Loveland Area Projects, 71273-71279 [E5-6575]
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Federal Register / Vol. 70, No. 227 / Monday, November 28, 2005 / Notices
separate NEPA review if funds became
available. This alternative differs from
the No Action Alternative in that the No
Action Alternative assumes sufficient
expenditures to sustain operational
capability, while the Reduced
Operations Alternative assumes
deactivation of facilities when their
continued safe operation requires more
than normal maintenance except where
noted above.
Public Scoping Process. The scoping
process is an opportunity for the public
to assist the NNSA in determining the
issues for impact analysis. A public
scoping meeting will be held as noted
under DATES. The purpose of the
scoping meeting is to provide the public
with an opportunity to present oral and
written comments, ask questions, and
discuss concerns regarding the new
SWEIS with NNSA officials. Comments
and recommendations can also be
communicated to NNSA as noted earlier
in this notice under ADDRESSES. The
SWEIS public meetings will use a
format to facilitate dialogue between
NNSA and the public. NNSA welcomes
specific comments or suggestions on the
content of the document.
The potential scope of the SWEIS
discussed in the previous portions of
this NOI is tentative and is intended to
facilitate public comment on the scope
of the SWEIS. The SWEIS will describe
the potential environmental impacts of
the alternatives by using available data
where possible and obtaining additional
data where necessary. Copies of written
comments and transcripts of oral
comments provided to NNSA during the
scoping period will be available at the
U.S. Department of Energy Public
Reading Room at 230 Warehouse Road,
Oak Ridge, TN 37830, and on the
internet at https://www.y-12sweis.com.
The 2001 SWEIS is available on the
internet at https://www.eh.doe.gov/nepa/
eis/eis0309/toc.html.
SWEIS Preparation Process. The
SWEIS preparation process begins with
the publication of this NOI in the
Federal Register. After the close of the
public scoping period, NNSA will begin
preparing the draft SWEIS. NNSA
expects to issue the draft SWEIS for
public review by next summer. Public
comments on the draft SWEIS will be
received during a comment period of at
least 45 days following the U.S.
Environmental Protection Agency
publication of the Notice of Availability
in the Federal Register. Notices placed
in local newspapers will specify dates
and locations for at least one public
hearing on the draft SWEIS, and will
establish a schedule for submitting
comments on the draft, including a final
date for submission of comments.
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Issuance of the final SWEIS is
scheduled for late 2006.
Classified Material. NNSA will review
classified material while preparing this
SWEIS. Within the limits of
classification, NNSA will provide the
public as much information as possible
to assist its understanding and ability to
comment. Any classified material
needed to explain the purpose and need
for the action, or the analyses in this
SWEIS, will be segregated into a
classified appendix or supplement,
which will not be available for public
review. However, all unclassified
information or results of calculations
using classified data will be reported in
the unclassified section of the SWEIS, to
the extent possible in accordance with
Federal classification requirements.
Issued in Washington, DC, this 18th day of
November, 2005.
Linton F. Brooks,
Administrator, National Nuclear Security
Administration.
[FR Doc. 05–23369 Filed 11–25–05; 8:45 am]
BILLING CODE 6450–01–P
DEPARTMENT OF ENERGY
Western Area Power Administration
[Rate Order No. WAPA–125]
Loveland Area Projects
Western Area Power
Administration, DOE.
ACTION: Notice of order concerning
power rates.
AGENCY:
SUMMARY: The Deputy Secretary of
Energy confirmed and approved Rate
Order No. WAPA–125 and Rate
Schedule L–F6, placing firm electric
service rates from the Loveland Area
Projects (LAP) 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 (Commission) 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
expenses, and repay power investment
and irrigation aid, within the allowable
periods.
DATES: Rate Schedule L–F6 will be
placed into effect on an interim basis on
the first day of the first full billing
period beginning on or after January 1,
2006, and will be in effect until the
Commission confirms, approves, and
places the provisional rates into effect
on a final basis ending December 31,
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71273
2010, or until the rate schedule is
superseded.
Mr.
Joel K. Bladow, Regional Manager,
Rocky Mountain Customer Service
Region, Western Area Power
Administration, 5555 East Crossroads
Boulevard, Loveland, Colorado, 80538–
8986, (970) 461–7201, or Mr. Daniel T.
Payton, Rates Manager, Rocky Mountain
Customer Service Region, Western Area
Power Administration, 5555 East
Crossroads Boulevard, Loveland,
Colorado, 80538–8986, telephone (970)
461–7442, e-mail dpayton@wapa.gov.
SUPPLEMENTARY INFORMATION: The
Deputy Secretary of Energy approved
existing Rate Schedule L–F5 for LAP
firm electric service on an interim basis
on December 24, 2003 (Rate Order No.
WAPA–105, 69 FR 644, January 6,
2004). The Commission confirmed and
approved the rate schedule on a final
basis on December 21, 2004, in FERC
Docket No. EF04–5181–000 (109 FERC
62,228). The existing rate schedule is
effective from February 1, 2004, through
December 31, 2008.
Existing firm electric service Rate
Schedule L–F5 is being superseded by
Rate Schedule L–F6. Under Rate
Schedule L–F5, the energy charge is
11.95 mills per kilowatthour (mills/
kWh) and the capacity charge is $3.14
per kilowattmonth (kWmonth). The
composite rate is 23.90 mills/kWh. The
provisional rates for LAP firm electric
service under Rate Schedule L–F6 are
being implemented in two steps. The
first step of the provisional rates for LAP
firm electric service consists of an
energy charge of 13.06 mills/kWh and a
capacity charge of $3.43 per kWmonth,
producing an overall composite rate of
26.12 mills/kWh on January 1, 2006.
This represents a 9.3 percent increase
when compared with the existing LAP
firm electric service rate under Rate
Schedule L–F5. The second step of the
provisional rates for LAP firm electric
service consists of an energy charge of
13.68 mills/kWh and a capacity charge
of $3.59 per kWmonth, producing an
overall composite rate of 27.36 mills/
kWh on January 1, 2007. This represents
an additional 5.2 percent increase.
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
FOR FURTHER INFORMATION CONTACT:
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Commission. Existing DOE 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 00–001.00A, 10 CFR part
903, and 18 CFR part 300, I hereby
confirm, approve, and place Rate Order
No. WAPA–125 and the proposed LAP
firm electric service rates into effect on
an interim basis. The new Rate
Schedule L–F6 will be promptly
submitted to the Commission for
confirmation and approval on a final
basis.
Dated: November 9, 2005.
Clay Sell,
Deputy Secretary.
Order Confirming, Approving, and
Placing the Loveland Area Projects
Firm Electric Service Rates Into Effect
on an Interim Basis
These rates were established in
accordance with section 302 of the
Department of Energy (DOE)
Organization Act (42 U.S.C. 7152). This
Act transferred to and vested in the
Secretary of Energy the power marketing
functions of the Secretary of the
Department of the 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 other Acts that
specifically apply to the project
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
Commission. Existing DOE procedures
for public participation in power rate
adjustments (10 CFR part 903) were
published on September 18, 1985.
Acronyms and Definitions
As used in this Rate Order, the
following acronyms and definitions
apply:
Administrator: The Administrator of
Western Area Power Administration.
Capacity: The electric capability of a
generator, transformer, transmission
circuit, or other equipment. It is
expressed in kW.
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Capacity Charge: The rate which sets
forth the charges for capacity. It is
expressed in dollars per kWmonth.
Commission: Federal Energy
Regulatory Commission.
Composite Rate: The rate for
commercial firm power and is the total
annual revenue requirement for capacity
and energy divided by the total annual
firm energy sales under contract. It is
expressed in mills/kWh and used for
comparison purposes.
Criteria: The Post-1989 General Power
Marketing and Allocation Criteria for
the sale of energy with capacity from the
Pick-Sloan Missouri Basin Program—
Western Division and the FryingpanArkansas Project.
Customer: An entity with a contract
for and receiving firm electric service
from Western’s Rocky Mountain Region.
Deficits: Deferred or unrecovered
annual expenses.
DOE Order RA 6120.2: An order
outlining power marketing
administration financial reporting and
rate-making procedures.
Energy: Measured in terms of the
work it is capable of doing over a period
of time. It is expressed in kWh.
Energy Charge: The rate which sets
forth the charges for energy. It is
expressed in mills per kWh and applied
to each kWh delivered to each customer.
FERC: The Commission (to be used
when referencing Commission Orders).
