Notice of Interim Approval, 48942-48946 [E9-23233]

Agencies

• DEPARTMENT OF ENERGY

[Federal Register Volume 74, Number 185 (Friday, September 25, 2009)]
[Notices]
[Pages 48942-48946]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-23233]


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DEPARTMENT OF ENERGY


Notice of Interim Approval

AGENCY: Southeastern Power Administration, DOE.

ACTION: Notice of Rate Order.

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SUMMARY: The Deputy Secretary of the Department of Energy, confirmed 
and approved, on an interim basis, Rate Schedules JW-1-I and JW-2-F. 
The rates were approved on an interim basis through September 19, 2014, 
and are subject to confirmation and approval by the Federal Energy 
Regulatory Commission (Commission) on a final basis.

DATES: Approval of rates on an interim basis is effective September 20, 
2009.

FOR FURTHER INFORMATION CONTACT: Leon Jourolmon, Assistant 
Administrator, Finance & Marketing, Southeastern Power Administration, 
Department of Energy, 1166 Athens Tech Road, Elberton, Georgia 30635-
6711, (706) 213-3800.

SUPPLEMENTARY INFORMATION: The Commission, by Order issued April 18, 
2005, in Docket No. EF04-3031-000, confirmed and approved Wholesale 
Power Rate Schedules JW-1-H and JW-2-E. Rate schedules JW-1-I and JW-2-
F replace these schedules.

    Dated: September 18, 2009.
Daniel B. Poneman,
Deputy Secretary.

Department of Energy, Deputy Secretary; In the Matter of: Southeastern 
Power Administration, Jim Woodruff Project Power Rates; Rate Order No. 
SEPA-51; Order Confirming and Approving Power Rates on an Interim Basis

    Pursuant to Sections 302(a) of the Department of Energy 
Organization Act, Public Law 95-91, the functions of the Secretary of 
the Interior and the Federal Power Commission under Section 5 of the 
Flood Control Act of 1944, 16 U.S.C. 825s, relating to the Southeastern 
Power Administration (``Southeastern'' or ``SEPA'') were transferred to 
and vested in the Secretary of Energy. By Delegation Order No. 00-
037.00, effective December 6, 2001, the Secretary of Energy delegated 
to Southeastern's Administrator the authority to develop power and 
transmission rates, delegated to the Deputy Secretary of Energy the 
authority to confirm, approve, and place in effect such rates on an 
interim basis, and delegated to the Federal Energy Regulatory 
Commission (``Commission'') the authority to confirm, approve, and 
place into effect on a final basis or to disapprove rates developed by 
the Administrator under the delegation. This rate order is issued by 
the Deputy Secretary pursuant to said delegation.

Background

    Power from the Jim Woodruff Project is presently sold under 
Wholesale Power Rate Schedules JW-1-H and JW-2-E. These rate schedules 
were approved by the Commission on April 18, 2005, for a period ending 
September 19, 2009 (111 FERC ]61,067).

Public Notice and Comment

    Southeastern prepared a Power Repayment Study, dated March 2009, 
that showed that revenues at current rates were not adequate to meet 
repayment criteria. A revised study with a revenue increase of 
$5,575,000 produced rates that are adequate to meet repayment criteria. 
On March 11, 2009, by Federal Register notice (74 FR 10570), 
Southeastern proposed a rate adjustment of about 70.6 percent to 
recover this revenue. The notice also announced a Public Information 
and Comment Forum to be held April 23, 2009, in Tallahassee, Florida. 
Nine parties asked questions or made comments at the forum. Responses 
to the questions are part of the written record of the forum. Written 
comments were accepted on or before June 26, 2009. Written comments 
were received from two sources. After review of all comments received 
Southeastern revised the repayment study. The new revised study with a 
revenue increase of $5,393,000 produces rates that are adequate to meet 
repayment criteria. The proposed rate adjustment is an increase of 
about 67.3 percent.

