80 FR 12819 - Proposed Rate Adjustment for Kerr-Philpott System

DEPARTMENT OF ENERGY
Southeastern Power Administration

Federal Register Volume 80, Issue 47 (March 11, 2015)

Southeastern will host a public information and comment forum to discuss its proposal to replace existing schedules of rates and charges applicable for the sale of power from the Kerr-Philpott System effective for a five-year period from October 1, 2015, through September 30, 2020. Southeastern will evaluate all comments received in this process.

[Federal Register Volume 80, Number 47 (Wednesday, March 11, 2015)]
[Notices]
[Pages 12819-12820]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-05534]



[[Page 12819]]

-----------------------------------------------------------------------

DEPARTMENT OF ENERGY

Southeastern Power Administration


Proposed Rate Adjustment for Kerr-Philpott System

AGENCY: Southeastern Power Administration (Southeastern), DOE.

ACTION: Notice of public hearing and opportunities for review and 
comment.

-----------------------------------------------------------------------

SUMMARY: Southeastern will host a public information and comment forum 
to discuss its proposal to replace existing schedules of rates and 
charges applicable for the sale of power from the Kerr-Philpott System 
effective for a five-year period from October 1, 2015, through 
September 30, 2020. Southeastern will evaluate all comments received in 
this process.

DATES: Written comments are due on or before June 9, 2015. A public 
information and comment forum will be held in Boydton, Virginia, at 
10:00 a.m. on April 21, 2015. Persons desiring to speak at the forum 
should notify Southeastern at least seven (7) days before the forum is 
scheduled so that a list of forum participants can be prepared. Others 
present at the forum may speak if time permits. Persons desiring to 
attend the forum should notify Southeastern at least seven (7) days 
before the forum is scheduled. Unless Southeastern has been notified by 
the close of business on April 14, 2015, that at least one person 
intends to be present at the forum, the forum may be canceled.

ADDRESSES: Written comments should be submitted to: Kenneth E. Legg, 
Administrator, Southeastern Power Administration, Department of Energy, 
Elberton, GA 30635. The public comment forum will meet at the John H. 
Kerr Visitor Assistance Center, 1930 Mays Chapel Road, Boydton, 
Virginia, 23917; Phone: (434) 738-6633.

FOR FURTHER INFORMATION CONTACT: Virgil G. Hobbs III, Assistant 
Administrator, Finance and Marketing, Southeastern Power 
Administration, Department of Energy, 1166 Athens Tech Road, Elberton, 
GA 30635-6711, (706) 213-3800; Email: [email protected].

SUPPLEMENTARY INFORMATION: The Federal Energy Regulatory Commission 
(FERC), by order issued March 11, 2011, 134 FERC ] 62,233, confirmed 
and approved Rate Schedules VA-1-B, VA-2-B, VA-3-B, VA-4-B, CP&L-1-B, 
CP&L-2-B, CP&L-3-B, CP&L-4-B, AP-1-B, AP-2-B, AP-3-B, AP-4-B, NC-1-B, 
and Replacement-2-A, for the period October 1, 2010, through September 
30, 2015. A repayment study prepared in January of 2015 showed that 
existing rates are adequate to recover all costs required by present 
repayment criteria. However, approval of the existing rate schedules 
expires September 30, 2015.
    The existing rate schedules include two true-up mechanisms. First, 
the base capacity and base energy charge are subject to annual 
adjustment on April 1 of each year based on transfers to plant in 
service for the preceding fiscal year. The adjustment is for each 
increase of $1,000,000 to plant in service and increase of $0.013 per 
kilowatt per month added to the capacity charge and 0.052 mills per 
kilowatt-hour added to the energy charge. Second, the rates include a 
true-up of the capacity and energy rates based on the variance of the 
actual net revenue available for repayment from the planned net revenue 
available for repayment. The adjustment is for every $100,000 under-
recovery of the planned net revenue available for repayment, the base 
capacity charge is increased by $0.02 per kilowatt per month, up to a 
maximum of $0.75 per kilowatt per month, and the base energy charge is 
increased by 0.10 mills per kilowatt-hour, up to a maximum of 3.0 mills 
per kilowatt-hour. For every $100,000 over-recovery of the planned net 
revenue available for repayment, the base capacity charge is reduced by 
$0.02 per kilowatt per month, up to a maximum of $0.75 per kilowatt per 
month, and the base energy charge is reduced by 0.10 mills per 
kilowatt-hour, up to a maximum of 3.0 mills per kilowatt-hour.
    The initial base capacity charge for the current rate schedules was 
$3.65 per kilowatt per month. The initial base energy charge was 14.63 
mills per kilowatt-hour. As of April 1, 2015, the base capacity charge 
has increased to $4.30 per kilowatt per month and the base energy 
charge has increased to 17.23 mills per kilowatt-hour because of 
transfers to plant in service. The true-up adjustment for net revenue 
available for repayment reduced the April 1, 2015 capacity charge to 
$4.18 per kilowatt per month and the energy charge to 16.63 mills per 
kilowatt-hour. The existing rates are adequate to meet repayment 
criteria. However, implementation of the true-ups incorporated in the 
rate schedules has proven to be difficult for Southeastern staff and 
customers to understand, and the rates have proven to be volatile. 
Southeastern is proposing to modify the true-up in an effort to 
simplify the process and stabilize the rates.

