Pacific Northwest-Pacific Southwest Intertie Project-Rate Order No. WAPA-157, 19700-19705 [2013-07618]
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19700
Federal Register / Vol. 78, No. 63 / Tuesday, April 2, 2013 / Notices
Filed Date: 3/26/13.
Accession Number: 20130326–5190.
Comments Due: 5 p.m. ET 4/16/13.
Docket Numbers: ER13–1163–000.
Applicants: Arizona Public Service
Company.
Description: Palo Verde-Morgan
500kV Transmission Project Joint
Participation Agreement to be effective
5/24/2013.
Filed Date: 3/25/13.
Accession Number: 20130325–5108.
Comments Due: 5 p.m. ET 4/15/13.
Docket Numbers: ER13–1164–000.
Applicants: American Electric Power
Service Corporation, Ohio Power
Company, PJM Interconnection, L.L.C.
Description: AEP submits new RAA
Schedule 8.1 Appendix-Ohio Power
Company FRR Capacity Rate to be
effective 8/8/2012.
Filed Date: 3/25/13.
Accession Number: 20130325–5148.
Comments Due: 5 p.m. ET 4/15/13.
Take notice that the Commission
received the following open access
transmission tariff filings:
Docket Numbers: OA13–3–000.
Applicants: New York Independent
System Operator, Inc.
Description: Annual Compliance
Report Regarding Unreserved Use and
Late Study Penalties of the New York
Independent System Operator, Inc.
Filed Date: 3/26/13.
Accession Number: 20130326–5255.
Comments Due: 5 p.m. ET 4/16/13.
The filings are accessible in the
Commission’s eLibrary system by
clicking on the links or querying the
docket number.
Any person desiring to intervene or
protest in any of the above proceedings
must file in accordance with Rules 211
and 214 of the Commission’s
Regulations (18 CFR 385.211 and
385.214) on or before 5:00 p.m. Eastern
time on the specified comment date.
Protests may be considered, but
intervention is necessary to become a
party to the proceeding.
eFiling is encouraged. More detailed
information relating to filing
requirements, interventions, protests,
service, and qualifying facilities filings
can be found at: https://www.ferc.gov/
docs-filing/efiling/filing-req.pdf. For
other information, call (866) 208–3676
(toll free). For TTY, call (202) 502–8659.
Dated: March 26, 2013.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
DEPARTMENT OF ENERGY
Federal Energy Regulatory
Commission
[Docket No. CP13–104–000]
Columbia Gas Transmission, LLC;
Notice of Request Under Blanket
Authorization
Take notice that on March 15, 2013,
Columbia Gas Transmission, LLC
(Columbia) 5151 San Felipe, Suite 2500,
Houston, Texas 77056, filed in Docket
No. CP13–104–000, an application
pursuant to sections 157.205, 157.208,
and 157.216(b) of the Commission’s
Regulations under the Natural Gas Act
(NGA) as amended, to abandon and
construct certain natural gas pipeline
facilities in Johnson and Martin
Counties, Kentucky, under Columbia’s
blanket certificate issued in Docket No.
CP83–76–000,1 all as more fully set
forth in the application which is on file
with the Commission and open to the
public for inspection.
Columbia proposes to abandon and
replace approximately 6.5 miles of bare,
coupled 10-inch diameter pipeline
originally constructed in 1912 without
cathodic protection on its Line PM–117
in Johnson and Martin Counties,
Kentucky. Columbia also proposes to
replace the abandoned pipeline with
approximately 7.4 miles of new 6-inch
diameter coated, cathodically protected,
steel pipeline. Columbia states that the
reduction in pipeline diameter would
have no adverse effect on Columbia’s
ability to meet its operational and firm
commitments on this pipeline.
Columbia also states that it would cost
approximately $15,400,000 to replace
the aging pipe on Line PM–117.
Columbia states that because of the
necessary relocation of a significant
portion of Line PM–117, Columbia has
identified 10 mainline consumer taps
that would be abandoned as part of the
proposed replacement. Columbia also
states that continuity of service to the
affected consumers would be
maintained by converting them to an
alternate energy source.
Any questions concerning this
application may be directed to Fredric
J. George, Senior Counsel, Columbia Gas
Transmission, LLC, P.O. Box 1273,
Charleston, West Virginia 25325–1273
or via telephone at (304) 357–2359 or by
facsimile (304) 357–3206.
This filing is available for review at
the Commission or may be viewed on
the Commission’s Web site at https://
www.ferc.gov, using the ‘‘eLibrary’’ link.
Enter the docket number excluding the
[FR Doc. 2013–07587 Filed 4–1–13; 8:45 am]
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BILLING CODE 6717–01–P
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FERC ¶ 62,029 (1983).
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last three digits in the docket number
filed to access the document. For
assistance, please contact FERC Online
Support at FERC
OnlineSupport@ferc.gov or call toll-free
at (866) 206–3676, or, for TTY, contact
(202) 502–8659. Comments, protests and
interventions 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 under the ‘‘e-Filing’’ link. The
Commission strongly encourages
intervenors to file electronically.
Any person or the Commission’s staff
may, within 60 days after issuance of
the instant notice by the Commission,
file pursuant to Rule 214 of the
Commission’s Procedural Rules (18 CFR
385.214) a motion to intervene or notice
of intervention and pursuant to Section
157.205 of the regulations under the
NGA (18 CFR 157.205), a protest to the
request. If no protest is filed within the
time allowed therefore, the proposed
activity shall be deemed to be
authorized effective the day after the
time allowed for filing a protest. If a
protest is filed and not withdrawn
within 30 days after the allowed time
for filing a protest, the instant request
shall be treated as an application for
authorization pursuant to Section 7 of
the NGA.
Dated: March 26, 2013.
Kimberly D. Bose,
Secretary.
[FR Doc. 2013–07544 Filed 4–1–13; 8:45 am]
BILLING CODE 6717–01–P
DEPARTMENT OF ENERGY
Western Area Power Administration
Pacific Northwest-Pacific Southwest
Intertie Project—Rate Order No.
WAPA–157
Western Area Power
Administration, DOE.
ACTION: Notice of Final Transmission
Service Rates.
AGENCY:
The Deputy Secretary of
Energy confirmed and approved Rate
Order No. WAPA–157 and Rate
Schedules INT–FT5 and INT–NFT4,
placing firm and nonfirm transmission
service rates for the Pacific NorthwestPacific Southwest Intertie Project
(Intertie) of the Western Area Power
Administration (Western) into effect on
an interim basis. The provisional rates
will be in effect until the Federal Energy
Regulatory Commission (FERC)
confirms, approves, and places them
into effect on a final basis, or until they
are replaced by other rates. The
SUMMARY:
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provisional rates will provide sufficient
revenue to pay all annual costs,
including interest expense, and repay
required investment within the
allowable periods.
Rate Schedules INT–FT5 and
INT–NFT4 are effective on the first day
of the first full billing period beginning
on or after May 1, 2013.
DATES:
Mr.
Jack Murray, Rates Manager, Desert
Southwest Customer Service Regional
Office, Western Area Power
Administration, P.O. Box 6457,
Phoenix, AZ 85005–6457, (602) 605–
2442, email jmurray@wapa.gov.
FOR FURTHER INFORMATION CONTACT:
The
previous Rate Schedules INT–FT4 and
INT–NFT3 for Rate Order No. WAPA–
130, were approved by FERC for a 5year period through September 30,
2012.1 These Rate Schedules were
extended temporarily through
September 30, 2013, under Rate Order
No. WAPA–159.2 Rate Schedules INT–
FT4 and INT–NFT3 are being
superseded by Rate Schedules INT–FT5
and INT–NFT4. Under Rate Schedule
INT–FT4, the rate for firm point-to-point
transmission service is $15.24 per
kilowatt year (kW-year). The provisional
rate for firm point-to-point transmission
service under Rate Schedule INT–FT5 is
$19.32/kW-year, which represents an
increase of 26.8 percent when compared
with the existing rate. Under Rate
Schedule INT–NFT3, the rate for
nonfirm point-to-point transmission
service is 1.74 mills per kilowatt hour
(mills/kWh). The provisional rate for
nonfirm point-to-point transmission
service under Rate Schedule INT–NFT4
is 2.21 mills/kWh, which represents an
increase of 27 percent when compared
with the existing rate.
