Notice of Interim Approval for Southeastern Power Administration Cumberland System, 59742-59756 [2015-25102]

Agencies

• DEPARTMENT OF ENERGY

[Federal Register Volume 80, Number 191 (Friday, October 2, 2015)]
[Notices]
[Pages 59742-59756]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-25102]


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DEPARTMENT OF ENERGY


Notice of Interim Approval for Southeastern Power Administration 
Cumberland System

AGENCY: Southeastern Power Administration, DOE.

ACTION: Notice of interim approval.

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SUMMARY: The Deputy Secretary of Energy confirmed and approved, on an 
interim basis, Rate Schedules CBR-1-I, CSI-1-I, CEK-1-I, CM-1-I, CC-1-
J, CK-1-I, CTV-1-I, CTVI-1-B, and Replacement-3. The rates were 
approved on an interim basis through September 30, 2020. The new rates 
take effect on October 1, 2015, and are subject to confirmation and 
approval on a final basis by the Federal Energy Regulatory Commission 
(Commission).

DATES: Approval of the rate schedules on an interim basis is effective 
October 1, 2015, through September 30, 2020.

FOR FURTHER INFORMATION CONTACT: Virgil G. Hobbs, III, Assistant 
Administrator, Finance & Marketing, Southeastern Power Administration, 
Department of Energy, 1166 Athens Tech Road, Elberton, Georgia 30635-
6711, (706) 213-3838.

SUPPLEMENTARY INFORMATION: On December 22, 2011, the Commission 
confirmed and approved on a final basis Wholesale Power Rate Schedules 
CBR-1-H, CSI-1-H, CEK-1-H, CM-1-H, CC-1-I, CK-1-H, CTV-1-H, CTVI-1-A, 
and Replacement-3 for the period from October 1, 2011, to September 30, 
2013 (137 FERC ] 62,249). On July 10, 2013, the Deputy Secretary 
approved an extension of the rate schedules through September 30, 2015 
(78 FR 42764).
    The Southeastern Power Administration's power marketing policy (58 
FR 41762, Aug. 5, 1993) provides peaking capacity, along with 1500 
kilowatt-hours of energy with each kilowatt of capacity, to customers 
outside the Tennessee Valley Authority (TVA) transmission system. Due 
to restrictions on the operations of the Center Hill Project imposed by 
the U.S. Army Corps of Engineers (Corps) as a precaution to prevent 
failure of the dam, Southeastern has not been able to provide full 
peaking capacity to these customers. A revised interim operating plan 
for the Cumberland System provides these customers with energy that 
includes a proportional percentage of normal marketed capacity.
    A current repayment study using present rates shows that revenues 
will not be adequate to meet repayment criteria. A revised study with a 
revenue requirement increase of $3,900,000, or about seven percent, 
shows that the rates established in this notice will be adequate to 
meet repayment criteria. The rate schedules have been developed to 
cover the differing marketing arrangements in the Cumberland System 
under normal operation conditions. The Rate Schedules CBR-1-I, CSI-1-I, 
and CM-1-I, include rates for customers who receive 1500 kilowatt-hours 
of energy annually for each kilowatt of capacity. Rate Schedule CEK-1-I 
is for East Kentucky Power Cooperative, which receives a fixed quantity 
of energy annually from projects connected to the TVA transmission 
system plus the output of the Laurel Project. Rate Schedule CK-1-I is 
for customers in Kentucky who receive 1800 kilowatt-hours of energy 
annually for each kilowatt of capacity. Rate Schedule CC-1-J is for 
customers on the Duke Energy Progress, Western Division, (formerly 
Carolina Power & Light, Western Division). Rate Schedule CTV-1-I is for 
TVA and TVPPA. Rate Schedule CTVI-1-B is for customers inside the TVA 
system who choose a power supplier other than TVA.


[[Page 59743]]


    Dated: September 25, 2015.
Elizabeth Sherwood-Randall,
Deputy Secretary.

DEPARTMENT OF ENERGY

DEPUTY SECRETARY

In the Matter of: Southeastern Power Administration Cumberland System 
Rates

Rate Order No. SEPA-59

Order Confirming and Approving Power Rates on an Interim Basis

    Pursuant to Sections 302(a) and 301(b) of the Department of Energy 
Organization Act, Public Law 95-91, the functions of the Secretary of 
the Interior and the Federal Power Commission under Section 5 of the 
Flood Control Act of 1944, 16 U.S.C. 825s, relating to the Southeastern 
Power Administration (Southeastern or SEPA) were transferred to and 
vested in the Secretary of Energy. DOE Delegation Order No. 00-037.00A, 
effective October 25, 2013, granted the Deputy Secretary authority to 
confirm, approve, and place into effect Southeastern's rates on an 
interim basis. This rate order is issued by the Deputy Secretary 
pursuant to this delegation.

Background

    On December 22, 2011, the Commission issued an order approving Rate 
Schedules CBR-1-H, CSI-1-H, CEK-1-H, CM-1-H, CC-1-I, CK-1-H, CTV-1-H, 
CTVI-1-A, and Replacement-3 on a final basis for the sale of power from 
the Cumberland System (137 FERC ] 62,249). On July 10, 2013, the Deputy 
Secretary of the Department of Energy issued an order extending the 
rate schedules through September 30, 2015. The power marketing policy 
(58 FR 41762, Aug. 5, 1993) provides peaking capacity, along with 1500 
kilowatt-hours of energy with each kilowatt of capacity, to customers 
outside the Tennessee Valley Authority (TVA) transmission system. Due 
to restrictions on the operations of the Center Hill Project imposed by 
the U.S. Army Corps of Engineers (Corps) as a precaution to prevent 
failure of the dam, Southeastern has not been able to provide full 
peaking capacity to these customers. A revised interim operating plan 
for the Cumberland System provides these customers with energy and 
reduced capacity.

Public Notice and Comment

    Notice of a proposed rate adjustment was published in the Federal 
Register May 28, 2015 (80 FR 30451). The notice advised interested 
parties of a public information and comment forum to be held in 
Nashville, Tennessee, on June 30, 2015. Comments were received from 
twelve sources pursuant to this notice.
    The comments have been condensed into the following seven major 
categories:

1. Dam Safety Act
2. Rate Development Authority
3. Rate Term
4. Rate Competitiveness
5. Revenue Requirement Mitigation
6. Capital Cost Recovery
7. Transmission Arrangements

    Southeastern's response follows each comment.

1. Dam Safety Act

    Comment: To prevent detrimental and long-term consequences related 
to the shifting of inappropriate and/or unnecessary costs to Cumberland 
System hydropower preference customers, we politely request a permanent 
15 percent cost allocation to be used in order to provide closure to 
the uncertainty of the applicability of the Dam Safety Act for repairs 
to Wolf Creek and Center Hill. . The record the Corps of Engineers has 
developed reveals the repairs at Wolf Creek and Center Hill Projects 
were pursued in an expedited manner in the interest of protecting the 
safety of lives and property downstream of Wolf Creek and Center Hill. 
The Corps of Engineers repaired the Wolf Creek Project and will fix the 
Center Hill Project consistent with state of the art criteria to 
protect safety. As such, hydropower customers should not be saddled 
with the full cost of over $1 billion in repairs. The Dam Safety Act 
acknowledges this broad benefit and allows repair costs to be fairly 
allocated among all beneficiaries Southeastern retains the right to 
structure a proposed rate which allows for the consideration of the 
cost reimbursement provisions of the Dam Safety Act. The Corps of 
Engineers' refusal to abide by the statutory provisions of the Dam 
Safety Act creates liability for the federal family because of the 
agency's admitted and flagrant disavowal of its statutory duty. There 
is no legal consequence for Southeastern if it develops a rate using 
the Dam Safety Act as appropriate guidance.
    Response: Under section 1203 of the Water Resources Development Act 
of 1986, otherwise known as the Dam Safety Act, Congress capped the 
percentage of dam repair costs that may be assigned to project purposes 
(such as hydropower) at 15 percent. This cap applies to dam 
modification costs, ''the cause of which results from new hydrologic or 
seismic data or changes in the state-of-the-art design or construction 
criteria deemed necessary for safety purposes''. 33 U.S.C. 467n(a). The 
Dam Safety Act requires that dam safety repair costs be recovered 
within thirty years of completion of the work. If the Dam Safety Act is 
not applied, 100 percent of all costs are assigned to project purposes 
for cost recovery but the thirty-year cost recovery requirement does 
not attach. Southeastern continues to discuss, analyze and seek 
guidance on the issue from other relevant agencies.
    Southeastern is finalizing a rate calculation that applies the cost 
sharing provision of the Dam Safety Act to the repair costs at Wolf 
Creek and Center Hill. However, Southeastern wishes to make clear that 
interagency discussions of this issue remain ongoing. If, as a result 
of those discussions, other relevant federal agencies provide a factual 
and legal basis for a contrary determination, the applicability of the 
Dam Safety Act would be reconsidered. Any such reconsideration would be 
the subject of an additional notice and comment process.

