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 Department of Energy
 AGENCY: Southeastern Power Administration, DOE.
 ACTION: Notice of Interim Approval for Southeastern Power Administration Cumberland System.
 SUMMARY: The Deputy Secretary of Energy confirmed and approved, on an interim basis, Rate Schedules CBR-1-G, CSI-1-G, CEK-1-G, CM-1-G, CC-1-H, CK-1-G, CTV-1-G, and Replacement-3. The rates were approved on an interim basis through September 30, 2013. The new rates take effect on October 1, 2008, and are subject to confirmation and approval on a final basis by the Federal Energy Regulatory Commission (“FERC”).
 DATES: Approval of the rate schedules on an interim basis is effective October 1, 2008, through September 30, 2013.
 FOR FURTHER INFORMATION CONTACT: Leon Jourolmon, Assistant 
                        ( print page 54574)
                        Administrator, Finance & Marketing, Southeastern Power Administration, Department of Energy, 1166 Athens Tech Road, Elberton, Georgia 30635-6711, (706) 213-3800.


SUPPLEMENTARY INFORMATION: On August 19, 2008, FERC confirmed and approved Interim Wholesale Power Rate Schedules CBR-1-F, CSI-1-F, CEK-1-F, CM-1-F, CC-1-G, CK-1-F, and CTV-1-F for the period from February 25, 2008 to September 30, 2008. Dated: September 12, 2008. Jeffrey F. Kupfer, Acting Deputy Secretary.
 DEPARTMENT OF ENERGY DEPUTY SECRETARY In the Matter of: Southeastern Power Administration Cumberland System Rates Order Confirming and Approving Power Rates on an Interim Basis Pursuant to Sections 302(a) and 301(b) of the Department of Energy Organization Act, Public Law 95-91, the functions of the Secretary of the Interior and the Federal Power Commission under Section 5 of the Flood Control Act of 1944, 16 U.S.C. 825s, relating to the Southeastern Power Administration (“Southeastern” or “SEPA”) were transferred to and vested in the Secretary of Energy. By Delegation Order No. 00-037.00, effective December 6, 2001, the Secretary of Energy delegated to Southeastern's Administrator the authority to develop power and transmission rates, and delegated to the Deputy Secretary of Energy the authority to confirm, approve, and place in effect such rates on an interim basis, and delegated to the Federal Energy Regulatory Commission (“FERC”) the authority to confirm, approve, and place into effect on a final basis or to disapprove rates developed by the Administrator under the delegation. This rate order is issued by the Deputy Secretary pursuant to said notice. Background The FERC issued an order approving Rate Schedules CBR-1-F, CSI-1-F, CEK-1-F, CM-1-F, CC-1-G, CK-1-F, and CTV-1-F on a final basis for the sale of power from the Cumberland System August 19, 2008 (124 FERC ¶ 62,139). The power marketing policy provides peaking capacity, along with 1500 hours of energy with each kilowatt of capacity, to customers outside the Tennessee Valley Authority (“TVA”) transmission system. Due to restrictions on the operations of the Wolf Creek and Center Hill Projects imposed by the U.S. Army Corps of Engineers (“Corps”) as a precaution to prevent failure of the dam, Southeastern has not been able to provide peaking capacity to these customers. An interim operating plan for the Cumberland System provides these customers with energy that does not include capacity. Public Notice and Comment Notice of a proposed rate adjustment was published in the 
                    **Federal Register**
                     April 11, 2008 (73 FR 19832). The notice advised interested parties of a public information and comment forum to be held in Nashville, Tennessee on May 22, 2008. Written comments were accepted on or before July 10, 2008. Written comments were received from six sources pursuant to this notice. *Comment 1:*
                     There is concern * * * whether the amounts included for Corps Operation and Maintenance (“O&M”) expense are appropriate forecasts in light of potential budget cuts in Corps appropriations in Fiscal Year 2009. The Southeastern Federal Power Customers, Inc. (“SeFPC” or “Customers”) has frequently questioned whether the amounts for Corps O&M and at times renewals and replacements, in a proposed rate are appropriate when Congress appears poised to reduce the funding levels for these precise activities. In particular, the Customers have not wanted to pay more in rates than what the Corps will receive from Congress for O&M and renewals and replacement activity. Therefore, the Customers encourage SEPA to examine closely the proposed O&M projections to ensure that they appropriately align with anticipated appropriations. *Response 1:*
                     The Corps provides O&M estimates to Southeastern annually. The customers have an opportunity to review the Corps'  estimated and actual costs annually through the O&M committee of the SeFPC. Southeastern believes that the estimates are the best available. *Comment 2:*
                     * * *  the SeFPC suggests that SEPA develop a consultation and related true-up process for implementing a rate in the event that capacity is made available. Under the consultation and true-up process suggested  * * *  SEPA would consult with preference customers regarding available capacity to market to all existing customers of the Cumberland River Basin projects. The consultation could involve a meeting or conference call or some other communication depending upon the immediacy of the available capacity. During this conference with the customers, SEPA would explain how it intends to market the capacity and how it would recover the necessary revenues. At or around this time, the customers could suggest how the marketing of the capacity could be adjusted, including offering comments as suitable on the appropriate pricing for capacity and energy. SEPA would consider the input from the customers  and make modifications as deemed appropriate for the implementation of the interim rate for capacity and energy sales. To remain true to the proposed rate, the Customers recommend that SEPA evaluate the sales of capacity and energy on an ongoing, yet practical, basis to determine whether the capacity and energy delivered was consistent with the projections used to develop the rates under rate Alternative Two. In the event that there is a significant deviation in the amount of delivered capacity and energy from the projections used to prepare the rate,  SEPA would again consult with the customers. As appropriate, SEPA would change the interim rate for the capacity and energy sales to ensure that the delivery of the benefits of the projects remains consistent with the underlying marketing plan for the Cumberland System of Projects. *Response 2:*
