Integrated System Power Rates, 34925-34928 [E6-9443]
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Federal Register / Vol. 71, No. 116 / Friday, June 16, 2006 / Notices
Commission to grant a 30-day extension
of time to comply with Ordering
Paragraph C of the April 21 Order.
PNM’s motion for technical
conference is granted. However, PNM’s
motion for extension of time to comply
with the April 21 Order is denied.
Take notice that the Federal Energy
Regulatory Commission will hold a
technical conference to discuss
mitigation for the El Paso control area.
This technical conference will be held
on June 14, 2006, in Hearing Room 2 of
the Federal Energy Regulatory
Commission, 888 First Street, NE.,
Washington, DC, from approximately 9
a.m. until approximately 1 p.m. (EST).
Federal Energy Regulatory
Commission conferences are accessible
under section 508 of the Rehabilitation
Act of 1973. For accessibility
accommodations please send an e-mail
to accessibility@ferc.gov or call toll free
(866) 208–3372 (voice) or 202–208–1659
(TTY), or send a FAX to 202–208–2106
with the required accommodations.
All interested parties and staff are
permitted to attend the technical
conference. For additional information
regarding the meeting, please contact
Cynthia Henry at
Cynthia.Henry@ferc.gov no later than 5
p.m. (EST), Tuesday, June 13, 2006.
Magalie R. Salas,
Secretary.
[FR Doc. E6–9390 Filed 6–15–06; 8:45 am]
BILLING CODE 6717–01–P
DEPARTMENT OF ENERGY
Federal Energy Regulatory
Commission
[Docket No. AD06–9–000]
RTO Border Utility Issues; Notice of
Technical Conference on RTO Border
Utility Issues
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June 8, 2006.
Take notice that on July 10, 2006, staff
of the Federal Energy Regulatory
Commission will convene a technical
conference on RTO border utility issues.
The conference will be held at the
Federal Energy Regulatory Commission,
888 First Street, NE., Washington, DC
20426. The conference will be open to
the public. Commission staff will lead
the conference and the Commissioners
plan to attend.
In a recent Commission proceeding,
parties raised the issue of an electric
utility’s ability to benefit from an RTO/
ISO’s regional markets while avoiding
some or all of the costs attributable to
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membership in the RTO/ISO.1 The
Commission found that the issues raised
‘‘generic concerns with implications
applicable to all RTOs and ISOs and to
all market participants with whom they
interact, whether directly or indirectly.’’
The Commission then announced its
intention to establish a technical
conference to hear from interested
parties concerning this issue.
Conference participants are asked to
identify discrete concerns and
contrasting views, establish which
specific market services, reliability
functions, and other features of RTO/
ISO markets provide non-members with
benefits for which they may not bear an
appropriate share of the respective
costs, or otherwise should not be
entitled to, and propose solutions to
identified problems. The Commission
wishes to be informed about this issue
across the country and invites
representatives of all regions to
participate.
Persons wishing to participate as
panelists in the conference are asked to
e-mail the following information to
Commission staff by June 15, 2006:
Name, organizational affiliation name
and mailing address, title, voice and fax
telephone numbers, e-mail address,
brief bio, and a description of the
proposed topic of presentation. Persons
interested in attending the conference as
a member of the audience are
encouraged to e-mail their name and
affiliation to facilitate security check in
and to estimate meeting room needs.
Both prospective panelists and audience
members should e-mail their
information to Kristine.Bailey@ferc.gov.
In the body of the e-mail, please identify
yourself as a potential panelist or
audience member, and use ‘‘RTO Border
Utility Conference’’ on the e-mail
subject line. If you do not have access
to e-mail, you may call Ms. Bailey at
202–502–6072.
An agenda will be issued prior to the
conference. You may use the
Commission’s e-subscription service to
be notified of future notices in this
proceeding. Please visit https://
www.ferc.gov/docs-filing/
esubscription.asp.
A free webcast of this event will be
available through https://www.ferc.gov.
Anyone with Internet access who
desires to view this event can do so by
navigating to https://www.ferc.gov’s
Calendar of Events and locating this
event in the Calendar. The event will
contain a link to its webcast. The
Capitol Connection provides technical
support for the webcasts. It also offers
1 Louisville Gas and Electric Company, et al., 114
FERC ¶ 61,282 (2006) at P 64–65.
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34925
access to open meetings via television in
the DC area and via phone bridge for a
fee. Visit https://
www.CapitolConnection.org or contact
Danelle Perkowski or David Reininger at
703–993–3100.
During the summer months,
Commission employees adopt business
casual dress, and the Commission
encourages conference participants and
attendees to do the same.
Commission conferences are
accessible under section 508 of the
Rehabilitation Act of 1973. For
accessibility accommodations please
send an e-mail to accessibility@ferc.gov
or call toll free 866–208–3372 (voice) or
202–208–1659 (TTY), or send a Fax to
202–208–2106 with the required
accommodations.
For further information on this
conference, please contact: Udi Helman,
Office of Energy Markets and Reliability,
Federal Energy Regulatory Commission,
888 First Street, NE., Washington, DC
20426. 202–502–8080.
Udi.Helman@ferc.gov.
Magalie R. Salas,
Secretary.
