Integrated System Rate Schedule, 28032-28039 [2019-12753]

Agencies

• DEPARTMENT OF ENERGY
• Southwestern Power Administration

[Federal Register Volume 84, Number 116 (Monday, June 17, 2019)]
[Notices]
[Pages 28032-28039]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-12753]


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DEPARTMENT OF ENERGY

Southwestern Power Administration


Integrated System Rate Schedule

AGENCY: Southwestern Power Administration, DOE.

ACTION: Notice of rate order.

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SUMMARY: The Assistant Secretary has approved and placed into effect on 
an interim basis Rate Order No. SWPA-73, which provides the following 
Integrated System Wholesale Rates for Hydro Peaking Power (P-13A) Rate 
Schedule: Rate Schedule P-13A, Wholesale Rates for Hydro Peaking Power.

FOR FURTHER INFORMATION CONTACT: Ms. Fritha Ohlson, Senior Vice 
President, Chief Operating Officer, Office of Corporate Operations, 
(918) 595-6684, [email protected], or facsimile transmission (918) 
595-6684.

SUPPLEMENTARY INFORMATION: Pursuant to Delegation Order No. 00-037.00B, 
effective November 19, 2016, and Redelegation Order No. 00-002.10D, 
effective June 4, 2019, Rate Order No. SWPA-73, is approved and placed 
into effect on an interim basis for the period July 1, 2019 through 
September 30, 2019, pursuant to the following rate schedule: Rate 
Schedule P-13A, Wholesale Rates for Hydro Peaking Power, which 
supersedes the existing Rate Schedule P-13, Wholesale Rates for Hydro 
Peaking Power. Southwestern Power Administration's (Southwestern) 
Administrator determined that an additional section within 
Southwestern's Integrated System P Rate Schedule was needed to provide 
a single instrument and procedure for establishing and making limited 
adjustments to its Peaking Energy Schedule Submission Time.
    Established by a 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. Central 
Prevailing Time (CPT) of the day preceding the day for delivery of 
Peaking Energy. The 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 
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 P-13 Rate Schedule had no provision for 
establishing or adjusting the time for customers to submit Peaking 
Energy schedules. The Administrator determined that adding the new 
Section 4.2 to the P-13 Rate Schedule, together with the corresponding 
definition of ``Peaking Energy Schedule Submission Time'' added as new 
Section 1.9, implements the desired change in Peaking Energy schedule 
submission time most efficiently. Additionally, the new Section 4.2 
provides a procedure

[[Page 28033]]

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. The name of the new rate schedule will 
be P-13A to reflect the fact that a new section was added.
    The Southwestern 2013 PRS indicated that rates prescribed by P-13, 
Wholesale Rates for Hydro Peaking Power, as approved in Docket No. 
EF14-1-000, for the period October 1, 2013, through September 30, 2017 
(and extended through September 30, 2019), are sufficient to meet 
repayment criteria and will have no impact on the amortization or 
status of repayment forecasted in the Southwestern 2013 PRS and will 
not require rate changes. Revenues based on current rates remain 
sufficient to meet repayment criteria.
    The Southwestern Administrator has followed title 10, part 903, 
subpart A of the Code of Federal Regulations (10 CFR part 903), 
``Procedures for Public Participation in Power and Transmission Rate 
Adjustments and Extensions,'' in connection with the rate schedule 
revision. The public was advised by notice published in the Federal 
Register (84 FR 8851), March 12, 2019, of the proposed rate schedule 
change and of the opportunity to provide written comments for a period 
of 30 days ending April 11, 2019. No comments were received.
    Information regarding this rate proposal, including studies and 
other supporting material, is available for public review in the 
offices of Southwestern Power Administration, Williams Tower I, One 
West Third Street, Tulsa, Oklahoma 74103. Following review of 
Southwestern's proposal within the Department of Energy, I approve Rate 
Order No. SWPA-73.