By Delegation Order No. 00–037.00,
effective December 6, 2001, the
Secretary of Energy delegated: (1) The
authority to develop power and
transmission rates to Western’s
Administrator, (2) the authority to
confirm, approve, and place such rates
into effect on an interim basis to the
Deputy Secretary of Energy, and (3) the
authority to confirm, approve, and place
into effect on a final basis, to remand,
or to disapprove such rates to FERC.
Existing Department of Energy
procedures for public participation in
power rate adjustments (10 CFR part
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SUPPLEMENTARY INFORMATION:
1 Rate Order No. WAPA–130 was approved by
FERC on a final basis on March 18, 2008, in Docket
No. EF08–5191–000 (122 FERC ¶ 62,236).
2 Rate Order No. WAPA–159 was approved by the
Deputy Secretary of Energy on August 27, 2012 (77
FR 54575; September 5, 2012), and filed with FERC
for informational purposes only.
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903) were published on September 18,
1985.
Under Delegation Order Nos.
00–037.00 and 00–001.00D, and in
compliance with 10 CFR part 903 and
18 CFR part 300, I hereby confirm,
approve, and place Rate Order No.
WAPA–157 and the proposed rates for
transmission service into effect on an
interim basis. The new Rate Schedules
INT–FT5 and INT–NFT4 will be
submitted promptly to FERC for
confirmation and approval on a final
basis.
Dated: March 27, 2013.
Daniel B. Poneman,
Deputy Secretary of Energy.
In the matter of: Western Area Power
Administration Rate Adjustment for the
Pacific Northwest-Pacific Southwest Intertie
Project.
Order Confirming, Approving, and
Placing the Pacific Northwest-Pacific
Southwest Intertie Project Transmission
Service Rates Into Effect on an Interim
Basis
These rates were established in
accordance with section 302 of the
Department of Energy (DOE)
Organization Act (42 U.S.C. 7152). This
Act transferred to and vested in the
Secretary of Energy the power marketing
functions of the Secretary of the
Department of the Interior and the
Bureau of Reclamation under the
Reclamation Act of 1902 (ch. 1093, 32
Stat. 388), as amended and
supplemented by subsequent laws,
particularly section 9(c) of the
Reclamation Project Act of 1939 (43
U.S.C. 485h(c)), and other Acts that
specifically apply to the project
involved.
By Delegation Order No. 00–037.00,
effective December 6, 2001, the
Secretary of Energy delegated: (1) The
authority to develop power and
transmission rates to Western’s
Administrator, (2) the authority to
confirm, approve, and place such rates
into effect on an interim basis to the
Deputy Secretary of Energy, and (3) the
authority to confirm, approve, and place
into effect on a final basis, to remand,
or to disapprove such rates to the
Federal Energy Regulatory Commission.
Existing DOE procedures for public
participation in power rate adjustments
(10 CFR part 903) were published on
September 18, 1985.
Acronyms and Definitions
As used in this Rate Order, the
following acronyms and definitions
apply:
Administrator: Administrator for the Western
Area Power Administration.
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Balancing Authority (BA): The responsible
entity that integrates resource plans ahead
of time, maintains load-interchangegeneration balance within a designated
area, and supports interconnection
frequency in real-time.
Capacity: The electric capability of a
transformer, transmission circuit, or other
equipment, expressed in kilowatts (kW).
Customer: An entity with a contract or
service agreement that receives service
from Western’s Desert Southwest Region.
Deficits: Deferred or unrecovered annual
expenses.
DOE: United States Department of Energy.
DOE Order RA 6120.2: A DOE order
outlining power marketing administration
financial reporting and ratemaking
procedures.
Desert Southwest Region: The Desert
Southwest Customer Service Region of
Western.
FERC: Federal Energy Regulatory
Commission.
Firm: A type of product and/or service that
is available at the time requested by the
customer.
FRN: Federal Register notice.
Intertie: Pacific Northwest-Pacific Southwest
Intertie Project.
Kilovolt (kV): Electrical unit of measure of
potential difference that equals 1,000 volts.
Kilowatt (kW): Electrical unit of capacity that
equals 1,000 watts.
Kilowatt hour (kWh): Electrical unit of energy
that equals 1,000 watts in 1 hour.
Kilowatt month (kW-month): Electrical unit
of the monthly amount of capacity.
Kilowatt year (kW-year): Electrical unit of the
yearly amount of capacity.
Mill: A monetary denomination of the United
States that equals one tenth of a cent or one
thousandth of a dollar.
Mills per kilowatt hour (mills/kWh): A unit
of charge.
NEPA: National Environmental Policy Act of
1969 (42 U.S.C. 4321, et seq.).
Nonfirm: A type of product and/or service
not always available at the time requested
by the customer.
Open Access Same Time Information System
(OASIS): An electronic posting system that
a service provider maintains for
transmission access data that allows all
customers to view information
simultaneously.
O&M: Operation and Maintenance.
Power Repayment Study (PRS): A study used
to determine how much revenue is needed
to cover annual costs and future repayment
obligations.
Proposed Rate: A rate that has been
recommended by Western to the Deputy
Secretary of Energy for approval.
Provisional Rate: A rate that has been
confirmed, approved, and placed into
effect on an interim basis by the Deputy
Secretary of Energy.
PPW: Purchase Power and Wheeling.
Rate Brochure: A document prepared for
public distribution explaining the rationale
and background for the rate proposal
contained in this rate order dated June
2012.
Reclamation: United States Department of
Interior, Bureau of Reclamation.
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Western: Western Area Power
Administration.
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Effective Date
The new provisional rates will take
effect on the first day of the first full
billing period beginning on or after May
1, 2013, and will remain in effect
through April 30, 2018, pending
approval by FERC on a final basis.
Public Notice and Comment
Western followed the Procedures for
Public Participation in Power and
Transmission Rate Adjustments and
Extensions, 10 CFR part 903, in
developing these rates. The steps
Western took to involve interested
parties in the rate process were:
1. A FRN was published on June 11,
2012, (77 FR 34381) announcing the
proposed rates for transmission service,
initiating a public consultation and
comment period, and setting forth the
dates and locations of public
information and public comment
forums.
2. On June 14, 2012, Western notified
all Intertie customers and interested
parties of the rate adjustment and
provided a copy of the published FRN.
3. On June 28, 2012, Western held a
public information forum in Phoenix,
Arizona. Western explained the
proposed rates and potential changes to
the proposed rates, answered questions,
and provided rate brochures and
presentation handouts.
4. On July 10, 2012, Western held a
public comment forum in Phoenix,
Arizona, to give the public an
opportunity to comment for the record.
Four individuals commented at this
forum.
5. On August 14, 2012, Western
received a data request for information.
6. On August 31, 2012, Western
provided the information requested by
sending a compact disc containing
numerous electronic data files.
7. On September 10, 2012, Western
received requests to extend the 90-day
consultation and comment period to
allow interested parties sufficient time
to analyze the information Western
distributed on August 31, 2012, and
respond accordingly.
8. On September 19, 2012, Western’s
Acting Administrator extended the
consultation and comment period
through October 8, 2012.
9. On September 20, 2012, Western
notified all Intertie customers and
interested parties of the extension and
provided a copy of the notice from
Western’s Acting Administrator.
10. Western received three comment
letters during the consultation and
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comment period. All formally submitted
comments have been considered in
preparing this Rate Order.
11. Western provided a Web site for
information about this rate adjustment
process. The Web site is located at
www.wapa.gov/dsw/pwrmkt/Intertie/
RateAdjust.htm.
Comments
Representatives of the following
organizations made oral comments:
Arizona Power Authority, Phoenix,
Arizona; Arizona Municipal Power
Users’ Association, Phoenix, Arizona;
K.R. Saline & Associates, Mesa, Arizona;
and Irrigation & Electrical Districts
Association of Arizona, Phoenix,
Arizona.
Written comments were received from
the following organizations: Arizona
Municipal Power Users’ Association,
Phoenix, Arizona; Griffith Energy LLC,
Houston, Texas; and Irrigation &
Electrical Districts Association of
Arizona, Phoenix, Arizona.
