Integrated System Power Rates, 8851-8858 [2019-04456]

Agencies

• DEPARTMENT OF ENERGY
• Southwestern Power Administration

[Federal Register Volume 84, Number 48 (Tuesday, March 12, 2019)]
[Notices]
[Pages 8851-8858]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-04456]


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DEPARTMENT OF ENERGY

Southwestern Power Administration


Integrated System Power Rates

AGENCY: Southwestern Power Administration, DOE.

ACTION: Notice of proposed change to Southwestern Power Administration 
Integrated System Wholesale Rates for Hydro Peaking Power Rate Schedule 
and opportunity for public review and comment.

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SUMMARY: The Administrator, Southwestern Power Administration 
(Southwestern), is proposing to add a new section to Southwestern's 
existing Integrated System Wholesale Rates for Hydro Peaking Power (P-
13) Rate Schedule. This new section is necessary

[[Page 8852]]

to effect a uniform shift in the time Southwestern requires its 
customers to submit Peaking Energy schedules. Southwestern has 
determined that the shift in Peaking Energy Schedule Submission Time 
from the current 2:00 p.m. CPT to the proposed 2:30 p.m. CPT allows 
Southwestern's customers to best incorporate Federal hydropower in 
their energy resource portfolios and better align with regional energy 
market considerations.

DATES: The consultation and comment period will begin on March 12, 2019 
and will end on April 11, 2019. Written comments are due on or before 
April 11, 2019.

ADDRESSES: Comments should be submitted to Ms. Fritha Ohlson, Senior 
Vice President and Chief Operating Officer, Southwestern Power 
Administration, U.S. Department of Energy, One West Third Street, 
Tulsa, Oklahoma 74103.

FOR FURTHER INFORMATION CONTACT: Ms. Fritha Ohlson, Senior Vice 
President, Chief Operating Officer, Office of Corporate Operations, 
(918) 595-6684, fritha.ohlson@swpa.gov, or facsimile transmission (918) 
595-6684.

SUPPLEMENTARY INFORMATION: Originally established by Order 1865, 
Secretary of the Interior, dated August 31, 1943 and effective 
September 1, 1943 (8 FR 12142 (Sept. 3, 1943)), Southwestern is an 
agency within the U.S. Department of Energy created by the Department 
of Energy Organization Act, Public Law 95-91, dated August 4, 1977. 
Guidelines for preparation of power repayment studies are included in 
DOE Order No. RA 6120.2 (Sept. 20, 1979), entitled Power Marketing 
Administration Financial Reporting. Procedures for public participation 
in power and transmission rate adjustments of the Power Marketing 
Administrations are found at title 10, part 903, subpart A of the Code 
of Federal Regulations (10 CFR part 903). Procedures for the 
confirmation and approval of rates for the Federal Power Marketing 
Administrations are found at title 18, part 300, subpart L of the Code 
of Federal Regulations (18 CFR part 300).
    Southwestern markets power from 24 multi-purpose reservoir projects 
with hydroelectric power facilities constructed and operated by the 
U.S. Army Corps of Engineers (Corps). These projects are located in the 
states of Arkansas, Missouri, Oklahoma, and Texas. Southwestern's 
marketing area includes these states plus Kansas and Louisiana. The 
costs associated with the hydropower facilities of 22 of the 24 
projects are repaid via revenues received under the Integrated System 
rates, as are those of Southwestern's transmission facilities, which 
consist of 1,380 miles of high-voltage transmission lines, 26 
substations, and 46 communication sites. Costs associated with the Sam 
Rayburn and Robert D. Willis Dams, two Corps projects that are isolated 
hydraulically, electrically, and financially from the Integrated 
System, are repaid under separate rate schedules and are not addressed 
in this Notice.

Public Review and Comment

    In accordance with 10 CFR part 903, Southwestern's proposed change 
to its P-13 Rate Schedule is considered a minor rate adjustment, as 
there is no change in annual revenues. 10 CFR part 903 also provides 
that neither a Public Information Forum nor a Public Comment Forum is 
required in conjunction with the consultation and comment period for a 
minor rate adjustment. Additionally, the proposed change is provided 
for contractually for those customers to whom the P-13 Rate Schedule 
applies. Therefore, Southwestern finds that holding a Public 
Information and Comment Forum in conjunction with the consultation and 
comment period is not necessary. Written comments will be accepted 
throughout the consultation and comment period (see DATES).

