Sam Rayburn Dam Project Power Rate Extension on an Interim Basis

AGENCY:

Southwestern Power Administration, DOE.

ACTION:

Notice of Rate Order.

SUMMARY:

The Deputy Secretary of Energy, acting under the authorities as implemented in 10 CFR 903.22(h) and 903.23(a)(3), has approved and placed into effect on an interim basis Rate Order No. SWPA-42.

SUPPLEMENTARY INFORMATION:

Southwestern Power Administration (Southwestern) currently has marketing responsibility for 2.2 million kilowatts of power from 24 multiple-purpose reservoir projects, with power facilities constructed and operated by the U.S. Army Corps of Engineers, generally in all or portions of the states of Arkansas, Kansas, Louisiana, Missouri, Oklahoma and Texas. The Integrated System, comprised of 22 of the projects, is interconnected through a transmission system presently consisting of 138-kV and 161-kV high-voltage transmission lines, 69-kV transmission lines, and numerous bulk power substations and switching stations. In addition, contractual transmission arrangements provide for integration of other projects into the system.

The remaining two projects, Sam Rayburn Dam and Robert Douglas Willis, are isolated hydraulically and electrically from the Southwestern transmission system, and their power is marketed under separate contracts through which the customer purchases the entire power output of the project at the dam. A separate Power Repayment Study (PRS) is prepared for each isolated project.

The existing rate schedule for the Sam Rayburn Dam Project was confirmed and approved on a final basis by the Federal Energy Regulatory Commission (FERC) on December 7, 1994, for the period October 1, 1994, through September 30, 1998. The Deputy Secretary of Energy extended the existing rate schedule for a one year period, through September 30, 1999. On September 15, 1999, the Secretary of Energy again extended the existing rate schedule for a one year period, through September 30, 2000. The FY 2000 Sam Rayburn Dam Project PRS indicates the need for a rate adjustment of $28,068 annually, or 1.3 percent.

Pursuant to implementing authority in 10 CFR 903(h) and 903.23(a)(3), the Deputy Secretary of Energy may extend a FERC-approved rate on an interim basis. The Administrator, Southwestern, published notice in the Federal Register on June 26, 2000, 65 FR 39386, announcing a 30-day period for public review and comment concerning the proposed interim rate extension. Written comments were accepted through July 26, 2000. In a facsimile transmission dated July 24, 2000, a Sam Rayburn Dam Electric Cooperative (SRDEC) official stated that SRDEC has no objection to the proposed rate extension. No other comments were received.

Discussion

The existing Sam Rayburn Dam Project rate is based on the FY 1994 PRS. PRSs have been completed on the Sam Rayburn Dam Project each year since approval of the existing rate. Rate changes identified by the PRSs since that period have indicated the need for minimal rate increases or decreases. Since the revenue changes reflected by the PRSs were within the plus-or-minus two percent Rate Adjustment Threshold established by Southwestern's Administrator on June 23, 1987, these rate adjustments were deferred in the best interest of the government and provided for the next year's PRS to determine the appropriate level of revenues needed for the next rate period.

The FY 2000 PRS indicates the need for an annual revenue increase of 1.3 percent. As has been the case since the existing rate was approved, the FY 2000 rate adjustment falls within Southwestern's plus-or-minus two percent Rate Adjustment Threshold and would normally be deferred. However, the existing rate expires on September 30, 2000. Consequently, Southwestern proposes to extend the existing rate for a one-year period ending September 30, 2001, on an interim basis under the implementation authorities noted in 10 CFR 903.22(h) and 903.23(a)(3).

Southwestern continues to make significant progress toward repayment of the Federal investment in the Sam Rayburn Dam Project. Through FY 1999, cumulative amortization for the Sam Rayburn Dam Project was $12,795,065, which represents approximately 49 percent of the $25,845,371 Federal investment. The status has increased almost 34 percent since the existing rates were placed in effect.

Information regarding this rate extension, including studies and other supporting material, is available for public review and comment in the offices of Southwestern Power Administration, Suite 1400, One West Third Street, Tulsa, Oklahoma 74103.

Order

In view of the foregoing and pursuant to the authorities granted in 10 CFR Sections 903.22(h) and 903.23(a)(3), I hereby extend on an interim basis, for the period of one year, effective October 1, 2000, the current FERC-approved Sam Rayburn Dam Project Rate for the sale of power and energy.

In the matter of: Southwestern Power Administration—Sam Rayburn Dam Project Rate; Order Approving Extension of Power Rate on an Interim Basis

Pursuant to Sections 302(a) and 301(b) of the Department of Energy Organization Act, Public Law 95-91, 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, for the Southwestern Power Administration were transferred to and vested in the Secretary of Energy. By Delegation Order No. 0204-108, effective December 14, 1983, 48 FR 55664, the Secretary of Energy delegated to the Deputy Secretary of Energy on a non-exclusive basis the authority to confirm, approve and place into effect on an interim basis power and transmission rates, and delegated to the Federal Energy Regulatory Commission (FERC) on an exclusive basis the authority to confirm, approve and place in effect on a final basis, or to disapprove power and transmission rates. Amendment No. 1 to Delegation Order No. 0204-108, effective May 30, 1986, 51 FR 19744, revised the delegation of authority to confirm, approve and place into effect on an interim basis power and transmission rates by delegating such authority to the Under Secretary of Energy rather than the Deputy Secretary of Energy. This delegation was reassigned to the Deputy Secretary of Energy by Department of Energy (DOE) Notice 1110.29, dated October 27, 1988, and clarified by Secretary of Energy Notice SEN-10-89, dated August 3, 1989, and subsequent revisions.

