FR Doc 05-17106

[Federal Register: August 29, 2005 (Volume 70, Number 166)]
[Notices]
[Page 51035-51040]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr29au05-48]

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DEPARTMENT OF ENERGY

Western Area Power Administration

Washoe Project-Rate Order No. WAPA-119

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of order concerning a non-firm power formula rate.

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SUMMARY: The Deputy Secretary of Energy confirmed and approved Rate
Order No. WAPA-119 and Rate Schedule SNF-6, placing a non-firm power
formula rate from the Stampede Powerplant of the Washoe Project
(Stampede) of the Western Area Power Administration (Western) into
effect on an interim basis. The provisional formula rate will be in
effect until the Federal Energy Regulatory Commission (Commission)
confirms, approves, and places it into effect on a final basis or until
replaced by other rates. The provisional rate will provide sufficient
revenue to pay all annual costs, including interest expense, and repay
power investment and irrigation aid, within the allowable periods.

DATES: Rate Schedule SNF-6 will be placed into effect on an interim
basis on the first day of the first full billing period beginning on or
after October 1, 2005, and will be in effect until the Commission
confirms, approves, and places the rate schedule in effect on a final
basis through September 30, 2010, or until the rate schedule is
superseded.

FOR FURTHER INFORMATION CONTACT: Mr. James D. Keselburg, Regional
Manager, Sierra Nevada Customer Service Region, Western Area Power
Administration, 114 Parkshore Drive, Folsom, CA 95630-4710, (916) 353-
4418, or Mr. Sean Sanderson, Rates Manager, Sierra Nevada Customer
Service Region, Western Area Power Administration, 114 Parkshore Drive,
Folsom, CA 95630-4710, (916) 353-4466.

SUPPLEMENTARY INFORMATION: The Deputy Secretary of Energy approved
existing Rate Schedule SNF-5 for Stampede non-firm energy on August 22,
2000 (Rate Order No. WAPA-93, September 1, 2000). The Commission
confirmed and approved the rate schedule on October 19, 2000, in FERC
Docket No. EF00-5161-000. The existing rate schedule is effective from

[[Page 51036]]

October 1, 2000, through September 30, 2005.
The existing non-firm power Rate Schedule SNF-5 consists of floor
and ceiling rates and is designed to recover an annual revenue
requirement. The floor rate for non-firm energy from Stampede is 17.89
mills per kilowatthour (mills/kWh) and on average for the 5-year rate
period provides sufficient revenue to repay nearly 100 percent of
annual expenses, excluding interest expense. The current ceiling rate
was set by a power repayment study and provides sufficient revenues to
repay all annual costs, including interest expense, and the investment
within the allowable period.
The Central Valley Project (CVP) 2004 Power Marketing Plan (2004
Power Marketing Plan) states that the output from the Washoe Project
remaining after meeting project use loads will be marketed to the CVP
preference customers. Beginning October 1, 2005, the costs remaining
after meeting project use requirements are included in the CVP Power
Revenue Requirement (PRR) on an annual basis. In addition, any energy
remaining after meeting project use requirements will be marketed under
the 2004 Power Marketing Plan. This situation makes it unnecessary to
establish a new proposed ceiling rate for Stampede. Western's Contract
No. 94-SAO-00010 with the Sierra Pacific Resources (Sierra) sets the
floor rate.
The existing non-firm Rate Schedule SNF-5 is being superseded by
SNF-6. SNF-6 removes the ceiling rate and provides a formula for
determining Stampede's annual PRR transferred to the CVP PRR.
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 Department of Energy
(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 00-001.00A, 10 CFR part
903, and 18 CFR part 300, I hereby confirm, approve, and place Rate
Order No. WAPA-119, the non-firm energy formula rate for Stampede, into
effect on an interim basis. The new Rate Schedule SNF-6 will be
promptly submitted to the Commission for confirmation and approval on a
final basis.

Dated: August 16, 2005.
Clay Sell,
Deputy Secretary.

Department of Energy, Deputy Secretary

[Rate Order No. WAPA-119]

In the matter of: Western Area Power Administration Rate
Adjustment for the Washoe Project, Stampede Division, Non-Firm Power
Formula Rate; Order Confirming, Approving, and Placing the Washoe
Project, Stampede Division, Non-firm Power Formula Rate Into Effect
on an Interim Basis

