Central Arizona Project-Rate Order No. WAPA-158

AGENCY:

Western Area Power Administration, DOE.

ACTION:

Notice of Extension of Transmission Service Rate Schedules.

SUMMARY:

This action is to extend the rate setting formula for the Central Arizona Project, reflected in Transmission Service Rate Schedules CAP-FT2, CAP-NFT2, and CAP-NITS2, from January 1, 2013, through December 31, 2015. These Transmission Service Rate Schedules contain formula rates recalculated from annual updated financial and load data.

FOR FURTHER INFORMATION CONTACT:

Mr. Darrick Moe, Regional Manager, Desert Southwest Customer Service Region, Western Area Power Administration, P.O. Box 6457, Phoenix, AZ 85005-6457, (602) 605-2522, email MOE@wapa.gov, or 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, email 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 Rate Schedules CAP-FT2, CAP-NFT2, CAP-NITS2 under Rate Order No. WAPA-124, were approved for a 5-year period beginning on January 1, 2006, and ending December 31, 2010. Rate Order No. WAPA-153 extended the approval period for these rate schedules for a 2-year period, beginning January 1, 2011, through December 31, 2012.

The existing Central Arizona Project rate setting formula methodology provides for the calculation of rates to collect sufficient revenue to pay 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. The rates are updated annually using new financial and transmission reservation data. For the reasons explained in its Proposed Extension WAPA-158, published in the Federal Register on August 7, 2012 (77 FR 47065), Western is not changing the rate formula at this time. Based on financial and contractual information, Western also determined that the existing calculated rate provides sufficient revenue to recover all appropriate costs and will remain in place through calendar year 2013. Therefore, Western proposed extending the usage of the current transmission service formula rate schedules through calendar year 2015 pursuant to 10 CFR 903.23(a) under Rate Order No. WAPA-158.

As allowed by 10 CFR 903.23(a) Western provided for a consultation and comment period on Proposed Extension WAPA-158, but did not conduct public information forums or public comment forums. The consultation and comment period ended on September 6, 2012. No comments were received.

Following review of Western's proposal within the Department of Energy, I hereby approve Rate Order No. WAPA-158 which extends Transmission Service Rate Schedules CAP-FT2, CAP-NFT2, and CAP-NITS2 on an interim basis effective as of January 1, 2013. This order places the rates schedules into effect without 30 days notice to avoid financial difficulties that may be created by questions concerning the applicable rates. A 30-day delay in effective date is also unnecessary given that the rate setting formulas remain unchanged from the previous formulas in effect until December 31, 2012. Rate Order No. WAPA-158 will be submitted promptly to FERC for confirmation and approval on a final basis.

Department of Energy Deputy Secretary

In the Matter of: Western Area Power Administration, Rate Extension for Central Arizona Project Transmission Service Rate Schedules.

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 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). This extension of the rate schedules is issued pursuant to the Delegation Order and DOE rate extension procedures at 10 CFR 903.23(a).

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 Central Arizona Project (CAP). The Transmission Service Rate Schedules, Rate Order No. WAPA-124, were approved for 5 years beginning December 23, 2005, through December 31, 2010. Rate Order No. WAPA-153 extended these rate schedules for a 2-year period, beginning January 1, 2011, and ending December 31, 2012. Western is requesting a further extension of the approval period for the CAP Transmission Service Rate Schedules, incorporated by reference herein, under Rate Order No. WAPA-158, through December 31, 2015.

Discussion

Western's existing formula transmission service rates for the Central Arizona Project 115kV and 230kV transmission facilities, which are recalculated annually, are expected to continue to sufficiently recover project expenses (including interest) and capital requirements through December 31, 2015. However, on December 31, 2012, the approval period for rate schedules CAP-FT2, CAP-NFT2 and CAP-NITS2, under which these rates are calculated, ended. This makes it necessary to extend the approval period for the existing rate schedules under 10 CFR 903.23(a).

Order

In view of the above and under the authority delegated to me, I hereby extend the existing Transmission Rate Schedules CAP-FT2, CAP-NFT2, and CAP-NITS2 for transmission service for the Central Arizona Project of the Western Area Power Administration on an interim basis. The existing Transmission Rate Schedules CAP-FT2, CAP-NFT2, AND CAP-NITS2 for transmission service for the Central Arizona Project of the Western Area Power Administration, shall remain in effect pending FERC confirmation and approval of their extension or substitute rates on a final basis through December 31, 2015.