[Federal Register Volume 74, Number 105 (Wednesday, June 3, 2009)]
[Notices]
[Pages 26682-26686]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-12920]


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DEPARTMENT OF ENERGY

Western Area Power Administration


Pick-Sloan Missouri Basin Program--Eastern Division-Rate Order 
No. WAPA-144

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of Proposed Transmission and Ancillary Services Rates.

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SUMMARY: The Western Area Power Administration (Western) is proposing 
to update its rates for transmission and ancillary services for the 
Pick-Sloan Missouri Basin Program--Eastern Division (P-SMBP--ED). 
Current formula rates, under Rate Schedules UGP-NT1, UGP-FPT1, UGP-
NFPT1, UGP-AS1, UGP-AS2, UGP-AS3, UGP-AS4, UGP-AS5, and UGP-AS6 will 
expire on September 30, 2010. Western is also proposing to add a new 
rate schedule, Rate Schedule UGP-AS7, for Generator Imbalance Service. 
Western is proposing these rates to meet evolving and expanding 
transmission system and ancillary services requirements. Western will 
prepare a brochure that provides detailed information on the proposed 
rates to all interested parties. The proposed rates, under Rate 
Schedules UGP-NT1, UGP-FPT1, UGP-NFPT1, UGP-AS1, UGP-AS2, UGP-AS3, UGP-
AS4, UGP-AS5, and UGP-AS6, are scheduled to go into effect on January 
1, 2010, and will remain in effect through December 31, 2014, or until 
superseded. The new rate schedule for Generator Imbalance Service, 
under Rate Schedule UGP-AS7, is scheduled to go into effect on the 
latter of January 1, 2010, or when Western's Open Access Transmission 
Tariff (OATT) is revised to provide for Generator Imbalance Service. If 
implemented, Rate Schedule UGP-AS7 will also remain in effect through 
December 31, 2014, or until superseded, to coincide with the other 
ancillary service rates in this rate order. Publication of this Federal 
Register notice begins the formal process for the proposed formula 
rates.

DATES: The consultation and comment period begins today and will end 
October 1, 2009. Western will present a detailed explanation of the 
proposed formula rates at a public information forum. The public 
information forum date is June 24, 2009, 9 a.m. to 12 p.m. CDT, Sioux 
Falls, South Dakota. Western will accept oral and written comments at a 
public comment forum. The public comment forum date is July 28, 2009, 9 
a.m. to 12 p.m. CDT, Sioux Falls, South Dakota. Western will accept 
written comments any time during the consultation and comment period.

ADDRESSES: Written comments and/or requests to be informed of Federal 
Energy Regulatory Commission (FERC) actions concerning the rates 
submitted by Western to the FERC for approval should be sent to Robert 
J. Harris, Regional Manager, Upper Great Plains Region, Western Area 
Power Administration, 2900 4th Avenue North, Billings, MT 59101-1266, 
e-mail <a href="/cdn-cgi/l/email-protection#4e1b091e071d1c2f3a2b0e392f3e2f60292138"><span class="__cf_email__" data-cfemail="a9fceef9e0fafbc8ddcce9dec8d9c887cec6df">[email protected]</span></a>. Western will post information about the rate 
process on its Web site at http://www.wapa.gov/ugp/rates/default.htm. 
Western will post official comments received via letter and e-mail to 
its Web site after the close of the comment period. Western must 
receive written comments by the end of the consultation and comment 
period to ensure they are considered in Western's decision process. The 
public information forum location is the Holiday Inn, 100 West 8th 
Street, Sioux Falls, SD. The public comment forum location is the 
Holiday Inn, 100 West 8th Street, Sioux Falls, SD.

