Central Arizona Project-Rate Order No. WAPA-153

AGENCY:

Western Area Power Administration, DOE.

ACTION:

Notice of Order Temporarily Extending Transmission Formula Rates.

SUMMARY:

This action is to extend the existing Central Arizona Project (CAP) formula rates through December 31, 2012. The existing Transmission Service Formula Rate Schedules CAP-FT2, CAP-NFT2, and CAP-NITS2 expire on December 31, 2010. These Transmission Service Rate Schedules contain formula rates that are recalculated from annual updated financial and load data.

FOR FURTHER INFORMATION CONTACT:

Mr. Jack Murray, Rates Manager, 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:

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 the Administrator of Western Area Power Administration (Western); (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 Federal Energy Regulatory Commission (FERC).

The existing rates, contained in Rate Order No. WAPA-124 were approved for 5 years through December 31, 2010. Western is proposing to temporarily extend the existing CAP transmission service formula rates pursuant to 10 CFR 903.23 (b).

Western is engaged in ongoing discussions with CAP stakeholders and these discussions may ultimately result in Western proposing future changes to the formula rates. Therefore, Western believes it is premature to proceed with a formal rate adjustment process at this time. Extending the existing Transmission Service Rate Schedules CAP-FT2, CAP-NFT2, and CAP-NITS2 through December 31, 2012, will provide adequate time for Western to finalize these discussions.

The existing CAP formula rates collect sufficient revenue to meet all annual costs, including interest expense, and repayment of required investment, thus ensuring repayment of the project within the cost recovery criteria set forth in DOE order RA 6120.2.

Western did not have a consultation and comment period and did not hold public information and comment forums, in accordance with 10 CFR 903.23 (b).

Following review of Western's proposal within the Department of Energy, I hereby approve Rate Order No. WAPA-153, extending the existing Transmission Service Rate Schedules CAP-FT2, CAP-NFT2, and CAP-NITS2 through December 31, 2012. Rate Order No. WAPA-153 will be submitted to FERC for informational purposes only.

Department of Energy

Deputy Secretary

In the Matter of:

Western Area Power Administration, Rate Extension for Central Arizona Project, Transmission Service Rate Schedules.

Rate Order No. WAPA-153.

Order Confirming and Approving an Extension of the Central Arizona Project Transmission Service Rate Schedules

Section 302 of the Department of Energy (DOE) Organization Act (42 U.S.C. 7152) 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 long-term power and transmission rates to the Administrator of the Western Area Power Administration (Western); (2) the authority to confirm, approve, and place such rates into effect on an interim basis to the 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 Federal Energy Regulatory Commission (FERC). This temporary extension is issued pursuant to the Delegation Order and DOE rate extension procedures at 10 CFR 903.23(b).

Background

On June 29, 2006, in Docket No. EF06-5111-000 at 115 FERC ¶ 62,326 FERC issued an order confirming, approving, and placing into effect on a final basis the Transmission Service Rate Schedules CAP-FT2, CAP-NFT2 and CAP-NITS2 for the CAP. The Transmission Service Rates, Rate Order No. WAPA-124, were approved for 5 years beginning January 1, 2006 through December 31, 2010.

Discussion

Western is proposing to extend the existing transmission rate schedules pursuant to

10 CFR 903.23(b). Western's existing Transmission Service Formula Rates, which are recalculated annually, would sufficiently recover project expenses (including interest) and capital requirements through December 31, 2012. Western did not have a consultation and comment period and did not hold public information and comment forums, in accordance with

10 CFR 903.23(b).

Order

In view of the above and under the authority delegated to me, I hereby extend from January 1, 2011 through December 31, 2012, the existing Rate Schedules CAP-FT2, CAP-NFT2, and CAP-NITS2 for transmission service for the Central Arizona Project of the Western Area Power Administration.

Dated: December 29, 2010.

Daniel B. Poneman,

Deputy Secretary.