White River Minimum Flows-Draft Addendum to Final Determination of Federal and Non-Federal Hydropower Impacts, 27135-27137 [E9-13322]
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Federal Register / Vol. 74, No. 108 / Monday, June 8, 2009 / Notices
submits an executed Amended and
Restates Large Generator
Interconnection Agreement among the
Midwest ISO, et al. limited liability
corporation, etc.
Filed Date: 05/27/2009.
Accession Number: 20090528–0059.
Comment Date: 5 p.m. Eastern Time
on Wednesday, June 17, 2009.
Take notice that the Commission
received the following open access
transmission tariff filings:
Docket Numbers: OA09–29–000.
Applicants: Avista Corporation.
Description: Avista Corporation’s
Informational Filing of Operational
Assessments and Distributions as
Required by Order Nos. 890 and 890–A.
Filed Date: 05/26/2009.
Accession Number: 20090526–5163.
Comment Date: 5 p.m. Eastern Time
on Tuesday, June 16, 2009.
Take notice that the Commission
received the following electric
reliability filings:
Docket Numbers: RD09–7–000.
Applicants: North American Electric
Reliability Corporation.
Description: Petition of the North
American Electric Reliability
Corporation for Approval of Version 2
Critical Infrastructure Protection
Standards.
Filed Date: 05/22/2009.
Accession Number: 20090522–5150.
Comment Date: 5 p.m. Eastern Time
on Monday, June 29, 2009.
Any person desiring to intervene or to
protest in any of the above proceedings
must file in accordance with Rules 211
and 214 of the Commission’s Rules of
Practice and Procedure (18 CFR 385.211
and 385.214) on or before 5 p.m. Eastern
time on the specified comment date. It
is not necessary to separately intervene
again in a subdocket related to a
compliance filing if you have previously
intervened in the same docket. Protests
will be considered by the Commission
in determining the appropriate action to
be taken, but will not serve to make
protestants parties to the proceeding.
Anyone filing a motion to intervene or
protest must serve a copy of that
document on the Applicant. In reference
to filings initiating a new proceeding,
interventions or protests submitted on
or before the comment deadline need
not be served on persons other than the
Applicant.
The Commission encourages
electronic submission of protests and
interventions in lieu of paper, using the
FERC Online links at https://
www.ferc.gov. To facilitate electronic
service, persons with Internet access
who will eFile a document and/or be
listed as a contact for an intervenor
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15:15 Jun 05, 2009
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must create and validate an
eRegistration account using the
eRegistration link. Select the eFiling
link to log on and submit the
intervention or protests.
Persons unable to file electronically
should submit an original and 14 copies
of the intervention or protest to the
Federal Energy Regulatory Commission,
888 First St., NE., Washington, DC
20426.
The filings in the above proceedings
are accessible in the Commission’s
eLibrary system by clicking on the
appropriate link in the above list. They
are also available for review in the
Commission’s Public Reference Room in
Washington, DC. There is an
eSubscription link on the Web site that
enables subscribers to receive e-mail
notification when a document is added
to a subscribed dockets(s). For
assistance with any FERC Online
service, please e-mail
FERCOnlineSupport@ferc.gov or call
(866) 208–3676 (toll free). For TTY, call
(202) 502–8659.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. E9–13330 Filed 6–5–09; 8:45 am]
BILLING CODE 6717–01–P
DEPARTMENT OF ENERGY
Southwestern Power Administration
White River Minimum Flows—Draft
Addendum to Final Determination of
Federal and Non-Federal Hydropower
Impacts
Southwestern Power
Administration, DOE.
ACTION: Notice of public review and
comment.
AGENCY:
SUMMARY: Southwestern Power
Administration (Southwestern) has
developed a draft addendum to its
January 2009 Final Determination
Report concerning the Federal and nonFederal hydropower impacts of the
White River Minimum Flows project.