[FR Doc. E6–9383 Filed 6–15–06; 8:45 am]
BILLING CODE 6717–01–P
DEPARTMENT OF ENERGY
Southwestern Power Administration
Integrated System Power Rates
Southwestern Power
Administration, DOE.
ACTION: Notice of public review and
comment.
AGENCY:
SUMMARY: The Administrator,
Southwestern Power Administration
(Southwestern), has prepared Current
and Revised 2006 Power Repayment
Studies which show the need for an
increase in annual revenues to meet cost
recovery criteria. Such increased
revenues are needed primarily to cover
increased investments and replacements
in hydroelectric generating facilities and
increased purchased power expenses.
The Administrator has developed
proposed Integrated System rates, which
are supported by a rate design study, to
recover the required revenues. The May
2006 Revised Study indicates that the
proposed rates would increase annual
system revenues approximately 25.9
percent from $136,267,400 to
$171,505,848, over a three-year period
to meet projected annual expenses and
repay the investments in facilities over
the required number of years.
DATES: The consultation and comment
period will begin on the date of
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Federal Register / Vol. 71, No. 116 / Friday, June 16, 2006 / Notices
publication of this Federal Register
notice and will end August 15, 2006.
The consultation and comment period
has been shortened by the
Administrator in accordance with Sec.
903.14(a) of 10 CFR part 903, because of
the need to assure new rates are in place
by October 1, 2006, to respond to
financial difficulties resulting from FY
2006 drought conditions. A combined
Public Information and Comment
Forum (Forum) will be held in Tulsa,
Oklahoma at 9 a.m. on July 12, 2006.
ADDRESSES: The Forum will be held in
Southwestern’s offices, Room 1460,
Williams Center Tower I, One West
Third Street, Tulsa, Oklahoma 74103.
FOR FURTHER INFORMATION CONTACT: Mr.
Forrest E. Reeves, Assistant
Administrator, Office of Corporate
Operations, Southwestern Power
Administration, U.S. Department of
Energy, One West Third Street, Tulsa,
Oklahoma 74103, (918) 595–6696,
gene.reeves@swpa.gov.
SUPPLEMENTARY INFORMATION: Originally
established by Secretarial Order No.
1865 dated August 31, 1943,
Southwestern is an agency within the
U.S. Department of Energy which was
created by an Act of the U.S. Congress,
entitled the Department of Energy
Organization Act, Public Law 95–91,
dated August 4, 1977. Guidelines for
preparation of power repayment studies
are included in DOE Order No. RA
6120.2 entitled Power Marketing
Administration Financial Reporting.
Procedures for Public Participation in
Power and Transmission Rate
Adjustments of the Power Marketing
Administrations are found at title 10,
part 903, subpart A of the Code of
Federal Regulations (10 CFR part 903).
Procedures for the confirmation and
approval of rates for the Federal Power
Marketing Administrations are found at
title 18, part 300, subpart L of the Code
of Federal Regulations (18 CFR part
300).
Southwestern markets power from 24
multi-purpose reservoir projects with
hydroelectric power facilities
constructed and operated by the U.S.
Army Corps of Engineers. These projects
are located in the states of Arkansas,
Missouri, Oklahoma, and Texas.
Southwestern’s marketing area includes
these States plus Kansas and Louisiana.
The costs associated with the
hydropower facilities of 22 of the 24
projects are repaid via revenues
received under the Integrated System
rates, as are those of Southwestern’s
transmission facilities, which consist of
1,380 miles of high-voltage transmission
lines, 24 substations, and 46 microwave
and VHF radio sites. Costs associated
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with the Sam Rayburn and Robert D.
Willis Dams, two Corps of Engineers
projects that are isolated hydraulically,
electrically, and financially from the
Integrated System are repaid under
separate rate schedules and are not
addressed in this notice.
Following Department of Energy
guidelines, Southwestern’s
Administrator, prepared a Current
Power Repayment Study using existing
system rates. The Study indicates that
Southwestern’s financial requirement to
repay annual operating costs and the
investment in power generating and
transmission facilities for power and
energy marketed by Southwestern will
not be met without an increase in
revenues. The need for increased
revenues is primarily due to projected
increases in investments and
replacements at hydroelectric generating
facilities of the U.S. Army’s Corps of
Engineers. Increased revenues are also
needed because of higher projected
average purchased power expenses due
to market price increases and a severe
drought during FY 2006 which has
caused Southwestern to incur
substantially more than average
purchased power costs. The Revised
Power Repayment Study shows that
additional annual revenues of
$35,238,448 (a 25.9 percent increase) are
needed to meet these increased
operating expense requirements and
satisfy repayment criteria.
A Rate Design Study has also been
completed which allocates the revenue
requirement to the various system rate
schedules for recovery, and provides for
transmission service rates in general
conformance with FERC Order Nos. 888
(A–C). The proposed rates would
increase estimated annual revenues
from $136,267,400 to $171,505,848 and
would meet annual operating expenses
and repay project and transmission
system investments within the required
number of years. As indicated in the
Integrated System Rate Design Study,
this revenue would be developed
through increases in the charges for
sales of capacity and energy, and
transmission services, including some of
the ancillary services for deliveries of
both Federal and non-Federal power
and associated energy from the
transmission system of Southwestern.