By Amendment No. 2 to Delegation Order No. 0204-108, effective August 23, 1991, 56 FR 41835, the Secretary of the Department of Energy revised Delegation Order No. 0204-108 to delegate to the Assistant Secretary, Conservation and Renewable Energy, the authority which was previously delegated to the Deputy Secretary in that Delegation Order. By Amendment No. 3 to Delegation Order No. 0204-108, effective November 10, 1993, the Secretary of Energy re-delegated to the Deputy Secretary of Energy, the authority to confirm, approve and place into effect on an interim basis power and transmission rates of the Power Marketing Administrations. Thus, the Deputy Secretary of Energy now exercises interim rate approval authority for Southwestern's rates.

This is an interim rate extension. It is made pursuant to the authorities as implemented in 10 CFR 903.22(h) and 903.23(a)(3).

Background

Southwestern Power Administration (Southwestern) currently has marketing responsibility for 2.2 million kilowatts of power from 24 multiple-purpose reservoir projects, with power facilities constructed and operated by the U.S. Army Corps of Engineers, generally in all or portions of the states of Arkansas, Kansas, Louisiana, Missouri, Oklahoma and Texas. The Integrated System, comprised of 22 of the projects, is interconnected through a transmission system presently consisting of 138-kV and 161-kV high-voltage transmission lines, 69-kV transmission lines, and numerous bulk power substations and switching stations. In addition, contractual transmission arrangements provide for integration of other projects into the system.

The remaining two projects, Sam Rayburn Dam and Robert Douglas Willis, are isolated hydraulically and electrically from the Southwestern transmission system, and their power is marketed under separate contracts through which the customer purchases the entire power output of the project at the dam. A separate Power Repayment Study (PRS) is prepared for each isolated project.

The existing rate schedule for the Sam Rayburn Dam Project was confirmed and approved on a final basis by the Federal Energy Regulatory Commission (FERC) on December 7, 1994, for the period October 1, 1994, through September 30, 1998. The rate was extended on an interim basis by the Deputy Secretary of Energy, who had authority at that time pursuant to Delegation Order 0204-108, for a one year period, October 1, 1998, through September 30, 1999. The rate was again extended on an interim basis by the Secretary of Energy, pursuant to Delegation Order 0204-108, for a one year period, October 1, 1999, through September 30, 2000. The FY 2000 Sam Rayburn Dam Project PRS indicates the need for a rate adjustment of $28,068 annually, or 1.3 percent.

Pursuant to implementing authority in 10 CFR 903.22(h) and 903.23(a)(3), the Deputy Secretary of Energy may extend a FERC-approved rate on an interim basis. The Administrator, Southwestern, published notice in the Federal Register on June 26, 2000, 65 FR 39386, announcing a 30-day period for public review and comment concerning the proposed interim rate extension. In addition, an informal meeting was held with customer representatives in May 2000. Written comments were accepted through July 26, 2000. One comment was received. This comment stated no objection to the proposed interim extension.

Discussion

The existing Sam Rayburn Dam Project rate is based on the FY 1994 PRS. PRSs have been completed on the Sam Rayburn Dam Project each year since approval of the existing rate. Rate changes identified by the PRSs since that period have indicated the need for minimal rate increases or decreases. Since the revenue changes reflected by the PRSs were within the plus-or-minus two percent Rate Adjustment Threshold established by Southwestern's Administrator on June 23, 1987, these rate adjustments were deferred in the best interest of the government and provided for the next year's PRS to determine the appropriate level of revenues needed for the next rate period.

The FY 2000 PRS indicates the need for an annual revenue increase of $28,068 (1.3 percent). As has been the case since the existing rates were approved, the FY 2000 rate adjustment falls within Southwestern's plus-or-minus two percent Rate Adjustment Threshold and would normally be deferred. However, the existing rate expires on September 30, 2000. Consequently, Southwestern proposes to extend the existing rate for a one-year period ending September 30, 2001, on an interim basis under the implementation authorities noted in 10 CFR 903.22(h) and 903.23(a)(3).

Southwestern continues to make significant progress toward repayment of the Federal investment in the Sam Rayburn Dam Project. Through FY 1999, cumulative amortization for the Sam Rayburn Dam Project was $12,795,065, which represents approximately 49 percent of the $25,845,371 Federal investment for the Sam Rayburn Dam Project. The cumulative amortization has increased almost 34 percent since the existing rate was placed in effect.

Information regarding this rate extension, including studies and other supporting material, is available for public review and comment in the offices of Southwestern Power Administration, One West Third Street, Tulsa, Oklahoma 74101.

Order

In view of the foregoing and pursuant to the authority delegated to me in 10 CFR 903, I hereby extend on an interim basis, for the period of one year, effective October 1, 2000, the current FERC-approved Sam Rayburn Dam Project rate for the sale of power and energy.