Rate Schedule Change

    The proposed new Section 4.2 establishes the Peaking Energy 
Schedule Submission Time as on or before 2:30 p.m. Central Prevailing 
Time (CPT) of the day preceding the day for delivery of Peaking Energy. 
Southwestern has determined that the proposed new Section 4.2 will 
provide a single instrument and procedure for establishing and making 
limited adjustments to its Peaking Energy Schedule Submission Time. 
There is no change in annual revenues associated with the proposed P-13 
Rate Schedule change.
    Established by the provision in each customer's power sales 
contract, Southwestern's current requirement is that customers submit 
Peaking Energy schedules to Southwestern on or before 2:00 p.m. CPT of 
the day preceding the day for delivery of Peaking Energy. The majority 
of existing power sales contracts permit a change to the Peaking Energy 
schedule submission time provided the time change is specified in 
Southwestern's in-effect Rate Schedule for Hydro Peaking Power. 
Southwestern's customers requested that Southwestern consider shifting 
the Peaking Energy schedule submission time later in the day, which 
allows Southwestern's customers to best incorporate Federal hydropower 
in their energy resource portfolios and better align with regional 
energy market considerations. Southwestern performed studies to 
determine if a change to the submission time would create any 
operational or financial issues. At this time, there are no significant 
issues identified with changing the Peaking Energy schedule submission 
time from 2:00 p.m. CPT to the proposed 2:30 p.m. CPT. Southwestern's 
customers have expressed support for such a change. Therefore, 
Southwestern determined that it would pursue shifting its Peaking 
Energy schedule submission time from 2:00 p.m. CPT to 2:30 p.m. CPT.
    For customers that schedule Peaking Energy with Southwestern, the 
majority of the customers' power sales contracts contain a provision 
for submitting Peaking Energy schedules to Southwestern on or before 
2:00 p.m. CPT of the day preceding the day for delivery of Peaking 
Energy, unless otherwise specified in Southwestern's in-effect Rate 
Schedule for Hydro Peaking Power. However, the current P-13 Rate 
Schedule has no provision for establishing or adjusting the time for 
customers to submit Peaking Energy schedules. The Administrator 
determined that adding the proposed new Section 4.2 to the P-13 Rate 
Schedule implements the desired change in Peaking Energy schedule 
submission time most efficiently. Additionally, the proposed new 
Section 4.2 provides a procedure by which the Administrator may adjust 
the Peaking Energy Schedule Submission Time once annually to a time no 
earlier than 2:00 p.m. CPT and no later than 3:00 p.m. CPT.
    Implementing the proposed new Section 4.2 that establishes the 
Peaking Energy Schedule Submission Time is consistent with the terms 
and conditions of the majority of existing power sales contracts. The 
few power sales contracts that do not contain the unless otherwise 
specified in Southwestern's in-effect Rate Schedule for Hydro Peaking 
Power provision are currently undergoing modification to insert such a 
provision, with execution anticipated prior to this proposed Rate 
Schedule change action taking effect. Southwestern would not implement 
the proposed new section in the P-13 Rate Schedule unless and until all 
applicable power sales contracts included the appropriate provision. 
Additionally, the proposed new Section 4.2 affords Southwestern a 
single instrument and procedure to utilize for establishing and making 
limited adjustments to its Peaking Energy Schedule Submission Time.

[[Page 8853]]

    The title of the P-13 Rate Schedule will be changed to P[dash]13A 
to reflect the addition of Section 4.2. A redlined version of the P-13 
Rate Schedule, which shows the revision proposed by the P-13A Rate 
Schedule, will be made available upon request. To request a copy, 
please contact Ms. Fritha Ohlson, Senior Vice President and Chief 
Operating Officer.
    Following review and consideration of written comments, the 
Administrator will determine whether to finalize and submit the 
proposed P-13A Rate Schedule to the Under Secretary of Energy for 
confirmation and approval on an interim basis, and subsequently to the 
Federal Energy Regulatory Commission (FERC) for confirmation and 
approval on a final basis. The FERC will allow the public an 
opportunity to provide written comments on the proposed rate schedule 
change before making a final decision.

    Dated: March 5, 2019.
Mike Wech,
Administrator.

UNITED STATES DEPARTMENT OF ENERGY

SOUTHWESTERN POWER ADMINISTRATION

RATE SCHEDULE P-13A \1\ **
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    \1\ Supersedes Rate Schedule P-13.
    ** Extended through September 30, 2019 by approval of Rate Order 
No. SWPA-72 by the Deputy Secretary of Energy.

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WHOLESALE RATES FOR HYDRO PEAKING POWER

Effective:

During the period October 1, 2013, through September 30, 2019**, in 
accordance with Federal Energy Regulatory Commission order issued 
January 9, 2014, Docket No. EF14[dash]1[dash]000.

Available:

In the marketing area of Southwestern Power Administration 
(Southwestern), described generally as the States of Arkansas, Kansas, 
Louisiana, Missouri, Oklahoma, and Texas.

Applicable:

To wholesale Customers which have contractual rights from Southwestern 
to purchase Hydro Peaking Power and associated energy (Peaking Energy 
and Supplemental Peaking Energy).