The draft addendum documents
proposed changes to Southwestern’s
final determination. The proposed
changes include: (1) Accounting for the
impacts that the increase in average
pool elevation has on the operation of
the Federal Bull Shoals and Norfork
projects, and (2) the inclusion of an
additional discount rate source to be
used by Southwestern in determination
of the present value of the losses to both
Federal projects and Federal Energy
Regulatory Commission (FERC) Project
No. 2221.
PO 00000
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Sfmt 4703
27135
Assuming a January 1, 2011, date of
implementation for the White River
Minimum Flows project and current
values for the specified parameters,
Southwestern’s modified final
determination results in a present value
of $22,340,800 for the estimated future
lifetime replacement costs of the
electrical energy and capacity at FERC
Project No. 2221. Southwestern’s
modified final determination results in
a present value of $60,851,800 for the
estimated future lifetime replacement
costs of the electrical energy and
capacity for Federal hydropower.
DATES: The consultation and comment
period will begin on the date of
publication of this Federal Register
notice and will end on July 8, 2009.
ADDRESSES: Written comments on
Southwestern’s draft addendum to its
final determination should be submitted
to George Robbins, Director, Division of
Resources and Rates, Southwestern
Power Administration, U.S. Department
of Energy, One West Third Street, Tulsa,
Oklahoma 74103, or e-mail
george.robbins@swpa.gov. Comments
will be accepted only on the proposed
changes in the draft addendum and not
on any other aspect of Southwestern’s
final determination.
FOR FURTHER INFORMATION CONTACT: Mr.
George Robbins, Director, Division of
Resources and Rates, Southwestern
Power Administration, U.S. Department
of Energy, One West Third Street, Tulsa,
Oklahoma 74103, (918) 595–6680,
george.robbins@swpa.gov.
SUPPLEMENTARY INFORMATION:
I. Discussion
Originally established by Secretarial
Order No. 1865 dated August 31, 1943,
as an agency of the U.S. Department of
the Interior, Southwestern is now 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 (1977). Southwestern
markets power from 24 multi-purpose
reservoir projects with hydroelectric
power facilities constructed and
operated by the U.S. Army Corps of
Engineers (Corps). These projects are
located in the states of Arkansas,
Missouri, Oklahoma, and Texas.
Southwestern’s marketing area includes
these states plus Kansas and Louisiana.
Section 132 of Public Law 109–103
(2005) authorized and directed the
Secretary of the Army to implement
alternatives BS–3 and NF–7, as
described in the Corps’ White River
Minimum Flows Reallocation Study
Report, Arkansas and Missouri, dated
July 2004. The law provides that the
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27136
Federal Register / Vol. 74, No. 108 / Monday, June 8, 2009 / Notices
Administrator of Southwestern, in
consultation with the project licensee
and the relevant state public utility
commissions, shall determine any
impacts on electric energy and capacity
generated at FERC Project No. 2221
caused by the storage reallocation at
Bull Shoals Lake. Further, the licensee
of Project No. 2221 is to be fully
compensated by the Corps for those
impacts on the basis of the present value
of the estimated future lifetime
replacement costs of the electrical
energy and capacity at the time of
implementation of the White River
Minimum Flows project.
The law also provides that losses to
the Federal hydropower purpose at the
Bull Shoals and Norfork Projects shall
be offset by a reduction in the costs
allocated to the Federal hydropower
purpose. Further, such reduction in
costs shall be determined by the
Administrator of Southwestern on the
basis of the present value of the
estimated future lifetime replacement
cost of the electrical energy and capacity
at the time of implementation of the
White River Minimum Flows project.
In accordance with the legislation,
Southwestern developed a procedure for
calculating projected energy and
capacity losses for FERC Project No.
2221 and the Bull Shoals and Norfork
projects, including additional losses
related to the reallocation for minimum
flows as appropriate. Input from
affected parties and from the public was
invited and utilized in the development
of the determination.
