E7-18950. Sam Rayburn Dam Power Rate Schedule

AGENCY:

Southwestern Power Administration, DOE.

ACTION:

Notice of Rate Order.

SUMMARY:

Pursuant to Delegation Order Nos. 00-037.00, effective December 6, 2001, and 00-001.00C, effective January 31, 2007, the Deputy Secretary of Energy has approved and placed into effect on an interim basis Rate Order No. SWPA-58, which increases the power rate for the Sam Rayburn Dam (Rayburn) pursuant to the following Sam Rayburn Dam Rate Schedule:

Rate Schedule SRD-07, Wholesale Rates for Hydropower and Energy Sold to Sam Rayburn Dam Electric Cooperative, Inc., (Contract No. DE-PM75-92SW00215).

DATES:

The effective period for the rate schedule specified in Rate Order No. SWPA-58 is October 1, 2007, through September 30, 2011.

FOR FURTHER INFORMATION CONTACT:

Mr. James K. McDonald, Assistant Administrator, Office of Corporate Operations, Southwestern Power Administration, Department of Energy, One West Third Street, Tulsa, Oklahoma 74103, [phone], [e-mail].

SUPPLEMENTARY INFORMATION:

The existing hydroelectric power rate for Rayburn is $2,816,064 per year. The Federal Energy Regulatory Commission approved this rate on a final basis on June 15, 2006, for the period January 1, 2006, through September 30, 2009. The 2007 Rayburn Power Repayment Studies indicates the need for an increase in the annual rate by $640,632 or 22.8 percent beginning October 1, 2007.

The Administrator, Southwestern Power Administration (Southwestern) has followed Title 10, Part 903 Subpart A, of the Code of Federal Regulations, “Procedures for Public Participation in Power and Transmission Rate Adjustments and Extensions” in connection with the proposed rate schedule. On May 23, 2007, Southwestern published notice in the Federal Register (72 FR 28963) of a 90-day comment period, together with a Public Information and Comment Forum, to provide an opportunity for customers and other interested members of the public to review and comment on a proposed rate increase for Rayburn. The public forum was canceled when no one expressed an intention to participate. Written comments were accepted through August 21, 2007. One comment was received from Gillis & Angley, LLP, Counsellors at Law, on behalf of Sam Rayburn Municipal Power Authority, the Vinton Public Power Authority, and the Sam Rayburn Dam Electric Cooperative, which stated that they had no objection to the proposed rate adjustment.

Information regarding this rate proposal, 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.

Following review of Southwestern's proposal within the Department of Energy, I approved Rate Order No. SWPA-58, on an interim basis, which increases the existing Rayburn rate to $3,456,696, per year, for the period October 1, 2007, through September 30, 2011.

Dated: September 13, 2007.

Clay Sell,

Deputy Secretary of Energy.

United States of America, Department of Energy, Deputy Secretary of Energy

In the Matter of: Southwestern Power Administration; Sam Rayburn Dam Project Rate; Order Confirming, Approving and Placing Increased Power Rate Schedule in Effect on an Interim Basis

Pursuant to sections 302(a) and 301(b) 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, relating to the Southwestern Power Administration (Southwestern) were transferred to and vested in the Secretary of Energy. By Delegation Order No. 0204-108, effective December 14, 1983, the Secretary of Energy delegated to the Administrator of Southwestern the authority to develop power and transmission rates, delegated to the Deputy Secretary of Energy the authority to confirm, approve, and place in effect such rates on an interim basis, and delegated to the Federal Energy Regulatory Commission (FERC) the authority to confirm and approve and place in to effect on a final basis or to disapprove rates developed by the Administrator under the delegation. Delegation Order No. 0204-108, as amended, was rescinded and subsequently replaced by Delegation Orders 00-037.00 (December 6, 2001) and 00-001-00C (January 31, 2007). The Deputy Secretary of Energy issued this rate order pursuant to said delegations.

Background

The Sam Rayburn Dam (Rayburn) is located on the Angelina River in the State of Texas in the Neches River Basin. Since the beginning of its operation in 1965, it has been marketed as an isolated project, under contract with Sam Rayburn Dam Electric Cooperative, Inc. (SRDEC) (Contract No. DE-PM75-92SW00215). SRDEC is comprised of two separate entities, the Sam Rayburn G&T, and the Sam Rayburn Municipal Power Agency.

On June 15, 2006, in Docket No. EF06-4021-000, FERC confirmed and approved the current annual Rayburn rate of $2,816,064 for the period January 1, 2006, through September 30, 2009.

