[Federal Register Volume 60, Number 54 (Tuesday, March 21, 1995)]
[Notices]
[Pages 14935-14936]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-6913]



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DEPARTMENT OF ENERGY
Western Area Power Administration


Parker-Davis Project--Proposed Firm Power Rate and Firm and 
Nonfirm Transmission Service Rates

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of proposed Parker-Davis Project power rate and firm and 
nonfirm transmission rate adjustments.

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SUMMARY: The Western Area Power Administration (Western) is initiating 
rate adjustments for firm power and firm and nonfirm transmission 
service for the Parker-Davis Project (P-DP). The power repayment study 
and other analyses indicate that the revenues required to pay all 
annual costs (including interest expense), plus repayment of required 
investment within the allowable time period has decreased by 
approximately $4.7 million since the last rate adjustment. The proposed 
P-DP rates for firm power and firm and nonfirm transmission service are 
expected to become effective October 1, 1995, and will supersede the 
existing step two rates.
    On January 6, 1994, the Deputy Secretary of the Department of 
Energy (DOE) approved the existing rates for firm power and firm and 
nonfirm transmission service on an interim basis. The existing rates 
for firm power and firm and nonfirm transmission service were placed in 
effect on February 1, 1994, and consisted of a two-step rate 
adjustment. Step one of the existing rates was effective February 1, 
1994, through September 30, 1995, and step two of the existing rates 
was to be effective on October 1, 1995, through January 31, 1999. The 
Federal Energy Regulatory Commission (FERC) confirmed and approved the 
rates on October 14, 1994.
    During this last P-DP rate adjustment process (WAPA-55), the 
Arizona Power Pooling Association, Inc.; Arizona Power Authority; and 
the Arizona Customer Group filed Motions To Intervene and Protest 
FERC's confirmation and approval of the P-DP rates described in Rate 
Order No. WAPA-55. On August 19, 1994, Western filed a Stipulation 
Agreement signed by Western and these customers in which the 
intervenors withdrew any protest and Western agreed to re-examine the 
issues raised as well as commence a new rate adjustment proceeding 
during fiscal year 1995.
    Western has re-examined the issues raised during the last rate 
adjustment process and has developed proposed P-DP rates to supersede 
step two of the existing rates which were to become effective October 
1, 1995, for firm power and firm and nonfirm transmission service. The 
major differences between step two of the existing rates and the 
proposed P-DP rates resulted from several activities which involved 
Western working in partnership with the P-DP customers. First, future 
revenue requirements were reduced by controlling Western's operation 
and maintenance costs, and by decreasing the construction and 
replacement program through the Engineering Ten Year Planning Process. 
The Engineering Ten Year Planning Process includes a decision making 
partnership among P-DP customers and Western.
    Second, Western revised the allocation of costs between the power 
and transmission customers which is described in a Costs Apportionment 
Study. A working group including customer representatives, Western, and 
the Bureau of Reclamation was formed to analyze the issues and concerns 
expressed by the customers during the last rate adjustment process on 
how costs were allocated between power and transmission. The working 
group derived a new methodology for allocating these costs in a manner 
deemed equitable. The new methodology also meets the concerns of both 
P-DP customers and Western.
    Third, the working group developed a revised rate design 
methodology using the results from the Costs Apportionment Study. The 
results from the Costs Apportionment Study were applied to total 
revenue requirements instead of incremental revenue requirements as was 
done to derive step two of the existing rates.
    When compared to step two of the existing rates, the activities 
stated resulted in a rate decrease for firm power customers and a rate 
increase for firm and nonfirm transmission customers.
    The proposed P-DP rates provide for an energy rate of 1.91 mills 
per kilowatthour (mills/kWh) and a capacity rate of $2.06 per kilowatt/
month (kW/month) for a composite rate of 6.62 mills/kWh. The proposed 
P-DP rates for transmission service provide for a firm transmission 
service rate of $13.28 per kilowatt/year (kW/year) and a nonfirm 
transmission service rate of 2.53 mills/kWh for P-DP and a firm 
transmission service rate for the Salt Lake City Area/Integrated 
Projects (SLCA/IP) of $6.64/kW/season. The SLCA/IP transmission service 
is for the SLCA/IP customers' seasonal use of the P-DP transmission 
system.
    Table One compares step two of the existing rates with the proposed 
P-DP rates.

