FR Doc E6-110

[Federal Register: January 10, 2006 (Volume 71, Number 6)]
[Notices]
[Page 1533-1538]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr10ja06-32]

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DEPARTMENT OF ENERGY

Western Area Power Administration

Central Arizona Project--Rate Order No. WAPA-124

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of order concerning transmission service rates.

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SUMMARY: The Deputy Secretary of Energy confirmed and approved Rate
Order No. WAPA-124 and Rate Schedules CAP-FT2, CAP-NFT2, and CAP-NITS2,
placing transmission rates from the Central Arizona Project (CAP) of
the Western Area Power Administration (Western) into effect on an
interim basis. The provisional rates will be in effect until the
Federal Energy Regulatory Commission (Commission) 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 repayment of
power investment, within the allowable periods.

DATES: Rate Schedules CAP-FT2, CAP-NFT2, and CAP-NITS2 will be placed
into effect on an interim basis on the first day of the first full
billing period beginning on or after January 1, 2006, and will be in
effect until the Commission confirms, approves, and places the rate
schedules in effect on a final basis through December 31, 2010, or
until the rate schedules are superseded.

FOR FURTHER INFORMATION CONTACT: Mr. J. Tyler Carlson, Regional
Manager, Desert Southwest Customer Service Region, Western Area Power
Administration, P.O. Box 6457, Phoenix, AZ 85005-6457, (602) 605-7348,
e-mail carlson@wapa.gov, or Mr. Jack D. Murray, Rates Team Lead, Desert
Southwest Customer Service Region, Western Area Power Administration,
P.O. Box 6457, Phoenix, AZ 85005-6457, (602) 605-2442, e-mail
jmurray@wapa.gov.

SUPPLEMENTARY INFORMATION: The Deputy Secretary of Energy approved Rate
Schedules CAP-FT1, CAP-NFT1, and CAP-NITS1 for transmission service on
December 11, 2000 (Rate Order No. WAPA-88, 65 FR 77368, December 11,
2000). The Commission confirmed and approved the rate schedules on July
31, 2001, in FERC Docket No. EF01-5111-000. The existing rate schedules
CAP-FT1, CAP-NFT1, and CAP-NITS1 are effective from January 1, 2001,
through December 31, 2005.
The existing rate schedules are being superseded by rate schedules
CAP-FT2, CAP-NFT2, and CAP-NITS2. The provisional formula rates for
point-to-point transmission service and Network Integration
Transmission Service (NITS) on the CAP 115kV and 230-kV transmission
lines are based on the calculation of a revenue requirement that
recovers the CAP 115kV and 230-kV transmission lines costs for
facilities associated with providing transmission service and the non-
facilities costs allocated to transmission service. These rate formulas
include costs for scheduling, system control, and dispatch service. The
provisional 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 5-year period FY 2006-FY 2010.
The revised formula rates reflect a 2.87-percent decrease for 2006
when compared to the existing CAP transmission rates, which expire
December 31, 2005. The decrease in the firm point-to-point rate is the
result of increased transmission reservations combined with relatively
stable expenses since the approval of Rate Order WAPA-88.
Implementation of the revised formula rates will result in a firm
transmission service rate of $9.55 per kilowattyear for 2006.
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

[[Page 1534]]

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.
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 DOE procedures for
public participation in power rate adjustments (10 CFR part 903) were
published on September 18, 1985.
Under Delegation Order Nos. 00-037.00 and 00-001.00B, and in
compliance with 10 CFR part 903, and 18 CFR part 300, I hereby confirm,
approve, and place Rate Order No. WAPA-124, the proposed formula rate
for CAP transmission, into effect on an interim basis. The new Rate
Schedules CAP-FT2, CAP-NFT2, and CAP-NITS2, will be promptly submitted
to the Commission for confirmation and approval on a final basis.

Dated: December 23, 2005.
Clay Sell,
Deputy Secretary.

DEPARTMENT OF ENERGY

Deputy Secretary

[Rate Order No. WAPA-124]

In the Matter of: Western Area Power Administration Rate Adjustment for
the Central Arizona Project. Order Confirming, Approving, and Placing
the Central Arizona Project Transmission Service Rates Into Effect on
an Interim Basis

This rate was established in accordance with section 302 of the
Department of Energy (DOE) Organization Act (42 U.S.C. 7152). This
Act transferred to and vested in the Secretary of Energy the power
marketing functions of the Secretary of the Department 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 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 DOE procedures for public participation in power rate
adjustments (10 CFR part 903) were published on September 18, 1985.