                     Southeastern will consult with Cumberland System customers on any marketing arrangements and rate design matters involved in the rates under Alternative Two. The consultation could include meetings, conference calls, or some other communications depending on the immediacy of the available capacity. Southeastern will consider the input from the customers  and make modifications Southeastern deems appropriate for the implementation of the interim rate for capacity and energy sales. Southeastern does not believe a true-up mechanism is appropriate or necessary for the rates that may be established under Alternative Two. Southeastern evaluates and monitors all sales of capacity and energy on an ongoing, continuous basis and makes changes when Southeastern determines they are appropriate. *Comment 3:*
                     South Mississippi Electric Power Association (“SMEPA”) encourages SEPA to examine closely the proposed rate increase and keep it to the absolute minimum required to satisfy SEPA revenue requirements. *Response 3:*
                     Under the Flood Control Act of 1944 (“Act”), Southeastern is required to market power at the lowest possible rates consistent with sound business principles. The Administrator 
                    ( print page 54575)
                    has certified that the proposed rates satisfy this requirement of the Act. *Comment 4:*
                     East Kentucky Power Cooperative (“EKPC”) submits that SEPA is not purchasing firm transmission service for the 70 MW at the Laurel Dam facility; therefore, EKPC should not have to pay a firm TVA transmission service charge for that capacity. *Response 4:*
                     By contract, under normal operating conditions, EKPC will receive 170 MW from the Cumberland projects. Delivery of EKPC's allocation is not limited to the operations of any Cumberland project. The output of the Laurel Project, which is in EKPC's control area, is supplemented by energy and capacity from the Cumberland Projects in TVA's control area. Southeastern believes it is appropriate to continue to recover the TVA transmission charge from EKPC's full allocation. *Comment 5:*
                     It is TVA's understanding that there were certain errors in the financial information set forth in Exhibit 5 of SEPA's rate change support materials. Those errors in turn resulted in errors in the calculation of the published proposed rate changes for TVA and for SEPA's other Cumberland System customers. It is TVA's understanding that SEPA is aware of those errors and intends to correct them. Accordingly, TVA's forbearance of raising objections to the proposed rate changes is based on TVA's expectation that these corrections will be made such that the new rates to be paid by all SEPA's Cumberland System customers will be increased by approximately the same 4.9 per centum consistent with SEPA's own policies for such rate changes regarding the Cumberland System of Projects. *Response 5:*
                     Southeastern has corrected certain errors in the rate design of the proposed rates under Alternative Three. After correcting the errors, the rate adjustment is about five percent (5%) for all Cumberland customers except those in Carolina Power & Light, Western Division (“CP&L”). The CP&L area customers'  increase is less because the CP&L transmission rate has not changed. *Comment 6:*
                     The purpose for the proposed rate changes cannot be achieved unless the Corps, SEPA, and the Cumberland System customers reach agreement upon and implement Memorandums of Agreement (“MOAs”) sufficient to cover each and all of Fiscal Years 2008 through 2028 and related Sub-agreements. Accordingly, TVA's forbearance of raising objections to the proposed rate changes is based on TVA's expectation that MOAs and related Sub-agreements * * * will be executed and appropriately implemented. The Tennessee Valley Public Power Association (“TVPPA”) respectfully recommends that unless and until the United States Army Corps of Engineers (“USACE”), the Southeastern Power Administration (“SEPA”) and the Cumberland System Customers of SEPA have reached an agreement with a specific understanding as to amount and duration for rehabilitation and replacement work on the USACE hydroelectric projects on the Cumberland System, that the rate increase should not be implemented. *Response 6:*
                     Southeastern is required to include estimates of replacements and additions in the repayment study to support the proposed rate schedules. Southeastern believes the estimates of replacements and additions included in this rate adjustment are the best available. Southeastern believes this rate adjustment would be necessary independent of the implementation of MOAs and related Sub-agreements. Discussion System Repayment An examination of Southeastern's revised system power repayment study, prepared in July  2008, for the Cumberland System, shows that with the proposed rates, all system power costs are paid within the 50-year repayment period required by existing law and DOE Order RA 6120.2. The Administrator of Southeastern has certified that the rates are consistent with applicable law and that they are the lowest possible rates to customers consistent with sound business principles. Environmental Impact Southeastern has reviewed the possible environmental impacts of the rate adjustment under consideration and has concluded that, because the adjusted rates would not significantly affect the quality of the human environment within the meaning of the National Environmental Policy Act of 1969, the proposed action is not a major Federal action for which preparation of an Environmental Impact Statement is required. Availability of Information Information regarding these rates, including studies, and other supporting materials, is available for public review in the offices of Southeastern Power Administration, 1166 Athens Tech Road, Elberton, Georgia 30635-6711. Submission to the Federal Energy Regulatory Commission The rates hereinafter confirmed and approved on an interim basis, together with supporting documents, will be submitted promptly to FERC for confirmation and approval on a final basis, ending no later than September 30, 2013. Order In view of the foregoing and pursuant to the authority delegated to me by the Secretary of Energy, I hereby confirm and approve on an interim basis, effective October 1, 2008, attached Wholesale Power Rate Schedules CBR-1-G, CSI-1-G, CEK-1-G, CM-1-G, CC-1-H, CK-1-G, CTV-1-G, and Replacement-3. The rate schedules shall remain in effect on an interim basis through September 30, 2013, unless such period is extended or until FERC confirms and approves them or substitute rate schedules on a final basis. Dated: September 12, 2008. Jeffrey F. Kupfer, Acting Deputy Secretary.
