[Federal Register Volume 62, Number 163 (Friday, August 22, 1997)]
[Notices]
[Pages 44670-44672]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-22334]


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DEPARTMENT OF ENERGY

Southwestern Power Administration


Integrated System Power Rates

AGENCY: Southwestern Power Administration, DOE.

ACTION: Notice of public review and comment.

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SUMMARY: The Administrator, Southwestern Power Administration 
(Southwestern), has prepared Current and Revised 1997 Power Repayment 
Studies which show the need for an increase in annual revenues to meet 
cost recovery criteria. Such increased revenues are needed primarily to 
cover increased investments and replacements in hydroelectric 
generating and high-voltage transmission facilities. The Administrator 
has developed proposed Integrated System Rate Schedules, which are 
supported by a rate design study, to recover the required revenues and 
to unbundle transmission rates for open access in accordance with the 
Federal Energy Regulatory Commission (FERC) Orders 888 and 889. 
Beginning January 1, 1998, the proposed rates would increase annual 
system revenues approximately 3.3 percent from $96,192,500 to 
$99,405,135.

DATES: The consultation and comment period will begin on August 22, 
1997 and will end November 20, 1997.
    1. Public Information Forum--September 4, 1997, 8:30 a.m.,Tulsa, 
OK.
    2. Public Comment Forum--October 9, 1997, 8:30 a.m.,Tulsa, OK.


[[Page 44671]]


ADDRESSES: The forums will be held in Southwestern's offices, Room 
1402, Williams Center Tower I, One West Third Street, Tulsa, Oklahoma 
74103. Ten copies of the written comments should be submitted to the 
Administrator, Southwestern Power Administration, U.S. Department of 
Energy, P.O. Box 1619, Tulsa, Oklahoma, 74101.

FOR FURTHER INFORMATION CONTACT: Mr. Forrest E. Reeves, Assistant 
Administrator, Office of Corporate Operations, Southwestern Power 
Administration, U.S. Department of Energy, P.O. Box 1619, Tulsa, 
Oklahoma 74101, (918) 595-6696.

SUPPLEMENTARY INFORMATION: The U.S. Department of Energy was created by 
an Act of the U.S. Congress, Department of Energy Organization Act, 
Public Law 95-91, dated August 4, 1977, and Southwestern's power 
marketing activities were transferred from the Department of Interior 
to the Department of Energy, effective October 1, 1977. Guidelines for 
preparation of power repayment studies are included in DOE Order No. RA 
6120.2, Power Marketing Administration Financial Reporting. Procedures 
for Public Participation in Power and Transmission Rate Adjustments of 
the Power Marketing Administrations are found at title 10, part 903, 
subpart A of the Code of Federal Regulations (10 CFR 903).
    Southwestern markets power from 24 multi-purpose reservoir projects 
with hydroelectric power facilities constructed and operated by the 
U.S. Army Corps of Engineers. These projects are located in the States 
of Arkansas, Missouri, Oklahoma, and Texas. Southwestern's marketing 
area includes these States plus Kansas and Louisiana. The costs 
associated with the hydropower facilities of 22 of the 24 projects are 
repaid via revenues received under the Integrated System rates, as are 
Southwestern's transmission facilities which consist of 2,220 
kilometers (1,380 miles) of high-voltage transmission line, 24 
substations, and 46 microwave and VHF radio sites. Costs associated 
with the Sam Rayburn and Robert D. Willis Dams, two projects that are 
isolated hydraulically, electrically, and financially from the 
Integrated System are repaid by separate rate schedules and are not 
addressed in this notice.
    Following Department of Energy guidelines, the Administrator, 
Southwestern, prepared a Current Power Repayment study using existing 
system rates. The Study indicates that Southwestern's legal requirement 
to repay the investment in power generating and transmission facilities 
for power and energy marketed by Southwestern will not be met without 
an increase in revenues. The need for increased revenues is primarily 
due to the increased costs for project investments, together with 
increased costs for transmission and generation replacements. The 
Revised Power Repayment Study shows that additional annual revenues of 
$3,212,635, (a 3.3 percent increase), beginning January 1, 1998, are 
needed to satisfy repayment criteria.
    A Rate Design Study has also been completed which allocates the 
revenue requirement to the various system rate schedules for recovery, 
and provides for transmission service rates in conformance with FERC 
Order No. 888 (Promoting Wholesale Competition Through Open Access Non-
Discriminatory Transmission Services by Public Utilities). The proposed 
new rates would increase estimated annual revenues from $96,192,500 to 
$99,405,195 and would satisfy the present financial criteria for 
repayment of the project and transmission system investments within the 
required number of years. As indicated in the Integrated System Rate 
Design Study, this revenue would be developed primarily through 
increases in the charges for transmission and ancillary services for 
deliveries of both Federal and non-Federal power and associated energy 
from the transmission system of Southwestern. There are also increased 
charges for transformation services for deliveries at voltages of 69 kV 
(kilovolt) or less. The generation component of the power rate has 
declined, as has the energy rate.
    A second component of the Integrated System rates for power and 
energy, the purchased power adder, produces revenues which are 
segregated to cover the cost of power purchased to meet required 
contractual obligations. The purchased power adder is established to 
reflect what is expected to be needed by Southwestern to meet purchased 
power needs on an average annual basis. It has been increased slightly 
from the existing rate to reflect the projected power costs based on 
present market rates. The Administrator's authority to adjust the 
purchased power adder annually at his discretion, plus or minus $0.0005 
per kilowatthour (kWh), is increased by six tenths of one mill per kWh 
to $0.0011 per kWh in the proposed rate schedules.
    Below is a general comparison of the existing and proposed system 
rates:

