[Federal Register Volume 80, Number 246 (Wednesday, December 23, 2015)]
[Notices]
[Pages 79883-79885]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-32365]
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DEPARTMENT OF ENERGY
Southwestern Power Administration
Robert D. Willis Hydropower Project Power Rate
AGENCY: Southwestern Power Administration, DOE.
ACTION: Notice of rate order.
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SUMMARY: Pursuant to Delegation Order Nos. 00-037.00A, effective
October 25, 2013, and 00-001.00F, effective November 17, 2014, the
Deputy Secretary has approved and placed into effect on an interim
basis Rate Order No. SWPA-70, which increases the power rate for the
Robert D. Willis Hydropower Project (Willis) pursuant to the Willis
Rate Schedule (RDW-15) which supersedes the existing rate schedule.
DATES: The effective period for the rate schedule specified in Rate
Order No. SWPA-70 is January 1, 2016, through September 30, 2019.
FOR FURTHER INFORMATION CONTACT: Mr. Marshall Boyken, Senior Vice
President, Chief Operating Office, Southwestern Power Administration,
U.S. Department of Energy, Williams Center Tower I, One West Third
Street, Tulsa, Oklahoma 74103, (918) 595-6646,
[email protected].
SUPPLEMENTARY INFORMATION: Rate Order No. SWPA-70, which has been
approved and placed into effect on an interim basis, increases the
power rate for Willis pursuant to the following Rate Schedule:
Rate Schedule RDW-15, Wholesale Rates for Hydro Power and Energy
Sold to Sam Rayburn Municipal Power Agency (Contract No. DE-PM75-
85SW00117)
The rate schedule supersedes the existing rate schedule shown
below:
Rate Schedule RDW-14, Wholesale Rates for Hydro Power and Energy
Sold to Sam Rayburn Municipal Power Agency (Contract No. DE-PM75-
85SW00117) (superseded by RDW-15)
Southwestern Power Administration's (Southwestern) Administrator
has determined, based on the 2015 Willis Current Power Repayment Study
that the existing power rate will not satisfy cost recovery criteria
specified in Department of Energy Order No. RA 6120.2 and Section 5 of
the Flood Control Act of 1944. The finalized 2015 Willis Power
Repayment Studies indicate that an increase in annual revenue of
$101,340, or 8.6 percent, beginning January 1, 2016, will satisfy cost
recovery criteria for Willis. The proposed Willis rate schedule would
ultimately increase annual revenues from $1,181,496 to $1,282,836, to
recover increased costs associated with operations and maintenance as
well as increased costs for investments and replacements in the
hydroelectric generating facility and the associated increased interest
expense, with one half (4.3 percent) beginning January 1, 2016, and the
remaining one half (4.3 percent) beginning on January 1, 2017.
The Administrator has followed title 10, part 903 subpart A, of the
Code of Federal Regulations (10 CFR part 903), ``Procedures for Public
Participation in Power and Transmission Rate Adjustments and
Extensions'' in connection with the proposed rate schedule. On October
9, 2015, Southwestern published notice in the Federal Register, (80 FR
61205), of the proposed power rate increase for Willis. Southwestern
provided a 30-day comment period as an opportunity for customers and
other interested members of the public to review and comment on the
proposed power rate increase with written comments due by November 9,
2015. Southwestern did not hold the combined Public Information and
Comment Forum (Forum) because Southwestern did not receive any requests
to hold the Forum. One comment was received from Gillis, Borchardt and
Barthel LLP, on behalf of the Vinton Public Power Authority and the Sam
Rayburn Generation and Transmission Cooperative which stated they had
no objection to the proposed rate adjustment.
Information regarding this rate proposal, including studies and
other supporting material, is available for public review and comment
in the offices of Southwestern Power Administration, Williams Center
Tower I, One West Third Street, Tulsa, Oklahoma 74103. Following review
of Southwestern's proposal within the Department of Energy, I approved
Rate Order No. SWPA-70, on an interim basis, which ultimately increases
the existing Willis power rate to $1,282,836 per year for the period
January 1, 2016 through September 30, 2019.
Dated: December 17, 2015.
Elizabeth Sherwood-Randall,
Deputy Secretary.
DEPARTMENT OF ENERGY
DEPUTY SECRETARY OF ENERGY
In the matter of: Southwestern Power Administration, Robert D.
Willis Hydropower Project Power Rate
[[Page 79884]]
Rate Order No. SWPA-70
ORDER CONFIRMING, APPROVING AND PLACING INCREASED POWER RATE SCHEDULE
IN EFFECT 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, relating to the Southwestern
Power Administration (Southwestern) were transferred to and vested in
the Secretary of Energy. By Delegation Order No. 00-037.00A, the
Secretary of Energy delegated to the Administrator of Southwestern the
authority to develop power and transmission rates, delegated to the
Deputy Secretary of the Department of Energy the authority to confirm,
approve, and place in effect such rates on an interim basis and
delegated to the Federal Energy Regulatory Commission (FERC) the
authority to confirm and approve on a final basis or to disapprove
rates developed by the Administrator under the delegation. Pursuant to
that delegated authority, the Deputy Secretary issued this interim rate
order.
