Southwestern Power Administration 2009 – Federal Register Recent Federal Regulation Documents

The Administrator, Southwestern Power Administration (Southwestern), has prepared Current and Revised 2009 Power Repayment Studies which show the need for an increase in annual revenues to meet cost recovery criteria. Such increased revenues are needed primarily to cover increased investments and replacements in hydroelectric generating facilities and increased operation and maintenance expenses. The Administrator has developed proposed Integrated System rates, which are supported by a rate design study, to recover the required revenues. The June 2009 Revised Study indicates that the proposed rates would increase annual system revenues approximately 10.8 percent from $160,255,300 to $177,586,158.

Section 132 of Public Law 109-103 (2005) authorized and directed the Secretary of the Army to implement alternatives BS-3 and NF-7, as described in the White River Minimum Flows Reallocation Study Report, Arkansas and Missouri, dated July 2004. The law states that the Administrator, Southwestern Power Administration (Southwestern), in consultation with the project licensee and the relevant state public utility commissions, shall determine any impacts on electric energy and capacity generated at Federal Energy Regulatory Commission (FERC) Project No. 2221 caused by the storage reallocation at Bull Shoals Lake. Further, the licensee of Project No. 2221 shall be fully compensated by the Corps of Engineers for those impacts on the basis of the present value of the estimated future lifetime replacement costs of the electrical energy and capacity at the time of implementation of the White River Minimum Flows project. The law also states that losses to the Federal hydropower purpose of the Bull Shoals and Norfork Projects shall be offset by a reduction in the costs allocated to the Federal hydropower purpose. Further, such reduction shall be determined by the Administrator of Southwestern on the basis of the present value of the estimated future lifetime replacement cost of the electrical energy and capacity at the time of implementation of the White River Minimum Flows project. Southwestern's draft determination was published by Federal Register Notice (73 FR 6717) dated February 5, 2008. Written comments were invited through March 6, 2008. All public comments received were considered, and Southwestern's draft determination was revised as necessary to incorporate the public comments. Since there were significant changes to Southwestern's draft determination, Southwestern published a proposed determination for additional public review and comment prior to its final determination. Southwestern's proposed determination was published by Federal Register Notice (73 FR 38198) on July 3, 2008. Written comments were invited through August 4, 2008. After receiving several requests for additional time to provide public comments, Southwestern reopened the public comment period through September 18, 2008. All public comments received were considered in revising the proposed determination, and Southwestern is publishing notification of its final determination. Southwestern's final determination is fully documented in its Final Determination Report dated January 2009, which was prepared in consultation with the licensee and the relevant public service commissions. Southwestern's Final Determination Report documents the procedure to be used to calculate the present value of the future lifetime replacement cost of the electrical energy and capacity lost due to the White River Minimum Flows project at the non-Federal FERC Project No. 2221 and the Federal Bull Shoals and Norfork projects. The actual hydropower compensation values are to be calculated using the method presented in the final determination and current values for the specified parameters based on the official implementation date. Assuming a January 1, 2011, date of implementation for the White River Minimum Flows project and November 2008 values for the specified parameters, Southwestern's determination results in a present value for the estimated future lifetime replacement costs of the electrical energy and capacity at FERC Project No. 2221 of $41,319,400. Southwestern's determination results in a present value for the estimated future lifetime replacement costs of the electrical energy and capacity for Federal hydropower of $109,920,200. An electronic copy of Southwestern's Final Determination Report is available on Southwestern's Web site at https://www.swpa.gov/pdfs/WRMF_ SWPA_FinalDeterminationReport.pdf.