Notice of Interim Approval of Rate Schedules for Cumberland System, 52985-52994 [2020-18822]

Agencies

• DEPARTMENT OF ENERGY
• Southeastern Power Administration

[Federal Register Volume 85, Number 167 (Thursday, August 27, 2020)]
[Notices]
[Pages 52985-52994]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-18822]


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DEPARTMENT OF ENERGY

Southeastern Power Administration


Notice of Interim Approval of Rate Schedules for Cumberland 
System

AGENCY: Southeastern Power Administration, DOE.

ACTION: Notice of interim approval.

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SUMMARY: The Administrator for the Southeastern Power Administration 
(Southeastern) has confirmed and approved, on an interim basis, new 
rate schedules CBR-1-J, CSI-1-J, CEK-1-J, CM-1-J, CC-1-K, CK-1-J, CTV-
1-J, CTVI-1-C, and Replacement-3. The rate schedules are approved on an 
interim basis through September 30, 2025, and are subject to 
confirmation and approval by the Federal Energy Regulatory Commission 
(FERC) on a final basis.

DATES: The approval of rates on an interim basis is effective October 
1, 2020.

FOR FURTHER INFORMATION CONTACT: Cathy Stillson, Power Marketing 
Advisor, Finance and Marketing, Southeastern Power Administration, U.S. 
Department of Energy, 1166 Athens Tech Road, Elberton, Georgia 30635-
6711, (706) 213-3847; Email: [email protected].

SUPPLEMENTARY INFORMATION: FERC, by order issued May 6, 2016, 155 FERC 
] 62,092, confirmed and approved Rate Schedules CBR-1-I, CSI-1-I, CEK-
1-I, CM-1-I, CC-1-J, CK-1-I, CTV-1-I, CTVI-1-B and Replacement-3 for 
the period from October 1, 2015, to September 30, 2020. This order 
replaces these rate schedules on an interim basis, subject to final 
approval by FERC.
    The power marketing policy provides peaking capacity, along with 
1500 kilowatt-hours (kWh) of energy with each kilowatt of capacity, to 
customers outside the Tennessee Valley Authority (TVA) transmission 
system.
    A current repayment study using present rates, under the original 
marketing policy and the application of an annual true-up adjustment, 
shows that revenues will not be adequate to meet repayment criteria. A 
revised study shows that a revenue requirement increase of $2,650,000, 
or about four percent, would be adequate to meet repayment criteria. 
The rate schedules CBR-1-J, CSI-1-J, and CM-1-J, include rates for 
customers who receive 1500 kWh of energy annually for each kilowatt of 
capacity. The transmission and scheduling arrangements under each of 
these rate schedules are different. Rate Schedule CEK-1-J is for East 
Kentucky Power Cooperative, which receives a fixed quantity of energy 
annually from projects connected to the TVA transmission system plus 
the output of the Laurel Project. Rate Schedule CK-1-J is for customers 
in Kentucky who receive 1800 kWh of energy annually for each kilowatt 
of capacity. Rate Schedule CC-1-K is for customers on the Duke Energy 
Progress, Western Division. Rate Schedule CTV-1-J is for TVA and 
Tennessee Valley Public Power Association (TVPPA). Rate Schedule CTVI-
1-C is for customers inside the TVA system who choose a power supplier 
other than TVA. The rate schedules continue adjustments annually on 
April 1 of each year, based on transfers of specific power investment 
to plant-in-service for the preceding Fiscal Year, to the base demand 
charge and base additional energy charge. The annual adjustment will 
be, for each increase of $1,000,000 to specific power plant-in-service, 
an increase of $0.003 per kilowatt per month added to the base capacity 
rate and an increase of 0.013 mills per kWh added to the base 
additional energy rate. Southeastern will give written notice to the 
customers of the amount of the true-up by February 1 of each year.

Signing Authority

    This document of the Department of Energy was signed on August 18, 
2020, by Virgil G. Hobbs, III, Administrator for Southeastern Power 
Administration, pursuant to delegated authority from the Secretary of 
Energy. That document, with the original signature and date, is 
maintained by DOE. For administrative purposes only, and in compliance 
with requirements of the Office of the Federal Register, the 
undersigned DOE Federal Register Liaison Officer has been authorized to 
sign and submit the document in electronic format for publication, as 
an official document of the Department of Energy. This administrative 
process in no way alters the legal effect of this document upon 
publication in the Federal Register.

    Signed in Washington, DC, on August 21, 2020.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.

Department of Energy

Administrator, Southeastern Power Administration

In the Matter of:
Southeastern Power Administration
Cumberland System Power Rates
 Rate Order No. SEPA-64

Order Confirming and Approving Power Rates on an Interim Basis

    Pursuant to Section 302(a) of the Department of Energy Organization 
Act (Pub. L. 95-91, 42 U.S.C. 7152(a)), the functions of the Secretary 
of the Interior and the Federal Power Commission under Section 5 of the 
Flood Control Act of 1944 (16 U.S.C. 825s), relating to the 
Southeastern Power Administration (Southeastern), were transferred to 
and vested in the Secretary of Energy. By Delegation Order No. 00-
037.00B, effective November 19, 2016, the Secretary of Energy delegated 
to Southeastern's Administrator the authority to develop power and

[[Page 52986]]

transmission rates, to the Deputy Secretary of Energy the authority to 
confirm, approve, and place such rates into effect on an interim basis, 
and to the Federal Energy Regulatory Commission (FERC) the authority to 
confirm, approve, and place into effect on a final basis, or to 
disapprove, rates developed by the Administrator under the delegation. 
By Delegation Order No. 00-002.00S, effective January 15, 2020, the 
Secretary of Energy also delegated the authority to confirm, approve, 
and place such rates into effect on an interim basis to the Under 
Secretary of Energy. By Redelegation Order No. 00-002.10E, effective 
February 14, 2020, the Under Secretary of Energy further delegated the 
authority to confirm, approve, and place such rates into effect on an 
interim basis to the Assistant Secretary for Electricity. By 
Redelegation Order No. 00-002.10-03, effective July 8, 2020, the 
Assistant Secretary for Electricity further delegated the authority to 
confirm, approve, and place such rates into effect on an interim basis 
to the Administrator, Southeastern Power Administration. This rate is 
issued by the Administrator, Southeastern Power Administration pursuant 
to the authority delegated in Redelegation Order No. 00-002.10-03.

