Source: https://www.federalregister.gov/documents/2009/01/16/E9-892/pick-sloan-missouri-basin-program-eastern-division-rate-order-no-wapa-140
Timestamp: 2017-10-18 06:03:39
Document Index: 788052771

Matched Legal Cases: ['art 903', 'art 903', 'art 300', 'art 903', 'arts 1500', 'art 1021']

Rate Schedules P-SED-F10 and P-SED-FP10 will be placed into effect on an interim basis on the first day of the first full billing period beginning on or after February 1, 2009, and will remain in effect until FERC confirms, approves, and places the rate schedules in effect on a final basis ending December 31, 2013, or until the rate schedules are superseded.
74 FR 3022
3022-3030 (9 pages)
E9-892
Western Area Power Administration Rate Adjustment for the Pick-Sloan Missouri Basin Program—Eastern Division; Rate Order No. WAPA-140;
1. Firm Power Rate
(Approved Under Rate Order No. WAPA-140)
Pick-Sloan Missouri Basin Program—Eastern Division Montana, North Dakota, South Dakota, Minnesota, Iowa, Nebraska;
https://www.federalregister.gov/d/E9-892 https://www.federalregister.gov/d/E9-892
The Acting Deputy Secretary of Energy confirmed and approved Rate Order No. WAPA-140 and Rate Schedules P-SED-F10 and P-SED-FP10, placing firm power and firm peaking power rates from the Pick-Sloan Missouri Basin Program—Eastern Division (P-SMBP—ED) of the Western Area Power Administration (Western) into effect on an interim basis. The provisional rates will be in effect until the Federal Energy Regulatory Commission (FERC) confirms, approves, and places them into effect on a final basis or until they are replaced by other rates. The provisional rates will provide sufficient revenue to pay all annual costs, including interest expense, and repayment of power investment and irrigation aid within the allowable periods.
Mr. Robert J. Harris, Regional Manager, Upper Great Plains Region, Western Area Power Administration, 2900 4th Avenue North, Billings, MT 59101-1266, telephone (406) 247-7405, e-mail rharris@wapa.gov, or Ms. Linda Cady-Hoffman, Rates Manager, Upper Great Plains Region, Western Area Power Administration, 2900 4th Avenue North, Billings, MT 59101-1266, (406) 247-7439, e-mail cady@wapa.gov.
The Deputy Secretary of Energy approved existing Rate Schedules P-SED-F9 and P-SED-FP9 for P-SMBP—ED firm and firm peaking electric service, respectively, on an interim basis on November 1, 2007 (72 FR 68,64,067 November 14, 2007), for a 5-year period beginning on January 1, 2008, and ending December 31, 2012.[1]
Under Rate Schedule P-SED-F9, the composite rate is 24.49 mills per kilowatthour (mills/kWh), the firm energy rate is 13.99 mills/kWh, and the firm capacity rate is $5.65 per kilowattmonth (kWmonth). Under Rate Schedule P-SED-FP9, the firm peaking capacity rate is $5.10/kWmonth. These Rate Schedules are formula based with Base and Drought Adder components and provide for an up to 2 mills/kWh increase in the Drought Adder rate component.
The current rate adjustment reflects a rate increase based on the P-SMBP Final Fiscal Year 2007 Power Repayment Study (PRS). The PRS sets the total annual P-SMBP—ED revenue requirement for 2009 for firm and firm peaking electric service at $283.0 million, or a 19.9 percent increase. The current rates, including the 2 mills/kWh increase provided for under the Drought Adder formula rate component, are not sufficient to meet the P-SMBP—ED revenue requirements.
The P-SMBP—ED revenue requirement increase is mainly attributed to the economic impacts of the drought. A decrease in hydro-power generation has caused purchase power expense to increase and revenue from Start Printed Page 3023non-firm energy sales to decrease. There has been an increase in both the price and volume of purchase power needed to meet contractual commitments to Western's customers. The purchase price of power is set by supply and demand on the open market.