2. Rate Development Authority

    Comment: SEPA and the Department of Energy have explicit 
responsibility to ensure unauthorized costs are not passed on to the 
power customers. This authority exists to ensure all appropriate costs 
are recovered in the rates.
    Response: Southeastern agrees that it retains full authority to 
ensure that the rates for power will be the lowest possible rates 
consistent with sound business principles within the meaning of Section 
5 of the Flood Control Act of 1944.
    Comment: There is no genuine question whether the proposed rate has 
been promulgated pursuant to authority squarely vested within the 
administrative PMA. Furthermore, because the rate established pursuant 
to this process presents a legal obligation for the customers, i.e., 
the level of payment that must be submitted in exchange for the 
delivery of electricity, there's no question that the rate-making 
exercise should be considered the development of a rule for purposes of 
applying fundamental tenets of administrative law.
    Response: Southeastern determines the power rates regarding surplus 
energy from Corps projects are consistent with the rulemaking 
requirements of the Administrative Procedure Act. Southeastern is 
finalizing a rate calculation that applies the cost sharing provision 
of the Dam Safety Act to the repair costs at Wolf Creek and Center 
Hill. However, Southeastern wishes to make clear that interagency 
discussions of this issue remain ongoing. If, as a result of those

[[Page 59744]]

discussions, other relevant federal agencies provide a factual and 
legal basis for a contrary determination, the applicability of the Dam 
Safety Act would be reconsidered. Any such reconsideration would be the 
subject of an additional notice and comment process.
    Comment: Southeastern retains the right to structure a proposed 
rate which allows for the consideration of the cost reimbursement 
provisions of the Dam Safety Act.
    [Commenter] believes there is no legal consequence for Southeastern 
if it develops a rate using the Dam Safety Act as appropriate guidance.
    Response: Southeastern has a statutory duty to balance the recovery 
of costs of the Corps projects in a reasonable number of years while 
providing the lowest possible rates to preference customers consistent 
with sound business principles. Southeastern is finalizing a rate 
calculation that applies the cost sharing provision of the Dam Safety 
Act to the repair costs at Wolf Creek and Center Hill. However, 
Southeastern wishes to make clear that interagency discussions of this 
issue remain ongoing. If, as a result of those discussions, other 
relevant federal agencies provide a factual and legal basis for a 
contrary determination, the applicability of the Dam Safety Act would 
be reconsidered. Any such reconsideration would be the subject of an 
additional notice and comment process.
    Comment: The Corps of Engineers' refusal to abide by the statutory 
provisions of the Dam Safety Act creates liability for the federal 
family because of the agency's admitted and flagrant disavowal of its 
statutory duty.
    The Corps of Engineers has no legal authority to recover the costs 
of its dam safety program from hydropower customers.
    Response: Recovery of the costs of the Corps of Engineers projects 
from surplus power is within the authority of Department of Energy as 
provided by the Flood Control Act of 1944 and the Department of Energy 
Organization Act. Southeastern is finalizing a rate calculation that 
applies the cost sharing provision of the Dam Safety Act to the repair 
costs at Wolf Creek and Center Hill. However, Southeastern wishes to 
make clear that interagency discussions of this issue remain ongoing. 
If, as a result of those discussions, other relevant federal agencies 
provide a factual and legal basis for a contrary determination, the 
applicability of the Dam Safety Act would be reconsidered. Any such 
reconsideration would be the subject of an additional notice and 
comment process.

3. Rate Term

    Comment: [Commenter] respectfully requests this rate is extended 
for five years to ensure accurate planning and reliability. There's no 
legal impediment for Southeastern to issue a five-year rate consistent 
with DOE Regulation RA6120.2. [Commenter] will ask Southeastern to 
revise the proposal for a five-year rate.
    Response: Southeastern agrees a five-year term for the rate 
schedules is appropriate for the following reasons. Southeastern 
updates the repayment study used to develop and support the rate 
schedules annually to incorporate the latest cost information provided 
and to incorporate actual operating results. If the update of the 
repayment study demonstrates that the rates are not adequate to recover 
costs, Southeastern can initiate a rate adjustment. A five-year rate 
can be modified before the term of the rate schedules expires. A five-
year term for the rate schedules will not interfere with Southeastern's 
ability to recover required costs.

4. Rate Competitiveness

    Comment: Even the current rate proposal is too high to provide an 
economic product. SEPA rates with the proposed increase would be 
basically out of the market for most of our customers that have 
alternatives. The increased cost and declining economic viability of 
this power have been a major concern for the past several years. 
Coupled with more frequent reductions in Cumberland System power 
production and decreases in hydropower unit availability, these 
increases in cost are aggravating and jeopardizing the future of this 
program.
    Response: Consistent with applicable law, Southeastern strives to 
ensure that the rates for Cumberland System power remain competitive 
with the customers' resource alternatives. Marketing arrangements in 
the Cumberland System cover diverse markets and include diverse 
products. The existing marketing arrangements have been in place since 
the power marketing policy for the Cumberland System was established in 
1983.
    Southeastern has incorporated a true-up mechanism in these rate 
schedules to reduce the initial rate adjustment to a seven percent 
increase in the revenue requirement. This has been included to improve 
the competitiveness of the rate.

5. Revenue Requirement Mitigation

    Comment: [Commenter] would propose an approach where we pay our 
fair share of the operation and maintenance costs and the recovery of 
capital [investment] making it more reflective of the rates being set 
on actual costs instead of a 50-year projection.
    SEPA is setting a rate for 50 years with no consideration for a 
potential increase in the future. We would propose paying for the 
capital [investment] when it becomes used and useful.
    Response: The Power Marketing Administrations prepare repayment 
studies used to establish rates following the guidance of DOE Order 
RA6120.2 (Order). The Order defines the power system's repayment period 
to extend to the final year allowed under the cost recovery criteria 
for amortization of the original investment in all projects included in 
the power repayment study. The Order further provides future 
replacement costs will be included in the studies. The remaining 
investment in the Cumberland System includes investment placed in 
service with a 50-year service life. The Order requires future 
replacement cost estimates to be included in the repayment study as 
well. Southeastern believes the repayment study used to develop these 
proposed rate schedules complies with DOE Order RA6120.2.
    Comment: [Commenter] recommends that SEPA review the methodology 
used in the repayment study to determine the proposed rate to:
    One, use forced payments to reduce the magnitude of large required 
payments; and
    Two, for large required payments, use the concept of planned 
capitalized deficits to spread the costs of those required single-year 
payments over a five-year period.
    Response: The comment refers to the approach used within the 
repayment study used to develop an optimized plan for repayment of the 
federal investment. Forced payments are normally used to override the 
normal priority of repayment when a lower-interest rate investment is 
reaching its required repayment date. Under highest interest first 
repayment, Southeastern defers repayment of the lowest interest rate 
investment to the extent possible while meeting repayment criteria. 
This achieves a lower revenue requirement.
    Capitalized deficits are incurred when Southeastern does not have 
sufficient revenue to cover annual operating expenses and interest or 
meet a required payment. Generally, Southeastern does not plan to incur 
capitalized deficits as part of rate adjustment. The proposed rates do 
not include capitalized deficits, which would be inconsistent with the

[[Page 59745]]

general requirement of DOE Order RA6120.2.

6. Capital Cost Recovery

    Comment: [Commenter] suggests SEPA explore capital cost recovery 
alternatives within its rate-making authority with the goal remaining 
to keep rates as low as possible for as long as possible. SEPA should 
consider a true-up rate as an alternative.
    Response: Southeastern staff proposed to employ an annual true-up 
to alter the rate each April accounting for actual hydropower 
investment completed and placed in service the prior fiscal year. A 
similar mechanism proved successful in the Kerr-Philpott System to 
address planned infrastructure rehabilitation. Comments supported or 
were silent with regard to enacting a true-up and Southeastern proposes 
to affect a true-up instrument to improve Federal hydropower's 
competitiveness in the energy market.

7. Transmission Arrangements

    Comment: We would suggest SEPA explore an agreement with TVA that 
more closely resembles the transmission service that SEPA now receives 
from TVA, delivering power to discrete delivery points from a network 
of resources or generation resources. We think the service you've 
received for years has been more of a network service.
    Response: Southeastern will discuss transmission service options 
with TVA in an effort to secure the most economical delivery method for 
our customers.

Discussion

System Repayment

    An examination of Southeastern's revised system power repayment 
study, prepared in August, 2015, for the Cumberland System, shows that 
with the rates established in this notice, all system power costs are 
paid within the 50-year repayment period, as required by existing law 
and DOE Order RA 6120.2. The Administrator of Southeastern has 
certified that the rates are consistent with applicable law and that 
they are the lowest possible rates to customers consistent with sound 
business principles.

Environmental Impact

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

Availability of Information

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

Submission to the Federal Energy Regulatory Commission

    The rates hereinafter confirmed and approved on an interim basis, 
together with supporting documents, will be submitted promptly to FERC 
for confirmation and approval on a final basis.

Order

    In view of the foregoing and pursuant to the authority delegated to 
me by the Secretary of Energy, I hereby confirm and approve on an 
interim basis, effective October 1, 2015, attached Wholesale Power Rate 
Schedules CBR-1-I, CSI-1-I, CEK-1-I, CM-1-I, CC-1-J, CK-1-I, CTV-1-I, 
CTVI-1-B, and Replacement-3. The rate schedules shall remain in effect 
on an interim basis through September 30, 2020, unless such period is 
extended or until FERC confirms and approves them or substitute rate 
schedules on a final basis.

    Dated: September 25, 2015.

Elizabeth Sherwood-Randall,
Deputy Secretary.

Wholesale Power Rate Schedule CBR-1-I

    Availability: This rate schedule shall be available to Big Rivers 
Electric Corporation and the City of Henderson, Kentucky (hereinafter 
called the Customer).
    Applicability: This rate schedule shall be applicable to electric 
capacity and energy available from the Dale Hollow, Center Hill, Wolf 
Creek, Cheatham, Old Hickory, Barkley, J. Percy Priest, and Cordell 
Hull Projects (all of such projects being hereinafter called 
collectively the ``Cumberland Projects'') and sold in wholesale 
quantities.
    Character of Service: The electric capacity and energy supplied 
hereunder will be three-phase alternating current at a nominal 
frequency of 60 hertz. The power shall be delivered at nominal voltages 
of 13,800 volts and 161,000 volts to the transmission system of Big 
Rivers Electric Corporation.
    Points of Delivery: Capacity and energy delivered to the Customer 
will be delivered at points of interconnection of the Customer at the 
Barkley Project Switchyard, at a delivery point in the vicinity of the 
Paradise steam plant and at such other points of delivery as may 
hereafter be agreed upon by the Government and Tennessee Valley 
Authority (TVA).
    Billing Month: The billing month for power sold under this schedule 
shall end at 2400 hours CDT or CST, whichever is currently effective, 
on the last day of each calendar month.
    Conditions of Service: The Customer shall at its own expense 
provide, install, and maintain on its side of each delivery point the 
equipment necessary to protect and control its own system. In so doing, 
the installation, adjustment, and setting of all such control and 
protective equipment at or near the point of delivery shall be 
coordinated with that which is installed by and at the expense of TVA 
on its side of the delivery point.
    Rate Alternatives: Southeastern Power Administration (Southeastern) 
is including three rate alternatives. All of the rate alternatives have 
an initial base annual revenue requirement of $63,500,000, including 
transmission and non-power revenue. The initial base annual revenue 
requirement from the sale of capacity and energy is $50,235,000. The 
initial base revenue requirements will be subject to annual true-up 
adjustment described below.
Rate Scenario 1--Revised Interim Operating Plan
    The final marketing policy for the Cumberland System was published 
in the Federal Register August 5, 1993 (58 FR 41762). The marketing 
policy for the Cumberland System of Projects provides peaking capacity, 
along with 1500 hours of energy annually with each kilowatt of 
capacity, to customers outside the TVA transmission system. Due to 
restrictions on the operation of the Center Hill Project imposed by the 
U.S. Army Corps of Engineers (Corps) as a precaution to prevent failure 
of the dam, Southeastern is not able to provide the full allocation of 
peaking capacity to these customers. Southeastern implemented a Revised 
Interim Operating Plan for the Cumberland System to provide these 
customers with a reduced amount of energy and a reduced amount of 
capacity. The rates under this Scenario 1 will remain in effect for the 
duration of the Revised Interim Operating Plan. The initial base rates 
for capacity and energy will be subject to annual true-up adjustment 
described below.
    Monthly Rate:
    The initial monthly base rate for capacity and energy sold under 
this rate schedule shall be:

