Proposed Rates for Transmission Service on the Central Arizona Project 115-kV and 230-kV Transmission Lines

AGENCY:

Western Area Power Administration, DOE.

ACTION:

Notice of proposed rates.

SUMMARY:

The Western Area Power Administration's (Western) Desert Southwest Customer Service Region (DSW) is proposing rate methodologies to calculate the rates for firm point-to-point transmission service, nonfirm point-to-point transmission service, and Network Integration Transmission Service (NITS) on the Central Arizona Project (CAP) 115-kV and 230-kV transmission lines. The proposed calculated rates will provide enough revenue to pay all annual costs, including interest expense, and repay the required investment within the allowable period. The proposed rate methodologies are scheduled to go into effect on October 1, 2000, and will remain in effect through September 30, 2005. This Federal Register notice initiates the formal process for these proposed rate methodologies.

DATES:

The consultation and comment period will begin from the date of publication of this Federal Register notice and will end August 22, 2000. DSW will present a detailed explanation of the proposed rate methodologies and will make available a rate brochure at a public information forum scheduled for June 16, 2000, beginning at 10 a.m. MST, at the DSW office. Western will receive oral and written comments at a public comment forum on July 17, 2000, beginning at 10 a.m. MST, also to be held at the DSW office.

ADDRESSES:

Written comments are to be sent to: Mr. J. Tyler Carlson, Regional Manager, Desert Southwest Customer Service Region, Western Area Power Administration, P.O. Box 6457, Phoenix, AZ 85005-6457, or by e-mail: carlson@wapa.gov. Western should receive written comments by the end of the consultation and comment period to be assured consideration. Western's DSW office, is located at 615 South 43rd Avenue, Phoenix, Arizona.

FOR FURTHER INFORMATION CONTACT:

Mr. Maher A. Nasir, Rates Team Lead, Desert Southwest Customer Service Region, Western Area Power Administration, P.O. Box 6457, Phoenix, AZ 85005-6457, telephone (602) 352-2768, or by e-mail: nasir@wapa.gov.

SUPPLEMENTARY INFORMATION:

The CAP 115-kV and 230-kV transmission lines have been used almost exclusively to provide power to the CAP water pumps. The planned construction of a number of independent power plants in Arizona and Nevada creates a potential demand for use of surplus transmission capacity on the CAP 115-kV and 230-kV transmission lines.

The proposed rate methodologies for point-to-point transmission service and NITS on the CAP 115-kV and 230-kV transmission lines are based on a revenue requirement that recovers the CAP 115-kV and 230-kV transmission lines costs for facilities associated with providing transmission service and the non-facilities costs allocated to transmission service. The methodology for calculating the rates for point-to-point transmission service on the CAP 115-kV and 230-kV transmission lines is determined by combining the annual amortization costs with the annual operations and maintenance costs, divided by the annual average contract rate of delivery. Implementing the proposed rate methodology results in a firm point-to-point CAP 115BkV and 230-kV transmission line rate of $8.37 per kilowattyear and a nonfirm point-to-point CAP 115-kV and 230-kV transmission line rate of 0.96 mills/kWh.

NITS allows a transmission customer to integrate, plan, economically dispatch, and regulate its network resources to serve its native load in a way comparable to how a transmission provider uses its own transmission system to service its native load customers. The monthly charge methodology for NITS on the CAP 115-kV and 230-kV transmission lines is the product of the transmission customer's load-ratio share times one-twelfth of the annual transmission revenue requirement. The customer's load-ratio share is calculated on a rolling 12-month basis (12CP). The customer's load-ratio share is equal to that customers' hourly load coincident with the CAP 115-kV and 230-kV transmission lines monthly transmission system peak divided by the resultant value of the CAP 115-kV and 230-kV transmission lines monthly transmission system peak minus the CAP 115-kV and 230-kV transmission lines coincident peak for all firm point-to-point transmission service plus the CAP 115-kV and 230-kV transmission lines firm point-to-point transmission service reservations.

The proposed rate methodologies include the costs for scheduling, system control, and dispatch service.

These rate methodologies for transmission service on the CAP 115-kV and 230-kV transmission lines are being set following the Department of Energy Organization Act, 42 U.S.C. 7101-7352; 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); and other acts specifically applicable to the project involved.

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 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. 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.

Existing Department of Energy procedures for public participation in power rate adjustments are located at 10 CFR part 903 effective on September 18, 1985 (50 FR 37835). Since the proposed rates constitute a major rate adjustment as defined in 10 CFR 903.2, both a public information forum and a public comment forum will be held. After reviewing public comments, Western will recommend the proposed rate methodologies be approved on an interim basis by the Deputy Secretary.

Availability of Information

All brochures, studies, comments, letters, memorandums, and other documents made or kept by Western in developing the proposed rate methodologies will be made available for inspection and copying at the DSW office, located at 615 South 43rd Avenue, Phoenix, Arizona.

Regulatory Procedural 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 that particularly applies to rates or services applicable to public property.

Environmental Compliance

In compliance with the National Environmental Policy Act of 1969 (NEPA) (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 the preparation of 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.