Notice of Interim Approval, 56409-56412 [2011-23356]
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Federal Register / Vol. 76, No. 177 / Tuesday, September 13, 2011 / Notices
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[FR Doc. 2011–23393 Filed 9–12–11; 8:45 am]
BILLING CODE 4000–01–P
DEPARTMENT OF ENERGY
Notice of Interim Approval
Southeastern Power
Administration, DOE.
AGENCY:
ACTION:
Notice of rate order.
The Deputy Secretary of the
Department of Energy confirmed and
approved, on an interim basis, Rate
Schedules JW–1–J and JW–2–F. The
rates were approved on an interim basis
up to September 19, 2016, and are
subject to confirmation and approval by
the Federal Energy Regulatory
Commission (Commission) on a final
basis.
SUMMARY:
Approval of rates on an interim
basis is effective September 20, 2011.
DATES:
FOR FURTHER INFORMATION CONTACT:
Virgil G. Hobbs III, Assistant
Administrator, Finance and Marketing,
Southeastern Power Administration,
Department of Energy, 1166 Athens
Tech Road, Elberton, Georgia 30635–
6711, (706) 213–3800. Relevant
documents and transcripts are available
for inspection.
The
Commission, by Order issued April 15,
2010, in Docket No. EF09–3031–000,
confirmed and approved Wholesale
Power Rate Schedules JW–1–I and JW–
2–F. Rate schedule JW–1–J replaces rate
schedule JW–1–I and rate schedule JW–
2–F is extended up to September 19,
2016.
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SUPPLEMENTARY INFORMATION:
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Dated: September 2, 2011.
Daniel B. Poneman,
Deputy Secretary.
Department of Energy
Deputy Secretary
Rate Order No. SEPA–54
In the Matter of: Southeastern Power
Administration—Jim Woodruff Project
Power Rates
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–I and JW–
2–F. These rate schedules were
approved by the Commission on April
15, 2010, for a period ending September
19, 2014 (131 FERC ¶62,044).
Public Notice and Comment
Southeastern prepared a Power
Repayment Study, dated January 2011,
showing revenues at current rates were
adequate to meet repayment criteria.
However, the Jim Woodruff preference
customers asked Southeastern to revise
the rates to include a pass-through of
purchased power expenses. The
proposed capacity and energy charge
reduction to the preference customers
will be completely recovered through
this separate, pass-through charge to the
affected customers. This rate structure
revision will result in no net loss of
revenue and will fully meet system
repayment criteria. On February 17,
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56409
2011, by Federal Register notice (76 FR
9349), Southeastern proposed a rate
adjustment. The notice also announced
a Public Information and Comment
Forum to be held March 29, 2011, in
Tallahassee, Florida. Three parties
asked questions at the forum. Responses
to the questions are part of the written
record of the forum, and a transcript of
the forum is available at Southeastern
Power Administration (see FOR FURTHER
INFORMATION CONTACT section). The
transcript of the forum is part of the
record to be filed with the Commission
and will be available on the
Commission’s Web site at https://
www.ferc.gov. Written comments were
accepted on or before May 18, 2011.
Written comments were received from
one source the Southeastern Federal
Power Customers.
Staff Review of Comments
Written comments received from the
Southeastern Federal Power Customers
are summarized below. Southeastern’s
response follows each comment.
Comment 1: The Jim Woodruff
preference customers support the
revised rate design SEPA has prepared.
Response 1: The rate schedules
Southeastern will propose to the Deputy
Secretary will include the pass-through
of purchased power expenses as
discussed with the preference
customers.
Comment 2: While the preference
customers of the Jim Woodruff support
the overall rate structure, including the
new pass through mechanism for
purchased power expenses, they have
concerns regarding the assumptions for
the Operations and Maintenance
(‘‘O&M’’) expenses. In materials
provided by SEPA on April 25th, the
Corps 2011 projections revealed
projected expenses for joint activities
not specific to a single business function
had increased by more than three
hundred percent for each year until
2015. While preference customers
throughout the Southeast have long
questioned the practices of the U.S.