FOR FURTHER INFORMATION CONTACT: Ms. Linda Cady-Hoffman, Rates Manager, 
Upper Great Plains Region, Western Area Power Administration, 2900 4th 
Avenue North, Billings, MT 59101-1266, telephone (406) 247-7439, e-mail 
<a href="/cdn-cgi/l/email-protection#0f6c6e6b764f786e7f6e21686079"><span class="__cf_email__" data-cfemail="6d0e0c09142d1a0c1d0c430a021b">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: The transmission facilities in the P-SMBP--
ED are integrated with transmission facilities of Basin Electric Power 
Cooperative (Basin) and Heartland Consumers Power District (Heartland) 
such that transmission services are provided over an integrated 
transmission system, called the Integrated System (IS), and the rates 
are sometimes referred to as IS Rates. Western acts as the 
administrator of the IS and monitors service under the OATT.\1\ As 
owners of the IS, Western, Basin, and Heartland may be referred to as 
IS Partners. The Deputy Secretary of Energy approved the current Rate 
Schedules UGP-FPT1, UGP-NFPT1, UGP-NT1, UGP-AS1, UGP-AS2, UGP-AS3, UGP-
AS4, UGP-AS5, and UGP-AS6 for P-SMBP--ED firm and non-firm transmission 
rates and ancillary services rates through September 30, 2010.\2\ The 
current rate schedules contain formula-based rates that are 
recalculated

[[Page 26683]]

annually. The proposed rates continue the formula-based approach and 
will be recalculated annually from financial and load information. 
Western intends for the proposed formula-based rates to go into effect 
January 1, 2010, and remain in effect through December 31, 2014. Annual 
recalculated rates are proposed go into effect on January 1, 2011, and 
annually on January 1 thereafter.
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    \1\ Western's OATT was most recently approved by FERC in Docket 
No. NJ07-2-000, 119 FERC 61,329 (2007) and the FERC's delegated 
order issued on September 6, 2007, in Docket No. NJ07-2-001.
    \2\ Rate Order No. WAPA-122, 70 FR 55821, September 23, 2005, 
and the FERC confirmed and approved the rate schedules on May 30, 
2006, under FERC Docket No. EF05-5031-000, 115 FERC 62,230.
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Proposed Change to Forward-Looking Formula Transmission Rates

    Western proposes to change the implementation of the formula rates 
to recover transmission expenses and investments on a current (forward-
looking), rather than a lagging basis. This will allow Western to more 
accurately match cost recovery with cost incurrence. Western will use 
projections to estimate transmission costs and load for the upcoming 
year in the annual recalculation of the Annual Transmission Revenue 
Requirement (ATRR). Western will ``true-up'' the cost estimates with 
Western's actual costs. This is a change in the manner in which the 
inputs for the revenue requirement are currently developed, rather than 
a change to the formula rate itself. Rates will continue to be 
recalculated every year. Revenue collected in excess of Western's 
actual net revenue requirement will be returned to customers through a 
credit against rates in a subsequent year. Actual revenues that are 
less than the net revenue requirement would likewise be recovered in a 
subsequent year. The true-up procedure would ensure that Western will 
recover no more and no less than the actual transmission costs for the 
year. For example, at the end of 2010, and as actual year-end financial 
data becomes available during 2011, the under or over collection of 
revenue during 2010 will be determined. When the rates are recalculated 
for implementation on January 1, 2012, the implemented rates will 
include an adjustment for revenue over or under collected in 2010.

Proposed Implementation of Transmission and Ancillary Services Rates on 
January 1

    With the implementation of the applicable rates (resulting from 
this process) effective on January 1, 2010, Western proposes to change 
the date of the annual implementation of the recalculated rates for 
each applicable rate schedule to January 1, 2011, and January 1 of each 
year thereafter. In the past, annual implementation of the 
recalculation of the formula rates was effective annually on May 1. 
With the implementation date change from May 1 to January 1, the data 
used in the rate recalculation for the rates that will be effective on 
January 1will be made available for review and comment on or shortly 
after September 1 each year. Western proposes providing customers the 
opportunity to discuss and comment on the recalculated rates on or 
before October 31, 2010, and October 31 of subsequent years. This 
procedure will ensure that the data is available, interested parties 
are aware of the data used to calculate the rates, and will provide 
interested parties the opportunity to comment before the costs are 
collected through the formula rate.