Staff Review of Comments

    The following comments were received during the public comment 
period. Southeastern's response follows each comment.
    Comment 1: The Southeastern Federal Power Customers (``SeFPC'') 
submitted comments on behalf of certain preference customers of the Jim 
Woodruff System (``Jim Woodruff Preference Customers''). The Jim 
Woodruff Preference Customers suggest setting aside the rate for the 
five year study period and preparing an interim one year rate, or in 
the alternative, setting a one year interim rate with an express 
understanding that SEPA will revisit the rate for the five year study 
period within one year.
    Response 1: Contract provisions in the Jim Woodruff System allow 
rate schedules to be adjusted periodically. One of the main drivers of 
this rate adjustment is the need to recover capitalized deficits in the 
rate period. The proposed rates are expected to recover these deficits 
in the five year period that the rate schedules are proposed to remain 
in effect. Southeastern interprets DOE Order RA 6120.2 to call for the 
proposed rates to recover capitalized deficits in the rate period. To 
recover the capitalized deficits in a one-year period, the proposed 
rates would have to be substantially higher than Southeastern is 
proposing. Southeastern is proposing that the rate schedules be 
approved for a five year period and will, if the customers make a 
request to Southeastern, revisit these rates in one year.
    Comment 2: The Jim Woodruff Preference Customers suggest evaluating 
the implementation of the contract with Progress Energy Florida that 
supplies replacement power in the event that the Jim Woodruff Project 
is unavailable.
    Response 2: Southeastern cannot change the existing agreement or 
the interpretation of the existing agreement with Progress Energy 
Florida unilaterally. Any change to the implementation of the existing 
agreement or modification of the existing agreement will require the 
consent of Progress Energy Florida. The existing agreement is a bundled

[[Page 48943]]

arrangement that includes transmission, firming energy, support 
capacity, and sales of energy surplus of the customers' needs to 
Progress Energy Florida. The agreement precedes FERC's open access 
rules. Southeastern will pursue changes to the existing agreement with 
Progress Energy Florida if a preponderance of the Jim Woodruff 
preference customers make a request.
    Comment 3: The Jim Woodruff Preference Customers suggest removing 
the marginal cost of the additional 9 MW of nameplate capacity from the 
existing rate schedule in light of the unavailability of that capacity 
at the Jim Woodruff Project.
    Response 3: The total nameplate capacity at the Jim Woodruff 
Project is 43.35 MW. DOE Order RA 6120.2 requires Southeastern to 
recover all costs placed in service and allocated to the power 
function. Southeastern has no information on the incremental costs 
associated with the increased capacity associated with the 
rehabilitation of the Jim Woodruff Project. The capacity increase was 
considered incidental and the marginal cost is thought to be minimal. 
Southeastern will request information from the U.S. Army Corps of 
Engineers (``Corps'') on the incremental cost associated with the 
additional 9 MW. A request for approval of a rate adjustment that does 
not include these costs would require a departure from the requirements 
of DOE Order RA 6120.2.
    Comment 4: The Jim Woodruff Preference Customers suggest developing 
communications protocols that will allow the Jim Woodruff Preference 
Customers to understand on a real time basis the operations of the Jim 
Woodruff Project including the availability or lack thereof of capacity 
and energy.
    Response 4: Southeastern will consider any communications protocols 
the Jim Woodruff Preference Customers request. To the extent that there 
are material costs associated with the requested communications 
protocols, these costs would be charged to the Jim Woodruff System and 
recovered from Jim Woodruff customers.
    Comment 5: The Jim Woodruff Preference Customers suggest providing 
a vigorous review of operations and maintenance (``O&M'') expenses 
incurred by the Corps and charged to the Jim Woodruff Project.
    Response 5: The Corps provides detailed annual reports of O&M costs 
charged to the Jim Woodruff Project to the O&M Committee of the 
Southeastern Federal Power Customers (SeFPC). This provides opportunity 
for vigorous review of these costs.
    Comment 6: The Jim Woodruff Preference Customers suggest developing 
a rate that provides transparency as to the repayment of expenses, 
particularly accumulated deficits.
    Response 6: DOE Order RA6120.2 requires power marketing 
administrations to update and monitor the status of repayment for all 
power marketing systems annually. The status of repayment is reported 
annually in the annual report for the Southeastern Federal Power 
Program. Southeastern will provide reports on the status of repayment 
that the customers request.
    Comment 7: SEPA admits that the estimates for purchased power 
expenses are nothing more than a simple two year average of the last 
two years of purchased power expenses in support of the Jim Woodruff 
Project. This historical two year average reflects a period of atypical 
and extremely limited water flows due to drought conditions in the 
region. This approach is overly simplistic and fails to take into 
account multiple factors that SEPA should have considered in 
determining a suitable level for purchased power expenses in the study 
period. Specifically, SEPA should have considered:
    (1) Anticipated more normal flows;
    (2) Availability of the units at the Jim Woodruff Project;
    (3) Scheduled outages;
    (4) Progress Energy's expected average system cost including the 
fuel adjustment clause in the existing contract with Progress Energy; 
and
    (5) Any particular load factors for the individual customers of the 
Jim Woodruff Project.
    Taken together, these factors would provide a sound basis for SEPA 
to set a level of purchased power expense for the next year.
    Response 7: Purchased power expense for the Jim Woodruff System has 
been volatile. Over the last five years, the expense has increased from 
about $495,000 in Fiscal Year 2004 to about $4,371,000 in Fiscal Year 
2008. This volatility makes estimating the purchased power expense for 
rate setting purposes challenging. Marketing arrangements in the Jim 
Woodruff System require Southeastern to provide energy to preference 
customers at the same load factor as the customers' other supplier. 
This means that the preference customers can impose an obligation on 
Southeastern to purchase more power by allocating capacity to delivery 
points that have a higher load factor. In the past two years, some Jim 
Woodruff customers have done this. Southeastern has limited experience 
with the new delivery points. However, it appears that these new 
delivery points will require Southeastern to purchase more power from 
Progress Energy Florida and will reduce the amount of residual energy 
available for sale to Progress Energy Florida.
    Due to Southeastern's limited experience with the new delivery 
points, Southeastern views modeling based on historic averages to be of 
limited value. Southeastern has limited in-house modeling capability. 
Southeastern is not convinced that more expensive modeling techniques 
yield more accurate results. Therefore, Southeastern will use the 
estimated purchased power costs included in the earlier repayment 
studies.
    Regardless of the estimate used for rate-setting purposes, 
Southeastern is required to recover the cost of purchased power from 
the sale of power. Any variance of actual costs from the estimates will 
be recovered in the next rate adjustment.
    Comment 8: In documents prepared by the Corps and attached hereto 
(Attachment B), the Corps has predicted that they would spend roughly 
$4.8 million per year on Corps O&M activities for the Jim Woodruff 
Project that are allocated to hydropower for fiscal year 2010 to 2013. 
Accordingly, the Jim Woodruff Preference Customers suggest that this 
figure of $4.8 million is an appropriate amount to include for years 2-
5 of the study period as a base amount.
    Response 8: Southeastern proposed rates in March of 2009. The Corps 
provides Southeastern with projections of O&M expenses and capital 
outlays in April. At the time rates were proposed, the April 2008 
projections were the most recent projections available. Southeastern 
will use the April 2009 projections in the rates that are proposed to 
the Deputy Secretary.
    Regardless of the estimate used for rate-setting purposes, 
Southeastern is required to recover the cost of Corps O&M from the sale 
of power. Any variance of actual costs from the estimates will be 
recovered in the next rate adjustment.
    Comment 9: The Jim Woodruff Preference Customers believe that SEPA 
needs to perform the following analyses under the contract:
    (1) Calculate whether Progress Energy's sale of firming energy 
leads to sales of energy to Progress Energy that would otherwise be 
available to the Jim Woodruff Preference Customers;
    (2) Evaluate the practices employed by Progress Energy to calculate 
the aggregate deficiency energy requirement under the contract; and