Character and Conditions of Service:

Three-phase, alternating current, delivered at approximately 60 Hertz, 
at the nominal voltage(s), at the point(s) of delivery, and in such 
quantities as are specified by contract.
1. Definitions of Terms
1.1. Ancillary Services

The services necessary to support the transmission of capacity and 
energy from resources to loads while maintaining reliable operation of 
the System of Southwestern in accordance with good utility practice, 
which include the following:
1.1.1. Scheduling, System Control, and Dispatch Service

is provided by Southwestern as Balancing Authority Area operator and is 
in regard to interchange and load-match scheduling and related system 
control and dispatch functions.

1.1.2. Reactive Supply and Voltage Control from Generation Sources 
Service

is provided at transmission facilities in the System of Southwestern to 
produce or absorb reactive power and to maintain transmission voltages 
within specific limits.

1.1.3. Regulation and Frequency Response Service

is the continuous balancing of generation and interchange resources 
accomplished by raising or lowering the output of on-line generation as 
necessary to follow the moment-by-moment changes in load and to 
maintain frequency within a Balancing Authority Area.

1.1.4. Spinning Operating Reserve Service

maintains generating units on-line, but loaded at less than maximum 
output, which may be used to service load immediately when disturbance 
conditions are experienced due to a sudden loss of generation or load.

1.1.5. Supplemental Operating Reserve Service

provides an additional amount of operating reserve sufficient to reduce 
Area Control Error to zero within 10 minutes following loss of 
generating capacity which would result from the most severe single 
contingency.

1.1.6. Energy Imbalance Service

corrects for differences over a period of time between schedules and 
actual hourly deliveries of energy to a load. Energy delivered or 
received within the authorized bandwidth for this service is accounted 
for as an inadvertent flow and is returned to the providing party by 
the receiving party in accordance with standard utility practice or a 
contractual arrangement between the parties.

1.2. Customer

The entity which is utilizing and/or purchasing Federal Power and 
Federal Energy and services from Southwestern pursuant to this Rate 
Schedule.
1.3. Demand Period

The period of time used to determine maximum integrated rates of 
delivery for the purpose of power accounting which is the 60-minute 
period that begins with the change of hour.
1.4. Federal Power and Energy

The power and energy provided from the System of Southwestern.
1.5. Hydro Peaking Power

The Federal Power that Southwestern sells and makes available to the 
Customers through their respective Power Sales Contracts in accordance 
with this Rate Schedule.
1.6. Peaking Billing Demand

The quantity equal to the Peaking Contract Demand for any month unless 
otherwise provided by the Customer's Power Sales Contract.
1.7. Peaking Contract Demand

The maximum rate in kilowatts at which Southwestern is obligated to 
deliver Federal Energy associated with Hydro Peaking Power as set forth 
in the Customer's Power Sales Contract.
1.8. Peaking Energy

The Federal Energy associated with Hydro Peaking Power that 
Southwestern sells and makes available to the Customer in accordance 
with the terms and conditions of the Customer's Power Sales Contract.
1.9. Peaking Energy Schedule Submission Time

The time by which Southwestern requires the Customer to submit Peaking 
Energy schedules to Southwestern as provided for in this Rate Schedule 
P-13A and in accordance with the terms and conditions of the Customer's 
Power Sales Contract.
1.10. Power Sales Contract

The Customer's contract with Southwestern for the sale of Federal Power 
and Federal Energy.
1.11. Supplemental Peaking Energy

The Federal Energy associated with Hydro Peaking Power that 
Southwestern sells and makes available to the Customer if determined by 
Southwestern to be available and that is in addition to the quantity of 
Peaking Energy purchased by the Customer in accordance with the terms 
and conditions of the Customer's Power Sales Contract.
1.12. System of Southwestern

    The transmission and related facilities owned by Southwestern, and/
or the generation, transmission, and related facilities owned by 
others, the capacity of which, by contract, is available to and 
utilized by Southwestern to satisfy its contractual obligations to the 
Customer.

[[Page 8854]]

1.13. Uncontrollable Force

Any force which is not within the control of the party affected, 
including, but not limited to failure of water supply, failure of 
facilities, flood, earthquake, storm, lightning, fire, epidemic, riot, 
civil disturbance, labor disturbance, sabotage, war, act of war, 
terrorist acts, or restraint by court of general jurisdiction, which by 
exercise of due diligence and foresight such party could not reasonably 
have been expected to avoid.
Wholesale Rates, Terms, and Conditions for Hydro Peaking Power, Peaking 
Energy, Supplemental Peaking Energy, and Associated Services
Unless otherwise specified, this Section 2 is applicable to all sales 
under the Customer's Power Sales Contract.