Southwestern’s draft determination
was published by Federal Register
Notice (73 FR 6717) dated February 5,
2008. Written comments were invited
through March 6, 2008. All public
comments received were considered,
and Southwestern’s draft determination
was revised as necessary to incorporate
the public comments. Since there were
significant changes to Southwestern’s
draft determination, Southwestern
published a proposed determination for
additional public review and comment
prior to its final determination.
Southwestern’s proposed
determination was published by Federal
Register Notice (73 FR 38198) on July 3,
2008. Written comments were invited
through August 4, 2008. After receiving
several requests for additional time to
provide public comments, Southwestern
reopened the public comment period
through September 18, 2008, by Federal
Register Notice (73 FR 46901) dated
August 12, 2008. All public comments
received were considered in revising the
proposed determination and developing
Southwestern’s final determination.
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Southwestern’s final determination
was published by Federal Register
Notice (74 FR 4183) on January 23,
2009. Southwestern’s final
determination is fully documented in its
Final Determination Report dated
January 2009, which was prepared in
consultation with the non-Federal
licensee and the relevant public utility
commissions. The report documents the
procedure to be used to calculate the
present value of the future lifetime
replacement cost of the electrical energy
and capacity lost due to the White River
Minimum Flows project at the nonFederal FERC Project No. 2221 and the
Federal Bull Shoals and Norfork
projects.
As a result of an extensive internal
review of its calculations in the final
determination, Southwestern discovered
an inadvertent omission of a portion of
the energy benefits associated with the
higher pools at the Federal Bull Shoals
and Norfork projects. A detailed review
of the energy loss calculations revealed
that a portion of the energy benefits at
the Federal projects which were
believed to be included in the
calculations had been inadvertently
omitted from the calculations. While the
gains from the increase in head (the
vertical distance between the lake, or
pool elevation, and the river, or
tailwater elevation) that resulted from
the higher pool elevations were
included in the computation of benefits
received from the generation of
minimum flows releases at Bull Shoals,
including an additional gain from a
lower tailwater, the head gains were
omitted for the remainder of the
generation. Southwestern’s draft
addendum corrects the computation of
energy loss and associated replacement
costs for both Federal projects to
include those gains.
The portion of the energy benefits due
to higher head from the raised pools that
were omitted amounted to an additional
11,669 megawatt-hours (MWh) at Bull
Shoals and 1,459 MWh at Norfork.
Inclusion of those benefits reduces the
net energy losses at Bull Shoals and
Norfork, respectively. The net annual
energy loss at Bull Shoals will be 12,186
MWh, and the net annual energy loss at
Norfork will be 12,065 MWh. As
discussed in Southwestern’s Final
Determination Report, all of the lost
energy at Bull Shoals is considered offpeak energy, and the lost energy at
Norfork is considered one-half on-peak
energy and one-half off-peak energy.
There are no changes in the capacity
loss at Norfork or in the capacity or
energy loss at the non-Federal project.
As part of its review of the impacts
that the average pool elevation increase
PO 00000
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has on the normal operation of the
Federal projects, Southwestern also
believed it should quantify dissolved
oxygen (DO) impacts due to the average
increase in pool elevation. In
Southwestern’s final determination it
was recognized that generation at both
Bull Shoals and Norfork is impacted
annually due to low DO conditions. It
was also noted that the higher pool
elevations at both projects will cause the
hypolimnion to be higher relative to the
penstock elevations at both projects,
causing water with lower DO levels to
flow through the turbines during
generation. Southwestern noted but did
not quantify the value of the potential
DO impact in its final determination.
Southwestern has developed a
procedure for quantifying the estimated
impacts and costs of lower DO levels on
Federal hydropower. The procedure
estimates the costs of mitigating the DO
impacts resulting from the increased
pool elevations at the Federal projects.
A number of alternative solutions have
been proposed for improving DO levels
downstream of the Federal projects.
Southwestern considered the initial
capital cost and annual operation and
maintenance expenses associated with
these systems in determining the total
impacts of the White River Minimum
Flows project on hydropower
production. The procedure is based on
historical DO level data and is detailed
in Southwestern’s draft addendum.