 Wholesale Power Rate Schedule CBR-1-G Availability This rate schedule shall be available to Big Rivers Electric Corporation and includes the City of Henderson, Kentucky, (hereinafter called the Customer). Applicability This rate schedule shall be applicable to electric capacity and energy available from the Dale Hollow, Center Hill, Wolf Creek, Cheatham, Old Hickory, Barkley, J. Percy Priest and Cordell Hull Projects (all of such projects being hereinafter called collectively the “Cumberland Projects”) and sold in wholesale quantities. Character of Service The electric capacity and energy supplied hereunder will be three-phase alternating current at a nominal frequency of sixty hertz. The power shall be delivered at nominal voltages of 13,800 volts and 161,000 volts to the transmission system of Big Rivers Electric Corporation. Points of Delivery Capacity and energy delivered to the Customer will be delivered at points of interconnection of the Customer at the Barkley Project Switchyard, at a delivery point in the vicinity of the Paradise steam plant and at such other points of delivery as may hereafter be 
                    ( print page 54576)
                    agreed upon by the Government and TVA. Billing Month The billing month for power sold under this schedule shall end at 2400 hours CDT or CST, whichever is currently effective, on the last day of each calendar month. Conditions of Service The customer shall at its own expense provide, install, and maintain on its side of each delivery point the equipment necessary to protect and control its own system. In so doing, the installation, adjustment, and setting of all such control and protective equipment at or near the point of delivery shall be coordinated with that which is installed by and at the expense of TVA on its side of the delivery point. Southeastern is including three rate alternatives. All of the rate alternatives have a revenue requirement of $50,400,000. Rate Alternative 1—Interim Operating Plan The final marketing policy for the Cumberland System was published in the 
                    **Federal Register**
                     August 5, 1993 (58 FR 41762). The marketing policy for the Cumberland System of Projects provides peaking capacity, along with 1500 hours of energy annually with each kilowatt of capacity, to customers outside the Tennessee Valley Authority (TVA) transmission system. Due to restrictions on the operation of the Wolf Creek Project and the Center Hill Project imposed by the U.S. Army Corps of Engineers as a precaution to prevent failure of the dams, Southeastern is not able to provide peaking capacity to these customers. Southeastern implemented an Interim Operating Plan for the Cumberland System to provide these customers with energy that did not include capacity. The rates under Alternative 1 will remain in effect for the duration of the Interim Operating Plan. Monthly Rate The monthly rate for capacity and energy sold under this rate schedule shall be: Demand Charge None. Energy Charge 12.67 mills per kilowatt-hour. Transmission The Customer will pay a ratable percent listed below of the credit the Administrator of Southeastern Power Administration (Administrator) provides to the Tennessee Valley Authority (TVA) as consideration for delivering capacity and energy for the account of the Administrator to points of delivery of Other Customers or interconnection points of delivery with other electric systems for the benefit of Other Customers, as agreed by contract between the Administrator and TVA. Big Rivers Electric Corporation—32.660% City of Henderson, Kentucky—2.202% Energy To Be Furnished by the Government The Customer will receive a ratable share of the energy made available by the Nashville District of the U.S. Army Corps of Engineers. Rate Alternative 2—Cost Recovered From Capacity and Energy This rate alternative will be implemented if a portion of the Cumberland Capacity can be scheduled, though not all the capacity in the published marketing policy can be scheduled. The revenue requirement under this alternative is $50,400,000, the same as the revenue requirement in Alternatives 1 and 3. The rate alternative 2 will receive revenues from capacity that can be scheduled and the remainder from energy, at charges that will be determined at the time. Under alternative 2, the cost of the TVA transmission credit will be passed to customers outside the TVA System. This rate alternative will be in effect when the Corps modifies operation of the Wolf Creek Project and the Center Hill Project to allow some of the capacity scheduled. When the lake level rises and capacity is available, the capacity will be allocated on an interim basis to the customers. Rate Alternative 3—Original Cumberland Marketing Policy The third rate alternative will go into effect once the Corps lifts all restrictions on the operation of the Wolf Creek Dam and Center Hill Dam and Southeastern returns to operations that support the published marketing policy. Monthly Rate The monthly rate for capacity and energy sold under this rate schedule shall be: Demand Charge $3.538 per kilowatt/month of total contract demand. Energy Charge None. Energy To Be Furnished by the Government The Government shall make available each contract year to the customer from the Projects through the customer's interconnections with TVA and the customer will schedule and accept an allocation of 1500 kilowatt-hours of energy delivered at the TVA border for each kilowatt of contract demand. A contract year is defined as the 12 months beginning July 1 and ending at midnight June 30 of the following calendar year. The energy made available for a contract year shall be scheduled monthly such that the maximum amount scheduled in any month shall not exceed 240 hours per kilowatt of the customer's contract demand and the minimum amount scheduled in any month shall not be less than 60 hours per kilowatt of the customer's contract demand. The customer may request and the Government may approve energy scheduled for a month greater than 240 hours per kilowatt of the customer's contract demand; provided, that the combined schedule of all SEPA customers outside TVA and served by TVA does not exceed 240 hours per kilowatt of the total contract demands of these customers. Service Interruption When delivery of capacity is interrupted or reduced due to conditions on the Administrator's system beyond his control, the Administrator will continue to make available the portion of his declaration of energy that can be generated with the capacity available. For such interruption or reduction due to conditions on the Administrator's system which have not been arranged for and agreed to in advance, the demand charge for capacity made available will be reduced as to the kilowatts of such capacity which have been interrupted or reduced in accordance with the following formula: 
 
  Wholesale Power Rate ScheduleCSI-1-G Availability This rate schedule shall be available to Southern Illinois Power Cooperative (hereinafter the Customer). Applicability This rate schedule shall be applicable to electric capacity and energy available from the Dale Hollow, Center Hill, Wolf Creek, Cheatham, Old Hickory, Barkley, J. Percy Priest and Cordell Hull Projects (all of such projects being hereinafter called collectively the “Cumberland Projects”) and sold in wholesale quantities. Character of Service The electric capacity and energy supplied hereunder will be three-phase alternating current at a nominal frequency of sixty hertz. The power shall be delivered at nominal voltages of 13,800 volts and 161,000 volts to the transmission system of Big Rivers Electric Corporation. Points of Delivery Capacity and energy delivered to the Customer will be delivered at points of interconnection of the Customer at the Barkley Project Switchyard, at a delivery point in the vicinity of the Paradise steam plant and at such other points of delivery as may hereafter be agreed upon by the Government and TVA. Billing Month The billing month for power sold under this schedule shall end at 2400 hours CDT or CST, whichever is currently effective, on the last day of each calendar month. Southeastern is including three rate alternatives. All of the rate alternatives have a revenue requirement of $50,400,000. Rate Alternative 1—Interim Operating Plan The final marketing policy for the Cumberland System was published in the 
                    **Federal Register**