Background

    Power from the Cumberland Projects is presently sold under 
Wholesale Power Rate Schedules CBR-1-I, CSI-1-I, CEK-1-I, CM-1-I, CC-1-
J, CK-1-I, CTV-1-I, CTVI-1-B, and Replacement-3. These rate schedules 
were approved by FERC on May 6, 2016, for a period ending September 30, 
2020 (155 FERC ] 62,092). The power marketing policy provides peaking 
capacity, along with 1500 kilowatt-hours (kWh) of energy with each 
kilowatt (kW) of capacity, to customers outside the Tennessee Valley 
Authority (TVA) transmission system.

Public Notice and Comment

    Notice of a proposed rate adjustment was published in the Federal 
Register on March 30, 2020 (85 FR 17574). Southeastern proposed an 
increase to existing rate schedules and to the annual true-up 
adjustment for the sale of power from the Cumberland System effective 
October 1, 2020, through September 30, 2025. The notice advised 
interested parties of a public information and comment forum to be held 
in Elberton, Georgia, and also by webinar, on May 12, 2020. Written 
comments were due on or before June 29, 2020.
    The rate schedules recover cost from capacity, energy, and 
additional energy. The revenue requirement is $66,150,000 per year. The 
rates would be as follows:

Cumberland System Rates

Original Marketing Policy

Inside TVA Preference Customers
    Capacity and Base Energy: $3.430 per kW/Month.
    Additional Energy: 12.835 mills per kWh.
    Transmission: Pass-through.
Outside TVA Preference Customers (Excluding Customers Served Through 
Duke Energy Progress or East Kentucky Power Cooperative)
    Capacity and Base Energy: $3.430 per kW/Month.
    Additional Energy: 12.835 mills per kWh.
    Transmission: Monthly TVA Transmission Charge divided by 545,000.
Customers Served Through Duke Energy Progress
    Capacity and Base Energy: $3.904 per kW/Month.
    TVA Transmission: TVA rate at border as computed above, adjusted 
for DEP delivery.
East Kentucky Power Cooperative
    Capacity: $1.826 per kW/Month.
    Energy: 12.835 mills per kWh.
    Transmission: Monthly TVA Transmission Charge divided by 545,000.
    The proposed rate schedules continue adjustments annually on April 
1 of each year, based on transfers of specific power investment to 
plant-in-service for the preceding Fiscal Year, to the base demand 
charge and base additional energy charge. The annual adjustment will 
be, for each increase of $1,000,000 to specific power plant-in-service, 
an increase of $0.003 per kilowatt per month added to the base capacity 
rate and an increase of 0.013 mills per kilowatt-hour added to the base 
additional energy rate. Southeastern will give written notice to the 
customers of the amount of the true-up by February 1 of each year.

Public Comments

    Southeastern received three written comments in response to the 
``Notice of proposed rates, public forum, and opportunities for public 
review and comment'' published in the Federal Register at 85 FR 17574 
on March 30, 2020. Southeastern received oral comments from five 
participants as part of the public information and comment forum on May 
12, 2020.
    The comments have been combined and condensed into the following 
categories:
    1. Dam Safety Act
    2. Corps O&M Cost Increases
    3. Non-hydropower Cost Inclusion and Operational Effect
    4. Rate Competitiveness
    5. Capital Cost Recovery for Rehabilitations
    6. Appreciation for Corps Operations & Southeastern Efforts
    Southeastern's response follows each comment category.

1. Dam Safety Act

    Comment: [Commenter 3] SEPA's conclusions regarding the recovery of 
major rehabilitation projects for the Cumberland System is in 
accordance with SEPA precedent and recent Army Corps of Engineers 
(``Corps'') guidance. On April 17, 2019, the Corps issued revised 
implementation guidance for Section 1139 of the Water Resources 
Development Act of 2016 addressing ``the application of Section 1203 
cost sharing for modifications related to changes in the state-of-the-
art design or construction criteria.'' The April 17th guidance does not 
provide direction that indicates SEPA's prior determination of applying 
the Dam Safety Act was incorrect. Therefore, SEPA's March 30, 2020 
proposed rate structure and the application of the Dam Safety Act 
should remain intact with regard to the major rehabilitation costs.
    Response: The Corps issued Engineering and Construction Bulletin 
No. 2019-17 (Bulletin) in December 2019. The Bulletin supersedes all 
prior guidance related to cost sharing for dam safety and provides 
interim guidance for deciding when dam safety modifications would 
qualify as changes in state-of-the-art design or construction criteria. 
The Bulletin does not indicate that Southeastern's prior determination 
of applying the Dam Safety Act was incorrect, and the cost sharing 
guidance in the Bulletin will only apply prospectively. Southeastern, 
under its statutory authority to determine rates, will continue to 
apply the Dam Safety Act with regard to the applicable major 
rehabilitation costs.

2. Corps Operation and Maintenance (O&M) Cost Increases

    Comment: [Commenter 1] In reviewing the O&M report, we were struck 
by the significant escalations in the USACE's O&M costs. These 
increases are significantly higher than the national inflationary rate 
and are in stark contrast to O&M increase in the electric industry in 
general.

[[Page 52987]]

    [Commenter 3] is concerned that the Corps' costs attributed to the 
hydropower program continue to rise and may undermine the financial 
viability and value of the SEPA hydropower resource.
    Response: Southeastern continues to work with preference customers 
and the Corps to review O&M actual costs and estimates to ensure 
accuracy of cost assignment and projections to establish the lowest 
possible rates consistent with sound business principles within the 
meaning of Section 5 of the Flood Control Act of 1944.