Project Description
The Intertie was authorized by
Section 8 of the Pacific Northwest
Power Marketing Act of August 31, 1964
(16 U.S.C. 837g). The basic purpose of
the Intertie was to provide, through
transmission system interconnections
among certain Federal and non-Federal
power systems, maximum use of power
resources to meet growing demands.
This purpose was to be accomplished
through the exchange of summer-winter
surplus peaking capacity between the
northwest and southwest to reduce
capital expenditures for new generating
capacity; the sale of northwest
secondary energy to the southwest; the
sale of southwest energy to the
northwest to ‘‘firm’’ peaking
hydroelectric sources during critical
water years; conservation of significant
amounts of fuel through the use of
surplus hydroelectric energy; and
increased efficiency in the operation of
hydroelectric and thermal resources. As
authorized, the Intertie was to be a
cooperative construction venture by
Federal and non-Federal entities,
incorporating the capability for
alternating current (AC) and direct
current (DC) transmission service.
The Lower Colorado Region of
Reclamation was assigned construction
jurisdiction for: (i) The Celilo-Mead 750kV DC transmission line from the
Oregon-Nevada border to Mead
Substation; (ii) Mead Substation; and
(iii) all facilities south of Mead
Substation. Several delays in
construction funding for the CeliloMead 750-kV DC transmission line
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revised its estimated in-service date to
the point that potential users withdrew
their interest. This, and the subsequent
lack of congressional funding, resulted
in the May 1969 indefinite
postponement of the Celilo-Mead 750kV DC transmission line construction.
The only facilities constructed were
Mead Substation and all facilities south
of Mead Substation, which provide AC
transmission service. Pursuant to
section 302 of the Department of Energy
Organization Act (42 U.S.C. 7152), dated
August 4, 1977, these Reclamation
constructed facilities were transferred to
Western.
Western’s Desert Southwest Region
administers these facilities as a standalone transmission project for
operational, financial, and repayment
purposes. The transmission facilities
consist of a 256-mile, 500-kV
transmission line from Mead Substation
(Nevada) to Perkins Substation
(Arizona); a 202-mile, 500-kV
transmission line from Mead Substation
to Adelanto Switching Substation
(California); a 238-mile, 345-kV
transmission line from Mead Substation
to Liberty Substation (Arizona); a 19mile, 230-kV transmission line from
Liberty Substation to Westwing
Substation (Arizona); and a 22-mile,
230-kV transmission line from
Westwing Substation to Pinnacle Peak
Substation (Arizona).
Existing and Provisional Rates
The existing rates for point-to-point
transmission service consist of a firm
rate and a nonfirm rate. The current rate
for firm point-to-point transmission
service under Rate Schedule INT–FT4 is
$15.24/kW-year. The current rate for
nonfirm point-to-point transmission
service under Rate Schedule INT–NFT3
is 1.74 mills/kWh. The existing rates
under Rate Schedules INT–FT4 and
INT–NFT3 expire September 30, 2013.
The provisional rates will supersede
the existing rates and become effective
on an interim basis on the first day of
the first full billing period beginning on
or after May 1, 2013. The provisional
rate for firm point-to-point transmission
service under Rate Schedule INT–FT5 is
$19.32/kW-year. The provisional rate for
nonfirm point-to-point transmission
service under Rate Schedule INT–NFT4
is 2.21 mills/kWh. The provisional rates
will result in a rate increase of
approximately 27 percent when
compared to the existing rates. A
comparison of the existing and
provisional rates for transmission
service follows:
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COMPARISON OF EXISTING AND PROVISIONAL RATESPACIFIC NORTHWEST—PACIFIC SOUTHWEST INTERTIE PROJECT
Transmission service
Existing rates
Provisional rates
(effective 5/1/13)
Firm Point-to-Point ........................................................
Nonfirm Point-to-Point ..................................................
$15.24/kW-year ...............................
1.74 mills/kWh ................................
$19.32/kW-year ...............................
2.21 mills/kWh ................................
Certification of Rates
Western’s Acting Administrator
certified that the provisional rates for
transmission service under Rate
Schedules INT–FT5 and INT–NFT4 are
the lowest possible rates consistent with
sound business principles. The
provisional rates were developed
following administrative policies and
applicable laws.
Transmission Rate Discussion
According to Reclamation Law,
Western must establish rates sufficient
to recover annual O&M, purchase
power, transmission service and other
costs, interest expense, and repay
investments. Western prepares a PRS
each fiscal year to determine if the
existing rates will provide adequate
revenues to repay all power system
costs within the required time.
Repayment criteria are based on existing
law and applicable policies, including
DOE Order RA 6120.2. To meet the cost
recovery criteria outlined in DOE Order
RA 6120.2, a PRS using the provisional
rates has been developed to demonstrate
that sufficient revenues will be available
to meet future obligations.
The existing rates are insufficient and
do not provide adequate revenues to
cover costs. The revenue deficiency is a
result of lower-than-projected sales of
transmission service. The existing rates
were based on projected sales of 500-kV
transmission service increasing each
year during the 5-year cost evaluation
period. The actual demand for
transmission capacity was significantly
less than expected and the projected
sales did not materialize. As a result, the
revenue derived from the sales of 500kV transmission service over the 5-year
cost evaluation period has been
considerably lower than planned. The
provisional rates include a notable
reduction in the sales forecast for 500kV transmission service over the next
5-year cost evaluation period, which is
the primary factor that led to the rate
increase.
A secondary factor of the rate increase
is that when the existing rates were
established, purchase power was
handled separately for each power
system and the Intertie, being a standalone transmission project, had no
Change
(percent)
26.8
27.0
purchase power costs to recover. Since
then, Western’s BA for the Desert
Southwest Region has initiated power
purchases for reliability purposes and
the associated costs are allocated to all
of the applicable transmission projects
within the BA, including the Intertie.
These annual purchase power costs are
subject to recovery and have been
included in the provisional rates.
Another factor impacting the rate
increase is the requirement to pay off
maturing debt associated with the
original project. In 1970, a major
element of the original project was
placed into commercial service, which
initiated the repayment cycle. This debt
of $28.4 million must be paid by 2020,
which is the last year this investment is
allowed to remain unpaid. Principal
payments for this debt have been
included in the provisional rates.
Statement of Revenue and Related
Expenses
The following table provides a
summary of projected revenue and
expense data for the provisional rates
through the 5-year approval period.
INTERTIE TRANSMISSION RATES—COMPARISON OF 5-YEAR APPROVAL PERIOD—TOTAL REVENUES AND EXPENSES
Existing
rates
($000)
Provisional
rates
($000)
Difference
($000)
$172,149
$187,873
$15,724
34,337
0
9,232
91,105
38,090
3,700
8,411
92,206
3,753
3,700
(821)
1,101
Total Expenses ..................................................................................................................
Principal Payments:
Capitalized Deficits ....................................................................................................................
Original Project and Additions ...................................................................................................
Replacements ............................................................................................................................
134,674
142,407
7,733
34,188
3,177
110
30,092
15,019
355
(4,096)
11,842
245
Total Principal Payments ............................................................................................
37,475
45,466
7,991
Total Revenue Distribution .........................................................................................
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Total Revenues ........................................................................................................................................
Revenue Distribution
Expenses:
O&M ..........................................................................................................................................
Purchase Power ........................................................................................................................
Transmission Service & Other ..................................................................................................
Interest .......................................................................................................................................
172,149
187,873
15,724
Comments
The comments and responses
regarding the proposed rates,
paraphrased for brevity when not
affecting the meaning of the
statement(s), are discussed below. Direct
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quotes from comment letters are used
for clarification where necessary.
Comment: Western should either
suspend or terminate the rate
adjustment until the next fiscal year
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since the existing rates have been
extended until September 30, 2013.
Response: The existing rates do not
provide sufficient revenue to cover all
annual costs and repay outstanding debt
within the allowable time frame. Since
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the existing rates were set to expire on
September 30, 2012, a temporary
extension was requested so that Western
could have additional time to complete
the rate adjustment process. The
proposed rates will supersede the
existing rates when approved.
Comment: Customers wish to
continue a dialogue with Western over
certain costs that have been included in
the proposed rates.