Army Corps of Engineers (‘‘Corps’’) in
assigning various costs of the Corps
program to this ‘‘catch-all’’ account,
there appears to be no basis for a three
hundred percent increase in joint use
costs.
Response 2: From fiscal year 2009 to
fiscal year 2010, Joint O&M allocated to
power increased from $664,000 to
$1,653,000, primarily as a result of
improvement projects funded by the
American Recovery and Reinvestment
Act. The estimated Joint O&M allocated
to power included in the repayment
study used to support the proposed
rates, set forth below, are similar to the
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56410
Federal Register / Vol. 76, No. 177 / Tuesday, September 13, 2011 / Notices
Joint O&M amounts from fiscal year
2009:
2011........$627,731
2012........$646,458
2013........$665,746
2014........$685,614
2015........$685,614
2016........$685,614
These estimates have been used to
develop the proposed rate schedules.
Any variance of the actual costs
incurred from these estimates will
impact the repayment of the federal
investment and will be accounted for in
the next rate adjustment. Repayment is
the residual of all variances. The
expenses reported by the Corps are
reviewed annually by Southeastern and
are made available to the customers
through the O&M Committee of the
SeFPC.
Comment 3: The full extent of
SeFPC’s O&M Committee is important
to note here because of statements that
SEPA has made in the past when
questions have been raised regarding the
amount of O&M in a rate. On more than
one occasion, SEPA has stated that
questions regarding the level of O&M in
a rate should be addressed in the
meeting of the O&M committee, thereby
indicating the SeFPC’s O&M committee
has a quasi administrative review of the
Corps operations. The record needs to
be corrected and set clear on this point.
Response 3: The activities of the O&M
Committee of the SeFPC, in which both
Southeastern and the Corps participate,
provides customers an 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. Adjustments to the
program are often made as a result of
questions raised at the meetings.
Questions regarding the level of Corps
O&M in a rate may be raised at any time.
If the questions are raised to
Southeastern, Southeastern will usually
forward the questions to the Corps for
a response. The Corps provides
representatives who participate and
answer questions in the meetings of the
O&M Committee. The SeFPC’s O&M
committee does not conduct any
administrative review of the Corps
operations.
Comment 4: The Corps has no
authority to set the rates charged to the
preference customers. This
responsibility is solely vested with the
Administrator pursuant to Section 5 of
the Flood Control Act of 1944. Thus,
when there is a question regarding the
amount of O&M to be included in a
proposed rate, the preference customers
appropriately raise concerns with SEPA.
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However, SEPA does have a
relationship with the Corps as defined
in a Memorandum of Understanding
setting forth the responsibilities
between the two agencies. Moreover, the
Administrator has the responsibility
under the Flood Control Act of 1944 to
set the rates. Therefore, in the context of
a rate increase which involves questions
regarding O&M, the Administrator has
the final say and all questions regarding
the ultimate level of O&M recovery are
appropriately resolved by SEPA rather
than the SeFPC O&M committee.
Response 4: There is a Memorandum
of Understanding between the South
Atlantic Division of the U.S. Army
Corps of Engineers and the
Administrator of Southeastern Power
Administration (MOU) established June
20, 1991. The MOU is available at
Southeastern Power Administration
(See FOR FURTHER INFORMATION CONTACT
Section). This MOU recognizes the
respective roles these two federal
entities play in the Southeastern Federal
Power Program.
Section 4 (c.) of the MOU states, ‘‘It
is recognized that the preference
customers of the Southeastern Federal
Power Program have an interest in the
maintenance, operation and
maintenance expense, and funding. It is
the intent of the parties to develop a
relationship of mutual respect and trust
between the parties and the preference
customers to resolve controversial
issues through discussion rather than
confrontation. The parties, therefore,
agree to meet as needed with the
customers, or their designated
representatives, to discuss maintenance,
expense and funding procedures.’’