3. Non-Hydropower Cost Inclusion and Operational Effect

    Comment: [Commenter 1] Non-hydropower costs incurred by the USACE 
and included in the SEPA rates continue to be a significant issue. 
Hydropower customers should not have to cover the USACE's costs for 
work associated with other water interest groups. Additionally, we 
would request SEPA to re-examine the shared costs to ensure the rates 
do not cover shared costs for other interest entities.
    [Commenter 2] We are concerned about non-hydropower related 
expenses and other unauthorized costs being charged to preference power 
customers for the Cumberland System. Environmental concerns, water 
supply issues, and other competing uses are being prioritized above 
water availability for power production. As [Commenter 2] communicated 
to USACE in our 6/13/18 letter . . . regarding J. Percy Priest Draft 
Water Supply Reallocation comments, it is important to correctly 
determine impacts to hydropower so the proper amount of revenue from 
all sources is collected and applied to offset power repayment. Other 
revisions, such as the May 2019 revision of the 1998 Dale Hollow Dam 
and Reservoir Control Manual are likely to divert resources away from 
the capability for hydropower to effectively and efficiently produce 
power.
    Response: Southeastern is working with the Corps to assure that 
costs are correctly allocated to joint costs versus the hydropower 
purpose and to specific purposes, if applicable, versus joint costs. 
Southeastern leadership is part of the Federal Hydropower Council and 
is working with the Corps, the US Bureau of Reclamation, and the other 
Power Marketing Administrations to discuss changes and to improve cost 
charging practices for the Federal hydropower program.

4. Rate Competitiveness

    Comment: [Commenter 1] Recent events in the power generation field 
have led to unprecedented decreases in market rates for energy 
purchases; this has principally been fueled by significant reduction in 
the cost of natural gas. The hydropower that SEPA markets is desirable 
due to its negligible impact on the environment; however ultimately the 
power purchase decision is principally driven by cost.
    [Commenter 2] Proposed rate could exceed prevailing alternative 
power resources in a depressed energy market. Other industry forecasts 
show forward prices for power, renewables, and natural gas remaining 
soft for the foreseeable future.
    [Commenter 3] is concerned that the Corps' costs attributed to the 
hydropower program continue to rise and may undermine the financial 
viability and value of the SEPA hydropower resource.
    Response: Southeastern works to ensure the rates for Cumberland 
System power remain competitive with the customers' resource 
alternatives. We strive to keep rates as low as possible and meet all 
revenue requirements and repayment criteria. Southeastern will work 
with the preference customers and the Corps to remain competitive in 
providing energy and capacity.

5. Capital Cost Recovery for Rehabilitations

    Comment: [Commenter 1] Given that there is a total of 28 
hydroelectric units in the Cumberland river system and that virtually 
all of them will need to be rehabilitated over the next few years, the 
upward pressure on the rates is considerable. We would strongly 
recommend that every effort be made to contain costs and optimize 
operations.
    [Commenter 2] appreciates that these valuable assets must be 
rehabilitated and maintained to produce energy and remain available at 
peak times. However, rates should not result in total costs exceeding 
prevailing market prices of alternative sources of power.
    [Commenter 3] SEPA precedent and Corps guidance clearly supports 
SEPA's conclusions in regard to the recovery of the major 
rehabilitation projects for the Cumberland Systems. As such, SEPA's 
March 30, 2020 proposed rate structure and the application of the Dam 
Safety Act should remain intact.
    Response: Southeastern, the Corps, and the preference customers 
work together in reviews of planned rehabilitation specifications and 
the related costs to facilitate discussion and decision input for cost 
containment and operation optimization. Customer Funding agreements for 
rehabilitation projects specify amounts, work items and provide 
estimated rate impacts. Southeastern will continue these coordination 
efforts to meet cost and operational goals. Southeastern notes it 
retains authority to ensure rates for power will be the lowest possible 
rates consistent with sound business principles within the meaning of 
Section 5 of the Flood Control Act of 1944. Southeastern continues to 
apply the cost sharing provision of the Dam Safety Act to the repair 
costs at Wolf Creek and Center Hill.

6. Appreciation for Corps Operations & Southeastern Efforts

    Comment: [Commenter 1] I would like to express our appreciation to 
SEPA for its ongoing efforts in managing the hydropower rates. I would 
also like to express our appreciation to the USACE for its faithful 
attention to the Cumberland River system and more specifically its 
efforts to maintain, rehabilitate and operate the associated hydropower 
system.
    [Commenter 2] We hope Southeastern Power Administration will 
continue to prudently manage factors impacting rates to minimize costs. 
Similar to [Commenter 2]'s mission to safely deliver competitive and 
reliable wholesale power to our Member-Owners, the Flood Control Act of 
1944 requires SEPA to set the ``lowest possible rates'' consistent with 
sound business principles. To that end, we respectfully request 
continued efforts to lower the overall rate.
    Response: Southeastern Power Administration is committed to the 
Federal hydropower program and its preference customers. Working 
relationships between Southeastern, its customers, and the Corps are 
valued and support our priorities to improve Federal hydropower's 
competitiveness in the energy market and in the delivery of reliable 
wholesale power.

Discussion

System Repayment

    An examination of Southeastern's revised system power repayment 
study, prepared in March, 2020, for the Cumberland System, shows that 
with the proposed rates, all system power costs are paid within the 
appropriate repayment period and meet the cost recovery criteria set 
forth in DOE Order RA 6120.2. The Administrator of Southeastern Power 
Administration has certified that the rates are consistent with 
applicable law and that they are the lowest possible rates to customers

[[Page 52988]]

consistent with sound business principles.

Environmental Impact

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

Determination Under Executive Order 12866

    Southeastern has an exemption from centralized regulatory review 
under Executive Order 12866; accordingly, no clearance of this notice 
by the Office of Management and Budget is required.

Availability of Information

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

Order

    In view of the foregoing and pursuant to the authority redelegated 
to me by the Assistant Secretary for Electricity, I hereby confirm and 
approve on an interim basis, effective October 1, 2020, attached 
Wholesale Power Rate Schedules CBR-1-J, CSI-1-J, CEK-1-J, CM-1-J, CC-1-
K, CK-1-J, CTV-1-J, CTVI-1-C, and Replacement-3. The rate schedules 
shall remain in effect on an interim basis through September 30, 2025, 
unless such period is extended or until FERC confirms and approves them 
or substitute rate schedules on a final basis.

Dated: August 18, 2020.

Virgil G. Hobbs, III,
Administrator, Southeastern Power Administration.

Wholesale Power Rate Schedule CBR-1-J

Availability

    This rate schedule shall be available to Big Rivers Electric 
Corporation and the City of Henderson, Kentucky (hereinafter called the 
Customer).