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).
BATO: Balancing Authority and Transmission Operations area.
Formerly referred to as a Control Area.
Capacity: The electric capability of a generator, transformer,
transmission circuit, or other equipment. It is expressed in kW.
CAP: Central Arizona Project, one of three related water
development projects that make up the Colorado River Basin Project.
Commission: Federal Energy Regulatory Commission.
CROD: Contract rate of delivery. The maximum amount of capacity
made available to a customer for a period specified under a contract
or service agreement.
Customer: An entity with a contract [BF8] or service agreement
that is receiving service from Western's Desert Southwest Region.
CY: Calendar year; January 1 through December 31.
DOE: United States Department of Energy.
DOE Order RA 6120.2: An order dealing with power marketing
administration financial reporting and ratemaking procedures.
Energy: Measured in terms of the work it is capable of doing
over a period of time. It is expressed in kilowatthours.
FERC: The Commission (to be used when referencing Commission
Orders).
Firm: A type of product and/or service available at the time
requested by the customer.
Formula Rates: A rate which is based upon a formula calculated
yearly.
FY: Fiscal year; October 1 to September 30.
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.
kWmonth: Kilowattmonth--the electrical unit of the monthly
amount of capacity.
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.
NEPA: National Environmental Policy Act of 1969 (42 U.S.C. 4321,
et seq.).
NITS: Network Integration Transmission Service.
Non-firm: A type of product and/or service not always available
at the time requested by the customer.
O&M: Operation and Maintenance.
Power: Capacity and energy.
Reclamation: United States Department of the Interior, Bureau of
Reclamation.
Revenue Requirement: The revenue required to recover annual
expenses (such as O&M, transmission service expenses, interest,
deferred expenses) and repayment of Federal investments, and other
assigned costs.
SCADA: Supervisory Control and Data Acquisition.
WALC: Western Area Lower Colorado BATO, operated by Desert
Southwest Region.
Western: United States Department of Energy, Western Area Power
Administration.

Effective Date

The new interim rates will take effect on the first day of the
first full billing period beginning on or after January 1, 2006, and
will remain in effect until December 31, 2010, pending approval by
the Commission on a final basis.

Public Notice and Comment

Western followed the Procedures for Public Participation in
Power and Transmission Rate Adjustments and Extensions, 10 CFR part
903, in developing these rates. The steps Western took to involve
interested parties in the rate process were:
1. On June 22, 2005, Western mailed a notice announcing an
informal meeting, which was held July 12, 2005. At this informal
meeting, Western explained the rationale for the rate adjustment,
presented rate designs and methodologies, and answered questions.
2. A Federal Register notice published on July 1, 2005 (70 FR
38130), announced the proposed rates for the Central Arizona
Project, began a public consultation and comment period, and
announced the public information and public comment forums.
3. On July 18, 2005, Western's Desert Southwest Region mailed
letters to all the Central Arizona Project customers and interested
parties transmitting the Brochure for Proposed Rates and the Federal
Register notice published on July 1, 2005.
4. On July 21, 2005, Western mailed data to the Central Arizona
Project customers and interested parties, in response to customers'
data request at the informal customer meeting.
5. On July 22, 2005, beginning at 10 a.m., Western held a public
information forum at the Desert Southwest Regional office in
Phoenix, Arizona. Western provided detailed explanations of the
proposed rates for CAP, and a list of issues that could affect the
proposed rates. Western also answered questions, provided rate
brochures, supporting documentation, and informational handouts.
6. On August 22, 2005, beginning at 1 p.m., Western held a
comment forum to give the public an opportunity to comment for the
record. There were no comments at this forum.
7. Western received one comment letter during the consultation
and comment period, which ended September 29, 2005. All formally
submitted comments have been considered in preparing this Rate
Order.

Comments

Written comments were received from the following organizations:
Central Arizona Water Conservation District.