BACKGROUND
The Robert Douglas Willis Hydropower Project (Willis) (aka: Dam B
and later Town Bluff Dam), located on the Neches River in eastern Texas
downstream from the Sam Rayburn Dam, was originally constructed in 1951
by the U.S. Army Corps of Engineers (Corps) and provides stream flow
regulation of releases from the Sam Rayburn Dam. The Lower Neches
Valley Authority contributed funds toward construction of both projects
and makes established annual payments for the right to withdraw up to
2000 cubic feet of water per second from Willis for its own use. Power
was legislatively authorized at the project, but installation of
hydroelectric facilities was deferred until justified by economic
conditions. A determination of feasibility was made in a 1982 Corps
study. In 1983, the Sam Rayburn Municipal Power Agency (SRMPA) proposed
to sponsor and finance the development of hydropower at Willis in
return for the output of the project to be delivered to its member
municipalities and participating member cooperatives of the Sam Rayburn
Dam Electric Cooperative.
The Willis power rate excludes the costs associated with the
hydropower design and construction performed by the Corps, because all
funds for these costs were provided by SRMPA. Under the Southwestern/
SRMPA power sales Contract No. DE-PM75-85SW00117, SRMPA will continue
to pay all annual operating and maintenance costs, as well as expected
capital replacement costs, through the power rate paid to Southwestern,
and will receive all power and energy produced at the project for a
period of 50 years.
FERC confirmation and approval of the current Willis rate schedule
was provided in FERC Docket No. EF15-5-000 issued on June 3, 2015, (151
FERC ]62,156) effective for the period January 1, 2015, through
September 30, 2018.
DISCUSSION
Southwestern prepared a 2015 Current Power Repayment Study which
indicated that the existing power rate would not satisfy present
financial criteria regarding repayment of investment within a 50-year
period due to increased costs associated with Corps operations and
maintenance as well as increased costs for investments and replacements
in the hydroelectric generating facilities and the associated increased
interest expense. The 2015 Revised Power Repayment Study indicated the
need for an 8.6 percent revenue increase. These preliminary results,
which presented the basis for the proposed revenue increase, were
provided to the customers for their review prior to the formal process.
The 2015 Revised Power Repayment Study has been finalized and
indicates that an increase in annual revenues of $101,340 (8.6 percent)
is necessary beginning January 1, 2016, to accomplish repayment in the
required number of years. Accordingly, Southwestern has prepared a
proposed rate schedule based on the additional revenue requirement to
ensure repayment.
Southwestern conducted the rate adjustment proceeding in accordance
with title 10, part 903, subpart A of the Code of Federal Regulations
(10 CFR part 903), ``Procedures for Public Participation in Power and
Transmission Rate Adjustments and Extensions.'' More specifically,
opportunities for public review and comment during a 30-day period on
the proposed Willis power rate were announced by a Federal Register
notice published on October 9, 2015 (80 FR 61205), with written
comments due November 9, 2015. The combined Public Information and
Comment Forum scheduled for October 28, 2015, in Tulsa, Oklahoma was
not held because Southwestern did not receive any requests to hold the
forum. Southwestern provided the Federal Register notice, to the
customers and interested parties for review and comment during the
public comment period. In response to concerns expressed by
Southwestern's customers during their review of the preliminary results
of the 2015 Power Repayment Studies, Southwestern is increasing revenue
in two steps over a twelve month period. Because Southwestern's current
Willis power rate is sufficient to recover all average operation and
maintenance expenses during the next two years, the ability to meet
both annual and long-term repayment criteria is satisfied by increasing
revenues in steps over the period.
The first step of the rate increase, beginning January 1, 2016,
would incorporate one half of the required revenue increase ($50,670 or
4.3 percent). The second step of the rate increase, beginning January
1, 2017, and ending on September 30, 2019, would incorporate the
remaining one half of the revenue increase requirement ($50,670 or 4.3
percent). Southwestern will continue to perform its Power Repayment
Studies annually, and if the 2016 results should indicate the need for
additional revenues, another rate filing will be conducted and updated
revenue requirements implemented for Fiscal Year 2017 and thereafter.
Following the conclusion of the comment period on November 9, 2015,
Southwestern finalized the Power Repayment Studies and rate schedule
for the proposed annual rate of $1,282,836 which is the lowest possible
rate needed to satisfy repayment criteria. This rate represents an
annual increase of 8.6 percent. The Administrator made the decision to
submit the rate proposal for interim approval and implementation.
COMMENTS AND RESPONSES
Southwestern received one comment during the public comment period.