The existing firm electric service Rate Schedules P-SED-F9 and P-SED-FP9 are being superseded by Rate Schedules P-SED-F10 and P-SED-FP10, respectively. Under Rate Schedule P-SED-F10, the provisional rates for firm electric services will result in a combined composite rate of 29.34 mills/kWh. The energy rate will be 16.71 mills/kWh (a Base component of 9.27 mills/kWh and a Drought Adder component of 7.44 mills/kWh), and the capacity rate will be $6.80/kWmonth (a Base component of $3.80/kWmonth and a Drought Adder component of $3.00/kWmonth). Under Rate Schedule P-SED-FP10, the provisional rates for firm peaking electric services consist of a capacity charge of $6.20/kWmonth (a Base component of $3.40/kWmonth and a Drought Adder component of $2.80/kWmonth) and an energy charge of 16.71 mills/kWh.
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 the Administrator of Western; (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 FERC. Existing Department of Energy procedures for public participation in power rate adjustments (10 CFR part 903) were published on September 18, 1985.
Under Delegation Order Nos. 00-037.00 and 00-001.00C, 10 CFR part 903, and 18 CFR part 300, I hereby confirm, approve, and place Rate Order No. WAPA-140, the proposed P-SMBP—ED firm power, and firm peaking power rates into effect on an interim basis.
The new Rate Schedules P-SED-F10 and P-SED-FP10 will be promptly submitted to FERC for confirmation and approval on a final basis.
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 the Administrator of Western; (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 Federal Energy Regulatory Commission. Existing DOE procedures for public participation in power rate adjustments (10 CFR part 903) were published on September 18, 1985.
Corps: The United States Army Corps of Engineers.
mills/kWh: Mills per kilowatthour—the unit of charge for energy (equal to one tenth of a cent or one thousandth of a dollar). Start Printed Page 3024
The new provisional rates will take effect on the first day of the first full billing period beginning on or after February 1, 2009, and will remain in effect until December 31, 2013, pending approval by FERC on a final basis.
1. The proposed rate adjustment process began April 9, 2008, when Western's UGPR mailed a notice announcing informal customer meetings to all P-SMBP—ED preference customers and interested parties. The informal meetings were held on April 29, 2008, in Denver, Colorado, and on April 30, 2008, in Sioux Falls, South Dakota. At these informal meetings, Western explained the rationale for the rate adjustment, presented rate designs and methodologies, and answered questions.
2. A Federal Register notice, published on August 15, 2008 (73 FR 47945) announced the proposed rates for P-SMBP—ED, began a public consultation and comment period and announced the public information and public comment forums.
3. On August 18, 2008, Western mailed letters to all P-SMBP—ED preference customers and interested parties transmitting the FRN published on August 15, 2008.
4. On August 29, 2008, a letter was mailed to preference customers and interested parties informing them of a $400,000 misstatement in the FRN published revenue requirement.
5. On September 9, 2008, at 9 a.m. (MDT), Western held a public information forum at the Ramada Plaza Hotel in Northglenn, Colorado. Western provided updates to the proposed firm power rates for the P-SMBP, which encompasses the P-SMBP—ED and LAP rates. Western also answered questions and gave notice that more information was available in the rate brochure.
6. On September 9, 2008, at 11:30 a.m. (MDT), following the public information forum, and at the same location, a public comment forum was held. The comment forum gave the public an opportunity to comment for the record. No oral or written comments were received at this forum.
7. On September 10, 2008, at 8 a.m. (CDT), Western held a public information forum at the Holiday Inn in Sioux Falls, South Dakota. Western provided updates to the proposed firm power rates for the P-SMBP, which encompasses the P-SMBP—ED and LAP rates. Western also answered questions and gave notice that more information was available in the rate brochure.
8. On September 10, 2008, at 10:30 a.m. (CDT), following the public information forum, and at the same location, a public comment forum was held. The comment forum gave the public an opportunity to comment for the record. One oral comment was received at this forum.
9. Western provided a Web site which contains all of the letters, time frames, dates, and locations of forums, documents discussed at the information meetings, FRNs, rate brochure, and all other information about this rate process for easy customer access. The Web site is located at http://www.wapa.gov/​ugp/​rates/​2009FirmRateAdjust.