----------------------------------------------------------------------------------------------------------------
                                                        Existing rates                    Proposed rates        
----------------------------------------------------------------------------------------------------------------
                                                  Rate Schedule P-90A (System       Rate Schedule P-98 (System  
                                                            Peaking)                         Peaking)           
Capacity: Grid or 138-161kV..................  $2.52/kW/Mo.....................  $1.87/kW/Mo + $0.66/kW/Mo      
                                                                                  (transmission) + $0.09        
                                                                                  (ancillary services) + up to  
                                                                                  $0.06/kW/Mo (ancillary        
                                                                                  services) for delivery in     
                                                                                  control area:                 
                                                    Transformation Service            Transformation Service    
69 kV........................................  +$0.12/kW/mo....................  +$0.27/kW/mo.                  
Delivery below 69 kV.........................  +$0.55/kW/mo....................  No separate charge.            
                                               Note: transformation charge       Note: transformation charge    
                                                applied on capacity reservation.  applied on usage, not         
                                                                                  reservation.                  
Energy.......................................  $0.0052/kWh of Peaking Energy     $0.0048/kWh of Peaking Energy  
                                                and Supplemental Peaking Energy   and Supplemental Peaking      
                                                + a Purchased Power Adder of      Energy + a Purchased Power    
                                                $0.0009/kWh of Peaking Energy,    Adder of $0.0011 of Peaking   
                                                decreasing to $0.00/kWh after 9/  Energy (<plus-minus> 0.0011   
                                                30/93; (<plus-minus>0.0005        annually at Administrator's   
                                                annually at Administrator's       discretion).                  
                                                discretion) with a customer-                                    
                                                specific purchase power credit                                  
                                                through September 30, 1993.                                     
                                               Rate Schedules P-90B & F90B.....  No longer applicable.          
                                                     Rate Schedule TDC-90              Rate Schedule TDC-98     
                                                         (Transmission)                   (Transmission)        
Capacity (Firm Reservation w/Energy) Grid or   $0.52/kW/mo.....................  $0.66/kW/Mo. $0.17/kW/week,    
 138-161 kV.                                     No firm service by week or day   $0.03/kW/day.                 
                                                offered.                         +Required Ancillary Services:  
                                                                                  $0.090/kW/mo, or $0.022/kW/   
                                                                                  week, or $0.004/kW/day.       
                                                                                 +Non-Req Ancillary Service: up 
                                                                                  to :$0.059/kW/mo, or $0.015/kW/
                                                                                  week, or $0.003/kW/day, or for
                                                                                  delivery in control area.     

[[Page 44672]]