Another component of the Integrated
System rates for power and energy, the
Purchased Power Adder (PPA),
produces revenues to cover the cost of
power purchased to meet contractual
obligations. The PPA is based on
Southwestern’s average annual
purchased power needs and has been
increased from the existing rate to
reflect projected power costs based on
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present market rates. Southwestern is
further proposing to expand the
Administrator’s authority to adjust the
PPA at his discretion (Discretionary
Purchased Power Adder Adjustment) to
increase the size of the Discretionary
PPA Adjustment and the frequency of
its application to no more than twice
annually (limited to ±$0.0067 (6.7
mills)/kWh per year) based on the need
for greater flexibility to better manage
cash flow during drought conditions.
With increased flexibility, Southwestern
will be able to alleviate some of the
increased revenue pressure of drought
situations, such as has occurred during
the drought of 2006, by implementing
increases more frequently.
Because of concerns expressed by
Southwestern’s customers, during their
informal participation in the
development of the Power Repayment
and Rate Design Studies, regarding the
magnitude and underlying causes of the
proposed increase, Southwestern is
proposing to increase revenue in three
steps over a three-year period.
The first step of the rate increase,
beginning October 1, 2006, will
incorporate increased PPA costs
($8,562,500 or 6.3 percent), with the
PPA increasing from $0.0029 (2.9 mills)/
kWh to $0.0067 (6.7 mills)/kWh during
the period that the rates are in effect.
The Administrator’s Discretionary PPA
Adjustment will be set to recover
purchased power costs for all of FY
2006 resulting from the drought which
far exceed the average. Presently, this
rate would be $0.0034 (3.4 mills)/kWh
($7,620,216 or 5.6 percent) based on
current costs through May 2006. All
other rates currently approved will
remain in effect through September 30,
2007.
The second step of the rate increase,
beginning October 1, 2007, through
September 30, 2008, will incorporate 1⁄2
of the remaining revenue requirement
($9,527,866 or 7.0 percent) caused by
increased investments and replacements
in facilities. As a result, the rate for
supplemental peaking energy will
increase to $0.0082 (8.2 mills)/kWh and
the capacity charge will increase to
$3.18/KW/Mo.
The final step of the rate increase,
beginning October 1, 2008, through
September 30, 2010, will reach the full
revenue requirement of $19,055,732, or
14.0 percent revenue increase, caused
by the increased investments and
replacements, and combined with the
PPA increase to $0.0067 (6.7 mills)/kWh
($8,562 500 or 6.3 percent) and the
$0.0034 (3.4 mills)/kWh Discretionary
PPA Adjustment increase ($7,620,216 or
5.6 percent) from the first and second
years, will ensure that cost recovery will
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be accomplished as required. The
capacity rate will increase to $3.51/kW/
Mo and ancillary services will increase
modestly, while the transmission
capacity rate will increase to $0.95/kW/
Mo, as well as the rate for network
service.
Existing rates
Below is a general comparison of the
existing and proposed system rates:
Proposed rates
Rate schedule P–05
(System Peaking)
Generation rates
Capacity
Grid or 138–161 kV ........................................
Required Ancillary Services (generation in
control area).
Regulation & Freq. Response (generation in
control area).
Reserve Ancillary Services (generation in
control area).
Transformation Service 69 kV (applied to
usage, not reservation).
Energy
Peaking Energy ..............................................
Supplemental Peaking Energy .......................
Purchased Power Adder (PPA) .....................
Administrator’s Discretionary PPA Adjustment Applied.
Administrator’s Discretionary PPA Adjustment Authority.
Rate schedule P–06
(System Peaking)
Step 1
10/1/06–9/30/07
Rate schedule P–06
(System Peaking)
Step 2
10/1/07–9/30/08
$3.03/kW/Mo ..............
$0.09/kW/Mo ..............
$3.03/kW/Mo ..............
$0.09/kW/Mo ..............
$3.18/kW/Mo ..............
$0.09/kW/Mo ..............
$3.51/kW/Mo.
$0.10/kW/Mo.
$0.08/kW/Mo ..............
$0.08/kW/Mo ..............
$0.08/kW/Mo ..............
$0.09/kW/Mo.
$0.0158/kW/Mo ..........
$0.0158/kW/Mo ..........
$0.0158/kW/Mo ..........
$0.0184/kW/Mo.
$0.30/kW/Mo ..............
$0.30/kW/Mo ..............
$0.30/kW/Mo ..............
$0.30/kW/Mo.
$0.0082/kWh ..............
$0.0055/kWh ..............
$0.0029/kWh ..............
$0.0/kWh ....................
$0.0082/kWh
$0.0055/kWh
$0.0067/kWh
$0.0034/kWh
$0.0082/kWh
$0.0082/kWh
$0.0067/kWh
$0.0034/kWh
$0.0082/kWh.
$0.0082/kWh
$0.0067/kWh.
$0.0034/kWh.
±$0.0011/kWh annually.
±$0.0067/kWh annually.
Rate schedule
NFTS–5
(Transmission)
Transmission rates
Capacity (Firm Reservation with energy) Grid
or 138–161 kV.
Required Ancillary Services ...........................
Reserve Ancillary Services (generation in
control area).
Regulation & Freq Response (deliveries
within control area).