Response: These costs are associated
with the PPW program for Western’s BA
in the Desert Southwest Region.
Western is committed to working with
its customers to ensure the allocation of
purchase power costs is appropriate. An
internal team is being formed to
examine all aspects of the PPW
program, including required reserves,
and will work collaboratively with
customers as additional information
becomes available.
Comment: Western should consider
phasing in the proposed rate increase
over two or more years to lessen the
negative impact on its customers.
Western should develop lower rates as
an alternative to its proposed rates.
Response: The proposed rates will
provide adequate revenue to cover debt
payments that must be made by 2020. It
would not be financially prudent to
delay the proposed rate increase. Such
action would only shorten the period of
time available to accumulate sufficient
revenue and result in substantial rate
increases until the outstanding debt is
paid.
Comment: Western should extend the
90-day consultation and comment
period to allow sufficient time to review
and comment on the information
provided in the data request response
dated August 31, 2012.
Response: Western’s Acting
Administrator extended the
consultation and comment period from
September 10, 2012, to October 8, 2012.
A copy of the notice of extension was
sent to all Intertie customers and
interested parties on September 20,
2012, and posted to Western’s Web site
at www.wapa.gov/dsw/pwrmkt/Intertie/
RateAdjust.htm and to Western’s OASIS
at www.oatioasis.com/WALC/
index.html.
Comment: Western should make
available to all customers and interested
parties the information provided in a
data request response dated August 31,
2012.
Response: Concur. The information
provided consisted of numerous
electronic data files that were originally
sent on a compact disc. Western posted
a copy of these files to its Web site at
www.wapa.gov/dsw/pwrmkt/Intertie/
RateAdjust.htm on September 20, 2012.
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Comment: Do the proposed rates
include capitalized costs from the use of
prepayments?
Response: The proposed rates do not
include any construction projects that
have been funded via prepayments. In
addition, none of the customer
approved construction projects for
prepayment funding involve Intertie
transmission facilities.
Comment: Has Western’s Operations
Consolidation Project or Balancing
Authority Consolidation resulted in any
cost increases that are included in the
proposed rates?
Response: The proposed rates do not
include any cost increases associated
with these consolidation activities and
efforts. The factors leading to the
proposed rate increase are the continual
shortfall in sales of 500-kV transmission
service, inclusion of purchased power
costs, and the required debt payments
that must be made by FY 2020.
Comment: Does Western’s BA in the
Rocky Mountain Region have any cost
impact on the proposed rates?
Response: The proposed rates only
include costs associated with Western’s
BA in the Desert Southwest Region.
Comment: The proposed rate increase
will cause prices for energy delivered by
customers using the Intertie to become
uncompetitive with other competing
energy suppliers.
Response: Western acknowledges that
the proposed rates represent a
significant increase for the Intertie
customers. However, Western is
required to establish rates that are
sufficient to recover annual costs and
repay investments to satisfy the cost
recovery criteria outlined in DOE Order
RA 6120.2. The proposed rates are costbased and do not include a rate of return
on capital investment. Western will
continue to explore methods to control
costs and maintain stable transmission
service rates.
Availability of Information
All brochures, studies, comments,
letters, memorandums, and other
documents that Western used to
develop the provisional rates are
available for inspection and copying at
the Desert Southwest Customer Service
Regional Office, Western Area Power
Administration, 615 South 43rd
Avenue, Phoenix, AZ 85009–5313.
Many of these documents and
supporting information are available on
Western’s Web site at www.wapa.gov/
dsw/pwrmkt/Intertie/RateAdjust.htm.
Ratemaking Procedure Requirements
Environmental Compliance
In compliance with the NEPA of 1969
(42 U.S.C. 4321, et seq.); Council on
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Fmt 4703
Sfmt 4703
Environmental Quality Regulations for
implementing NEPA (40 CFR parts
1500–1508); and DOE NEPA
Implementing Procedures and
Guidelines (10 CFR part 1021), Western
has determined that this action is
categorically excluded from preparing
an environmental assessment or an
environmental impact statement.
Determination Under Executive Order
12866
Western has an exemption from
centralized regulatory review under
Executive Order 12866; accordingly, no
clearance of this notice by the Office of
Management and Budget is required.
Submission to the Federal Energy
Regulatory Commission
The provisional interim rates herein
confirmed, approved, and placed into
effect, together with supporting
documents, will be submitted to FERC
for confirmation and final approval.
Order
In view of the foregoing and under the
authority delegated to me, I confirm and
approve on an interim basis, effective
May 1, 2013, Rate Schedules INT–FT5
and INT–NFT4 for the Pacific
Northwest-Pacific Southwest Intertie
Project of the Western Area Power
Administration. The rate schedules
shall remain in effect on an interim
basis pending FERC’s confirmation and
approval of them or substitute rates on
a final basis through April 30, 2018.
Dated: March 27, 2013,
Daniel B. Poneman,
Deputy Secretary of Energy.
Certification of Rates
Western Area Power Administration
Desert Southwest Customer Service
Region
I certify that the rates under Rate
Schedules INT–FT5 and INT–NFT4 for
the Pacific Northwest-Pacific Southwest
Intertie Project were developed
following administrative policies and
applicable laws and the rates are the
lowest possible, consistent with sound
business principles.
Dated: February 13, 2013.
Anita J. Decker,
Acting Administrator.
Long-Term and Short-Term Firm PointTo-Point Transmission Service
Effective: The first day of the first full
billing period beginning on or after May
1, 2013, and will remain in effect
through April 30, 2018, or until
superseded by another rate schedule.
Applicable: To firm point-to-point
transmission service customers where
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capacity and energy are supplied to the
Pacific Northwest-Pacific Southwest
Intertie Project (Intertie) transmission
system at points of interconnection with
other systems and transmitted and
delivered, less losses, to points of
delivery on the Intertie transmission
system.
Long-Term Rate: For transmission
service of one year or longer, the rate is
$19.32 for each kilowatt (kW) per year,
payable monthly at the rate of $1.61 for
each kW per month.
Short-Term Rates: For transmission
service up to one year, the maximum
rate for each kW is as follows:
Monthly: $1.61
Weekly: $0.3715
Daily: $0.0529
Hourly: 2.21 mills
Discounts may be offered from timeto-time in accordance with Western’s
Open Access Transmission Tariff
(OATT).
Billing: Western will bill firm pointto-point transmission service customers
monthly by applying the rates listed
above to the amount of capacity
reserved. Payment for long-term
transmission service will be required
one month in advance of said service.
Character and Conditions of Service:
Alternating current at 60 hertz, threephase, delivered and metered at the
voltages and points of delivery
established by the service agreement or
contract.
Adjustments for Reactive Power:
There shall be no entitlement to transfer
of reactive kilovolt-amperes at delivery
points, except when such transfers may
be mutually agreed upon by the
customer and Western or their
authorized representatives.
Adjustments for Losses: Capacity and
energy losses incurred in connection
with the transmission and delivery of
capacity and energy under this rate
schedule shall be supplied by the
customer in accordance with the service
agreement or contract. If losses are not
fully provided by a customer, charges
for financial compensation may apply.
Unreserved Use: Western will assess a
charge for any unreserved use of the
transmission system. Unreserved use
occurs when a customer uses
transmission service that it has not
reserved or uses transmission service in
excess of its reserved capacity.
Unreserved use may also include a
customer’s failure to curtail
transmission when requested.
The charge for unreserved use is two
times the maximum allowable rate for
the service at issue, assessed as follows:
The penalty for a single hour of
unreserved use is based on the daily
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short-term rate. The penalty for more
than one assessment of unreserved use
for any given duration (e.g., daily)
increases to next longest duration (e.g.,
weekly). The penalty for multiple
instances of unreserved use (e.g., more
than one hour) within a day is based on
the daily short-term rate. The penalty
for multiple instances of unreserved use
isolated to one calendar week is based
on the weekly short-term rate. The
penalty for multiple instances of
unreserved use during more than one
week in a calendar month is based on
the monthly short-term rate.