 Proposed Unit Rates

    The initial base rates for capacity and energy will be as follows:

Capacity: $3.97 per kW per month
Energy: 16.04 mills per kWh

    Southeastern proposes to eliminate the true-up mechanism for 
transfers to plant in service. The rates are based on a repayment study 
that projects the Kerr-Philpott System are expected to produce the 
following net revenue available for repayment (rounded to nearest 
$10,000):

------------------------------------------------------------------------
                                             Estimated
                                            annual net    Cumulative net
               Fiscal year                    revenue         revenue
                                           available for   available for
                                             repayment       repayment
------------------------------------------------------------------------
2015....................................      $2,130,000      $2,130,000
2016....................................       2,120,000       4,250,000
2017....................................       1,830,000       6,080,000
2018....................................       1,640,000       7,720,000
2019....................................       1,640,000       9,360,000
2020....................................       1,720,000      11,080,000
2021....................................       1,800,000      12,880,000
2022....................................       1,870,000      14,750,000
2023....................................       1,950,000      16,700,000
2024....................................       2,040,000      18,740,000
------------------------------------------------------------------------

    The proposed rates include a true-up of the capacity and energy 
rates based on the cumulative net revenue available for repayment from 
the table above. For every $100,000 under-recovery of the planned 
cumulative net revenue available for repayment, Southeastern will 
increase the base capacity charge by $0.02 per kilowatt per month, up 
to a maximum of $0.75 per kilowatt per month, and increase the base 
energy charge by 0.10 mills per kilowatt-hour, up to a maximum of 3.0 
mills per kilowatt-hour. For every $100,000 over-recovery of the 
planned cumulative net revenue available for repayment, Southeastern 
will reduce the base capacity charge by $0.02 per kilowatt per month, 
up to a maximum of $0.75 per kilowatt per month, and reduce the base 
energy charge by 0.10 mills per kilowatt-hour, up to a maximum of 3.0 
mills per kilowatt-hour, to be implemented April 1 of the next fiscal 
year.
    The initial base rate is a revenue reduction of $1,301,000 
annually, or about six percent (6%) under the base rates currently in 
effect.
    Southeastern is proposing the following rate schedules to be 
effective for the period from October 1, 2015, through September 30, 
2020. The capacity charge and energy charge will be the same for all 
rate schedules. These rate schedules are necessary to accommodate the 
transmission and scheduling arrangements that are available in the 
Kerr-Philpott System.

[[Page 12820]]

Rate Schedule VA-1-C

    Available to public bodies and cooperatives in Virginia and North 
Carolina to whom power may be transmitted and scheduled pursuant to 
contracts between the Government, Virginia Electric and Power Company 
(also known as Dominion Virginia Power [DVP]), and DVP's Transmission 
Operator, currently PJM Interconnection, LLC (PJM).