[[Page 59746]]

    Initial Base Demand charge: $1.902 per kilowatt per month
    Initial Base Energy Charge: 12.35 mills per kilowatt-hour
    True-up Adjustment: The Base Capacity Charge and Base Energy Charge 
will be subject to annual adjustment on April 1 of each year based on 
transfers of specific power investment to plant-in-service for the 
preceding Fiscal Year. Under this scenario the adjustment will be for 
each increase of $1,000,000 to specific power plant-in-service an 
increase of $0.001 per kilowatt per month added to the base capacity 
charge and 0.02 mills per kilowatt-hour added to the base energy rate.
    Southeastern will give written notice to the Customer of the amount 
of the true-up by February 1 of each year.
    Transmission: The Customer will pay a ratable percent listed below 
of the credit the Administrator of Southeastern Power Administration 
(Administrator) provides to the TVA as consideration for delivering 
capacity and energy for the account of the Administrator to points of 
delivery of customers outside the TVA System or interconnection points 
of delivery with other electric systems for the benefit of customers 
outside the TVA System, as agreed by contract between the Administrator 
and TVA.

------------------------------------------------------------------------
                                                                Percent
------------------------------------------------------------------------
Big Rivers Electric Corporation..............................     32.660
City of Henderson, Kentucky..................................      2.202
------------------------------------------------------------------------

Rate Scenario 2--Modified Revised Interim Operating Plan
    This rate alternative will be implemented if a portion of the 
Cumberland Capacity can be scheduled, though not all the capacity in 
the published marketing policy can be scheduled. The initial base 
annual revenue requirement under this alternative is $63,500,000, 
including transmission and non-power revenue, the same as the annual 
revenue requirement in Scenarios 1 and 3. The annual revenue 
requirement from the sale of capacity and energy is $50,235,000. This 
Rate Scenario 2 will receive revenues from capacity that can be 
scheduled and the remainder from energy, at charges that will be 
determined at the time. Under Scenario 2, the cost of the TVA 
transmission credit will be passed to customers outside the TVA System. 
This rate alternative will be in effect if Southeastern chooses to 
modify the Revised Interim Operating Plan.
    The annual revenue requirement and rates under this scenario 2 will 
be subject to annual adjustment on April 1 of each year based on 
transfers of specific power investment to plant-in-service for the 
preceding Fiscal Year. Under this scenario 2, the adjustment is an 
increase of $53,000 per year to the annual revenue requirement for each 
increase of $1,000,000 to specific power plant-in-service. Southeastern 
will give written notice to the Customer of the amount of the true-up 
by February 1 of each year.
Rate Scenario 3--Original Cumberland Marketing Policy
    The third rate alternative will go into effect once the Corps lifts 
all restrictions on the operation of the Center Hill Dam and 
Southeastern returns to operations that support the published marketing 
policy. The initial base rates for capacity, energy, and additional 
energy will be subject to annual true-up adjustment described below.
    Monthly Rate:
    The initial monthly base rate for capacity and energy sold under 
this rate schedule shall be:
    Initial Base Demand charge (includes 1500 hours of energy 
annually): $3.115 per kilowatt/month of total contract demand.

    Initial Base Energy Charge: None.

    Initial Base Additional Energy Charge: 1.612 mills per kilowatt-
hour.

    True-up Adjustment: The base demand charge and base additional 
energy charge under this scenario will be subject to annual adjustment 
on April 1 of each year based on transfers to specific power plant-in-
service. Under this scenario 3, the adjustment is for each increase of 
$1,000,000 to specific power plant-in-service an increase of $0.003 per 
kilowatt per month added to the base Capacity rate and an increase of 
0.012 mills per kilowatt-hour added to the additional energy rate.
    Southeastern will give written notice to the Customer of the amount 
of the true-up by February 1 of each year.
    Transmission Charge: Monthly TVA Transmission Charge divided by 
545,000.

    Energy to be Furnished by the Government: The Government shall make 
available each contract year to the Customer from the Projects through 
the Customer's interconnections with TVA and the Customer will schedule 
and accept an allocation of 1500 kilowatt-hours of energy delivered at 
the TVA border for each kilowatt of contract demand. A contract year is 
defined as the 12 months beginning July 1 and ending at midnight June 
30 of the following calendar year. The energy made available for a 
contract year shall be scheduled monthly such that the maximum amount 
scheduled in any month shall not exceed 240 hours per kilowatt of the 
Customer's contract demand and the minimum amount scheduled in any 
month shall not be less than 60 hours per kilowatt of the customer's 
contract demand. The Customer may request and the Government may 
approve energy scheduled for a month greater than 240 hours per 
kilowatt of the Customer's contract demand; provided, that the combined 
schedule of all Southeastern customers outside TVA and served by TVA 
does not exceed 240 hours per kilowatt of the total contract demands of 
these customers.
    Service Interruption: When delivery of capacity is interrupted or 
reduced due to conditions on the Administrator's system beyond his 
control, the Administrator will continue to make available the portion 
of his declaration of energy that can be generated with the capacity 
available.
    For such interruption or reduction due to conditions on the 
Administrator's system which have not been arranged for and agreed to 
in advance, the demand charge for capacity made available will be 
reduced as to the kilowatts of such capacity which have been 
interrupted or reduced in accordance with the following formula:
[GRAPHIC] [TIFF OMITTED] TN02OC15.012


[[Page 59747]]



Wholesale Power Rate Schedule CSI-1-I

    Availability: This rate schedule shall be available to Southern 
Illinois Power Cooperative (hereinafter the Customer).
    Applicability: This rate schedule shall be applicable to electric 
capacity and energy available from the Dale Hollow, Center Hill, Wolf 
Creek, Cheatham, Old Hickory, Barkley, J. Percy Priest, and Cordell 
Hull Projects (all of such projects being hereinafter called 
collectively the ``Cumberland Projects'') and sold in wholesale 
quantities.
    Character of Service: The electric capacity and energy supplied 
hereunder will be three-phase alternating current at a nominal 
frequency of 60 hertz. The power shall be delivered at nominal voltages 
of 13,800 volts and 161,000 volts to the transmission system of Big 
Rivers Electric Corporation.
    Points of Delivery: Capacity and energy delivered to the Customer 
will be delivered at points of interconnection of the Customer at the 
Barkley Project Switchyard, at a delivery point in the vicinity of the 
Paradise steam plant and at such other points of delivery as may 
hereafter be agreed upon by the Government and Tennessee Valley 
Authority (TVA).
    Billing Month: The billing month for power sold under this schedule 
shall end at 2400 hours CDT or CST, whichever is currently effective, 
on the last day of each calendar month.
    Rate Alternatives: Southeastern Power Administration (Southeastern) 
is including three rate alternatives. All of the rate alternatives have 
an initial base annual revenue requirement of $63,500,000, including 
transmission and non-power revenue. The initial base annual revenue 
requirement from the sale of capacity and energy is $50,235,000. The 
initial base revenue requirements will be subject to annual true-up 
adjustment described below.
Rate Scenario 1--Revised Interim Operating Plan
    The final marketing policy for the Cumberland System was published 
in the Federal Register August 5, 1993 (58 FR 41762). The marketing 
policy for the Cumberland System of Projects provides peaking capacity, 
along with 1500 hours of energy annually with each kilowatt of 
capacity, to customers outside the TVA transmission system. Due to 
restrictions on the operation of the Center Hill Project imposed by the 
U.S. Army Corps of Engineers (Corps) as a precaution to prevent failure 
of the dam, Southeastern is not able to provide the full allocation of 
peaking capacity to these customers. Southeastern implemented a Revised 
Interim Operating Plan for the Cumberland System to provide these 
customers with a reduced amount of energy and a reduced amount of 
capacity. The rates under this Scenario 1 will remain in effect for the 
duration of the Revised Interim Operating Plan. The initial base rates 
for capacity and energy will be subject to annual true-up adjustment 
described below.
    Monthly Rate: The initial monthly base rate for capacity and energy 
sold under this rate schedule shall be:
    Initial Base Demand charge: $1.902 per kilowatt per month.
    Initial Base Energy Charge: 12.35 mills per kilowatt-hour.
    True-up Adjustment: The Base Capacity Charge and Base Energy Charge 
will be subject to annual adjustment on April 1 of each year based on 
transfers of specific power investment to plant-in-service for the 
preceding Fiscal Year. Under this scenario the adjustment will be for 
each increase of $1,000,000 to specific power plant-in-service an 
increase of $0.001 per kilowatt per month added to the base capacity 
charge and 0.02 mills per kilowatt-hour added to the base energy rate.
    Southeastern will give written notice to the Customer of the amount 
of the true-up by February 1 of each year.
    Transmission Charge: The Customer will pay 5.138 percent of the 
credit the Administrator of Southeastern Power Administration 
(Administrator) provides to the TVA as consideration for delivering 
capacity and energy for the account of the Administrator to points of 
delivery of customers outside the TVA System or interconnection points 
of delivery with other electric systems for the benefit of customers 
outside the TVA System, as agreed by contract between the Administrator 
and TVA.
Rate Scenario 2--Modified Revised Interim Operating Plan
    This rate alternative will be implemented if a portion of the 
Cumberland Capacity can be scheduled, though not all the capacity in 
the published marketing policy can be scheduled. The initial base 
annual revenue requirement under this alternative is $63,500,000, 
including transmission and non-power revenue, the same as the annual 
revenue requirement in Scenarios 1 and 3. The annual revenue 
requirement from the sale of capacity and energy is $50,235,000. This 
Rate Scenario 2 will receive revenues from capacity that can be 
scheduled and the remainder from energy, at charges that will be 
determined at the time. Under Scenario 2, the cost of the TVA 
transmission credit will be passed to customers outside the TVA System. 
This rate alternative will be in effect if Southeastern chooses to 
modify the Revised Interim Operating Plan.
    The annual revenue requirement and rates under this scenario 2 will 
be subject to annual adjustment on April 1 of each year based on 
transfers of specific power investment to plant-in-service for the 
preceding Fiscal Year. Under this scenario 2, the adjustment is an 
increase of $53,000 per year to the annual revenue requirement for each 
increase of $1,000,000 to specific power plant-in-service. Southeastern 
will give written notice to the Customer of the amount of the true-up 
by February 1 of each year.
Rate Scenario 3--Original Cumberland Marketing Policy
    The third rate alternative will go into effect once the Corps lifts 
all restrictions on the operation of the Center Hill Dam and 
Southeastern returns to operations that support the published marketing 
policy. The initial base rates for capacity, energy, and additional 
energy will be subject to annual true-up adjustment described below.
    Monthly Rate: The initial monthly base rate for capacity and energy 
sold under this rate schedule shall be:
    Initial Base Demand charge (includes 1500 hours of energy 
annually): $3.115 per kilowatt/month of total contract demand.
    Initial Base Energy Charge: None.
    Initial Base Additional Energy Charge: 11.612 mills per kilowatt-
hour
    True-up Adjustment: The base demand charge and base additional 
energy charge under this scenario will be subject to annual adjustment 
on April 1 of each year based on transfers to specific power plant-in-
service. Under this scenario 3, the adjustment is for each increase of 
$1,000,000 to specific power plant-in-service an increase of $0.003 per 
kilowatt per month added to the base Capacity rate and an increase of 
0.012 mills per kilowatt-hour added to the additional energy rate.
    Southeastern will give written notice to the Customer of the amount 
of the true-up by February 1 of each year.
    Transmission Charge: Monthly TVA Transmission Charge divided by 
545,000.
    Energy to be Furnished by the Government: The Government shall make 
available each contract year to the Customer from the Projects through 
the Customer's interconnections with TVA and the Customer will schedule 
and accept an allocation of 1500 kilowatt-hours of energy delivered at 
the TVA

