Pacific Northwest-Pacific Southwest Intertie Project-Rate Order No. WAPA-157, 19700-19705 [2013-07618]

Download as PDF srobinson on DSK4SPTVN1PROD with NOTICES 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: http://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 http:// www.ferc.gov, using the ‘‘eLibrary’’ link. Enter the docket number excluding the [FR Doc. 2013–07587 Filed 4–1–13; 8:45 am] 1 22 BILLING CODE 6717–01–P VerDate Mar<15>2010 19:35 Apr 01, 2013 Jkt 229001 PO 00000 FERC ¶ 62,029 (1983). Frm 00064 Fmt 4703 Sfmt 4703 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: E:\FR\FM\02APN1.SGM 02APN1 Federal Register / Vol. 78, No. 63 / Tuesday, April 2, 2013 / Notices 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 srobinson on DSK4SPTVN1PROD with NOTICES 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. VerDate Mar<15>2010 19:35 Apr 01, 2013 Jkt 229001 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. PO 00000 Frm 00065 Fmt 4703 Sfmt 4703 19701 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. E:\FR\FM\02APN1.SGM 02APN1 19702 Federal Register / Vol. 78, No. 63 / Tuesday, April 2, 2013 / Notices Western: Western Area Power Administration. srobinson on DSK4SPTVN1PROD with NOTICES 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 VerDate Mar<15>2010 19:35 Apr 01, 2013 Jkt 229001 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 PO 00000 Frm 00066 Fmt 4703 Sfmt 4703 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: E:\FR\FM\02APN1.SGM 02APN1 19703 Federal Register / Vol. 78, No. 63 / Tuesday, April 2, 2013 / Notices 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 ......................................................................................... srobinson on DSK4SPTVN1PROD with NOTICES 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 VerDate Mar<15>2010 19:35 Apr 01, 2013 Jkt 229001 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 PO 00000 Frm 00067 Fmt 4703 Sfmt 4703 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 E:\FR\FM\02APN1.SGM 02APN1 srobinson on DSK4SPTVN1PROD with NOTICES 19704 Federal Register / Vol. 78, No. 63 / Tuesday, April 2, 2013 / Notices 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. VerDate Mar<15>2010 19:35 Apr 01, 2013 Jkt 229001 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 PO 00000 Frm 00068 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 E:\FR\FM\02APN1.SGM 02APN1 srobinson on DSK4SPTVN1PROD with NOTICES Federal Register / Vol. 78, No. 63 / Tuesday, April 2, 2013 / Notices 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 VerDate Mar<15>2010 19:35 Apr 01, 2013 Jkt 229001 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 PO 00000 Frm 00069 Fmt 4703 Sfmt 4703 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: E:\FR\FM\02APN1.SGM 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]


-----------------------------------------------------------------------

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/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.
    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