Proposed Use of Revenue Requirement Calculation Templates

    Western proposes to initiate the use of standard revenue 
requirement calculation templates for the annual rate recalculation to 
aid in the revenue requirement/rate recalculation and review processes. 
The revenue requirement templates will provide a standard format to 
gather and record required financial information from Western, Basin, 
Heartland, and Transmission Customers receiving facilities credits for 
facilities integrated with the IS. Entities submitting financial data 
may request the use of other or modified templates. However, once 
accepted, consistent use of the accepted template will be required for 
subsequent financial data submission for that entity. Western will 
review future requests to utilize other or modified templates for 
appropriateness and conduct a public process prior to granting approval 
for use.

Proposed Formula Rate for Network Transmission Service

    The formula for calculating the Network Transmission Service rate 
is unchanged from Western's previously approved filing with the FERC. 
The change to a current year formula rate involves a change to the 
manner in which the inputs are developed rather than a change in the 
formula rate itself. The same ATRR is used for both network and point-
to-point rates. The current methodology for determining the customers' 
charges for monthly Network IS Transmission Service is the product of 
the network customer's load ratio share times one-twelfth (1/12) of the 
annual network transmission revenue requirement. The network 
transmission revenue requirement is derived by annualizing the IS 
transmission investment and adding transmission-related annual costs, 
including operation, maintenance, interest, administrative and general 
costs, and depreciation. The annual costs are reduced by revenue 
credits for the Non-Firm Transmission Service. The load ratio share is 
based upon the network customer's hourly load coincident with the IS 
monthly transmission system peak minus the coincident peak for all IS 
Firm Point-to-Point Transmission Service plus the point-to-point 
reservations. The Network Transmission Service rate includes costs for 
Scheduling, System Control, and Dispatch (SSCD) Service needed to 
provide transmission service. A revenue requirement template will be 
used to calculate the ATRR utilizing the costs estimates as data 
inputs.

Proposed Formula Rate for Firm Point-to-Point IS Transmission Service

    Western proposes no change in the rate formula for Firm Point-to-
Point IS Transmission Service other than utilizing transmission cost 
projections as data inputs in the determination of the annual revenue 
requirement as described above. The proposed Firm Point-to-Point IS 
Transmission Service rate remains the annual revenue requirement 
required for IS transmission service less the non-firm revenue credits 
all divided by annual average transmission system monthly peak load and 
then divided again by 12 months. The Firm Point-to-Point rate includes 
the cost for SSCD Service needed to provide transmission service.

Proposed Formula Rate for Non-Firm Point-to-Point Transmission Service

    Western proposes no change in the rate formula for Non-Firm Point-
to-Point Transmission Service other than utilizing transmission cost 
projections as data inputs to determine the annual revenue requirement 
as described above. The Non-Firm Point-to-Point Transmission Service 
rate formula remains the monthly IS Firm Point-to-Point Transmission 
Service rate divided by 730 hours per month times 1000 mills per 
dollar.

Proposed Formula Rate for SSCD Service

    Western proposes to continue the current formula-based rate 
methodology for SSCD Service, except that the formula will divide the 
annual revenue requirement for SSCD Service by the number of daily tags 
in the calculation year instead of dividing the annual revenue 
requirement by the number of daily schedules in the calculation year. 
This is a terminology change only. Schedules and tags have become 
synonymous in Western's Upper Great Plains Region, and therefore, 
calculating the SSCD Service rate with either as the

[[Page 26684]]

denominator will result in the same rate. The change of terminology 
provides consistency among Western's regions in describing the formula 
for SSCD Service.

Proposed Formula Rate for Reactive Supply and Voltage Control From 
Generation Sources Service