Applicability

    This rate schedule shall be applicable to electric capacity and 
energy available from the Dale Hollow, Center Hill, Wolf Creek, 
Cheatham, Old Hickory, Barkley, J. Percy Priest, and Cordell Hull 
Projects (all of such projects being hereinafter called collectively 
the ``Cumberland Projects'') and sold in wholesale quantities.

Character of Service

    The electric capacity and energy supplied hereunder will be three-
phase alternating current at a nominal frequency of 60 hertz. The power 
shall be delivered at nominal voltages of 13,800 volts and 161,000 
volts to the transmission system of Big Rivers Electric Corporation.

Points of Delivery

    Capacity and energy delivered to the Customer will be delivered at 
points of interconnection of the Customer at the Barkley Project 
Switchyard, at a delivery point in the vicinity of the Paradise steam 
plant and at such other points of delivery as may hereafter be agreed 
upon by the Government and Tennessee Valley Authority (TVA).

Billing Month

    The billing month for power sold under this schedule shall end at 
2400 hours CDT or CST, whichever is currently effective, on the last 
day of each calendar month.

Conditions of Service

    The Customer shall at its own expense provide, install, and 
maintain on its side of each delivery point the equipment necessary to 
protect and control its own system. In so doing, the installation, 
adjustment, and setting of all such control and protective equipment at 
or near the point of delivery shall be coordinated with that which is 
installed by and at the expense of TVA on its side of the delivery 
point.

Monthly Rate

    The initial monthly base rate for capacity and energy sold under 
this rate schedule shall be:
    Initial Base Demand charge (includes 1,500 hours of energy 
annually): $3.430 per kilowatt/month of total contract demand.
    Initial Base Energy Charge: None.
    Initial Base Additional Energy Charge: 12.835 mills per kilowatt-
hour.
    True-up Adjustment: The base demand charge and base additional 
energy charge will be subject to annual adjustment on April 1 of each 
year based on transfers to specific power plant-in-service. The 
adjustment is for each increase of $1,000,000 to specific power plant-
in-service an increase of $0.003 per kilowatt per month added to the 
base Capacity rate and an increase of 0.013 mills per kilowatt-hour 
added to the additional energy rate.
    Southeastern will give written notice to the Customer of the amount 
of the true-up by February 1 of each year.
    Transmission Charge: Monthly TVA Transmission Charge divided by 
545,000.

Energy To Be Furnished by the Government

    The Government shall make available each contract year to the 
Customer from the Projects through the Customer's interconnections with 
TVA and the Customer will schedule and accept an allocation of 1500 
kilowatt-hours of energy delivered at the TVA border for each kilowatt 
of contract demand. A contract year is defined as the 12 months 
beginning July 1 and ending at midnight June 30 of the following 
calendar year. The energy made available for a contract year shall be 
scheduled monthly such that the maximum amount scheduled in any month 
shall not exceed 240 hours per kilowatt of the Customer's contract 
demand and the minimum amount scheduled in any month shall not be less 
than 60 hours per kilowatt of the customer's contract demand. The 
Customer may request and the Government may approve energy scheduled 
for a month greater than 240 hours per kilowatt of the Customer's 
contract demand; provided, that the combined schedule of all 
Southeastern customers outside TVA and served by TVA does not exceed 
240 hours per kilowatt of the total contract demands of these 
customers.

Service Interruption

    When delivery of capacity is interrupted or reduced due to 
conditions on the Administrator's system beyond his control, the 
Administrator will continue to make available the portion of his 
declaration of energy that can be generated with the capacity 
available.
    For such interruption or reduction due to conditions on the 
Administrator's system which have not been arranged for and agreed to 
in advance, the demand charge for capacity made available will be 
reduced as to the kilowatts of such capacity which have been 
interrupted or reduced in accordance with the following formula:

[[Page 52989]]

[GRAPHIC] [TIFF OMITTED] TN27AU20.000

Wholesale Power Rate Schedule CSI-1-J

Availability

    This rate schedule shall be available to Southern Illinois Power 
Cooperative (hereinafter the Customer).

Applicability

    This rate schedule shall be applicable to electric capacity and 
energy available from the Dale Hollow, Center Hill, Wolf Creek, 
Cheatham, Old Hickory, Barkley, J. Percy Priest, and Cordell Hull 
Projects (all of such projects being hereinafter called collectively 
the ``Cumberland Projects'') and sold in wholesale quantities.

Character of Service

    The electric capacity and energy supplied hereunder will be three-
phase alternating current at a nominal frequency of 60 hertz. The power 
shall be delivered at nominal voltages of 13,800 volts and 161,000 
volts to the transmission system of Big Rivers Electric Corporation.

Points of Delivery

    Capacity and energy delivered to the Customer will be delivered at 
points of interconnection of the Customer at the Barkley Project 
Switchyard, at a delivery point in the vicinity of the Paradise steam 
plant and at such other points of delivery as may hereafter be agreed 
upon by the Government and Tennessee Valley Authority (TVA).

Billing Month

    The billing month for power sold under this schedule shall end at 
2400 hours CDT or CST, whichever is currently effective, on the last 
day of each calendar month.

Monthly Rate

    The initial monthly base rate for capacity and energy sold under 
this rate schedule shall be:
    Initial Base Demand charge (includes 1500 hours of energy 
annually): $3.430 per kilowatt/month of total contract demand.
    Initial Base Energy Charge: None.
    Initial Base Additional Energy Charge: 12.835 mills per kilowatt-
hour.
    True-up Adjustment: The base demand charge and base additional 
energy charge will be subject to annual adjustment on April 1 of each 
year based on transfers to specific power plant-in-service. The 
adjustment is for each increase of $1,000,000 to specific power plant-
in-service an increase of $0.003 per kilowatt per month added to the 
base Capacity rate and an increase of 0.013 mills per kilowatt-hour 
added to the additional energy rate.
    Southeastern will give written notice to the Customer of the amount 
of the true-up by February 1 of each year.
    Transmission Charge: Monthly TVA Transmission Charge divided by 
545,000.

