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DEPARTMENT OF ENERGY

Western Area Power Administration

NOTICE: NOTICES

ACTION: Power rates:

DOCUMENT ACTION: Notice of rate order.

SUBJECT CATEGORY: Pacific Northwest-Pacific Southwest Intertie Project--Firm and Nonfirm Transmission Service Rates--Rate Order No. WAPA-108

DOCUMENT SUMMARY: This action is taken to extend the existing Pacific Northwest- Pacific Southwest Intertie Project (AC Intertie) firm pointtopoint transmission service rate for the 230/345kilovolt (kV) transmission system, Rate Order No. WAPA76, and firm pointtopoint transmission service rate for the 500kV transmission system, and the nonfirm point topoint transmission service rate for the 230/345/500kV, Rate Order No. WAPA91, through December 31, 2006. AC Intertie Project rates will expire December 31, 2003.

SUMMARY: Pacific Northwest-Pacific Southwest Intertie Project,

SUPPLEMENTAL INFORMATION

By Delegation Order No. 00-037.00 effective December 6, 2001, the Secretary of Energy delegated: (1) The authority to develop longterm power and transmission rates on a nonexclusive basis to Western's Administrator; (2) the authority to confirm, approve, and place such rates into effect on an interim basis to the Deputy Secretary; 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).

Western's firm pointtopoint transmission service rate for the AC Intertie 230/345kV transmission system was revised through Rate Order No. WAPA76 and submitted to FERC for confirmation and approval on February 8, 1999. On June 22, 1999, in Docket No. EF995191000, 87 FERC ] 61,346, FERC issued an order confirming, approving, and placing into effect on a final basis the firm pointtopoint transmission service rate of $12.00/kilowattyear for the AC Intertie 230/345kV transmission system. The rate was approved for 5 years from January 1, 1999, to December 31, 2003.

During the firm pointtopoint transmission service rate development for the AC Intertie 230/345kV transmission system (Rate Order No. WAPA76), Western determined that it would take about 10 years for the AC Intertie 500kV transmission system to be subscribed to a level sufficient to meet its own revenue repayment requirements. The ratesetting Power Repayment Study (PRS) established for the AC Intertie 230/345/500kV transmission system (Rate Order No. WAPA76) reflected the phasingin of AC Intertie 500kV transmission system revenues starting in fiscal year (FY) 1999 through FY 2008. The projected firm transmission sales in the 500kV transmission system PRS assume that in 10 years the 500kV Project will be economically viable and capable of demonstrating repayment. The PRS was programmed for first year sales of 62.5 megawatt (MW) and annual increases of 100 MW through the tenth year. Based on that projection, the total sales target projected at the end of fiscal year 2003 was 562.5 MW. The 500 kV system contractual commitments are currently 664 MW. The 230/345kV system contractual commitments are 1,059 MW. The total combined firm transmission sales beginning in FY 2004 is projected to be 1,723 MW. This ratesetting PRS methodology remains valid. Projected revenue levels from sales of firm and nonfirm pointtopoint transmission service and miscellaneous items will recover project expenses and capital requirements through FY 2049 for the AC Intertie 230/345/500kV transmission system.

On August 15, 2000, the Deputy Secretary approved Rate Order WAPA 91. This extended the existing firm pointtopoint transmission service rate of $17.23/kilowattyear for the AC Intertie 500kV transmission system, and the existing nonfirm pointtopoint transmission service rate of 2.00 mills/kWh for the AC Intertie 230/345/500kV transmission system through December 31, 2003.

Western has decided to extend the existing firm pointtopoint transmission service rate of $17.23/kilowattyear for the AC Intertie 500kV transmission system, firm pointtopoint transmission service rate of $12.00/kilowattyear for the AC Intertie 230/345kV transmission system, and the nonfirm pointtopoint transmission service rate of 2.00 mills/kilowatthour for the AC Intertie 230/345/500kV transmission system through December 31, 2006. This extension will also allow Western time to evaluate impacts of combining revenue requirements of the Desert Southwest Region's transmission systems and to determine a methodology to put in place a multisystem transmission rate. Western proposes to extend the current rates pursuant to 10 CFR 903.23. Upon its approval, Rate Order No. WAPA76 and Rate Order No. WAPA91 will be extended under Rate Order No. WAPA108. Under 10 CFR 903.23(a)(2), Western did not have a consultation and comment period. Western held an informal public information forum.

Following review of Western's proposal within the Department of Energy, I approved Rate Order No. WAPA108, which extends the existing firm pointtopoint transmission service rate of $17.23/kilowattyear for the AC Intertie 500kV transmission system, the firm pointtopoint transmission service rate of $12.00/kilowattyear for the AC Intertie 230/345kV transmission system, and the nonfirm pointtopoint transmission service rate of 2.00 mills/kilowatthour for the AC Intertie 230/345/500kV transmission system on an interim basis through December 31, 2006. Rate Order No. WAPA108 will be submitted to FERC for confirmation and approval on a final basis.

