power capacity rate is $3.48/kW-Month.
If Spinning or Supplemental Reserves are unavailable from WACM
resources, Western may obtain the reserves on the open market for the
customer and pass through the cost of those reserves, plus a cost for
administration.
When reserves are called on for Emergency Use, Western will assess
a charge for energy used, at the greater of 30 mills/kWh or the
prevailing market energy rate in the Region.
The Transmission Customer will be responsible for the transmission
service to get these reserves to their destination.
III. Table 1--Summary of LAP Proposed Service Rates
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Service Rate calculation or basis Proposed rate
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Network Transmission............... Customer's Load Ratio Share *\1/12\* Annual Based upon customer load
Transmission Revenue Requirement ($43,554,579). share.
Firm Point-to-Point Transmission... Total Annual Revenue Requirement/12 CP/12 $3.25/kW-month.
months ($43,554,579/1,118,245 kW/12).
Non Firm Point-to-Point Firm point-to-point rate/730 hours per month Maximum of 4.45 mills/kWh.
Transmission. ($3.25/kW-Month/730).
Scheduling, System Control, and Annual cost of personnel and related costs/
Dispatch. number of schedules per year.
Before consolidation into WACM: $1,098,873/ Before: $32.51/schedule/
33,800 schedules. day.
After consolidation into WACM: $1,223,140/ After: $25.71/schedule/
47,580 schedules. day.
Reactive Supply and Voltage Control Total Annual Revenue Requirement for Generation
from Generation Sources. *Percentage of Resource Capacity Used for
Reactive Power = Annual Revenue Requirement
for Reactive Power/Load in Control Area
Requiring Reactive Power/12 months.
Before consolidation into WACM: $51,456,799 Before: $0.09/kW-Month.
*2.82%=$1,448,509; then, $1,448,509/1,383,432
kW/12.
After consolidation into WACM: $73,299,264 After: $0.12/kW-Month.
*2.82%=$2,063,374; then $2,063,374/1,407,918
kW/12.
Regulation and Frequency Response.. Total Annual Revenue Requirement for Regulation/
Load in Control Area Requiring Regulation/12/
Months.
Before consolidation into WACM: $1,746,658/ Before: $0.11/kW-Month.
1,353,712 kW/12.
After consolidation into WACM: $2,531,065/ After: $0.15/kW-Month.
1,407,918 kW/12.
Energy Imbalance................... Charge for Energy Imbalance will be applied to As described.
deviations outside a 3 percent bandwidth.
Negative deviations above 1.5 percent,
occurring more than five times per month, will
be assessed 100 mills/kWh, with a 2 MW minimum
deviation.
Any Positive deviations above 1.5 percent will
be credited to customer at 50 percent of
average monthly non-firm market price in WACM
control area.
Spinning/Supplemental/Emergency Use Anticipate no long-term surplus reserves Spinning/Supplemental
Reserves. available for sale. Reserves will be charged
the Current Firm Power
Capacity Rates:
If available from a WACM resource on short-term LAP: $2.85kW Month.
basis, Spinning/Supplemental reserves would be
assessed the LAP or SLCA-IP firm power
capacity rate in effect at the time the
request is made.
Spinning/Supplemental reserves are unavailable SLCA-IP: $3.48/kW-Month
from a WACM resource, Western would offer to (Proposed).
purchase and pass-through cost of the
reserves, plus a cost for administration.
Emergency Use reserves will be charged the Emergency Use will be
greater of 30 mills/kWh or the prevailing charged > of 30 mills/kWh
market energy rate in the Region. or prevailing market.
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IV. Authorities
Transmission and ancillary services rates for the LAP are being
established pursuant to the Department of Energy (DOE) 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 5 of the Flood Control Act of 1944 (16
U.S.C. 825s) 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
[[Page 49221]]
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.
Regulatory Flexibility Analysis
Pursuant to the Regulatory Flexibility Act of 1980 (5 U.S.C. 601,
et seq.), each agency, when required 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
LAP transmission rate and ancillary service rate adjustments are
related to non-regulatory services provided by Western at particular
rates. 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 LAP transmission rates and ancillary
services are of limited applicability, no flexibility analysis is
required.
Environmental Compliance
Western will conduct an environmental evaluation of the proposed
rates and develop the appropriate level of environmental documentation
pursuant to the National Environmental Policy Act (NEPA) of 1969 (42
U.S.C. 4321 et seq.); the Council on Environmental Quality Regulations
for implementing NEPA (40 CFR parts 1500 through 1508); and the DOE
NEPA Implementing Procedures and Guidelines (10 CFR part 1021).
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.
Availability of Information
All brochures, studies, comments, letters, memoranda, or other
documents made or kept by Western for developing the proposed rates,
will be made available for inspection and copying at the RMR Office,
located at 5555 East Crossroads Boulevard, Loveland, Colorado, 80537,
during normal business hours.
Dated: Sepember 11, 1997.
Michael S. Hacskaylo,
Acting Administrator.
[FR Doc. 97-24950 Filed 9-18-97; 8:45 am]
BILLING CODE 6450-01-P