2.1. Hydro Peaking Power Rates, Terms, and Conditions

2.1.1. Monthly Capacity Charge for Hydro Peaking Power

$4.50 per kilowatt of Peaking Billing Demand.
2.1.2. Services Associated with Capacity Charge for Hydro Peaking Power

    The capacity charge for Hydro Peaking Power includes such 
transmission services as are necessary to integrate Southwestern's 
resources in order to reliably deliver Hydro Peaking Power and 
associated energy to the Customer. This capacity charge also includes 
two Ancillary Services charges: Scheduling, System Control, and 
Dispatch Service; and Reactive Supply and Voltage Control from 
Generation Sources Service.

2.1.3. Secondary Transmission Service under Capacity Associated with 
Hydro Peaking Power

    Customers may utilize the transmission capacity associated with 
Peaking Contract Demand for the transmission of non-Federal energy, on 
a non-firm, as-available basis, at no additional charge for such 
transmission service or associated Ancillary Services, under the 
following terms and conditions:

2.1.3.1.1. The sum of the capacity, for any hour, which is used for 
Peaking Energy, Supplemental Peaking Energy, and Secondary Transmission 
Service, may not exceed the Peaking Contract Demand;

2.1.3.1.2. The non-Federal energy transmitted under such secondary 
service is delivered to the Customer's point of delivery for Hydro 
Peaking Power;

2.1.3.1.3. The Customer commits to provide Real Power Losses associated 
with such deliveries of non-Federal energy; and
2.1.3.1.4. Sufficient transfer capability exists between the point of 
receipt into the System of Southwestern of such non-Federal energy and 
the Customer's point of delivery for Hydro Peaking Power for the time 
period that such secondary transmission service is requested.

2.1.4. Adjustment for Reduction in Service

    If, during any month, the Peaking Contract Demand associated with a 
Power Sales Contract in which Southwestern has the obligation to 
provide 1,200 kilowatthours of Peaking Energy per kilowatt of Peaking 
Contract Demand is reduced by Southwestern for a period or periods of 
not less than two consecutive hours by reason of an outage caused by 
either an Uncontrollable Force or by the installation, maintenance, 
replacement or malfunction of generation, transmission and/or related 
facilities on the System of Southwestern, or insufficient pool levels, 
the Customer's capacity charges for such month will be reduced for each 
such reduction in service by an amount computed under the formula:

    R = (C x K x H) / S

with the factors defined as follows:

R = The dollar amount of reduction in the monthly total capacity 
charges for a particular reduction of not less than two consecutive 
hours during any month, except that the total amount of any such 
reduction shall not exceed the product of the Customer's capacity 
charges associated with Hydro Peaking Power times the Peaking Billing 
Demand.
C = The Customer's capacity charges associated with Hydro Peaking Power 
for the Peaking Billing Demand for such month.
K = The reduction in kilowatts in Peaking Billing Demand for a 
particular event.
H = The number of hours duration of such particular reduction.
S = The number of hours that Peaking Energy is scheduled during such 
month, but not less than 60 hours times the Peaking Contract Demand.

Such reduction in charges shall fulfill Southwestern's obligation to 
deliver Hydro Peaking Power and Peaking Energy.

2.2. Peaking Energy and Supplemental Peaking Energy Rates, Terms, and 
Conditions

2.2.1. Peaking Energy Charge

$0.0094 per kilowatthour of Peaking Energy delivered plus the Purchased 
Power Adder as defined in Section 2.2.3 of this Rate Schedule.

2.2.2. Supplemental Energy Charge

$0.0094 per kilowatthour of Supplemental Peaking Energy delivered.

2.2.3. Purchased Power Adder

A purchased power adder of $0.0059 per kilowatthour of Peaking Energy 
delivered, as adjusted by the Administrator, Southwestern, in 
accordance with the procedure within this Rate Schedule.

2.2.3.1. Applicability of Purchased Power Adder

The Purchased Power Adder shall apply to sales of Peaking Energy. The 
Purchased Power Adder shall not apply to sales of Supplemental Peaking 
Energy or sales to any Customer which, by contract, has assumed the 
obligation to supply energy to fulfill the minimum of 1,200 
kilowatthours of Peaking Energy per kilowatt of Peaking Contract Demand 
during a contract year (hereinafter ``Contract Support Arrangements'').

