[Federal Register Volume 89, Number 218 (Tuesday, November 12, 2024)]
[Notices]
[Pages 88997-88999]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-26144]


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DEPARTMENT OF ENERGY

Southwestern Power Administration


Integrated System Power Rates

AGENCY: Southwestern Power Administration, DOE.

ACTION: Notice of proposed rate.

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SUMMARY: Southwestern Power Administration (Southwestern) proposes to 
revise the existing Integrated System rate schedules to meet the 
identified average annual revenue need of $237,821,129, an increase of 
$44,230,649 (22.8 percent), effective April 1, 2025, through September 
30, 2027. Interested persons may review the proposed rate and 
supporting studies on Southwestern's website, request to participate in 
a public forum, and submit comments. Southwestern will evaluate all 
comments received in this process.

DATES: A consultation and comment period will begin November 12, 2024 
and end February 10, 2025. Written comments are due on or before 
February 10, 2025. If requested, a public information and comment forum 
(Forum) will be held on December 18, 2024, at 9:00 a.m. to no later 
than 12:00 p.m. Central Standard Time (CST). The Forum will be 
conducted via Microsoft Teams. Persons desiring to attend the Forum 
should notify Southwestern by December 11, 2024, at 11:59 p.m. CST, so 
that a list of Forum participants can be prepared. Requests to attend 
the Forum should be sent via email to <a href="/cdn-cgi/l/email-protection#95e6e2e5f4e7f4e1f0e6d5e6e2e5f4bbf2fae3"><span class="__cf_email__" data-cfemail="94e7e3e4f5e6f5e0f1e7d4e7e3e4f5baf3fbe2">[email protected]</span></a> should include 
the individual's name, address, phone number, entity (if any) they 
represent, and email address. Persons desiring to speak at the Forum 
should specify this in their notification to Southwestern; others may 
speak if time permits.
    If Southwestern does not receive a request for a Forum, the Forum 
will not be held. If a Forum is requested, the Microsoft Teams meeting 
information will be posted to Southwestern's website.

ADDRESSES: Written comments should be submitted to: Fritha Ohlson, 
Senior Vice President, Chief Operating Officer, Office of Corporate 
Operations, Southwestern Power Administration, U.S. Department of 
Energy, One West Third Street, Tulsa, Oklahoma 74103 or emailed to 
<a href="/cdn-cgi/l/email-protection#c9babeb9a8bba8bdacba89babeb9a8e7aea6bf"><span class="__cf_email__" data-cfemail="4f3c383f2e3d2e3b2a3c0f3c383f2e61282039">[email protected]</span></a>.

