Central Arizona Project-Rate Order No. WAPA-124

AGENCY:

Western Area Power Administration, DOE.

ACTION:

Notice of proposed transmission rates.

SUMMARY:

The Western Area Power Administration (Western) is proposing revised rates for the Central Arizona Project (CAP) firm point-to-point transmission service, nonfirm point-to-point transmission service, and Network Integration Transmission Service (NITS) on the CAP 115 kilovolt (kV) and 230-kV transmission lines. Current rates, under Rate Schedules CAP-FT1, CAP-NFT1 and CAP-NITS1, extend through December 31, 2005. Proposed rates will provide sufficient revenue to pay all annual costs, including interest expense, and repay required investment within the allowable period. Western will prepare a brochure that provides detailed information on the rates to all interested parties. Proposed rates, under Rate Schedules CAP-FT2, CAP-NFT2, and CAP-NITS2, are scheduled to go into effect on January 1, 2006, and will remain in effect through December 31, 2010. Publication of this Federal Register notice begins the formal process for the proposed rates.

DATES:

The consultation and comment period begins today and will end September 29, 2005. Western will present a detailed explanation of the proposed rates at a public information forum. The public information forum is: July 22, 2005, 10-12 p.m. MST, Phoenix, AZ.

Western will accept oral and written comments at a public comment forum. The public comment forum will be held on the following date: August 22, 2005, 1 p.m. MST, Phoenix, AZ.

ADDRESSES:

Send written comments to Mr. J. Tyler Carlson, Regional Manager, Desert Southwest Customer Service Region, Western Area Power Administration, P.O. Box 6457, Phoenix, AZ 85005-6457, e-mail carlson@wapa.gov. Western will post official information about the rate process on its Web site at http://www.wapa.gov/dsw/pwrmkt/CAPTRP/CAPTRP.htm. Western will post official comments received via letter and e-mail to its Web site after the close of the comment period. Western must receive written comments by the end of the consultation and comment period to ensure they are considered in Western's decision process. The public information forum and public comment forum will be held at: Western's Desert Southwest Region (DSWR) office, 615 South 43rd Avenue, Phoenix, AZ.

FOR FURTHER INFORMATION CONTACT:

Mr. Jack Murray, Rates Team Lead, Desert Southwest Customer Service Region, Western Area Power Administration, P.O. Box 6457, Phoenix, AZ 85005-6457, telephone (602) 605-2442, e-mail jmurray@wapa.gov.

SUPPLEMENTARY INFORMATION:

Proposed rates for the CAP 115-kV and 230-kV transmission lines are designed to recover an annual revenue requirement that includes investment repayment, interest, operation and maintenance expense, and other expenses.

The Deputy Secretary of Energy approved Rate Schedules CAP-FT1, CAP-NFT1, and CAP-NITS1 for transmission service effective January 1, 2001 (Rate Order No. WAPA-88, 65 FR 77368, December 11, 2000), and the Federal Energy Regulatory Commission (Commission) confirmed and approved the rate schedules on July 31, 2001, under FERC Docket No. EF01-5111-000 (96 FERC 62,094). Approval for Rate Schedules CAP-FT1, CAP-NFT1, and CAP-NITS1 covered 5 years beginning on January 1, 2001, ending on December 31, 2005.

Proposed rates for point-to-point transmission service and NITS on the CAP 115BkV and 230-kV transmission lines are based on a revenue requirement that recovers the CAP 115BkV and 230-kV transmission lines costs for facilities associated with providing transmission service and the non-facilities costs allocated to transmission service. Proposed rates for point-to-point transmission service on the CAP 115-kV/230-kV transmission system are determined by combining the average annual amortization costs with the average annual operations and maintenance costs, and dividing them by the average annual contract rate of delivery for the cost evaluation period, fiscal years FY 2006-FY 2010.

The proposed rates reflect a 11.09% decrease due to decreases in operation and maintenance, principal, and interest cost for the five year period ending 2010. Implementing the proposed rates results in a firm point-to-point CAP 115-kV and 230-kV transmission line rate of $8.74 per kilowattyear and a nonfirm point-to-point CAP 115-kV and 230-kV transmission line rate of 1.66 mills/kWh.

NITS allows a transmission customer to integrate, plan, economically dispatch, and regulate its network resources to serve its native load in a way comparable to how a transmission provider uses its own transmission system to service its native load customers. The monthly charge methodology for NITS on the CAP 115-kV and 230-kV transmission lines is the product of the transmission customer's load-ratio share times one-twelfth of the annual transmission revenue requirement. The customer's load-ratio share is calculated on a rolling 12-month basis. The customer's load-ratio share is equal to that customer's hourly load coincident with the CAP 115-kV and 230-kV transmission lines monthly transmission system peak divided by the resultant value of the CAP 115-kV and 230-kV transmission lines monthly transmission system peak minus the CAP 115-kV and 230-kV transmission lines coincident peak for all firm point-to-point transmission service plus the CAP 115-kV and 230-kV transmission lines firm point-to-point transmission service reservations.

The proposed rates include the costs for scheduling, system control, and dispatch service.

Legal Authority

Western is establishing rates for transmission service on the CAP 115-kV and 230-kV transmission lines under the Department of Energy Organization Act (42 U.S.C. 7101-7352); the Reclamation Act of 1902 (ch. 1093, 32 Stat. 388), as amended and supplemented by subsequent laws, particularly section 9(c) of the Reclamation Project Act of 1939 (43 U.S.C. 485h(c)); and other acts that specifically apply to the project involved.

By Delegation Order No. 00-037-00, effective December 6, 2001, the Secretary of Energy delegated: (1) The authority to develop power and transmission rates to Western's Administrator; (2) the authority to confirm, approve, and place such rates into effect on an interim basis to the Deputy Secretary of Energy; and (3) the authority to confirm, approve, and place into effect on a final basis, to remand, or to disapprove such rates to the Commission. Existing Department of Energy (DOE) procedures for public participation in power rate adjustments (10 CFR part 903) were published on September 18, 1985.

Availability of Information

All brochures, studies, comments, letters, memorandums, and other documents Western initiates or uses to develop the proposed rates are available for inspection and copying at the DSWR office, located at 615 South 43rd Avenue, Phoenix, Arizona. Many of these documents and supporting information are also available on its Web site at http://www.wapa.gov/dsw/pwrmkt/CAPTRP/CAPTRP.htm.

Regulatory Procedure Requirements

Regulatory Flexibility Analysis

The Regulatory Flexibility Act of 1980 (5 U.S.C. 601, et seq.) requires Federal agencies to perform a regulatory flexibility analysis if a final rule is likely to have a significant economic impact on a substantial number of small entities and there is a legal requirement to issue a general notice of proposed rulemaking. This action does not require a regulatory flexibility analysis since it is a rulemaking of particular applicability involving rates or services applicable to public property.

Environmental Compliance

In compliance with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321, et seq.); Council on Environmental Quality Regulations (40 CFR parts 1500-1508); and DOE NEPA Regulations (10 CFR part 1021), Western has determined this action is categorically excluded from preparing an environmental assessment or an environmental impact statement.

Determination Under Executive Order 12866

Western 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.

Small Business Regulatory Enforcement Fairness Act

Western has determined that this rule is exempt from congressional notification requirements under 5 U.S.C. 801 because the action is a rulemaking of particular applicability relating to rates or services and involves matters of procedure.