Washoe Project, Stampede Division-Rate Order No. WAPA-93

AGENCY:

Western Area Power Administration, DOE.

ACTION:

Notice of rate order.

SUMMARY:

The Deputy Secretary of the Department of Energy (DOE) has confirmed and approved Rate Order No. WAPA-93 and Rate Schedule SNF-5 placing into effect provisional nonfirm energy rates for the Washoe Project, Stampede Division (Stampede), of the Western Area Power Administration (Western). The provisional rates will be in effect for an interim basis until the Federal Energy Regulatory Commission (FERC) confirms, approves, and places them into effect on a final basis or until they are replaced by other rates. The provisional rates will provide sufficient revenue to pay all annual costs, including interest expense, and repay the power investment in the allowable period.

DATES:

The provisional rates will be effective from October 1, 2000, and continue on an interim basis until FERC confirms, approves, and places the rate schedule into effect on a final basis for 5 years ending September 30, 2005, or until the rate schedule is superseded.

FOR FURTHER INFORMATION CONTACT:

Ms. Debbie Dietz, Rates Manager, Sierra Nevada Customer Service Region, Western Area Power Administration, 114 Parkshore Drive, Folsom, California 95630-4710, (916) 353-4453, e-mail ddietz@wapa.gov.

SUPPLEMENTARY INFORMATION:

The Deputy Secretary of Energy approved the existing Rate Schedule SNF-4 for Stampede nonfirm energy on September 29, 1995 (Rate Order No. WAPA-67, 60 FR 53785, October 17, 1995). FERC confirmed and approved the rate schedule on March 31, 1997, under FERC Docket No. EF96-5161-000 (78 FERC ¶ 61364). The existing Rate Schedule is effective from October 1, 1995, through September 30, 2000, and is being superseded by Rate Schedule SNF-5.

To serve project use loads and market the energy from Stampede, Western's contract with Sierra Pacific Resources (Sierra) provides for the Stampede Energy Exchange Account (SEEA). SEEA is an annual energy exchange account for Stampede energy. Under this contract, Sierra accepts delivery of all energy generated from Stampede into Sierra's electrical system. The dollar value of the Stampede energy received by Sierra during any month is credited into the SEEA at the provisional floor rate. Western uses the SEEA to benefit project use facilities, market energy from Stampede to preference entities over Sierra's transmission system, and sell a portion of the energy to Sierra. As long as Western has a balance in the SEEA, Western and Sierra agree to do any combination of the above transactions in any month. After project use requirements have been met, available nonfirm energy is sold to Sierra at the provisional floor rate or to other entities, giving priority to preference customers, at a rate not greater than the provisional ceiling rate but no lower than the provisional floor rate. Beginning January 1, 2005, energy available after meeting project use requirements will be sold to the Central Valley Project (CVP) at the provisional ceiling rate, as provided in the CVP 2004 Marketing Plan. The formula for the provisional floor rate is equal to 85 percent of the then effective, nontime differentiated rate provided in Sierra's California Quarterly Short-Term Purchase Price Schedule for as-available purchases from qualifying facilities with capacities of 100 kilowatts (kW) or less. This provisional floor rate is used to calculate the value of the SEEA for the benefit of project use facilities. Western applied the ratio of the projected costs for project use service to the projected revenue from Stampede generation recorded in the SEEA, to the projected power costs to calculate the nonreimbursable costs. The reimbursable costs are reduced by revenues from sales made at less than the ceiling rate. The remaining reimbursable costs and the estimated energy remaining after meeting project use service were used to calculate the ceiling rate necessary to repay Stampede costs.

Under Rate Schedule SNF-5, the provisional nonfirm energy rate is 17.89 mills per kilowatthour (mills/kWh) for the floor rate and 90.07 mills/kWh for the ceiling rate. This table compares existing and provisional rates.

Provisional Rates for Stampede Nonfirm Energy

Provisional rates for the sale of Stampede nonfirm energy consist of floor and ceiling rates and are designed to recover an annual revenue requirement including investment repayment, interest, project use costs, and operation and maintenance expenses. A power repayment study indicates the provisional ceiling rate provides sufficient revenue to repay all annual costs, including interest expense, and the investment in the allowable period. Other analyses indicate the provisional floor rate provides sufficient revenue to pay annual operation and maintenance expenses.

The provisional rates for Stampede nonfirm energy are developed under the Department of Energy Organization Act (42 U.S.C. 7101-7352), through which the power marketing functions of the Secretary of the Interior and the Bureau of Reclamation under the Reclamation Act of 1902 (ch. 1093, 32 Stat. 388), as amended and supplemented by subsequent enactments, 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, were transferred to and vested in the Secretary of Energy.