A customer that exceeds its reserved
capacity at any point of receipt or point
of delivery, or a customer that uses
transmission service at a point of receipt
or point of delivery that it has not
reserved, is required to pay for all
ancillary services that were provided by
the Western Area Lower Colorado
(WALC) Balancing Authority and
associated with the unreserved use. The
customer will pay for ancillary services
based on the amount of transmission
service used and not reserved.
Nonfirm Transmission Service
Effective: The first day of the first full
billing period beginning on or after May
1, 2013, and will remain in effect
through April 30, 2018, or until
superseded by another rate schedule.
Applicable: To nonfirm transmission
service customers where capacity and
energy are supplied to the NorthwestPacific Southwest Intertie Project
(Intertie) transmission system at points
of interconnection with other systems
and transmitted and delivered, less
losses, to points of delivery on the
Intertie transmission system.
Rate: The nonfirm transmission
service rate is 2.21 mills for each
kilowatt per hour. Discounts may be
offered from time-to-time in accordance
with Western’s Open Access
Transmission Tariff (OATT).
Billing: Western will bill nonfirm
transmission service customers monthly
by applying the rate listed above to the
amount of capacity reserved.
Character and Conditions of Service:
Alternating current at 60 hertz, threephase, interruptible, delivered and
metered at the voltages and points of
delivery established by service
agreement or in advance by Western.
Curtailment conditions shall be
determined by Western and in
accordance with Western’s OATT.
Adjustments for Reactive Power:
There shall be no entitlement to transfer
of reactive kilovolt amperes at delivery
points, except when such transfers may
be mutually agreed upon by the
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19705
customer and Western or their
authorized representatives.
Adjustment for Losses: Capacity and
energy losses incurred in connection
with the transmission and delivery of
capacity and energy under this rate
schedule shall be supplied by the
customer in accordance with the service
agreement or contract. If losses are not
fully provided by a customer, charges
for financial compensation may apply.
Unreserved Use: Western will assess a
charge for any unreserved use of the
transmission system. Unreserved use
occurs when a customer uses
transmission service that it has not
reserved or uses transmission service in
excess of its reserved capacity.
Unreserved use may also include a
customer’s failure to curtail
transmission when requested.
The charge for unreserved use is two
times the maximum allowable rate for
the service at issue, assessed as follows:
The penalty for a single hour of
unreserved use is based on the daily
short-term rate. The penalty for more
than one assessment of unreserved use
for any given duration (e.g., daily)
increases to next longest duration (e.g.,
weekly). The penalty for multiple
instances of unreserved use (e.g., more
than one hour) within a day is based on
the daily short-term rate. The penalty
for multiple instances of unreserved use
isolated to one calendar week is based
on the weekly short-term rate. The
penalty for multiple instances of
unreserved use during more than one
week in a calendar month is based on
the monthly short-term rate.
A customer that exceeds its reserved
capacity at any point of receipt or point
of delivery, or a customer that uses
transmission service at a point of receipt
or point of delivery that it has not
reserved, is required to pay for all
ancillary services that were provided by
the Western Area Lower Colorado
(WALC) Balancing Authority and
associated with the unreserved use. The
customer will pay for ancillary services
based on the amount of transmission
service used and not reserved.
[FR Doc. 2013–07618 Filed 4–1–13; 8:45 am]
BILLING CODE 6450–01–P
ENVIRONMENTAL PROTECTION
AGENCY
[EPA–HQ–OPP–2013–0182; FRL–9382–3]
FIFRA Scientific Advisory Panel;
Notice of Public Meeting
Environmental Protection
Agency (EPA).
ACTION: Notice.
AGENCY:
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02APN1
Agencies
[Federal Register Volume 78, Number 63 (Tuesday, April 2, 2013)]
[Notices]
[Pages 19700-19705]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-07618]
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DEPARTMENT OF ENERGY
Western Area Power Administration
Pacific Northwest-Pacific Southwest Intertie Project--Rate Order
No. WAPA-157
AGENCY: Western Area Power Administration, DOE.
ACTION: Notice of Final Transmission Service Rates.
-----------------------------------------------------------------------
SUMMARY: The Deputy Secretary of Energy confirmed and approved Rate
Order No. WAPA-157 and Rate Schedules INT-FT5 and INT-NFT4, placing
firm and nonfirm transmission service rates for the Pacific Northwest-
Pacific Southwest Intertie Project (Intertie) of the Western Area Power
Administration (Western) into effect on an interim basis. The
provisional rates will be in effect until the Federal Energy Regulatory
Commission (FERC) confirms, approves, and places them into effect on a
final basis, or until they are replaced by other rates. The
[[Page 19701]]
provisional rates will provide sufficient revenue to pay all annual
costs, including interest expense, and repay required investment within
the allowable periods.
DATES: Rate Schedules INT-FT5 and INT-NFT4 are effective on the first
day of the first full billing period beginning on or after May 1, 2013.
FOR FURTHER INFORMATION CONTACT: Mr. Jack Murray, Rates Manager, Desert
Southwest Customer Service Regional Office, Western Area Power
Administration, P.O. Box 6457, Phoenix, AZ 85005-6457, (602) 605-2442,
email jmurray@wapa.gov.
SUPPLEMENTARY INFORMATION: The previous Rate Schedules INT-FT4 and INT-
NFT3 for Rate Order No. WAPA-130, were approved by FERC for a 5-year
period through September 30, 2012.\1\ These Rate Schedules were
extended temporarily through September 30, 2013, under Rate Order No.
WAPA-159.\2\ Rate Schedules INT-FT4 and INT-NFT3 are being superseded
by Rate Schedules INT-FT5 and INT-NFT4. Under Rate Schedule INT-FT4,
the rate for firm point-to-point transmission service is $15.24 per
kilowatt year (kW-year). The provisional rate for firm point-to-point
transmission service under Rate Schedule INT-FT5 is $19.32/kW-year,
which represents an increase of 26.8 percent when compared with the
existing rate. Under Rate Schedule INT-NFT3, the rate for nonfirm
point-to-point transmission service is 1.74 mills per kilowatt hour
(mills/kWh). The provisional rate for nonfirm point-to-point
transmission service under Rate Schedule INT-NFT4 is 2.21 mills/kWh,
which represents an increase of 27 percent when compared with the
existing rate.
---------------------------------------------------------------------------
\1\ Rate Order No. WAPA-130 was approved by FERC on a final
basis on March 18, 2008, in Docket No. EF08-5191-000 (122 FERC ]
62,236).
\2\ Rate Order No. WAPA-159 was approved by the Deputy Secretary
of Energy on August 27, 2012 (77 FR 54575; September 5, 2012), and
filed with FERC for informational purposes only.
---------------------------------------------------------------------------
By Delegation Order No. 00-037.00, effective December 6, 2001, the
Secretary of Energy delegated: (1) The authority to develop power and
transmission rates to Western's Administrator, (2) the authority to
confirm, approve, and place such rates into effect on an interim basis
to the Deputy Secretary of Energy, and (3) the authority to confirm,
approve, and place into effect on a final basis, to remand, or to
disapprove such rates to FERC. Existing Department of Energy procedures
for public participation in power rate adjustments (10 CFR part 903)
were published on September 18, 1985.
Under Delegation Order Nos. 00-037.00 and 00-001.00D, and in
compliance with 10 CFR part 903 and 18 CFR part 300, I hereby confirm,
approve, and place Rate Order No. WAPA-157 and the proposed rates for
transmission service into effect on an interim basis. The new Rate
Schedules INT-FT5 and INT-NFT4 will be submitted promptly to FERC for
confirmation and approval on a final basis.
Dated: March 27, 2013.
Daniel B. Poneman,
Deputy Secretary of Energy.
In the matter of: Western Area Power Administration Rate
Adjustment for the Pacific Northwest-Pacific Southwest Intertie
Project.
Order Confirming, Approving, and Placing the Pacific Northwest-Pacific
Southwest Intertie Project Transmission Service Rates Into Effect on an
Interim Basis
These rates were established in accordance with section 302 of the
Department of Energy (DOE) Organization Act (42 U.S.C. 7152). This Act
transferred to and vested in the Secretary of Energy the power
marketing functions of the Secretary of the Department of the Interior
and the Bureau of Reclamation under the Reclamation Act of 1902 (ch.