Firm: A type of product and/or service
that is available at the time requested by
the customer.
FRN: Federal Register notice.
Fry-Ark: Fryingpan-Arkansas Project.
FY: Fiscal year; October 1 to
September 30. kW: Kilowatt—the
electrical unit of capacity that equals
1,000 watts.
kWmonth: Kilowattmonth—the
electrical unit of the monthly amount of
capacity.
kWh: Kilowatthour—the electrical
unit of energy that equals 1,000 watts in
1 hour.
kilowattyear: Kilowattyear—the
electrical unit of the yearly amount of
capacity.
LAP: Loveland Area Projects.
L–F5: Loveland Area Projects existing
firm electric service rate schedule
(expires December 31, 2008, or until
superseded).
L–F6: Loveland Area Projects
provisional firm electric service rate
schedule (effective January 1, 2006).
M&I: Municipal and industrial water
development.
mills/kWh: Mills per kilowatthour—
the unit of charge for energy (equals one
tenth of a cent or one thousandth of a
dollar).
MOU: Memorandum of
Understanding for the Pick-Sloan
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Missouri Basin Program and the Fry-Ark
Project. Signatories include Western,
Reclamation, U.S. Army Corps of
Engineers, Mid-West Electric
Consumers Association, Loveland Area
Customers Association, and Western
States Power Corporation.
NEPA: National Environmental Policy
Act of 1969 (42 U.S.C. 4321, et seq.).
O&M: Operation and Maintenance.
P–SMBP: The Pick-Sloan Missouri
Basin Program.
P–SMBP—WD: Pick-Sloan Missouri
Basin Program—Western Division.
Power: Capacity and energy.
Preference: The requirements of
Reclamation Law which provide that
preference in the sale of Federal power
shall be given to municipalities and
other public corporations or agencies
and also to cooperatives and other
nonprofit organizations financed in
whole or in part by loans made under
the Rural Electrification Act of 1936
(Reclamation Project Act of 1939,
section 9(c), 43 U.S.C. 485h(c)).
Provisional Rates: Rates which have
been confirmed, approved, and placed
into effect on an interim basis by the
Deputy Secretary.
PRS: Power Repayment Study.
Rate Brochure: A document prepared
for public distribution explaining the
rationale and background of the rate
proposal contained in this rate order
and dated June 2005.
Ratesetting PRS: The PRS used for the
rate adjustment proposal.
Reclamation: United States
Department of the Interior, Bureau of
Reclamation.
Reclamation Law: A series of Federal
laws. Viewed as a whole, these laws
create the originating framework in
which Western markets power.
Revenue Requirement: The revenue
required to recover annual expenses
(such as O&M, purchase power,
transmission service expenses, interest
expenses, and deferred expenses) and
repay Federal investments, and other
assigned costs.
Rocky Mountain Region: The Rocky
Mountain Customer Service Region of
Western.
Western: United States Department of
Energy, Western Area Power
Administration.
Effective Date
The new provisional rates will take
effect on the first day of the first full
billing period beginning on or after
January 1, 2006, and will be in effect
until December 31, 2010, pending
approval by the Commission on a final
basis.
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Public Notice and Comment
Western followed the Procedures for
Public Participation in Power and
Transmission Rate Adjustments and
Extensions, 10 CFR part 903, in
developing these rates. The steps
Western took to involve interested
parties in the rate process were:
1. The proposed rate adjustment was
initiated on April 22, 2005, when
Western’s Rocky Mountain Region
mailed a notice announcing an informal
customer meeting to discuss the
proposed firm electric service rate
adjustment to all LAP preference
customers and interested parties. The
informal meeting was held on May 11,
2005, in Denver, Colorado. At this
informal meeting, Western explained
the rationale for the rate adjustment,
presented rate designs and
methodologies, and answered questions.
2. An FRN was published on June 16,
2005 (70 FR 35079), officially
announcing proposed LAP rates,
initiating the public consultation and
comment period, and announcing the
public information and public comment
forums.
3. On July 1, 2005, Western’s Rocky
Mountain Region mailed letters to all
LAP preference customers and
interested parties transmitting a copy of
the FRN published on June 16, 2005 (70
FR 35079).
4. The public information forums
were held on July 19, 2005, beginning
at 10 a.m. MDT, in Denver, Colorado,
and again on July 20, 2005, beginning at
8 a.m. CDT, in Lincoln, Nebraska.
Western provided detailed explanations
of the proposed LAP rates, provided a
list of issues that could change the
proposed rates, and answered questions.
A rate brochure detailing the proposed
rates was provided at the forums.
5. The public comment forum was
held on August 16, 2005, beginning at
9 a.m. MDT, in Denver, Colorado.
Western gave the public an opportunity
to comment for the record. No oral
comments were made and no written
comments were received during the
comment forum.
6. Western received four comment
letters during the consultation and
comment period, which ended
September 14, 2005. All formally
submitted comments have been
considered in preparing this Rate Order.
7. Western’s Rocky Mountain Region
provided a Web site with all of the
letters, time frames, dates and locations
of forums, documents discussed at the
information meetings, FRNs, and all
other information about this rate process
for customer access. The Web site is
located at https://www.wapa.gov/rm/
Rates/firm_power_rate_adj_2006.htm.
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Comments
Written comments were received from
the following organizations: East River
Electric Power Cooperative, Mid-West
Electric Consumers Association,
Municipal Energy Agency of Nebraska,
Valley Electric Cooperative, Inc.
Project Descriptions
Loveland Area Projects
The Post-1989 General Power
Marketing and Allocation Criteria,
published in the Federal Register on
January 31, 1986 (51 FR 4012),
integrated the resources of the P–
SMBP—WD and Fry-Ark. This
operational and contractual integration,
known as LAP, allowed an increase in
marketable resource, simplified contract
administration, and established a
blended rate for LAP power sales.
However, the P–SMBP—WD and FryArk retain separate financial status. For
this reason, separate PRSs are prepared
annually for each project. These PRSs
are used to determine the sufficiency of
the power rate to generate adequate
revenue to repay project investment and
costs during each project’s prescribed
repayment period. The revenue
requirement of the Fry-Ark PRS is
combined with the P–SMBP—WD
revenue requirement derived from the
P—SMBP PRS, to develop one rate for
LAP firm electric sales.
Pick-Sloan Missouri Basin Program—
Western Division
The initial stages of the Missouri
River Basin Project were authorized by
Congress in section 9 of the Flood
Control Act of December 22, 1944,
commonly referred to as the 1944 Flood
Control Act (Pub. L. 78–534, 58 Stat.
877, 891). The Missouri River Basin
Project, later renamed the Pick-Sloan
Missouri Basin Program to honor its two
principal authors, has been under
construction since 1944. The P–SMBP
encompasses a comprehensive program
of flood control, navigation
improvement, irrigation, M&I water
development, and hydroelectric
production for the entire Missouri River
Basin. Multipurpose projects have been
developed on the Missouri River and its
tributaries in Colorado, Montana,
Nebraska, North Dakota, South Dakota,
and Wyoming.
The Colorado-Big Thompson,
Kendrick, Riverton, and Shoshone
projects were administratively
combined with P–SMBP in 1954,
followed by the North Platte Project in
1959. These projects are known as the
‘‘Integrated Projects’’ of the P–SMBP.
The Riverton Project was reauthorized
as a unit of the P–SMBP in 1970.
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The P–SMBP—WD and the Integrated
Projects include 19 powerplants. There
are six powerplants in the P–SMBP—
WD: Glendo, Kortes, and Fremont
Canyon powerplants on the North Platte
River; Boysen and Pilot Butte on the
Wind River; and Yellowtail powerplant
on the Big Horn River.
In the Colorado-Big Thompson
Project, there are also six powerplants.
Green Mountain powerplant on the Blue
River is on the West Slope of the Rocky
Mountains. Marys Lake, Estes, Pole Hill,
Flatiron, and Big Thompson
powerplants are on the East Slope.
The Kendrick Project has two power
production facilities: Alcova and
Seminoe powerplants. Power
production facilities in the Shoshone
Project are Shoshone, Buffalo Bill, Heart
Mountain, and Spirit Mountain
powerplants. The only production
facility in the North Platte Project is the
Guernsey powerplant.
Fryingpan-Arkansas Project
The Fry-Ark is a transmountain
diversion development in southeastern
Colorado authorized by the Act of
Congress on August 16, 1962 (Pub. L.