By Amendment No. 3 to Delegation Order No. 0204-108, published November 10, 1993 (58 FR 59716), the Secretary of Energy delegated (1) the authority to develop long-term power and transmission rates on a nonexclusive basis to Western's Administrator; and (2) the authority to confirm, approve, and place into effect on a final basis, to remand, or to disapprove such rates to FERC. In Delegation Order No. 0204-172, effective November 24, 1999, the Secretary of Energy delegated the authority to confirm, approve, and place such rates into effect on an interim basis to the Deputy Secretary.

Western followed the DOE procedures for Public Participation in Power and Transmission Rate Adjustments and Extensions, 10 CFR part 903, in developing these provisional rates.

Rate Order No. WAPA-93, confirming, approving, and placing the proposed Stampede nonfirm energy rates into effect on an interim basis, is issued. The new Rate Schedule SNR-5 will be submitted promptly to FERC for confirmation and approval on a final basis.

Order Confirming, Approving, and Placing the Washoe Project, Stampede Division Nonfirm Power Service Rates Into Effect on an Interim Basis

These rates are developed under the Department of Energy Organization Act (42 U.S.C. 7101-7352), through which the power marketing functions of the Secretary of the Interior and the Bureau of Reclamation under the Reclamation Act of 1902 (ch. 1093, 32 Stat. 388), as amended and supplemented by subsequent enactments, particularly section 9(c) of the Reclamation Project Act of 1939 (43 U.S.C. 485h(c)), and other acts specifically applicable to the project involved, were transferred to and vested in the Secretary of Energy (Secretary).

By Amendment No. 3 to Delegation Order No. 0204-108, published November 10, 1993 (58 FR 59716), the Secretary delegated (1) the authority to develop long-term power and transmission rates on a nonexclusive basis to Western's Administrator; and (2) the authority to confirm, approve, and place into effect on a final basis, to remand, or to disapprove such rates to the Federal Energy Regulatory Commission (FERC). In Delegation Order No. 0204-172, effective November 24, 1999, the Secretary delegated the authority to confirm, approve, and place such rates into effect on an interim basis to the Deputy Secretary. Existing DOE procedures for public participation in power rate adjustments are found in 10 CFR part 903. Procedures for approving Power Marketing Administration rates by FERC are found in 18 CFR part 300.

Acronyms and Definitions

As used in this rate order, the following acronyms and definitions apply:

Administrator: The Administrator of the Western Area Power Administration (Western).

CVP: Central Valley Project.

Customer: An entity with a contract and receiving service from Western's Sierra Nevada Region.

DOE: United States Department of Energy.

DOE Order RA 6120.2: An order dealing with power marketing administration financial reporting and rate-making procedures.

Energy: Measured in terms of the work it is capable of doing over a period of time. It is expressed in kWh.

Energy Rate: The rate which sets forth the charges for energy. It is expressed in mills/kWh and applied to each kWh delivered to each customer.

FERC: Federal Energy Regulatory Commission.

FY: Fiscal year; October 1 to September 30.

Interior: United States Department of the Interior.

kV: Kilovolt. The electrical unit of measure of electric potential that equals 1,000 volts.

kW: Kilowatt. The electrical unit of capacity that equals 1,000 watts.

kWh: Kilowatthour. The electrical unit of energy that equals 1,000 watts in 1 hour.

Mill: A monetary denomination of the United States that equals one tenth of a cent or one thousandth of a dollar.

Mills/kWh: Mills per kilowatthour. The unit of charge for energy.

MW: Megawatt. The electrical unit of capacity that equals 1 million watts or 1,000 kilowatts.

NEPA: National Environmental Policy Act of 1969 (42 U.S.C. 4321, et seq.).

Net Revenue: Revenue remaining after paying all annual expenses.

Nonfirm: A type of product and/or service that is not always available at the time requested by the customer.

O&M: Operation and maintenance.

Power: Capacity and energy.

Preference: The requirements of Reclamation Law which provide that preference in the sale of Federal power must be given to municipalities and other public corporations or agencies and also to cooperatives and other nonprofit organizations financed in whole or in part by loans under the Rural Electrification Act of 1936 (Reclamation Project Act of 1939, section 9(c), 43 U.S.C. 485h(c)).

Project Use: Power used to operate the Lahontan National Fish Hatchery and the Marble Bluff Fish Facility, which are project use loads of the Washoe Project.

Provisional Rates: Rate schedules which have been confirmed, approved, and placed in effect on an interim basis by the Deputy Secretary of DOE.

PRS: Power repayment study.

Rate Brochure: A document prepared for public distribution explaining the rationale and background of the rate proposal contained in this rate order dated March 2000.