The MOU also provides that the Corps
will provide Southeastern with
summarized financial statements and
the statements will be audited
periodically by an independent auditing
firm.
Section 5 of the Flood Control Act of
1944 states, ‘‘Rate schedules shall be
drawn having regard to the recovery
(upon the basis of the application of
such rate schedules to the capacity of
the electric facilities of the projects) of
the cost of producing and transmitting
such electric energy, including the
amortization of the capital investment
allocated to power over a reasonable
period of years.’’
The Corps does not submit its budget
to Southeastern, and Southeastern has
no authority over the Corps’ spending of
Congressional appropriations.
Southeastern is legally responsible for
the recovery of costs properly allocated
to the power function. While the
Administrator is responsible for
formulating rate schedules for the
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recovery of these costs, the rate
schedules are required to be submitted
to the Deputy Secretary of the
Department of Energy for interim
approval and to the Federal Energy
Regulatory Commission for final
approval.
The O&M Committee of the SeFPC
also has no authority over the Corps
O&M expense.
Discussion
System Repayment
An examination of Southeastern’s
revised system power repayment study,
prepared in July 2011, for the Jim
Woodruff Project, shows the proposed
rates will pay all system power costs
within the 50-year repayment period
required by existing law and DOE Order
RA 6120.2. The Administrator of
Southeastern has certified the rates are
consistent with applicable law and 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, 2011, and ending no later than
September 19, 2016.
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, 2011, attached
Wholesale Power Rate Schedules JW–1–
J and JW–2–F. The rate schedules shall
remain in effect on an interim basis
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Federal Register / Vol. 76, No. 177 / Tuesday, September 13, 2011 / Notices
56411
Wholesale Power Rate Schedule JW–1–J
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:
$10.29 per kilowatt of monthly contract
demand.
Energy Charge:
26.51 mills per kilowatt-hour.
Purchased Power Pass-Through:
In addition to the capacity and energy
charges, each preference customer will be
charged for power purchased by
Southeastern on behalf of the preference
customer. This pass-through will be
computed as follows:
On or about the 20th of each month,
Progress Energy provides Southeastern with
the meter readings for preference customer’s
delivery points that have an allocation of
capacity from Southeastern. Subsequently,
Progress Energy provides Southeastern with
reports of purchased power and support
capacity requirements around the 10th of the
succeeding month. Southeastern will
compute its purchased power obligation for
each delivery point monthly. Southeastern
will compute any revenue from sales to
Progress Energy for each delivery point
monthly. Southeastern will sum the
purchased power obligation and any revenue
from sales to Progress Energy for each
preference customer monthly. The purchased
power obligation minus any revenue from
sales to Progress Energy for each customer
will be called the Net Purchased Power Cost.
Southeastern will charge each customer its
respective monthly Net Purchased Power
Cost in equal portions over the next eleven
billing months. This computation of the passthrough is to begin 11 months before the
pass-through is implemented. The first bill
prepared using this method is to include the
computations for the previous 11 months.
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 30minute 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 12:00 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.
[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, switchyard,
village lighting, and similar uses.
The on-peak hours shall be the hours
between 7:00 a.m. and 11:00 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
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Dated: September 2, 2011.
Daniel B. Poneman,
Deputy Secretary.
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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:
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EN13SE11.009</GPH>
through September 19, 2016, unless
such period is extended or until the
Federal Energy Regulatory Commission
confirms and approves them or
substitute rate schedules on a final
basis.
56412
Federal Register / Vol. 76, No. 177 / Tuesday, September 13, 2011 / Notices
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.
Power Factor:
The purchaser and seller under this rate
schedule agree that they will both so operate
their respective systems that neither party
will impose an undue reactive burden on the
other.
[FR Doc. 2011–23356 Filed 9–12–11; 8:45 am]
BILLING CODE 6450–01–P
DEPARTMENT OF ENERGY
Ultra-Deepwater and Unconventional
Natural Gas and Other Petroleum
Resources Research and Development
Program 2011 Annual Plan
Office of Fossil Energy,
Department of Energy.