    Western's current formula for Reactive Supply and Voltage Control 
from Generation Sources (RSVC) Service is determined by multiplying the 
total P-SMBP--ED generation net plant by the generation fixed charge 
rate. The annual cost is multiplied by the five (5) year average peak 
monthly percentage of Western's generation operating in a synchronous 
condenser mode to determine Western's reactive service revenue 
requirement. Western's, Basin's, Heartland's, and Missouri River Energy 
Services' annual costs for revenue requirements for RSVC Service are 
summed to get the total revenue requirement for this service. The RSVC 
rate is then derived by dividing the total annual revenue requirement 
by the load requiring reactive service. The annual cost is then divided 
by 12 months to obtain a monthly charge. In this formula, Western is 
only compensated for providing RSVC Service based upon the cost of 
Western's generation operating outside the 0.95 leading to 0.95 lagging 
power factor bandwidth, while Basin, Heartland, and Missouri River 
Energy Services are compensated based on costs for generation operating 
within this power factor bandwidth.
    Western is proposing a change to its rate for RSVC Service by 
removing costs of any generation associated with operation within the 
bandwidth from the total revenue requirement for this service. Under 
Western's current rate, Western is not compensated for providing RSVC 
Service from its own generators operating inside the bandwidth, while 
non-Federal generators are receiving compensation for providing RSVC 
Service within the bandwidth. Western believes that both Federal and 
non-Federal generators should be treated comparably when they provide 
RSVC Service within the bandwidth. Therefore, Western is proposing 
discontinuing payment for all other generators providing RSVC Service 
within the 0.95 leading to 0.95 lagging power factor bandwidth.
    Western will continue to collect its RSVC Service cost, for its 
generators operating within the bandwidth, in the firm power revenue 
requirement under the then appropriate firm power rate schedule and not 
from Transmission Customers under its OATT. Therefore, only Federal 
preference power customers will pay the RSVC costs of the Federal 
generators operating within the bandwidth. This change will result in 
transmission service customers paying for RSVC Service based only upon 
costs for generators operating outside the bandwidth. Excluding RSVC 
Service costs associated with generator operation within the bandwidth 
from the RSVC Service revenue requirement will require all other non-
Federal generator owners to recover their RSVC Service costs, for 
operation within the bandwidth, elsewhere.
    Western's Federal generation is required to operate in synchronous 
condenser mode (i.e., outside the power factor bandwidth) to maintain 
system voltages and meet reliability criteria and therefore, consistent 
with the previous practice, Western will include its costs to provide 
RSVC Service for Federal generators operating outside the bandwidth. 
Western will also include costs associated with other non-Federal 
generators required to operate outside the power factor bandwidth to 
maintain system voltages and meet reliability criteria (e.g., other 
generators that operate as synchronous condensers, or generators that 
are requested by Western to operate outside the bandwidth as noted in 
Western's generator interconnection procedures and agreements).
    The following rate formula will apply: Western's total P-SMBP-ED 
generation net plant multiplied by the generation fixed charge rate (in 
percent) provides Western's annual cost. That annual cost is multiplied 
by the five (5) year average peak monthly percentage of Western's 
Federal synchronous condensing generation to determine Western's 
``outside the bandwidth'' reactive service revenue requirement. 
Western's revenue requirement is then summed with any revenue 
requirement or costs incurred from other non-Federal generators 
required by Western to operate outside the bandwidth to provide the 
total annual revenue requirement for RSVC Service. This total annual 
revenue requirement is then divided by the total load (kWyear) in 
Western's Control Areas.\3\ The annual cost is then divided by 12 
months to obtain a monthly charge.
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    \3\ Western has retained the term ``Control Area'' in this 
document maintaining consistency with usage of the term in the 
FERC's pro forma tariff and Western's current OATT.* As defined in 
Western's OATT, a Control Area is: An electric power system or 
combination of electric power systems to which a common automatic 
generation control scheme is applied in order to: (1) Match, at all 
times, the power output of the generators within the electric 
system(s) and capacity and energy purchased from entities outside 
the electric power system(s), with load within the electric power 
system(s); (2) maintain scheduled interchange with other Control 
Areas, within the limits of Good Utility Practice; (3) maintain the 
frequency of the electric power system(s) within reasonable limits 
in accordance with Good Utility Practice; and (4) provide sufficient 
generating capacity to maintain operating reserves in accordance 
with Good Utility Practice.
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Proposed Formula Rate for Regulation and Frequency Response Service

