Sam Rayburn Dam Project Power Rate

AGENCY:

Southwestern Power Administration, DOE.

ACTION:

Notice of proposed extension.

SUMMARY:

The current Sam Rayburn Dam Project Rate was approved by the Federal Energy Regulatory Commission (FERC) on December 7, 1994, Docket No. EF94-4021-000. This rate was effective October 1, 1994, through September 30, 1998. On August 14, 1998, the Deputy Secretary of Energy approved a one-year extension of the Sam Rayburn Dam Rate Schedule for the period October 1, 1998 through September 30, 1999. On September 15, 1999, the Secretary of Energy approved a one-year extension of the Sam Rayburn Dam Rate Schedule for the period October 1, 1999 through September 30, 2000. Southwestern's Administrator has prepared Current and Revised Fiscal Year (FY) 2000 Power Repayment Studies for the Sam Rayburn Dam Project which show the need for a minor rate adjustment of $28,068 (1.3 percent increase) in annual revenues. Southwestern's rate adjustment threshold, dated June 23, 1987, provides that Southwestern's Administrator may defer a revenue decrease or increase in the magnitude of two percent or less. The Deputy Secretary of Energy has the authority to extend rates, previously confirmed and approved by FERC, on an interim basis, pursuant to 10 CFR 903.22(h) and 903.23(a)(3). The Administrator is proposing that the rate adjustment be deferred and that the current rate be extended for a one-year period effective through September 30, 2001, in accordance with Department of Energy (DOE) rate extension authority and Southwestern's rate adjustment threshold.

DATES:

Written comments are due on or before July 26, 2000.

FOR FURTHER INFORMATION CONTACT:

Forrest E. Reeves, Assistant Administrator, Office of Corporate Operations, Southwestern Power Administration, Department of Energy, P.O. Box 1619, Tulsa, Oklahoma 74101, (918) 595-6696, reeves@swpa.gov.

SUPPLEMENTARY INFORMATION:

The U.S. Department of Energy was created by an Act of the U.S. Congress, Department of Energy Organization Act, Pub. L. 95-91, dated August 4, 1977, and Southwestern's power marketing activities were transferred from the Department of the Interior to the Department of Energy, effective October 1, 1977.

Southestern markets power from 24 multiple-purpose reservoir projects with power facilities constructed and operated by the U.S. Army Corps of Engineers (Corps). These projects are located in the States of Arkansas, Missouri, Oklahoma and Texas. Southwestern's marketing area includes these states plus Kansas and Louisiana. Southwestern's Integrated System is comprised of 22 of these projects interconnected through Southwestern's transmission system and exchange agreements with other utilities. The other two projects (Sam Rayburn and Robert Douglas Willis) are not interconnected with Southwestern's Integrated System. Their power is marketed under contracts through which two customers purchase the entire power output of each of the projects at the dams.

Following DOE Order Number RA 6120.2, Southwestern's Administrator prepared a FY 2000 Current Power Repayment Study (PRS) using the existing Sam Rayburn Dam Project rate schedule. The Current PRS shows the cumulative amortization through FY 1999 at $12,795,065 on a total investment of $25,845,371. The FY 2000 Revised PRS indicates the need for an increase in annual revenues of $28,068, or 1.3 percent.

Southwestern generally defers, as a matter of practice, an indicated rate adjustment that falls within Southwestern's plus-or-minus two percent rate adjustment threshold. The threshold was developed to minimize Southwestern's cost while still maintaining adequate rates and is consistent with cost recovery criteria within DOE Order Number RA 6120.2 regarding rate adjustment plans. The Sam Rayburn Dam Project's FY 1999 (last year's) PRS concluded that the annual revenues needed to be increased by 0.2 percent. At that time, it was determined prudent to defer the increase in accordance with the established threshold and the current rate schedule was continued for one year. It once again seems prudent to defer this potential rate adjustment in accordance with Southwestern's rate adjustment threshold and re-evaluate the ability of the existing rate to provide sufficient revenues to satisfy costs projected in the FY 2001 (next year's) PRS.

The current rate schedule for the Sam Rayburn Dam Project was confirmed and approved by the FERC on a final basis on December 7, 1994, for a period that ended September 30, 1998. In accordance with 10 CFR 903.22(h) and 903.23(a)(3), the Deputy Secretary may extend existing rates on an interim basis beyond the period specified by the FERC.

As a result of the benefits of reduced Federal expense and rate stability obtained by a rate adjustment deferral, Southwestern's Administrator is proposing to extend the current Sam Rayburn Dam Project Rate Schedule. The schedule is to be effective for the one-year period beginning October 1, 2000, and extending through September 30, 2001.

Opportunity is presented for customers and interested parties to receive copies of the study data for the Sam Rayburn Dam Project. If you desire a copy of the Power Repayment Study data package for the Sam Rayburn Dam Project, please submit your request to: Mr. Forrest E. Reeves, Assistant Administrator, Office of Corporate Operations, P.O. Box 1619, Tulsa, OK 74101, call (918) 595-6696 or e-mail reeves@swpa.gov.

Following review of the written comments (absent any substantive reasons to do otherwise), the Administrator will submit the rate extension proposal for the Sam Rayburn Dam Project to the Deputy Secretary of Energy for confirmation and approval.