The comment on behalf of the Vinton Public Power Authority and the Sam
Rayburn Generation and Transmission Cooperative expressed no objection
to the proposed rate increase.
AVAILABILITY OF INFORMATION
Information regarding this power rate increase, including studies,
comments and other supporting material, is available for public review
in the offices of Southwestern Power Administration, One West Third
Street, Tulsa, OK 74103.
ADMINISTRATION'S CERTIFICATION
The 2015 Willis Revised Power Repayment Study indicates that the
increased power rate of $1,282,836 will repay all costs of the project
including
[[Page 79885]]
amortization of the power investment consistent with the provisions of
Department of Energy Order No. RA 6120.2. In accordance with Delegation
Order No. 00-037.00A (October 25, 2013), and Section 5 of the Flood
Control Act of 1944, the Administrator has determined that the proposed
Willis power rate is consistent with applicable law and is the lowest
possible rate to the customer consistent with sound business
principles.
ENVIRONMENT
The environmental impact of the power rate increase proposal was
evaluated in consideration of the Department of Energy's guidelines for
implementing the procedural provisions of the National Environmental
Policy Act and was determined to fall within the class of actions that
are categorically excluded from the requirements of preparing either an
Environmental Impact Statement or an Environmental Assessment (10 CFR
part 1021, App. B to subpart D, Sec. B1.1 ``Changing rates &
prices'').
ORDER
In view of the foregoing and pursuant to the authority delegated to
me by the Secretary of Energy, I hereby confirm, approve and place in
effect on an interim basis, effective January 1, 2016, through
September 30, 2019, the phased-in annual Willis power rate of
$1,282,836 for the sale of power and energy from Willis to the Sam
Rayburn Municipal Power Agency, under Contract No. DE-PM75-85SW00117,
as amended. This rate shall remain in effect on an interim basis
through September 30, 2019, or until the FERC confirms and approves the
rate on a final basis.
Dated: December 17, 2015
Dr. Elizabeth Sherwood-Randall,
Deputy Secretary
UNITED STATES DEPARTMENT OF ENERGY
SOUTHWESTERN POWER ADMINISTRATION
RATE SCHEDULE RDW-15 \1\
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\1\ Supersedes Rate Schedule RDW-14.
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WHOLESALE RATES FOR HYDRO POWER AND ENERGY SOLD TO SAM RAYBURN
MUNICIPAL POWER AGENCY
(CONTRACT NO. DE-PM75-85SW00117)
Effective:
During the period January 1, 2016, through September 30, 2019,
in accordance with interim approval from Rate Order No. SWPA-70
issued by the Deputy Secretary of Energy on December 17, 2015 and
pursuant to final approval by the Federal Energy Regulatory
Commission.
Applicable:
To the power and energy purchased by Sam Rayburn Municipal Power
Agency (SRMPA) from the Southwestern Power Administration
(Southwestern) under the terms and conditions of the Power Sales
Contract dated June 28, 1985, as amended, for the sale of all Hydro
Power and Energy generated at the Robert Douglas Willis Hydropower
Project (Robert D. Willis) (formerly designated as Town Bluff).
Character and Conditions of Service:
Three-phase, alternating current, delivered at approximately 60
Hertz, at the nominal voltage, at the point of delivery, and in such
quantities as are specified by contract.
1. Wholesale Rates, Terms, and Conditions for Hydro Power and Energy
1.1. These rates shall be applicable regardless of the quantity
of Hydro Power and Energy available or delivered to SRMPA; provided,
however, that if an Uncontrollable Force prevents utilization of
both of the project's power generating units for an entire billing
period, and if during such billing period water releases were being
made which otherwise would have been used to generate Hydro Power
and Energy, then Southwestern shall, upon request by SRMPA, suspend
billing for subsequent billing periods, until such time as at least
one of the project's generating units is again available.
1.2. The term ``Uncontrollable Force,'' as used herein, shall
mean any force which is not within the control of the party
affected, including, but not limited to, failure of water supply,
failure of facilities, flood, earthquake, storm, lightning, fire,
epidemic, riot, civil disturbance, labor disturbance, sabotage, war,
acts of war, terrorist acts, or restraint by court of general
jurisdiction, which by exercise of due diligence and foresight such
party could not reasonably have been expected to avoid.
1.3. Hydro Power Rates, Terms, and Conditions
1.3.1. Monthly Charge for the Period of January 1, 2016 through
December 31, 2016
$102,681 per month ($1,232,172 per year) for Robert D. Willis
Hydro Power and Energy purchased by SRMPA from January 1, 2016,
through December 31, 2016.
1.3.2. Monthly Charge for the Period of January 1, 2017 through
September 30, 2019
$106,903 per month ($1,282,836 per year) for Robert D. Willis
Hydro Power and Energy purchased by SRMPA from January 1, 2017,
through September 30, 2019.
[FR Doc. 2015-32365 Filed 12-22-15; 8:45 am]
BILLING CODE 6450-01-P