1093, 32 Stat. 388), as amended and supplemented by subsequent laws,
particularly section 9(c) of the Reclamation Project Act of 1939 (43
U.S.C. 485h(c)), and other Acts that specifically apply to the project
involved.
By Delegation Order No. 00-037.00, effective December 6, 2001, the
Secretary of Energy delegated: (1) The authority to develop power and
transmission rates to Western's Administrator, (2) the authority to
confirm, approve, and place such rates into effect on an interim basis
to the Deputy Secretary of Energy, and (3) the authority to confirm,
approve, and place into effect on a final basis, to remand, or to
disapprove such rates to the Federal Energy Regulatory Commission.
Existing DOE procedures for public participation in power rate
adjustments (10 CFR part 903) were published on September 18, 1985.
Acronyms and Definitions
As used in this Rate Order, the following acronyms and definitions
apply:
Administrator: Administrator for the Western Area Power
Administration.
Balancing Authority (BA): The responsible entity that integrates
resource plans ahead of time, maintains load-interchange-generation
balance within a designated area, and supports interconnection
frequency in real-time.
Capacity: The electric capability of a transformer, transmission
circuit, or other equipment, expressed in kilowatts (kW).
Customer: An entity with a contract or service agreement that
receives service from Western's Desert Southwest Region.
Deficits: Deferred or unrecovered annual expenses.
DOE: United States Department of Energy.
DOE Order RA 6120.2: A DOE order outlining power marketing
administration financial reporting and ratemaking procedures.
Desert Southwest Region: The Desert Southwest Customer Service
Region of Western.
FERC: Federal Energy Regulatory Commission.
Firm: A type of product and/or service that is available at the time
requested by the customer.
FRN: Federal Register notice.
Intertie: Pacific Northwest-Pacific Southwest Intertie Project.
Kilovolt (kV): Electrical unit of measure of potential difference
that equals 1,000 volts.
Kilowatt (kW): Electrical unit of capacity that equals 1,000 watts.
Kilowatt hour (kWh): Electrical unit of energy that equals 1,000
watts in 1 hour.
Kilowatt month (kW-month): Electrical unit of the monthly amount of
capacity.
Kilowatt year (kW-year): Electrical unit of the yearly amount of
capacity.
Mill: A monetary denomination of the United States that equals one
tenth of a cent or one thousandth of a dollar.
Mills per kilowatt hour (mills/kWh): A unit of charge.
NEPA: National Environmental Policy Act of 1969 (42 U.S.C. 4321, et
seq.).
Nonfirm: A type of product and/or service not always available at
the time requested by the customer.
Open Access Same Time Information System (OASIS): An electronic
posting system that a service provider maintains for transmission
access data that allows all customers to view information
simultaneously.
O&M: Operation and Maintenance.
Power Repayment Study (PRS): A study used to determine how much
revenue is needed to cover annual costs and future repayment
obligations.
Proposed Rate: A rate that has been recommended by Western to the
Deputy Secretary of Energy for approval.
Provisional Rate: A rate that has been confirmed, approved, and
placed into effect on an interim basis by the Deputy Secretary of
Energy.
PPW: Purchase Power and Wheeling.
Rate Brochure: A document prepared for public distribution
explaining the rationale and background for the rate proposal
contained in this rate order dated June 2012.
Reclamation: United States Department of Interior, Bureau of
Reclamation.
[[Page 19702]]
Western: Western Area Power Administration.
Effective Date
The new provisional rates will take effect on the first day of the
first full billing period beginning on or after May 1, 2013, and will
remain in effect through April 30, 2018, pending approval by FERC on a
final basis.
Public Notice and Comment
Western followed the Procedures for Public Participation in Power
and Transmission Rate Adjustments and Extensions, 10 CFR part 903, in
developing these rates. The steps Western took to involve interested
parties in the rate process were:
1. A FRN was published on June 11, 2012, (77 FR 34381) announcing
the proposed rates for transmission service, initiating a public
consultation and comment period, and setting forth the dates and
locations of public information and public comment forums.
2. On June 14, 2012, Western notified all Intertie customers and
interested parties of the rate adjustment and provided a copy of the
published FRN.
3. On June 28, 2012, Western held a public information forum in
Phoenix, Arizona. Western explained the proposed rates and potential
changes to the proposed rates, answered questions, and provided rate
brochures and presentation handouts.
4. On July 10, 2012, Western held a public comment forum in
Phoenix, Arizona, to give the public an opportunity to comment for the
record. Four individuals commented at this forum.
5. On August 14, 2012, Western received a data request for
information.
6. On August 31, 2012, Western provided the information requested
by sending a compact disc containing numerous electronic data files.
7. On September 10, 2012, Western received requests to extend the
90-day consultation and comment period to allow interested parties
sufficient time to analyze the information Western distributed on
August 31, 2012, and respond accordingly.
8. On September 19, 2012, Western's Acting Administrator extended
the consultation and comment period through October 8, 2012.
9. On September 20, 2012, Western notified all Intertie customers
and interested parties of the extension and provided a copy of the
notice from Western's Acting Administrator.
10. Western received three comment letters during the consultation
and comment period. All formally submitted comments have been
considered in preparing this Rate Order.
11. Western provided a Web site for information about this rate
adjustment process. The Web site is located at www.wapa.gov/dsw/pwrmkt/Intertie/RateAdjust.htm.
Comments
Representatives of the following organizations made oral comments:
Arizona Power Authority, Phoenix, Arizona; Arizona Municipal Power
Users' Association, Phoenix, Arizona; K.R. Saline & Associates, Mesa,
Arizona; and Irrigation & Electrical Districts Association of Arizona,
Phoenix, Arizona.
Written comments were received from the following organizations:
Arizona Municipal Power Users' Association, Phoenix, Arizona; Griffith
Energy LLC, Houston, Texas; and Irrigation & Electrical Districts
Association of Arizona, Phoenix, Arizona.
Project Description
The Intertie was authorized by Section 8 of the Pacific Northwest
Power Marketing Act of August 31, 1964 (16 U.S.C. 837g). The basic
purpose of the Intertie was to provide, through transmission system
interconnections among certain Federal and non-Federal power systems,
maximum use of power resources to meet growing demands. This purpose
was to be accomplished through the exchange of summer-winter surplus
peaking capacity between the northwest and southwest to reduce capital
expenditures for new generating capacity; the sale of northwest
secondary energy to the southwest; the sale of southwest energy to the
northwest to ``firm'' peaking hydroelectric sources during critical
water years; conservation of significant amounts of fuel through the
use of surplus hydroelectric energy; and increased efficiency in the
operation of hydroelectric and thermal resources. As authorized, the
Intertie was to be a cooperative construction venture by Federal and
non-Federal entities, incorporating the capability for alternating
current (AC) and direct current (DC) transmission service.
The Lower Colorado Region of Reclamation was assigned construction
jurisdiction for: (i) The Celilo-Mead 750-kV DC transmission line from
the Oregon-Nevada border to Mead Substation; (ii) Mead Substation; and
(iii) all facilities south of Mead Substation. Several delays in
construction funding for the Celilo-Mead 750-kV DC transmission line
revised its estimated in-service date to the point that potential users
withdrew their interest. This, and the subsequent lack of congressional
funding, resulted in the May 1969 indefinite postponement of the
Celilo-Mead 750-kV DC transmission line construction. The only
facilities constructed were Mead Substation and all facilities south of
Mead Substation, which provide AC transmission service. Pursuant to
section 302 of the Department of Energy Organization Act (42 U.S.C.
7152), dated August 4, 1977, these Reclamation constructed facilities
were transferred to Western.
Western's Desert Southwest Region administers these facilities as a
stand-alone transmission project for operational, financial, and
repayment purposes. The transmission facilities consist of a 256-mile,
500-kV transmission line from Mead Substation (Nevada) to Perkins
Substation (Arizona); a 202-mile, 500-kV transmission line from Mead
Substation to Adelanto Switching Substation (California); a 238-mile,
345-kV transmission line from Mead Substation to Liberty Substation
(Arizona); a 19-mile, 230-kV transmission line from Liberty Substation
to Westwing Substation (Arizona); and a 22-mile, 230-kV transmission
line from Westwing Substation to Pinnacle Peak Substation (Arizona).