87–590, 76 Stat. 389, as amended by
Title XI of the Act of Congress on
October 27, 1974 (Pub. L. 93–493, 88
Stat. 1486, 1497)). The Fry-Ark diverts
water from the Fryingpan River and
other tributaries of the Roaring Fork
River in the Colorado River Basin on the
West Slope of the Rocky Mountains to
the Arkansas River on the East Slope.
The water diverted from the West Slope,
together with regulated Arkansas River
water, provides supplemental irrigation,
M&I water supplies, and produces
hydroelectric power. Flood control, fish
and wildlife enhancement, and
recreation are other important purposes
of Fry-Ark. The only generating facility
in Fry-Ark is the Mt. Elbert PumpedStorage Powerplant on the East Slope.
Power Repayment Studies
Western prepares a PRS each FY to
determine if revenues will be sufficient
to repay, within the required time, all
costs assigned to the LAP revenues.
Repayment criteria are based on law,
policies including DOE Order RA
6120.2, and authorizing legislation. To
meet Cost Recovery Criteria outlined in
DOE Order RA 6120.2, a revised study
and rate adjustment has been developed
to demonstrate that sufficient revenues
will be collected to meet future
obligations.
In the P–SMBP PRS, payments toward
irrigation assistance and capital debt are
necessary before deficits are completely
repaid. Traditionally, prepayment of
irrigation assistance or capital is only
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done in the absence of deficits.
However, if all revenue were applied
toward deficits prior to making any
prepayments for irrigation and other
capital requirements, an extraordinarily
large rate increase to meet single-year
repayment obligations would be
required. Once these single-year
repayment obligations were satisfied,
another rate adjustment would be
necessary to decrease the rates. While
repayment of capital debt and irrigation
assistance prior to complete repayment
of deficits is not typical, the approach
approved within this Rate Order is well
within the bounds of DOE Order RA
6120.2. Western will repay all deficits
and also make previously planned
payments for irrigation assistance and
other investments that are due in the
years 2013 and 2014. Prepaying
irrigation and capital investments has
been part of P–SMBP repayment plans
and approved rate adjustments for the
past 20 years. It is an integral part of the
long-term plan for the project and has
provided rate stability for consumers
while meeting Federal repayment
obligations. Modest irrigation and
investment payments for a brief period
of 2 to 3 years will reduce the singleyear revenue requirement for irrigation
assistance and hold increases to the
‘‘lowest possible rates to consumers
consistent with sound business
principles,’’ as outlined in section 5 of
the Flood Control Act of 1944.
The provisional rates for LAP will be
implemented in two steps. First step
rates are to become effective on an
interim basis on the first day of the first
full billing period beginning on or after
January 1, 2006. Second step rates are to
become effective on the first day of the
first full billing period beginning on or
after January 1, 2007. Under Rate
Schedule L–F6, the first and second step
provisional rates for LAP firm electric
service will result in a total composite
rate increase of approximately 14.5
percent. The current composite rate
under Rate Schedule L–F5 is 23.90
mills/kWh. The provisional composite
rate is 27.36 mills/kWh.
Existing and Provisional Rates
A comparison of the existing and
provisional rates for LAP firm electric
service follows:
COMPARISON OF EXISTING AND PROVISIONAL RATES LAP FIRM ELECTRIC SERVICE
Firm electric service
Existing rates
Rate Schedule .................................................................................................................
Composite Rate (mills/kWh) ............................................................................................
Firm Capacity ($/kWmonth) .............................................................................................
Firm Energy (mills/kWh) ..................................................................................................
Certification of Rates
Western’s Administrator certified that
the provisional rates for LAP firm
electric service under Rate Schedule L–
F6 are the lowest possible rates
consistent with sound business
principles. The provisional rates were
developed following administrative
policies and applicable laws.
LAP Firm Electric Service Discussion
According to Reclamation Law,
Western must establish power rates
sufficient to recover operation,
maintenance, and purchase power
expenses, and repay power investment
and irrigation aid.
The Criteria, published in the Federal
Register on January 31, 1986 (51 FR
4012), operationally and contractually
integrated the resources of the P–
SMBP—WD and Fry-Ark (thereafter
referred to as LAP). A blended rate was
established for the sale of LAP power.
The P–SMBP—WD portion of the
revenue requirements for the LAP firm
electric service rates was developed
from the revenue requirement
calculated in the P–SMBP Ratesetting
PRS. The P–SMBP—WD revenue
First step provisional rates and
percent change,
effective Jan. 1,
2006
Second step provisional rates
and percent
change, effective
Jan. 1, 2007
L–F6
26.12 (9.3%)
$3.43 (9.2%)
13.06 (9.3%)
L–F6
27.36 (5.2%)
$3.59 (5.1%)
13.68 (5.2%)
L–F5
23.90
$3.14
11.95
requirement increased approximately 17
percent due to increased purchase
power costs due to extended drought as
well as costs associated with increased
O&M expenses. The adjustment to the
P–SMBP revenue requirement is a
separate formal rate process which is
documented in Rate Order No. WAPA–
126. Rate Order No. WAPA–126 is also
scheduled to go into effect on the first
day of the first full billing period
beginning on or after January 1, 2006.
The revenue requirements for P–
SMBP—WD are as follows:
SUMMARY OF P–SMBP—WD REVENUE REQUIREMENTS ($000)
Present Revenue Requirement ...............................................................................................................................................................
(18.06 mills/kWh × 1,988,000,000 kWh) .................................................................................................................................................
$35,903
Provisional Increases
Provisional First Step Increase (Jan 06) .................................................................................................................................................
(1.96 mills/kWh × 1,988,000,000 kWh) ...................................................................................................................................................
3,896
Provisional Second Step Increase (Jan 07) ............................................................................................................................................
(1.07 mills/kWh × 1,988,000,000 kWh) ...................................................................................................................................................
Total Increase ...................................................................................................................................................................................
(3.03 mills/kWh × 1,988,000,000 kWh) ............................................................................................................................................
Provisional Revenue Requirement ..........................................................................................................................................................
(18.06 + 3.03 = 21.09 mills/kWh × 1,988,000,000 kWh) ........................................................................................................................
The Fry-Ark piece of the revenue
requirements for the LAP firm electric
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service rates was developed from the
revenue requirement calculated in the
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2,127
6,024
41,927
Fry-Ark Ratesetting PRS, which has
been updated to reflect the most current
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information. The Fry-Ark revenue
requirement contains two components.
The project has an average annual
energy generation of 52 gigawatthours
from flow-through water. The remaining
revenue requirement is derived from the
firm capacity component. This is the
procedure used in the study to account
for the Fry-Ark portion of the energy
marketed by LAP. The Fry-Ark revenue
requirement increased approximately 8
percent also due to increased O&M
expenses and higher costs associated
with increased purchase power costs
due to extended drought.
SUMMARY OF FRY-ARK REVENUE REQUIREMENTS ($000)
Present Revenue Requirement ...............................................................................................................................................................
$12,855
Provisional Increases
Provisional First Step Increase (Jan 06) .................................................................................................................................................
Provisional Second Step Increase (Jan 07) ............................................................................................................................................
650
396
Total Increase ...................................................................................................................................................................................
Provisional Revenue Requirement ..........................................................................................................................................................
1,046
13,901
This table compares the LAP existing
revenue requirements to the proposed
revenue requirements:
SUMMARY OF LAP REVENUE REQUIREMENTS ($000)
Existing
First step
(January
2006)
Second step
(January
2007)
P–SMBP—WD .........................................................................................................................................
Fry-Ark .....................................................................................................................................................
$35,903
12,855
$39,800
13,505
$41,927
13,901
Total LAP ..........................................................................................................................................
48,758
53,305
55,828
Statement of Revenue and Related
Expenses
The following table provides a
summary of projected revenue and
expense data for the Fry-Ark firm
electric service revenue requirement
through the 5-year provisional rate
approval period:
FRY-ARK COMPARISON OF 5-YEAR RATE APPROVAL PERIOD (FY 2006–2010) TOTAL REVENUE AND EXPENSE ($000)
Existing rate
Proposed
rate
Difference
Total Revenues ....................................................................................................................................
Revenue Distribution:
Expenses:
O&M .........................................................................................................................................................
Purchase Power and Transmission .........................................................................................................
Interest 1 ...................................................................................................................................................