Energy To Be Furnished by the Government

    The Government shall make available each contract year to the 
Customer from the Projects through the Customer's interconnections with 
TVA and the Customer will schedule and accept an allocation of 1500 
kilowatt-hours of energy delivered at the TVA border for each kilowatt 
of contract demand. A contract year is defined as the 12 months 
beginning July 1 and ending at midnight June 30 of the following 
calendar year. The energy made available for a contract year shall be 
scheduled monthly such that the maximum amount scheduled in any month 
shall not exceed 240 hours per kilowatt of the Customer's contract 
demand and the minimum amount scheduled in any month shall not be less 
than 60 hours per kilowatt of the customer's contract demand. The 
Customer may request and the Government may approve energy scheduled 
for a month greater than 240 hours per kilowatt of the Customer's 
contract demand; provided, that the combined schedule of all 
Southeastern customers outside TVA and served by TVA does not exceed 
240 hours per kilowatt of the total contract demands of these 
customers.

Service Interruption

    When delivery of capacity is interrupted or reduced due to 
conditions on the Administrator's system beyond his control, the 
Administrator will continue to make available the portion of his 
declaration of energy that can be generated with the capacity 
available.
    For such interruption or reduction due to conditions on the 
Administrator's system which have not been arranged for and agreed to 
in advance, the demand charge for capacity made available will be 
reduced as to the kilowatts of such capacity which have been 
interrupted or reduced in accordance with the following formula:
[GRAPHIC] [TIFF OMITTED] TN27AU20.001

Wholesale Power Rate Schedule CEK-1-J

Availability

    This rate schedule shall be available to East Kentucky Power 
Cooperative (hereinafter called the Customer).

Applicability

    This rate schedule shall be applicable to electric capacity and 
energy available from the Dale Hollow, Center Hill, Wolf Creek, 
Cheatham, Old Hickory, Barkley, J. Percy Priest, and Cordell Hull 
Projects (all of such projects being hereinafter called collectively 
the ``Cumberland Projects'') and power available from the Laurel 
Project and sold in wholesale quantities.

Character of Service

    The electric capacity and energy supplied hereunder will be three-
phase alternating current at a nominal frequency of 60 hertz. The power 
shall be delivered at nominal voltages of 161,000 volts to the 
transmission systems of the Customer.

Points of Delivery

    The points of delivery will be the 161,000 volt bus of the Wolf 
Creek Power Plant and the 161,000 volt bus of the Laurel Project. Other 
points of delivery may be as agreed upon.

Billing Month

    The billing month for power sold under this schedule shall end at 
2400

[[Page 52990]]

hours CDT or CST, whichever is currently effective, on the last day of 
each calendar month.

Conditions of Service

    The Customer shall, at its own expense, provide, install, and 
maintain on its side of each delivery point the equipment necessary to 
protect and control its own system. In so doing, the installation, 
adjustment, and setting of all such control and protective equipment at 
or near the point of delivery shall be coordinated with that which is 
installed by and at the expense of the Tennessee Valley Authority (TVA) 
on its side of the delivery point.

Monthly Rate

    The initial monthly base rate for capacity and energy sold under 
this rate schedule shall be:
    Initial Base Demand charge: $1.826 per kilowatt/month of total 
contract demand.
    Initial Base Energy Charge: 12.835 mills per kilowatt-hour.
    True-up Adjustment: The base demand charge and base energy charge 
will be subject to annual adjustment on April 1 of each year based on 
transfers to specific power plant-in-service. The adjustment is for 
each increase of $1,000,000 to specific power plant-in-service an 
increase of $0.003 per kilowatt per month added to the base Capacity 
rate and an increase of 0.013 mills per kilowatt-hour added to the 
energy rate.
    Southeastern will give written notice to the Customer of the amount 
of the true-up by February 1 of each year.
    Transmission Charge: Monthly TVA Transmission Charge divided by 
545,000.

Energy To Be Furnished by the Government

    The Government shall make available each contract year to the 
Customer from the Projects through the Customer's interconnections with 
TVA and the Customer will schedule and accept an allocation of 1500 
kilowatt-hours of energy delivered at the TVA border for each kilowatt 
of contract demand plus 369 kilowatt-hours of energy delivered for each 
kilowatt of contract demand to supplement energy available at the 
Laurel Project. A contract year is defined as the 12 months beginning 
July 1 and ending at midnight June 30 of the following calendar year. 
The energy made available for a contract year shall be scheduled 
monthly such that the maximum amount scheduled in any month shall not 
exceed 240 hours per kilowatt of the Customer's contract demand and the 
minimum amount scheduled in any month shall not be less than 60 hours 
per kilowatt of the Customer's contract demand. The Customer may 
request and the Government may approve energy scheduled for a month 
greater than 240 hours per kilowatt of the customer's contract demand; 
provided, that the combined schedule of all Southeastern customers 
outside TVA and served by TVA does not exceed 240 hours per kilowatt of 
the total contract demands of these customers.

Service Interruption

    When delivery of capacity is interrupted or reduced due to 
conditions on the Administrator's system beyond his control, the 
Administrator will continue to make available the portion of his 
declaration of energy that can be generated with the capacity 
available.
    For such interruption or reduction due to conditions on the 
Administrator's system which have not been arranged for and agreed to 
in advance, the demand charge for capacity made available will be 
reduced as to the kilowatts of such capacity which have been 
interrupted or reduced in accordance with the following formula:
[GRAPHIC] [TIFF OMITTED] TN27AU20.002

Wholesale Power Rate Schedule CM-1-J

Availability

    This rate schedule shall be available to Cooperative Energy 
(formerly the South Mississippi Electric Power Association), Municipal 
Energy Agency of Mississippi, and Mississippi Delta Energy Agency 
(hereinafter called the Customers).

Applicability

    This rate schedule shall be applicable to electric capacity and 
energy available from the Dale Hollow, Center Hill, Wolf Creek, 
Cheatham, Old Hickory, Barkley, J. Percy Priest, and Cordell Hull 
Projects (all of such projects being hereinafter called collectively 
the ``Cumberland Projects'') and sold in wholesale quantities.

Character of Service

    The electric capacity and energy supplied hereunder will be three-
phase alternating current at a nominal frequency of 60 hertz. The power 
shall be delivered at nominal voltages of 161,000 volts to the 
transmission systems of Mississippi Power and Light.

Points of Delivery

    The points of delivery will be at interconnection points of the 
Tennessee Valley Authority (TVA) system and the Mississippi Power and 
Light system. Other points of delivery may be as agreed upon.

Billing Month

    The billing month for power sold under this schedule shall end at 
2400 hours CDT or CST, whichever is currently effective on the last day 
of each calendar month.