Transformation Service 69 kV and below
(applied on usage, not reservation) No
weekly/daily rates.
Capacity (Non-firm with energy) ....................
Network Service .............................................
Required Ancillary Services ...........................
Reserve Ancillary Services (generation in
control area).
Regulation & Freq Response (deliveries
within control area).
..............
..............
..............
..............
..............
..............
..............
..............
±$0.0067/kWh annually.
Rate schedule
NFTS–06
(Transmission)
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Opportunity is presented for
Southwestern’s customers and other
interested parties to receive copies of
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±$0.0067/kWh annually.
Rate schedule
NFTS–06
(Transmission)
Rate schedule
NFTS–06
(Transmission)
$0.90/kW/Mo, $0.225/ $0.90/kW/Mo, $0.225/ $0.90/kW/Mo, $0.225/ $0.95/kW/Mo, $0.238/
kW/Week, $0.0409/
kW/Week, $0.0409/
kW/Week, $0.0409/
kW/Week, $0.0432/
kW/Day.
kW/Day.
kW/Day.
kW/Day.
$0.09/kW/Mo, or
$0.09/kW/Mo, or
$0.09/kW/Mo, or
$0.10/kW/Mo, or
$0.023/kW/Week, or
$0.023/kW/Week, or
$0.023/kW/Week, or
$0.025/kW/Week, or
$0.0041/kW/Day.
$0.0041/kW/Day.
$0.0041/kW/Day.
$0.0045/kW/Day.
$0.0158/kW/Mo, or
$0.0158/kW/Mo, or
$0.0158/kW/Mo, or
$0.0184/kW/Mo, or
$0.00395/kW/Week,
$0.00395/kW/Week,
$0.00395/kW/Week,
$0.0046/kW/Week,
or $0.00072/kW/Day.
or $0.00072/kW/Day.
or $0.00072/kW/Day.
or $0.00084/kW/
Day.
$0.08/kW/Mo, or
$0.08/kW/Mo, or
$0.08/kW/Mo, or
$0.09/kW/Mo, or
$0.020/kW/Week, or
$0.020/kW/Week, or
$0.020/kW/Week, or
$0.023/kW/Week, or
$0.0036/kW/Day.
$0.0036/kW/Day.
$0.0036/kW/Day.
$0.0041/kW/Day.
$0.30/kW/Mo .............. $0.30/kW/Mo .............. $0.30/kW/Mo .............. $0.30/kW/Mo.
No capacity charge
80% of firm monthly
charge divided by 4
for weekly rate, divided by 22 for daily
rate, and divided by
352 for hourly rate.
$0.90/kW/Mo ..............
$0.09/kW/Mo ..............
$0.00158/kW/Mo ........
No capacity charge
80% of firm monthly
charge divided by 4
for weekly rate, divided by 22 for daily
rate, and divided by
352 for hourly rate.
$0.90/kW/Mo ..............
$0.09/kW/Mo ..............
$0.00158/kW/Mo ........
No capacity charge
80% of firm monthly
charge divided by 4
for weekly rate, divided by 22 for daily
rate, and divided by
352 for hourly rate.
$0.90/kW/Mo ..............
$0.09/kW/Mo ..............
$0.00158/kW/Mo ........
No capacity charge
80% of firm monthly
charge divided by 4
for weekly rate, divided by 22 for daily
rate, and divided by
352 for hourly rate.
$0.95/kW/Mo.
$0.10/kW/Mo.
$0.00184/kW/Mo.
$0.08/kW/Mo ..............
$0.08/kW/Mo ..............
$0.08/kW/Mo ..............
$0.09/kW/Mo.
Rate schedule
EE–05
(Excess Energy)
Energy ..........................................................
Rate schedule P–06
(System Peaking)
Step 3
10/1/08—9/30/10
Rate schedule
EE–06
(Excess Energy)
Rate schedule
EE–06
(Excess Energy)
$0.0055/kWh ............
$0.0055/kWh ............
$0.0082/kWh ............
the Integrated System Studies. If you
desire a copy of the Integrated System
Power Repayment Studies and Rate
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Rate schedule
EE–06
(Excess Energy)
$0.0082/kWh.
Design Study Data Package, submit your
request to Mr. Forrest E. Reeves,
Assistant Administrator, Office of
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Federal Register / Vol. 71, No. 116 / Friday, June 16, 2006 / Notices
Corporate Operations, Southwestern
Power Administration, One West Third,
Tulsa, OK 74103 (918) 595–6696.
A Public Information and Comment
Forum is scheduled for July 12, 2006, to
explain to the public the proposed rates
and supporting studies and to allow for
comment. The proceeding will be
transcribed. A chairman, who will be
responsible for orderly procedure, will
conduct the Forum. Questions
concerning the rates, studies, and
information presented at the Forum will
be answered, to the extent possible, at
the Forum. Questions not answered at
the Forum will be answered in writing,
except that questions involving
voluminous data contained in
Southwestern’s records may best be
answered by consultation and review of
pertinent records at Southwestern’s
offices.