Based on the procedure and on current
values of the specified parameters, the
present value of the lifetime impact of
lower DO levels on Federal hydropower
is $10,207,900. It should be noted that
the $10,207,900 amount only addresses
the incremental impact of the increased
pool elevation on DO levels and is not
representation of an amount to satisfy
all DO issues at the Federal projects.
Southwestern is also proposing to
include an additional source for the
discount rate to be used in the present
value computation for all three projects.
The 30-year Treasury bond rates in
effect at the time of publication of
Southwestern’s draft, proposed, and
final determinations were as high as 5.0
percent. The recent changes in the
investment sector have resulted in the
current rate being artificially lowered. In
early 2009, the rate dropped as low as
3.5 percent. The rate is currently 4.25
percent. The discount rate used should
be reflective of the ‘‘cost of cash’’ during
the period of analysis. If the discount
rate drops below the cost of long-term
debt for either the Federal or nonFederal projects it is reasonable to
assume that any offset or compensation
would wisely be used to pay off those
debts rather than invest the funds in
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lower interest bearing accounts.
Therefore, using the lower 30-year
Treasury bond rate for the present value
calculation would not be appropriate
and would result in too much
compensation for the losses.
Southwestern’s draft addendum revises
the discount rate selection for
calculation of the present value of the
losses as follows: In calculating the
present value of the Federal and nonFederal losses, Southwestern will use
the higher of the current 30-year
Treasury bond rate or each entity’s,
Southwestern and Empire, respectively,
cost of long-term debt.
Based on an analysis of the long-term
debt for Southwestern, the current 30year Treasury bond rate is higher than
Southwestern’s cost of long-term debt.
Using the updated procedure, the
current discount rate to be used in the
calculation of the present value of the
Federal hydropower losses is the 30year Treasury bond rate. Based on an
analysis of the long-term debt for the
non-Federal licensee utilizing
information in its filings with FERC, the
current 30-year Treasury bond rate is
lower than the non-Federal licensee’s
cost of long-term debt. The updated
procedure results in the use of the nonFederal licensee’s cost of long-term debt
as the current discount rate in the
calculation of the present value of the
non-Federal hydropower losses.
Southwestern’s draft addendum
details the proposed changes to
Southwestern’s final determination.
Assuming a January 1, 2011 date of
implementation for the White River
Minimum Flows project and current
values for the specified parameters,
Southwestern’s modified final
determination results in a present value
for the estimated future lifetime
replacement costs of the electrical
energy and capacity at FERC Project No.
2221 of $22,340,800. Southwestern’s
modified final determination results in
a present value for the estimated future
lifetime replacement costs of the
electrical energy and capacity for
Federal hydropower of $60,851,800. The
actual compensation values are to be
calculated using the method presented
in Southwestern’s modified final
determination and current values for the
specified parameters based on the
official implementation date.
II. Public Review and Comment
Procedures
Opportunity is presented for
interested parties to receive copies of
Southwestern’s draft addendum
detailing the proposed changes to
Southwestern’s final determination of
the Federal and non-Federal
hydropower impacts. If you desire a
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15:15 Jun 05, 2009
Jkt 217001
copy of the draft addendum, submit
your request to Mr. George Robbins,
Director, Division of Resources and
Rates, Southwestern Power
Administration, One West Third Street,
Tulsa, OK 74103, (918) 595–6680,
george.robbins@swpa.gov.
Written comments on Southwestern’s
draft addendum are due on or before
July 8, 2009. Comments should be
submitted to George Robbins, Director,
Division of Resources and Rates,
Southwestern, at the above-mentioned
address for Southwestern’s offices.
Comments will be accepted only on the
proposed changes in the draft
addendum and not on any other aspect
of Southwestern’s final determination.
Southwestern will review and address
the written comments, making any
necessary changes to the draft
addendum. The Administrator will
publish the results of Southwestern’s
finalized addendum in the Federal
Register.