FOR FURTHER INFORMATION CONTACT: Ashley Corker, Director, Division of 
Resources and Rates, Southwestern Power Administration, U.S. Department 
of Energy, One West Third Street, Tulsa, Oklahoma 74103, (918) 595-
6682, <a href="/cdn-cgi/l/email-protection#b6d7c5dedad3cf98d5d9c4ddd3c4f6c5c1c6d798d1d9c0"><span class="__cf_email__" data-cfemail="dfbeacb7b3baa6f1bcb0adb4baad9faca8afbef1b8b0a9">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: Southwestern markets power from 24 multi-
purpose reservoir projects with hydroelectric power facilities 
constructed and operated by the Corps. These projects are located in 
Arkansas, Missouri, Oklahoma, and Texas. Southwestern's marketing area 
includes these states plus Kansas and Louisiana. The costs associated 
with 22 of these 24 hydropower projects are repaid with revenues 
received under the Integrated System rates. These rates also cover the 
costs of Southwestern's transmission facilities that consist of 1,381 
miles of high-voltage transmission lines, 27 substations, and 46 
microwave and VHF radio sites.
    On September 30, 2013, the Deputy Secretary of Energy, via Rate 
Order No. SWPA-66, placed Southwestern's Integrated System rate 
schedules (P-13, NFTS-13, and EE-13) into effect until September 30, 
2017. Subsequently, rate schedule NFTS-13 was renamed to NFTS-13A and 
rate schedule P-13 was renamed to P-13A and then later to P-13B, in 
each case with no revenue adjustment.\1\ Additionally, all three rate 
schedules have been extended with no revenue adjustment.\2\ Most 
recently, the Southwestern Administrator extended rate schedules P-13B, 
NFTS-13A, and EE-13, via Rate Order No. SWPA-85, through September 30, 
2025.
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    \1\ Rate Order Nos. SWPA-71 (January 1, 2017), SWPA-73 (July 15, 
2017), SWPA-80 (July 15, 2023)
    \2\ Rate Order Nos. SWPA-72 (September 13, 2017), SWPA-74 
(September 22, 2019), SWPA-77 (August 30, 2021), SWPA-81 (September 
20, 2023).
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    The guidelines for preparation of power repayment studies are 
included in DOE Order No. RA 6120.2, ``Power Marketing Administration 
Financial Reporting.'' In simple terms, the rate process works as 
follows. First, Southwestern conducts a Power Repayment Study to 
determine whether its current revenues are sufficient for Southwestern 
to meet its repayment obligations. If a revenue shortfall (or surplus) 
is indicated, Southwestern conducts a revised Power Repayment Study to 
determine the level of revenue needed. If the revenue change needed to 
meet Southwestern's repayment obligations is within a small margin of 
Agency discretion, Southwestern will finalize the Power Repayment 
Studies for that year and Southwestern's rates will not be adjusted. 
This is what occurred annually for Southwestern's Integrated System 
Rates from 2013 until 2023.
    If, however, Southwestern's annual Power Repayment Studies indicate 
a revenue shortfall (or surplus) outside of that small margin of Agency 
discretion, Southwestern must then engage in a Rate Design Study to 
inform the Administrator as to what the new proposed rates should be in 
order to generate the needed revenue. This is what occurred in 2023.
    Unlike previous years, Southwestern's 2023 Power Repayment Studies 
indicated the need for a revenue increase that was substantial enough 
to impact Southwestern's ability to meet its repayment obligations. The 
2023 Power Repayment Studies indicated the need for an increase of 
$44,230,649 in average annual revenue. Southwestern then engaged in a 
Rate Design Study to develop rates necessary to generate this 
additional revenue. The resulting rates are described in the chart.
    Part of the total additional revenue identified by the Power 
Repayment Studies is a need to increase revenues specifically for 
purchased power and wheeling. The Purchased Power & Wheeling Adder 
(PPWA) produces revenues which are segregated to cover the cost of 
power purchased to meet contractual obligations. The PPWA is 
established to reflect revenues required to meet Southwestern's 
purchased power and wheeling needs on an average annual basis. The PPWA 
rate will increase to reflect the increasing average cost of purchasing 
power over the period as well as the cost of firm transmission to wheel 
power and energy from two projects, Blakely Mountain and DeGray, from 
MISO into Southwestern's system. Revenue from the sale of excess energy 
from Blakely Mountain and DeGray will offset the increase in purchased 
power and wheeling cost. The Administrator's authority to adjust the 
PPWA at her or his discretion with the Purchased Power & Wheeling Adder 
Adjustment (PPWAA) will remain in force.\3\ The PPWAA is limited to two 
adjustments per year not to exceed a total of <plus-minus>8.7 mills per 
kilowatt-hour per year. The PPWA will increase to $0.0087 per kilowatt-
hour and the PPWAA will