    Western proposes to continue the current formula-based rate 
methodology for Regulation and Frequency Response Service as described 
below. Regulation and Frequency Response Service in the east side of 
the Control Area is provided primarily by Oahe generation and in the 
west side of the Control Area by Fort Peck generation, both of which 
are United States Army Corps of Engineers (Corps) facilities. The 
Corps' generation fixed charge rate (in percent) is applied to Oahe and 
Fort Peck generation net plant investment producing an annual Corps 
generation cost for the Oahe and Fort Peck Power plants. This cost is 
divided by the capacity at the plants to derive a dollar per kilowatt 
amount for Oahe's and Fort Peck's installed capacity (kWyear). This 
dollar per kilowatt amount is then applied to the capacity of Oahe and 
Fort Peck generation reserved for Regulation and Frequency Response 
Service in the Control Area. Western's annual revenue requirement for 
Regulation and Frequency Response Service is determined by applying the 
dollar per kilowatt charge to the capacity used for Regulation and 
Frequency Response Service and adding cost associated with the purchase 
of power resources to provide Regulation and Frequency Response Service 
to support intermittent renewable resources as described below. The 
total Regulation and Frequency Response Service revenue requirement is 
determined by adding the Regulation and Frequency Response Revenue 
Requirement for Western, Basin, and Heartland. The Regulation and 
Frequency Response Service charge is then determined by dividing the 
total revenue requirement by the IS Network Load in the Control Area 
(kWyear). The annual cost is then divided by 12 months to obtain a 
monthly charge.
    Western supports the installation of renewable sources of energy 
but recognizes that certain operational constraints exist in managing 
the significant fluctuations that are a normal part of their operation. 
When Western purchases power resources to provide Regulation and 
Frequency Response Service to intermittent renewable generation 
resources serving load within Western's Control Areas, costs for these

[[Page 26685]]

regulation resources will become part of Western's Regulation and 
Frequency Response Service charges. However, Western has marketed the 
maximum practical amount of power from each of its projects, leaving 
little or no flexibility for provision of additional power services. 
Consequently, Western will not regulate for the difference between the 
output of an intermittent generator located within Western's Control 
Area and a delivery schedule from that generator serving load located 
outside of Western's Control Area. Intermittent generators serving load 
outside Western's Control Area will be required to pseudo-tie or 
dynamically schedule their generation to another Control Area.
    An intermittent resource, for the limited purpose of these Rate 
Schedules, is an electric generator that is not dispatchable and cannot 
store its fuel source and therefore cannot respond to changes in system 
demand or respond to transmission security constraints.

Proposed Rate for Energy Imbalance Service

    Western proposes to revise its rate for Energy Imbalance Service to 
be consistent with rules promulgated by FERC to the extent consistent 
with Western's mission and permitted by law and regulations. Currently, 
penalty charges apply only to energy imbalances outside a 3-percent 
bandwidth (+/-1.5 percent deviation). The penalty for under deliveries 
outside the 3-percent bandwidth is 100 mills/kWh while over deliveries 
outside the bandwidth are forfeited.
    Western proposes that charges be modified and based on deviation 
bands as follows:
    (i) Deviations within +/-1.5 percent (with a minimum of 2 MW) of 
the scheduled transaction to be applied hourly to any energy imbalance 
that occurs as a result of Transmission Customer's scheduled 
transaction(s) will be netted on a monthly basis and settled 
financially, at the end of the month, at 100 percent of the average 
incremental cost for the month;
    (ii) Deviations greater than +/-1.5 percent up to 7.5 percent (or 
greater than 2 MW up to 10 MW) of the scheduled transaction(s) to be 
applied hourly to any energy imbalance that occurs as a result of 
Transmission Customer's scheduled transaction(s) will be settled 
financially, at the end of each month, at 110 percent of incremental 
cost when energy taken by the Transmission Customer in a schedule hour 
is greater than the energy scheduled or 90 percent of incremental cost 
when energy taken by a Transmission Customer in a schedule hour is less 
than the scheduled amount; and
    (iii) Deviations greater than +/-7.5 percent (or 10 MW) of the 
scheduled transaction to be applied hourly to any energy imbalance that 
occurs as a result of the Transmission Customer's scheduled 
transaction(s) will be settled financially, at the end of each month, 
at 125 percent of the highest incremental cost that occurs that day for 
energy taken by the Transmission Customer in a scheduled hour that is 
greater than the energy scheduled, or 75 percent of the lowest 
incremental cost that occurs that day when energy taken by a 
Transmission Customer is less than the scheduled amount.
    Western's incremental cost will be based upon a representative 
hourly energy index or combination of indexes. The index to be used 
will be posted on Western's Open Access Same-Time Information System 
(OASIS) http://www.oatioasis.com/wapa/index.html at least 30 days prior 
to use for determining the Western incremental cost and will not be 
changed more often than once per year unless Western determines that 
the existing index is no longer a reliable price index.