Dated: October 27, 2003.
Kyle E. McSlarrow,
Deputy Secretary.
Order Confirming and Approving an Extension of the Pacific Northwest Pacific Southwest Intertie Project Firm and Nonfirm Transmission Service Rates

The Pacific NorthwestPacific Southwest Intertie Project (AC Intertie) transmission service rates were established following section 302(a) of the Department of Energy (DOE) Organization Act (42 U.S.C. 7152(a)). This act transferred to and vested in the Secretary of Energy (Secretary) 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), and other acts that specifically apply to the project system involved.

By Delegation Order No. 00037.00 effective December 6, 2001, the Secretary of Energy delegated: (1) The authority to develop longterm power and transmission rates on a nonexclusive basis to Western's Administrator; (2) the authority to confirm, approve, and place such rates into effect on an interim basis to the Deputy Secretary; 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 rate extension is issued following the Delegation Order and the DOE rate extension procedures at 10 CFR part 903.
[[Page 63084]]

Background

Western's firm pointtopoint transmission service rate for the AC Intertie 230/345kV transmission system was revised through Rate Order No. WAPA76 and submitted to FERC for confirmation and approval on February 8, 1999. On June 22, 1999, in Docket No. EF99 5191000, 87 FERC ] 61,346, FERC issued an order confirming, approving, and placing into effect on a final basis the firm point topoint transmission service rate of $12.00/kilowattyear for the AC Intertie 230/345kV transmission system. The rate was approved for 5 years from January 1, 1999, to December 31, 2003.

On August 15, 2000, the Deputy Secretary approved Rate Order WAPA91. This extended the existing firm pointtopoint transmission service rate of $17.23/kilowattyear for the AC Intertie 500kV transmission system, and the existing nonfirm pointtopoint transmission service rate of 2.00 mills/kWh for the AC Intertie 230/ 345/500kV transmission system through December 31, 2003.

Discussion

During development of the firm pointtopoint transmission service rate for the AC Intertie 230/345kV transmission system (Rate Order No. WAPA76), Western determined that it would take about 10 years for the AC Intertie 500kV transmission system to be subscribed to a level sufficient to meet its own revenue repayment requirements. The ratesetting Power Repayment Study (PRS)
established for the AC Intertie 230/345/500kV transmission system (Rate Order No. WAPA76) reflected the phasingin of the AC Intertie 500kV transmission system revenues starting in fiscal year (FY) 1999 through FY 2008. The projected firm transmission sales in the 500kV transmission system PRS assume that in 10 years the 500kV Project will be economically viable and capable of demonstrating repayment. The PRS was programmed for first year sales of 62.5 MW and annual increases of 100 MW through the tenth year. Based on that projection, the total sales target projected at the end of fiscal year 2003 is 562.5 MW. The 500kV system contractual commitments are currently 664 MW. The 230/345kV system contractual commitments are 1,059 MW. The total combined firm transmission sales beginning in FY 2004 is projected to be 1,723 MW. This ratesetting PRS methodology remains valid. Projected revenue levels from sales of firm and nonfirm pointtopoint transmission service and miscellaneous items will recover project expenses and capital requirements through FY 2049 for the AC Intertie 230/345/500kV transmission system.

Western has decided to extend the existing firm pointtopoint transmission service rate of $17.23/kilowattyear for the AC Intertie 500kV transmission system, the firm pointtopoint transmission service rate of $12.00/kilowattyear for the AC Intertie 230/345kV transmission system, and the nonfirm pointtopoint transmission service rate of 2.00 mills/kilowatthour for the AC Intertie 230/345/ 500kV transmission system through December 31, 2006. This extension will also allow Western time to evaluate impacts of combining revenue requirements of the Desert Southwest Region's transmission systems and to determine a methodology to put in place a multi system transmission rate. Western proposes to extend the current rates pursuant to 10 CFR 903.23. Upon its approval, Rate Order No. WAPA76 and Rate Order No. WAPA91 will be extended under Rate Order No. WAPA108. Under 10 CFR 903.23(a)(2), Western did not have a consultation and comment period.

Order

In view of the above and under the authority delegated to me by the Secretary, I hereby extend from December 31, 2003, to December 31, 2006, the existing firm pointtopoint transmission service rate of $17.23/kilowattyear for the AC Intertie 500kV transmission system, the firm pointtopoint transmission service rate of $12.00/ kilowattyear for the AC Intertie 230/345kV transmission system, and the nonfirm pointtopoint transmission service rate of 2.00 mills/ kilowatthour for the AC Intertie 230/345/500kV transmission system on an interim basis. The existing AC Intertie transmission system rates for transmission service shall remain in effect pending FERC confirmation and approval of their extension or substitute rates on a final basis through December 31, 2006.

Dated: October 27, 2003.
Kyle E. McSlarrow,
Deputy Secretary.
[FR Doc. 0328095 Filed 11603; 8:45 am]
BILLING CODE 645001P

FOR FURTHER INFORMATION CONTACT Mr. Jack Murray, Rates Team Lead, Desert Southwest Customer Service Region, Western Area Power Administration, P.O. Box 6457, Phoenix, AZ 850056457, (602) 3522442, or email jmurray@wapa.gov.