Monthly Rate

    The initial monthly base rate for capacity and energy sold under 
this rate schedule shall be:
    Initial Base Demand charge (includes 1500 hours of energy 
annually): $3.430 per kilowatt/month of total contract demand.
    Initial Base Energy Charge: None.
    Initial Base Additional Energy Charge: 12.835 mills per kilowatt-
hour.

True-Up Adjustment

    The base demand charge and base additional energy charge will be 
subject to annual adjustment on April 1 of each year based on transfers 
to specific power plant-in-service. The adjustment is for each increase 
of $1,000,000 to specific power plant-in-service an increase of $0.003 
per kilowatt per month added to the base Capacity rate and an increase 
of 0.013 mills per kilowatt-hour added to the additional energy rate.
    Southeastern will give written notice to the Customers of the 
amount of the true-up by February 1 of each year.
    Transmission Charge: Monthly TVA Transmission Charge divided by 
545,000.

Energy To Be Furnished by the Government

    The Government shall make available each contract year to the 
Customer from the Projects through the Customer's interconnections with 
TVA and the

[[Page 52991]]

Customer will schedule and accept an allocation of 1500 kilowatt-hours 
of energy delivered at the TVA border for each kilowatt of contract 
demand. A contract year is defined as the 12 months beginning July 1 
and ending at midnight June 30 of the following calendar year. The 
energy made available for a contract year shall be scheduled monthly 
such that the maximum amount scheduled in any month shall not exceed 
240 hours per kilowatt of the Customer's contract demand and the 
minimum amount scheduled in any month shall not be less than 60 hours 
per kilowatt of the Customer's contract demand. The Customer may 
request and the Government may approve energy scheduled for a month 
greater than 240 hours per kilowatt of the Customer's contract demand; 
provided, that the combined schedule of all Southeastern customers 
outside TVA and served by TVA does not exceed 240 hours per kilowatt of 
the total contract demands of these customers.
    In the event that any portion of the capacity allocated to the 
Customers is not initially delivered to the Customers as of the 
beginning of a full contract year, the 1500 kilowatt hours shall be 
reduced 1/12 for each month of that year prior to initial delivery of 
such capacity.

Service Interruption

    When delivery of capacity is interrupted or reduced due to 
conditions on the Administrator's system beyond his control, the 
Administrator will continue to make available the portion of his 
declaration of energy that can be generated with the capacity 
available.
    For such interruption or reduction due to conditions on the 
Administrator's system which have not been arranged for and agreed to 
in advance, the demand charge for capacity made available will be 
reduced as to the kilowatts of such capacity which have been 
interrupted or reduced in accordance with the following formula:
[GRAPHIC] [TIFF OMITTED] TN27AU20.003

Wholesale Power Rate Schedule CC-1-K

Availability

    This rate schedule shall be available to public bodies and 
cooperatives served through the facilities of Duke Energy Progress 
(formerly known as Carolina Power & Light Company), Western Division 
(hereinafter called the Customers).

Applicability

    This rate schedule shall be applicable to electric capacity and 
energy available from the Dale Hollow, Center Hill, Wolf Creek, 
Cheatham, Old Hickory, Barkley, J. Percy Priest, and Cordell Hull 
Projects (all of such projects being hereinafter called collectively 
the ``Cumberland Projects'') and sold in wholesale quantities.

Character of Service

    The electric capacity and energy supplied hereunder will be three-
phase alternating current at a nominal frequency of 60 hertz. The power 
shall be delivered at nominal voltages of 161,000 volts to the 
transmission system of Duke Energy Progress, Western Division.

Points of Delivery

    The points of delivery will be at interconnecting points of the 
Tennessee Valley Authority (TVA) system and the Duke Energy Progress, 
Western Division system. Other points of delivery may be as agreed 
upon.

Billing Month

    The billing month for power sold under this schedule shall end at 
2400 hours CDT or CST, whichever is currently effective, on the last 
day of each calendar month.

Monthly Rate

    The initial monthly base rate for capacity and energy sold under 
this rate schedule shall be:
    Initial Base Demand charge (includes 1500 hours of energy annually 
at the TVA Border): $3.904 per kilowatt/month of total contract demand.
    Initial Base Energy Charge: None.
    Initial Base Additional Energy Charge: 12.835 mills per kilowatt-
hour.
    True-up Adjustment: The base demand charge and base additional 
energy charge will be subject to annual adjustment on April 1 of each 
year based on transfers to specific power plant-in-service. The 
adjustment is for each increase of $1,000,000 to specific power plant-
in-service an increase of $0.003 per kilowatt per month added to the 
base Capacity rate and an increase of 0.013 mills per kilowatt-hour 
added to the additional energy rate.
    Southeastern will give written notice to the Customers of the 
amount of the true-up by February 1 of each year.
    Transmission Charge: Monthly TVA Transmission Charge divided by 
545,000, and adjusted for Duke Energy Progress delivery. The adjustment 
under the current contract is 14,000/12,300.

Energy To Be Furnished by the Government

    The Government will sell to the Customers and the Customers will 
purchase from the Government energy each billing month equivalent to a 
percentage specified by contract of the energy made available to Duke 
Energy Progress (less applicable losses). The Customer's contract 
demand and accompanying energy allocation will be divided pro rata 
among its individual delivery points served from the Duke Energy 
Progress, Western Division transmission system.

Wholesale Power Rate Schedule CK-1-J

Availability

    This rate schedule shall be available to public bodies served 
through the facilities of Kentucky Utilities Company (hereinafter 
called the Customers).

Applicability

    This rate schedule shall be applicable to electric capacity and 
energy available from the Dale Hollow, Center Hill, Wolf Creek, 
Cheatham, Old Hickory, Barkley, J. Percy Priest, and Cordell Hull 
Projects (all of such projects being hereinafter called collectively 
the ``Cumberland Projects'') and sold in wholesale quantities.

Character of Service

    The electric capacity and energy supplied hereunder will be three-
phase alternating current at a nominal frequency of 60 hertz. The power 
shall be delivered at nominal voltages of

[[Page 52992]]

161,000 volts to the transmission systems of Kentucky Utilities 
Company.

Points of Delivery

    The points of delivery will be at interconnecting points between 
the Tennessee Valley Authority (TVA) system and the Kentucky Utilities 
Company system. Other points of delivery may be as agreed upon.