                     August 5, 1993 (58 FR 41762). The marketing policy for the Cumberland System of Projects provides peaking capacity, along with 1500 hours of energy annually with each kilowatt of capacity, to customers outside the Tennessee Valley Authority (TVA) transmission system. Due to restrictions on the operation of the Wolf Creek Project and the Center Hill Project imposed by the U.S. Army Corps of Engineers as a precaution to prevent failure of the dams, Southeastern is not able to provide peaking capacity to these customers. Southeastern implemented an Interim Operating Plan for the Cumberland System to provide these customers with energy that did not include capacity. The rates under Alternative 1 will remain in effect for the duration of the Interim Operating Plan. Monthly Rate The monthly rate for capacity and energy sold under this rate schedule shall be: Demand Charge None. Energy Charge 12.67 mills per kilowatt-hour. Transmission Charge The Customer will pay 5.138 percent of the credit the Administrator of Southeastern Power Administration (Administrator) provides to the Tennessee Valley Authority (TVA) as consideration for delivering capacity and energy for the account of the Administrator to points of delivery of Other Customers or interconnection points of delivery with other electric systems for the benefit of Other Customers, as agreed by contract between the Administrator and TVA. Energy To Be Furnished by the Government The Customer will receive a ratable share of the energy made available by the Nashville District of the U.S. Army Corps of Engineers. Rate Alternative 2—Cost Recovered From Capacity and Energy This rate alternative will be implemented if a portion of the Cumberland Capacity can be scheduled, though not all the capacity in the published marketing policy can be scheduled. The revenue requirement under this alternative is $50,400,000, the same as the revenue requirement in Alternatives 1 and 3. The rate alternative 2 will receive revenues from capacity that can be scheduled and the remainder from energy, at charges that will be determined at the time. Under alternative 2, the cost of the TVA transmission credit will be passed to customers outside the TVA System. This rate alternative will be in effect when the Corps modifies operation of the Wolf Creek Project and the Center Hill Project to allow some of the capacity scheduled. When the lake level rises and capacity is available, the capacity will be allocated on an interim basis to the customers. Rate Alternative 3—Original Cumberland Marketing Policy The third rate alternative will go into effect once the Corps lifts all restrictions on the operation of the Wolf Creek Dam and Center Hill Dam and Southeastern returns to operations that support the published marketing policy. Monthly Rate The monthly rate for capacity and energy sold under this rate schedule shall be: Demand Charge $3.538 per kilowatt/month of total contract demand. Energy Charge None. Energy To Be Furnished by the Government The Government shall make available each contract year to the customer from the Projects through the customer's interconnections with TVA and the customer will schedule and accept an allocation of 1500 kilowatt-hours of energy delivered at the TVA border for each kilowatt of contract demand. A contract year is defined as the 12 months beginning July 1 and ending at midnight June 30 of the following calendar year. The energy made available for a contract year shall be scheduled monthly such that the maximum amount scheduled in any month shall not exceed 240 hours per kilowatt of the customer's contract demand and the minimum amount scheduled in any month shall not be less than 60 hours per kilowatt of the customer's contract demand. The customer may request and the Government may approve energy scheduled for a month greater than 240 hours per kilowatt of the customer's contract demand; provided, that the combined schedule of all SEPA customers outside TVA and served by TVA does not exceed 240 hours per kilowatt of the total contract demands of these customers. 
                    ( print page 54578) Service Interruption When delivery of capacity is interrupted or reduced due to conditions on the Administrator's system beyond his control, the Administrator will continue to make available the portion of his declaration of energy that can be generated with the capacity available. For such interruption or reduction due to conditions on the Administrator's system which have not been arranged for and agreed to in advance, the demand charge for capacity made available will be reduced as to the kilowatts of such capacity which have been interrupted or reduced in accordance with the following formula:  Wholesale Power Rate Schedule CEK-1-G Availability This rate schedule shall be available to East Kentucky Power Cooperative (hereinafter called the Customer). Applicability This rate schedule shall be applicable to electric capacity and energy available from the Dale Hollow, Center Hill, Wolf Creek, Cheatham, Old Hickory, Barkley, J. Percy Priest and Cordell Hull Projects (all of such projects being hereinafter called collectively the “Cumberland Projects”) and power available from the Laurel Project and sold in wholesale quantities. Character of Service The electric capacity and energy supplied hereunder will be three-phase alternating current at a nominal frequency of sixty hertz. The power shall be delivered at nominal voltages of 161,000 volts to the transmission systems of the Customer. Points of Delivery The points of delivery will be the 161,000 volt bus of the Wolf Creek Power Plant and the 161,000 volt bus of the Laurel Project. Other points of delivery may be as agreed upon. Billing Month The billing month for power sold under this schedule shall end at 2400 hours CDT or CST, whichever is currently effective, on the last day of each calendar month. Conditions of Service The customer shall at its own expense provide, install, and maintain on its side of each delivery point the equipment necessary to protect and control its own system. In so doing, the installation, adjustment and setting of all such control and protective equipment at or near the point of delivery shall be coordinated with that which is installed by and at the expense of TVA on its side of the delivery point. Southeastern is including three rate alternatives. All of the rate alternatives have a revenue requirement of $50,400,000. Rate Alternative 1—Interim Operating Plan The final marketing policy for the Cumberland System was published in the 
                    **Federal Register**
                     August 5, 1993 (58 FR 41762). The marketing policy for the Cumberland System of Projects provides peaking capacity, along with 1500 hours of energy annually with each kilowatt of capacity, to customers outside the Tennessee Valley Authority (TVA) transmission system. Due to restrictions on the operation of the Wolf Creek Project and the Center Hill Project imposed by the U. S. Army Corps of Engineers as a precaution to prevent failure of the dams, Southeastern is not able to provide peaking capacity to these customers. Southeastern implemented an Interim Operating Plan for the Cumberland System to provide these customers with energy that did not include capacity. The rates under Alternative 1 will remain in effect for the duration of the Interim Operating Plan. Monthly Rate The monthly rate for capacity and energy sold under this rate schedule shall be: Demand Charge None. Energy Charge 12.67 mills per kilowatt-hour. Transmission Charge The Customer will pay 31.192 percent of the credit the Administrator of Southeastern Power Administration (Administrator) provides to the Tennessee Valley Authority (TVA) as consideration for delivering capacity and energy for the account of the Administrator to points of delivery of Other Customers or interconnection points of delivery with other electric systems for the benefit of Other Customers, as agreed by contract between the Administrator and TVA. Energy To Be Furnished by the Government The Customer will receive a ratable share of the energy made available by the Nashville District of the U.S. Army Corps of Engineers. Rate Alternative 2—Cost Recovered from Capacity and Energy This rate alternative will be implemented if a portion of the Cumberland Capacity can be scheduled, though not all the capacity in the published marketing policy can be scheduled. The revenue requirement under this alternative is $50,400,000, the same as the revenue requirement in Alternatives 1 and 3. The rate alternative 2 will receive revenues from capacity that can be scheduled and the remainder from energy, at charges that will be determined at the time. Under alternative 2, the cost of the TVA transmission credit will be passed to customers outside the TVA System. This rate alternative will be in effect when the Corps modifies operation of the Wolf Creek Project and the Center Hill Project to allow some of the capacity scheduled. When the lake level rises and capacity is available, the capacity will be allocated on an interim basis to the customers. Rate Alternative 3—Original Cumberland Marketing Policy The third rate alternative will go into effect once the Corps lifts all restrictions on the operation of the Wolf Creek Dam and Center Hill Dam and Southeastern returns to operations that support the published marketing policy. Monthly Rate The monthly rate for capacity and energy sold under this rate schedule shall be: Demand Charge $2.364 per kilowatt/month of total contract demand. 