$71,850
$76,724
$4,747
22,095
21,743
23,939
22,601
23,399
23,881
506
1,656
¥58
Total Expenses .................................................................................................................................
Principal Payments:
Capitalized Expenses ..............................................................................................................................
Original Project and Additions .................................................................................................................
Replacements ..........................................................................................................................................
67,777
69,881
2,104
0
3,133
940
374
940
5,529
374
¥2,193
4,589
Total Principal Payments ..................................................................................................................
4,073
6,843
2,770
Total Revenue Distribution ...............................................................................................................
71,850
76,724
4,874
1 Interest
expenses decreased due to a lower interest rate being used for future replacements and additions in the Ratesetting PRS.
The summary of P–SMBP—WD
revenues and expenses for the 5-year
provisional rate approval period is
included in the P–SMBP Statement of
Revenue and Related Expenses that is
part of Rate Order No. WAPA–126.
VerDate Aug<31>2005
15:28 Nov 25, 2005
Jkt 208001
Basis for Rate Development
The P–SMBP PRS calculates the
composite rate in mills/kWh for future
firm power (capacity and energy) sales.
In the Fry-Ark PRS, the study calculates
the capacity charge in dollars per
kilowattyear. The charge is adjusted
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Fmt 4703
Sfmt 4703
until sufficient revenues are generated
to meet the cost-recovery requirement.
The proposed LAP firm electric
service rate is designed to recover 50
percent of the revenue requirement from
the capacity charge and 50 percent from
the energy charge. The capacity charge
is calculated by dividing 50 percent of
E:\FR\FM\28NON1.SGM
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Federal Register / Vol. 70, No. 227 / Monday, November 28, 2005 / Notices
the total annual revenue requirement by
the number of billing units (kWmonth)
in a year. The energy charge is
calculated by dividing 50 percent of the
total annual revenue requirement by the
annual energy sales under contract.
The existing rates for LAP firm
electric service in Rate Schedule L–F5,
which expire on December 31, 2008, no
longer provide sufficient revenues to
pay all annual costs, including interest
expense, and repay power investment
and irrigation aid within the allowable
period. The adjusted rates reflect
increases primarily in purchase power
costs, O&M costs, and interest expenses.
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
January 1, 2006, and will remain in
effect through December 31, 2010.
Comments
The comments and responses
applicable to the LAP firm electric
service rates, paraphrased for brevity
when not affecting the meaning of the
statement(s), are discussed below.
Comments that apply to P–SMBP only
are being answered in Rate Order No.
WAPA–126.
A. Comment: Customers support
implementing the two-step rate
adjustment on a calendar year basis.
Response: The two-step rate
adjustment proposal meets all
repayment requirements according to
DOE Order RA 6120.2, and since the
majority of the customers support the
calendar year implementation, Western
will implement the first step of the twostep rate adjustment on January 1, 2006,
and the second step of the two-step rate
adjustment on January 1, 2007.
B. Comment: One commenter noted
that working with Western through the
MOU work group has been beneficial
during this process. The MOU group has
identified an issue regarding personnel
costs of the federal agencies that merits
further attention. The commenter
recognized that this issue could not be
resolved during consideration of the rate
increase, but the commenter encouraged
Western to move forward with its
investigation into this issue.
Response: Western, through the MOU
process, has agreed to look into this
issue.
C. Comment: Customers noted their
concern regarding the rate of increase in
Reclamation’s O&M costs.
Response: Western is actively
participating with the customers
through the MOU group, in which
Reclamation also participates, to better
VerDate Aug<31>2005
15:28 Nov 25, 2005
Jkt 208001
understand what is driving
Reclamation’s increases.
D. Comment: One commenter noted
that ongoing drought should be viewed
as a good opportunity to review cutting
discretionary costs where possible and
look at the rate structure for some of
Western’s less widely used products to
determine if they are appropriate and if
they could be modified to more
accurately reflect cost of service
principles.
Response: As mentioned above,
Western is actively participating with
the customers through the MOU group
to identify and address such issues.
E. Comment: One commenter
encouraged Western to continue
investigating ways to maximize the
value of its assets, including
transmission rights across neighboring
systems and high-value transmission
across constrained paths.
Response: Western continually looks
for ways to increase revenues and
decrease costs, including maximizing
the use of the transmission system.
However, Western has determined that
this particular comment is not directly
related to the proposed action and is
outside the scope of the rate process.
NEPA Regulations (10 CFR part 1021),
Western has determined that this action
is categorically excluded from preparing
an environmental assessment or an
environmental impact statement.
Availability of Information
Order
In view of the foregoing and under the
authority delegated to me, I confirm and
approve on an interim basis, effective
January 1, 2006, Rate Schedule L–F6 for
the Loveland Area Projects of the
Western Area Power Administration.
The rate schedule shall remain in effect
on an interim basis, pending the
Commission’s confirmation and
approval of them or substitute rates on
a final basis through December 31, 2010.
Information about this rate
adjustment, including PRSs, comments,
letters, memorandums, and other
supporting material made or kept by
Western that was used to develop the
provisional rates is available for public
review in the Rocky Mountain Customer
Service Regional Office, Western Area
Power Administration, 5555 East
Crossroads Boulevard, Loveland,
Colorado.
Regulatory Procedure Requirements
Regulatory Flexibility Analysis
The Regulatory Flexibility Act of 1980
(5 U.S.C. 601, et seq.) requires Federal
agencies to perform a regulatory
flexibility analysis if a final rule is likely
to have a significant economic impact
on a substantial number of small entities
and there is a legal requirement to issue
a general notice of proposed
rulemaking. Western has determined
that this action does not require a
regulatory flexibility analysis since it is
a rulemaking of particular applicability
involving rates or services applicable to
public property.
Environmental Compliance
In compliance with the National
Environmental Policy Act (NEPA) of
1969 (42 U.S.C. 4321, et seq.); Council
on Environmental Quality Regulations
(40 CFR parts 1500–1508); and DOE
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Sfmt 4703
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.
Small Business Regulatory Enforcement
Fairness Act
Western has determined that this rule
is exempt from congressional
notification requirements under 5 U.S.C.
801 because the action is a rulemaking
of particular applicability relating to
rates or services and involves matters of
procedure.
Submission to the Federal Energy
Regulatory Commission
The provisional rates herein
confirmed, approved, and placed into
effect, together with supporting
documents, will be submitted to the
Commission for confirmation and final
approval.
Dated: November 9, 2005.
Clay Sell,
Deputy Secretary.
Rate Schedule L–F6 (Supersedes
Schedule L–F5)
Loveland Area Projects; Colorado,
Kansas, Nebraska, Wyoming
Schedule of Rates for Firm Electric
Service
Effective
First Step: Beginning on the first day
of the first full billing period on or after
January 1, 2006, through December 31,
2006.
Second Step: Beginning on the first
day of the first full billing period on or
after January 1, 2007, through December
31, 2010.
Available
Within the marketing area served by
the Loveland Area Projects.
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Applicable
To the wholesale power customers for
firm power service supplied through
one meter at one point of delivery, or as
otherwise established by contract.
Character
Alternating current, 60 hertz, three
phase, delivered and metered at the
voltages and points established by
contract.
Monthly Rates
First Step:
Demand Charge: $3.43 per kilowatt
(kW) of billing demand.
Energy Charge: 13.06 mills per
kilowatthour (kWh) of use.
Billing Demand: Unless otherwise
specified by contract, the billing
demand will be the seasonal contract
rate of delivery.
Second Step:
Demand Charge: $3.59 per kW of
billing demand.
Energy Charge: 13.68 mills per kWh of
use.
Billing Demand: Unless otherwise
specified by contract, the billing
demand will be the seasonal contract
rate of delivery.
Adjustments
For Transformer Losses: If delivery is
made at transmission voltage but
metered on the low-voltage side of the
substation, the meter readings will be
increased to compensate for transformer
losses as provided for in the contract.
For Power Factor: None. The customer
will be required to maintain a power
factor at all points of measurement
between 95-percent lagging and 95percent leading.
[FR Doc. E5–6575 Filed 11–25–05; 8:45 am]
BILLING CODE 6450–01–P
DEPARTMENT OF ENERGY
Western Area Power Administration
Parker-Davis Project, Pacific
Northwest-Pacific Southwest Intertie
Project, and the Central Arizona
Project—Rate Order No. WAPA–114
Western Area Power
Administration, DOE.
ACTION: Notice of withdrawal of multisystem transmission rate proposal.