Persons desiring to attend the Forum
should indicate in writing (address cited
above) by letter, email or facsimile
transmission (918–595–6656) by July 1,
2006, their intent to appear at such
Forum. If no one so indicates his or her
intent to attend, no such Forum will be
held. Persons interested in speaking at
the Forum should submit a request to
Mr. Forrest E. Reeves, Assistant
Administrator, Southwestern, at least
seven (7) calendar days prior to the
Forum so that a list of forum
participants can be developed. The
chairman may allow others to speak if
time permits.
A transcript of the Forum will be
made. Copies of the transcript may be
obtained, for a fee, from the transcribing
service. Copies of all documents
introduced will also be available from
the transcribing service upon request for
a fee. Five copies of all written
comments, together with a diskette or
compact disk in MS Word, on the
proposed Integrated System Rates are
due on or before August 15, 2006.
Comments should be submitted to
Forrest E. Reeves, Assistant
Administrator, Southwestern, at the
above-mentioned address for
Southwestern’s offices.
Following review of the oral and
written comments and the information
gathered in the course of the
proceeding, the Administrator will
submit the finalized Integrated System
Rate Proposal, Power Repayment
Studies, and Rate Design Study in
support of the proposed rates to the
Deputy Secretary of Energy for
confirmation and approval on an
interim basis, and subsequently to the
Federal Energy Regulatory Commission
(Commission) for confirmation and
approval on a final basis. The
Commission will allow the public an
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opportunity to provide written
comments on the proposed rate increase
before making a final decision.
Dated: May 30, 2006.
Michael A. Deihl,
Administrator.
[FR Doc. E6–9443 Filed 6–15–06; 8:45 am]
BILLING CODE 6450–01–P
ENVIRONMENTAL PROTECTION
AGENCY
[EPA–HQ–OPPT–2005–0043; FRL–8184–7]
Agency Information Collection
Activities; Submission to OMB for
Review and Approval; Comment
Request; Notification of Substantial
Risk of Injury to Health and the
Environment Under TSCA Sec. 8(e);
EPA ICR; No. 0794.11, OMB No. 2070–
0046
Environmental Protection
Agency (EPA).
ACTION: Notice.
AGENCY:
SUMMARY: In compliance with the
Paperwork Reduction Act (44 U.S.C.
3501 et seq.), this document announces
the submission of an Information
Collection Request (ICR) to the Office of
Management and Budget (OMB) for
review and approval: (Notification of
Substantial Risk of Injury to Health and
the Environment Under TSCA Sec. 8(e);
EPA ICR No. 0794.11, OMB No. 2070–
0046. This is a request to renew an
existing approved collection that is
scheduled to expire on June 30, 2006.
Under OMB regulations, the AGency
may continue to conduct or sponsor the
collection of information while this
submission is pending at OMB. The ICR,
which is abstracted below, describes the
nature of the information collection
activity and its expected burden and
costs.
Additional comments may be
submitted on or before July 17, 2006.
ADDRESSES: Submit your comments,
referencing docket ID Number EPA–
HQ–OPPT–2005–0043, to (1) EPA
online using https://www.regulations.gov
(our preferred method), by e-mail to
oppt.ncic@epa.gov or by mail to:
Document Control Office (DCO), Office
of Pollution Prevention and Toxics
(OPPT), Environmental Protection
Agency, Mail Code; 7407T, 1200
Pennsylvania Ave., NW., Washington,
DC 20460, and (2) OMB at: Office of
Information and Regulatory Affairs,
Office of Management and Budget
(OMB), Attention: Desk Officer for EPA,
725 17th Street, NW., Washington, DC
20503.
DATES:
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FOR FURTHER INFORMATION CONTACT:
Barbara Cunningham, Acting Director,
Environmental Assistance Division,
Office of Pollution Prevention and
Toxics, Environmental Protection
Agency, Mailcode: 7408, 1200
Pennsylvania Ave., NW.,
Washington,DC 20460; telephone
number: 202–554–1404; e-mail address:
TSCA-Hotline@epa.gov.
SUPPLEMENTARY INFORMATION: EPA has
submitted the following ICR to OMB for
review and approval according to the
procedures prescribed in 5 CFR 1320.12.
On October 20, 2005 (70 FR 611240,
EPA sought comments on this renewal
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HQ–OPPT–2005–0043, which is
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E:\FR\FM\16JNN1.SGM
16JNN1
]]>Agencies
[Federal Register Volume 71, Number 116 (Friday, June 16, 2006)]
[Notices]
[Pages 34925-34928]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-9443]
-----------------------------------------------------------------------
DEPARTMENT OF ENERGY
Southwestern Power Administration
Integrated System Power Rates
AGENCY: Southwestern Power Administration, DOE.
ACTION: Notice of public review and comment.
-----------------------------------------------------------------------
SUMMARY: The Administrator, Southwestern Power Administration
(Southwestern), has prepared Current and Revised 2006 Power Repayment
Studies which show the need for an increase in annual revenues to meet
cost recovery criteria. Such increased revenues are needed primarily to
cover increased investments and replacements in hydroelectric
generating facilities and increased purchased power expenses. The
Administrator has developed proposed Integrated System rates, which are
supported by a rate design study, to recover the required revenues. The
May 2006 Revised Study indicates that the proposed rates would increase
annual system revenues approximately 25.9 percent from $136,267,400 to
$171,505,848, over a three-year period to meet projected annual
expenses and repay the investments in facilities over the required
number of years.