Reclamation: United States Department of the Interior, Bureau of Reclamation.

Reclamation Law: A series of Federal laws. Viewed as a whole, these laws create the originating framework in which Western markets power.

Revenue Requirement: The revenue required to recover the reimbursable portion of O&M expenses, project use costs, interest, deferred expenses, and repayment of Federal investment within the allowable period.

Secretary: Secretary of Energy.

SEEA: Stampede Energy Exchange Account.

Sierra: Sierra Pacific Resources, formally known as the Sierra Pacific Power Company.

Sierra Nevada Region: The Sierra Nevada Customer Service Region of Western.

Stampede: Power system of Washoe Project, Stampede Division.

Washoe Project: A Federal water project in the Lahontan Basin in west-central Nevada and east-central California.

Western: United States Department of Energy, Western Area Power Administration.

Effective Date

The provisional rates will take effect on the first day of the first full billing period beginning on or after October 1, 2000. They will be in effect pending FERC's approval of them or substitute rates on a final basis through September 30, 2005, or until superseded.

Public Notice and Comment

Western followed the DOE Procedures for Public Participation in Power and Transmission Rate Adjustments and Extensions, 10 CFR part 903, in developing these rates. Stampede is a power system which has annual sales of less than 100 million kWh and an installed capacity of less than 20,000 kW; therefore, this rate adjustment constitutes a minor rate adjustment as defined in 10 CFR part 903.2(f). Since this is a minor rate adjustment, no public meetings were scheduled; however, Western accepted comments from interested parties. Western took these steps to ensure involvement of interested parties in the rate process:

1. Published a Federal Register notice on March 28, 2000 (65 FR 16390), officially announcing the proposed nonfirm power rate adjustment and initiating the public consultation and comment period.

2. Mailed letters on April 3, 2000, to all Washoe customers and interested parties transmitting the Federal Register notice of March 28, 2000, and announcing the beginning of the consultation and comment period.

3. Made a rate brochure available to all interested parties upon request in March 2000.

4. Ended the comment period on April 27, 2000.

Project Description

The Stampede Dam and Reservoir are on the Little Truckee River about 8 miles above the junction of the Little Truckee and Truckee Rivers. The dam and reservoir are in Sierra County, California, about 11 miles northeast of the town of Truckee. The water source for the Stampede Reservoir is the Little Truckee River drainage basin containing about 136 square miles of densely wooded slopes and grass meadowlands.

When the Stampede Dam and Reservoir project was authorized in 1956, hydroelectric power development was included. However, power facilities were not constructed at the time the Stampede Dam was built during 1966-1970, because the power function was not economically justified. Nevertheless, provisions were made to facilitate the addition of power facilities at a later date.

Subsequently, preliminary reevaluation of a powerplant at Stampede was conducted and published in a special Reclamation report, Adding Powerplants at Existing Federal Dams in California (July 1976). In the report, Reclamation recommended construction of a Stampede powerplant. As a result, definite plan studies were initiated in FY 1977, and construction of the powerplant was completed in 1987. A one-half mile 60-kV transmission line interconnects the Stampede power facilities with Sierra's transmission system.

The Stampede Dam and Reservoir are operated for four specific purposes; flood control, fisheries enhancement, recreation, and power generation. The powerplant is a 3.65 MW generator, and provides about 11 million kWh annually. The energy generated by the powerplant has a priority reservation for designated project use loads. All remaining energy generation is sold on a nonfirm basis, giving priority to preference entities. Energy generated at Stampede depends on the run of the river and is nonfirm.

Power Repayment Study

Western prepares a PRS each FY to determine if power revenues will be sufficient to pay the revenue requirement in the prescribed time periods. Repayment criteria are based on law, policies, and authorizing legislation.

Existing and Provisional Rates

The provisional rates for nonfirm energy sales from Stampede consist of floor and ceiling rates and are designed to recover the revenue requirement. The formula for the provisional floor rate is equal to 85 percent of the then effective, nontime differentiated rate provided in Sierra's California Quarterly Short-Term Purchase Price Schedule for as-available purchases from qualifying facilities with capacities of 100 kW or less. This table compares existing and provisional rates.

Certification of Rates

Western's Administrator certified that the Stampede nonfirm power rates placed into effect on an interim basis are the lowest possible rates consistent with sound business principles. The provisional rates were developed under administrative policies and applicable laws.

Discussion

To serve project use loads and market the energy from Stampede, Western's contract with Sierra provides for the SEEA. The SEEA is an annual energy exchange account for Stampede energy. Under this contract, Sierra accepts delivery of all energy generated from Stampede into Sierra's electrical system. The dollar value of the Stampede energy received by Sierra during any month is credited into the SEEA at the provisional floor rate. Western uses the SEEA to benefit project use facilities, market energy from Stampede to preference entities over Sierra's transmission system, and sell a portion of the energy to Sierra. As long as Western has a balance in the SEEA, Western and Sierra agree to do any combination of the above transactions in any month.