AGENCY:
ACTION:
Notice of report availability.
The Office of Fossil Energy
announces the availability of the 2011
Annual Plan for the Ultra-Deepwater
and Unconventional Natural Gas and
Other Petroleum Resources Research
and Development Program on the DOE
Web site at https://
www.fossil.energy.gov/programs/oilgas/
ultra_and_unconventional/2011–
2012_Committees/
2011_annual_plan.pdf or in print form
(see ‘‘Contact’’ below). The 2011 Annual
Plan is in compliance with the Energy
Policy Act of 2005, Subtitle J, Section
999B(e)(3) which requires the
publication of this plan and all written
comments in the Federal Register.
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SUMMARY:
FOR FURTHER INFORMATION CONTACT:
Elena Melchert, U.S. Department of
Energy, Office of Oil and Natural Gas,
Mail Stop FE–30, 1000 Independence
Avenue, SW., Washington, DC 20585 or
phone: (202) 586–5600 or e-mail to
UltraDeepwater@hq.doe.gov.
SUPPLEMENTARY INFORMATION:
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Executive Summary [Excerpted From
the 2011 Annual Plan p. iii]
As the Nation transitions to the clean
energy economy of the future, we must
also ensure that we effectively mitigate
the risks of our current energy portfolio.
This 2011 Annual Plan, the fifth such
plan to be produced since the launch of
the Ultra-Deepwater and
Unconventional Natural Gas and Other
Petroleum Resources Research Program,
reflects an important shift in priorities
towards safety and environmental
sustainability. This shift is based on the
recognition that a critical element in
prudently developing our domestic
resource base is a scientific assessment
of the risks which exploration and
production activities entail, and the
development of appropriate
technologies and processes to mitigate
these risks.
Domestic deepwater and ultradeepwater oil and gas resources, and
domestic unconventional natural gas
resources, are important contributors to
our Nation’s energy supply portfolio.
Recent events, the Macondo well
blowout and the Deepwater Horizon
explosion in the Gulf of Mexico, and
growing public opposition to the rapid
pace of shale gas development onshore
are stark reminders of the
environmental risks of our current
energy portfolio. The 2011 Annual Plan
proposes scientific research that will
quantify and mitigate risks associated
with oil and gas exploration and
production onshore and offshore,
thereby improving safety and
minimizing environmental impacts.
The Department will ensure that the
federal government’s understanding of
the risks associated with these
operations keeps pace. This will be
accomplished through scientific
assessment of the risks, potential
impacts, and adequacy of current
response and mitigation technologies.
The research discussed in this Annual
Report will be administered by the
Research Partnership to Secure Energy
for America (RPSEA), which operates
under the guidance of the Secretary of
Energy. RPSEA is a consortium which
includes representatives from industry,
academia and research institutions.
RPSEA’s expertise in all areas of the
exploration and production value chain
ensure that the Department of Energy’s
research program has access to relevant
emerging technologies and processes,
and that projects are designed in a way
that have a direct impact on practices in
the field.
Background
Offshore and onshore research
activities are administered pursuant to
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an annual plan in compliance with Title
IX, Subtitle J of EPACT, which directs
that $50 million per year of federal
royalties, rents and bonus payments be
used to fund an oil and natural gas
research and development (R&D) effort,
the Ultra-Deepwater and
Unconventional Natural Gas and Other
Petroleum Resources Research Program
(Program).
The Secretary of Energy approves all
awards to research performers, and the
planned R&D activities support the
goals and objectives of the annual plan.
The research activities are administered
by a Program Consortium that has been
selected by the Secretary, as detailed in
the Program Consortium section below.
The National Energy Technology
Laboratory (NETL) is responsible for
implementation of the Program. Within
NETL, the responsibility for overall
program implementation, including
oversight of the Program Consortium
contract, has been assigned to the
Strategic Center for Natural Gas and Oil.