[[Page 59748]]

border for each kilowatt of contract demand. A contract year is defined 
as the 12 months beginning July 1 and ending at midnight June 30 of the 
following calendar year. The energy made available for a contract year 
shall be scheduled monthly such that the maximum amount scheduled in 
any month shall not exceed 240 hours per kilowatt of the Customer's 
contract demand and the minimum amount scheduled in any month shall not 
be less than 60 hours per kilowatt of the customer's contract demand. 
The Customer may request and the Government may approve energy 
scheduled for a month greater than 240 hours per kilowatt of the 
Customer's contract demand; provided, that the combined schedule of all 
Southeastern customers outside TVA and served by TVA does not exceed 
240 hours per kilowatt of the total contract demands of these 
customers.
    Service Interruption: When delivery of capacity is interrupted or 
reduced due to conditions on the Administrator's system beyond his 
control, the Administrator will continue to make available the portion 
of his declaration of energy that can be generated with the capacity 
available.
    For such interruption or reduction due to conditions on the 
Administrator's system which have not been arranged for and agreed to 
in advance, the demand charge for capacity made available will be 
reduced as to the kilowatts of such capacity which have been 
interrupted or reduced in accordance with the following formula:
[GRAPHIC] [TIFF OMITTED] TN02OC15.013

Wholesale Power Rate Schedule CEK-1-I

    Availability: This rate schedule shall be available to East 
Kentucky Power Cooperative (hereinafter called the Customer).
    Applicability: This rate schedule shall be applicable to electric 
capacity and energy available from the Dale Hollow, Center Hill, Wolf 
Creek, Cheatham, Old Hickory, Barkley, J. Percy Priest, and Cordell 
Hull Projects (all of such projects being hereinafter called 
collectively the ``Cumberland Projects'') and power available from the 
Laurel Project and sold in wholesale quantities.
    Character of Service: The electric capacity and energy supplied 
hereunder will be three-phase alternating current at a nominal 
frequency of 60 hertz. The power shall be delivered at nominal voltages 
of 161,000 volts to the transmission systems of the Customer.
    Points of Delivery: The points of delivery will be the 161,000 volt 
bus of the Wolf Creek Power Plant and the 161,000 volt bus of the 
Laurel Project. Other points of delivery may be as agreed upon.
    Billing Month: The billing month for power sold under this schedule 
shall end at 2400 hours CDT or CST, whichever is currently effective, 
on the last day of each calendar month.
    Conditions of Service: The Customer shall, at its own expense, 
provide, install, and maintain on its side of each delivery point the 
equipment necessary to protect and control its own system. In so doing, 
the installation, adjustment and setting of all such control and 
protective equipment at or near the point of delivery shall be 
coordinated with that which is installed by and at the expense of the 
Tennessee Valley Authority (TVA) on its side of the delivery point.
    Rate Alternatives: Southeastern Power Administration (Southeastern) 
is including three rate alternatives. All of the rate alternatives have 
an initial base annual revenue requirement of $63,500,000, including 
transmission and non-power revenue. The initial base annual revenue 
requirement from the sale of capacity and energy is $50,235,000. The 
initial base revenue requirements will be subject to annual true-up 
adjustment described below.
Rate Scenario 1--Revised Interim Operating Plan
    The final marketing policy for the Cumberland System was published 
in the Federal Register August 5, 1993 (58 FR 41762). The marketing 
policy for the Cumberland System of Projects provides peaking capacity, 
along with 1500 hours of energy annually with each kilowatt of 
capacity, to customers outside the TVA transmission system. Due to 
restrictions on the operation of the Center Hill Project imposed by the 
U.S. Army Corps of Engineers (Corps) as a precaution to prevent failure 
of the dam, Southeastern is not able to provide the full allocation of 
peaking capacity to these customers. Southeastern implemented a Revised 
Interim Operating Plan for the Cumberland System to provide these 
customers with a reduced amount of energy and a reduced amount of 
capacity. The rates under this Scenario 1 will remain in effect for the 
duration of the Revised Interim Operating Plan. The initial base rates 
for capacity and energy will be subject to annual true-up adjustment 
described below.
    Monthly Rate: The initial monthly base rate for capacity and energy 
sold under this rate schedule shall be:
    Initial Base Demand charge: $1.902 per kilowatt per month.
    Initial Base Energy Charge: 12.35 mills per kilowatt-hour.
    True-up Adjustment: The Base Capacity Charge and Base Energy Charge 
will be subject to annual adjustment on April 1 of each year based on 
transfers of specific power investment to plant-in-service for the 
preceding Fiscal Year. Under this scenario the adjustment will be for 
each increase of $1,000,000 to specific power plant-in-service an 
increase of $0.001 per kilowatt per month added to the base capacity 
charge and 0.02 mills per kilowatt-hour added to the base energy rate.
    Southeastern will give written notice to the Customer of the amount 
of the true-up by February 1 of each year.
    Transmission: The Customer will pay 31.192 percent of the credit 
the Administrator of Southeastern Power Administration (Administrator) 
provides to the TVA as consideration for delivering capacity and energy 
for the account of the Administrator to points of delivery of customers 
outside the TVA System or interconnection points of delivery with other 
electric systems for the benefit customers outside the TVA System, as 
agreed by contract between the Administrator and TVA.
Rate Scenario 2--Modified Revised Interim Operating Plan
    This rate alternative will be implemented if a portion of the 
Cumberland Capacity can be scheduled, though not all the capacity in 
the published marketing policy can be

[[Page 59749]]

scheduled. The initial base annual revenue requirement under this 
alternative is $63,500,000, including transmission and non-power 
revenue, the same as the annual revenue requirement in Scenarios 1 and 
3. The annual revenue requirement from the sale of capacity and energy 
is $50,235,000. The Rate Scenario 2 will receive revenues from capacity 
that can be scheduled and the remainder from energy, at charges that 
will be determined at the time. Under Scenario 2, the cost of the TVA 
transmission credit will be passed to customers outside the TVA System. 
This rate alternative will be in effect if Southeastern chooses to 
modify the Revised Interim Operating Plan. The initial base rates for 
capacity and energy will be subject to annual true-up adjustment 
described in the true-up section of this rate schedule.
Rate Scenario 3--Original Cumberland Marketing Policy
    The third rate alternative will go into effect once the Corps lifts 
all restrictions on the operation of the Center Hill Dam and 
Southeastern returns to operations that support the published marketing 
policy. The initial base rates for capacity, energy, and additional 
energy will be subject to annual true-up adjustment described below.
    Monthly Rate: The initial monthly base rate for capacity and energy 
sold under this rate schedule shall be:
    Initial Base Demand charge: $1.664 per kilowatt/month of total 
contract demand.
    Initial Base Energy Charge: 11.612 mills per kilowatt-hour
    True-up Adjustment: The base demand charge and base energy charge 
under this scenario will be subject to annual adjustment on April 1 of 
each year based on transfers to specific power plant-in-service. Under 
this scenario 3, the adjustment is for each increase of $1,000,000 to 
specific power plant-in-service an increase of $ 0.003 per kilowatt per 
month added to the base Capacity rate and an increase of 0.012 mills 
per kilowatt-hour added to the energy rate.
    Southeastern will give written notice to the Customer of the amount 
of the true-up by February 1 of each year.
    Transmission Charge: Monthly TVA Transmission Charge divided by 
545,000.