This rate was established in accordance with section 302 of the 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 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:
2004 Power Marketing Plan: The 2004 CVP Power Marketing Plan (64 FR
34417) effective January 1, 2005.
Administrator: The Administrator of the Western Area Power
Administration.
Ancillary Services: Those services necessary to support the
transfer of electricity while maintaining reliable operation of the
transmission provider's transmission system in accordance with standard
utility practice.
Base Resource: The Central Valley and Washoe Project power output
and existing power purchase contracts extending beyond 2004, as
determined by Western to be available for marketing, after meeting the
requirements of Project Use and First Preference Customers, and any
adjustments for maintenance, reserves, transformation losses, and
certain ancillary services.
Capacity: The electric capability of a generator, transformer,
transmission circuit, or other equipment expressed in kilowatts.
Commission: The Federal Energy Regulatory Commission.
Customer: An entity with a contract that receives service from the
Western's Sierra Nevada Customer Service Region (SNR).
CVP: The Central Valley Project is a multipurpose Federal water
development project extending from the Cascade Range in northern
California to the plains along the Kern River south of Bakersfield,
California.
DOE: United States Department of Energy.
DOE Order RA 6120.2: A DOE order outlining power marketing
administration financial reporting and ratemaking procedures.
FERC: The Commission (to be used when referencing Commission
Orders).
First Preference: A Customer or entity qualified to use Preference
power within a county of origin (Trinity, Calaveras, and Tuolumne) as
specified under the Trinity River Division Act of August 12, 1955 (69
Stat. 719) and the Flood Control Act of 1962 (76 Stat. 1173, 1191-
1192).
Floor Rate: Per the contract with Sierra, is equal to 85 percent of
the then effective, non-time 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.
FRN: Federal Register notice.
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.
kWh: Kilowatthour--The electrical unit of energy that equals 1,000
watts in 1 hour.
Load: The amount of electric power or energy delivered or required
at any specified point(s) on a transmission or distribution system.
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.

[[Page 51037]]

NEPA: National Environmental Policy Act of 1969 (42 U.S.C. 4321, et
seq.).
Net Revenue: Revenue remaining after paying all annual expenses.
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.
Preference: The provisions of Reclamation Law which require Western
to first make Federal power available to certain entities. For example,
section 9(c) of the Reclamation Project Act of 1939 states that
preference in the sale of Federal power shall 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 made under the Rural Electrification Act of 1936 (43
U.S.C. 485h(c)).
Project Use: Power used to operate Washoe Project facilities under
Reclamation Law. The Lahontan National Fish Hatchery and the Marble
Bluff Fish Facility are designated project use loads of the Washoe
Project.
Provisional Rate: A rate which has been confirmed, approved, and
placed into effect on an interim basis by the Deputy Secretary.
PRR: Power revenue requirement. The annual revenue that must be
collected to recover annual expenses such as O&M, purchase power,
transmission service expenses, interest, deferred expenses, and repay
Federal investments and other assigned costs.
PRS: Power repayment study.
Rate Brochure: A document dated May 2005 explaining the rationale
and background for the rate proposal contained in this Rate Order.
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 under which Western markets
power.
Revenue Requirement: The revenue required to recover annual
expenses such as O&M, purchase power, transmission service expenses,
interest, deferred expenses, and repay Federal investments and other
assigned costs.
SEEA: The Stampede Energy Exchange Account.
Sierra: Sierra Pacific Power Company also known as Nevada Power and
Sierra Pacific Resources.
SNR: The Sierra Nevada Customer Service Region of Western.
Stampede: Power system facilities of Washoe Project, Stampede
Division.
Stampede Annual PRR: The total power revenue requirement for
Stampede required to repay all reimbursable annual costs, including
interest and the investment within the allowable period.
Stampede Revenue: Revenue generated from the floor rate and project
generation.
Washoe Project: A Reclamation project located 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 new interim rates will take effect on the first day of the
first full billing period beginning on or after October 1, 2005, and
will remain in effect until September 30, 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. A Federal Register notice published on May 6, 2005, (70 FR
24019), announced the proposed formula rate for non-firm energy from
Stampede. This notice began the public consultation and comment period.
2. On May 9, 2005, Western e-mailed the Federal Register notice (70
FR 24019) to the SNR Preference Customers and interested parties
explaining the fact that this was a minor rate adjustment. Therefore,
there was no public information or comment forum for this rate process.
Western also reiterated its availability to meet with interested
parties to discuss the studies that support the formula rate.
3. On May 9, 2005, Western also mailed letters to the SNR
Preference Customers and interested parties transmitting the Web site
address to obtain a copy of the FRN and providing instructions on how
to receive a copy of the Rate Brochure.
4. Western communicated clarifying information on the proposed rate
with the following Customers and/or interested parties. This
information is included in the record.

Bay Area Rapid Transit District, California.
Energy Source, Nevada.
Northern California Power Agency, California.
Sacramento Municipal Utility District, California.
Sierra Pacific Power Company, aka Nevada Power, Nevada.