SUMMARY: The Western Area Power
Administration (Western) initiated a
formal rate process for the purpose of
implementing a multi-system
transmission rate (MSTR) by a Federal
Register notice published on June 22,
15:28 Nov 25, 2005
Jkt 208001
During the
consultation and comment period for
the rate process, Western received
comments voicing strong opposition to
the proposed methodology. No
comments were received in support of
the customer choice methodology.
The consultation and comment period
ended June 1, 2005. All formally
submitted comments, both written and
oral, were considered in preparing this
notice.
SUPPLEMENTARY INFORMATION:
Comments
AGENCY:
VerDate Aug<31>2005
2004. The process was extended by a
Federal Register notice on March 3,
2005. The purpose of the extension was
to allow Western time to respond to
customer requests to develop a customer
choice model. Western developed and
presented a customer choice
methodology in public information and
public comment forums held March 29,
2005, and April 6, 2005, respectively.
Effective November 28, 2005, Western is
withdrawing the MSTR proposal for
long-term firm transmission service on
the Parker-Davis Project (P–DP), the
Pacific Northwest-Pacific Southwest
Intertie Project (Intertie), and the Central
Arizona Project (CAP). Western has
considered all comments in its decision
to withdraw its proposal for the MSTR
for long-term firm transmission service.
Western is, however, studying the
conversion of non-firm and short-term
firm transmission service on the ParkerDavis, Intertie and Central Arizona
projects to a multi-system service.
Customer notification will be provided
and feedback sought in a separate
informal process.
FOR FURTHER INFORMATION CONTACT: Mr.
J. Tyler Carlson, Regional Manager,
Desert Southwest Customer Service
Region, Western Area Power
Administration, P.O. Box 6457,
Phoenix, AZ 85005–6457, telephone
(602) 605–2453, e-mail
carlson@wapa.gov, or Mr. Jack Murray,
Rates Team Lead, Desert Southwest
Customer Service Region, Western Area
Power Administration, P.O. Box 6457,
Phoenix, AZ 85005–6457, telephone
(602) 605–2442, e-mail
jmurray@wapa.gov.
Written comments were received from
the following organizations: Arizona
Power Authority, Arizona Public
Service Company, K. R. Saline &
Associates, Robert S. Lynch and
Associates, Salt River Project.
Representatives of the following
organizations made oral comments:
Irrigation & Electrical Districts
Association of Arizona, R. W. Beck, Salt
River Project.
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71279
Western responded to an oral
comment received during the Public
Information Forum in a letter dated May
17, 2005. The letter is posted on
Western’s Web site at https://
www.wapa.gov/dsw/pwrmkt/MSTRP/
MSTRP.htm. Responses in this notice
focus on written comments received
during the consultation and comment
period pertinent to a revised customer
choice model and Western’s authority to
develop an MSTR.
Comment: Western received a
comment suggesting it has no legal
authority to implement an MSTR of any
sort if the revenue requirements of
multiple projects will be combined.
Comments also questioned whether an
MSTR is allowed by DOE Order
RA6120.2.
Response: Under all MSTR
approaches presented by Western, each
power system would remain financially
independent for accounting and
repayment purposes. Each power
system would maintain a separate
Power Repayment Study (PRS) and
financial reports. The total MSTR
revenue collected would be allocated to
each power system based on the
individual power system’s percentage of
the total MSTR revenue requirement.
Western is not prohibited from
implementing such a blended rate by
either DOE Order RA 6120.2 or projectspecific legislation. Western has
combined the revenue requirements of
multiple projects for ratesetting
purposes in its other regional offices
and continues to set rates in this
manner.
Comment: A commenter who had
asked Western to provide general
information on the MSTR more than one
year ago believes Western has not
provided this information.
Response: The specific request had to
do with Western’s initial presentation of
a customer choice methodology. The
presentation consisted mainly of tables
and mathematical formulas to explain
the circular problem with the method.
At the commenter’s request an
explanation in words was posted on the
Web site in June, 2003 under the
heading ‘‘Informal Customer Meeting
May 23, 2003’’ linked with the phrase
‘‘Customer Choice Discussion.’’
Comment: A customer commented
that the ‘‘customer choice’’ model is an
attempt to lower rates for a small group
of ‘‘pancaked’’ customers at the expense
of the majority of Western’s firm
transmission customers.
Response: Western undertook the
design of the proposed ‘‘customer
choice model’’ to address several
customers’ comments received during
the initial MSTR consultation and
E:\FR\FM\28NON1.SGM
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]]>Agencies
[Federal Register Volume 70, Number 227 (Monday, November 28, 2005)]
[Notices]
[Pages 71273-71279]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-6575]
-----------------------------------------------------------------------
DEPARTMENT OF ENERGY
Western Area Power Administration
[Rate Order No. WAPA-125]
Loveland Area Projects
AGENCY: Western Area Power Administration, DOE.
ACTION: Notice of order concerning power rates.
-----------------------------------------------------------------------
SUMMARY: The Deputy Secretary of Energy confirmed and approved Rate
Order No. WAPA-125 and Rate Schedule L-F6, placing firm electric
service rates from the Loveland Area Projects (LAP) 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 (Commission) 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 expenses, and repay power investment and
irrigation aid, within the allowable periods.
DATES: Rate Schedule L-F6 will be placed into effect on an interim
basis on the first day of the first full billing period beginning on or
after January 1, 2006, and will be in effect until the Commission
confirms, approves, and places the provisional rates into effect on a
final basis ending December 31, 2010, or until the rate schedule is
superseded.
FOR FURTHER INFORMATION CONTACT: Mr. Joel K. Bladow, Regional Manager,
Rocky Mountain Customer Service Region, Western Area Power
Administration, 5555 East Crossroads Boulevard, Loveland, Colorado,
80538-8986, (970) 461-7201, or Mr. Daniel T. Payton, Rates Manager,
Rocky Mountain Customer Service Region, Western Area Power
Administration, 5555 East Crossroads Boulevard, Loveland, Colorado,
80538-8986, telephone (970) 461-7442, e-mail dpayton@wapa.gov.
SUPPLEMENTARY INFORMATION: The Deputy Secretary of Energy approved
existing Rate Schedule L-F5 for LAP firm electric service on an interim
basis on December 24, 2003 (Rate Order No. WAPA-105, 69 FR 644, January
6, 2004). The Commission confirmed and approved the rate schedule on a
final basis on December 21, 2004, in FERC Docket No. EF04-5181-000 (109
FERC 62,228). The existing rate schedule is effective from February 1,
2004, through December 31, 2008.
Existing firm electric service Rate Schedule L-F5 is being
superseded by Rate Schedule L-F6. Under Rate Schedule L-F5, the energy
charge is 11.95 mills per kilowatthour (mills/kWh) and the capacity
charge is $3.14 per kilowattmonth (kWmonth). The composite rate is
23.90 mills/kWh. The provisional rates for LAP firm electric service
under Rate Schedule L-F6 are being implemented in two steps. The first
step of the provisional rates for LAP firm electric service consists of
an energy charge of 13.06 mills/kWh and a capacity charge of $3.43 per
kWmonth, producing an overall composite rate of 26.12 mills/kWh on
January 1, 2006. This represents a 9.3 percent increase when compared
with the existing LAP firm electric service rate under Rate Schedule L-
F5. The second step of the provisional rates for LAP firm electric
service consists of an energy charge of 13.68 mills/kWh and a capacity
charge of $3.59 per kWmonth, producing an overall composite rate of
27.36 mills/kWh on January 1, 2007. This represents an additional 5.2
percent increase.
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
[[Page 71274]]
Commission. Existing DOE 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 00-001.00A, 10 CFR part
903, and 18 CFR part 300, I hereby confirm, approve, and place Rate
Order No. WAPA-125 and the proposed LAP firm electric service rates
into effect on an interim basis. The new Rate Schedule L-F6 will be
promptly submitted to the Commission for confirmation and approval on a
final basis.
Dated: November 9, 2005.
Clay Sell,
Deputy Secretary.
Order Confirming, Approving, and Placing the Loveland Area Projects
Firm Electric Service Rates Into Effect on an Interim Basis
These rates were established in accordance with section 302 of the
Department of Energy (DOE) Organization Act (42 U.S.C. 7152). This Act
transferred to and vested in the Secretary of Energy the power
marketing functions of the Secretary of the Department of the 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 other Acts that specifically apply to the project
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 Commission. Existing DOE procedures for
public participation in power rate adjustments (10 CFR part 903) were
published on September 18, 1985.