Project Description

The CAP was authorized by passage of the Colorado River Basin
Project Act (Act of September 30, 1968, Pub. L. 90-537, 82 Stat.
885) for the purposes of furnishing irrigation

[[Page 1535]]

water and municipal water supplies to the water-deficient areas of
Arizona and western New Mexico through direct diversion or exchange
of water, conservation and development of fish and wildlife
resources, enhancement of recreation opportunities, and for other
purposes.
The Secretary of the Interior was directed to construct, operate
and maintain the CAP, consisting of the following principal works:
(1) A system of main conduits and canals, including a main canal and
pumping plants for diverting and carrying water; (2) water storage
facilities and power-pumping plants; (3) aqueducts and pumping
plants; (4) related canals, regulating facilities, hydroelectric
power plants, and electrical transmission facilities required for
the operation of said principal works; (5) related water
distribution and drainage works; and (6) appurtenant works.
The Colorado River Basin Project Act also authorized Federal
participation with non-Federal interests for construction,
operation, and maintenance of a thermal generating power plant
(Navajo Generating Station or NGS) whereby the United States
acquired the rights to plant capacity, including the delivery of
power and energy over appurtenant transmission facilities to
mutually agreed upon delivery points, as the Secretary of the
Interior determines is required to provide pumping power for the
CAP.
When not required for the CAP, the NGS power and energy may be
disposed of by the Secretary of the Interior for other purposes at
such prices the Secretary determines, including its marketing in
conjunction with the sale of power and energy from Federal power
plants in the Colorado River system, so as to produce the greatest
practicable amount of power and energy that can be sold at firm
power and energy rates.
On August 4, 1977, the Department of Energy Organization Act
(Pub. L. 95-91, 91 Stat. 565; 42 U.S.C. 7101) was signed into law,
establishing the DOE. Section 302(a)(3) of the Act created Western
within DOE. Section 302(a)(1)(E) transferred the power marketing
functions of the Bureau of Reclamation, including the construction,
operation, and maintenance of transmission lines and attendant
facilities to the DOE.

Transmission Rate Methodology Study

Western prepared a transmission rate methodology study to ensure
that transmission service rates are adequate to recover the costs
associated with providing transmission service on the CAP 115/230-kV
transmission system. The design includes all transmission expenses
and associated offsetting revenues.
Western reviews the CAP rate design each year to determine if
revenues will be sufficient to repay, within the required time, all
costs assigned to the Central Arizona Project revenues. Repayment
criteria are based on law, policies including DOE Order RA 6120.2,
and authorizing legislation.
The revised firm transmission rate for CAP firm transmission
reflects an overall rate decrease of approximately 2.87 percent for
2006 when compared to the existing CAP firm transmission rate in
Rate Schedule CAP-FT1.

Comparison of Current and Provisional Firm Transmission Rate
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Proposed formula rates
Type of service Existing rates 115/230-kV 115/230-kV system 1/1/ Percent change
system 2006
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Firm Transmission Service.............. $9.83/kW/year............ $9.55/kW/year............ (2.87%)
Nonfirm Transmission Service........... 1.12 mills/kWh........... 1.09 mills/kWh........... (2.87%)
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Western's revised rate formula will be used to calculate rates
annually for all current and future CAP transmission service. The
current CAP transmission rate formula became effective on January 1,
2001. The current CAP rate under WAPA Rate Order No. 88 will expire
December 31, 2005. The revised transmission rate formula is expected
to be effective January 1, 2006, through December 31, 2010. These
rate formulas include costs for scheduling, system control, and
dispatch service.
The methodology is an annual formula that will divide the
average annual transmission revenue requirement by the average
annual transmission reservations to determine the rate for firm
point-to-point transmission service. The annual transmission revenue
requirement includes O&M expenses, administrative and general
expenses, investment costs, and interest expense. This revenue
requirement is offset by any CAP transmission system revenue
credits, such as revenue from non-firm or short-term sales, to
determine the net revenue requirement.

Firm Point-to-Point

Western seeks approval of the rate design formula to calculate
the transmission rate to be applied annually. Using this formula,
the provisional rate for firm CAP transmission service is $9.55 per
kW-year for 2006, a 2.87-percent decrease from the existing
transmission rate of $9.83 per kW-year, which became effective
January 1, 2001. The decrease is due to transmission capacity
reservations increasing more rapidly than increases in total annual
costs. The rate formula is calculated annually, using the most
recent 5-year projections of total expenses and revenues. If needed,
a revised rate will become effective each January 1. The proposed
rate formula would be effective January 1, 2006, through December
31, 2010.
The cost/kW-year is calculated using the following two-step
formula:

[GRAPHIC] [TIFF OMITTED] TN10JA06.000

Where:

ARR = Annual Revenue Requirement. The costs associated with
facilities that support the transfer capability of the CAP
transmission system, excluding generation facilities. These costs
include investment costs, interest expense, administrative and
general expenses, and operation and maintenance expense. The revenue
requirement for CAP is based on projected average costs for the
upcoming 5-year rate-setting period.
TRC = Transmission Revenue Credits. The revenues generated by the
CAP transmission system not related to the revenues from the sale of
long-term firm transmission.
NARR = Net Annual Transmission Revenue Requirement. The Annual
Revenue Requirement minus Transmission Revenue Credits.
TSTL = CAP Transmission System Total Load. The sum of the total
average CAP transmission capacity under long-term reservation,
including the total network integration loads at system peak for the
upcoming 5-year rate-setting period.