    Energy to be Furnished by the Government: The Government shall make 
available each contract year to the Customer from the Projects through 
the Customer's interconnections with TVA and the Customer will schedule 
and accept an allocation of 1500 kilowatt-hours of energy delivered at 
the TVA border for each kilowatt of contract demand plus 369 kilowatt-
hours of energy delivered for each kilowatt of contract demand to 
supplement energy available at the Laurel Project. A contract year is 
defined as the 12 months beginning July 1 and ending at midnight June 
30 of the following calendar year. The energy made available for a 
contract year shall be scheduled monthly such that the maximum amount 
scheduled in any month shall not exceed 240 hours per kilowatt of the 
Customer's contract demand and the minimum amount scheduled in any 
month shall not be less than 60 hours per kilowatt of the Customer's 
contract demand. The Customer may request and the Government may 
approve energy scheduled for a month greater than 240 hours per 
kilowatt of the customer's contract demand; provided, that the combined 
schedule of all Southeastern customers outside TVA and served by TVA 
does not exceed 240 hours per kilowatt of the total contract demands of 
these customers.
    Service Interruption: When delivery of capacity is interrupted or 
reduced due to conditions on the Administrator's system beyond his 
control, the Administrator will continue to make available the portion 
of his declaration of energy that can be generated with the capacity 
available.
    For such interruption or reduction due to conditions on the 
Administrator's system which have not been arranged for and agreed to 
in advance, the demand charge for capacity made available will be 
reduced as to the kilowatts of such capacity which have been 
interrupted or reduced in accordance with the following formula:
[GRAPHIC] [TIFF OMITTED] TN02OC15.014

Wholesale Power Rate Schedule CM-1-I

    Availability: This rate schedule shall be available to the South 
Mississippi Electric Power Association, Municipal Energy Agency of 
Mississippi, and Mississippi Delta Energy Agency (hereinafter called 
the Customers).
    Applicability: This rate schedule shall be applicable to electric 
capacity and energy available from the Dale Hollow, Center Hill, Wolf 
Creek, Cheatham, Old Hickory, Barkley, J. Percy Priest, and Cordell 
Hull Projects (all of such projects being hereinafter called 
collectively the ``Cumberland Projects'') and sold in wholesale 
quantities.
    Character of Service: The electric capacity and energy supplied 
hereunder will be three-phase alternating current at a nominal 
frequency of 60 hertz. The power shall be delivered at nominal voltages 
of 161,000 volts to the transmission systems of Mississippi Power and 
Light.
    Points of Delivery: The points of delivery will be at 
interconnection points of the Tennessee Valley Authority (TVA) system 
and the Mississippi Power and Light system. Other points of delivery 
may be as agreed upon.
    Billing Month: The billing month for power sold under this schedule 
shall end at 2400 hours CDT or CST, whichever is currently effective on 
the last day of each calendar month.
    Rate Alternatives: Southeastern Power Administration (Southeastern) 
is including three rate alternatives. All of the rate alternatives have 
an initial base annual revenue requirement of $63,500,000, including 
transmission and non-power revenue. The initial base annual revenue 
requirement from the sale of capacity and energy is $50,235,000. The 
initial base revenue requirements will be subject to annual true-up 
adjustment described below.
Rate Scenario 1--Revised Interim Operating Plan
    The final marketing policy for the Cumberland System was published 
in the Federal Register August 5, 1993 (58 FR 41762). The marketing 
policy for the Cumberland System of Projects provides peaking capacity, 
along with 1500 hours

[[Page 59750]]

of energy annually with each kilowatt of capacity, to customers outside 
the TVA transmission system. Due to restrictions on the operation of 
the Center Hill Project imposed by the U. S. Army Corps of Engineers 
(Corps) as a precaution to prevent failure of the dam, Southeastern is 
not able to provide the full allocation of peaking capacity to these 
customers. Southeastern implemented a Revised Interim Operating Plan 
for the Cumberland System to provide these customers with a reduced 
amount of energy and a reduced amount of capacity. The rates under this 
Scenario 1 will remain in effect for the duration of the Revised 
Interim Operating Plan. The initial base rates for capacity and energy 
will be subject to annual true-up adjustment described below.
    Monthly Rate: The initial monthly base rate for capacity and energy 
sold under this rate schedule shall be:
    Initial Base Demand charge: $1.902 per kilowatt per month.
    Initial Base Energy Charge: 12.35 mills per kilowatt-hour.
    True-up Adjustment: The Base Capacity Charge and Base Energy Charge 
will be subject to annual adjustment on April 1 of each year based on 
transfers of specific power investment to plant-in-service for the 
preceding Fiscal Year. Under this scenario the adjustment will be for 
each increase of $1,000,000 to specific power plant-in-service an 
increase of $0.001 per kilowatt per month added to the base capacity 
charge and 0.02 mills per kilowatt-hour added to the base energy rate.
    Southeastern will give written notice to the Customers of the 
amount of the true-up by February 1 of each year.
    Transmission Charge: The Customer will pay a ratable percent listed 
below of the credit the Administrator of Southeastern Power 
Administration (Administrator) provides to the TVA as consideration for 
delivering capacity and energy for the account of the Administrator to 
points of delivery of customers outside the TVA System or 
interconnection points of delivery with other electric systems for the 
benefit of customers outside the TVA System, as agreed by contract 
between the Administrator and TVA.

------------------------------------------------------------------------
                                                                Percent
------------------------------------------------------------------------
Mississippi Delta Energy Agency..............................      2.058
Municipal Energy Agency of Mississippi.......................      3.447
South Mississippi EPA........................................      9.358
------------------------------------------------------------------------

Rate Scenario 2--Modified Revised Interim Operating Plan
    This rate alternative will be implemented if a portion of the 
Cumberland Capacity can be scheduled, though not all the capacity in 
the published marketing policy can be scheduled. The initial base 
annual revenue requirement under this alternative is $63,500,000, 
including transmission and non-power revenue, the same as the annual 
revenue requirement in Scenarios 1 and 3. The annual revenue 
requirement from the sale of capacity and energy is $50,235,000. This 
Rate Scenario 2 will receive revenues from capacity that can be 
scheduled and the remainder from energy, at charges that will be 
determined at the time. Under Scenario 2, the cost of the TVA 
transmission credit will be passed to customers outside the TVA System. 
This rate alternative will be in effect if Southeastern chooses to 
modify the Revised Interim Operating Plan.
    The annual revenue requirement and rates under this scenario 2 will 
be subject to annual adjustment on April 1 of each year based on 
transfers of specific power investment to plant-in-service for the 
preceding Fiscal Year. Under this scenario 2, the adjustment is an 
increase of $53,000 per year to the annual revenue requirement for each 
increase of $1,000,000 to specific power plant-in-service. Southeastern 
will give written notice to the Customers of the amount of the true-up 
by February 1 of each year.
Rate Scenario 3--Original Cumberland Marketing Policy
    The third rate alternative will go into effect once the Corps lifts 
all restrictions on the operation of the Center Hill Dam and 
Southeastern returns to operations that support the published marketing 
policy. The initial base rates for capacity, energy, and additional 
energy will be subject to annual true-up adjustment described below.
    Monthly Rate: The initial monthly base rate for capacity and energy 
sold under this rate schedule shall be:
    Initial Base Demand charge (includes 1500 hours of energy 
annually): $3.115 per kilowatt/month of total contract demand.
    Initial Base Energy Charge: None.
    Initial Base Additional Energy Charge: 11.612 mills per kilowatt-
hour.
    True-up Adjustment:The base demand charge and base additional 
energy charge under this scenario will be subject to annual adjustment 
on April 1 of each year based on transfers to specific power plant-in-
service. Under this scenario 3, the adjustment is for each increase of 
$1,000,000 to specific power plant-in-service an increase of $ 0.003 
per kilowatt per month added to the base Capacity rate and an increase 
of 0.012 mills per kilowatt-hour added to the additional energy rate.
    Southeastern will give written notice to the Customers of the 
amount of the true-up by February 1 of each year.
    Transmission Charge: Monthly TVA Transmission Charge divided by 
545,000.
    Energy to be Furnished by the Government: The Government shall make 
available each contract year to the Customer from the Projects through 
the Customer's interconnections with TVA and the Customer will schedule 
and accept an allocation of 1500 kilowatt-hours of energy delivered at 
the TVA border for each kilowatt of contract demand. A contract year is 
defined as the 12 months beginning July 1 and ending at midnight June 
30 of the following calendar year. The energy made available for a 
contract year shall be scheduled monthly such that the maximum amount 
scheduled in any month shall not exceed 240 hours per kilowatt of the 
Customer's contract demand and the minimum amount scheduled in any 
month shall not be less than 60 hours per kilowatt of the Customer's 
contract demand. The Customer may request and the Government may 
approve energy scheduled for a month greater than 240 hours per 
kilowatt of the Customer's contract demand; provided, that the combined 
schedule of all Southeastern customers outside TVA and served by TVA 
does not exceed 240 hours per kilowatt of the total contract demands of 
these customers.
    In the event that any portion of the capacity allocated to the 
Customers is not initially delivered to the Customers as of the 
beginning of a full contract year, the 1500 kilowatt hours shall be 
reduced \1/12\ for each month of that year prior to initial delivery of 
such capacity.
    Service Interruption: When delivery of capacity is interrupted or 
reduced due to conditions on the Administrator's system beyond his 
control, the Administrator will continue to make available the portion 
of his declaration of energy that can be generated with the capacity 
available.
    For such interruption or reduction due to conditions on the 
Administrator's system which have not been arranged for and agreed to 
in advance, the demand charge for capacity made available will be 
reduced as to the kilowatts of such capacity which have been 
interrupted or reduced

[[Page 59751]]

in accordance with the following formula:
[GRAPHIC] [TIFF OMITTED] TN02OC15.015

Wholesale Power Rate Schedule CC-1-J

    Availability: This rate schedule shall be available to public 
bodies and cooperatives served through the facilities of Duke Energy 
Progress (formerly known as Carolina Power & Light Company), Western 
Division (hereinafter called the Customers).
    Applicability: This rate schedule shall be applicable to electric 
capacity and energy available from the Dale Hollow, Center Hill, Wolf 
Creek, Cheatham, Old Hickory, Barkley, J. Percy Priest, and Cordell 
Hull Projects (all of such projects being hereinafter called 
collectively the ``Cumberland Projects'') and sold in wholesale 
quantities.
    Character of Service: The electric capacity and energy supplied 
hereunder will be three-phase alternating current at a nominal 
frequency of 60 hertz. The power shall be delivered at nominal voltages 
of 161,000 volts to the transmission system of Duke Energy Progress, 
Western Division.
    Points of Delivery: The points of delivery will be at 
interconnecting points of the Tennessee Valley Authority (TVA) system 
and the Duke Energy Progress, Western Division system. Other points of 
delivery may be as agreed upon.
    Billing Month: The billing month for power sold under this schedule 
shall end at 2400 hours CDT or CST, whichever is currently effective, 
on the last day of each calendar month.
    Rate Alternatives: Southeastern Power Administration (Southeastern) 
is including three rate alternatives. All of the rate alternatives have 
an initial base annual revenue requirement of $63,500,000, including 
transmission and non-power revenue. The initial base annual revenue 
requirement from the sale of capacity and energy is $50,235,000. The 
initial base revenue requirements will be subject to annual true-up 
adjustment described below.
Rate Scenario 1--Revised Interim Operating Plan
    The final marketing policy for the Cumberland System was published 
in the Federal Register August 5, 1993 (58 FR 41762). The marketing 
policy for the Cumberland System of Projects provides peaking capacity, 
along with 1500 hours of energy annually with each kilowatt of 
capacity, to customers outside the TVA transmission system. Due to 
restrictions on the operation of the Center Hill Project imposed by the 
U. S. Army Corps of Engineers (Corps) as a precaution to prevent 
failure of the dam, Southeastern is not able to provide the full 
allocation of peaking capacity to these customers. Southeastern 
implemented a Revised Interim Operating Plan for the Cumberland System 
to provide these customers with a reduced amount of energy and a 
reduced amount of capacity. The rates under this Scenario 1 will remain 
in effect for the duration of the Revised Interim Operating Plan. The 
initial base rates for capacity and energy will be subject to annual 
true-up adjustment described below.
    Monthly Rate: The initial monthly base rate for capacity and energy 
sold under this rate schedule shall be:
    Initial Base Demand charge:

$2.165 per kilowatt per month.