2.2.3.1.1. Procedure for Determining Net Purchased Power Adder 
Adjustment

Not more than twice annually, the Purchased Power Adder of $0.0059 (5.9 
mills) per kilowatthour of Peaking Energy, as noted in this Rate 
Schedule, may be adjusted by the Administrator, Southwestern, by an 
amount up to a total of $0.0059 (5.9 mills) per 
kilowatthour per year, as calculated by the following formula:

ADJ = (PURCH - EST + DIF) / SALES

with the factors defined as follows:

ADJ = The dollar per kilowatthour amount of the total adjustment, plus 
or minus, to be applied to the net Purchased Power Adder, rounded to 
the nearest $0.0001 per kilowatthour, provided that the total ADJ to be 
applied in any year shall not vary from the then-effective ADJ by more 
than $0.0059 per kilowatthour;
PURCH = The actual total dollar cost of Southwestern's System Direct 
Purchases as accounted for in the financial records of the Southwestern 
Federal Power System for the period;
EST = The estimated total dollar cost ($13,273,800 per year) of 
Southwestern's System Direct Purchases used as the basis for the 
Purchased Power Adder of $0.0059 per kilowatthour of Peaking Energy;
DIF = The accumulated remainder of the difference in the actual and

[[Page 8855]]

estimated total dollar cost of Southwestern's System Direct Purchases 
since the effective date of the currently approved Purchased Power 
Adder set forth in this Rate Schedule, which remainder is not projected 
for recovery through the ADJ in any previous periods;
SALES = The annual Total Peaking Energy sales projected to be delivered 
(2,241,300,000 KWh per year) from the System of Southwestern, which 
total was used as the basis for the $0.0059 per kilowatthour Purchased 
Power Adder.

2.3. Transformation Service Rates, Terms, and Conditions

2.3.1. Monthly Capacity Charge for Transformation Service

$0.46 per kilowatt will be assessed for capacity used to deliver energy 
at any point of delivery at which Southwestern provides transformation 
service for deliveries at voltages of 69 kilovolts or less from higher 
voltage facilities.

2.3.2. Applicability of Capacity Charge for Transformation Service

Unless otherwise specified by contract, for any particular month, a 
charge for transformation service will be assessed on the greater of 
(1) that month's highest metered demand, or (2) the highest metered 
demand recorded during the previous 11 months, at any point of 
delivery. For the purpose of this Rate Schedule, the highest metered 
demand will be based on all deliveries, of both Federal and non-Federal 
energy, from the System of Southwestern, at such point during such 
month.

2.4. Ancillary Services Rates, Terms, and Conditions

2.4.1. Capacity Charges for Ancillary Services

2.4.1.1. Regulation and Frequency Response Service

Monthly rate of $0.07 per kilowatt of Peaking Billing Demand plus the 
Regulation Purchased Adder as defined in Section 2.4.5 of this Rate 
Schedule.

2.4.1.2. Spinning Operating Reserve Service

Monthly rate of $0.0146 per kilowatt of Peaking Billing Demand.

Daily rate of $0.00066 per kilowatt for non-Federal generation inside 
Southwestern's Balancing Authority Area.

2.4.1.3. Supplemental Operating Reserve Service

Monthly rate of $0.0146 per kilowatt of Peaking Billing Demand.

Daily rate of $0.00066 per kilowatt for non-Federal generation inside 
Southwestern's Balancing Authority Area.

2.4.1.4. Energy Imbalance Service

$0.0 per kilowatt for all reservation periods.

2.4.2. Availability of Ancillary Services

Regulation and Frequency Response Service and Energy Imbalance Service 
are available only for deliveries of power and energy to load within 
Southwestern's Balancing Authority Area. Spinning Operating Reserve 
Service and Supplemental Operating Reserve Service are available only 
for deliveries of non-Federal power and energy generated by resources 
located within Southwestern's Balancing Authority Area and for 
deliveries of all Hydro Peaking Power and associated energy from and 
within Southwestern's Balancing Authority Area. Where available, such 
Ancillary Services must be taken from Southwestern; unless, 
arrangements are made in accordance with Section 2.4.4 of this Rate 
Schedule.

2.4.3. Applicability of Charges for Ancillary Services

For any month, the charges for Ancillary Services for deliveries of 
Hydro Peaking Power shall be based on the Peaking Billing Demand.

The daily charge for Spinning Operating Reserve Service and 
Supplemental Operating Reserve Service for non-Federal generation 
inside Southwestern's Balancing Authority Area shall be applied to the 
greater of Southwestern's previous day's estimate of the peak, or the 
actual peak, in kilowatts, of the internal non-Federal generation.

2.4.4. Provision of Ancillary Services by Others

Customers for which Ancillary Services are made available as specified 
above, must inform Southwestern by written notice of the Ancillary 
Services which they do not intend to take and purchase from 
Southwestern, and of their election to provide all or part of such 
Ancillary Services from their own resources or from a third party.