Complementary research prescribed
under Section 999A(d) is carried out by
NETL’s Office of Research and
Development.
Program Consortium
In 2006, DOE selected the Research
Partnership to Secure Energy for
America (RPSEA) through a competitive
solicitation to serve as the Program
Consortium and administer the research
activities pursuant to Section 999B(c).
RPSEA has a broad membership base
that includes representatives from all
levels and sectors of both the oil and
natural gas exploration and production
(E&P) and oil and natural gas R&D
communities. The breadth of
membership helps to ensure that R&D
funds leverage existing industry efforts
in accomplishing the Program’s
objectives.
Administration funds provided to
RPSEA cannot exceed 10 percent
pursuant to Section 999G(3). The
private companies, universities, and
other organizations that are awarded
contracts through this program provide
cost-share contributions of at least 20
percent.
The Annual Plan Development Process
Pursuant to Section 999B(e)(2)(A), the
Program Consortium prepared its 2011
Draft Annual Plan (DAP) which it
delivered to the Secretary July 2010.
The Department of Energy prepared a
Draft 2011 Annual Plan. Subsequently,
the Draft 2011 Annual Plan and the DAP
were reviewed by the Unconventional
Resources Technology Advisory
Committee (URTAC) which presented
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]]>Agencies
[Federal Register Volume 76, Number 177 (Tuesday, September 13, 2011)]
[Notices]
[Pages 56409-56412]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-23356]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF ENERGY
Notice of Interim Approval
AGENCY: Southeastern Power Administration, DOE.
ACTION: Notice of rate order.
-----------------------------------------------------------------------
SUMMARY: The Deputy Secretary of the Department of Energy confirmed and
approved, on an interim basis, Rate Schedules JW-1-J and JW-2-F. The
rates were approved on an interim basis up to September 19, 2016, 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,
2011.
FOR FURTHER INFORMATION CONTACT: Virgil G. Hobbs III, Assistant
Administrator, Finance and Marketing, Southeastern Power
Administration, Department of Energy, 1166 Athens Tech Road, Elberton,
Georgia 30635-6711, (706) 213-3800. Relevant documents and transcripts
are available for inspection.
SUPPLEMENTARY INFORMATION: The Commission, by Order issued April 15,
2010, in Docket No. EF09-3031-000, confirmed and approved Wholesale
Power Rate Schedules JW-1-I and JW-2-F. Rate schedule JW-1-J replaces
rate schedule JW-1-I and rate schedule JW-2-F is extended up to
September 19, 2016.
Dated: September 2, 2011.
Daniel B. Poneman,
Deputy Secretary.
Department of Energy
Deputy Secretary
Rate Order No. SEPA-54
In the Matter of: Southeastern Power Administration--Jim Woodruff
Project Power Rates
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-I and JW-2-F. These rate schedules
were approved by the Commission on April 15, 2010, for a period ending
September 19, 2014 (131 FERC ]62,044).
Public Notice and Comment
Southeastern prepared a Power Repayment Study, dated January 2011,
showing revenues at current rates were adequate to meet repayment
criteria. However, the Jim Woodruff preference customers asked
Southeastern to revise the rates to include a pass-through of purchased
power expenses. The proposed capacity and energy charge reduction to
the preference customers will be completely recovered through this
separate, pass-through charge to the affected customers. This rate
structure revision will result in no net loss of revenue and will fully
meet system repayment criteria. On February 17, 2011, by Federal
Register notice (76 FR 9349), Southeastern proposed a rate adjustment.
The notice also announced a Public Information and Comment Forum to be
held March 29, 2011, in Tallahassee, Florida. Three parties asked
questions at the forum. Responses to the questions are part of the
written record of the forum, and a transcript of the forum is available
at Southeastern Power Administration (see FOR FURTHER INFORMATION
CONTACT section). The transcript of the forum is part of the record to
be filed with the Commission and will be available on the Commission's
Web site at https://www.ferc.gov. Written comments were accepted on or
before May 18, 2011. Written comments were received from one source the
Southeastern Federal Power Customers.