5. Western received no comment letters during the consultation and
comment period, which ended on June 6, 2005.

Project Description

The Stampede Dam and Reservoir are located on the Little Truckee
River approximately 8 miles above the confluence of the Little Truckee
and Truckee River. The dam and reservoir are in Sierra County,
California, about 11 miles northeast of the town of Truckee. The water
source for 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,
under Public Law 858 hydroelectric power development was included.
However, during the period 1966-1970 when the Stampede Dam was built,
power facilities were not constructed because the power function was
not economically justified. Nevertheless, provisions were made to
facilitate the addition of power facilities at a later date.
Subsequently, in July 1976, a preliminary reevaluation of a
powerplant at Stampede was conducted and published in a special
Reclamation report Adding Powerplants at Existing Federal Dams in
California. In the report, Reclamation recommended construction of a
Stampede powerplant. As a result, definitive 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.
Stampede Dam and Reservoir is operated for four specific purposes:
flood control, fisheries enhancement, recreation, and power generation.
The powerplant has a 3.65 MW generator and it provides approximately 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 non-firm basis under the conditions
outlined in Western's contract with Sierra. Energy generated at
Stampede is dependent on the run of the river and is, therefore, non-
firm.
The Lahontan National Fish Hatchery and the Marble Bluff Fish
Facility are project use facilities entitled to energy from the
Stampede Powerplant. The Marble Bluff Fish Hatchery is located on the
Truckee River about 3.5 miles upstream from Pyramid Lake. The other
project use facility, the Lahontan

[[Page 51038]]

National Fish Hatchery, is located off the Carson River just south of
Carson City in Gardnerville, Nevada. The loads at these facilities are
projected to be approximately 2 million kWh annually.

Power Repayment Study

Western prepares a PRS each FY to determine if revenues will be
sufficient to repay, within the required time, all costs assigned to
the power function. Repayment criteria are based on law, applicable
policies, including DOE Order RA 6120.2, and authorizing legislation.
To benefit project use loads and market the energy from Stampede,
Western's contract with Sierra provides for the SEEA. 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 floor rate. Western can use the SEEA to benefit project use
facilities and market energy from Stampede to preference entities. The
formula for the provisional floor rate, per the contract with Sierra,
is equal to 85 percent of the then effective, non-time 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 and determines the benefit of
Stampede power for project use loads. Western applies the ratio of
projected project use costs to the projected revenue recorded in the
SEEA to determine a non-reimbursable percentage. This non-reimbursable
percentage is then applied to the appropriate power-related costs to
determine the reimbursable costs. The reimbursable costs are reduced by
revenues from sales made at the floor rate. Under the 2004 Power
Marketing Plan, the remaining reimbursable costs are then transferred
to the CVP PRR. Based on estimated expenses and projected revenues
generated from the floor rate, Western anticipates including an annual
cost of $401,000 in the CVP PRR for the 5-year rate case period (FY
2006-2010).

Existing and Provisional Rates and Revenue Requirement

The provisional rate for Stampede non-firm energy results in no
change to the floor rate. This rate adjustment also marks a transition
to a new marketing plan for Stampede. Any energy remaining after
meeting project use requirements is marketed under the 2004 Power
Marketing Plan and mitigates the need for a ceiling rate. In addition,
the provisional formula rate calculates an annual transfer of Stampede
revenue to the CVP PRR. The following table compares the current and
provisional non-firm rates as listed under the existing (SNF-5) and
provisional (SNF-6) rate schedules.

Comparison of Existing and Provisional Rates Washoe Project, Stampede Powerplant
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Existing rates (as Provisional rates
Non-firm energy formula rate components of 10/1/00) (effective 10/1/05) Percent change
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Rate Schedule.................................... \(1)\ \(2)\ ...................
Floor Rate (Mills/kWh)........................... 17.89 17.89 0
Ceiling Rate..................................... 90.07 N/A N/A
Estimated Stampede Annual Transferred PRR ($).... N/A $401,000 N/A
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\1\ SNF-5.
\2\ SNF-6.

Certification of Rates

Western's Administrator certified that the provisional non-firm
power formula rates for Stampede are the lowest possible rates
consistent with sound business principles. The provisional formula rate
was developed following administrative policies and applicable laws.

Non-Firm Power Formula Rate and Power Revenue Requirement Discussion

According to Reclamation Law, Western must establish rates
sufficient to recover O&M, other annual and interest expenses, and
repay power investment and irrigation aid.

Statement of Revenue and Related Expenses

The following table provides a summary of projected revenues and
expenses data for the Stampede non-firm power formula rate through the
5-year provisional rate approval period, including a comparison of
existing rate data to provisional rate data and the difference.