DATES: The consultation and comment period will begin on the date of
[[Page 34926]]
publication of this Federal Register notice and will end August 15,
2006. The consultation and comment period has been shortened by the
Administrator in accordance with Sec. 903.14(a) of 10 CFR part 903,
because of the need to assure new rates are in place by October 1,
2006, to respond to financial difficulties resulting from FY 2006
drought conditions. A combined Public Information and Comment Forum
(Forum) will be held in Tulsa, Oklahoma at 9 a.m. on July 12, 2006.
ADDRESSES: The Forum will be held in Southwestern's offices, Room 1460,
Williams Center Tower I, One West Third Street, Tulsa, Oklahoma 74103.
FOR FURTHER INFORMATION CONTACT: Mr. Forrest E. Reeves, Assistant
Administrator, Office of Corporate Operations, Southwestern Power
Administration, U.S. Department of Energy, One West Third Street,
Tulsa, Oklahoma 74103, (918) 595-6696, gene.reeves@swpa.gov.
SUPPLEMENTARY INFORMATION: Originally established by Secretarial Order
No. 1865 dated August 31, 1943, Southwestern is an agency within the
U.S. Department of Energy which was created by an Act of the U.S.
Congress, entitled the Department of Energy Organization Act, Public
Law 95-91, dated August 4, 1977. Guidelines for preparation of power
repayment studies are included in DOE Order No. RA 6120.2 entitled
Power Marketing Administration Financial Reporting. Procedures for
Public Participation in Power and Transmission Rate Adjustments of the
Power Marketing Administrations are found at title 10, part 903,
subpart A of the Code of Federal Regulations (10 CFR part 903).
Procedures for the confirmation and approval of rates for the Federal
Power Marketing Administrations are found at title 18, part 300,
subpart L of the Code of Federal Regulations (18 CFR part 300).
Southwestern markets power from 24 multi-purpose reservoir projects
with hydroelectric power facilities constructed and operated by the
U.S. Army Corps of Engineers. These projects are located in the states
of Arkansas, Missouri, Oklahoma, and Texas. Southwestern's marketing
area includes these States plus Kansas and Louisiana. The costs
associated with the hydropower facilities of 22 of the 24 projects are
repaid via revenues received under the Integrated System rates, as are
those of Southwestern's transmission facilities, which consist of 1,380
miles of high-voltage transmission lines, 24 substations, and 46
microwave and VHF radio sites. Costs associated with the Sam Rayburn
and Robert D. Willis Dams, two Corps of Engineers projects that are
isolated hydraulically, electrically, and financially from the
Integrated System are repaid under separate rate schedules and are not
addressed in this notice.
Following Department of Energy guidelines, Southwestern's
Administrator, prepared a Current Power Repayment Study using existing
system rates. The Study indicates that Southwestern's financial
requirement to repay annual operating costs and the investment in power
generating and transmission facilities for power and energy marketed by
Southwestern will not be met without an increase in revenues. The need
for increased revenues is primarily due to projected increases in
investments and replacements at hydroelectric generating facilities of
the U.S. Army's Corps of Engineers. Increased revenues are also needed
because of higher projected average purchased power expenses due to
market price increases and a severe drought during FY 2006 which has
caused Southwestern to incur substantially more than average purchased
power costs. The Revised Power Repayment Study shows that additional
annual revenues of $35,238,448 (a 25.9 percent increase) are needed to
meet these increased operating expense requirements and satisfy
repayment criteria.
A Rate Design Study has also been completed which allocates the
revenue requirement to the various system rate schedules for recovery,
and provides for transmission service rates in general conformance with
FERC Order Nos. 888 (A-C). The proposed rates would increase estimated
annual revenues from $136,267,400 to $171,505,848 and would meet annual
operating expenses and repay project and transmission system
investments within the required number of years. As indicated in the
Integrated System Rate Design Study, this revenue would be developed
through increases in the charges for sales of capacity and energy, and
transmission services, including some of the ancillary services for
deliveries of both Federal and non-Federal power and associated energy
from the transmission system of Southwestern.
Another component of the Integrated System rates for power and
energy, the Purchased Power Adder (PPA), produces revenues to cover the
cost of power purchased to meet contractual obligations. The PPA is
based on Southwestern's average annual purchased power needs and has
been increased from the existing rate to reflect projected power costs
based on present market rates. Southwestern is further proposing to
expand the Administrator's authority to adjust the PPA at his
discretion (Discretionary Purchased Power Adder Adjustment) to increase
the size of the Discretionary PPA Adjustment and the frequency of its
application to no more than twice annually (limited to $0.0067 (6.7 mills)/kWh per year) based on the need for greater
flexibility to better manage cash flow during drought conditions. With
increased flexibility, Southwestern will be able to alleviate some of
the increased revenue pressure of drought situations, such as has
occurred during the drought of 2006, by implementing increases more
frequently.
Because of concerns expressed by Southwestern's customers, during
their informal participation in the development of the Power Repayment
and Rate Design Studies, regarding the magnitude and underlying causes
of the proposed increase, Southwestern is proposing to increase revenue
in three steps over a three-year period.