Staff Review of Comments
Written comments received from the Southeastern Federal Power
Customers are summarized below. Southeastern's response follows each
comment.
Comment 1: The Jim Woodruff preference customers support the
revised rate design SEPA has prepared.
Response 1: The rate schedules Southeastern will propose to the
Deputy Secretary will include the pass-through of purchased power
expenses as discussed with the preference customers.
Comment 2: While the preference customers of the Jim Woodruff
support the overall rate structure, including the new pass through
mechanism for purchased power expenses, they have concerns regarding
the assumptions for the Operations and Maintenance (``O&M'') expenses.
In materials provided by SEPA on April 25th, the Corps 2011 projections
revealed projected expenses for joint activities not specific to a
single business function had increased by more than three hundred
percent for each year until 2015. While preference customers throughout
the Southeast have long questioned the practices of the U.S. Army Corps
of Engineers (``Corps'') in assigning various costs of the Corps
program to this ``catch-all'' account, there appears to be no basis for
a three hundred percent increase in joint use costs.
Response 2: From fiscal year 2009 to fiscal year 2010, Joint O&M
allocated to power increased from $664,000 to $1,653,000, primarily as
a result of improvement projects funded by the American Recovery and
Reinvestment Act. The estimated Joint O&M allocated to power included
in the repayment study used to support the proposed rates, set forth
below, are similar to the
[[Page 56410]]
Joint O&M amounts from fiscal year 2009:
2011........$627,731
2012........$646,458
2013........$665,746
2014........$685,614
2015........$685,614
2016........$685,614
These estimates have been used to develop the proposed rate schedules.
Any variance of the actual costs incurred from these estimates will
impact the repayment of the federal investment and will be accounted
for in the next rate adjustment. Repayment is the residual of all
variances. The expenses reported by the Corps are reviewed annually by
Southeastern and are made available to the customers through the O&M
Committee of the SeFPC.
Comment 3: The full extent of SeFPC's O&M Committee is important to
note here because of statements that SEPA has made in the past when
questions have been raised regarding the amount of O&M in a rate. On
more than one occasion, SEPA has stated that questions regarding the
level of O&M in a rate should be addressed in the meeting of the O&M
committee, thereby indicating the SeFPC's O&M committee has a quasi
administrative review of the Corps operations. The record needs to be
corrected and set clear on this point.
Response 3: The activities of the O&M Committee of the SeFPC, in
which both Southeastern and the Corps participate, provides customers
an 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. Adjustments to the program
are often made as a result of questions raised at the meetings.
Questions regarding the level of Corps O&M in a rate may be raised
at any time. If the questions are raised to Southeastern, Southeastern
will usually forward the questions to the Corps for a response. The
Corps provides representatives who participate and answer questions in
the meetings of the O&M Committee. The SeFPC's O&M committee does not
conduct any administrative review of the Corps operations.
Comment 4: The Corps has no authority to set the rates charged to
the preference customers. This responsibility is solely vested with the
Administrator pursuant to Section 5 of the Flood Control Act of 1944.
Thus, when there is a question regarding the amount of O&M to be
included in a proposed rate, the preference customers appropriately
raise concerns with SEPA.
However, SEPA does have a relationship with the Corps as defined in
a Memorandum of Understanding setting forth the responsibilities
between the two agencies. Moreover, the Administrator has the
responsibility under the Flood Control Act of 1944 to set the rates.
Therefore, in the context of a rate increase which involves questions
regarding O&M, the Administrator has the final say and all questions
regarding the ultimate level of O&M recovery are appropriately resolved
by SEPA rather than the SeFPC O&M committee.
Response 4: There is a Memorandum of Understanding between the
South Atlantic Division of the U.S. Army Corps of Engineers and the
Administrator of Southeastern Power Administration (MOU) established
June 20, 1991. The MOU is available at Southeastern Power
Administration (See FOR FURTHER INFORMATION CONTACT Section). This MOU
recognizes the respective roles these two federal entities play in the
Southeastern Federal Power Program.