[[Page 48944]]

    (3) Determine whether such practices allow Progress Energy to true 
up energy obligations in a manner that increases the overall purchased 
power obligation for SEPA.
    Response 9: See Response 2, above.
    Comment 10: SEPA has indicated that the full cost of the hydropower 
plant and service at the Jim Woodruff Project is included in the rates. 
SEPA considers the full 45 megawatt nameplate capacity to be the plant 
in service and subject to cost recovery from the customers under the 
rate. However, SEPA's marketing policy only allows for the marketing of 
36 megawatts from the Jim Woodruff Project. Indeed it is arbitrary and 
capricious for SEPA to set a rate that recovers excess amounts from the 
customers that is in clear departure from its marketing policy. 
Accordingly, the Jim Woodruff Preference Customers believe that the 
marginal cost for the rehabilitation that raised the nameplate capacity 
from the previous 36 megawatts to the current 45 megawatts should be 
excluded from the rate base in the repayment study.
    Response 10: See Response 3, above.
    Comment 11: The Jim Woodruff Preference Customers encourage SEPA to 
meet and develop real time communications protocols which would allow 
the individual Jim Woodruff Preference Customers, to integrate this 
resource into their own systems on a real time basis and allow them to 
take full advantage the Jim Woodruff project energy and capacity.
    Response 11: See Response 4, above.
    Comment 12: At the forum conducted in Tallahassee, SEPA made the 
assertion that the Jim Woodruff Preference Customers have signed off on 
the O&M expenses for the Jim Woodruff Project through the O&M Committee 
of the SeFPC. This is plainly false.
    Response 12: Southeastern has reviewed the transcripts of the forum 
conducted in Tallahassee, Florida, on April 23, 2009. The words 
``signed'' or ``off'' do not appear in the transcripts. The quote from 
the transcript the commenter appears to be referring to is as follows:

    MR. JOUROLMON: ``Southeastern Power customers, of which you're 
all members, have a committee that looks at the estimates of the 
Corps of Engineer costs and compares them with the actuals.
    That committee will be meeting on Monday, this coming Monday. 
They will be looking at it in depth. The numbers that we used in our 
study were the numbers that were looked at a year ago at this time.
    The projections were made a year ago and were studied at that 
time. There are a lot of increases in there. One of those that I can 
recall is environmental support.
    We can go through and give you several other examples, but the 
truth of the matter is that committee is the one who does look at 
them. And customers, maybe not from your system, but Southeast 
Federal Power customers are the ones who look at those costs, and 
the Corps explains those costs to them.''

    Southeastern believes that the activities of the O&M Committee of 
the SeFPC give the customers the best opportunity to review the Corps 
O&M Expenses. Participation in the O&M committee does not require 
participants to sign off on the Corps' projections or the actual costs 
incurred.
    Regardless of the estimate used for rate-setting purposes, 
Southeastern is required to recover the actual cost of Corps O&M from 
the sale of power. Any variance of actual costs from the estimates will 
be recovered in the next rate adjustment.
    Comment 13: An appropriate audit is merited in the immediate 
circumstance of those expenses that are allocated to hydropower that 
are appropriately termed environmental restoration activities. The Jim 
Woodruff Preference Customers strongly question whether it is 
appropriate for SEPA to include several activities including the 
elimination of aquatic nuisance plants and certain environmental 
studies at the Jim Woodruff Project in the rates charged to the 
hydropower customers.
    Response 13: Under DOE Order RA 6120.2, Southeastern is required to 
recover all costs allocated to the power function, including joint 
costs allocated to the power function.
    Southeastern will work with the customers and the Corps to assure 
that all costs are properly allocated. Southeastern suggests that the 
O&M Committee of the SeFPC is the best means to provide this review.
    The SeFPP financial statements are audited by an independent audit 
firm, as required under DOE Order RA 6120.2. In addition, the Corps 
financial statements are subject an independent audit as well as an 
internal audit. The auditors' responsibilities include assuring that 
costs are appropriately allocated and reported. Southeastern does not 
believe that any additional audit is merited.
    Comment 14: In light of the shortcomings of the prior rate, the Jim 
Woodruff Preference Customers ask SEPA to take the following steps with 
the current rate proposal:
    (1) Institute an annual reporting of the revenues and expenses in 
order to know whether deficiencies exist with regard to the rate before 
the end of the five year study period; and
    (2) Indicate on monthly bills the amount of the accumulated deficit 
that has been paid and the amount that remains to be paid.
    Response 14: Under DOE Order RA 6120.2 Southeastern is required to 
update the repayment studies for all systems within 180 days of the 
close of the previous fiscal year. The status of repayment is reported 
annually in the annual report for the Southeastern Federal Power 
Program.
    Under current accounting practices of the Southeastern Federal 
Power Program (SeFPP), the Corps provides Southeastern with financial 
reports annually. Providing a report on the monthly bills of the 
accumulated deficit that has been paid and the amount that remains to 
be repaid is not possible without an upgrade to the financial reporting 
of Southeastern and the Corps.
    Southeastern provides an annual report on the status of repayment 
that are included in the SeFPP annual report. Southeastern can provide 
additional reports at the customers' request.
    Southeastern can provide reports on purchased power expense 
monthly.
    Comment 15: Quincy is not in favor of a pass through of purchase 
power cost. Power purchases should continue to be placed in the rate 
established by SEPA.
    Response 15: Southeastern informally discussed the possibility of a 
rolling 12 month pass-through of purchased power costs and the benefits 
of residual energy sales to the preference customers. Because the 
customers did not endorse the proposal, it is not part of this rate 
proposal.
    Southeastern is required to recover all purchased power costs from 
the sale of power, whether by a pass-through rate design or by bundling 
the costs into the capacity and energy charge, as proposed in this rate 
adjustment. Any variance of actual costs from the estimates will be 
recovered in the next rate adjustment.
    Comment 16: SEPA has increased the revenue from Progress Energy by 
2.5 times for each year of the study period.
    Response 16: Revenue from sales to Progress Energy is estimated to 
be $700,000 per year for the five-year period the rates are proposed to 
remain in effect.
    Comment 17: Apparently SEPA intends to sell Progress Energy the 
excess capacity of the difference between the three rated units at 
14,450 kilowatts (43,350 kw) less 36,000 kilowatts that is currently 
contracted to the Preference Customers. The rate design must be changed 
to allocate this additional capacity to the Preference Customers.

