Loveland Area Projects-Rate Order No. WAPA-89

AGENCY:

Western Area Power Administration, DOE.

ACTION:

Notice of proposed extension of firm electric service rate.

SUMMARY:

This action is a proposal to extend the existing Loveland Area Projects (LAP) firm electric service rate, Rate Order No. WAPA-51, through September 30, 2003. The existing firm electric service rate will expire January 31, 2001. This notice of proposed extension of the rate is issued pursuant to 10 CFR part 903.23(a)(1). In accordance with 10 CFR part 903.23(a)(2), Western will not have a consultation and comment period.

FOR FURTHER INFORMATION CONTACT:

Mr. Daniel T. Payton, Rates Manager, Rocky Mountain Customer Service Region, Western Area Power Administration, P.O. Box 3700, Loveland, CO 80539-3003, (970) 490-7442, or e-mail dpayton@wapa.gov.

SUPPLEMENTARY INFORMATION:

By Amendment No. 3 to Delegation Order No. 0204-108, published November 10, 1993 (58 FR 59716), the Secretary of Energy delegated (1) the authority to develop long-term power and transmission rates on a non-exclusive basis to the Administrator of the Western Area Power Administration (Western); (2) 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). In Delegation Order No. 0204-172, effective November 24, 1999, the Secretary of Energy delegated the authority to confirm, approve, and place such rates into effect on an interim basis to the Deputy Secretary.

Pursuant to Delegation Order No. 0204-108 and existing Department of Energy procedures for public participation in firm electric service rate adjustments at 10 CFR part 903, Western's LAP firm electric service rate was submitted to FERC for confirmation and approval on January 10, 1994. On July 14, 1994, in Docket No. EF94-5181-000 at 68 FERC ¶ 62,040, FERC issued an order confirming, approving, and placing into effect on a final basis the firm electric service rate for LAP. LAP consists of the Fryingpan-Arkansas Project and the Pick-Sloan Missouri Basin Program, Western Division. The rate set forth in Rate Order No. WAPA-51 was approved for a 5-year period beginning February 1, 1994, and ending January 31, 1999. On October 16, 1998, upon signing Rate Order No. WAPA-82, the Deputy Secretary extended the existing rate for a 2-year period beginning February 1, 1999, and ending January 31, 2001.

On January 31, 2001, the LAP firm electric service rate expires. This makes it necessary to extend the current rate pursuant to 10 CFR part 903. Upon its approval, Rate Order No. WAPA-51, previously extended under Rate Order No. WAPA-82, will be extended under Rate Order No. WAPA-89.

Western proposes to extend the existing rate of $2.85/kilowattmonth for capacity and 10.85 mills/kilowatthour for energy which is sufficient to recover project expenses (including interest) and capital requirements through September 30, 2003. Increased revenue from good hydrologic conditions and lower operation and maintenance expenses over the cost evaluation period have made this possible. For the Pick Sloan Missouri Basin Program, the ratesetting study projected the deficit to peak at $178 million in Fiscal Year (FY) 1994 and to be repaid in FY 2002. The deficit actually peaked at $171 million in FY 1993 and was totally repaid in FY 1997. The total annual revenue requirement of $44.3 million from firm power sales is sufficient to cover the expenses and capital requirements through September 30, 2003.

All documents made or kept by Western for developing this notice for proposed extension of the firm electric service rate will be made available for inspection and copying at the Rocky Mountain Customer Service Region, located at 5555 East Crossroads Boulevard, Loveland, Colorado.

Thirty days after publication of this notice, Rate Order No. WAPA-89 will be submitted to the Deputy Secretary for approval through September 30, 2003.