10. During the consultation and comment period, which ended November 13, 2008, Western received 17 comment letters. One comment letter was rescinded. Western also received an oral comment. All formally submitted comments have been considered in preparing this Rate Order.
City of Blue Hill, Nebraska.
City of Burwell, Nebraska (2).
City of Fort Morgan, Colorado.
City of Sargent, Nebraska.
City of Wall Lake, Iowa.
City of West Point, Nebraska.
City of Wood River, Nebraska.
North Iowa Municipal Electric Cooperative Association, Iowa.
Spencer Municipal Utilities, Iowa.
Village of Oxford, Nebraska.
Village of Shickley, Nebraska.
Village of Spencer, Nebraska.
Village of Stuart, Nebraska.
A representative of the following organization made an oral comment:
Minnesota Municipal Utilities, Minnesota. Start Printed Page 3025
The P-SMBP was authorized by Congress in section 9 of the Flood Control Act of December 22, 1944, commonly referred to as the 1944 Flood Control Act. This multipurpose program provides flood control, irrigation, navigation, recreation, preservation and enhancement of fish and wildlife, and power generation. Multipurpose projects have been developed on the Missouri River and its tributaries in Colorado, Montana, Nebraska, North Dakota, South Dakota, and Wyoming.
The P-SMBP is administered by two regions. The UGPR, with a regional office in Billings, Montana, markets power from the Eastern Division of P-SMBP, and the RMR, with a regional office in Loveland, Colorado, markets the Western Division power of P-SMBP. The UGPR markets power in western Iowa, western Minnesota, Montana east of the Continental Divide, North Dakota, South Dakota, and the eastern two-thirds of Nebraska. The RMR markets P-SMBP—WD power, which in combination with Fry-Ark power is known as LAP power, in northeastern Colorado, east of the Continental Divide in Wyoming, west of the 101st meridian in Nebraska, and most of Kansas. The P-SMBP power is marketed to approximately 300 firm power customers by the UGPR and approximately 60 firm power customers by the RMR.
Under Rate Schedule P-SED-F9, the composite rate is 24.49 mills/kWh, the firm energy rate is 13.99 mills/kWh, and the firm capacity rate is $5.65/kWmonth. For Rate Schedule P-SED-FP9 the firm peaking capacity rate is $5.10/kWmonth. These Rate Schedules are formula based with Base and Drought Adder components and provide for an up to a 2 mills/kWh increase in the Drought Adder rate component.
The current rate adjustment reflects a rate increase based on the P-SMBP Fiscal Year 2007 PRS. The PRS sets the total annual P-SMBP—ED revenue requirement for 2009 for firm and firm peaking electric service at $283.0 million, or a 19.9 percent increase.
Rate Schedules P-SED-F9/P-SED-FP9 P-SED-F10/P-SED-FP10
Firm and Firm Peaking Revenue Requirement (million) $235.9 $283.0 19.9
Composite Rate (mills/kWh) 24.49 29.34 19.8
Firm Capacity Rate (/kWmonth) $5.65 $6.80 20.4
Firm Energy Rate (mills/kWh) 13.99 16.71 19.4
Firm Peaking Capacity Rate (/kWmonth) $5.10 $6.20 21.6
Firm Peaking Energy Rate (mills/kWh)1 13.99 16.71 19.4
The LAP rate is designed to recover the P-SMBP—WD revenue requirement for the P-SMBP and the revenue requirement for Fry-Ark. The adjustment to the LAP rate is a separate formal rate process which is documented in Rate Order No. WAPA-142. Rate Order No. WAPA-142 is scheduled to go into effect on the first day of the first full billing period after the Acting Deputy Secretary of Energy approves the rate.
The P-SMBP—ED firm power and firm peaking power rates must be increased due to the economic impact of the drought, increased annual expenses, increased investments, and increased interest expense associated with deficits.