                    ( print page 54579) Energy Charge 9.392 mills per kilowatt-hour. Energy To Be Furnished by the Government The Government shall make available each contract year to the customer from the Projects through the customer's interconnections with TVA and the customer will schedule and accept an allocation of 1500 kilowatt-hours of energy delivered at the TVA border for each kilowatt of contract demand plus 369 kilowatt-hours of energy delivered for each kilowatt of contract demand to supplement energy available at the Laurel Project. A contract year is defined as the 12 months beginning July 1 and ending at midnight June 30 of the following calendar year. The energy made available for a contract year shall be scheduled monthly such that the maximum amount scheduled in any month shall not exceed 240 hours per kilowatt of the customer's contract demand and the minimum amount scheduled in any month shall not be less than 60 hours per kilowatt of the customer's contract demand. The customer may request and the Government may approve energy scheduled for a month greater than 240 hours per kilowatt of the customer's contract demand; provided, that the combined schedule of all SEPA customers outside TVA and served by TVA does not exceed 240 hours per kilowatt of the total contract demands of these customers. Service Interruption When delivery of capacity is interrupted or reduced due to conditions on the Administrator's system beyond his control, the Administrator will continue to make available the portion of his declaration of energy that can be generated with the capacity available. For such interruption or reduction due to conditions on the Administrator's system which have not been arranged for and agreed to in advance, the demand charge for capacity made available will be reduced as to the kilowatts of such capacity which have been interrupted or reduced in accordance with the following formula:  Wholesale Power Rate Schedule CM-1-G Availability This rate schedule shall be available to the South Mississippi Electric Power Association, Municipal Energy Agency of Mississippi, and Mississippi Delta Energy Agency (hereinafter called the Customers). Applicability This rate schedule shall be applicable to electric capacity and energy available from the Dale Hollow, Center Hill, Wolf Creek, Cheatham, Old Hickory, Barkley, J. Percy Priest and Cordell Hull Projects (all of such projects being hereinafter called collectively the “Cumberland Projects”) and sold in wholesale quantities. Character of Service The electric capacity and energy supplied hereunder will be three-phase alternating current at a nominal frequency of sixty hertz. The power shall be delivered at nominal voltages of 161,000 volts to the transmission systems of Mississippi Power and Light. Points of Delivery The points of delivery will be at interconnection points of the Tennessee Valley Authority system and the Mississippi Power and Light system. Other points of delivery may be as agreed upon. Billing Month The billing month for power sold under this schedule shall end at 2400 hours CDT or CST, whichever is currently effective on the last day of each calendar month. Southeastern is including three rate alternatives. All of the rate alternatives have a revenue requirement of $50,400,000. Rate Alternative 1—Interim Operating Plan The final marketing policy for the Cumberland System was published in the 
                    **Federal Register**
                     August 5, 1993 (58 FR 41762). The marketing policy for the Cumberland System of Projects provides peaking capacity, along with 1500 hours of energy annually with each kilowatt of capacity, to customers outside the Tennessee Valley Authority (TVA) transmission system. Due to restrictions on the operation of the Wolf Creek Project and the Center Hill Project imposed by the U.S. Army Corps of Engineers as a precaution to prevent failure of the dams, Southeastern is not able to provide peaking capacity to these customers. Southeastern implemented an Interim Operating Plan for the Cumberland System to provide these customers with energy that did not include capacity. The rates under Alternative 1 will remain in effect for the duration of the Interim Operating Plan. Monthly Rate The monthly rate for capacity and energy sold under this rate schedule shall be: Demand Charge None. Energy Charge 12.67 mills per kilowatt-hour. Transmission Charge The Customer will pay a ratable percent listed below of the credit the Administrator of Southeastern Power Administration (Administrator) provides to the Tennessee Valley Authority (TVA) as consideration for delivering capacity and energy for the account of the Administrator to points of delivery of Other Customers or interconnection points of delivery with other electric systems for the benefit of Other Customers, as agreed by contract between the Administrator and TVA. Mississippi Delta Energy Agency—2.058% Municipal Energy Agency of Mississippi—3.447% South Mississippi EPA—9.358% Energy To Be Furnished by the Government The Customer will receive a ratable share of the energy made available by the Nashville District of the U.S. Army Corps of Engineers. Rate Alternative 2—Cost Recovered From Capacity and Energy This rate alternative will be implemented if a portion of the Cumberland Capacity can be scheduled, though not all the capacity in the published marketing policy can be scheduled. The revenue requirement under this alternative is $50,400,000, the same as the revenue requirement in Alternatives 1 and 3. The rate alternative 2 will receive revenues from 
                    ( print page 54580)
                    capacity that can be scheduled and the remainder from energy, at charges that will be determined at the time. Under alternative 2, the cost of the TVA transmission credit will be passed to customers outside the TVA System. This rate alternative will be in effect when the Corps modifies operation of the Wolf Creek Project and the Center Hill Project to allow some of the capacity scheduled. When the lake level rises and capacity is available, the capacity will be allocated on an interim basis to the customers. Rate Alternative 3—Original Cumberland Marketing Policy The third rate alternative will go into effect once the Corps lifts all restrictions on the operation of the Wolf Creek Dam and Center Hill Dam and Southeastern returns to operations that support the published marketing policy. Monthly Rate The monthly rate for capacity and energy sold under this rate schedule shall be: Demand Charge $3.538 per kilowatt/month of total contract demand. Energy Charge None. Energy To Be Furnished by the Government The Government shall make available each contract year to the Customer from the Projects through the Customer's interconnections with TVA and the Customer will schedule and accept an allocation of 1500 kilowatt-hours of energy delivered at the TVA border for each kilowatt of contract demand. A contract year is defined as the 12 months beginning July 1 and ending at midnight June 30 of the following calendar year. The energy made available for a contract year shall be scheduled monthly such that the maximum amount scheduled in any month shall not exceed 240 hours per kilowatt of the Customer's contract demand and the minimum amount scheduled in any month shall not be less than 60 hours per kilowatt of the Customer's contract demand. The Customer may request and the Government may approve energy