Rate Schedule VA-2-C

    Available to public bodies and cooperatives in Virginia and North 
Carolina to whom power may be transmitted pursuant to contracts between 
the Government, DVP, and PJM. The customer is responsible for providing 
a scheduling arrangement with the Government.

Rate Schedule VA-3-C

    Available to public bodies and cooperatives in Virginia and North 
Carolina to whom power may be scheduled pursuant to contracts between 
the Government, DVP, and PJM. The customer is responsible for providing 
a transmission arrangement.

Rate Schedule VA-4-C

    Available to public bodies and cooperatives in the service area of 
DVP and PJM. The customer is responsible for providing a scheduling 
arrangement with the Government and for providing a transmission 
arrangement.

Rate Schedule CP&L-1-C

    Available to public bodies and cooperatives in North Carolina to 
whom power may be transmitted and scheduled pursuant to contracts 
between the Government and Duke Energy Progress (as successor of 
Carolina Power & Light).

Rate Schedule CP&L-2-C

    Available to public bodies and cooperatives in North Carolina to 
whom power may be transmitted pursuant to contracts between the 
Government and Duke Energy Progress (as successor of Carolina Power & 
Light). The customer is responsible for providing a scheduling 
arrangement with the Government.

Rate Schedule CP&L-3-C

    Available to public bodies and cooperatives in North Carolina to 
whom power may be scheduled pursuant to contracts between the 
Government and Duke Energy Progress (as successor of Carolina Power & 
Light). The customer is responsible for providing a transmission 
arrangement.

Rate Schedule CP&L-4-C

    Available to public bodies and cooperatives in the service area of 
Duke Energy Progress. The customer is responsible for providing a 
scheduling arrangement with the Government and for providing a 
transmission arrangement.

Rate Schedule AP-1-C

    Available to public bodies and cooperatives in Virginia to whom 
power may be transmitted and scheduled pursuant to contracts between 
the Government, American Electric Power Service Corporation and the 
American Electric Power Service Corporation's Transmission Operator, 
currently and the PJM Interconnection, LLC (PJM).

Rate Schedule AP-2-C

    Available to public bodies and cooperatives in Virginia to whom 
power may be transmitted pursuant to contracts between the Government, 
American Electric Power Service Corporation, and PJM. The customer is 
responsible for providing a scheduling arrangement with the Government.

Rate Schedule AP-3-C

    Available to public bodies and cooperatives in Virginia to whom 
power may be scheduled pursuant to contracts between the Government, 
American Electric Power Service Corporation, and PJM. The customer is 
responsible for providing a transmission arrangement.

Rate Schedule AP-4-C

    Available to public bodies and cooperatives in the service area of 
American Electric Power Service Corporation and PJM. The customer is 
responsible for providing a scheduling arrangement with the Government 
and for providing a transmission arrangement.

Rate Schedule NC-1-C

    Available to public bodies and cooperatives in Virginia and North 
Carolina to whom power may be transmitted pursuant to a contract 
between the Government and PJM and scheduled pursuant to a contract 
between the Government and Duke Energy Progress (as successor of 
Carolina Power & Light).

Rate Schedule Replacement-2-B

    This rate schedule shall be applicable to the sale energy purchased 
to meet contract minimum energy and sold under appropriate contracts 
between the Government and the Customer.
    The referenced repayment studies are available for examination at 
1166 Athens Tech Road, Elberton, GA 30635. Proposed Rate Schedules VA-
1-C, VA-2-C, VA-3-C, VA-4-C, CP&L-1-C, CP&L-2-C, CP&L-3-C, CP&L-4-C, 
AP-1-C, AP-2-C, AP-3-C, AP-4-C, NC-1-B, and Replacement-2-B are also 
available.

    Issued at Elberton, Georgia, on February 26, 2015.
Kenneth E. Legg,
Administrator.
[FR Doc. 2015-05534 Filed 3-10-15; 8:45 am]
 BILLING CODE 6450-01-P