Proposed Formula Rates for Operating Reserves Service--Spinning and 
Supplemental

    Western proposes to continue the current formula-based rate 
methodology for Spinning Reserve Service and Supplemental Reserve 
Service (Reserve Services), except that Western will substitute the 
reserve requirement of the current reserve sharing group of which 
Western and the IS Partners are members or will substitute Western's 
and the IS Partners' own operating reserve requirement for the Mid-
Continent Area Power Pool requirement.
    Western's annual cost of generation for Reserve Services is 
determined by multiplying the generation fixed charge rate by the P-
SMBP-ED generation net plant investment. The cost/kWyear is determined 
by dividing the annual cost of generation by the plant capacity. The 
capacity used for Reserve Services is determined by multiplying the 
peak IS load by the operating reserve requirement of either the current 
reserve sharing group of which Western and the IS Partners are members 
or their own operating reserve requirement. The cost/kWyear is 
multiplied by the capacity used for Reserve Services to obtain the 
annual revenue requirement. The annual revenue requirement for Reserve 
Services is divided by Western's peak transmission load to calculate 
the annual rate. The annual rate is then divided by 12 months to obtain 
a monthly rate. This rate design recovers only Western's revenue 
requirement associated with Reserve Services.
    Western has no long-term reserves available beyond its own internal 
requirements. At a customer's request, Western will acquire needed 
resources and pass the costs on to the requesting customer. The 
customer is responsible to provide the transmission to deliver these 
reserves.

Proposed Rate for Generator Imbalance Service

    Western proposes to add a Generator Imbalance Service rate in a new 
rate schedule, Rate Schedule UGP-AS7, to be consistent with rules 
promulgated by FERC to the extent consistent with Western's mission and 
permitted by law and regulations. However, if Western does not also 
implement a Generator Imbalance Service in a revised OATT, this rate 
will not be utilized.
    Generator Imbalance Service is provided when a difference occurs 
between the output of a generator located within the Transmission 
Provider's Control Area and a delivery schedule from that generator to 
(1) another Control Area or (2) a load within the Transmission 
Provider's Control Area over a single hour. Western will offer this 
service, to the extent that it is feasible to do so from its own 
resources or from resources available to it, when Transmission Service 
is used to deliver energy from a generator located within its Control 
Area. The Transmission Customer must either purchase this service from 
Western or make alternative comparable arrangements, which may include 
use of non-generation resources capable of providing this service, to 
satisfy its Generator Imbalance Service obligation. Western may charge 
a Transmission Customer a penalty for either hourly generator 
imbalances under this Schedule UGP-AS7 or hourly energy imbalances 
under Rate Schedule UGP-AS4 for imbalances occurring during the same 
hour, but not both, unless the imbalances aggravate rather than offset 
each other.
    Western supports the installation of renewable sources of energy 
but recognizes that certain operational constraints exist in managing 
the significant fluctuations that are a normal part of their operation. 
Western has marketed the maximum practical amount of power from each of 
its projects, leaving little or no flexibility for provision of 
additional power services. Consequently, Western will not regulate for 
the difference between

[[Page 26686]]