Discussion

Southwestern's 2007 Current Power Repayment Study (PRS) indicates that the existing annual power rate of $2,816,064 does not meet cost recovery criteria. The increased revenue requirement is due to an increase in the U.S. Army Corps of Engineers projected future replacement investment. The Revised PRS indicates that an increase in annual revenues of $640,632 beginning October 1, 2007, is sufficient to accomplish repayment of the Federal investment in the required number of years. Accordingly, Southwestern developed a proposed rate schedule based on that increased revenue requirement.

Title 10, Part 903, Subpart A of the Code of Federal Regulations, “Procedures for Public Participation in Power and Transmission Rate Adjustments and Extensions,” has been followed in connection with the proposed rate adjustment. More specifically, opportunities for public review and comment during a 90-day period on the proposed Rayburn power rate were announced by a Federal Register (72 FR 28963) notice published on May 23, 2007. A Public Information and Comment Forum was scheduled to be held June 27, 2007, in Tulsa, Oklahoma. The forum was canceled as no one expressed an intention to participate. Written comments were due by August 21, 2007. Southwestern provided the Federal Register notice, together with requested supporting data, to the customer and interested parties for review and comment during the formal period of public participation. In addition, prior to the formal 90-day public participation process, Southwestern discussed with the customer representatives the preliminary information on the proposed rate adjustment. Only one formal comment was received from Gillis & Angley, LLP, Counsellors at Law, on behalf of Sam Rayburn Municipal Power Agency, Vinton Public Power Authority, and the Sam Rayburn Dam Electric Cooperative, Inc., which stated that they had no objection to the proposed rate adjustment.

Upon conclusion of the comment period in August 2007, Southwestern finalized the PRS and rate schedule for the proposed annual rate of $3,456,696, which is the lowest possible rate needed to satisfy repayment criteria. This rate represents an annual increase of 22.8 percent.

Availability of Information

Information regarding this rate increase, 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.

Comments and Responses

Southwestern received one written comment in which the customer representative expressed no objection to the proposed rate adjustment.

Other Issues

There were no other issues raised during the informal period or during the formal public participation period.

Administrator's Certification

The 2007 Revised Rayburn PRS indicates that the annual power rate of $3,456,696 will repay all costs of the project, including amortization of the power investment consistent with provisions of the DOE Order RA 6120.2. In accordance with Delegation Order Nos. 00-037.00 (December 6, 2001) and 00-001.00C (January 31, 2007), and section 5 of the Flood Control Act of 1944, the Administrator has determined that the proposed Rayburn power rate is consistent with applicable law and the lowest possible rate consistent with sound business principles.

Environment

The environmental impact of the rate increase proposal was evaluated in consideration of DOE's guidelines for implementing the procedural provisions of the National Environmental Policy Act, (10 CFR Part 1021, Subpart D, App. B4.3), and was 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.

Order

In view of the foregoing and pursuant to the authority delegated to me, I hereby confirm, approve and place in effect on an interim basis, for the period October 1, 2007, through September 30, 2011, the annual Sam Rayburn Dam rate of $3,456,696 for the sale of power and energy from Sam Rayburn Dam to the Sam Rayburn Dam Electric Cooperative, Inc., under Contract No. DE-PM75-92SW00215, dated October 7, 1992.

This rate shall remain in effect on an interim basis through September 30, 2011, or until the FERC confirms and approves the rate on a final basis.

Dated: September 13, 2007.

Clay Sell,

Deputy Secretary of Energy.

United States Department of Energy; Southwestern Power Administration

Wholesale Rates for Hydro Power and Energy Sold to Sam Rayburn Dam Electric Cooperative, Inc. (Contract No. DE-PM75-92SW00215)

Effective

During the period October 1, 2007, through September 30, 2011, in accordance with Rate Order No. 58, issued by the Deputy Secretary of Energy on September 13, 2007.

Applicable

To the power and energy purchased by Sam Rayburn Dam Electric Cooperative, Inc. (SRDEC) from the Southwestern Power Administration (Southwestern) under the terms and conditions of the Power Sales Contract dated October 7, 1992, for the sale of all Hydro Power and Energy generated at the Sam Rayburn Dam.

Character and Conditions of Service

Three-phase alternating current, delivered at approximately 60 hertz, at the nominal voltage and point of delivery, and in such quantities as provided by contract.

Monthly Rates

SRDEC shall compensate Southwestern for Sam Rayburn Dam Hydro Power and Energy purchased by SRDEC, in the amount of $288,058 per month ($3,456,696 per year).

The preceding rate shall be applicable regardless of the quantity of Hydro Power and Energy available or delivered to SRDEC; provided, however, that if an “Uncontrollable Force” prevents utilization of both of the project's power generating units for an entire billing period, and if during such billing period water releases were being made which otherwise would have been used to generate Hydro Power and Energy, then Southwestern shall, upon request by SRDEC, suspend billing for subsequent billing periods, until such time as at least one of the project's generating units is again available.

Footnotes

*.  Supersedes Rate Schedule SRD-05.