    Dated: June 7, 2019.
Bruce J. Walker,
Assistant Secretary.
UNITED STATES OF AMERICA DEPARTMENT OF ENERGY
DEPUTY SECRETARY
In the matter of: Southwestern Power Administration Integrated System 
Hydro Peaking Power Rate Schedule
Rate Order No. SWPA-73
ORDER CONFIRMING, APPROVING AND PLACING REVISED POWER RATE SCHEDULE IN 
EFFECT ON AN INTERIM BASIS
(July 1, 2019)
    Pursuant to Sections 302(a) and 301(b) of the Department of Energy 
Organization Act, Public Law 95[dash]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 Southwestern 
Power Administration (Southwestern) were transferred to and vested in 
the Secretary of Energy. By Delegation Order No. 00-037.00B, the 
Secretary of Energy delegated to the Administrator of Southwestern the 
authority to develop power and transmission rates and the Federal 
Energy Regulatory Commission (FERC) was delegated the authority to 
confirm and approve on a final basis or to disapprove rates developed 
by the Administrator under the delegation. By Redelegation Order No. 
00-002.10D authority to confirm, approve, and place in effect such 
rates on an interim basis was delegated to the Assistant Secretary for 
Electricity of the Department of Energy. Pursuant to that delegated 
authority, the Assistant Secretary has issued this interim rate order.

BACKGROUND

    In July 2013, Southwestern completed its review of the adequacy of 
the current rate schedules for the Integrated System and finalized its 
2013 Power Repayment Studies (PRS). The 2013 PRS indicated that the 
proposed rates would meet cost recovery criteria for the Integrated 
System. The Federal Energy Regulatory Commission's (FERC) confirmation 
and approval of the Integrated System rate schedules, including Rate 
Schedule P-13, Wholesale Rates for Hydro Peaking Power, was provided in 
a FERC order issued in Docket No. EF14-1-000 on January 9, 2014,\1\ for 
the period October 1, 2013, through September 30, 2017 and subsequently 
extended for a two-year period effective October 1, 2017 through 
September 30, 2019 by the Deputy Secretary of Energy. Based on 
operations under the approved rate schedules, the Administrator 
determined that adding a new section to the existing P-13 Rate 
Schedule, together with the corresponding definition of ``Peaking 
Energy Schedule Submission Time'' added as new Section 1.9, will 
provide a single instrument and procedure for establishing and making 
limited adjustments to its Peaking Energy Schedule Submission Time. A 
new section 4.2 provides a shift of its Peaking Energy schedule 
submission time from 2:00 p.m. Central Prevailing Time (CPT) to 2:30 
p.m. CPT and 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 if deemed 
needed.
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    \1\ 146 FERC ]62,016
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    The designation of the rate schedule has been revised from P-13 to 
P-13A to reflect that a new section has been added.
    Southwestern followed Title 10, Part 903 Subpart A, of the Code of 
Federal Regulations, ``Procedures for Public Participation in Power and 
Transmission Rate Adjustments and Extensions'' (Part 903) in connection 
with the proposed Rate Schedule P[dash]13A. An opportunity for 
customers and other interested members of the public to review and 
comment on the proposed rate schedule was announced by notice published 
in the Federal Register March 12, 2019, (84 FR 8851), with written 
comments due by April 11, 2019.

DISCUSSION

    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 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 
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 in-effect P-

[[Page 28034]]

13 Rate Schedule had no provision for establishing or adjusting the 
time for customers to submit Peaking Energy schedules. The 
Administrator determined that adding the new Section 4.2 to the P-13 
Rate Schedule, together with the corresponding definition of ``Peaking 
Energy Schedule Submission Time'' added as new Section 1.9, implements 
the desired change in Peaking Energy schedule submission time most 
efficiently. Additionally, the 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. The name of the new rate schedule will 
be P-13A to reflect the fact that a new section was added.

COMMENTS AND RESPONSES

    No comments were received.

AVAILABILITY OF INFORMATION

    Information regarding this rate schedule change is available for 
public review in the offices of Southwestern Power Administration, 
Williams Tower I, One West Third Street, Tulsa, Oklahoma 74103.

ADMINISTRATOR'S CERTIFICATION

    The revised rate schedule will repay all costs of the Integrated 
System including amortization of the power investment consistent with 
the provisions of Department of Energy Order No. RA 6120.2. In 
accordance with Delegation Order No. 00-037.00B, effective November 19, 
2016, and Redelegation Order No. 00-002.10D, effective June 4, 2019, 
and Section 5 of the Flood Control Act of 1944, the Administrator has 
determined that the proposed Integrated System rate schedule is 
consistent with applicable law and the lowest possible rates consistent 
with sound business principles.