Billing Month

    The billing month for power sold under this schedule shall end at 
2400 hours CDT or CST, whichever is currently effective on the last day 
of each calendar month.

Monthly Rate

    The initial monthly base rate for capacity and energy sold under 
this rate schedule shall be:
    Initial Base Demand charge (includes 1,500 hours of energy 
annually): $3.430 per kilowatt/month of total contract demand.
    Initial Base Energy Charge: None.
    Initial Base Additional Energy Charge: 12.835 mills per kilowatt-
hour.
    True-up Adjustment: The base demand charge and base additional 
energy charge will be subject to annual adjustment on April 1 of each 
year based on transfers to specific power plant-in-service. The 
adjustment is for each increase of $1,000,000 to specific power plant-
in-service an increase of $0.003 per kilowatt per month added to the 
base Capacity rate and an increase of 0.013 mills per kilowatt-hour 
added to the additional energy rate.
    Southeastern will give written notice to the Customers of the 
amount of the true-up by February 1 of each year.

Transmission Charge

    Monthly TVA Transmission Charge divided by 545,000.

Energy To Be Furnished by the Government

    The Government shall make available each contract year to the 
Customer from the Projects and the Customer will accept an allocation 
of 1500 kilowatt-hours of energy for each kilowatt of contract demand. 
A contract year is defined as the 12 months beginning July 1 and ending 
at midnight June 30 of the following calendar year. The energy made 
available for a contract year shall be scheduled monthly such that the 
maximum amount scheduled in any month shall not exceed 240 hours per 
kilowatt of the Customer's contract demand and the minimum amount 
scheduled in any month shall not be less than 60 hours per kilowatt of 
the Customer's contract demand. The Customers may request and the 
Government may approve energy scheduled for a month greater than 240 
hours per kilowatt of the Customer's contract demand; provided, that 
the combined schedule of all Southeastern customers outside TVA and 
served by TVA does not exceed 240 hours per kilowatt of the total 
contract demands of these customers.
    In the event that any portion of the capacity allocated to the 
Customers is not initially delivered to the Customers as of the 
beginning of a full contract year, the 1500 kilowatt hours shall be 
reduced 1/12 for each month of that year prior to initial delivery of 
such capacity.
    For billing purposes, each kilowatt of capacity will include 1500 
kilowatt-hours of energy per year. Customers will pay for additional 
energy at the additional energy rate.

Wholesale Power Rate Schedule CTV-1-J

Availability

    This rate schedule shall be available to the Tennessee Valley 
Authority (hereinafter called TVA) on behalf of members of the 
Tennessee Valley Public Power Association (hereinafter called TVPPA).

Applicability

    This rate schedule shall be applicable to electric capacity and 
energy generated at the Dale Hollow, Center Hill, Wolf Creek, Old 
Hickory, Cheatham, Barkley, J. Percy Priest, and Cordell Hull Projects 
(all of such projects being hereafter called collectively the 
``Cumberland Projects'') and the Laurel Project sold under agreement 
between the Department of Energy and TVA.

Character of Service

    The electric capacity and energy supplied hereunder will be three-
phase alternating current at a frequency of approximately 60 hertz at 
the outgoing terminals of the Cumberland Projects' switchyards.

Billing Month

    The billing month for capacity and energy sold under this schedule 
shall end at 2400 hours CDT or CST, whichever is currently effective, 
on the last day of each calendar month.

Contract Year

    For purposes of this rate schedule, a contract year shall be as in 
Section 13.1 of the Southeastern Power Administration--Tennessee Valley 
Authority Contract.

Power Factor

    TVA shall take capacity and energy from the Department of Energy at 
such power factor as will best serve TVA's system from time to time; 
provided, that TVA shall not impose a power factor of less than .85 
lagging on the Department of Energy's facilities which requires 
operation contrary to good operating practice or results in overload or 
impairment of such facilities.

Monthly Rate

    The initial monthly base rate for capacity and energy sold under 
this rate schedule shall be:
    Initial Base Demand charge (includes 1500 hours of energy 
annually): $3.430 per kilowatt/month of total contract demand.
    Initial Base Energy Charge: None.
    Initial Base Additional Energy Charge: 12.835 mills per kilowatt-
hour.
    True-up Adjustment: The base demand charge and base additional 
energy charge will be subject to annual adjustment on April 1 of each 
year based on transfers to specific power plant-in-service. The 
adjustment is for each increase of $1,000,000 to specific power plant-
in-service an increase of $0.003 per kilowatt per month added to the 
base Capacity rate and an increase of 0.013 mills per kilowatt-hour 
added to the additional energy rate.
    Southeastern will give written notice to the TVA and TVPPA of the 
amount of the true-up by February 1 of each year.

Energy To Be Made Available

    The Department of Energy shall determine the energy that is 
available from the projects for declaration in the billing month.
    To meet the energy requirements of the Department of Energy's 
customers outside the TVA area (hereinafter called Outside Customers), 
768,000 megawatt-hours of net energy shall be available annually 
(including 36,900 megawatt-hours of annual net energy to supplement 
energy available at Laurel Project). The energy requirement of the 
Outside Customers shall be available annually, divided monthly such 
that the maximum available in any month shall not exceed 240 hours per 
kilowatt of total Outside Customers contract demand, and the minimum 
amount available in any month shall not be less than 60 hours per 
kilowatt of total Outside Customers demand.
    In the event that any portion of the capacity allocated to Outside 
Customers is not initially delivered to the Outside Customers as of the 
beginning of a full contract year (July through June), the

[[Page 52993]]

1,500 hours, plus any such additional energy required as discussed 
above, shall be reduced 1/12 for each month of that year prior to 
initial delivery of such capacity.
    The energy scheduled by TVA for use within the TVA System in any 
billing month shall be the total energy delivered to TVA less (1) an 
adjustment for fast or slow meters, if any, (2) an adjustment for 
Barkley-Kentucky Canal of 15,000 megawatt-hours of energy each month 
which is delivered to TVA under the agreement from the Cumberland 
Projects without charge to TVA, (3) the energy scheduled by the 
Department of Energy in said month for the Outside Customers plus 
losses of two percent [2%], and (4) station service energy furnished by 
TVA.
    Each kilowatt of capacity will include 1500 kilowatt-hours of 
energy per year, which is defined as base energy. Energy received in 
excess of 1500 kilowatt-hours per kilowatt will be subject to an 
additional energy charge identified in the monthly rates section of 
this rate schedule.