[[Page 88998]]

decrease to $0.00 per kilowatt-hour when the proposed rate schedules 
take effect.
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    \3\ See 138 FERC ] 62,199 (2012).
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    Additionally, the Capacity Overrun and Energy Overrun penalties in 
the proposed Hydro Peaking Power rate schedule have been updated to be 
formula rates, which are the greater of the penalties as included in P-
13B, or the applicable day-ahead locational marginal price. This change 
is to ensure that penalties are sufficient to cover the financial 
impact of unauthorized capacity and energy overruns. The Excess Energy 
rate schedule has also been converted to a formula rate based on the 
applicable market rates at the time of sale, rather than a set rate as 
in EE-13. Like EE-13, the proposed Excess Energy rate schedule does not 
include a transmission component, as transmission service will be the 
sole responsibility of the entity purchasing excess energy.
    Below is a comparison of the existing and proposed Integrated 
System rates:

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                                              Existing                 Proposed                  Change
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                                               P-13B                     P-23             Dollars      Percent
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                                               Hydro Peaking Power
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Energy:
    Peaking Energy..................  $0.0094 /kWh...........  $0.0128 /kWh...........      $0.0034         36.2
    Supplemental Peaking Energy.....  $0.0094 /kWh...........  $0.0128 /kWh...........       0.0034         36.2
    Purchased Power & Wheeling......  $0.0059 /kWh...........  $0.0087 /kWh...........       0.0028         47.5
    Administrator's Discretionary     +/-$0.0059 /kWh........  +/-$0.0087 /kWh........       0.0028         47.5
     Adder Adjustment--Annual Limit.
Capacity:
    Grid or 138-161 kV..............  $4.50 /kW/Mo...........  $5.30 /kW/Mo...........         0.80         17.8
    Regulation & Frequency Response.  $0.07 /kW/Mo...........  $0.0208 /kW/Mo.........     (0.0492)        -70.3
    Operational Reserves--Spinning..  $0.0146 /kW/Mo.........  $0.0208 /kW/Mo.........       0.0062         42.5
    Operational Reserves--            $0.0146 /kW/Mo.........  $0.0208 /kW/Mo.........       0.0062         42.5
     Supplemental.
    Energy Imbalance................  $0.0 /kW/Mo............  $0.0 /kW/Mo............          0.0          0.0
    Regulation Purchased Adder (load  prorated share of total  prorated share of total          N/A          N/A
     within SWPA BAA).                 energy cost.             energy cost.
    Transformation Service 69 kV &    $0.46 /kW/Mo...........  $0.86 /kW/Mo...........       0.4000         87.0
     less (applied to usage, not
     reservation).
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                          Non-Federal Transmission & Interconnection Facilities Service
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                                      NFTS-13A...............  NFS-23.................      Dollars      Percent
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Firm Point-to-Point Capacity........  $1.48 /kW/Mo...........  $1.15 /kW/Mo...........      ($0.33)        -22.3
Non-Firm Point-to-Point Capacity (80  $1.184 /kW/Mo..........  $0.92 /kW/Mo...........       (0.26)        -22.3
 percent of Firm Point-to-Point).
Network Integration.................  $1.48 /kW/Mo...........  $1.15 /kW/Mo...........       (0.33)        -22.3
Interconnection Facilities..........  $1.48 /kW/Mo...........  $1.15 /kW/Mo...........       (0.33)        -22.3
Transformation Service 69 kV & less   $0.46 /kW/Mo...........  $0.86 /kW/Mo...........         0.40         87.0
 (applied to usage, not reservation).
Scheduling, System Control, &         $0.09 /kW/Mo...........  $0.17 /kW/Mo...........         0.08         88.9
 Dispatch.
Reactive Supply & Voltage Control...  $0.04 /kW/Mo...........  $0.10 /kW/Mo...........         0.06        150.0
Regulation & Frequency Response.....  $0.07 /kW/Mo...........  $0.0208 /kW/Mo.........     (0.0492)        -70.3
Operational Reserves--Spinning......  $0.0146 /kW/Mo.........  $0.0208 /kW/Mo.........       0.0062         42.5
Operational Reserves--Supplemental..  $0.0146 /kW/Mo.........  $0.0208 /kW/Mo.........       0.0062         42.5
Energy Imbalance....................  $0.0 /kW/Mo............  $0.0 /kW/Mo............          0.0          0.0
Regulation Purchased Adder (load      prorated share of total  prorated share of total          N/A          N/A
 within SWPA BAA).                     energy cost.             energy cost.
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                                                  Excess Energy
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                                      EE-13..................  EE-23..................      Dollars      Percent
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Excess Energy.......................  $0.0094 /kWh...........  formula rate...........          N/A          N/A
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Public Participation

