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DEPARTMENT OF ENERGY

Western Area Power Administration

NOTICE: NOTICES

ACTION: Power rates:

DOCUMENT ACTION: Notice of Order Concerning Power Rates.

SUBJECT CATEGORY: Loveland Area Projects--Rate Order No. WAPA-134

DATES: Rate Schedule L-F7 will be placed into effect on an interim basis on the first day of the first full billing period beginning on or after January 1, 2008, and will be in effect until FERC confirms, approves, and places the provisional rates into effect on a final basis ending December 31, 2012, or until the rate schedule is superseded.

DOCUMENT SUMMARY: The Deputy Secretary of Energy confirmed and approved Rate Order No. WAPA134 and Rate Schedule LF7, placing firm electric service rates from the Loveland Area Projects (LAP) of the Western Area Power Administration (Western) into effect on an interim basis. The provisional rates will be in effect until the Federal Energy Regulatory Commission (FERC) confirms, approves, and places them into effect on a final basis or until they are replaced by other rates. The provisional rates will provide sufficient revenue to pay all annual costs, including interest expenses, and repay power investment and irrigation aid within the allowable periods.

SUMMARY: Loveland Area Projects,

SUPPLEMENTAL INFORMATION

The Deputy Secretary of Energy approved existing Rate Schedule LF6 for LAP firm electric service on an interim basis on November 9, 2005 \1\. The existing rate schedule is effective from January 1, 2006, through December 31, 2010.
\1\ Rate Order No. WAPA125, November 9, 2005 (70 FR 71273). It was confirmed and approved by FERC on a final basis on June 14, 2006, in Docket No. EF065181000 (115 FERC ] 62276).

The LAP firm power rates must be increased due to the economic impact of the drought, increased operation and maintenance and other annual expenses, increased investments, and increased interest expense associated with drought induced deficits. Additionally, under Rate Schedule LF7, Western will identify its firm electric revenue requirement using a Base component (Base) and a Drought Adder component (Drought Adder).

The existing firm electric service Rate Schedule LF6 is being superseded by Rate Schedule LF7. Under the current Rate Schedule LF6, a twostep method was approved. The composite rate for the second step of Rate Schedule LF6, effective on January 1, 2007, is 27.36 mills per kilowatthour (mills/kWh), the firm energy rate is 13.68 mills/kWh and the firm capacity rate is $3.59 per kilowattmonth (kWmonth). Under Rate Schedule LF7, the provisional rates for LAP firm electric services will result in a combined composite rate of 32.42 mills/kWh. The energy rate will be 16.21 mills/kWh (a Base component of 11.92 mills/kWh and a Drought Adder component of 4.29 mills/kWh) and the capacity rate will be $4.25/kWmonth (a Base component of $3.13/kWmonth and a Drought Adder component of $1.12/kWmonth). This will result in an increase of 18.5 percent when compared with the existing LAP firm power rate under Rate Schedule LF6.

By Delegation Order No. 00037.00, effective December 6, 2001, the Secretary of Energy delegated: (1) The authority to develop power and transmission rates to Western's Administrator, (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 FERC. Existing DOE procedures for public participation in power rate adjustments (10 CFR part 903) were published on September 18, 1985.

Under Delegation Order Nos. 00037.00 and 00001.00C, 10 CFR part 903, and 18 CFR part 300, I hereby confirm, approve, and place Rate Order No. WAPA134 and the proposed LAP firm electric service rates into effect on an interim basis. The new Rate Schedule LF7 will be promptly submitted to FERC for confirmation and approval on a final basis.

Dated: November 1, 2007.
Clay Sell,
Deputy Secretary of Energy.
Department of Energy; Deputy Secretary
In the matter of: Western Area Power Administration Rate Adjustment for the Loveland Area Projects: Order Confirming, Approving, and Placing the Loveland Area Projects Firm Electric Service Rates Into Effect on an Interim Basis

Rate Order No. WAPA134]

These rates for Loveland Area Projects firm electric service were established in accordance with section 302 of the Department of Energy (DOE) Organization Act (42 U.S.C. 7152). This Act 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 section 5 of the Flood Control Act of 1944 (16 U.S.C. 825s); and other Acts that specifically apply to the project involved.

By Delegation Order No. 00037.00, effective December 6, 2001, the Secretary of Energy delegated: (1) The authority to develop power and transmission rates to Western's Administrator, (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 FERC. Existing DOE procedures for public participation in power rate adjustments (10 CFR part 903) were published on September 18, 1985.

Acronyms and Definitions

As used in this Rate Order, the following acronyms and definitions apply:
Administrator: The Administrator of the Western Area Power Administration.
Base: Revenue requirement component of the power rate including annual operation and maintenance expenses, investment repayment and associated interest, normal timing power purchases, and transmission costs. Capacity: The electric capability of a generator, transformer, transmission circuit, or other equipment. It is expressed in kilowatts. [[Page 64062]]
Capacity charge: The rate which sets forth the charges for capacity. It is expressed in dollars per kWmonth.
Composite rate: The rate for commercial firm power which is the total annual revenue requirement for capacity and energy divided by the total annual firm energy sales under contract. It is expressed in mills per kilowatthour and used for comparison purposes.
Criteria: The Post1989 General Power Marketing and Allocation Criteria for the sale of energy with capacity from the PickSloan Missouri Basin ProgramWestern Division and the FryingpanArkansas Project.
Customer: An entity with a contract for and receiving firm electric service from Western's Rocky Mountain Region.
Deficits: Deferred or unrecovered annual expenses.
DOE Order RA 6120.2: An order outlining power marketing administration financial reporting and ratemaking procedures.
Drought Adder: Formulabased revenue requirement component including costs associated with the drought.
Energy: Measured in terms of the work it is capable of doing over a period of time. It is expressed in kilowatthours.
Energy charge: The rate which sets forth the charges for energy. It is expressed in mills per kilowatthour and applied to each kilowatthour delivered to each customer.

FOR FURTHER INFORMATION CONTACT Mr. James D. Keselburg, Regional Manager, Rocky Mountain Customer Service Region, Western Area Power Administration, 5555 East Crossroads Boulevard, Loveland, CO, 80538 8986, telephone (970) 4617201, or Mrs. Sheila D. Cook, Rates Manager, Rocky Mountain Customer Service Region, Western Area Power Administration, 5555 East Crossroads Boulevard, Loveland, CO, 80538 8986, telephone (970) 4617211, email scook@wapa.gov.