Dated: June 1, 2009.
Jon C. Worthington,
Administrator.
[FR Doc. E9–13322 Filed 6–5–09; 8:45 am]
BILLING CODE 6450–01–P
DEPARTMENT OF ENERGY
Federal Energy Regulatory
Commission
[Project No. 1354–081]
Pacific Gas & Electric Company;
Notice of Availability of Environmental
Assessment
June 1, 2009.
In accordance with the National
Environmental Policy Act of 1969, as
amended, and the Federal Energy
Regulatory Commission’s (Commission)
regulations (18 CFR Part 380),
Commission staff has reviewed plans,
filed May 13, 2008, and supplemented
April 17, 2009, to perform seismic
remediation work at Crane Valley Dam,
part of the Crane Valley Hydroelectric
Project. The project occupies
approximately 738 acres of federal lands
within Sierra National Forest,
approximately 40 miles northeast of the
city of Fresno in Modesto County,
California. Crane Valley Dam is located
on North Fork Willow Creek, in the San
Joaquin River Basin. An environmental
assessment (EA) has been prepared as
part of staff’s review.
The project licensee, Pacific Gas and
Electric Company (PG&E), at the request
of the California Department of Water
Resources, Division of Safety of Dams
(DSOD), revised the seismic stability
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27137
analyses for Crane Valley Dam, finding
that modifications to the dam are
necessary to correct a possible
vulnerability during a seismic event that
could lead to an uncontrolled release,
endangering downstream residents.
Accordingly, the Commission has
required remediation under Part 12 of
its regulations.
PG&E proposes to increase the
seismic stability of Crane Valley Dam
by: (1) Adding approximately 200,000
cubic yards of rock fill to areas on the
upstream and downstream faces of the
dam; and (2) raising the elevation of the
dam by approximately 10 feet, to
increase freeboard, using approximately
10,000 cubic yards of earth fill.
Consultation among the Commission,
DSOD, and the licensee has also
determined that Bass Lake’s normal
recreational elevation should be
reduced 10 feet in 2009 and 2010 to
reduce pressure on the dam until the
remediation work is complete. The
proposed work would be performed
within the project boundary and on U.S.
Forest Service lands.
In the EA, Commission staff analyzes
the probable environmental effects of
the proposed work and has concluded
that approval of the work, with
appropriate environmental measures,
would not constitute a major Federal
action significantly affecting the quality
of the human environment.
A copy of the EA is available for
review at the Commission’s Public
Reference Room, or it may be viewed on
the Commission’s Web site at https://
www.ferc.gov using the ‘‘eLibrary’’ link.
Enter the docket number (P–1354) in the
docket number field to access the
document. For assistance, call (202)
502–8222, or (202) 502–8659 (for TTY).
Any comments should be filed by July
1, 2009, and should be addressed to
Secretary, Federal Energy Regulatory
Commission, 888 First Street, NE.,
Washington, DC 20426. Please reference
the Crane Valley Project No. 1354 on all
comments. For further information on
this notice, please contact B. Peter
Yarrington at (202) 502–6129.
Comments may be filed electronically
via the Internet in lieu of paper. See 18
CFR 385.2001(a)(1)(iii) and the
instructions on the Commission’s Web
site at www.ferc.gov under the e-Filing
link. The Commission strongly
encourages electronic filing.
Kimberly D. Bose,
Secretary.
[FR Doc. E9–13235 Filed 6–5–09; 8:45 am]
BILLING CODE 6717–01–P
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]]>Agencies
[Federal Register Volume 74, Number 108 (Monday, June 8, 2009)]
[Notices]
[Pages 27135-27137]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-13322]
-----------------------------------------------------------------------
DEPARTMENT OF ENERGY
Southwestern Power Administration
White River Minimum Flows--Draft Addendum to Final Determination
of Federal and Non-Federal Hydropower Impacts
AGENCY: Southwestern Power Administration, DOE.