                                                                                                                
                                                    Transformation Service            Transformation Service    
69 kV........................................  +$0.12/kW/Mo....................  +$0.27/kW/Mo                   
Delivery below 69 kV.........................  +$0.55/kW/Mo....................  No separate charge.            
                                               Note: transformation charge       Note: transformation charge    
                                                applied on capacity reservation.  applied on usage, not         
                                                                                  reservation. Weekly and daily 
                                                                                  rates not applied.            
Energy (Firm w/o Capacity)...................  $0.0012/kWh.....................  No longer offered.             
Capacity (Non-firm with energy): Grid or 138-  The lesser of:..................  No separate capacity charge.   
 161 kV.                                         $0.0172/kW/day, or............  $0.0015/kWh delivered.         
                                                 $0.0014/kWh...................                                 
                                                    Transformation Service            Transformation Service    
69 kV........................................  The lesser of:..................                                 
                                               +$0.0040/kW/day.................  No separate capacity charge.   
                                               +$0.0004/kWh....................  Note: transformation charge    
                                                                                  applied on usage, not         
                                                                                  reservation. Weekly, daily,   
                                                                                  and hourly rates not applied. 
                                                    Transformation Service                                      
Delivery below 69 kV.........................  The lesser of:..................                                 
                                                 +$0.0183/kW/day...............  No separate capacity charge.   
                                                 +$0.0015/kWh..................  Note: transformation charge    
                                                                                  applied on usage, not         
                                                                                  reservation. Weekly, daily,   
                                                                                  and hourly rates not applied. 
                                               Rate Schedule IC-90.............  Service no longer offered.     
                                                  Rate Schedule EE-90 (Excess                                   
                                                            Energy)                                             
Energy.......................................  $0.0052/kWh.....................  $0.0048/kWh + $0.0018/kWh      
                                                                                  (transmission) + $0.00025/kWh 
                                                                                  (ancillary service) + for     
                                                                                  delivery in control area:     
                                                                                  $0.00017/kWh (ancillary       
                                                                                  service).                     
----------------------------------------------------------------------------------------------------------------

    Opportunity is presented for Southwestern customers and other 
interested parties to receive copies of the Integrated System Studies 
and proposed rate schedules. If you desire a copy of the Integrated 
System Power Repayment Studies and Rate Design Study Data Package with 
proposed Rate Schedules, submit your request to Mr. Forrest E. Reeves, 
Assistant Administrator, Office of Corporate Operations, Southwestern 
Power Administration, P.O. Box 1619, Tulsa, OK 74101-1619 (918) 595-
6696.
    A Public Information Forum is being held to explain to customers 
and the public the proposed rates and supporting studies. The Forum 
will be conducted by a chairman who will be responsible for orderly 
procedure. Questions concerning the rates, studies, and information 
presented at the Forum will be answered, to the extent possible, at the 
Forum. Questions not answered at the Forum will be answered in writing, 
except that questions involving voluminous data contained in 
Southwestern's records may best be answered by consultation and review 
of pertinent records at Southwestern's offices.
    Persons interested in attending the Public Information Forum should 
indicate in writing by letter or facsimile transmission (918-595-6656) 
by August 31, 1997, their intent to appear at such Forum. If no one so 
indicates their intent to attend, no such Forum will be held.
    A Public Comment Forum will be held at which interested persons may 
submit written comments or make oral presentations of their views and 
comments. The Forum will be conducted by a chairman who will be 
responsible for orderly procedure. Southwestern's representatives will 
be present, and they and the chairman may ask questions of the 
speakers. Persons interested in attending the Public Comment Forum 
should indicate in writing by letter or facsimile transmission (918-
595-6656) by September 30, 1997, their intent to appear at such Forum. 
If no one so indicates their intent to attend, no such Forum will be 
held. Persons interested in speaking at the Forum should submit a 
request to the Administrator, Southwestern, at least three (3) days 
prior to the Forum so that a list of speakers can be developed. The 
chairman may allow others to speak if time permits.
    A transcript of each Forum will be made. Copies of the transcripts 
may be obtained from the transcribing service. Copies of all documents 
introduced will be available from Southwestern upon request for a fee. 
Written comments on the proposed Integrated System Rates are due on or 
before November 20, 1997. Ten copies of the written comment should be 
submitted to the Administrator, Southwestern, at the above-mentioned 
address for Southwestern's offices.
    Following review of the oral and written comments and the 
information gathered in the course of the proceedings, the 
Administrator will submit the amended Integrated System Rate Proposal, 
Power Repayment Studies, and Rate Design Study in support of the 
proposed rates to the Deputy Secretary of Energy for confirmation and 
approval on an interim basis, and to the Federal Energy Regulatory 
Commission (FERC) for confirmation and approval on a final basis. The 
FERC will allow the public an opportunity to provide written comments 
on the proposed rate increase before making a final decision.

    Issued in Tulsa, Oklahoma, this 8th day of August, 1997.
Forrest E. Reeves,
Acting Administrator.
[FR Doc. 97-22334 Filed 8-21-97; 8:45 am]
BILLING CODE 6450-01-P