Nonfirm Point-to-Point

The proposed rate for nonfirm point-to-point CAP transmission
service is a mills/kWh rate, based upon the current firm point-to-
point rate and may be discounted. This rate will remain in effect
for the same period as the firm point-to-point rate and will also be
reviewed annually. The provisional rate for CAP non-firm
transmission service is based on the current CAP firm point-to-point
transmission rate. The provisional rate is expressed in mills/kWh
and is a maximum of 1.09 mills/kWh for 2006. Transmission
availability will be posted on Western's OASIS.

Network Integration Transmission Service

The proposed rate for network transmission is a formula
calculation based upon the annual transmission revenue requirement.
There are no changes to the existing network integration
transmission service formula under Rate Schedule CAP-NITS2.
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

[[Page 1536]]

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 revenue requirement includes the costs for
scheduling, system control, and dispatch service. The reactive
supply and voltage control ancillary service must be purchased from
the WALC BATO. The transmission customer may self-supply the four
remaining ancillary services or request them from WALC. These four
ancillary services are regulation and frequency response service,
energy imbalance service, spinning reserve service, and supplemental
reserve service. The rates for these ancillary services are set
forth in Rate Schedules DSW-SD1, DSW-RS1, DSW-EI1, DSW-FR1, DSW-
SPR1, and DSW-SUR1. Western is currently engaged in a public process
to implement new Rates Schedules for ancillary services, which are
expected to be effective April 1, 2006.

Certification of Rates

Western's Administrator certified that the provisional rates for
CAP transmission service are the lowest possible rates consistent
with sound business principles. The provisional rates were developed
following administrative policies and applicable laws.

Basis for Rate Development

According to Reclamation Law, Western must establish
transmission rates sufficient to recover operation, maintenance,
purchased power and interest expenses, and repayment of investment.
The existing rate for CAP firm transmission under Rate Schedule
CAP-FT1 expires December 31, 2005. Effective January 1, 2006, Rate
Schedule CAP-FT1 will be superseded by the new rates in Rate
Schedule CAP-FT2. The provisional rate for CAP firm point-to-point
transmission is $9.55 per kW per year.

Statement of Revenue and Related Expenses

The following table provides a summary of projected revenue and
expense data for the CAP firm transmission rate through the 5-year
provisional rate approval period.

CAP Firm Transmission.--Comparison of 5-Year Rate Period (FY 2006-FY 2010)
[Total revenues and expenses]
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Existing formula Proposed formula
rate rate Difference
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Total Revenues........................................ $34,429,675 $40,103,745 $5,674,070
Revenue Distribution
Expenses:
O&M (including replacements expense).............. 6,417,770 10,864,596 4,446,826
Purchased Power and Wheeling...................... 0 0 0
Interest.......................................... 19,343,148 17,931,221 (1,411,927)
Other............................................. 345,140 1,813,043 1,467,903
--------------------
Total Expenses................................ 26,106,058 30,608,860 4,502,802
====================
Principal Payments:
Original Project and Additions.................... 8,323,302 9,484,969 1,161,667
Replacements...................................... 0 0 0
--------------------
Total Principal Payments...................... 8,323,302 9,484,969 1,161,667
====================
Total Revenue Distribution.................... 34,429,360 40,093,829 5,664,469
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The cost data reflects an increase in total costs when comparing
the existing rates to the proposed rates. The increases in total
costs, however, are outpaced by increases in total transmission
reservations, resulting in a proposed rate decrease of 2.87 percent
effective January 1, 2006.

Comments

The comments and responses regarding the firm transmission rate,
paraphrased for brevity when not affecting the meaning of the
statement(s), are discussed below. Direct quotes from comment
letters are used for clarification where necessary. The rate process
issues discussed are, (1) Central Arizona Water Conservation
District (CAWCD) O&M costs, (2) Western expenses to the CAP
transmission system, and (3) capital additions and replacements.