ACTION: Notice of public review and comment.
-----------------------------------------------------------------------
SUMMARY: Southwestern Power Administration (Southwestern) has developed
a draft addendum to its January 2009 Final Determination Report
concerning the Federal and non-Federal hydropower impacts of the White
River Minimum Flows project. The draft addendum documents proposed
changes to Southwestern's final determination. The proposed changes
include: (1) Accounting for the impacts that the increase in average
pool elevation has on the operation of the Federal Bull Shoals and
Norfork projects, and (2) the inclusion of an additional discount rate
source to be used by Southwestern in determination of the present value
of the losses to both Federal projects and Federal Energy Regulatory
Commission (FERC) Project No. 2221.
Assuming a January 1, 2011, date of implementation for the White
River Minimum Flows project and current values for the specified
parameters, Southwestern's modified final determination results in a
present value of $22,340,800 for the estimated future lifetime
replacement costs of the electrical energy and capacity at FERC Project
No. 2221. Southwestern's modified final determination results in a
present value of $60,851,800 for the estimated future lifetime
replacement costs of the electrical energy and capacity for Federal
hydropower.
DATES: The consultation and comment period will begin on the date of
publication of this Federal Register notice and will end on July 8,
2009.
ADDRESSES: Written comments on Southwestern's draft addendum to its
final determination should be submitted to George Robbins, Director,
Division of Resources and Rates, Southwestern Power Administration,
U.S. Department of Energy, One West Third Street, Tulsa, Oklahoma
74103, or e-mail george.robbins@swpa.gov. Comments will be accepted
only on the proposed changes in the draft addendum and not on any other
aspect of Southwestern's final determination.
FOR FURTHER INFORMATION CONTACT: Mr. George Robbins, Director, Division
of Resources and Rates, Southwestern Power Administration, U.S.
Department of Energy, One West Third Street, Tulsa, Oklahoma 74103,
(918) 595-6680, george.robbins@swpa.gov.
SUPPLEMENTARY INFORMATION:
I. Discussion
Originally established by Secretarial Order No. 1865 dated August
31, 1943, as an agency of the U.S. Department of the Interior,
Southwestern is now 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 (1977).
Southwestern markets power from 24 multi-purpose reservoir projects
with hydroelectric power facilities constructed and operated by the
U.S. Army Corps of Engineers (Corps). These projects are located in the
states of Arkansas, Missouri, Oklahoma, and Texas. Southwestern's
marketing area includes these states plus Kansas and Louisiana.
Section 132 of Public Law 109-103 (2005) authorized and directed
the Secretary of the Army to implement alternatives BS-3 and NF-7, as
described in the Corps' White River Minimum Flows Reallocation Study
Report, Arkansas and Missouri, dated July 2004. The law provides that
the
[[Page 27136]]
Administrator of Southwestern, in consultation with the project
licensee and the relevant state public utility commissions, shall
determine any impacts on electric energy and capacity generated at FERC
Project No. 2221 caused by the storage reallocation at Bull Shoals
Lake. Further, the licensee of Project No. 2221 is to be fully
compensated by the Corps for those impacts on the basis of the present
value of the estimated future lifetime replacement costs of the
electrical energy and capacity at the time of implementation of the
White River Minimum Flows project.
The law also provides that losses to the Federal hydropower purpose
at the Bull Shoals and Norfork Projects shall be offset by a reduction
in the costs allocated to the Federal hydropower purpose. Further, such
reduction in costs shall be determined by the Administrator of
Southwestern on the basis of the present value of the estimated future
lifetime replacement cost of the electrical energy and capacity at the
time of implementation of the White River Minimum Flows project.
In accordance with the legislation, Southwestern developed a
procedure for calculating projected energy and capacity losses for FERC
Project No. 2221 and the Bull Shoals and Norfork projects, including
additional losses related to the reallocation for minimum flows as
appropriate. Input from affected parties and from the public was
invited and utilized in the development of the determination.