Subject to Southwestern's approval of the ability of such resources or 
third parties to meet Southwestern's technical and operational 
requirements for provision of such Ancillary Services, the Customer may 
change the Ancillary Services which it takes from Southwestern and/or 
from other sources at the beginning of any month upon the greater of 60 
days notice or upon completion of any necessary equipment modifications 
necessary to accommodate such change; Provided, That, if the Customer 
chooses not to take Regulation and Frequency Response Service, which 
includes the associated Regulation Purchased Adder, the Customer must 
pursue these services from a different host Balancing Authority; 
thereby moving all metered loads and resources from Southwestern's 
Balancing Authority Area to the Balancing Authority Area of the new 
host Balancing Authority. Until such time as that meter reconfiguration 
is accomplished, the Customer will be charged for the Regulation and 
Frequency Response Service and applicable Adder then in effect. The 
Customer must notify Southwestern by July 1 of this choice, to be 
effective the subsequent calendar year.

2.4.5. Regulation Purchased Adder

Southwestern has determined the amount of energy used from storage to 
provide Regulation and Frequency Response Service in order to meet 
Southwestern's Balancing Authority Area requirements. The replacement 
value of such energy used shall be recovered through the Regulation 
Purchased Adder. The Regulation Purchased Adder during the time period 
of January 1 through December 31 of the current calendar year is based 
on the average annual use of energy from storage \1\ for Regulation and 
Frequency Response Service and Southwestern's estimated purchased power 
price for the corresponding year from the most currently approved Power 
Repayment Studies.
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    \1 \ The average annual use of energy from storage for 
Regulation and Frequency Response Service is based on Southwestern 
studies.

The Regulation Purchased Adder will be phased in over a period of four 
(4) years as follows:

------------------------------------------------------------------------
                                     Regulation purchased adder for the
               Year                   incremental replacement value of
                                          energy used from storage
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2014..............................  \1/4\ of the average annual use of
                                     energy from storage x 2014
                                     Purchased Power price.
2015..............................  \1/2\ of the average annual use of
                                     energy from storage x 2015
                                     Purchased Power price.
2016..............................  \3/4\ of the average annual use of
                                     energy from storage x 2016
                                     Purchased Power price.

[[Page 8856]]

 
2017 and thereafter...............  The total average annual use of
                                     energy from storage x the
                                     applicable Purchased Power price.
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2.4.5.1. Applicability of Regulation Purchased Adder

The replacement value of the estimated annual use of energy from 
storage for Regulation and Frequency Response Service shall be 
recovered by Customers located within Southwestern's Balancing 
Authority Area on a non-coincident peak ratio share basis, divided into 
twelve equal monthly payments, in accordance with the formula in 
Section 2.4.5.2.

If the Regulation Purchased Adder is determined and applied under 
Southwestern's Rate Schedule NFTS-13, then it shall not be applied 
here.

2.4.5.1.1. Procedure for Determining Regulation Purchased Adder

Unless otherwise specified by contract, the Regulation Purchased Adder 
for an individual Customer shall be based on the following formula 
rate, calculated to include the replacement value of the estimated 
annual use of energy from storage by Southwestern for Regulation and 
Frequency Response Service.

RPA = The Regulation Purchased Adder for an individual Customer per 
month, which is as follows:

[(L Customer / L Total) x RP Total ] / 
12

with the factors defined as follows:

L Customer = The sum in MW of the following three factors:

    (1) The Customer's highest metered load plus generation used to 
serve the Customer's load that is accounted for through a reduction in 
the Customer's metered load (referred to as `generation behind the 
meter') during the previous calendar year, and
    (2) The Customer's highest rate of Scheduled Exports \2\ during the 
previous calendar year, and
    (3) The Customer's highest rate of Scheduled Imports \2\ during the 
previous calendar year.
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    \2\ Scheduled Exports and Scheduled Imports are transactions, 
such as sales and purchases respectively, which are in addition to a 
Customer's metered load that contribute to Southwestern's Balancing 
Authority Area need for regulation.

L Total = The sum of all L Customer factors for 
all Customers that were inside Southwestern's Balancing Authority Area 
at the beginning of the previous calendar year in MW.
RP Total = The ``net'' cost in dollars and cents based on 
Southwestern's estimated purchased power price for the corresponding 
year from the most currently approved Power Repayment Studies 
multiplied by the average annual use of energy from storage, as 
provided for in the table in Section 2.4.5, to support Southwestern's 
ability to regulate within its Balancing Authority Area. The ``net'' 
cost in dollars and cents shall be adjusted by subtracting the product 
of the quantity of such average annual use of energy from storage in 
MWh and Southwestern's highest rate in dollars per MWh for Supplemental 
Peaking Energy during the previous calendar year.

For Customers that have aggregated their load, resources, and 
scheduling into a single node by contract within Southwestern's 
Balancing Authority Area, the individual Customer's respective 
Regulation Purchased Adder shall be that Customer's ratio share of the 
Regulation Purchased Adder established for the node. Such ratio share 
shall be determined for the Customer on a non-coincident basis and 
shall be calculated for the Customer from their highest metered load 
plus generation behind the meter.