Under Rate Schedule P-SED-F10, Western will continue identifying its firm electric service revenue requirement using Base and Drought Adder rate components. The Base rate component is a revenue requirement that includes annual operation and maintenance expenses, investment repayment and associated interest, normal timing power purchases, and transmission costs. Western's normal timing power purchases are purchases due to operational constraints (e.g., management of endangered species habitat, water quality, navigation, etc.) and are not associated with the current drought. The Base component cannot be Start Printed Page 3026adjusted by Western without a public process.
The Drought Adder rate component is a formula-based revenue requirement that includes costs attributable to the past and present drought conditions within the Pick-Sloan Program. The Drought Adder rate component includes costs associated with future non-timing power purchases to meet firm power contractual obligations not covered with available system generation due to the drought, previously incurred deficits due to purchased power debt that resulted from non-timing power purchases made during this drought, and the interest associated with the previously incurred and future drought deficit. The Drought Adder rate component is designed to repay Western's drought deficit within 10 years from the time the debt was incurred, using balloon-payment methodology. For example, the drought deficit incurred by Western in 2007 will be repaid by 2017.
The annual revenue requirement calculation will continue to be summarized by the following formula: Annual Revenue Requirement = Base Revenue Requirement + Drought Adder Revenue Requirement. Under this Provisional Rate, effective February 1, 2009, the P-SMBP—ED annual revenue requirement equals $294.1 million and is comprised of a Base revenue requirement of $163.5 million plus a Drought Adder revenue requirement of $130.6 million. Both the Base and Drought Adder rate components recover portions of the firm power revenue requirement, firm peaking power, and associated 5 percent discount revenue necessary to equal the P-SMBP—ED revenue requirement. A comparison of the current and proposed rate components are listed in Table 2.
Existing rates P-SED-F9/P-SED-FP9
Provisional rates P-SED-F10/ P-SED-FP10
Firm Peaking Energy Rate (mills/kWh)1 8.93 5.06 13.99 9.27 7.44 16.71
As set forth in Table 2 above, provisional Rate Schedule P-SED-F10 has a firm capacity rate of $6.80/kWmonth and a firm energy rate of 16.71 mills/kWh. Under proposed Rate Schedule P-SED-FP10, the firm peaking capacity rate will increase to $6.20/kWmonth, or a 21.6 percent increase. Peaking energy is either returned to Western or paid for in accordance with the terms of the contract between Western and the peaking power customer.
Continuing to identify the firm electric service revenue requirement using Base and Drought Adder rate components will assist Western in presenting the effects of the drought within the P-SMBP, demonstrating repayment of the drought related costs, and allowing Western to be more responsive to changes in drought related expenses. Western will continue to charge and bill customers firm electric service rates for energy and capacity, which are the sum of the Base and Drought Adder rate components.
In accordance with the original implementation of the Drought Adder rate component, Western will continue to review the Drought Adder rate component each September to determine if drought costs differ from those projected in the PRS. If drought costs differ, Western will determine if an adjustment to the Drought Adder rate component is necessary. Western will notify customers by letter each October of the planned incremental or decremental adjustment and implement the adjustment in the January billing cycle. Although decremental adjustments to the Drought Adder rate component will occur as drought costs are repaid, the adjustments cannot result in a negative Drought Adder rate component. To give customers advance notice, Western will conduct a preliminary review of the Drought Adder rate component in early summer and notify customers by letter of the estimated change to the Drought Adder rate component for the following January. Western will verify the final Drought Adder rate component adjustment by notification in the October letter to the customers. Implementing the Drought Adder rate component adjustment on January 1 of each year will help keep the drought deficits from escalating as quickly, will lower the interest expense due to drought deficits, will demonstrate responsible deficit management, and will provide prompt drought deficit repayments.