Southwestern's draft determination was published by Federal
Register Notice (73 FR 6717) dated February 5, 2008. Written comments
were invited through March 6, 2008. All public comments received were
considered, and Southwestern's draft determination was revised as
necessary to incorporate the public comments. Since there were
significant changes to Southwestern's draft determination, Southwestern
published a proposed determination for additional public review and
comment prior to its final determination.
Southwestern's proposed determination was published by Federal
Register Notice (73 FR 38198) on July 3, 2008. Written comments were
invited through August 4, 2008. After receiving several requests for
additional time to provide public comments, Southwestern reopened the
public comment period through September 18, 2008, by Federal Register
Notice (73 FR 46901) dated August 12, 2008. All public comments
received were considered in revising the proposed determination and
developing Southwestern's final determination.
Southwestern's final determination was published by Federal
Register Notice (74 FR 4183) on January 23, 2009. Southwestern's final
determination is fully documented in its Final Determination Report
dated January 2009, which was prepared in consultation with the non-
Federal licensee and the relevant public utility commissions. The
report documents the procedure to be used to calculate the present
value of the future lifetime replacement cost of the electrical energy
and capacity lost due to the White River Minimum Flows project at the
non-Federal FERC Project No. 2221 and the Federal Bull Shoals and
Norfork projects.
As a result of an extensive internal review of its calculations in
the final determination, Southwestern discovered an inadvertent
omission of a portion of the energy benefits associated with the higher
pools at the Federal Bull Shoals and Norfork projects. A detailed
review of the energy loss calculations revealed that a portion of the
energy benefits at the Federal projects which were believed to be
included in the calculations had been inadvertently omitted from the
calculations. While the gains from the increase in head (the vertical
distance between the lake, or pool elevation, and the river, or
tailwater elevation) that resulted from the higher pool elevations were
included in the computation of benefits received from the generation of
minimum flows releases at Bull Shoals, including an additional gain
from a lower tailwater, the head gains were omitted for the remainder
of the generation. Southwestern's draft addendum corrects the
computation of energy loss and associated replacement costs for both
Federal projects to include those gains.
The portion of the energy benefits due to higher head from the
raised pools that were omitted amounted to an additional 11,669
megawatt-hours (MWh) at Bull Shoals and 1,459 MWh at Norfork. Inclusion
of those benefits reduces the net energy losses at Bull Shoals and
Norfork, respectively. The net annual energy loss at Bull Shoals will
be 12,186 MWh, and the net annual energy loss at Norfork will be 12,065
MWh. As discussed in Southwestern's Final Determination Report, all of
the lost energy at Bull Shoals is considered off-peak energy, and the
lost energy at Norfork is considered one-half on-peak energy and one-
half off-peak energy. There are no changes in the capacity loss at
Norfork or in the capacity or energy loss at the non-Federal project.
As part of its review of the impacts that the average pool
elevation increase has on the normal operation of the Federal projects,
Southwestern also believed it should quantify dissolved oxygen (DO)
impacts due to the average increase in pool elevation. In
Southwestern's final determination it was recognized that generation at
both Bull Shoals and Norfork is impacted annually due to low DO
conditions. It was also noted that the higher pool elevations at both
projects will cause the hypolimnion to be higher relative to the
penstock elevations at both projects, causing water with lower DO
levels to flow through the turbines during generation. Southwestern
noted but did not quantify the value of the potential DO impact in its
final determination.
Southwestern has developed a procedure for quantifying the
estimated impacts and costs of lower DO levels on Federal hydropower.
The procedure estimates the costs of mitigating the DO impacts
resulting from the increased pool elevations at the Federal projects. A
number of alternative solutions have been proposed for improving DO
levels downstream of the Federal projects. Southwestern considered the
initial capital cost and annual operation and maintenance expenses
associated with these systems in determining the total impacts of the
White River Minimum Flows project on hydropower production. The
procedure is based on historical DO level data and is detailed in
Southwestern's draft addendum. Based on the procedure and on current
values of the specified parameters, the present value of the lifetime
impact of lower DO levels on Federal hydropower is $10,207,900. It
should be noted that the $10,207,900 amount only addresses the
incremental impact of the increased pool elevation on DO levels and is
not representation of an amount to satisfy all DO issues at the Federal
projects.