1. CAWCD O&M Costs

Comment: The CAWCD representative strongly supports including
the costs identified during the public process. However, there are
other CAP transmission system O&M costs incurred by CAWCD, in
addition to the McCullough O&M charge, which are not reflected in
Western's rate review.
Response: Western has committed to continue to work with CAWCD
to ensure that costs appropriately attributed to the CAP 115/230-kV
transmission system will be included in the rate calculation. O&M
expenses incurred by CAWCD to aid in maintaining the Federal
transmission system are appropriately included in the transmission
rate. Costs will be reviewed annually as part of the annual review
to determine adequacy of the transmission rate.

2. Western Expenses to the CAP Transmission System

Comment: The CAWCD representative indicated the CAP transmission
line miles and SCADA point values that are used to allocate costs
for transmission system studies (``STUDM'' costs) and costs for
assets providing benefit to multiple power systems (``RENTM''
costs), respectively, are too high and should be adjusted.
Response: Western has responded to CAWCD's review of the
allocation practices and stated that adjustments will be made where
appropriate in FY 2006. Any resulting increase or decrease in the
revenue requirement which results in an over or under collection
will be accounted for in the subsequent year.

3. Capital Additions and Replacements in Rate

Comment: The CAWCD representative indicated that Western's July
2005 rate adjustment brochure states that no capital additions or
replacements are projected for FY 2006 through FY 2010. The customer
believes the brochure statement to be untrue, and anticipates annual
costs for capital additions or replacements in FY 2007 and beyond to
average at least $500,000. Those costs should be included in the CAP
transmission rate methodology. CAWCD encourages Western to modify
the proposed CAP transmission rate to be charged for CY 2006 to
include projections for new capital investments.
Response: Western is working with CAWCD and the Bureau of
Reclamation to ensure appropriate amortization costs for capitalized
replacements or additions are included in the rate calculation.
Based on reviews of available data, Western has included an estimate
of $625,000 in replacements for the rate to be charged in CY 2006.
In the event capitalized replacements or additions are added to
plant-in-service in a given year, and the amortization costs
(principal and interest) were not included in

[[Page 1537]]

the rate calculation, they will be included in the subsequent year.

Availability of Information

Information about this rate adjustment, including power
repayment studies, comments, letters, memorandums, and other
supporting material made or kept by Western to develop the
provisional rates, is available for public review in the Desert
Southwest Customer Service Region, Western Area Power
Administration, 615 South 43rd Avenue, Phoenix, Arizona.

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.
Western has determined that 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 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 has
determined that 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.

Submission to the Federal Energy Regulatory Commission

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

Order

In view of the foregoing and under the authority delegated to
me, I confirm and approve on an interim basis, effective January 1,
2006, Rate Schedules CAP-FT2, CAP-NFT2, and CAP-NITS2 for the
Central Arizona Project of the Western Area Power Administration.
The rate schedules shall remain in effect on an interim basis,
pending the Commission's confirmation and approval of them or
substitute rates on a final basis through December 31, 2010.

Dated: December 23, 2005.
Clay Sell,
Deputy Secretary.

Rate Schedule CAP-FT2
Supersedes Rate Schedule CAP-FT1

United States Department of Energy Western Area Power Administration

Central Arizona Project

Schedule of Rate(s) for Firm Point-to-Point CAP 115-kv/230-kv
Transmission Service

Effective: The first day of the first full billing period
beginning on or after January 1, 2006, through December 31, 2010.
Available: In the area served by the Central Arizona Project
(CAP) 115-kV/230-kV transmission system.
Applicable: The transmission service customers shall compensate
the CAP where firm capacity and energy are supplied to the CAP 115-
kV/230-kV transmission system at points of interconnection with
other systems and transmitted and delivered, less losses, to points
of delivery on the CAP 115-kV/230-kV system specified in the
contract or service agreement. The formula for the annual revenue
requirement used to calculate the charges for this firm service
under this schedule was promulgated and may be modified pursuant to
applicable Federal laws, regulations, and policies.
The Desert Southwest Region may modify the charges for firm
point-to-point transmission service upon written notice to the
transmission customer. Any change to the charges to the transmission
customer for firm point-to-point transmission, shall be as set forth
in a revision to this rate schedule promulgated pursuant to
applicable Federal laws, regulations, and policies and made part of
the applicable service contract or service agreement. DSW shall
charge the transmission customer in accordance with the revenue
requirements then in effect.
Character and Conditions of Service: Alternating current at 60
Hertz, three-phase, delivered and metered at the voltages and points
of delivery established by contract or service agreement over the
CAP 115-kV/230-kV transmission system.