[[Page 48945]]

    Response 17: All of the capacity that is marketed from the Jim 
Woodruff Project is delivered to preference customers. Under the 
current contract with Progress Energy Florida, Southeastern can deliver 
36,000 kilowatts of capacity to preference customers. Southeastern will 
pursue changes to the existing agreement with Progress Energy Florida 
if a preponderance of the Jim Woodruff preference customers make a 
request.
    Comment 18: Quincy's contract obligates SEPA to provide Quincy 
capacity requirements and associated energy. Instead of meeting its 
contract commitment, SEPA sells energy that is otherwise due to Quincy 
and other Preference customers.
    Response 18: The existing agreement between Southeastern and 
Progress Energy Florida provides for the sale of energy generated in 
excess of the preference customers' load to Progress Energy Florida. 
Southeastern will pursue changes to the existing agreement with 
Progress Energy Florida if a preponderance of the Jim Woodruff 
preference customers make a request.

Discussion

System Repayment

    An examination of Southeastern's revised system power repayment 
study, prepared in July 2009, for the Jim Woodruff Project, shows that 
with the proposed rates, all system power costs are paid within the 50-
year repayment period required by existing law and DOE Procedure RA 
6120.2. The Administrator of Southeastern has certified that the rates 
are consistent with applicable law and that they are the lowest 
possible rates to preference customers consistent with sound business 
principles.

Environmental Impact

    Southeastern has reviewed the possible environmental impacts of the 
rate adjustment under consideration and has concluded the adjusted 
rates would not significantly affect the quality of the human 
environment within the meaning of the National Environmental Policy Act 
of 1969. The proposed action is not a major Federal action for which 
preparation of an Environmental Impact Statement is required.

Availability of Information

    Information regarding these rates, including studies, and other 
supporting materials is available for public review in the offices of 
Southeastern Power Administration, 1166 Athens Tech Road, Elberton, 
Georgia 30635-6711.

Submission to the Federal Energy Regulatory Commission

    The rates hereinafter confirmed and approved on an interim basis, 
together with supporting documents, will be submitted promptly to the 
Federal Energy Regulatory Commission for confirmation and approval on a 
final basis for a period beginning September 20, 2009, and ending no 
later than September 19, 2014.

Order

    In view of the foregoing and pursuant to the authority delegated to 
me by the Secretary of Energy, I hereby confirm and approve on an 
interim basis, effective September 20, 2009, attached Wholesale Power 
Rate Schedules JW-1-I and JW-2-F. The rate schedules shall remain in 
effect on an interim basis through September 19, 2014, unless such 
period is extended or until the Federal Energy Regulatory Commission 
confirms and approves them or substitute rate schedules on a final 
basis.
Dated: September 18, 2009
Daniel B. Poneman,
Deputy Secretary

Wholesale Power Rate Schedule JW-1-I

Availability

    This rate schedule shall be available to public bodies and 
cooperatives served by the Progress Energy Florida and having points of 
delivery within 150 miles of the Jim Woodruff Project (hereinafter 
called the Project).

Applicability

    This rate schedule shall be applicable to firm power and 
accompanying energy made available by the Government from the Project 
and sold in wholesale quantities.

Character of Service

    The electric capacity and energy supplied hereunder will be three-
phase alternating current at a nominal frequency of 60 cycles per 
second delivered at the delivery points of the customer.

Monthly Rate

    The monthly rate for capacity and energy made available or 
delivered under this rate schedule shall be:

Demand Charge

    $13.06 per kilowatt of monthly contract demand.

Energy Charge

    32.07 mills per kilowatt-hour.

Billing Demand

    The monthly billing demand for any billing month shall be the lower 
of (a) the Customer's contract demand or (b) the sum of the maximum 30-
minute integrated demands for the month at each of the Customer's 
points of delivery; provided, that, if an allocation of contract demand 
to delivery points has become effective, the 30-minute maximum 
integrated demand for any point of delivery shall not be considered to 
be greater than the portion of the Customer's contract demand allocated 
to that point of delivery.