Acronyms and Definitions
As used in this Rate Order, the following acronyms and definitions
apply:
Administrator: The Administrator of Western Area Power
Administration.
Capacity: The electric capability of a generator, transformer,
transmission circuit, or other equipment. It is expressed in kW.
Capacity Charge: The rate which sets forth the charges for
capacity. It is expressed in dollars per kWmonth.
Commission: Federal Energy Regulatory Commission.
Composite Rate: The rate for commercial firm power and is the total
annual revenue requirement for capacity and energy divided by the total
annual firm energy sales under contract. It is expressed in mills/kWh
and used for comparison purposes.
Criteria: The Post-1989 General Power Marketing and Allocation
Criteria for the sale of energy with capacity from the Pick-Sloan
Missouri Basin Program--Western Division and the Fryingpan-Arkansas
Project.
Customer: An entity with a contract for and receiving firm electric
service from Western's Rocky Mountain Region.
Deficits: Deferred or unrecovered annual expenses.
DOE Order RA 6120.2: An order outlining power marketing
administration financial reporting and rate-making procedures.
Energy: Measured in terms of the work it is capable of doing over a
period of time. It is expressed in kWh.
Energy Charge: The rate which sets forth the charges for energy. It
is expressed in mills per kWh and applied to each kWh delivered to each
customer.
FERC: The Commission (to be used when referencing Commission
Orders).
Firm: A type of product and/or service that is available at the
time requested by the customer.
FRN: Federal Register notice.
Fry-Ark: Fryingpan-Arkansas Project.
FY: Fiscal year; October 1 to September 30. kW: Kilowatt--the
electrical unit of capacity that equals 1,000 watts.
kWmonth: Kilowattmonth--the electrical unit of the monthly amount
of capacity.
kWh: Kilowatthour--the electrical unit of energy that equals 1,000
watts in 1 hour.
kilowattyear: Kilowattyear--the electrical unit of the yearly
amount of capacity.
LAP: Loveland Area Projects.
L-F5: Loveland Area Projects existing firm electric service rate
schedule (expires December 31, 2008, or until superseded).
L-F6: Loveland Area Projects provisional firm electric service rate
schedule (effective January 1, 2006).
M&I: Municipal and industrial water development.
mills/kWh: Mills per kilowatthour--the unit of charge for energy
(equals one tenth of a cent or one thousandth of a dollar).
MOU: Memorandum of Understanding for the Pick-Sloan Missouri Basin
Program and the Fry-Ark Project. Signatories include Western,
Reclamation, U.S. Army Corps of Engineers, Mid-West Electric Consumers
Association, Loveland Area Customers Association, and Western States
Power Corporation.
NEPA: National Environmental Policy Act of 1969 (42 U.S.C. 4321, et
seq.).
O&M: Operation and Maintenance.
P-SMBP: The Pick-Sloan Missouri Basin Program.
P-SMBP--WD: Pick-Sloan Missouri Basin Program--Western Division.
Power: Capacity and energy.
Preference: The requirements of Reclamation Law which provide that
preference in the sale of Federal power shall be given to
municipalities and other public corporations or agencies and also to
cooperatives and other nonprofit organizations financed in whole or in
part by loans made under the Rural Electrification Act of 1936
(Reclamation Project Act of 1939, section 9(c), 43 U.S.C. 485h(c)).
Provisional Rates: Rates which have been confirmed, approved, and
placed into effect on an interim basis by the Deputy Secretary.
PRS: Power Repayment Study.
Rate Brochure: A document prepared for public distribution
explaining the rationale and background of the rate proposal contained
in this rate order and dated June 2005.
Ratesetting PRS: The PRS used for the rate adjustment proposal.
Reclamation: United States Department of the Interior, Bureau of
Reclamation.
Reclamation Law: A series of Federal laws. Viewed as a whole, these
laws create the originating framework in which Western markets power.
Revenue Requirement: The revenue required to recover annual
expenses (such as O&M, purchase power, transmission service expenses,
interest expenses, and deferred expenses) and repay Federal
investments, and other assigned costs.
Rocky Mountain Region: The Rocky Mountain Customer Service Region
of Western.
Western: United States Department of Energy, Western Area Power
Administration.
Effective Date
The new provisional rates will take effect on the first day of the
first full billing period beginning on or after January 1, 2006, and
will be in effect until December 31, 2010, pending approval by the
Commission on a final basis.
[[Page 71275]]
Public Notice and Comment
Western followed the Procedures for Public Participation in Power
and Transmission Rate Adjustments and Extensions, 10 CFR part 903, in
developing these rates. The steps Western took to involve interested
parties in the rate process were:
1. The proposed rate adjustment was initiated on April 22, 2005,
when Western's Rocky Mountain Region mailed a notice announcing an
informal customer meeting to discuss the proposed firm electric service
rate adjustment to all LAP preference customers and interested parties.
The informal meeting was held on May 11, 2005, in Denver, Colorado. At
this informal meeting, Western explained the rationale for the rate
adjustment, presented rate designs and methodologies, and answered
questions.
2. An FRN was published on June 16, 2005 (70 FR 35079), officially
announcing proposed LAP rates, initiating the public consultation and
comment period, and announcing the public information and public
comment forums.
3. On July 1, 2005, Western's Rocky Mountain Region mailed letters
to all LAP preference customers and interested parties transmitting a
copy of the FRN published on June 16, 2005 (70 FR 35079).
4. The public information forums were held on July 19, 2005,
beginning at 10 a.m. MDT, in Denver, Colorado, and again on July 20,
2005, beginning at 8 a.m. CDT, in Lincoln, Nebraska. Western provided
detailed explanations of the proposed LAP rates, provided a list of
issues that could change the proposed rates, and answered questions. A
rate brochure detailing the proposed rates was provided at the forums.
5. The public comment forum was held on August 16, 2005, beginning
at 9 a.m. MDT, in Denver, Colorado. Western gave the public an
opportunity to comment for the record. No oral comments were made and
no written comments were received during the comment forum.
6. Western received four comment letters during the consultation
and comment period, which ended September 14, 2005. All formally
submitted comments have been considered in preparing this Rate Order.
7. Western's Rocky Mountain Region provided a Web site with all of
the letters, time frames, dates and locations of forums, documents
discussed at the information meetings, FRNs, and all other information
about this rate process for customer access. The Web site is located at
https://www.wapa.gov/rm/Rates/firm_power_rate_adj_2006.htm.
Comments
Written comments were received from the following organizations:
East River Electric Power Cooperative, Mid-West Electric Consumers
Association, Municipal Energy Agency of Nebraska, Valley Electric
Cooperative, Inc.
Project Descriptions
Loveland Area Projects
The Post-1989 General Power Marketing and Allocation Criteria,
published in the Federal Register on January 31, 1986 (51 FR 4012),
integrated the resources of the P-SMBP--WD and Fry-Ark. This
operational and contractual integration, known as LAP, allowed an
increase in marketable resource, simplified contract administration,
and established a blended rate for LAP power sales.
However, the P-SMBP--WD and Fry-Ark retain separate financial
status. For this reason, separate PRSs are prepared annually for each
project. These PRSs are used to determine the sufficiency of the power
rate to generate adequate revenue to repay project investment and costs
during each project's prescribed repayment period. The revenue
requirement of the Fry-Ark PRS is combined with the P-SMBP--WD revenue
requirement derived from the P--SMBP PRS, to develop one rate for LAP
firm electric sales.
Pick-Sloan Missouri Basin Program--Western Division
The initial stages of the Missouri River Basin Project were
authorized by Congress in section 9 of the Flood Control Act of
December 22, 1944, commonly referred to as the 1944 Flood Control Act
(Pub. L. 78-534, 58 Stat. 877, 891). The Missouri River Basin Project,
later renamed the Pick-Sloan Missouri Basin Program to honor its two
principal authors, has been under construction since 1944. The P-SMBP
encompasses a comprehensive program of flood control, navigation
improvement, irrigation, M&I water development, and hydroelectric
production for the entire Missouri River Basin. Multipurpose projects
have been developed on the Missouri River and its tributaries in
Colorado, Montana, Nebraska, North Dakota, South Dakota, and Wyoming.
