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###### Department of Energy

###### Southwestern Power Administration

# AGENCY:

Southwestern Power Administration, DOE.

# ACTION:

Notice of proposed extension.

# SUMMARY:

Southwestern Power Administration's (Southwestern's) current Integrated System Rate Schedules P-98D, NFTS-98D and EE-98 expire September 30, 2001. Southwestern's Administrator has prepared Current and Revised Fiscal Year (FY) 2001 Power Repayment Studies for the Integrated System which show the need for a rate adjustment of $1,876,231 (1.8 percent increase) in annual revenues. It is proposed that this rate adjustment will be deferred in accordance with Southwestern's rate adjustment threshold and that an extension of the aforementioned rate schedules from October 1, 2001 to September 30, 2002, will be sent to the Deputy Secretary of Energy for interim approval.

# DATES:

Written comments are due on or before June 11. 2001.

# ADDRESSES:

Written comments should be submitted to the Administrator, Southwestern Power Administration, U.S. Department of Energy, One West Third Street, Tulsa, Oklahoma 74103.

# FOR FURTHER INFORMATION CONTACT:

                        Forrest E. Reeves,Assistant Administrator,Office of Corporate Operations,Southwestern Power Administration,Department of Energy,One West Third Street,Tulsa, Oklahoma 74103,(918) 595-6696,                         *reeves@swpa.gov*

# SUPPLEMENTARY INFORMATION:

## a. Decision

Following DOE Order Number RA 6120.2, Southwestern's Administrator prepared a FY 2001 Current Power Repayment Study (PRS) using the existing Integrated System rate schedules. The Current PRS showed that current revenues were insufficient to meet repayment criteria. The FY 2001 Revised PRS indicates that an increase in annual revenues of $1,876,231, or 1.8 percent would satisfy cost recovery requirements.

                    Southwestern generally defers an indicated rate adjustment that falls within Southwestern's plus-or-minus two percent rate adjustment threshold. The threshold was developed to minimize Southwestern's costs while still maintaining adequate rates and is consistent with cost recovery criteria within DOE Order Number RA 6120.2 regarding rate adjustment plans. As a result of the benefits of reduced Federal expense and rate stability obtained by a rate adjustment deferral, Southwestern's Administrator is proposing to extend the current Integrated System Rate Schedules (P-98D, NFTS-98D and EE-98). The rate schedules are to be effective for a one-year period beginning                           ( print page 24132)                        October 1, 2001, and extending through September 30, 2002.                

Following review of the written comments (absent any substantive reasons to do otherwise), the Administrator will submit the rate extension proposal for the Integrated System to the Deputy Secretary of Energy for confirmation and interim approval.

## b. Rationale for the Decision

The Integrated System's FY 2000 (last year's) PRS concluded that the annual revenues needed to be increased by 0.4 percent. At that time, it was determined prudent to defer the increase in accordance with the established threshold and the current rate schedule was continued for one year. It once again seems prudent to defer this potential rate adjustment in accordance with Southwestern's rate adjustment threshold and re-evaluate the ability of the existing rate to provide sufficient revenues to satisfy costs projected in the FY 2002 (next year's) PRS. In accordance with 10 CFR Sections 903.22(h) and 903.23(a)(3), the Deputy Secretary may extend existing rates on an interim basis beyond the period specified by the FERC.

The current rate schedules for the Integrated System were confirmed and approved by the FERC on a final basis on April 29, 1998, for a period that is to end September 30, 2001. Since initial FERC approval, specific provisions within rate schedules P-98A and NFTS-98 have been revised to address issues that have arisen from restructuring of the electric industry. Rate schedules were redesignated 98B, 98C and 98D with each revision. All subsequent revisions of the Integrated System rate schedules through 98C have been approved by FERC. Rate schedules P-98D and NFTS-98D are currently under FERC review for final approval. These revisions had no impacts on the initially established revenue requirements for Southwestern's Integrated System. In addition, no change was made to the expiration date, September 30, 2001. Consequently, the net result of the revenue requirements projected in the FY1997 Integrated System Power Repayment Studies, which provided the basis for the existing rate schedules, is not changed.

## c. Background

The U.S. Department of Energy was created by an Act of the U.S. Congress, Department of Energy Organization Act, Pub. L. 95-91, dated August 4, 1977, and Southwestern's power marketing activities were transferred from the Department of the Interior to the Department of Energy, effective October 1, 1977.

Southwestern markets power from 24 multiple-purpose reservoir projects with power facilities constructed and operated by the U.S. Army Corps of Engineers (Corps). These projects are located in the States of Arkansas, Missouri, Oklahoma and Texas. Southwestern's marketing area includes these states plus Kansas and Louisiana. Southwestern's Integrated System is comprised of 22 of these projects interconnected through Southwestern's transmission system and exchange agreements with other utilities. The other two projects (Sam Rayburn and Robert Douglas Willis) are not interconnected with Southwestern's Integrated System. Their power is marketed under contracts through which two customers purchase the entire power output of each of the projects at the dams.

## d. Availability of Information

                    Opportunity is presented for customers and interested parties to receive copies of the study data for the Integrated System. If you desire a copy of this information, please submit your request to: Mr. James W. Sherwood, Division Director, Division of Rates and Repayment, Office of Corporate Operations, One West Third Street, Tulsa, OK 74103, call (918) 595-6673 or e-mail                     *sherwood@swpa.gov.*

Dated: April 26, 2001.

Michael A. Deihl,

Administrator.

[FR Doc. 01-11929 Filed 5-10-01; 8:45 am]

BILLING CODE 6450-01-P