The first step of the rate increase, beginning October 1, 2006,
will incorporate increased PPA costs ($8,562,500 or 6.3 percent), with
the PPA increasing from $0.0029 (2.9 mills)/kWh to $0.0067 (6.7 mills)/
kWh during the period that the rates are in effect. The Administrator's
Discretionary PPA Adjustment will be set to recover purchased power
costs for all of FY 2006 resulting from the drought which far exceed
the average. Presently, this rate would be $0.0034 (3.4 mills)/kWh
($7,620,216 or 5.6 percent) based on current costs through May 2006.
All other rates currently approved will remain in effect through
September 30, 2007.
The second step of the rate increase, beginning October 1, 2007,
through September 30, 2008, will incorporate \1/2\ of the remaining
revenue requirement ($9,527,866 or 7.0 percent) caused by increased
investments and replacements in facilities. As a result, the rate for
supplemental peaking energy will increase to $0.0082 (8.2 mills)/kWh
and the capacity charge will increase to $3.18/KW/Mo.
The final step of the rate increase, beginning October 1, 2008,
through September 30, 2010, will reach the full revenue requirement of
$19,055,732, or 14.0 percent revenue increase, caused by the increased
investments and replacements, and combined with the PPA increase to
$0.0067 (6.7 mills)/kWh ($8,562 500 or 6.3 percent) and the $0.0034
(3.4 mills)/kWh Discretionary PPA Adjustment increase ($7,620,216 or
5.6 percent) from the first and second years, will ensure that cost
recovery will
[[Page 34927]]
be accomplished as required. The capacity rate will increase to $3.51/
kW/Mo and ancillary services will increase modestly, while the
transmission capacity rate will increase to $0.95/kW/Mo, as well as the
rate for network service.
Below is a general comparison of the existing and proposed system
rates:
----------------------------------------------------------------------------------------------------------------
Existing rates Proposed rates
-------------------------------------------------------------------------------
Rate schedule P-06 Rate schedule P-06 Rate schedule P-06
Generation rates Rate schedule P-05 (System Peaking) (System Peaking) (System Peaking)
(System Peaking) Step 1 10/1/06-9/ Step 2 10/1/07-9/ Step 3 10/1/08--9/
30/07 30/08 30/10
----------------------------------------------------------------------------------------------------------------
Capacity
Grid or 138-161 kV.............. $3.03/kW/Mo....... $3.03/kW/Mo....... $3.18/kW/Mo....... $3.51/kW/Mo.
Required Ancillary Services $0.09/kW/Mo....... $0.09/kW/Mo....... $0.09/kW/Mo....... $0.10/kW/Mo.
(generation in control area).
Regulation & Freq. Response $0.08/kW/Mo....... $0.08/kW/Mo....... $0.08/kW/Mo....... $0.09/kW/Mo.
(generation in control area).
Reserve Ancillary Services $0.0158/kW/Mo..... $0.0158/kW/Mo..... $0.0158/kW/Mo..... $0.0184/kW/Mo.
(generation in control area).
Transformation Service 69 kV $0.30/kW/Mo....... $0.30/kW/Mo....... $0.30/kW/Mo....... $0.30/kW/Mo.
(applied to usage, not
reservation).
Energy
Peaking Energy.................. $0.0082/kWh....... $0.0082/kWh....... $0.0082/kWh....... $0.0082/kWh.
Supplemental Peaking Energy..... $0.0055/kWh....... $0.0055/kWh....... $0.0082/kWh....... $0.0082/kWh
Purchased Power Adder (PPA)..... $0.0029/kWh....... $0.0067/kWh....... $0.0067/kWh....... $0.0067/kWh.
Administrator's Discretionary $0.0/kWh.......... $0.0034/kWh....... $0.0034/kWh....... $0.0034/kWh.
PPA Adjustment Applied.
Administrator's Discretionary $0.0011/kWh minus>$0.0067/kWh minus>$0.0067/kWh minus>$0.0067/kWh
annually. annually. annually. annually.
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Rate schedule NFTS- Rate schedule NFTS- Rate schedule NFTS- Rate schedule NFTS-
Transmission rates 5 (Transmission) 06 (Transmission) 06 (Transmission) 06 (Transmission)
----------------------------------------------------------------------------------------------------------------
Capacity (Firm Reservation with $0.90/kW/Mo, $0.90/kW/Mo, $0.90/kW/Mo, $0.95/kW/Mo,
energy) Grid or 138-161 kV. $0.225/kW/Week, $0.225/kW/Week, $0.225/kW/Week, $0.238/kW/Week,
$0.0409/kW/Day. $0.0409/kW/Day. $0.0409/kW/Day. $0.0432/kW/Day.
Required Ancillary Services..... $0.09/kW/Mo, or $0.09/kW/Mo, or $0.09/kW/Mo, or $0.10/kW/Mo, or
$0.023/kW/Week, $0.023/kW/Week, $0.023/kW/Week, $0.025/kW/Week,
or $0.0041/kW/Day. or $0.0041/kW/Day. or $0.0041/kW/Day. or $0.0045/kW/
Day.
Reserve Ancillary Services $0.0158/kW/Mo, or $0.0158/kW/Mo, or $0.0158/kW/Mo, or $0.0184/kW/Mo, or
(generation in control area). $0.00395/kW/Week, $0.00395/kW/Week, $0.00395/kW/Week, $0.0046/kW/Week,
or $0.00072/kW/ or $0.00072/kW/ or $0.00072/kW/ or $0.00084/kW/
Day. Day. Day. Day.