    Initial Base Energy Charge: 12.35 mills per kilowatt-hour.

    True-up Adjustment: The Base Capacity Charge and Base Energy Charge 
will be subject to annual adjustment on April 1 of each year based on 
transfers of specific power investment to plant-in-service for the 
preceding Fiscal Year. Under this scenario the adjustment will be for 
each increase of $1,000,000 to specific power plant-in-service an 
increase of $0.001 per kilowatt per month added to the base capacity 
charge and 0.02 mills per kilowatt-hour added to the base energy rate.
    Southeastern will give written notice to the Customers of the 
amount of the true-up by February 1 of each year.
    TVA Transmission Charge: The Customer will pay a ratable percent 
listed below of the credit the Administrator of Southeastern Power 
Administration (Administrator) provides to the TVA as consideration for 
delivering capacity and energy for the account of the Administrator to 
points of delivery of customers outside the TVA System or 
interconnection points of delivery with other electric systems for the 
benefit of customers outside the TVA System, as agreed by contract 
between the Administrator and TVA.

------------------------------------------------------------------------
                                                                Percent
------------------------------------------------------------------------
French Broad EMC.............................................      1.713
Haywood EMC..................................................      0.501
Town of Waynesville..........................................      0.355
------------------------------------------------------------------------

    Duke Energy Progress Transmission Charge: The Customer will pay a 
ratable percent listed below of the charge for transmission service 
furnished by Duke Energy Progress, Western Division.

------------------------------------------------------------------------
                                                                Percent
------------------------------------------------------------------------
French Broad EMC.............................................     66.667
Haywood EMC..................................................     19.512
Town of Waynesville..........................................     13.821
------------------------------------------------------------------------

Rate Scenario 2--Modified Revised Interim Operating Plan
    This rate alternative will be implemented if a portion of the 
Cumberland Capacity can be scheduled, though not all the capacity in 
the published marketing policy can be scheduled. The initial base 
annual revenue requirement under this alternative is $63,500,000, 
including transmission and non-power revenue, the same as the annual 
revenue requirement in Scenarios 1 and 3. The annual revenue 
requirement from the sale of capacity and energy is $50,235,000. This 
Rate Scenario 2 will receive revenues from capacity that can be 
scheduled and the remainder from energy, at charges that will be 
determined at the time. Under Scenario 2, the cost of the TVA 
transmission credit will be passed to customers outside the TVA System. 
This rate alternative will be in effect if Southeastern chooses to 
modify the Revised Interim Operating Plan.
    The annual revenue requirement and rates under this scenario 2 will 
be subject to annual adjustment on April 1 of each year based on 
transfers of specific power investment to plant-in-service for the 
preceding Fiscal Year. Under this scenario 2, the adjustment is an 
increase of $53,000 per year to the annual revenue requirement for each

[[Page 59752]]

increase of $1,000,000 to specific power plant-in-service. Southeastern 
will give written notice to the Customers of the amount of the true-up 
by February 1 of each year.
Rate Scenario 3--Original Cumberland Marketing Policy
    The third rate alternative will go into effect once the Corps lifts 
all restrictions on the operation of the Center Hill Dam and 
Southeastern returns to operations that support the published marketing 
policy. The initial base rates for capacity, energy, and additional 
energy will be subject to annual true-up adjustment described below.
    Monthly Rate: The initial monthly base rate for capacity and energy 
sold under this rate schedule shall be:
    Initial Base Demand charge (includes 1500 hours of energy annually 
at the TVA Border): $3.546 per kilowatt/month of total contract demand.
    Initial Base Energy Charge: None.

    Initial Base Additional Energy Charge: 11.612 mills per kilowatt-
hour.

    True-up Adjustment: The base demand charge and base additional 
energy charge under this scenario will be subject to annual adjustment 
on April 1 of each year based on transfers to specific power plant-in-
service. Under this scenario 3, the adjustment is for each increase of 
$1,000,000 to specific power plant-in-service an increase of $ 0.003 
per kilowatt per month added to the base Capacity rate and an increase 
of 0.012 mills per kilowatt-hour added to the additional energy rate.
    Southeastern will give written notice to the Customers of the 
amount of the true-up by February 1 of each year.
    Transmission Charge: Monthly TVA Transmission Charge divided by 
545,000, and adjusted for Duke Energy Progress delivery. The adjustment 
under the current contract is 14,000/12,300, or 13.821 percent.
    CP&L Transmission Charge: $1.546 per kilowatt/month of total 
contract demand (As of February 2015 and provided for illustrative 
purposes.)
    The Duke Energy Progress transmission rate is subject to annual 
adjustment on April 1 of each year and will be computed subject to the 
formula in Appendix A attached to the Government--Duke Energy Progress 
contract.
    Energy to be Furnished by the Government: The Government will sell 
to the Customers and the Customers will purchase from the Government 
energy each billing month equivalent to a percentage specified by 
contract of the energy made available to Duke Energy Progress (less 
applicable losses). The Customer's contract demand and accompanying 
energy allocation will be divided pro rata among its individual 
delivery points served from the Duke Energy Progress, Western Division 
transmission system.

Wholesale Power Rate Schedule CK-1-I

    Availability: This rate schedule shall be available to public 
bodies served through the facilities of Kentucky Utilities Company, 
(hereinafter called the Customers.)
    Applicability: This rate schedule shall be applicable to electric 
capacity and energy available from the Dale Hollow, Center Hill, Wolf 
Creek, Cheatham, Old Hickory, Barkley, J. Percy Priest, and Cordell 
Hull Projects (all of such projects being hereinafter called 
collectively the ``Cumberland Projects'') and sold in wholesale 
quantities.
    Character of Service: The electric capacity and energy supplied 
hereunder will be three-phase alternating current at a nominal 
frequency of 60 hertz. The power shall be delivered at nominal voltages 
of 161,000 volts to the transmission systems of Kentucky Utilities 
Company.
    Points of Delivery: The points of delivery will be at 
interconnecting points between the Tennessee Valley Authority (TVA) 
system and the Kentucky Utilities Company system. Other points of 
delivery may be as agreed upon.
    Billing Month:
    The billing month for power sold under this schedule shall end at 
2400 hours CDT or CST, whichever is currently effective on the last day 
of each calendar month.
    Rate Alternatives: Southeastern Power Administration (Southeastern) 
is including three rate alternatives. All of the rate alternatives have 
an initial base annual revenue requirement of $63,500,000, including 
transmission and non-power revenue. The initial base annual revenue 
requirement from the sale of capacity and energy is $50,235,000. The 
initial base revenue requirements will be subject to annual true-up 
adjustment described below.
Rate Scenario 1--Revised Interim Operating Plan
    The final marketing policy for the Cumberland System was published 
in the Federal Register August 5, 1993 (58 FR 41762). The marketing 
policy for the Cumberland System of Projects provides peaking capacity, 
along with 1500 hours of energy annually with each kilowatt of 
capacity, to customers outside the TVA transmission system. Due to 
restrictions on the operation of the Center Hill Project imposed by the 
U. S. Army Corps of Engineers (Corps) as a precaution to prevent 
failure of the dam, Southeastern is not able to provide the full 
allocation of peaking capacity to these customers. Southeastern 
implemented a Revised Interim Operating Plan for the Cumberland System 
to provide these customers with a reduced amount of energy and a 
reduced amount of capacity. The rates under this Scenario 1 will remain 
in effect for the duration of the Revised Interim Operating Plan. The 
initial base rates for capacity and energy will be subject to annual 
true-up adjustment described below.
    Monthly Rate: The initial monthly base rate for capacity and energy 
sold under this rate schedule shall be:
    Initial Base Demand charge: $1.902 per kilowatt per month.

    Initial Base Energy Charge: 12.35 mills per kilowatt-hour.

    True-up Adjustment: The Base Capacity Charge and Base Energy Charge 
will be subject to annual adjustment on April 1 of each year based on 
transfers of specific power investment to plant-in-service for the 
preceding Fiscal Year. Under this scenario the adjustment will be for 
each increase of $1,000,000 to specific power plant-in-service an 
increase of $0.001 per kilowatt per month added to the base capacity 
charge and 0.02 mills per kilowatt-hour added to the base energy rate.
    Southeastern will give written notice to the Customers of the 
amount of the true-up by February 1 of each year.
    Transmission Charge: The Customers will pay a ratable percent 
listed below of the credit the Administrator of Southeastern Power 
Administration (Administrator) provides to the TVA as consideration for 
delivering capacity and energy for the account of the Administrator to 
points of delivery of customers outside the TVA System or 
interconnection points of delivery with other electric systems for the 
benefit of customers outside the TVA System, as agreed by contract 
between the Administrator and TVA.

------------------------------------------------------------------------
                                                                Percent
------------------------------------------------------------------------
City of Barbourville.........................................      0.404
City of Bardstown............................................      0.412
City of Bardwell.............................................      0.099
City of Benham...............................................      0.046
City of Corbin...............................................      0.477
City of Falmouth.............................................      0.108
City of Frankfort............................................      2.866
City of Madisonville.........................................      1.432
City of Nicholasville........................................      0.469
City of Owensboro............................................      4.587
City of Paris................................................      0.250

[[Page 59753]]

 
City of Providence...........................................      0.226
------------------------------------------------------------------------

Rate Scenario 2--Modified Revised Interim Operating Plan
    This rate alternative will be implemented if a portion of the 
Cumberland Capacity can be scheduled, though not all the capacity in 
the published marketing policy can be scheduled. The initial base 
annual revenue requirement under this alternative is $63,500,000, 
including transmission and non-power revenue, the same as the annual 
revenue requirement in Scenarios 1 and 3. The annual revenue 
requirement from the sale of capacity and energy is $50,235,000. This 
Rate Scenario 2 will receive revenues from capacity that can be 
scheduled and the remainder from energy, at charges that will be 
determined at the time. Under Scenario 2, the cost of the TVA 
transmission credit will be passed to customers outside the TVA System. 
This rate alternative will be in effect if Southeastern chooses to 
modify the Revised Interim Operating Plan.
    The annual revenue requirement and rates under this scenario 2 will 
be subject to annual adjustment on April 1 of each year based on 
transfers of specific power investment to plant-in-service for the 
preceding Fiscal Year. Under this scenario 2, the adjustment is an 
increase of $53,000 per year to the annual revenue requirement for each 
increase of $1,000,000 to specific power plant-in-service. Southeastern 
will give written notice to the Customers of the amount of the true-up 
by February 1 of each year.
Rate Scenario 3--Original Cumberland Marketing Policy
    The third rate alternative will go into effect once the Corps lifts 
all restrictions on the operation of the Center Hill Dam and 
Southeastern returns to operations that support the published marketing 
policy. The initial base rates for capacity, energy, and additional 
energy will be subject to annual true-up adjustment described below.
    Monthly Rate: The initial monthly base rate for capacity and energy 
sold under this rate schedule shall be:
    Initial Base Demand charge (includes 1500 hours of energy 
annually):

$2.915 per kilowatt/month of total contract demand.
    Initial Base Energy Charge: None.