scheduled for a month greater than 240 hours per kilowatt of the Customer's contract demand; provided, that the combined schedule of all SEPA Customers outside TVA and served by TVA does not exceed 240 hours per kilowatt of the total contract demands of these Customers. In the event that any portion of the capacity allocated to the Customers is not initially delivered to the Customers as of the beginning of a full contract year, the 1500 kilowatt hours shall be reduced 1/12 for each month of that year prior to initial delivery of such capacity. Service Interruption When delivery of capacity is interrupted or reduced due to conditions on the Administrator's system beyond his control, the Administrator will continue to make available the portion of his declaration of energy that can be generated with the capacity available. For such interruption or reduction due to conditions on the Administrator's system which have not been arranged for and agreed to in advance, the demand charge for capacity made available will be reduced as to the kilowatts of such capacity which have been interrupted or reduced in accordance with the following formula:  Wholesale Power Rate Schedule CC-1-H Availability This rate schedule shall be available to public bodies and cooperatives served through the facilities of Carolina Power & Light Company, Western Division (hereinafter called the Customers). Applicability This rate schedule shall be applicable to electric capacity and energy available from the Dale Hollow, Center Hill, Wolf Creek, Cheatham, Old Hickory, Barkley, J. Percy Priest and Cordell Hull Projects (all of such projects being hereinafter called collectively the “Cumberland Projects”) and sold in wholesale quantities. Character of Service The electric capacity and energy supplied hereunder will be three-phase alternating current at a nominal frequency of sixty hertz. The power shall be delivered at nominal voltages of 161,000 volts to the transmission system of Carolina Power & Light Company, Western Division. Points of Delivery The points of delivery will be at interconnecting points of the Tennessee Valley Authority system and the Carolina Power & Light Company, Western Division system. Other points of delivery may be as agreed upon. Billing Month The billing month for power sold under this schedule shall end at 2400 hours CDT or CST, whichever is currently effective, on the last day of each calendar month. Southeastern is including three rate alternatives. All of the rate alternatives have a revenue requirement of $50,400,000. Rate Alternative 1—Interim Operating Plan The final marketing policy for the Cumberland System was published in the 
                    **Federal Register**
                     August 5, 1993 (58 FR 41762). The marketing policy for the Cumberland System of Projects provides peaking capacity, along with 1500 hours of energy annually with each kilowatt of capacity, to customers outside the Tennessee Valley Authority (TVA) transmission system. Due to restrictions on the operation of the Wolf Creek Project and the Center Hill Project imposed by the U.S. Army Corps of Engineers as a precaution to prevent failure of the dams, Southeastern is not able to provide peaking capacity to these customers. Southeastern implemented an Interim Operating Plan for the Cumberland System to provide these customers with energy that did not include capacity. The rates under Alternative 1 will remain in effect for the duration of the Interim Operating Plan. Monthly Rate The monthly rate for capacity and energy sold under this rate schedule shall be: Demand Charge None. Energy Charge 12.67 mills per kilowatt-hour. 
                    ( print page 54581) TVA Transmission Charge The Customer will pay a ratable percent listed below of the credit the Administrator of Southeastern Power Administration (Administrator) provides to the Tennessee Valley Authority (TVA) as consideration for delivering capacity and energy for the account of the Administrator to points of delivery of Other Customers or interconnection points of delivery with other electric systems for the benefit of Other Customers, as agreed by contract between the Administrator and TVA. French Broad EMC—1.713% Haywood EMC—0.501% Town of Waynesville—0.355% CP&L Transmission Charge The Customer will pay a ratable percent listed below of the charge for transmission service furnished by Carolina Power & Light Company, Western Division. French Broad EMC—66.667% Haywood EMC—19.512% Town of Waynesville—13.821% Energy To Be Furnished by the Government The Government will sell to the customer and the customer will purchase from the Government energy each billing month equivalent to a percentage specified by contract of the energy made available to Carolina Power & Light Company (less applicable losses). The Customer's contract demand and accompanying energy allocation will be divided pro rata among its individual delivery points served from the Carolina Power & Light Company's Western Division transmission system. Rate Alternative 2—Cost Recovered From Capacity and Energy This rate alternative will be implemented if a portion of the Cumberland Capacity can be scheduled, though not all the capacity in the published marketing policy can be scheduled. The revenue requirement under this alternative is $50,400,000, the same as the revenue requirement in Alternatives 1 and 3. The rate alternative 2 will receive revenues from capacity that can be scheduled and the remainder from energy, at charges that will be determined at the time. Under alternative 2, the cost of the TVA transmission credit will be passed to customers outside the TVA System. This rate alternative will be in effect when the Corps modifies operation of the Wolf Creek Project and the Center Hill Project to allow some of the capacity scheduled. When the lake level rises and capacity is available, the capacity will be allocated on an interim basis to the customers. Rate Alternative 3—Original Cumberland Marketing Policy The third rate alternative will go into effect once the Corps lifts all restrictions on the operation of the Wolf Creek Dam and Center Hill Dam and Southeastern returns to operations that support the published marketing policy. Monthly Rate The monthly rate for capacity and energy sold under this rate schedule shall be: Demand Charge $4.027 per kilowatt/month of total contract demand. Energy Charge None. CP&L Transmission Charge $1.1022 per kilowatt/month of total contract demand. The CP&L transmission rate is subject to annual adjustment on April 1 of each year and will be computed subject to the formula in Appendix A attached to the Government-Carolina Power & Light Company contract. Energy To Be Furnished by the Government The Government will sell to the customer and the customer will purchase from the Government energy each billing month equivalent to a percentage specified by contract of the energy made available to Carolina Power & Light Company (less six percent (6%) losses). The Customer's contract demand and accompanying energy allocation will be divided pro rata among its individual delivery points served from the Carolina Power & Light Company's Western Division transmission system. Wholesale Power Rate Schedule CK-1-G Availability This rate schedule shall be available to public bodies served through the facilities of Kentucky Utilities Company (hereinafter called the Customers.) Applicability This rate schedule shall be applicable to electric