After meeting project use power requirements, the remaining energy available through the SEEA is sold to Sierra at the provisional floor rate or to other entities, giving priority to preference customers, at a rate not greater than the provisional ceiling rate but no lower than the provisional floor rate. Beginning January 1, 2005, energy available after meeting project use requirements will be sold to the CVP at the provisional ceiling rate, as provided in the CVP 2004 Marketing Plan.

The formula for the provisional floor rate is equal to 85 percent of the then effective, nontime differentiated rate provided in Sierra's California Quarterly Short-Term Purchase Price Schedule for as-available purchases from qualifying facilities with capacities of 100 kW or less. This provisional floor rate is used to calculate the value of the SEEA for the benefit of project use facilities. Western applied the ratio of the projected costs for project use service to the projected revenue from Stampede generation recorded in the SEEA, to the projected power costs to calculate the nonreimbursable costs. The reimbursable costs are reduced by revenues from sales made at less than the ceiling rate. The remaining reimbursable costs and the estimated energy remaining after meeting project use service were used to calculate the ceiling rate necessary to repay Stampede costs.

Statement of Revenue and Related Expenses

This table shows a summary of revenue and expense data through the 5-year cost evaluation period.

This table shows a summary of the average annual revenues and expenses for the 5-year cost evaluation period.

Basis for Rate Development

The existing rates for Stampede nonfirm power in Rate Schedule SNF-4 expire on September 30, 2000. The provisional power rates will produce sufficient revenue to pay the revenue requirement. The provisional rates take effect on October 1, 2000, to correspond with the start of the FY and remain in effect through September 30, 2005.

Comments

During the 30-day comment period, Western did not receive any written comments either requesting information or commenting on the rate adjustment.

Environmental Compliance

In compliance with the NEPA of 1969, 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 determined this action is categorically excluded from the preparation of 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. This notice is not required to be cleared by the Office of Management and Budget.

Regulatory Flexibility Analysis

The Regulatory Flexibility Act of 1980 (5 U.S.C. 601, et seq.) requires Federal agencies to do 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. Western has determined 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.

Small Business Regulatory Enforcement Fairness Act

Western determined 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.

Availability of Information

Information about this rate adjustment, including PRSs, letters, memorandums, and other supporting material made or kept by Western used to develop the provisional rates, is available for public review. This information is in the Power Marketing Manager's office, Sierra Nevada Customer Service Region, Western Area Power Administration, 114 Parkshore Drive, Folsom, California.

Submission to the Federal Energy Regulatory Commission

The provisional rates herein confirmed, approved, and placed into effect, together with supporting documents, will be submitted to FERC for confirmation and final approval.

Order

In view of the foregoing and under the authority delegated to me by the Secretary of Energy, I confirm and approve on an interim basis, effective October 1, 2000, Rate Schedule SNF-5 for the Washoe Project, Stampede Division, for the Western Area Power Administration. The rate schedule will remain in effect on an interim basis, pending FERC confirmation and approval of it or substitute rates on a final basis through September 30, 2005.

Dated: August 22, 2000.

T.J. Glauthier,

Deputy Secretary of Energy.

Rate Schedule for Nonfirm Power Service

Effective: The first day of the first full billing period beginning on or after October 1, 2000, through September 30, 2005.

Available: In the area served by the Stampede Division.

Applicable: To power customers for general power service.

Character and Conditions of Service: Alternating current, 60-hertz, three-phase, delivered and metered at the voltages and points established by the contract.

Demand Charge: None.

Energy Charge: There is a floor and ceiling rate for nonfirm energy sales from Stampede. The floor rate is 85 percent of the then effective, nontime differentiated rate as provided in Sierra Pacific Power Company's California Quarterly Short-Term Purchase Price Schedule for as-available purchases from qualifying facilities with capacities of 100 kW or less. The ceiling rate is calculated by dividing the revenue requirement needed to repay all annual reimbursable power costs (less any revenue for sales made at less than the ceiling rate) by the nonfirm energy remaining after providing project use service. The ceiling rate will be calculated and customers told of changes in the ceiling rate by April 1 each year. Sales of nonfirm energy will be made at the floor or ceiling rates or at a rate between the floor and ceiling rates.

Adjustments: Stampede energy will be adjusted for losses and delivered at Donner Summit Metering Station, Gonder Substation, or another point of delivery on Sierra Pacific Power Company's system.