Existing and Provisional Rates
The existing rates for point-to-point transmission service consist
of a firm rate and a nonfirm rate. The current rate for firm point-to-
point transmission service under Rate Schedule INT-FT4 is $15.24/kW-
year. The current rate for nonfirm point-to-point transmission service
under Rate Schedule INT-NFT3 is 1.74 mills/kWh. The existing rates
under Rate Schedules INT-FT4 and INT-NFT3 expire September 30, 2013.
The provisional rates will supersede the existing rates and become
effective on an interim basis on the first day of the first full
billing period beginning on or after May 1, 2013. The provisional rate
for firm point-to-point transmission service under Rate Schedule INT-
FT5 is $19.32/kW-year. The provisional rate for nonfirm point-to-point
transmission service under Rate Schedule INT-NFT4 is 2.21 mills/kWh.
The provisional rates will result in a rate increase of approximately
27 percent when compared to the existing rates. A comparison of the
existing and provisional rates for transmission service follows:
[[Page 19703]]
Comparison of Existing and Provisional RatesPacific Northwest--Pacific Southwest Intertie Project
----------------------------------------------------------------------------------------------------------------
Provisional rates Change
Transmission service Existing rates (effective 5/1/13) (percent)
----------------------------------------------------------------------------------------------------------------
Firm Point-to-Point...................... $15.24/kW-year............. $19.32/kW-year............. 26.8
Nonfirm Point-to-Point................... 1.74 mills/kWh............. 2.21 mills/kWh............. 27.0
----------------------------------------------------------------------------------------------------------------
Certification of Rates
Western's Acting Administrator certified that the provisional rates
for transmission service under Rate Schedules INT-FT5 and INT-NFT4 are
the lowest possible rates consistent with sound business principles.
The provisional rates were developed following administrative policies
and applicable laws.
Transmission Rate Discussion
According to Reclamation Law, Western must establish rates
sufficient to recover annual O&M, purchase power, transmission service
and other costs, interest expense, and repay investments. Western
prepares a PRS each fiscal year to determine if the existing rates will
provide adequate revenues to repay all power system costs within the
required time. Repayment criteria are based on existing law and
applicable policies, including DOE Order RA 6120.2. To meet the cost
recovery criteria outlined in DOE Order RA 6120.2, a PRS using the
provisional rates has been developed to demonstrate that sufficient
revenues will be available to meet future obligations.
The existing rates are insufficient and do not provide adequate
revenues to cover costs. The revenue deficiency is a result of lower-
than-projected sales of transmission service. The existing rates were
based on projected sales of 500-kV transmission service increasing each
year during the 5-year cost evaluation period. The actual demand for
transmission capacity was significantly less than expected and the
projected sales did not materialize. As a result, the revenue derived
from the sales of 500-kV transmission service over the 5-year cost
evaluation period has been considerably lower than planned. The
provisional rates include a notable reduction in the sales forecast for
500-kV transmission service over the next 5-year cost evaluation
period, which is the primary factor that led to the rate increase.
A secondary factor of the rate increase is that when the existing
rates were established, purchase power was handled separately for each
power system and the Intertie, being a stand-alone transmission
project, had no purchase power costs to recover. Since then, Western's
BA for the Desert Southwest Region has initiated power purchases for
reliability purposes and the associated costs are allocated to all of
the applicable transmission projects within the BA, including the
Intertie. These annual purchase power costs are subject to recovery and
have been included in the provisional rates.
Another factor impacting the rate increase is the requirement to
pay off maturing debt associated with the original project. In 1970, a
major element of the original project was placed into commercial
service, which initiated the repayment cycle. This debt of $28.4
million must be paid by 2020, which is the last year this investment is
allowed to remain unpaid. Principal payments for this debt have been
included in the provisional rates.
Statement of Revenue and Related Expenses
The following table provides a summary of projected revenue and
expense data for the provisional rates through the 5-year approval
period.
Intertie Transmission Rates--Comparison of 5-Year Approval Period--Total
Revenues and Expenses
------------------------------------------------------------------------
Existing Provisional
rates rates Difference
($000) ($000) ($000)
------------------------------------------------------------------------
Total Revenues................... $172,149 $187,873 $15,724
Revenue Distribution
Expenses:
O&M...................... 34,337 38,090 3,753
Purchase Power........... 0 3,700 3,700
Transmission Service & 9,232 8,411 (821)
Other...................
Interest................. 91,105 92,206 1,101
--------------------------------------
Total Expenses....... 134,674 142,407 7,733
Principal Payments:
Capitalized Deficits..... 34,188 30,092 (4,096)
Original Project and 3,177 15,019 11,842
Additions...............
Replacements............. 110 355 245
--------------------------------------
Total Principal 37,475 45,466 7,991
Payments........
--------------------------------------
Total Revenue 172,149 187,873 15,724
Distribution....
------------------------------------------------------------------------
Comments
The comments and responses regarding the proposed rates,
paraphrased for brevity when not affecting the meaning of the
statement(s), are discussed below. Direct quotes from comment letters
are used for clarification where necessary.
Comment: Western should either suspend or terminate the rate
adjustment until the next fiscal year since the existing rates have
been extended until September 30, 2013.
Response: The existing rates do not provide sufficient revenue to
cover all annual costs and repay outstanding debt within the allowable
time frame. Since
[[Page 19704]]
the existing rates were set to expire on September 30, 2012, a
temporary extension was requested so that Western could have additional
time to complete the rate adjustment process. The proposed rates will
supersede the existing rates when approved.
Comment: Customers wish to continue a dialogue with Western over
certain costs that have been included in the proposed rates.
Response: These costs are associated with the PPW program for
Western's BA in the Desert Southwest Region. Western is committed to
working with its customers to ensure the allocation of purchase power
costs is appropriate. An internal team is being formed to examine all
aspects of the PPW program, including required reserves, and will work
collaboratively with customers as additional information becomes
available.
Comment: Western should consider phasing in the proposed rate
increase over two or more years to lessen the negative impact on its
customers. Western should develop lower rates as an alternative to its
proposed rates.
Response: The proposed rates will provide adequate revenue to cover
debt payments that must be made by 2020. It would not be financially
prudent to delay the proposed rate increase. Such action would only
shorten the period of time available to accumulate sufficient revenue
and result in substantial rate increases until the outstanding debt is
paid.
Comment: Western should extend the 90-day consultation and comment
period to allow sufficient time to review and comment on the
information provided in the data request response dated August 31,
2012.
Response: Western's Acting Administrator extended the consultation
and comment period from September 10, 2012, to October 8, 2012. A copy
of the notice of extension was sent to all Intertie customers and
interested parties on September 20, 2012, and posted to Western's Web
site at www.wapa.gov/dsw/pwrmkt/Intertie/RateAdjust.htm and to
Western's OASIS at www.oatioasis.com/WALC/.
Comment: Western should make available to all customers and
interested parties the information provided in a data request response
dated August 31, 2012.
Response: Concur. The information provided consisted of numerous
electronic data files that were originally sent on a compact disc.
Western posted a copy of these files to its Web site at www.wapa.gov/dsw/pwrmkt/Intertie/RateAdjust.htm on September 20, 2012.
Comment: Do the proposed rates include capitalized costs from the
use of prepayments?
Response: The proposed rates do not include any construction
projects that have been funded via prepayments. In addition, none of
the customer approved construction projects for prepayment funding
involve Intertie transmission facilities.
Comment: Has Western's Operations Consolidation Project or
Balancing Authority Consolidation resulted in any cost increases that
are included in the proposed rates?
Response: The proposed rates do not include any cost increases
associated with these consolidation activities and efforts. The factors
leading to the proposed rate increase are the continual shortfall in
sales of 500-kV transmission service, inclusion of purchased power
costs, and the required debt payments that must be made by FY 2020.
Comment: Does Western's BA in the Rocky Mountain Region have any
cost impact on the proposed rates?
Response: The proposed rates only include costs associated with
Western's BA in the Desert Southwest Region.
Comment: The proposed rate increase will cause prices for energy
delivered by customers using the Intertie to become uncompetitive with
other competing energy suppliers.