2.4.6. Energy Imbalance Service Limitations

Energy Imbalance Service primarily applies to deliveries of power and 
energy which are required to satisfy a Customer's load. As Hydro 
Peaking Power and associated energy are limited by contract, the Energy 
Imbalance Service bandwidth specified for Non-Federal Transmission 
Service does not apply to deliveries of Hydro Peaking Power, and 
therefore Energy Imbalance Service is not charged on such deliveries. 
Customers who consume a capacity of Hydro Peaking Power greater than 
their Peaking Contract Demand may be subject to a Capacity Overrun 
Penalty.
3. Hydro Peaking Power Penalties, Terms, and Conditions
3.1. Capacity Overrun Penalty

3.1.1. Penalty Charge for Capacity Overrun
For each hour during which Hydro Peaking Power was provided at a rate 
greater than that to which the Customer is entitled, the Customer will 
be charged a Capacity Overrun Penalty at the following rates:

------------------------------------------------------------------------
                                                             Rate per
              Months associated with charge                  kilowatt
------------------------------------------------------------------------
March, April, May, October, November, December..........           $0.15
January, February, June, July, August, September........            0.30
------------------------------------------------------------------------

3.1.2. Applicability of Capacity Overrun Penalty

Customers which have loads within Southwestern's Balancing Authority 
Area are obligated by contract to provide resources, over and above the 
Hydro Peaking Power and associated energy purchased from Southwestern, 
sufficient to meet their loads. A Capacity Overrun Penalty shall be 
applied only when the formulas provided in Customers' respective Power 
Sales Contracts indicate an overrun on Hydro Peaking Power, and 
investigation determines that all resources, both firm and non-firm, 
which were available at the time of the apparent overrun were 
insufficient to meet the Customer's load.

3.2. Energy Overrun Penalty

3.2.1. Penalty Charge for Energy Overrun

$0.1034 per kilowatthour for each kilowatthour of overrun.

3.2.2. Applicability of Energy Overrun Penalty

By contract, the Customer is subject to limitations on the maximum 
amounts of Peaking Energy which may be scheduled under the Customer's 
Power Sales Contract. When the Customer schedules an amount in excess 
of such maximum amounts, such Customer is subject to the Energy Overrun 
Penalty.

3.3. Power Factor Penalty


[[Page 8857]]


3.3.1. Requirements Related to Power Factor

Any Customer served from facilities owned by or available by contract 
to Southwestern will be required to maintain a power factor of not less 
than 95 percent and will be subject to the following provisions.

3.3.2. Determination of Power Factor

The power factor will be determined for all Demand Periods and shall be 
calculated under the formula:

[GRAPHIC] [TIFF OMITTED] TN12MR19.001


with the factors defined as follows:

PF = The power factor for any Demand Period of the month.
kWh = The total quantity of energy which is delivered during such 
Demand Period to the point of delivery or interconnection in accordance 
with Section 3.3.4.
rkVAh = The total quantity of reactive kilovolt-ampere-hours (kVARs) 
delivered during such Demand Period to the point of delivery or 
interconnection in accordance with Section 3.3.4

3.3.3. Penalty Charge for Power Factor

The Customer shall be assessed a penalty for all Demand Periods of a 
month where the power factor is less than 95 percent lagging. For any 
Demand Period during a particular month such penalty shall be in 
accordance with the following formula:

C = D x (0.95-LPF) x $0.10

with the factors defined as follows:

C = The charge in dollars to be assessed for any particular Demand 
Period of such month that the determination of power factor ``PF'' is 
calculated to be less than 95 percent lagging.
D = The Customer's demand in kilowatts at the point of delivery for 
such Demand Period in which a low power factor was calculated.
LPF = The lagging power factor, if any, determined by the formula 
``PF'' for such Demand Period.

If C is negative, then C = zero (0).

3.3.4. Applicability of Power Factor Penalty

The Power Factor Penalty is applicable to radial interconnections with 
the System of Southwestern. The total Power Factor Penalty for any 
month shall be the sum of all charges ``C'' for all Demand Periods of 
such month. No penalty is assessed for leading power factor. 
Southwestern, in its sole judgment and at its sole option, may 
determine whether power factor calculations should be applied to (i) a 
single physical point of delivery, (ii) a combination of physical 
points of delivery where a Customer has a single, electrically 
integrated load, (iii) or interconnections. The general criteria for 
such decision shall be that, given the configuration of the Customer's 
and Southwestern's systems, Southwestern will determine, in its sole 
judgment and at its sole option, whether the power factor calculation 
more accurately assesses the detrimental impact on Southwestern's 
system when the above formula is calculated for a single physical point 
of delivery, a combination of physical points of delivery, or for an 
interconnection as specified by an Interconnection Agreement.