the output of an intermittent generator located within Western's 
Control Area and a delivery schedule from that generator serving load 
located outside of Western's Control Area. Intermittent generators 
serving load outside Western's Control Area will be required to pseudo-
tie or dynamically schedule their generation to another Control Area. 
An intermittent resource, for the limited purpose of these schedules, 
is an electric generator that is not dispatchable and cannot store its 
fuel source and therefore cannot respond to changes in system demand or 
respond to transmission security constraints.
    Western proposes to base the rate on deviation bands as follows:
    (i) Deviations within +/-1.5 percent (with a minimum of 2 MW) of 
the scheduled transaction to be applied hourly to any generator 
imbalance that occurs as a result of Transmission Customer's scheduled 
transaction(s) will be netted on a monthly basis and settled 
financially, at the end of the month, at 100 percent of the average 
incremental cost;
    (ii) Deviations greater than <plus-minus>1.5 percent up to 7.5 
percent (or greater than 2 MW up to 10 MW) of the scheduled transaction 
to be applied hourly to any generator imbalance that occurs as a result 
of Transmission Customer's scheduled transaction(s) will be settled 
financially, at the end of each month. When energy delivered in a 
schedule hour from the generation resource is less than the energy 
scheduled, the charge is 110 percent of incremental cost. When energy 
delivered from the generation resource is greater than the scheduled 
amount, the credit is 90 percent of the incremental cost; and
    (iii) Deviations greater than <plus-minus>7.5 percent (or 10 MW) of 
the scheduled transaction to be applied hourly to any generator 
imbalance that occurs as a result of the Transmission Customer's 
scheduled transaction(s) will be settled at 125 percent of Western's 
highest incremental cost for the day when energy delivered in a 
schedule hour is less than the energy scheduled or 75 percent of 
Western's lowest daily incremental cost when energy delivered from the 
generation resource is greater than the scheduled amount. As an 
exception, an intermittent resource will be exempt from this deviation 
band and will pay the deviation band charges for all deviations greater 
than the larger of 1.5 percent or 2 MW.
    Notwithstanding the foregoing, deviations from scheduled 
transactions in order to respond to directives by the Transmission 
Provider, a balancing authority, or a reliability coordinator shall not 
be subject to the deviation bands identified above and, instead, shall 
be settled financially, at the end of the month, at 100 percent of 
incremental cost. Such directives may include instructions to correct 
frequency decay, respond to a reserve sharing event, or change output 
to relieve congestion.
    Western's incremental cost will be based upon a representative 
hourly energy index or combination of indexes. The index to be used 
will be posted on Western's OASIS http://www.oatioasis.com/wapa/index.html at least 30 days prior to use for determining the Western 
incremental cost and will not be changed more often than once per year 
unless Western determines that the existing index is no longer a 
reliable price index.

Legal Authority

    Western is proposing transmission and ancillary service rates for 
the P-SMBP--ED in accordance with section 302 of the Department of 
Energy (DOE) Organization Act (42 U.S.C. 7152). This section 
transferred to and vested in the Secretary of Energy the power 
marketing functions of the Secretary of the Department of Interior and 
the Bureau of Reclamation under the Reclamation Act of 1902 (ch. 1093, 
32 Stat. 388), as amended and supplemented by subsequent laws, 
particularly section 9(c) of the Reclamation Project Act of 1939 (43 
U.S.C. 485h(c)); and section 5 of the Flood Control Act of 1944 (16 
U.S.C. 825s); and other acts that specifically apply to the projects 
involved.
    By Delegation Order No. 00-037.00, effective December 6, 2001, the 
Secretary of Energy delegated: (1) The authority to develop power and 
transmission rates to Western'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, to remand, or to 
disapprove such rates to the FERC. Existing DOE procedures for public 
participation in power rate adjustments (10 CFR part 903) were 
published on September 18, 1985 (50 FR 37835).
    After review of public comments, and possible amendments or 
adjustments, Western will recommend the Deputy Secretary of Energy 
approve the proposed rates on an interim basis.

Availability of Information

    All brochures, studies, comments, letters, memorandums, or other 
documents that Western initiates or uses to develop the proposed rates 
are available for inspection and copying at the Upper Great Plains 
Regional Office, located at 2900 4th Avenue North, Billings, Montana. 
Many of these documents and supporting information are also available 
on its Web site under the ``2009 Transmission and Ancillary Services 
Rate Adjustment Process'' section located at http://www.wapa.gov/ugp/rates/default.htm.
    Regulatory Procedure Requirements:

Environmental Compliance

    In compliance with the National Environmental Policy Act of 1969 
(NEPA) (42 U.S.C. 4321-4347), Council on Environmental Quality 
Regulations (40 CFR parts 1500-1508), and DOE NEPA Regulations (10 CFR 
part 1021), Western 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.

Determination Under Executive Order 12866

    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.

    Dated: May 15, 2009.
Timothy J. Meeks,
Administrator.
[FR Doc. E9-12920 Filed 6-2-09; 8:45 am]
BILLING CODE 6450-01-P


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