capacity and energy available from the Dale Hollow, Center Hill, Wolf Creek, Cheatham, Old Hickory, Barkley, J. Percy Priest and Cordell Hull Projects (all of such projects being hereinafter called collectively the “Cumberland Projects”) and sold in wholesale quantities. Character of Service The electric capacity and energy supplied hereunder will be three-phase alternating current at a nominal frequency of sixty hertz. The power shall be delivered at nominal voltages of 161,000 volts to the transmission systems of Kentucky Utilities Company. Points of Delivery The points of delivery will be at interconnecting points between the Tennessee Valley Authority system and the Kentucky Utilities Company system. Other points of delivery may be as agreed upon. Billing Month The billing month for power sold under this schedule shall end at 2400 hours CDT or CST, whichever is currently effective on the last day of each calendar month. Southeastern is including three rate alternatives. All of the rate alternatives have a revenue requirement of $50,400,000. Rate Alternative 1—Interim Operating Plan The final marketing policy for the Cumberland System was published in the 
                    **Federal Register**
                     August 5, 1993 (58 FR 41762). The marketing policy for the Cumberland System of Projects provides peaking capacity, along with 1500 hours of energy annually with each kilowatt of capacity, to customers outside the Tennessee Valley Authority (TVA) transmission system. Due to restrictions on the operation of the Wolf Creek Project and the Center Hill Project imposed by the U.S. Army Corps of Engineers as a precaution to prevent failure of the dams, Southeastern is not able to provide peaking capacity to these customers. Southeastern implemented an Interim Operating Plan for the Cumberland System to provide these customers with energy that did not include capacity. The rates under Alternative 1 will remain in effect for the duration of the Interim Operating Plan. Monthly Rate The monthly rate for capacity and energy sold under this rate schedule shall be: Demand Charge None. Energy Charge 12.67 mills per kilowatt-hour. 
                    ( print page 54582) Transmission Charge The Customer will pay a ratable percent listed below of the credit the Administrator of Southeastern Power Administration (Administrator) provides to the Tennessee Valley Authority (TVA) as consideration for delivering capacity and energy for the account of the Administrator to points of delivery of Other Customers or interconnection points of delivery with other electric systems for the benefit of Other Customers, as agreed by contract between the Administrator and TVA. City of Barbourville
0.404%City of Bardstown
0.412%City of Bardwell
0.099%City of Benham
0.046%City of Corbin
0.477%City of Falmouth
0.108%City of Frankfort
2.866%City of Madisonville
1.432%City of Nicholasville
0.469%City of Owensboro
4.587%City of Paris
0.250%City of Providence
0.226%
 Energy To Be Furnished by the Government The Customer will receive a ratable share of the energy made available by the Nashville District of the U.S. Army Corps of Engineers. Rate Alternative 2—Cost Recovered From Capacity and Energy This rate alternative will be implemented if a portion of the Cumberland Capacity can be scheduled, though not all the capacity in the published marketing policy can be scheduled. The revenue requirement under this alternative is $50,400,000, the same as the revenue requirement in Alternatives 1 and 3. The rate alternative 2 will receive revenues from capacity that can be scheduled and the remainder from energy, at charges that will be determined at the time. Under alternative 2, the cost of the TVA transmission credit will be passed to customers outside the TVA System. This rate alternative will be in effect when the Corps modifies operation of the Wolf Creek Project and the Center Hill Project to allow some of the capacity scheduled. When the lake level rises and capacity is available, the capacity will be allocated on an interim basis to the customers. Rate Alternative 3—Original Cumberland Marketing Policy The third rate alternative will go into effect once the Corps lifts all restrictions on the operation of the Wolf Creek Dam and Center Hill Dam and Southeastern returns to operations that support the published marketing policy. Monthly Rate The monthly rate for capacity and energy sold under this rate schedule shall be: Demand Charge $3.538 per kilowatt/month of total contract demand Energy Charge None. Additional Energy Charge 9.392 mills per kilowatt-hour. Energy To Be Furnished by the Government The Government shall make available each contract year to the Customer from the Projects and the Customer will accept an allocation of 1500 kilowatt-hours of energy for each kilowatt of contract demand. A contract year is defined as the 12 months beginning July 1 and ending at midnight June 30 of the following calendar year. The energy made available for a contract year shall be scheduled monthly such that the maximum amount scheduled in any month shall not exceed 240 hours per kilowatt of the Customer's contract demand and the minimum amount scheduled in any month shall not be less than 60 hours per kilowatt of the Customer's contract demand. The Customer may request and the Government may approve energy scheduled for a month greater than 240 hours per kilowatt of the Customer's contract demand; provided, that the combined schedule of all SEPA Customers outside TVA and served by TVA does not exceed 240 hours per kilowatt of the total contract demands of these Customers. In the event that any portion of the capacity allocated to the Customers is not initially delivered to the Customers as of the beginning of a full contract year, the 1500 kilowatt hours shall be reduced 
                    1/12
                     for each month of that year prior to initial delivery of such capacity. For billing purposes, each kilowatt of capacity will include 1500 kilowatt-hours energy per year. Customers will pay for additional energy at the additional energy rate. Wholesale Power Rate Schedule CTV-1-G Availability This rate schedule shall be available to the Tennessee Valley Authority (hereinafter called TVA). Applicability This rate schedule shall be applicable to electric capacity and energy generated at the Dale Hollow, Center Hill, Wolf Creek, Old Hickory, Cheatham, Barkley, J. Percy Priest, and Cordell Hull Projects (all of such projects being hereafter called collectively the “Cumberland Projects”) and the Laurel Project sold under agreement between the Department of Energy and TVA. Character of Service The electric capacity and energy supplied hereunder will be three-phase alternating current at a frequency of approximately 60 Hertz at the outgoing terminals of the Cumberland Projects' switchyards. Billing Month The billing month for capacity and energy sold under this schedule shall end at 2400 hours CDT or CST, whichever is currently effective, on the last day of each calendar month. Contract Year For purposes of this rate schedule, a contract year shall be as in Section 13.1 of the Southeastern Power Administration—Tennessee Valley Authority Contract. Power Factor TVA shall take capacity and energy from the Department of Energy at such power factor as will best serve TVA's system from time to time; provided, that TVA shall not impose a power factor of less than .85 lagging on the Department of Energy's facilities which requires operation contrary to good operating practice or results in overload or impairment of such facilities. Southeastern is including three rate alternatives. All of the rate alternatives have a revenue requirement of $50,400,000. Rate Alternative 1—Interim Operating Plan The final marketing policy for the Cumberland System was published in the 
