Pick-Sloan Missouri Basin Program-Eastern Division-Notice of Order Confirming and Approving an Extension of the Firm Power Service and Firm Peaking Power Service Rates for Rate Order No. WAPA-90

AGENCY:

Western Area Power Administration, DOE.

ACTION:

Notice of rate order.

SUMMARY:

This action is to extend the existing Pick-Sloan Missouri Basin Program-Eastern Division (P-SMBP-ED) firm power service and firm peaking power service rates, Rate Order No. WAPA-60, through September 30, 2003. The existing firm power service and firm peaking power service rates will expire January 31, 2001. This notice of an extension of rates is issued pursuant to 10 CFR 903.23. Rate Order No. WAPA-60, previously extended under Rate Order No. WAPA-83, is further extended under Rate Order No. WAPA-90.

FOR FURTHER INFORMATION CONTACT:

Mr. Robert F. Riehl, Rates Manager, Upper Great Plains Customer Service Region, Western Area Power Administration, P.O. Box 35800, Billings, MT 59107-5800, telephone (406) 247-7388, or e-mail riehl@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 nonexclusive basis to the Administrator of the Western Area Power Administration (Western); and (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 of Energy.

Pursuant to Delegation Order No. 0204-108 and existing Department of Energy procedures for public participation in power rate adjustments at 10 CFR part 903, Western's P-SMBP-ED firm power service and firm peaking power service rates were submitted to FERC for confirmation and approval on January 10, 1994. On July 14, 1994, in Docket No. EF94-5031-000 at 68 FERC ¶ 62,040, FERC issued an order confirming, approving, and placing into effect on a final basis the firm power service and firm peaking power service rates for the P-SMBP-ED. The rates set forth, Rate Order No. WAPA-60, were approved for the 5-year period beginning February 1, 1994, and ending January 31, 1999. On October 16, 1998, upon signing Rate Order No. WAPA 83, the Deputy Secretary extended the existing rates for a 2-year period beginning February 1, 1999, and ending January 31, 2001.

On January 31, 2001, the P-SMBP-ED firm power service and firm peaking power service rates will expire.

Western proposed to extend the existing rate of $3.20/kilowattmonth for capacity and the rate of 8.32 mills/kilowatthour for energy which are sufficient to recover project expenses, including interest, and capital requirements through September 30, 2003. Increased revenue from good hydrologic conditions and effective cost containment efforts have resulted in lower operation and maintenance expenses over the cost-evaluation period to make this possible. For the Pick-Sloan Missouri Basin Program, the rate setting study projected the deficit associated with the drought starting in 1989 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, with interest, in FY 1997. The total revenue requirement of $135.2 million is sufficient to cover the expenses and capital requirements through September 30, 2003. Western, therefore, has decided to extend the existing rates pursuant to 10 CFR 903.23.

In accordance with 10 CFR 903.23(a)(2), Western did not have a consultation and comment period. The notice of an extension of the firm power service and firm peaking power service rates was published in the Federal Register on March 29, 2000.

Following review of Western's proposal within the Department of Energy, I approved Rate Order No. WAPA-90, which extends the existing P-SMBP-ED firm power service and firm peaking power service rate schedules P-SED-F6 and P-SED-FP6 on an interim basis through September 30, 2003.

Department of Energy Deputy Secretary

In the Matter of: Western Area Power Administration Extension of the Firm Power Service and Firm Peaking Power Service Rates for the Pick-Sloan Missouri Basin Program-Eastern Division

Order Confirming and Approving an Extension of the Pick-Sloan Missouri Basin Program-Eastern Division Firm Power Service and Firm Peaking Power Service Rates

This rate extension was established pursuant to section 302(a) of the Department of Energy Organization Act, 42 U.S.C. 7152(a), through which 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 enactments, particularly section 9(c) of the Reclamation Project Act of 1939, 43 U.S.C. 485h(c), were transferred to and vested in the Secretary of Energy (Secretary).

By Amendment No. 3 to Delegation Order No. 0204-108, published November 10, 1993 (58 FR 59716), the Secretary delegated (1) the authority to develop long-term power and transmission rates on a nonexclusive basis to the Administrator of the Western Area Power Administration (Western); and (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 delegated the authority to confirm, approve, and place such rates into effect on an interim basis to the Deputy Secretary. This rate extension is issued pursuant to the Delegation Order and the Department of Energy rate extension procedures at 10 CFR part 903.

Background

In the order issued July 14, 1994, in Docket No. EF94-5031-000 at 68 FERC ¶ 62,040, FERC confirmed, approved, and placed in effect on a final basis Rate Order No. WAPA-60, for the firm power service and firm peaking power service rates for the Pick-Sloan Missouri Basin Program-Eastern Division (P-SMBP-ED), The rates were approved for the period from February 1, 1994, through January 31, 1999. On October 16, 1998, upon signing Rate Order No. WAPA-83 the Secretary extended the existing rates for a 2-year period beginning February 1, 1999, through January 31, 2001. On January 21, 2001, the P-SMBP-ED firm power service and firm peaking power service rates will expire. This makes it necessary to extend the current rates pursuant to 10 CFR part 903. With this approval, Rate Order No. WAPA-60, previously extended under Rate Order No. WAPA-83, will be extended under Rate Order WAPA-90. A notice of an extension of the firm power and firm peaking power service rates was published in the Federal Register on March 29, 2000. Therefore, Western is extending P-SMBP-ED firm power and firm peaking power service rates under Rate Order No. WAPA-90.

Discussion

The existing P-SMBP-ED rate is $3.20/kilowattmonth for capacity and 8.32 mills/kilowatthour for energy. The existing rates are sufficient to recover project expenses, including interest and capital requirements through September 30, 2003. Increased revenue from good hydrologic conditions and effective cost containment efforts have resulted in lower operation and maintenance expenses over the cost-evaluation period. For the Pick-Sloan Missouri Basin Program, the rate setting study projected the deficit associated with the drought starting in 1989 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, with interest, in FY 1997. The total revenue requirement of $135.2 million is sufficient to cover the expenses and capital requirements through September 30, 2003.

In accordance with 10 CFR part 903.23(a)(2), Western did not have a consultation and comment period. The notice of proposed extension of the firm power service and firm peaking power service rates was published in the Federal Register on March 29, 2000.

Order

In view of the foregoing and pursuant to the authority delegated to me by the Secretary, I hereby extend for a period effective February 1, 2001, and ending September 30, 2003, the existing Rate Schedules P-SED-F6 for firm power service and P-SED-FP6 on an interim basis for firm peaking power service for the P-SMBP-ED.