The Colorado-Big Thompson, Kendrick, Riverton, and Shoshone
projects were administratively combined with P-SMBP in 1954, followed
by the North Platte Project in 1959. These projects are known as the
``Integrated Projects'' of the P-SMBP. The Riverton Project was
reauthorized as a unit of the P-SMBP in 1970.
The P-SMBP--WD and the Integrated Projects include 19 powerplants.
There are six powerplants in the P-SMBP--WD: Glendo, Kortes, and
Fremont Canyon powerplants on the North Platte River; Boysen and Pilot
Butte on the Wind River; and Yellowtail powerplant on the Big Horn
River.
In the Colorado-Big Thompson Project, there are also six
powerplants. Green Mountain powerplant on the Blue River is on the West
Slope of the Rocky Mountains. Marys Lake, Estes, Pole Hill, Flatiron,
and Big Thompson powerplants are on the East Slope.
The Kendrick Project has two power production facilities: Alcova
and Seminoe powerplants. Power production facilities in the Shoshone
Project are Shoshone, Buffalo Bill, Heart Mountain, and Spirit Mountain
powerplants. The only production facility in the North Platte Project
is the Guernsey powerplant.
Fryingpan-Arkansas Project
The Fry-Ark is a transmountain diversion development in
southeastern Colorado authorized by the Act of Congress on August 16,
1962 (Pub. L. 87-590, 76 Stat. 389, as amended by Title XI of the Act
of Congress on October 27, 1974 (Pub. L. 93-493, 88 Stat. 1486, 1497)).
The Fry-Ark diverts water from the Fryingpan River and other
tributaries of the Roaring Fork River in the Colorado River Basin on
the West Slope of the Rocky Mountains to the Arkansas River on the East
Slope. The water diverted from the West Slope, together with regulated
Arkansas River water, provides supplemental irrigation, M&I water
supplies, and produces hydroelectric power. Flood control, fish and
wildlife enhancement, and recreation are other important purposes of
Fry-Ark. The only generating facility in Fry-Ark is the Mt. Elbert
Pumped-Storage Powerplant on the East Slope.
Power Repayment Studies
Western prepares a PRS each FY to determine if revenues will be
sufficient to repay, within the required time, all costs assigned to
the LAP revenues. Repayment criteria are based on law, policies
including DOE Order RA 6120.2, and authorizing legislation. To meet
Cost Recovery Criteria outlined in DOE Order RA 6120.2, a revised study
and rate adjustment has been developed to demonstrate that sufficient
revenues will be collected to meet future obligations.
In the P-SMBP PRS, payments toward irrigation assistance and
capital debt are necessary before deficits are completely repaid.
Traditionally, prepayment of irrigation assistance or capital is only
[[Page 71276]]
done in the absence of deficits. However, if all revenue were applied
toward deficits prior to making any prepayments for irrigation and
other capital requirements, an extraordinarily large rate increase to
meet single-year repayment obligations would be required. Once these
single-year repayment obligations were satisfied, another rate
adjustment would be necessary to decrease the rates. While repayment of
capital debt and irrigation assistance prior to complete repayment of
deficits is not typical, the approach approved within this Rate Order
is well within the bounds of DOE Order RA 6120.2. Western will repay
all deficits and also make previously planned payments for irrigation
assistance and other investments that are due in the years 2013 and
2014. Prepaying irrigation and capital investments has been part of P-
SMBP repayment plans and approved rate adjustments for the past 20
years. It is an integral part of the long-term plan for the project and
has provided rate stability for consumers while meeting Federal
repayment obligations. Modest irrigation and investment payments for a
brief period of 2 to 3 years will reduce the single-year revenue
requirement for irrigation assistance and hold increases to the
``lowest possible rates to consumers consistent with sound business
principles,'' as outlined in section 5 of the Flood Control Act of
1944.
The provisional rates for LAP will be implemented in two steps.
First step rates are to become effective on an interim basis on the
first day of the first full billing period beginning on or after
January 1, 2006. Second step rates are to become effective on the first
day of the first full billing period beginning on or after January 1,
2007. Under Rate Schedule L-F6, the first and second step provisional
rates for LAP firm electric service will result in a total composite
rate increase of approximately 14.5 percent. The current composite rate
under Rate Schedule L-F5 is 23.90 mills/kWh. The provisional composite
rate is 27.36 mills/kWh.
Existing and Provisional Rates
A comparison of the existing and provisional rates for LAP firm
electric service follows:
Comparison of Existing and Provisional Rates LAP Firm Electric Service
----------------------------------------------------------------------------------------------------------------
First step Second step
provisional provisional
rates and rates and
Firm electric service Existing rates percent change, percent change,
effective Jan. effective Jan.
1, 2006 1, 2007
----------------------------------------------------------------------------------------------------------------
Rate Schedule............................................. L-F5 L-F6 L-F6
Composite Rate (mills/kWh)................................ 23.90 26.12 (9.3%) 27.36 (5.2%)
Firm Capacity ($/kWmonth)................................. $3.14 $3.43 (9.2%) $3.59 (5.1%)
Firm Energy (mills/kWh)................................... 11.95 13.06 (9.3%) 13.68 (5.2%)
----------------------------------------------------------------------------------------------------------------
Certification of Rates
Western's Administrator certified that the provisional rates for
LAP firm electric service under Rate Schedule L-F6 are the lowest
possible rates consistent with sound business principles. The
provisional rates were developed following administrative policies and
applicable laws.
LAP Firm Electric Service Discussion
According to Reclamation Law, Western must establish power rates
sufficient to recover operation, maintenance, and purchase power
expenses, and repay power investment and irrigation aid.
The Criteria, published in the Federal Register on January 31, 1986
(51 FR 4012), operationally and contractually integrated the resources
of the P-SMBP--WD and Fry-Ark (thereafter referred to as LAP). A
blended rate was established for the sale of LAP power. The P-SMBP--WD
portion of the revenue requirements for the LAP firm electric service
rates was developed from the revenue requirement calculated in the P-
SMBP Ratesetting PRS. The P-SMBP--WD revenue requirement increased
approximately 17 percent due to increased purchase power costs due to
extended drought as well as costs associated with increased O&M
expenses. The adjustment to the P-SMBP revenue requirement is a
separate formal rate process which is documented in Rate Order No.
WAPA-126. Rate Order No. WAPA-126 is also scheduled to go into effect
on the first day of the first full billing period beginning on or after
January 1, 2006. The revenue requirements for P-SMBP--WD are as
follows:
Summary of P-SMBP--WD Revenue Requirements ($000)
------------------------------------------------------------------------
------------------------------------------------------------------------
Present Revenue Requirement................................ $35,903
(18.06 mills/kWh x 1,988,000,000 kWh)......................
------------------------------------------------------------
Provisional Increases
Provisional First Step Increase (Jan 06)................... 3,896
(1.96 mills/kWh x 1,988,000,000 kWh).......................
------------
Provisional Second Step Increase (Jan 07).................. 2,127
(1.07 mills/kWh x 1,988,000,000 kWh).......................
Total Increase......................................... 6,024
(3.03 mills/kWh x 1,988,000,000 kWh)...................
Provisional Revenue Requirement............................ 41,927
(18.06 + 3.03 = 21.09 mills/kWh x 1,988,000,000 kWh).......
------------------------------------------------------------------------
The Fry-Ark piece of the revenue requirements for the LAP firm
electric service rates was developed from the revenue requirement
calculated in the Fry-Ark Ratesetting PRS, which has been updated to
reflect the most current
[[Page 71277]]
information. The Fry-Ark revenue requirement contains two components.
The project has an average annual energy generation of 52 gigawatthours
from flow-through water. The remaining revenue requirement is derived
from the firm capacity component. This is the procedure used in the
study to account for the Fry-Ark portion of the energy marketed by LAP.
The Fry-Ark revenue requirement increased approximately 8 percent also
due to increased O&M expenses and higher costs associated with
increased purchase power costs due to extended drought.