Southwestern is also proposing to include an additional source for
the discount rate to be used in the present value computation for all
three projects. The 30-year Treasury bond rates in effect at the time
of publication of Southwestern's draft, proposed, and final
determinations were as high as 5.0 percent. The recent changes in the
investment sector have resulted in the current rate being artificially
lowered. In early 2009, the rate dropped as low as 3.5 percent. The
rate is currently 4.25 percent. The discount rate used should be
reflective of the ``cost of cash'' during the period of analysis. If
the discount rate drops below the cost of long-term debt for either the
Federal or non-Federal projects it is reasonable to assume that any
offset or compensation would wisely be used to pay off those debts
rather than invest the funds in
[[Page 27137]]
lower interest bearing accounts. Therefore, using the lower 30-year
Treasury bond rate for the present value calculation would not be
appropriate and would result in too much compensation for the losses.
Southwestern's draft addendum revises the discount rate selection for
calculation of the present value of the losses as follows: In
calculating the present value of the Federal and non-Federal losses,
Southwestern will use the higher of the current 30-year Treasury bond
rate or each entity's, Southwestern and Empire, respectively, cost of
long-term debt.
Based on an analysis of the long-term debt for Southwestern, the
current 30-year Treasury bond rate is higher than Southwestern's cost
of long-term debt. Using the updated procedure, the current discount
rate to be used in the calculation of the present value of the Federal
hydropower losses is the 30-year Treasury bond rate. Based on an
analysis of the long-term debt for the non-Federal licensee utilizing
information in its filings with FERC, the current 30-year Treasury bond
rate is lower than the non-Federal licensee's cost of long-term debt.
The updated procedure results in the use of the non-Federal licensee's
cost of long-term debt as the current discount rate in the calculation
of the present value of the non-Federal hydropower losses.
Southwestern's draft addendum details the proposed changes to
Southwestern's final determination. Assuming a January 1, 2011 date of
implementation for the White River Minimum Flows project and current
values for the specified parameters, Southwestern's modified final
determination results in a present value for the estimated future
lifetime replacement costs of the electrical energy and capacity at
FERC Project No. 2221 of $22,340,800. Southwestern's modified final
determination results in a present value for the estimated future
lifetime replacement costs of the electrical energy and capacity for
Federal hydropower of $60,851,800. The actual compensation values are
to be calculated using the method presented in Southwestern's modified
final determination and current values for the specified parameters
based on the official implementation date.
II. Public Review and Comment Procedures
Opportunity is presented for interested parties to receive copies
of Southwestern's draft addendum detailing the proposed changes to
Southwestern's final determination of the Federal and non-Federal
hydropower impacts. If you desire a copy of the draft addendum, submit
your request to Mr. George Robbins, Director, Division of Resources and
Rates, Southwestern Power Administration, One West Third Street, Tulsa,
OK 74103, (918) 595-6680, george.robbins@swpa.gov.
Written comments on Southwestern's draft addendum are due on or
before July 8, 2009. Comments should be submitted to George Robbins,
Director, Division of Resources and Rates, Southwestern, at the above-
mentioned address for Southwestern's offices. Comments will be accepted
only on the proposed changes in the draft addendum and not on any other
aspect of Southwestern's final determination.
Southwestern will review and address the written comments, making
any necessary changes to the draft addendum. The Administrator will
publish the results of Southwestern's finalized addendum in the Federal
Register.
Dated: June 1, 2009.
Jon C. Worthington,
Administrator.
[FR Doc. E9-13322 Filed 6-5-09; 8:45 am]
BILLING CODE 6450-01-P