Southwestern, at its sole option, may reduce or waive Power Factor 
Penalties when, in Southwestern's sole judgment, low power factor 
conditions were not detrimental to the System of Southwestern due to 
particular loading and voltage conditions at the time the power factor 
dropped below 95 percent lagging.
4. Hydro Peaking Power Miscellaneous Rates, Terms, and Conditions
4.1. Real Power Losses

Customers are required to self-provide all Real Power Losses for non-
Federal energy transmitted by Southwestern on behalf of such Customers 
under the provisions detailed below.

Real Power Losses are computed as four (4) percent of the total amount 
of non-Federal energy transmitted by Southwestern. The Customer's 
monthly Real Power Losses are computed each month on a megawatthour 
basis as follows:

ML = 0.04 x NFE

with the factors defined as follows:

ML = The total monthly loss energy, rounded to the nearest 
megawatthour, to be scheduled by a Customer for receipt by Southwestern 
for Real Power Losses associated with non-Federal energy transmitted on 
behalf of such Customer; and
NFE = The amount of non-Federal energy that was transmitted by 
Southwestern on behalf of a Customer during a particular month.

The Customer must schedule or cause to be scheduled to Southwestern, 
Real Power Losses for which it is responsible subject to the following 
conditions:

4.1.1. The Customer shall schedule and deliver Real Power Losses back 
to Southwestern during the second month after they were incurred by 
Southwestern in the transmission of the Customer's non-Federal power 
and energy over the System of Southwestern unless such Customer has 
accounted for Real Power Losses as part of a metering arrangement with 
Southwestern.

4.1.2. On or before the twentieth day of each month, Southwestern shall 
determine the amount of non-Federal loss energy it provided on behalf 
of the Customer during the previous month and provide a written 
schedule to the Customer setting forth hour-by-hour the quantities of 
non-Federal energy to be delivered to Southwestern as losses during the 
next month.

4.1.3. Real Power Losses not delivered to Southwestern by the Customer, 
according to the schedule provided, during the month in which such 
losses are due shall be billed by Southwestern to the Customer to 
adjust the end-of-month loss energy balance to zero (0) megawatthours 
and the Customer shall be obliged to purchase such energy at the 
following rates:

------------------------------------------------------------------------
                                                       Rate per kilowatt
            Months associated with charge                     hour
------------------------------------------------------------------------
March, April, May, October, November, December.......              $0.15
January, February, June, July, August, September.....               0.30
------------------------------------------------------------------------

4.1.4. Real Power Losses delivered to Southwestern by the Customer in 
excess of the losses due during the month shall be purchased by 
Southwestern from the Customer at a rate per megawatthour equal to 
Southwestern's rate per megawatthour for Supplemental Peaking Energy, 
as set forth in Southwestern's then-effective Rate Schedule for Hydro 
Peaking Power to adjust such hourly end-of-month loss energy balance to 
zero (0) megawatthours.


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4.2. Peaking Energy Schedule Submission Time

Southwestern's Peaking Energy Schedule Submission Time is on or before 
2:30 p.m. Central Prevailing Time (CPT), as adjusted by the 
Administrator, Southwestern, in accordance with Section 4.2.2 in this 
Rate Schedule, of the day preceding the day for the delivery of Peaking 
Energy. The Peaking Energy Schedule Submission Time supersedes the 
Peaking Energy schedule submission time provided in the Customer's 
Power Sales Contract, pursuant to Section 4.2.1 of this Rate Schedule.

4.2.1. Applicability of Peaking Energy Schedule Submission Time

The Peaking Energy Schedule Submission Time shall apply to the 
scheduling of Peaking Energy. The Peaking Energy Schedule Submission 
Time shall not apply to the scheduling of Supplemental Peaking Energy 
or to Contract Support Arrangements.

4.2.2. Procedure for Adjusting the Peaking Energy Schedule Submission 
Time

Not more than once annually, the Peaking Energy Schedule Submission 
Time of 2:30 p.m. CPT, as noted in Section 4.2 of this Rate Schedule, 
may be adjusted by the Administrator, Southwestern, to a time no 
earlier than 2:00 p.m. CPT and no later than 3:00 p.m. CPT.

4.2.2.1.1. Determination of Need to Adjust the Peaking Energy Schedule 
Submission Time

The Administrator, Southwestern, will make a determination on the need 
to adjust the Peaking Energy Schedule Submission Time based on 
Southwestern's studies involving financial analysis, regional energy 
market conditions, and/or operational considerations.

4.2.2.1.2. Notification of Peaking Energy Schedule Submission Time 
Adjustment
The Administrator, Southwestern, will notify customers of the 
determination to adjust the Peaking Energy Schedule Submission Time in 
writing no later than 30 calendar days prior to the effective date of 
the Peaking Energy Schedule Submission Time adjustment.

[FR Doc. 2019-04456 Filed 3-11-19; 8:45 am]
 BILLING CODE 6450-01-P