04-7327. Desert Southwest Customer Service Region

AGENCY:

Western Area Power Administration, DOE.

ACTION:

Notice of order extending network integration transmission and ancillary service rates.

SUMMARY:

This action is to extend the existing Rate Schedules DSW-SD1, DSW-RS1, DSW-FR1, DSW-EI1, DSW-SPR1, DSW-SUR1, PD-NTS1, and INT-NTS1 for the Desert Southwest Customer Service Region network integration transmission services for the Parker-Davis Project and the Pacific Northwest-Pacific Southwest Intertie Project and ancillary services for the Western Area Lower Colorado control area through March 31, 2005. The additional time is needed to accommodate changes in the firm transmission rate due to the upcoming Multi-System Transmission Rate (MSTR) Public Process.

FOR FURTHER INFORMATION CONTACT:

Mr. Jack Murray, Rates Team Lead, Desert Southwest Customer Service Region, Western Area Power Administration, P.O. Box 6457, Phoenix, AZ 85005-6457, [phone], e-mail [e-mail].

SUPPLEMENTARY INFORMATION:

By Delegation Order No. 00-037.00 approved December 6, 2001, the Secretary delegated: (1) The authority to develop power and transmission rates on a nonexclusive basis to the Administrator of the Western Area Power Administration (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. The existing rates contained within Rate Order No. WAPA-84 were approved for a 5-year period, beginning April 1, 1999, and ending March 31, 2004.

Western is currently evaluating methodologies and preparing to enter into a public process proposing an MSTR for cost recovery purposes for the Parker-Davis Project, the Pacific Northwest-Pacific Southwest Intertie Project and the Central Arizona Project. The methodologies to charge for the network integration transmission service are currently written to apply to each Project. Through the public process, these service methodologies will be changed to accommodate some variation of the proposed MSTR. Western believes that the additional time afforded by extending the date for the expiration of the network integration transmission and ancillary services will allow Western to develop new rates to facilitate cost recovery in the future. In order to conduct the planned MSTR public process, the current Rate Schedules must be extended pursuant to 10 CFR 903. The rate schedules covered by Rate Order No. WAPA-84 will be extended under Rate Order No. WAPA-112.

Western's existing formulary rate schedules for network integration transmission and ancillary services, which are recalculated annually, would sufficiently recover project expenses (including interest) and capital requirements through March 31, 2005.

Following review of Western's proposal within the DOE, I approve Rate Order No. WAPA-112, which extends the existing Network Integration Transmission and Ancillary Service Rates through March 31, 2005.

Dated: March 22, 2004.

Kyle E. McSlarrow,

Deputy Secretary.

Order Confirming and Approving an Extension of the Desert Southwest Customer Service Region Network Integration Transmission and Ancillary Service Rates

These service rate methodologies were established following section 302 of the Department of Energy (DOE) Organization Act (42 U.S.C. 7152). This Act transferred to and vested in the Secretary of Energy (Secretary) the power marketing functions of the Secretary of the Department of the Interior and the Bureau of Reclamation under the Reclamation Act of 1902 (ch. 1093, 32 Stat. 388), 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 other Acts that specifically apply to the project system involved.

By Delegation Order No. 00-037.00 approved December 6, 2001, the Secretary delegated: (1) The authority to develop power and transmission rates on a non-exclusive basis to the Administrator of the Western Area Power Administration (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. This rate extension is issued following the Delegation Order and the DOE rate extension procedures at 10 CFR 903.23(b).

Background

The existing rates contained within Rate Order No. WAPA-84 were approved for 5 years, beginning April 1, 1999, and ending March 31, 2004.

Discussion

Western is currently evaluating methodologies and preparing to enter into a public process proposing a Multi-System Transmission Rate (MSTR) for cost recovery purposes for the Parker-Davis Project, the Pacific Northwest-Pacific Southwest Intertie Project, and the Central Arizona Project. The methodology to charge for the network integration transmission service is currently written to apply to each Project. Through the public process, the service methodology may be changed to accommodate the proposed MSTR. Western believes that the additional time afforded by extending the date for the expiration of the network integration transmission and ancillary services will allow Western to develop these rates to facilitate cost recovery.

Therefore, time requirements make it necessary to extend the current rates pursuant to 10 CFR 903. Upon its approval, Rate Order No. WAPA-84 will be extended under Rate Order No. WAPA-112.

Order

In view of the above and under the authority delegated to me by the Secretary, I hereby extend the existing Ancillary Service Rate Schedules DSW-SD1, DSW-RS1, DSW-FR1, DSW-EI1, DSW-SPR1, DSW-SUR1, and the existing network integration transmission rate schedules PD-NTS1, and INT-NTS1. These existing Rate Schedules shall remain in effect through March 31, 2005.

Dated: March 22, 2004.

Kyle E. McSlarrow,

Deputy Secretary.