                                                                        
[[Page 14936]]                                                          
                                                    Table One                                                   
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                                             Step two of the existing      Proposed rates October 1,    Percent 
             Type of service                  rates October 1, 1995,      1995, through September 30,    change 
                                             through January 31, 1999                2000                 (%)   
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Composite Rate...........................  12.01 mills/kWh.............  6.62 mills/kWh..............        -45
Energy Rate..............................  6.01 mills/kWh..............  1.91 mills/kWh..............        -68
Capacity Rate............................  $2.63 per kW/month..........  $2.06 per kW/month..........        -22
Firm Transmission Service................  $12.55 per kW/year..........  $13.28 per kW/year..........          6
Nonfirm Transmission Service.............  2.39 mills/kWh..............  2.53 mills/kWh..............          6
Transmission Service for SLCA/IP.........  $6.27 per kW/season.........  $6.64 per kW/season.........          6
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    Overall, annual revenue requirements for the proposed rates has 
slightly increased as compared to step one of the existing rates and 
has decreased as compared to step two of the existing rates. Table Two 
shows a comparison of the annual revenue requirements for step one of 
the existing rates, step two of the existing rates, and the proposed 
rates.

                                Table Two                               
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    Step one of the                                                     
     existing rates          Step two of the          Proposed rates    
   (February 1, 1994,    existing rates (October     (October 1, 1995,  
 through September 30,       1, 1995, through      through September 30,
         1995)              January 31, 1999)              2000)        
------------------------------------------------------------------------
$37,209,290............          $42,099,987              $37,385,908   
------------------------------------------------------------------------

    Since the proposed P-DP rates constitute a major rate adjustment as 
defined by the procedures for public participation in general rate 
adjustments, as cited below, both a public information forum and a 
public comment forum will be held. After review of public comments, 
Western will recommend proposed P-DP rates for approval on an interim 
basis by the Deputy Secretary of DOE (Deputy Secretary).

DATES: The consultation and comment period will begin with publication 
of this notice in the Federal Register and will end not less than 90 
days later, or June 21, 1995, whichever occurs last. A public 
information forum will be held at 9:30 a.m. on April 5, 1995, at 
Western's Phoenix Area Office, 615 South 43rd Avenue, Phoenix, Arizona. 
A public comment forum at which Western will receive oral and written 
comments will be held at 9:30 a.m. on May 15, 1995, also at Western's 
Phoenix Area Office.
    Written comments should be received by Western by the end of the 
consultation and comment period to be assured consideration and should 
be sent to the address below.

FOR FURTHER INFORMATION CONTACT: Mr. J. Tyler Carlson, Area Manager, 
Western Area Power Administration, Phoenix Area Office, P.O. Box 6457, 
Phoenix, AZ 85005, (602) 352-2453.

SUPPLEMENTARY INFORMATION: Power and transmission rates for the P-DP 
are established pursuant to the Department of Energy Organization Act 
(42 U.S.C. 7101 et seq.), the Reclamation Act of 1902 (43 U.S.C. 392 et 
seq.), 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 the Act of May 28, 1954 (ch. 241, 68 Stat. 143).
    By Amendment No. 3 to Delegation Order No. 0204-108, published 
November 10, 1993 (58 FR 59716), the Secretary of Energy (Secretary) 
delegated (1) the authority to develop long-term power and transmission 
rates on a nonexclusive basis to the Administrator of Western; (2) the 
authority to confirm, approve, and place such rates in 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 FERC. Existing DOE procedures for 
public participation in rate adjustments (10 CFR Part 903) became 
effective on September 18, 1985 (50 FR 37837).

Availability of Information

    All brochures, studies, comments, letters, memorandums, and other 
documents made or kept by Western for the purpose of developing the 
proposed P-DP rates for firm power and firm and nonfirm transmission 
service are and will be made available for inspection and copying at 
the Phoenix Area Office, 615 South 43rd Avenue, Phoenix, Arizona 85005.

Determination Under Executive Order 12866

    DOE has determined that this is not a significant regulatory action 
because it does not meet the criteria of Executive Order 12866, 58 FR 
51735. Western 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.

Environmental Evaluation

    In compliance with the National Environmental Policy Act of 1969 
(NEPA), 42 U.S.C. 4321 et seq.; Council on Environmental Quality 
Regulations (40 CFR Parts 1500-1508); and DOE NEPA Regulations (10 CFR 
Part 1021), Western has determined that this action is categorically 
excluded from the preparation of an environmental assessment or an 
environmental impact statement.

    Issued in Golden, Colorado, March 10, 1995.
J. M. Shafer,
Administrator.
[FR Doc. 95-6913 Filed 3-20-95; 8:45 am]
BILLING CODE 6450-01-P