Service Interruption

    When delivery of capacity to TVA is interrupted or reduced due to 
conditions on the Department of Energy's system that are beyond its 
control, the Department of Energy will continue to make available the 
portion of its declaration of energy that can be generated with the 
capacity available.
    For such interruption or reduction (exclusive of any restrictions 
provided in the agreement) due to conditions on the Department of 
Energy's system which have not been arranged for and agreed to in 
advance, the demand charge for scheduled capacity made available to TVA 
will be reduced as to the kilowatts of such scheduled capacity which 
have been so interrupted or reduced for each day in accordance with the 
following formula:
[GRAPHIC] [TIFF OMITTED] TN27AU20.004

Wholesale Power Rate Schedule CTVI-1-C

Availability

    This rate schedule shall be available to customers (hereinafter 
called the Customer) who are or were formerly in the Tennessee Valley 
Authority (hereinafter called TVA) service area.

Applicability

    This rate schedule shall be applicable to electric capacity and 
energy generated at the Dale Hollow, Center Hill, Wolf Creek, Old 
Hickory, Cheatham, Barkley, J. Percy Priest, and Cordell Hull Projects 
(all of such projects being hereafter called collectively the 
``Cumberland Projects'') and the Laurel Project sold under agreement 
between the Department of Energy and the Customer.

Character of Service

    The electric capacity and energy supplied hereunder will be three-
phase alternating current at a frequency of approximately 60 hertz at 
the outgoing terminals of the Cumberland Projects' switchyards.

Billing Month

    The billing month for capacity and energy sold under this schedule 
shall end at 2,400 hours CDT or CST, whichever is currently effective, 
on the last day of each calendar month.

Contract Year

    For purposes of this rate schedule, a contract year shall be as in 
Section 13.1 of the Southeastern Power Administration--Tennessee Valley 
Authority Contract.

Monthly Rate

    The initial monthly base rate for capacity and energy sold under 
this rate schedule shall be:
    Initial Base Demand charge (includes 1,500 hours of energy 
annually): $3.430 per kilowatt/month of total contract demand.
    Initial Base Energy Charge: None.
    Initial Base Additional Energy Charge: 12.835 mills per kilowatt-
hour.
    True-up Adjustment: The base demand charge and base additional 
energy charge will be subject to annual adjustment on April 1 of each 
year based on transfers to specific power plant-in-service. The 
adjustment is for each increase of $1,000,000 to specific power plant-
in-service an increase of $0.003 per kilowatt per month added to the 
base Capacity rate and an increase of 0.013 mills per kilowatt-hour 
added to the additional energy rate.
    Southeastern will give written notice to the Customer of the amount 
of the true-up by February 1 of each year.
    Transmission Charge: The initial charge for transmission and 
Ancillary Services will be the Customer's ratable share of the charges 
for transmission, distribution, and ancillary services paid by the 
Government. The charges for transmission and ancillary services are 
governed by and subject to refund based upon the determination in 
proceedings before FERC or other overseeing entity involving the TVA's 
and other transmission provider's Open Access Transmission Tariff 
(OATT).
    Proceedings before FERC or other overseeing entity involving the 
OATT or the Distribution charge may result in the separation of charges 
currently included in the transmission rate. In this event, the 
Government may charge the Customer for any and all separate 
transmission, ancillary services, and distribution charges paid by the 
Government in behalf of the Customer. These charges could be recovered 
through a capacity charge or an energy charge, as determined by the 
Government.

Energy To Be Made Available

    The energy will be scheduled by TVA and the Customer will receive 
their ratable share, in accordance with the Government-Customer 
Contract. Energy shall be accounted for, in accordance with agreements 
with TVA.
    The Customer will receive a ratable share of their capacity, in 
accordance with the Government-Customer Contract.

Service Interruption

    When delivery of capacity to TVA is interrupted or reduced due to 
conditions on the Department of Energy's system that are beyond its 
control, the Department of Energy will continue to make available the 
portion of its declaration of energy that can be generated with the 
capacity available. The customer will receive a ratable share of this 
capacity.

[[Page 52994]]

    For such interruption or reduction (exclusive of any restrictions 
provided in the agreement) due to conditions on the Department of 
Energy's system which have not been arranged for and agreed to in 
advance, the demand charge for scheduled capacity made available to the 
Customer will be reduced as to the kilowatts of such scheduled capacity 
which have been so interrupted or reduced for each day in accordance 
with the following formula:
[GRAPHIC] [TIFF OMITTED] TN27AU20.005

Wholesale Rate Schedule Replacement-3

Availability

    This rate schedule shall be available to public bodies and 
cooperatives (any one of whom is hereinafter called the Customer) in 
Alabama, Georgia, Illinois, Kentucky, North Carolina, Mississippi, 
Tennessee, and Virginia to whom power is provided pursuant to contracts 
between the Government and the customer from the Dale Hollow, Center 
Hill, Wolf Creek, Cheatham, Old Hickory, Barkley, J. Percy Priest, 
Cordell Hull, and Laurel Projects (all of such projects being 
hereinafter called collectively the ``Cumberland Projects'').

Applicability

    This rate schedule shall be applicable to the sale of wholesale 
energy purchased to meet contract minimum energy sold under appropriate 
contracts between the Government and the Customer.

Character of Service

    The energy supplied hereunder will be delivered at the delivery 
points provided for under appropriate contracts between the Government 
and the Customer.

Monthly Charge

    The rate for replacement energy will be a formulary capacity charge 
based on the monthly cost to the Government to purchase replacement 
energy necessary to support capacity in the Cumberland System divided 
by the capacity available from the Cumberland System, which is 950,000 
kilowatts in the published power marketing policy. The capacity rate 
will be adjusted for any capacity retained by the Customer's 
transmission facilitator.

Conditions of Service

    The customer shall--at its own expense--provide, install, and 
maintain on its side of each delivery point the equipment necessary to 
protect and control its own system.

[FR Doc. 2020-18822 Filed 8-26-20; 8:45 am]
BILLING CODE 6450-01-P