Summary of Fry-Ark Revenue Requirements ($000)
------------------------------------------------------------------------
------------------------------------------------------------------------
Present Revenue Requirement................................ $12,855
------------------------------------------------------------
Provisional Increases
------------------------------------------------------------
Provisional First Step Increase (Jan 06)................... 650
Provisional Second Step Increase (Jan 07).................. 396
------------
Total Increase......................................... 1,046
Provisional Revenue Requirement............................ 13,901
------------------------------------------------------------------------
This table compares the LAP existing revenue requirements to the
proposed revenue requirements:
Summary of LAP Revenue Requirements ($000)
------------------------------------------------------------------------
First step Second step
Existing (January (January
2006) 2007)
------------------------------------------------------------------------
P-SMBP--WD....................... $35,903 $39,800 $41,927
Fry-Ark.......................... 12,855 13,505 13,901
--------------
Total LAP.................... 48,758 53,305 55,828
------------------------------------------------------------------------
Statement of Revenue and Related Expenses
The following table provides a summary of projected revenue and
expense data for the Fry-Ark firm electric service revenue requirement
through the 5-year provisional rate approval period:
Fry-Ark Comparison of 5-Year Rate Approval Period (FY 2006-2010) Total
Revenue and Expense ($000)
------------------------------------------------------------------------
Existing Proposed
rate rate Difference
------------------------------------------------------------------------
Total Revenues................. $71,850 $76,724 $4,747
Revenue Distribution:
Expenses:
O&M.............................. 22,095 22,601 506
Purchase Power and Transmission.. 21,743 23,399 1,656
Interest \1\..................... 23,939 23,881 -58
--------------
Total Expenses............... 67,777 69,881 2,104
Principal Payments:
Capitalized Expenses............. 0 374 374
Original Project and Additions... 3,133 940 -2,193
Replacements..................... 940 5,529 4,589
--------------
Total Principal Payments..... 4,073 6,843 2,770
==============
Total Revenue Distribution... 71,850 76,724 4,874
------------------------------------------------------------------------
\1\ Interest expenses decreased due to a lower interest rate being used
for future replacements and additions in the Ratesetting PRS.
The summary of P-SMBP--WD revenues and expenses for the 5-year
provisional rate approval period is included in the P-SMBP Statement of
Revenue and Related Expenses that is part of Rate Order No. WAPA-126.
Basis for Rate Development
The P-SMBP PRS calculates the composite rate in mills/kWh for
future firm power (capacity and energy) sales. In the Fry-Ark PRS, the
study calculates the capacity charge in dollars per kilowattyear. The
charge is adjusted until sufficient revenues are generated to meet the
cost-recovery requirement.
The proposed LAP firm electric service rate is designed to recover
50 percent of the revenue requirement from the capacity charge and 50
percent from the energy charge. The capacity charge is calculated by
dividing 50 percent of
[[Page 71278]]
the total annual revenue requirement by the number of billing units
(kWmonth) in a year. The energy charge is calculated by dividing 50
percent of the total annual revenue requirement by the annual energy
sales under contract.
The existing rates for LAP firm electric service in Rate Schedule
L-F5, which expire on December 31, 2008, no longer provide sufficient
revenues to pay all annual costs, including interest expense, and repay
power investment and irrigation aid within the allowable period. The
adjusted rates reflect increases primarily in purchase power costs, O&M
costs, and interest expenses. 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 January 1, 2006, and
will remain in effect through December 31, 2010.
Comments
The comments and responses applicable to the LAP firm electric
service rates, paraphrased for brevity when not affecting the meaning
of the statement(s), are discussed below. Comments that apply to P-SMBP
only are being answered in Rate Order No. WAPA-126.
A. Comment: Customers support implementing the two-step rate
adjustment on a calendar year basis.
Response: The two-step rate adjustment proposal meets all repayment
requirements according to DOE Order RA 6120.2, and since the majority
of the customers support the calendar year implementation, Western will
implement the first step of the two-step rate adjustment on January 1,
2006, and the second step of the two-step rate adjustment on January 1,
2007.
B. Comment: One commenter noted that working with Western through
the MOU work group has been beneficial during this process. The MOU
group has identified an issue regarding personnel costs of the federal
agencies that merits further attention. The commenter recognized that
this issue could not be resolved during consideration of the rate
increase, but the commenter encouraged Western to move forward with its
investigation into this issue.
Response: Western, through the MOU process, has agreed to look into
this issue.
C. Comment: Customers noted their concern regarding the rate of
increase in Reclamation's O&M costs.
Response: Western is actively participating with the customers
through the MOU group, in which Reclamation also participates, to
better understand what is driving Reclamation's increases.
D. Comment: One commenter noted that ongoing drought should be
viewed as a good opportunity to review cutting discretionary costs
where possible and look at the rate structure for some of Western's
less widely used products to determine if they are appropriate and if
they could be modified to more accurately reflect cost of service
principles.
Response: As mentioned above, Western is actively participating
with the customers through the MOU group to identify and address such
issues.
E. Comment: One commenter encouraged Western to continue
investigating ways to maximize the value of its assets, including
transmission rights across neighboring systems and high-value
transmission across constrained paths.
Response: Western continually looks for ways to increase revenues
and decrease costs, including maximizing the use of the transmission
system. However, Western has determined that this particular comment is
not directly related to the proposed action and is outside the scope of
the rate process.
Availability of Information
Information about this rate adjustment, including PRSs, comments,
letters, memorandums, and other supporting material made or kept by
Western that was used to develop the provisional rates is available for
public review in the Rocky Mountain Customer Service Regional Office,
Western Area Power Administration, 5555 East Crossroads Boulevard,
Loveland, Colorado.
Regulatory Procedure Requirements
Regulatory Flexibility Analysis
The Regulatory Flexibility Act of 1980 (5 U.S.C. 601, et seq.)
requires Federal agencies to perform a regulatory flexibility analysis
if a final rule is likely to have a significant economic impact on a
substantial number of small entities and there is a legal requirement
to issue a general notice of proposed rulemaking. Western has
determined that this action does not require a regulatory flexibility
analysis since it is a rulemaking of particular applicability involving
rates or services applicable to public property.
Environmental Compliance
In compliance with the National Environmental Policy Act (NEPA) of
1969 (42 U.S.C. 4321, et seq.); Council on Environmental Quality
Regulations (40 CFR parts 1500-1508); and DOE NEPA Regulations (10 CFR
part 1021), Western has determined that this action is categorically
excluded from preparing an environmental assessment or an environmental
impact statement.
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.
Small Business Regulatory Enforcement Fairness Act
Western has determined that this rule is exempt from congressional
notification requirements under 5 U.S.C. 801 because the action is a
rulemaking of particular applicability relating to rates or services
and involves matters of procedure.
Submission to the Federal Energy Regulatory Commission
The provisional rates herein confirmed, approved, and placed into
effect, together with supporting documents, will be submitted to the
Commission for confirmation and final approval.
Order
In view of the foregoing and under the authority delegated to me, I
confirm and approve on an interim basis, effective January 1, 2006,
Rate Schedule L-F6 for the Loveland Area Projects of the Western Area
Power Administration. The rate schedule shall remain in effect on an
interim basis, pending the Commission's confirmation and approval of
them or substitute rates on a final basis through December 31, 2010.
Dated: November 9, 2005.
Clay Sell,
Deputy Secretary.
Rate Schedule L-F6 (Supersedes Schedule L-F5)
Loveland Area Projects; Colorado, Kansas, Nebraska, Wyoming
Schedule of Rates for Firm Electric Service
Effective
First Step: Beginning on the first day of the first full billing
period on or after January 1, 2006, through December 31, 2006.
Second Step: Beginning on the first day of the first full billing
period on or after January 1, 2007, through December 31, 2010.
Available
Within the marketing area served by the Loveland Area Projects.
[[Page 71279]]
Applicable
To the wholesale power customers for firm power service supplied
through one meter at one point of delivery, or as otherwise established
by contract.
Character
Alternating current, 60 hertz, three phase, delivered and metered
at the voltages and points established by contract.
Monthly Rates
First Step:
Demand Charge: $3.43 per kilowatt (kW) of billing demand.
Energy Charge: 13.06 mills per kilowatthour (kWh) of use.
Billing Demand: Unless otherwise specified by contract, the billing
demand will be the seasonal contract rate of delivery.
Second Step:
Demand Charge: $3.59 per kW of billing demand.
Energy Charge: 13.68 mills per kWh of use.
Billing Demand: Unless otherwise specified by contract, the billing
demand will be the seasonal contract rate of delivery.
Adjustments
For Transformer Losses: If delivery is made at transmission voltage
but metered on the low-voltage side of the substation, the meter
readings will be increased to compensate for transformer losses as
provided for in the contract.
For Power Factor: None. The customer will be required to maintain a
power factor at all points of measurement between 95-percent lagging
and 95-percent leading.
[FR Doc. E5-6575 Filed 11-25-05; 8:45 am]
BILLING CODE 6450-01-P