                    **Federal Register**
                     August 5, 1993 (58 FR 41762). The marketing policy for the Cumberland System of Projects provides peaking capacity, along with 1500 hours of energy annually with each kilowatt of capacity, to customers outside the Tennessee Valley Authority (TVA) transmission system. Due to restrictions on the operation of the Wolf Creek Project and the Center Hill Project imposed by the U. S. Army Corps of Engineers as a precaution to prevent failure of the dams, Southeastern is not able to provide peaking capacity to these customers. Southeastern implemented an Interim Operating Plan for the Cumberland System to provide 
                    ( print page 54583)
                    these customers with energy that did not include capacity. The rates under Alternative 1 will remain in effect for the duration of the Interim Operating Plan. Monthly Rates The monthly rate for capacity and energy sold under this rate schedule shall be: Demand Charge None. Energy Charge 12.67 mills per kilowatt-hour. Energy To Be Made Available The Customer will receive a ratable share of the energy made available by the Nashville District of the U.S. Army Corps of Engineers. Rate Alternative 2—Cost Recovered From Capacity and Energy This rate alternative will be implemented if a portion of the Cumberland Capacity can be scheduled, though not all the capacity in the published marketing policy can be scheduled. The revenue requirement under this alternative is $50,400,000, the same as the revenue requirement in Alternatives 1 and 3. The rate alternative 2 will receive revenues from capacity that can be scheduled and the remainder from energy, at charges that will be determined at the time. Under alternative 2, the cost of the TVA transmission credit will be passed to customers outside the TVA System. This rate alternative will be in effect when the Corps modifies operation of the Wolf Creek Project and the Center Hill Project to allow some of the capacity scheduled. When the lake level rises and capacity is available, the capacity will be allocated on an interim basis to the customers. Rate Alternative 3—Original Cumberland Marketing Policy The third rate alternative will go into effect once the Corps lifts all restrictions on the operation of the Wolf Creek Dam and Center Hill Dam and Southeastern returns to operations that support the published marketing policy. Monthly Rate The monthly rate for capacity and energy sold under this rate schedule shall be: Demand Charge $2.072 per kilowatt/month of total contract demand. Energy Charge None. Additional Energy Charge 9.392 mills per kilowatt-hour. Energy To Be Made Available The Department of Energy shall determine the energy that is available from the projects for declaration in the billing month. To meet the energy requirements of the Department of Energy's customers outside the TVA area (hereinafter called Other Customers), 768,000 megawatt-hours of net energy shall be available annually (including 36,900 megawatt-hours of annual net energy to supplement energy available at Laurel Project). The energy requirement of the Other Customers shall be available annually, divided monthly such that the maximum available in any month shall not exceed 240 hours per kilowatt of total Other Customers contract demand, and the minimum amount available in any month shall not be less than 60 hours per kilowatt of total Other Customers demand. In the event that any portion of the capacity allocated to Other Customers is not initially delivered to the Other Customers as of the beginning of a full contract year, (July through June), the 1500 hours, plus any such additional energy required as discussed above, shall be reduced 
                    1/12
                     for each month of that year prior to initial delivery of such capacity. The energy scheduled by TVA for use within the TVA System in any billing month shall be the total energy delivered to TVA less (1) an adjustment for fast or slow meters, if any, (2) an adjustment for Barkley-Kentucky Canal of 15,000 megawatt-hours of energy each month which is delivered to TVA under the agreement from the Cumberland Projects without charge to TVA, (3) the energy scheduled by the Department of Energy in said month for the Other Customers plus losses of two (2) percent, and (4) station service energy furnished by TVA. Each kilowatt of capacity will include 1500 kilowatt-hours of energy per year, which is defined as base energy. Energy received in excess of 1500 kilowatt-hours per kilowatt will be subject to an additional energy charge identified in the monthly rates section of this rate schedule. Service Interruption When delivery of capacity to TVA is interrupted or reduced due to conditions on the Department of Energy's system that are beyond its control, the Department of Energy will continue to make available the portion of its declaration of energy that can be generated with the capacity available. For such interruption or reduction (exclusive of any restrictions provided in the agreement) due to conditions on the Department of Energy's system which have not been arranged for and agreed to in advance, the demand charge for scheduled capacity made available to TVA will be reduced as to the kilowatts of such scheduled capacity which have been so interrupted or reduced for each day in accordance with the following formula:  Wholesale Rate Schedule Replacement—3 Availability This rate schedule shall be available to public bodies and cooperatives ( any one of whom is hereinafter called the Customer) in Virginia, North Carolina, Tennessee, Georgia, Alabama, Mississippi, Kentucky and southern Illinois to whom power is provided pursuant to contracts between the Government and the customer from the Dale Hollow, Center Hill, Wolf Creek, Cheatham, Old Hickory, Barkley, J. Percy Priest, Cordell Hull, and Laurel Projects (all of such projects being hereinafter called collectively the “Cumberland Projects”). Applicability This rate schedule shall be applicable to the sale of wholesale energy purchased to meet contract minimum energy sold under appropriate contracts between the Government and the Customer. 
                    ( print page 54584) Character of Service The energy supplied hereunder will be delivered at the delivery points provided for under appropriate contracts between the Government and the Customer. Monthly Charge The rate for replacement energy will be a formulary capacity charge based on the monthly cost to the Government to purchase replacement energy necessary to support capacity in the Cumberland System divided by the capacity available from the Cumberland System, which is 950,000 kilowatts in the published power marketing policy. The capacity rate will be adjusted for any capacity retained by the Customer's transmission facilitator. Conditions of Service The customer shall at its own expense provide, install, and maintain on its side of each delivery point the equipment necessary to protect and control its own system.


[FR Doc. E8-22097 Filed 9-19-08; 8:45 am] BILLING CODE 6450-01-P