Stampede Non-Firm Power Rate Comparison of 5-Year Rate Period (FY 2006-2010) Total Revenues and Expenses
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Existing rate Provisional revenue
($000) requirement ($000) Difference ($000)
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Total Revenues................................... $2,905 $2,989 $84
Revenue Distribution:
Expenses:
O&M.......................................... 64 64 0
Project Use Expense.......................... 952 952 0
Interest..................................... 1,147 1,213 66
----------------------
Total Expenses........................... 2,163 2,229 66
======================
Principal Payments:
Capitalized Expenses......................... 742 760 18
Original Project and Additions............... 0 0 0
Replacements................................. 0 0 0

[[Page 51039]]

Irrigation................................... N/A N/A N/A
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Total Principal Payments................. 742 760 18
======================
Total Revenue Distribution........... 2,905 2,989 84
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Basis for Rate Development

To benefit project use loads and market the energy from Stampede,
Western's contract with Sierra provides for the SEEA. 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 floor rate. The formula for the provisional floor rate, per the
contract with Sierra, is equal to 85 percent of the then effective,
non-time 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 and
determines the benefit of Stampede power for project use loads. Western
applies the ratio of projected project use costs to the projected
revenue recorded in the SEEA to determine a non-reimbursable
percentage. This non-reimbursable percentage is then applied to the
appropriate power-related costs to determine the reimbursable costs.
The reimbursable costs are reduced by revenues from sales made at the
floor rate. Under the 2004 Power Marketing Plan, the remaining
reimbursable costs after meeting project use service are then
transferred to the CVP PRR.
The provisional formula rate for Stampede power is:

Stampede Annual Transferred PRR = Stampede Annual PRR-Stampede Revenue
------------------------------------------------------------------------

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Where:
Stampede Annual Transferred PRR = Stampede annual costs (Power
Revenue Requirement) transferred to the CVP.
Stampede Annual PRR = The total power revenue requirement for
Stampede required to repay all reimbursable annual costs, including
interest and the investment within the allowable period.
Stampede Revenue = Revenue generated from the floor rate and project
generation.
Floor Rate = Per the contract with Sierra, is equal to 85 percent of
the then effective, non-time 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.
------------------------------------------------------------------------

Comments

Western received no comments on the rate proposal during the public
comment and consultation period that ended on June 6, 2005.

Availability of Information

Information about this rate adjustment, including power repayment
studies, comments, letters, memorandums, and other supporting material
made and kept by Western and used to develop the provisional rates, is
available for public review in the Sierra Nevada Regional Office,
Western Area Power Administration, 114 Parkshore Drive, Folsom,
California.

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 National Environmental Policy Act (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 October 1, 2005,
Rate Schedule SNF-6 for the Washoe Project, Stampede Division of the
Western Area Power Administration. The rate schedule 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 September
30, 2010.

[[Page 51040]]

Dated: August 16, 2005.
Clay Sell,
Deputy Secretary.

Rate Schedule SNF-6 (Supersedes Schedule SNF-5)

United States Department of Energy, Western Area Power Administration,
Washoe Project, Stampede Division

Schedule of Rates for Non-Firm Power Formula Rate

Effective: October 1, 2005, through September 30, 2010.
Available: Within the marketing area served by the Sierra Nevada
Customer Service Region.
Applicable: To preference customers under the 2004 Power Marketing
Plan and to the Sierra Pacific Power Company under the terms of
Contract No. 14-SAO-00010.
Character and Conditions of Service: Alternating current, 60 hertz,
three-phase, delivered and metered at the voltages and points
established by contract.
Non-Firm Power Formula Rate: The formula for the floor rate, per
the contract with Sierra, is equal to 85 percent of the then effective,
non-time 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 floor
rate is used to calculate the value of the SEEA and determines the
benefit of Stampede power for project use loads. Western applies the
ratio of projected project use costs to the projected revenue recorded
in the SEEA to determine a non-reimbursable percentage. This non-
reimbursable percentage is then applied to the appropriate power-
related costs to determine the reimbursable costs. The reimbursable
costs are reduced by the revenues from sales made at the floor rate.
Under the 2004 Power Marketing Plan, the remaining reimbursable costs
are then transferred to the CVP PRR.
The formula rate for Stampede power is:

Stampede Annual Transferred PRR = Stampede Annual PRR-Stampede Revenue
------------------------------------------------------------------------

Billing: Billing for the floor rate will be as specified in the
service agreement.
Adjustment for Losses: Losses will be accounted for under this rate
schedule as stated in the service agreement.

[FR Doc. 05-17106 Filed 8-26-05; 8:45 am]

BILLING CODE 6450-01-P