The firm power rates for both divisions have been developed with the following revenues and expenses for the P-SMBP: Start Printed Page 3027
Table 3—Total P-SMBP Firm Power Comparison of 5-Year Rate Period (FY 2009-2013) Total Revenues and Expenses
Total Revenues 2,124,002 2,417,497 293,495
O&M 904,589 859,559 (45,030)
Purchased Power 155,654 431,180 275,526
Interest 528,272 639,356 111,084
Transmission 55,596 65,963 10,367
Total Expenses 1,644,111 1,996,058 351,947
Capitalized Expenses (Deficits)1 150,549 351,517 200,968
Original Project and Additions1 263,052 1,546 (261,506)
Replacements1 3,314 2,704 (610)
Irrigation Aid 62,976 65,672 2,696
Total Principal Payments 479,891 421,439 (58,452)
Total Revenue Distribution 2,124,002 2,417,497 293,495
The existing rates for P-SMBP—ED firm power in Rate Schedule P-SED-F9, which expire December 31, 2012, no longer provide sufficient revenues to pay all annual costs, including interest expense, and repay investment and irrigation aid within the allowable period. The adjusted rates reflect increases due to the economic impact of the drought, increased annual expenses, increased investments, and increased interest expense associated with investments and drought deficits. The Provisional Rates will provide sufficient revenue to pay all annual costs, including interest expense, and repay power investment and irrigation aid within the allowable periods. The Provisional Rates will take effect on February 1, 2009, and will remain in effect on an interim basis, pending FERC's confirmation and approval of them or substitute rates on a final basis, through December 31, 2013.
Due to continuing below-normal hydropower generation, Western may need to use the Continuing Fund (Emergency Fund) to pay for unanticipated purchase power and wheeling expenses necessary to meet its contractual obligations for the sale and delivery of power to its customers. Should Western use this funding mechanism, Western will replenish the Continuing Fund (Emergency Fund) in accordance with law and Western's current repayment policy.[2]
The issues discussed are (1) Firm Power Rate and (2) MISO Markets.
Comment: Western received numerous comments from customers stating that they understand the need for the rate increases and support the concept of the Drought Adder, which provides a set window during which drought-related expenses are repaid.
Response: Western appreciates the customer support received for the rate adjustment proposal. Western continues separation of the annual revenue requirement into Base and Drought Adder components.
Comment: Many comments were received from customers that showed appreciation for Western's commitment to keep power customers informed and involved throughout this rate process. Customers were grateful for past cost-cutting measures and encouraged Western's continued vigilance in keeping controllable costs as low as possible.
Response: Western is pleased with the level of customer interest and participation in the public meetings. Under the Flood Control Act of 1944, power is to be sold at the lowest possible rates consistent with sound business principles. Western is committed to keeping controllable costs as low as possible while continuing to deliver reliable cost-based hydroelectric power and related services.
Response: Western's goal is to work closely with our customers throughout this rate, as well as any future rate adjustments. Changes to the Base Rate are made through a public process and allow for input.
Comment: Two customers were opposed to the firm peaking rate and questioned whether it reflects the costs associated with the drought and delivery of peaking power. It was noted that the firm peaking rate is being increased at approximately the same percentage rate as the firm power rate, which the commenting customers felt may not be fair and equitable. These customers wanted additional information regarding the firm peaking contracts so the impact on the rates can be better understood and evaluated. It was understood that Western allows peaking energy to be returned. They questioned under what terms and Start Printed Page 3028conditions peaking customers are allowed to return energy and whether peaking energy is allowed to be returned off-peak. Customers asked if Western makes market purchases to fulfill Western's peaking contracts. The customers asked for assurance from Western that the firm peaking rate is fairly priced based on the nature of the product and its historical and future contributions to the bottom line.
Response: Western separated the firm and firm peaking rates and developed rate designs for both firm power and firm peaking power in the FRN published November 14, 2007 (72 FR ¶ 64067). In development of this firm peaking rate design, Western analyzed historical peaking data and concluded that this rate reflects the firm peaking customer's historical usage and their impact on the drought costs. During the current rate adjustment process, Western concluded that there has not been substantial change to the firm peaking usage or power markets since the introduction of the new firm peaking rate design that would support revisiting the rate design at this time. Western believes that both the firm and firm peaking customers are being treated equitably with the current rate designs. The firm peaking rate design accurately reflects the value and restrictions of the peaking product.
Comment: One customer would like to evaluate the voltage discount and was concerned that it may be too high in light of the recent drought-related increases. The concern was that billing amounts have grown since the voltage discount was put into place and now the discount may be too much in comparison to the actual cost.