Regulation & Freq Response $0.08/kW/Mo, or $0.08/kW/Mo, or $0.08/kW/Mo, or $0.09/kW/Mo, or
(deliveries within control $0.020/kW/Week, $0.020/kW/Week, $0.020/kW/Week, $0.023/kW/Week,
area). or $0.0036/kW/Day. or $0.0036/kW/Day. or $0.0036/kW/Day. or $0.0041/kW/
Day.
Transformation Service 69 kV and $0.30/kW/Mo....... $0.30/kW/Mo....... $0.30/kW/Mo....... $0.30/kW/Mo.
below (applied on usage, not
reservation) No weekly/daily
rates.
Capacity (Non-firm with energy). No capacity charge No capacity charge No capacity charge No capacity charge
80% of firm 80% of firm 80% of firm 80% of firm
monthly charge monthly charge monthly charge monthly charge
divided by 4 for divided by 4 for divided by 4 for divided by 4 for
weekly rate, weekly rate, weekly rate, weekly rate,
divided by 22 for divided by 22 for divided by 22 for divided by 22 for
daily rate, and daily rate, and daily rate, and daily rate, and
divided by 352 divided by 352 divided by 352 divided by 352
for hourly rate. for hourly rate. for hourly rate. for hourly rate.
Network Service................. $0.90/kW/Mo....... $0.90/kW/Mo....... $0.90/kW/Mo....... $0.95/kW/Mo.
Required Ancillary Services..... $0.09/kW/Mo....... $0.09/kW/Mo....... $0.09/kW/Mo....... $0.10/kW/Mo.
Reserve Ancillary Services $0.00158/kW/Mo.... $0.00158/kW/Mo.... $0.00158/kW/Mo.... $0.00184/kW/Mo.
(generation in control area).
Regulation & Freq Response $0.08/kW/Mo....... $0.08/kW/Mo....... $0.08/kW/Mo....... $0.09/kW/Mo.
(deliveries within control
area).
----------------------------------------------------------------------------------------------------------------
Rate schedule EE- Rate schedule EE- Rate schedule EE- Rate schedule EE-
05 (Excess Energy) 06 (Excess Energy) 06 (Excess Energy) 06 (Excess Energy)
----------------------------------------------------------------------------------------------------------------
Energy.......................... $0.0055/kWh....... $0.0055/kWh....... $0.0082/kWh....... $0.0082/kWh.
----------------------------------------------------------------------------------------------------------------
Opportunity is presented for Southwestern's customers and other
interested parties to receive copies of the Integrated System Studies.
If you desire a copy of the Integrated SystemPower Repayment Studies
and Rate Design Study Data Package, submit your request to Mr. Forrest
E. Reeves, Assistant Administrator, Office of
[[Page 34928]]
Corporate Operations, Southwestern Power Administration, One West
Third, Tulsa, OK 74103 (918) 595-6696.
A Public Information and Comment Forum is scheduled for July 12,
2006, to explain to the public the proposed rates and supporting
studies and to allow for comment. The proceeding will be transcribed. A
chairman, who will be responsible for orderly procedure, will conduct
the Forum. Questions concerning the rates, studies, and information
presented at the Forum will be answered, to the extent possible, at the
Forum. Questions not answered at the Forum will be answered in writing,
except that questions involving voluminous data contained in
Southwestern's records may best be answered by consultation and review
of pertinent records at Southwestern's offices.
Persons desiring to attend the Forum should indicate in writing
(address cited above) by letter, email or facsimile transmission (918-
595-6656) by July 1, 2006, their intent to appear at such Forum. If no
one so indicates his or her intent to attend, no such Forum will be
held. Persons interested in speaking at the Forum should submit a
request to Mr. Forrest E. Reeves, Assistant Administrator,
Southwestern, at least seven (7) calendar days prior to the Forum so
that a list of forum participants can be developed. The chairman may
allow others to speak if time permits.
A transcript of the Forum will be made. Copies of the transcript
may be obtained, for a fee, from the transcribing service. Copies of
all documents introduced will also be available from the transcribing
service upon request for a fee. Five copies of all written comments,
together with a diskette or compact disk in MS Word, on the proposed
Integrated System Rates are due on or before August 15, 2006. Comments
should be submitted to Forrest E. Reeves, Assistant Administrator,
Southwestern, at the above-mentioned address for Southwestern's
offices.
Following review of the oral and written comments and the
information gathered in the course of the proceeding, the Administrator
will submit the finalized Integrated System Rate Proposal, Power
Repayment Studies, and Rate Design Study in support of the proposed
rates to the Deputy Secretary of Energy for confirmation and approval
on an interim basis, and subsequently to the Federal Energy Regulatory
Commission (Commission) for confirmation and approval on a final basis.
The Commission will allow the public an opportunity to provide written
comments on the proposed rate increase before making a final decision.
Dated: May 30, 2006.
Michael A. Deihl,
Administrator.
[FR Doc. E6-9443 Filed 6-15-06; 8:45 am]
BILLING CODE 6450-01-P