ENVIRONMENT

    No additional evaluation of the environmental impact of the 
proposed rate schedule change was conducted since no change in 
anticipated revenues has been made to the currently-approved Integrated 
System rates which were determined by the Southwestern National 
Environmental Policy Act (NEPA) Compliance Officer to fall within the 
class of actions that are categorically excluded from the requirements 
of preparing either an Environmental Impact Statement or an 
Environmental Assessment.

ADMINISTRATIVE PROCEDURES

    The Administrative Procedure Act (5 U.S.C. 553(d)) prescribes that 
the required publication or service of a substantive rule shall be made 
not less than 30 days before its effective date, except (1) a 
substantive rule that grants or recognizes an exemption or relieves a 
restriction; (2) interpretative rules and statements of policy; or (3) 
as otherwise provided by the agency for good cause found and published 
with the rule. For the reasons stated in the paragraph that follows, 
the Department of Energy finds good cause to waive the 30-day delay in 
effective date because a 30-day delay would be unnecessary.
    Specifically, in this action, Southwestern updates its submission 
time for Peaking Energy schedules from 2:00 p.m. CPT to 2:30 p.m. CPT. 
The change provides an extended time during which Southwestern's 
customers may submit their Peaking Energy schedules to Southwestern, 
thereby allowing the customers to best incorporate Federal hydropower 
in their energy resource portfolios in a manner providing more value, 
as the timing better aligns with regional energy market considerations. 
There are no additional contractual or operational changes required by 
Southwestern or its customers to effectuate the Peaking Energy schedule 
submission time change provided for in P-13A. Commenters raised no 
concerns during the public comment period for the P-13A rate action.
    Furthermore, the P-13A rate schedule change effects no change in 
anticipated revenues. It is considered a ``minor rate adjustment'' 
pursuant to Southwestern's regulations at 10 CFR part 903, subpart A, 
and Southwestern has treated it as such in the rate actions to date. A 
``minor rate adjustment'' is defined as a rate adjustment that (1) will 
produce less than 1 percent change in the annual revenues of the power 
system; or (2) is for a power system that has either annual sales 
normally less than 100 million kilowatt hours or an installed capacity 
of less than 20,000 kilowatts. 10 CFR part 903, subpart A, (as amended 
in Federal Register (84 FR 5347)) provides that the effective date of 
rate schedules put into effect on an interim basis by the Secretary or 
his or her designee may be sooner than 30 days after the Secretary's 
decision ``when appropriate to meet a contract deadline, to avoid 
financial difficulties, to provide a rate for new service, or to make a 
minor rate adjustment.''

ORDER

    In view of the foregoing and pursuant to the authority delegated to 
me by the Secretary of Energy, I hereby confirm, approve and place in 
effect on an interim basis, effective July 1, 2019, the Southwestern 
Integrated System Rate Schedule P-13A which shall remain in effect on 
an interim basis through September 30, 2019, or the FERC confirms and 
approves the rates on a final basis.

    Dated: June 7, 2019.

Bruce J. Walker,
Assistant Secretary.

UNITED STATES DEPARTMENT OF ENERGY

SOUTHWESTERN POWER ADMINISTRATION

RATE SCHEDULE P-13A \2\ **
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    \2\ 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:

[[Page 28035]]

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 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.
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.
2.

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. 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;
    2.1.3.2. The non-Federal energy transmitted under such secondary 
service is delivered to the Customer's

[[Page 28036]]

point of delivery for Hydro Peaking Power;
    2.1.3.3. The Customer commits to provide Real Power Losses 
associated with such deliveries of non-Federal energy; and
    2.1.3.4. 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'').

2.2.3.2. 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 
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.

[[Page 28037]]

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

    \1\ The average annual use of energy from storage for Regulation 
and Frequency Response Service is based on Southwestern studies.

------------------------------------------------------------------------
                                   Regulation Purchased Adder for the
             Year                incremental replacement value of energy
                                            used from storage
------------------------------------------------------------------------
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.
2017 and thereafter...........  The total average annual use of energy
                                 from storage x the applicable Purchased
                                 Power price.
------------------------------------------------------------------------

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.

2.4.5.2. 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.
---------------------------------------------------------------------------

    \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.

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

[[Page 28038]]

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

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] TN17JN19.005

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

[[Page 28039]]

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
              Months associated with charge                kilowatthour
------------------------------------------------------------------------
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.
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 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.

4.2.2.2 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. 2019-12753 Filed 6-14-19; 8:45 am]
 BILLING CODE 6450-01-P