Response: Historically, Western has provided a 5-percent voltage discount as a provision to the firm power rate schedule. The purpose of the discount is to provide the discount on firm power sales to customers who receive deliveries at higher transmission voltage and relieve Western of substation delivery costs. Reclamation began, and Western continues, the 5-percent voltage discount to customers meeting the criteria. Up to this time, Western has not been formally asked to change the discount percentage and has not evaluated the impacts of such a change on the firm power customers. Western is open to discussion among our customers and exploring options regarding the 5-percent voltage discount; but until additional customers request a review or modification of this provision, Western will continue applying the discount.
Response: Western acknowledges the extended drought, its financial impacts, and the need for a firm power rate increase as well. The Drought Adder will allow Western to be more responsive to the changing hydrological conditions.
Comment: A customer representative acknowledged the financial challenges of this drought and made note of the difficulties Federal power customers are confronted with in fulfilling their financial responsibilities to the Federal government. They noted the good water years in the 1990s generated significant revenue surplus to P-SMBP financial requirements. Also noted was Western's administration of repayment according to repayment policies and the repayment of a significant amount of capital investment ahead of schedule. This early repayment benefitted both P-SMBP customers and the Federal government but left no financial resources to deal with drought. Thus, the current repayment practices and policies exacerbate the impacts of the natural swings in hydrology. When the drought deficit is repaid, there will still be a substantial amount of paid-ahead investments for the P-SMBP. The customer would like to work with Western to address this issue.
Response: Western acknowledges the financial impacts of the current drought and believes the ratemaking policy of identifying the Base and Drought Adder components will make the rates more responsive to hydrological changes caused by both drought and flush water years. The Drought Adder component may be adjusted annually up to 2 mills/kWh without a public process to quickly address drought impacts, and the Base Rate component can only be adjusted through a public process. This practice will lower interest expense due to drought deficits and demonstrate responsible deficit management. Western acknowledges the customer group statements regarding Western's adherence to repayment policies and the associated repayment of a significant amount of capital investment ahead of schedule in the 1990s. Prepayment is an integral part of the long-term plan for P-SMBP and has provided rate stability for consumers while meeting Federal repayment obligations. The ability to reduce the Drought Adder rate component when normal hydrological conditions return to P-SMBP will allow appropriate recognition of repayment obligations. Western appreciates the customers' support and willingness to work with Western and will continue to discuss issues, impacts, and possible solutions with the customers.
Comment: Western has received numerous comments concerning the issue of whether to join MISO and its Day Two Markets. The comments support a thorough review of costs and benefits to all of Western's customers before a change is made. Comments suggest that administrative costs associated with the Day Two Markets may impose a significant burden, especially on smaller customers. There were concerns that if Western joins MISO and other area transmission owners that serve the customers join SPP there could be significant cost issues associated with the delivery of Western's allocation to Preference customer loads. Comments stated that if there are benefits to participating in the Day Two Market those benefits should flow to all of Western's customers, not just those that participate in joint dispatching arrangements inside the Integrated System. Concerns are that costs associated to deliver Western's allocations to the edge of the system should be recovered as part of the total system transmission rate recovery, as it has been done in the past.
Response: This comment is not directly related to the proposed rate action. However, Western is actively addressing these issues as well as other options and evaluating them based on costs and benefits to Western's customers.
Comment: A commenter noted that MISO intends to start an ancillary service market; and when that occurs, Western has preference power customers that are served in the MISO footprint. The question was asked does Western have avoided costs due to the MISO market providing those ancillary services; specifically, are there avoided costs in Schedule 3, Regulation and Frequency Response; Schedule 5, Operating Reserves Spinning; and Schedule 6, Operating Reserves Supplemental.
Response: This comment is not directly related to the proposed rate action. Western is actively evaluating its obligations to customers in the MISO Ancillary Services Market footprint. As Western moves forward in evaluating the impacts on market participation and changes for customers, Western will Start Printed Page 3029seek input from customers and will continue to keep customers informed of decisions regarding these matters.