Response: Western acknowledges that the proposed rates represent a
significant increase for the Intertie customers. However, Western is
required to establish rates that are sufficient to recover annual costs
and repay investments to satisfy the cost recovery criteria outlined in
DOE Order RA 6120.2. The proposed rates are cost-based and do not
include a rate of return on capital investment. Western will continue
to explore methods to control costs and maintain stable transmission
service rates.
Availability of Information
All brochures, studies, comments, letters, memorandums, and other
documents that Western used to develop the provisional rates are
available for inspection and copying at the Desert Southwest Customer
Service Regional Office, Western Area Power Administration, 615 South
43rd Avenue, Phoenix, AZ 85009-5313. Many of these documents and
supporting information are available on Western's Web site at
www.wapa.gov/dsw/pwrmkt/Intertie/RateAdjust.htm.
Ratemaking Procedure Requirements
Environmental Compliance
In compliance with the NEPA of 1969 (42 U.S.C. 4321, et seq.);
Council on Environmental Quality Regulations for implementing NEPA (40
CFR parts 1500-1508); and DOE NEPA Implementing Procedures and
Guidelines (10 CFR part 1021), Western has determined that this action
is categorically excluded from preparing an environmental assessment or
an environmental impact statement.
Determination Under Executive Order 12866
Western has an exemption from centralized regulatory review under
Executive Order 12866; accordingly, no clearance of this notice by the
Office of Management and Budget is required.
Submission to the Federal Energy Regulatory Commission
The provisional interim rates herein confirmed, approved, and
placed into effect, together with supporting documents, will be
submitted to FERC for confirmation and final approval.
Order
In view of the foregoing and under the authority delegated to me, I
confirm and approve on an interim basis, effective May 1, 2013, Rate
Schedules INT-FT5 and INT-NFT4 for the Pacific Northwest-Pacific
Southwest Intertie Project of the Western Area Power Administration.
The rate schedules shall remain in effect on an interim basis pending
FERC's confirmation and approval of them or substitute rates on a final
basis through April 30, 2018.
Dated: March 27, 2013,
Daniel B. Poneman,
Deputy Secretary of Energy.
Certification of Rates
Western Area Power Administration
Desert Southwest Customer Service Region
I certify that the rates under Rate Schedules INT-FT5 and INT-NFT4 for
the Pacific Northwest-Pacific Southwest Intertie Project were developed
following administrative policies and applicable laws and the rates are
the lowest possible, consistent with sound business principles.
Dated: February 13, 2013.
Anita J. Decker,
Acting Administrator.
Long-Term and Short-Term Firm Point-To-Point Transmission Service
Effective: The first day of the first full billing period beginning
on or after May 1, 2013, and will remain in effect through April 30,
2018, or until superseded by another rate schedule.
Applicable: To firm point-to-point transmission service customers
where
[[Page 19705]]
capacity and energy are supplied to the Pacific Northwest-Pacific
Southwest Intertie Project (Intertie) transmission system at points of
interconnection with other systems and transmitted and delivered, less
losses, to points of delivery on the Intertie transmission system.
Long-Term Rate: For transmission service of one year or longer, the
rate is $19.32 for each kilowatt (kW) per year, payable monthly at the
rate of $1.61 for each kW per month.
Short-Term Rates: For transmission service up to one year, the
maximum rate for each kW is as follows:
Monthly: $1.61
Weekly: $0.3715
Daily: $0.0529
Hourly: 2.21 mills
Discounts may be offered from time-to-time in accordance with
Western's Open Access Transmission Tariff (OATT).
Billing: Western will bill firm point-to-point transmission service
customers monthly by applying the rates listed above to the amount of
capacity reserved. Payment for long-term transmission service will be
required one month in advance of said service.
Character and Conditions of Service: Alternating current at 60
hertz, three-phase, delivered and metered at the voltages and points of
delivery established by the service agreement or contract.
Adjustments for Reactive Power: There shall be no entitlement to
transfer of reactive kilovolt-amperes at delivery points, except when
such transfers may be mutually agreed upon by the customer and Western
or their authorized representatives.
Adjustments for Losses: Capacity and energy losses incurred in
connection with the transmission and delivery of capacity and energy
under this rate schedule shall be supplied by the customer in
accordance with the service agreement or contract. If losses are not
fully provided by a customer, charges for financial compensation may
apply.
Unreserved Use: Western will assess a charge for any unreserved use
of the transmission system. Unreserved use occurs when a customer uses
transmission service that it has not reserved or uses transmission
service in excess of its reserved capacity. Unreserved use may also
include a customer's failure to curtail transmission when requested.
The charge for unreserved use is two times the maximum allowable
rate for the service at issue, assessed as follows: The penalty for a
single hour of unreserved use is based on the daily short-term rate.
The penalty for more than one assessment of unreserved use for any
given duration (e.g., daily) increases to next longest duration (e.g.,
weekly). The penalty for multiple instances of unreserved use (e.g.,
more than one hour) within a day is based on the daily short-term rate.
The penalty for multiple instances of unreserved use isolated to one
calendar week is based on the weekly short-term rate. The penalty for
multiple instances of unreserved use during more than one week in a
calendar month is based on the monthly short-term rate.
A customer that exceeds its reserved capacity at any point of
receipt or point of delivery, or a customer that uses transmission
service at a point of receipt or point of delivery that it has not
reserved, is required to pay for all ancillary services that were
provided by the Western Area Lower Colorado (WALC) Balancing Authority
and associated with the unreserved use. The customer will pay for
ancillary services based on the amount of transmission service used and
not reserved.
Nonfirm Transmission Service
Effective: The first day of the first full billing period beginning
on or after May 1, 2013, and will remain in effect through April 30,
2018, or until superseded by another rate schedule.
Applicable: To nonfirm transmission service customers where
capacity and energy are supplied to the Northwest-Pacific Southwest
Intertie Project (Intertie) transmission system at points of
interconnection with other systems and transmitted and delivered, less
losses, to points of delivery on the Intertie transmission system.
Rate: The nonfirm transmission service rate is 2.21 mills for each
kilowatt per hour. Discounts may be offered from time-to-time in
accordance with Western's Open Access Transmission Tariff (OATT).
Billing: Western will bill nonfirm transmission service customers
monthly by applying the rate listed above to the amount of capacity
reserved.
Character and Conditions of Service: Alternating current at 60
hertz, three-phase, interruptible, delivered and metered at the
voltages and points of delivery established by service agreement or in
advance by Western. Curtailment conditions shall be determined by
Western and in accordance with Western's OATT.
Adjustments for Reactive Power: There shall be no entitlement to
transfer of reactive kilovolt amperes at delivery points, except when
such transfers may be mutually agreed upon by the customer and Western
or their authorized representatives.
Adjustment for Losses: Capacity and energy losses incurred in
connection with the transmission and delivery of capacity and energy
under this rate schedule shall be supplied by the customer in
accordance with the service agreement or contract. If losses are not
fully provided by a customer, charges for financial compensation may
apply.
Unreserved Use: Western will assess a charge for any unreserved use
of the transmission system. Unreserved use occurs when a customer uses
transmission service that it has not reserved or uses transmission
service in excess of its reserved capacity. Unreserved use may also
include a customer's failure to curtail transmission when requested.
The charge for unreserved use is two times the maximum allowable
rate for the service at issue, assessed as follows: The penalty for a
single hour of unreserved use is based on the daily short-term rate.
The penalty for more than one assessment of unreserved use for any
given duration (e.g., daily) increases to next longest duration (e.g.,
weekly). The penalty for multiple instances of unreserved use (e.g.,
more than one hour) within a day is based on the daily short-term rate.
The penalty for multiple instances of unreserved use isolated to one
calendar week is based on the weekly short-term rate. The penalty for
multiple instances of unreserved use during more than one week in a
calendar month is based on the monthly short-term rate.
A customer that exceeds its reserved capacity at any point of
receipt or point of delivery, or a customer that uses transmission
service at a point of receipt or point of delivery that it has not
reserved, is required to pay for all ancillary services that were
provided by the Western Area Lower Colorado (WALC) Balancing Authority
and associated with the unreserved use. The customer will pay for
ancillary services based on the amount of transmission service used and
not reserved.
[FR Doc. 2013-07618 Filed 4-1-13; 8:45 am]
BILLING CODE 6450-01-P