Formula Rate for Firm Point-to-Point Transmission Service

Annual Rate = 5-Year Average Annual Revenue Requirement divided by
the 5-Year Average Contract Rate of Delivery, rounded to the nearest
penny.
Monthly Rate = Annual Rate divided by 12, rounded to the nearest
penny.

Calculated Rates

For 2006, the annual firm rate calculates to $9.55 per kW year,
and the monthly firm rate calculates to $0.80 per kW month. Based on
updated financial and load data, recalculated rates will go into
effect on January 1 of each year during the effective rate schedule
period.

Adjustments

For Reactive Power: There shall be no entitlement to transfer of
reactive kilovolt amperes at delivery points, except when such
transfers may be mutually agreed upon by contractor and contracting
officer or their authorized representatives.
For Losses: Capacity and energy losses incurred in connection
with the transmission and delivery of capacity and energy under this
rate schedule shall be supplied by the customer in accordance with
the contract or service agreement.
Billing for Unauthorized Overruns: For each billing period in
which there is a contract violation involving an unauthorized
overrun of the contractual firm transmission obligations, such
overrun shall be billed at 10 times the above rates.

Rate Schedule CAP-NFT2
Supersede Rate Schedule CAP-NFT1

United States Department of Energy Western Area Power Administration

Central Arizona Project

Schedule of Rate(s) for Nonfirm Point-to-Point CAP 115-kV/230-kV
Transmission Service

Effective: The first day of the first full billing period
beginning on or after January 1, 2006, through December 31, 2010.
Available: In the marketing area served by the Central Arizona
Project 115-kV/230-kV transmission system.
Applicable: The transmission service customer shall compensate
the Central Arizona Project (CAP) for nonfirm point-to-point
transmission service where capacity and energy are supplied to the
CAP 115-kV/230-kV transmission system at points of interconnection
with other systems, transmitted subject to the availability of the
transmission capacity, and delivered less losses, to points of
delivery on the CAP 115-kV/230-kV system specified in the contract
or service agreement.
Character and Conditions of Service: Alternating current at 60
Hertz, three-phase, delivered and metered at the voltages and points
of delivery established by contract or service agreement over the
CAP 115-kV/230-kV transmission system.

Formula Rate for Nonfirm Point-to-Point Transmission Service

Nonfirm Point-To-Point Transmission Service Rate: Each
Contractor shall be billed monthly a mills per kilowatthour rate of
scheduled or delivered kilowatthours at point of delivery,
established by contract, payable monthly. This rate is equal to the
CAP 115-kV/230-kV Firm Transmission dollar per kilowattyear rate
then in effect divided by 8760, multiplied by 1,000, rounded to two
decimal places.

Calculated Rate

For 2006, the nonfirm rate calculates to 1.09 mills/kWh. Based
on updated financial and load data, a recalculated rate will go into
effect on January 1 of each year during the effective rate schedule
period.

Adjustments

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For Losses: Capacity and energy losses incurred in connection
with the transmission and delivery of capacity and energy under this
rate schedule shall be supplied by the customer in accordance with
the contract or service agreement.

Rate Schedule CAP-NITS2
Supersedes Rate Schedule CAP-NITS1

United States Department of Energy Western Area Power Administration

Central Arizona Project

Schedule of Rate(s) for Network Integration Transmission Service

Effective: The first day of the first full billing period
beginning on or after January 1, 2006, through December 31, 2010.
Applicable: The transmission customer shall compensate the CAP
each month for Network Integration Transmission Service (NITS)
pursuant to the applicable Network Integration Transmission Service
Agreement and annual revenue requirement referred to below. The
formula for the annual revenue requirement used to calculate the
charges for this service under this schedule was promulgated and may
be modified pursuant to applicable Federal laws, regulations, and
policies.
The Desert Southwest Region (DSW) may modify the charges for
NITS upon written notice to the transmission customer. DSW shall
charge the transmission customer in accordance with the revenue
requirement then in effect.

Formula Rate

Monthly Charge = Transmission Customer's Load-Ratio Share x (Revenue
Requirement/12)

Calculated Rate

The NITS rate is calculated using a projected annual revenue
requirement. Based on updated financial and load data, a
recalculated revenue requirement will go into effect on January 1 of
each year during the effective rate schedule period.

[FR Doc. E6-110 Filed 1-9-06; 8:45 am]

BILLING CODE 6450-01-P