In compliance with the National Environmental Policy Act (NEPA) of 1969, 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 has determined that this action is categorically excluded from preparing of an environmental assessment or an environmental impact statement.
In view of the foregoing and under the authority delegated to me, I confirm and approve on an interim basis, effective February 1, 2009, Rate Schedules P-SED-F10 and P-SED-FP10 for the Pick-Sloan Missouri Basin Program—Eastern Division Project of the Western Area Power Administration. These rate schedules shall remain in effect on an interim basis, pending FERC's confirmation and approval of them or substitute rates on a final basis through December 31, 2013.
Rate Schedule P-SED-F10
(Supersedes Schedule P-SED-F9)
Demand Charge: $6.80 for each kilowatt per month (kWmonth) of billing demand.
Energy Charge: 16.71 mills per kilowatthour (kWh) for all energy delivered as firm power service.
Base: A fixed revenue requirement that includes operation and maintenance expense, investments and replacements, interest on investments and replacements, normal timing purchase power costs (purchases due to operational constraints, not associated with drought), and transmission costs. The Base revenue requirement is $163.5 million.
Drought Adder: A formula-based revenue requirement that includes future purchase power expense excluding timing purchases, previous purchase power drought deficits, and interest on the purchase power drought deficits. For the period beginning February 1, 2009, the Drought Adder revenue requirement is $130.6 million.
Process: Any proposed change to the Base component will require a public process. The Drought Adder component may be adjusted annually using the above formula for any costs attributed to drought of less than or equal to the equivalent of 2 mills/kWh to the Power Repayment Study (PRS) composite rate. Any planned incremental adjustment to the Drought Adder component greater than the equivalent of 2 mills/kWh to the PRS composite rate will require a public process.
For Drought Adder: Adjustments pursuant to the Drought Adder Start Printed Page 3030component will be documented in a revision to this rate schedule.
For Character and Conditions of Service: Customers who receive deliveries at transmission voltage may in some instances be eligible to receive a 5-percent discount on demand and energy charges when facilities are provided by the customer that results in a sufficient savings to Western to justify the discount. The determination of eligibility for receipt of the voltage discount shall be exclusively vested in Western.
Rate Schedule P-SED-FP10
(Supersedes Schedule P-SED-FP9)
Available: Within the marketing area served by the Eastern Division of the Pick-Sloan Missouri Basin Program, to customers with generating resources enabling them to use firm peaking power service.
Demand Charge: $6.20 for each kilowatt per month (kWmonth) of the effective contract rate of delivery for peaking power or the maximum amount scheduled, whichever is greater.
Energy Charge: 16.71 mills for each kilowatthour (kWh) for all energy scheduled for delivery without return.
Base: A fixed revenue requirement that includes operation and maintenance expense, investment and replacements, normal timing purchase power costs (purchases due to operational constraints, not associated with drought), and transmission costs. The Base peaking revenue requirement is $14.5 million.
Energy 1 = 9.27 mills/kWh
Drought Adder: A formula-based revenue requirement that includes future purchase power above timing purchases, previous purchase power drought deficits, and interest on the purchase power drought deficits. For the period beginning February 1, 2009, the Drought Adder peaking revenue requirement is $12.0 million.
Energy [1] = 7.44 mills/kWh
Any proposed change to the Base component will require a public process. The Drought Adder component may be adjusted annually using the above formula for any costs attributed to drought of less than or equal to the equivalent of 2 mills/kWh to the Power Repayment Study (PRS) composite rate. Any planned incremental adjustment to the Drought Adder component greater than the equivalent of 2 mills/kWh to the PRS composite rate will require a public process.
1. FERC confirmed and approved Rate Order No. WAPA-135 on April 14, 2008, in Docket No. EF08-5031-000. See United States Department of Energy, Western Area Power Administration, Pick-Sloan Missouri Basin Program, 123 FERC ¶ 62048 (April 14, 2008).
1. Firm peaking energy is normally returned. This rate will be assessed in the event firm peaking energy is not returned.
[FR Doc. E9-892 Filed 1-15-09; 8:45 am]