    The procedures for public participation are found at title 10, part 
903, subpart A of the Code of Federal Regulations (10 CFR part 903). 
This proposed action is considered a ``Major Rate Adjustment,'' as 
defined by 10 CFR 903.2(d). As such, in accordance with 10 CFR 903.14, 
the public consultation and comment period is 90 days. In accordance 
with 10 CFR 903.15(a) and 903.16(a), Southwestern will hold a Forum for 
this proposed rate adjustment if requested. Southwestern will review 
and consider all timely public comments at the conclusion of the 
consultation and comment period and adjust the proposal as appropriate. 
The Integrated System rate schedules will then be approved on an 
interim basis.

Legal Authority

    By Delegation Order No. S1-DEL-RATES-2016, effective November 19, 
2016, the Secretary of Energy delegated: (1) the authority to develop 
power and transmission rates to Southwestern's Administrator; (2) the 
authority to confirm, approve, and place such rates into effect on an 
interim basis to the Deputy Secretary of Energy; and (3) the authority 
to confirm, approve, and place into effect on a final basis, or to 
remand or disapprove such rates, to FERC. By Delegation Order No. S1-
DEL-S3-2024, effective August 30, 2024, the Secretary of Energy also 
delegated the authority to confirm, approve, and place such rates into 
effect on an interim basis to the

[[Page 88999]]

Under Secretary for Infrastructure. By Redelegation Order No. S3-DEL-
SWPA1-2023, effective April 10, 2023, the Under Secretary for 
Infrastructure redelegated the authority to confirm, approve, and place 
such rates into effect on an interim basis to the Administrator, 
Southwestern.

Availability of Information

    The 2023 Integrated System Power Repayment Studies and the 
associated Rate Design Study as well as the proposed Integrated System 
rate schedules are available on Southwestern's website at: https://www.energy.gov/swpa/rate-schedule-actions. At the conclusion of the 
consultation and comment period, Southwestern will post all comments 
received at the same website location. If a Forum is held, the 
transcript of the Forum and any other documents introduced during the 
Forum will also be made available on Southwestern's website.

Environmental Impact

    Southwestern is in the process of determining whether an 
environmental assessment or an environmental impact statement should be 
prepared or if this action can be categorically excluded from those 
requirements.\4\
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    \4\ In compliance with the National Environmental Policy Act 
(NEPA) of 1969, as amended, 42 U.S.C. 4321 through 4347; the Council 
on Environmental Quality Regulations for implementing NEPA (40 CFR 
parts 1500 through 1508); and DOE NEPA Implementing Procedures and 
Guidelines (10 CFR part 1021)
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Determination Under Executive Order 12866

    Southwestern has an exemption from centralized regulatory review 
under Executive Order 12866; accordingly, no clearance of this notice 
by the Office of Management and Budget is required.

Signing Authority

    This document of the Department of Energy was signed on November 6, 
2024, by Mike Wech, Administrator for Southwestern Power 
Administration, pursuant to delegated authority from the Secretary of 
Energy. That document, with the original signature and date, is 
maintained by DOE. For administrative purposes only, and in compliance 
with requirements of the Office of the Federal Register, the 
undersigned DOE Federal Register Liaison Officer has been authorized to 
sign and submit the document in electronic format for publication, as 
an official document of DOE. This administrative process in no way 
alters the legal effect of this document upon publication in the 
Federal Register.

    Signed in Washington, DC, on November 6, 2024.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
[FR Doc. 2024-26144 Filed 11-8-24; 8:45 am]
BILLING CODE 6450-01-P


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