Contract Demand

    The contract demand is the amount of capacity in kilowatts stated 
in the contract which the Government is obligated to supply and the 
Customer is entitled to receive.

Energy Made Available

    During any billing month in which the Government supplies all the 
Customer's capacity requirements for a particular delivery point, the 
Government will make available the total energy requirement of said 
point. When both the Government and the Progress Energy Florida are 
supplying capacity to a delivery point, each kilowatt of capacity 
supplied to such point during such month will be considered to be 
accompanied by an equal quantity of energy.

Billing Month

    The billing month for power sold under this schedule shall end at 
12 midnight on the 20th day of each calendar month.

Conditions of Service

    The customer shall, at its own expense, provide, install, and 
maintain on its side of each delivery point the equipment necessary to 
protect and control its own system. In so doing, the installation, 
adjustment, and setting of all such control and protective equipment at 
or near the point of delivery shall be coordinated with that which is 
installed by and at the expense of the Progress Energy Florida on its 
side of the delivery point.

Service Interruption

    When energy delivered to the Customer's system for the account of 
the Government is reduced or interrupted for one hour or longer, and 
such reduction or interruption is not due to conditions on the 
Customer's system or has not been planned and agreed to in advance, the 
demand charge for the month shall be appropriately reduced.

[[Page 48946]]

Proposed Wholesale Power Rate Schedule JW-2-F

Availability

    This rate schedule shall be available to the Florida Power 
Corporation (or Progress Energy Florida, hereinafter called the 
Company).

Applicability

    This rate schedule shall be applicable to electric energy generated 
at the Jim Woodruff Project (hereinafter called the Project) and sold 
to the Company in wholesale quantities.

Points of Delivery

    Power sold to the Company by the Government will be delivered at 
the connection of the Company's transmission system with the Project 
bus.

Character of Service

    Electric power delivered to the Company will be three-phase 
alternating current at a nominal frequency of 60 cycles per second.

Monthly Rate

    The monthly rate for energy sold under this schedule shall be equal 
to 100 percent of the calculated saving in the cost of fuel per KWH to 
the Company determined as follows:
[GRAPHIC] [TIFF OMITTED] TN25SE09.063

    [Computed to the nearest $0.00001 (1/100mill) per KWH]

Where: Fm = Company fuel cost in the current period as defined in 
Federal Power Commission Order 517 issued November 13, 1974, Docket 
No. R-479.
Sm = Company sales in the current period reflecting only losses 
associated with wholesale sales for resale. Sale shall be equated to 
the sum of (a) generation, (b) purchases, (c) interchange-in, less 
(d) inter-system sales, less estimated wholesale losses (based on 
average transmission loss percentage for preceding calendar year).

Determination of Energy Sold

    Energy will be furnished by the Company to supply any excess of 
Project use over Project generation. Energy so supplied by the Company 
will be deducted from the actual deliveries to the Company's system to 
determine the net deliveries for energy accounting and billing 
purposes. Energy for Project use shall consist of energy used for 
station service, lock operation, Project yard, village lighting, and 
similar uses.
    The on-peak hours shall be the hours between 7 a.m. and 11 p.m., 
Monday through Sunday, inclusive. Off-peak hours shall be all other 
hours.
    All energy made available to the Company shall, to the extent 
required, be classified as energy transmitted to the Government's 
preference customers served from the Company's system. All energy made 
available to the Company from the Project shall be separated on the 
basis of the metered deliveries to it at the Project during on-peak and 
off-peak hours, respectively. Deliveries to preference customers of the 
Government shall be divided on the basis (with allowance for losses) of 
77 percent being considered as on-peak energy and 23 percent being off-
peak energy. Such percentages may by mutual consent be changed from 
time to time as further studies show to be appropriate. In the event 
that in classifying energy there is more than enough on-peak energy 
available to supply on-peak requirements of the Government's preference 
customers but less than enough off-peak energy available to supply such 
customers off-peak requirements, such excess on-peak energy may be 
applied to the extent necessary to meet off-peak requirements of such 
customers in lieu of purchasing deficiency energy to meet such off-peak 
requirements.

Billing Month

    The billing month under this schedule shall end at 12:00 midnight 
on the 20th day of each calendar month.

[FR Doc. E9-23233 Filed 9-24-09; 8:45 am]
BILLING CODE 6450-01-P