Section 4 (c.) of the MOU states, ``It is recognized that the
preference customers of the Southeastern Federal Power Program have an
interest in the maintenance, operation and maintenance expense, and
funding. It is the intent of the parties to develop a relationship of
mutual respect and trust between the parties and the preference
customers to resolve controversial issues through discussion rather
than confrontation. The parties, therefore, agree to meet as needed
with the customers, or their designated representatives, to discuss
maintenance, expense and funding procedures.''
The MOU also provides that the Corps will provide Southeastern with
summarized financial statements and the statements will be audited
periodically by an independent auditing firm.
Section 5 of the Flood Control Act of 1944 states, ``Rate schedules
shall be drawn having regard to the recovery (upon the basis of the
application of such rate schedules to the capacity of the electric
facilities of the projects) of the cost of producing and transmitting
such electric energy, including the amortization of the capital
investment allocated to power over a reasonable period of years.''
The Corps does not submit its budget to Southeastern, and
Southeastern has no authority over the Corps' spending of Congressional
appropriations. Southeastern is legally responsible for the recovery of
costs properly allocated to the power function. While the Administrator
is responsible for formulating rate schedules for the recovery of these
costs, the rate schedules are required to be submitted to the Deputy
Secretary of the Department of Energy for interim approval and to the
Federal Energy Regulatory Commission for final approval.
The O&M Committee of the SeFPC also has no authority over the Corps
O&M expense.
Discussion
System Repayment
An examination of Southeastern's revised system power repayment
study, prepared in July 2011, for the Jim Woodruff Project, shows the
proposed rates will pay all system power costs within the 50-year
repayment period required by existing law and DOE Order RA 6120.2. The
Administrator of Southeastern has certified the rates are consistent
with applicable law and 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, 2011, and ending no
later than September 19, 2016.
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, 2011, attached Wholesale Power
Rate Schedules JW-1-J and JW-2-F. The rate schedules shall remain in
effect on an interim basis
[[Page 56411]]
through September 19, 2016, 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 2, 2011.
Daniel B. Poneman,
Deputy Secretary.
Wholesale Power Rate Schedule JW-1-J
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:
$10.29 per kilowatt of monthly contract demand.
Energy Charge:
26.51 mills per kilowatt-hour.
Purchased Power Pass-Through:
In addition to the capacity and energy charges, each preference
customer will be charged for power purchased by Southeastern on
behalf of the preference customer. This pass-through will be
computed as follows:
On or about the 20th of each month, Progress Energy provides
Southeastern with the meter readings for preference customer's
delivery points that have an allocation of capacity from
Southeastern. Subsequently, Progress Energy provides Southeastern
with reports of purchased power and support capacity requirements
around the 10th of the succeeding month. Southeastern will compute
its purchased power obligation for each delivery point monthly.
Southeastern will compute any revenue from sales to Progress Energy
for each delivery point monthly. Southeastern will sum the purchased
power obligation and any revenue from sales to Progress Energy for
each preference customer monthly. The purchased power obligation
minus any revenue from sales to Progress Energy for each customer
will be called the Net Purchased Power Cost. Southeastern will
charge each customer its respective monthly Net Purchased Power Cost
in equal portions over the next eleven billing months. This
computation of the pass-through is to begin 11 months before the
pass-through is implemented. The first bill prepared using this
method is to include the computations for the previous 11 months.
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 12:00 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.
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] TN13SE11.009
[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, switchyard, village
lighting, and similar uses.
The on-peak hours shall be the hours between 7:00 a.m. and 11:00
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
[[Page 56412]]
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.
Power Factor:
The purchaser and seller under this rate schedule agree that
they will both so operate their respective systems that neither
party will impose an undue reactive burden on the other.
[FR Doc. 2011-23356 Filed 9-12-11; 8:45 am]
BILLING CODE 6450-01-P