    Initial Base Additional Energy Charge: 11.612 mills per kilowatt-
hour.
    True-up Adjustment: The base demand charge and base additional 
energy charge under this scenario will be subject to annual adjustment 
on April 1 of each year based on transfers to specific power plant-in-
service. Under this scenario 3, the adjustment is for each increase of 
$1,000,000 to specific power plant-in-service an increase of $ 0.003 
per kilowatt per month added to the base Capacity rate and an increase 
of 0.012 mills per kilowatt-hour added to the additional energy rate.
    Southeastern will give written notice to the Customers of the 
amount of the true-up by February 1 of each year.
    Transmission Charge: Monthly TVA Transmission Charge divided by 
545,000.
    Energy To Be Furnished by the Government: The Government shall make 
available each contract year to the Customer from the Projects and the 
Customer will accept an allocation of 1500 kilowatt-hours of energy for 
each kilowatt of contract demand. A contract year is defined as the 12 
months beginning July 1 and ending at midnight June 30 of the following 
calendar year. The energy made available for a contract year shall be 
scheduled monthly such that the maximum amount scheduled in any month 
shall not exceed 240 hours per kilowatt of the Customer's contract 
demand and the minimum amount scheduled in any month shall not be less 
than 60 hours per kilowatt of the Customer's contract demand. The 
Customers may request and the Government may approve energy scheduled 
for a month greater than 240 hours per kilowatt of the Customer's 
contract demand; provided, that the combined schedule of all 
Southeastern customers outside TVA and served by TVA does not exceed 
240 hours per kilowatt of the total contract demands of these 
customers.
    In the event that any portion of the capacity allocated to the 
Customers is not initially delivered to the Customers as of the 
beginning of a full contract year, the 1500 kilowatt hours shall be 
reduced \1/12\ for each month of that year prior to initial delivery of 
such capacity.
    For billing purposes, each kilowatt of capacity will include 1500 
kilowatt-hours energy per year. Customers will pay for additional 
energy at the additional energy rate.

Wholesale Power Rate Schedule CTV-1-I

    Availability: This rate schedule shall be available to the 
Tennessee Valley Authority (hereinafter called TVA) on behalf of 
members of the Tennessee Valley Public Power Association (hereinafter 
called TVPPA).
    Applicability: This rate schedule shall be applicable to electric 
capacity and energy generated at the Dale Hollow, Center Hill, Wolf 
Creek, Old Hickory, Cheatham, Barkley, J. Percy Priest, and Cordell 
Hull Projects (all of such projects being hereafter called collectively 
the ``Cumberland Projects'') and the Laurel Project sold under 
agreement between the Department of Energy and TVA.
    Character of Service: The electric capacity and energy supplied 
hereunder will be three-phase alternating current at a frequency of 
approximately 60 hertz at the outgoing terminals of the Cumberland 
Projects' switchyards.
    Billing Month: The billing month for capacity and energy sold under 
this schedule shall end at 2400 hours CDT or CST, whichever is 
currently effective, on the last day of each calendar month.
    Contract Year: For purposes of this rate schedule, a contract year 
shall be as in Section 13.1 of the Southeastern Power Administration--
Tennessee Valley Authority Contract.
    Power Factor: TVA shall take capacity and energy from the 
Department of Energy at such power factor as will best serve TVA's 
system from time to time; provided, that TVA shall not impose a power 
factor of less than .85 lagging on the Department of Energy's 
facilities which requires operation contrary to good operating practice 
or results in overload or impairment of such facilities.
    Rate Alternatives: Southeastern Power Administration (Southeastern) 
is including three rate alternatives. All of the rate alternatives have 
an initial base annual revenue requirement of $63,500,000, including 
transmission and non-power revenue. The initial base annual revenue 
requirement from the sale of capacity and energy is $50,235,000. The 
initial base revenue requirements will be subject to annual true-up 
adjustment described below.
Rate Scenario 1--Revised Interim Operating Plan
    The final marketing policy for the Cumberland System was published 
in the Federal Register August 5, 1993 (58 FR 41762). The marketing 
policy for the Cumberland System of Projects provides peaking capacity, 
along with 1500 hours of energy annually with each kilowatt of 
capacity, to customers outside the TVA transmission system. Due to 
restrictions on the operation of the Center Hill Project imposed by the 
U.S. Army Corps of Engineers (Corps) as a precaution to prevent failure 
of the dam, Southeastern is not able to provide the full allocation of 
peaking capacity to these customers. Southeastern implemented a Revised

[[Page 59754]]

Interim Operating Plan for the Cumberland System to provide these 
customers with a reduced amount of energy and a reduced amount of 
capacity. The rates under this Scenario 1 will remain in effect for the 
duration of the Revised Interim Operating Plan. The initial base rates 
for capacity and energy will be subject to annual true-up adjustment 
described below.
    Monthly Rate: The initial monthly base rate for capacity and energy 
sold under this rate schedule shall be:
    Initial Base Demand charge: $1.902 per kilowatt per month
    Initial Base Energy Charge: 12.35 mills per kilowatt-hour.
    True-up Adjustment: The Base Capacity Charge and Base Energy Charge 
will be subject to annual adjustment on April 1 of each year based on 
transfers of specific power investment to plant-in-service for the 
preceding Fiscal Year. Under this scenario the adjustment will be for 
each increase of $1,000,000 to specific power plant-in-service an 
increase of $0.001 per kilowatt per month added to the base capacity 
charge and 0.02 mills per kilowatt-hour added to the base energy rate.
    Southeastern will give written notice to the TVA and TVPPA of the 
amount of the true-up by February 1 of each year.
Rate Scenario 2--Modified Revised Interim Operating Plan
    This rate alternative will be implemented if a portion of the 
Cumberland Capacity can be scheduled, though not all the capacity in 
the published marketing policy can be scheduled. The initial base 
annual revenue requirement under this alternative is $63,500,000, 
including transmission and non-power revenue, the same as the annual 
revenue requirement in Scenarios 1 and 3. The annual revenue 
requirement from the sale of capacity and energy is $50,235,000. This 
Rate Scenario 2 will receive revenues from capacity that can be 
scheduled and the remainder from energy, at charges that will be 
determined at the time. Under Scenario 2, the cost of the TVA 
transmission credit will be passed to customers outside the TVA System. 
This rate alternative will be in effect if Southeastern chooses to 
modify the Revised Interim Operating Plan.
    The annual revenue requirement and rates under this scenario 2 will 
be subject to annual adjustment on April 1 of each year based on 
transfers of specific power investment to plant-in-service for the 
preceding Fiscal Year. Under this scenario 2, the adjustment is an 
increase of $53,000 per year to the annual revenue requirement for each 
increase of $1,000,000 to specific power plant-in-service. Southeastern 
will give written notice to the TVA and TVPPA of the amount of the 
true-up by February 1 of each year.
Rate Scenario 3--Original Cumberland Marketing Policy
    The third rate alternative will go into effect once the Corps lifts 
all restrictions on the operation of the Center Hill Dam and 
Southeastern returns to operations that support the published marketing 
policy. The initial base rates for capacity, energy, and additional 
energy will be subject to annual true-up adjustment described below.
    Monthly Rate: The initial monthly base rate for capacity and energy 
sold under this rate schedule shall be:
    Initial Base Demand charge (includes 1500 hours of energy 
annually): $3.115 per kilowatt/month of total contract demand.
    Initial Base Energy Charge: None.
    Initial Base Additional Energy Charge: 11.612 mills per kilowatt-
hour.
    True-up Adjustment:The base demand charge and base additional 
energy charge under this scenario will be subject to annual adjustment 
on April 1 of each year based on transfers to specific power plant-in-
service. Under this scenario 3, the adjustment is for each increase of 
$1,000,000 to specific power plant-in-service an increase of $ 0.003 
per kilowatt per month added to the base Capacity rate and an increase 
of 0.012 mills per kilowatt-hour added to the additional energy rate.
    Southeastern will give written notice to the TVA and TVPPA of the 
amount of the true-up by February 1 of each year.
    Energy to be Made Available: The Department of Energy shall 
determine the energy that is available from the projects for 
declaration in the billing month.
    To meet the energy requirements of the Department of Energy's 
customers outside the TVA area (hereinafter called Outside Customers), 
768,000 megawatt-hours of net energy shall be available annually 
(including 36,900 megawatt-hours of annual net energy to supplement 
energy available at Laurel Project). The energy requirement of the 
Outside Customers shall be available annually, divided monthly such 
that the maximum available in any month shall not exceed 240 hours per 
kilowatt of total Outside Customers contract demand, and the minimum 
amount available in any month shall not be less than 60 hours per 
kilowatt of total Outside Customers demand.
    In the event that any portion of the capacity allocated to Outside 
Customers is not initially delivered to the Outside Customers as of the 
beginning of a full contract year, (July through June), the 1500 hours, 
plus any such additional energy required as discussed above, shall be 
reduced \1/12\ for each month of that year prior to initial delivery of 
such capacity.
    The energy scheduled by TVA for use within the TVA System in any 
billing month shall be the total energy delivered to TVA less (1) an 
adjustment for fast or slow meters, if any, (2) an adjustment for 
Barkley-Kentucky Canal of 15,000 megawatt-hours of energy each month 
which is delivered to TVA under the agreement from the Cumberland 
Projects without charge to TVA, (3) the energy scheduled by the 
Department of Energy in said month for the Outside Customers plus 
losses of two percent [2%], and (4) station service energy furnished by 
TVA.
    Each kilowatt of capacity will include 1500 kilowatt-hours of 
energy per year, which is defined as base energy. Energy received in 
excess of 1500 kilowatt-hours per kilowatt will be subject to an 
additional energy charge identified in the monthly rates section of 
this rate schedule.
    Service Interruption: When delivery of capacity to TVA is 
interrupted or reduced due to conditions on the Department of Energy's 
system that are beyond its control, the Department of Energy will 
continue to make available the portion of its declaration of energy 
that can be generated with the capacity available.
    For such interruption or reduction (exclusive of any restrictions 
provided in the agreement) due to conditions on the Department of 
Energy's system which have not been arranged for and agreed to in 
advance, the demand charge for scheduled capacity made available to TVA 
will be reduced as to the kilowatts of such scheduled capacity which 
have been so interrupted or reduced for each day in accordance with the 
following formula:

[[Page 59755]]

[GRAPHIC] [TIFF OMITTED] TN02OC15.016

Wholesale Power Rate Schedule CTVI-1-B
    Availability: This rate schedule shall be available to customers 
(hereinafter called the Customer) who are or were formerly in the 
Tennessee Valley Authority (hereinafter called TVA) service area.
    Applicability: This rate schedule shall be applicable to electric 
capacity and energy generated at the Dale Hollow, Center Hill, Wolf 
Creek, Old Hickory, Cheatham, Barkley, J. Percy Priest, and Cordell 
Hull Projects (all of such projects being hereafter called collectively 
the ``Cumberland Projects'') and the Laurel Project sold under 
agreement between the Department of Energy and the Customer.
    Character of Service: The electric capacity and energy supplied 
hereunder will be three-phase alternating current at a frequency of 
approximately 60 hertz at the outgoing terminals of the Cumberland 
Projects' switchyards.
    Billing Month: The billing month for capacity and energy sold under 
this schedule shall end at 2400 hours CDT or CST, whichever is 
currently effective, on the last day of each calendar month.
    Contract Year: For purposes of this rate schedule, a contract year 
shall be as in Section 13.1 of the Southeastern Power Administration--
Tennessee Valley Authority Contract.
    Rate Alternatives: Southeastern Power Administration (Southeastern) 
is including three rate alternatives. All of the rate alternatives have 
an initial base annual revenue requirement of $63,500,000, including 
transmission and non-power revenue. The initial base annual revenue 
requirement from the sale of capacity and energy is $50,235,000. The 
initial base revenue requirements will be subject to annual true-up 
adjustment described below.
Rate Scenario 1--Revised Interim Operating Plan
    The final marketing policy for the Cumberland System was published 
in the Federal Register August 5, 1993 (58 FR 41762). The marketing 
policy for the Cumberland System of Projects provides peaking capacity, 
along with 1500 hours of energy annually with each kilowatt of 
capacity, to customers outside the TVA transmission system. Due to 
restrictions on the operation of the Center Hill Project imposed by the 
U.S. Army Corps of Engineers (Corps) as a precaution to prevent failure 
of the dam, Southeastern is not able to provide the full allocation of 
peaking capacity to these customers. Southeastern implemented a Revised 
Interim Operating Plan for the Cumberland System to provide these 
customers with a reduced amount of energy and a reduced amount of 
capacity. The rates under this Scenario 1 will remain in effect for the 
duration of the Revised Interim Operating Plan. The initial base rates 
for capacity and energy will be subject to annual true-up adjustment 
described below.
    Monthly Rate: The initial monthly base rate for capacity and energy 
sold under this rate schedule shall be:
    Initial Base Demand charge: $1.902 per kilowatt per month.

    Initial Base Energy Charge: 12.35 mills per kilowatt-hour.

    True-up Adjustment: The Base Capacity Charge and Base Energy Charge 
will be subject to annual adjustment on April 1 of each year based on 
transfers of specific power investment to plant-in-service for the 
preceding Fiscal Year. Under this scenario the adjustment will be for 
each increase of $1,000,000 to specific power plant-in-service an 
increase of $0.001 per kilowatt per month added to the base capacity 
charge and 0.02 mills per kilowatt-hour added to the base energy rate.
    Southeastern will give written notice to the Customer of the amount 
of the true-up by February 1 of each year.
    Transmission Charge: The initial charge for transmission and 
Ancillary Services will be the Customer's ratable share of the charges 
for transmission, distribution, and ancillary services paid by the 
Government. The charges for transmission and ancillary services are 
governed by and subject to refund based upon the determination in 
proceedings before the Federal Energy Regulatory Commission (FERC) or 
other overseeing entity involving the TVA's and other transmission 
provider's Open Access Transmission Tariff (OATT).
    Proceedings before FERC or other overseeing entity involving the 
OATT or the Distribution charge may result in the separation of charges 
currently included in the transmission rate. In this event, the 
Government may charge the Customer for any and all separate 
transmission, ancillary services, and distribution charges paid by the 
Government in behalf of the Customer. These charges could be recovered 
through a capacity charge or an energy charge, as determined by the 
Government.
Rate Scenario 2--Modified Revised Interim Operating Plan
    This rate alternative will be implemented if a portion of the 
Cumberland Capacity can be scheduled, though not all the capacity in 
the published marketing policy can be scheduled. The initial base 
annual revenue requirement under this alternative is $63,500,000, 
including transmission and non-power revenue, the same as the annual 
revenue requirement in Scenarios 1 and 3. The annual revenue 
requirement from the sale of capacity and energy is $50,235,000. This 
Rate Scenario 2 will receive revenues from capacity that can be 
scheduled and the remainder from energy, at charges that will be 
determined at the time. Under Scenario 2, the cost of the TVA 
transmission credit will be passed to customers outside the TVA System. 
This rate alternative will be in effect if Southeastern chooses to 
modify the Revised Interim Operating Plan.
    The annual revenue requirement and rates under this scenario 2 will 
be subject to annual adjustment on April 1 of each year based on 
transfers of specific power investment to plant-in-service for the 
preceding Fiscal Year. Under this scenario 2, the adjustment is an 
increase of $53,000 per year to the annual revenue requirement for each 
increase of $1,000,000 to specific power plant-in-service. Southeastern 
will give written notice to the Customer of the amount of the true-up 
by February 1 of each year.
Rate Scenario 3--Original Cumberland Marketing Policy
    The third rate alternative will go into effect once the Corps lifts 
all restrictions on the operation of the Center Hill Dam and 
Southeastern returns to operations that support the published marketing 
policy. The initial base rates for capacity, energy, and additional 
energy

[[Page 59756]]

will be subject to annual true-up adjustment described below.
    Monthly Rate: The initial monthly base rate for capacity and energy 
sold under this rate schedule shall be:
    Initial Base Demand charge (includes 1500 hours of energy 
annually): $3.115 per kilowatt/month of total contract demand.
    Initial Base Energy Charge: None.

    Initial Base Additional Energy Charge: 11.612 mills per kilowatt-
hour.

    True-up Adjustment: The base demand charge and base additional 
energy charge under this scenario will be subject to annual adjustment 
on April 1 of each year based on transfers to specific power plant-in-
service. Under this scenario 3, the adjustment is for each increase of 
$1,000,000 to specific power plant-in-service an increase of $ 0.003 
per kilowatt per month added to the base Capacity rate and an increase 
of 0.012 mills per kilowatt-hour added to the additional energy rate.
    Southeastern will give written notice to the Customer of the amount 
of the true-up by February 1 of each year.
    Transmission Charge: The initial charge for transmission and 
Ancillary Services will be the Customer's ratable share of the charges 
for transmission, distribution, and ancillary services paid by the 
Government. The charges for transmission and ancillary services are 
governed by and subject to refund based upon the determination in 
proceedings before FERC or other overseeing entity involving the TVA's 
and other transmission provider's Open Access Transmission Tariff 
(OATT).
    Proceedings before FERC or other overseeing entity involving the 
OATT or the Distribution charge may result in the separation of charges 
currently included in the transmission rate. In this event, the 
Government may charge the Customer for any and all separate 
transmission, ancillary services, and distribution charges paid by the 
Government in behalf of the Customer. These charges could be recovered 
through a capacity charge or an energy charge, as determined by the 
Government.
    Energy to be Made Available: The energy will be scheduled by TVA 
and the Customer will receive their ratable share, in accordance with 
the Government-Customer Contract. Energy shall be accounted for, in 
accordance with agreements with TVA.
    The Customer will receive a ratable share of their capacity, in 
accordance with the Government-Customer Contract.
    Service Interruption: When delivery of capacity to TVA is 
interrupted or reduced due to conditions on the Department of Energy's 
system that are beyond its control, the Department of Energy will 
continue to make available the portion of its declaration of energy 
that can be generated with the capacity available. The customer will 
receive a ratable share of this capacity.
    For such interruption or reduction (exclusive of any restrictions 
provided in the agreement) due to conditions on the Department of 
Energy's system which have not been arranged for and agreed to in 
advance, the demand charge for scheduled capacity made available to the 
Customer will be reduced as to the kilowatts of such scheduled capacity 
which have been so interrupted or reduced for each day in accordance 
with the following formula:
[GRAPHIC] [TIFF OMITTED] TN02OC15.017

Wholesale Rate Schedule Replacement--3

    Availability: This rate schedule shall be available to public 
bodies and cooperatives (any one of whom is hereinafter called the 
Customer) in Alabama, Georgia, Illinois, Kentucky, North Carolina, 
Mississippi, Tennessee, and Virginia to whom power is provided pursuant 
to contracts between the Government and the customer from the Dale 
Hollow, Center Hill, Wolf Creek, Cheatham, Old Hickory, Barkley, J. 
Percy Priest, Cordell Hull, and Laurel Projects (all of such projects 
being hereinafter called collectively the ``Cumberland Projects'').
    Applicability: This rate schedule shall be applicable to the sale 
of wholesale energy purchased to meet contract minimum energy sold 
under appropriate contracts between the Government and the Customer.
    Character of Service: The energy supplied hereunder will be 
delivered at the delivery points provided for under appropriate 
contracts between the Government and the Customer.
    Monthly Charge: The rate for replacement energy will be a formulary 
capacity charge based on the monthly cost to the Government to purchase 
replacement energy necessary to support capacity in the Cumberland 
System divided by the capacity available from the Cumberland System, 
which is 950,000 kilowatts in the published power marketing policy. The 
capacity rate will be adjusted for any capacity retained by the 
Customer's transmission facilitator.
    Conditions of Service: The customer shall at its own expense 
provide, install, and maintain on its side of each delivery point the 
equipment necessary to protect and control its own system.

[FR Doc. 2015-25102 Filed 10-1-15; 8:45 am]
 BILLING CODE 6450-01-P