80 FR 79883 - Robert D. Willis Hydropower Project Power Rate

DEPARTMENT OF ENERGY
Southwestern Power Administration

Federal Register Volume 80, Issue 246 (December 23, 2015)

Pursuant to Delegation Order Nos. 00-037.00A, effective October 25, 2013, and 00-001.00F, effective November 17, 2014, the Deputy Secretary has approved and placed into effect on an interim basis Rate Order No. SWPA-70, which increases the power rate for the Robert D. Willis Hydropower Project (Willis) pursuant to the Willis Rate Schedule (RDW-15) which supersedes the existing rate schedule.

[Federal Register Volume 80, Number 246 (Wednesday, December 23, 2015)]
[Notices]
[Pages 79883-79885]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-32365]


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DEPARTMENT OF ENERGY

Southwestern Power Administration


Robert D. Willis Hydropower Project Power Rate

AGENCY: Southwestern Power Administration, DOE.

ACTION: Notice of rate order.

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SUMMARY: Pursuant to Delegation Order Nos. 00-037.00A, effective 
October 25, 2013, and 00-001.00F, effective November 17, 2014, the 
Deputy Secretary has approved and placed into effect on an interim 
basis Rate Order No. SWPA-70, which increases the power rate for the 
Robert D. Willis Hydropower Project (Willis) pursuant to the Willis 
Rate Schedule (RDW-15) which supersedes the existing rate schedule.

DATES: The effective period for the rate schedule specified in Rate 
Order No. SWPA-70 is January 1, 2016, through September 30, 2019.

FOR FURTHER INFORMATION CONTACT: Mr. Marshall Boyken, Senior Vice 
President, Chief Operating Office, Southwestern Power Administration, 
U.S. Department of Energy, Williams Center Tower I, One West Third 
Street, Tulsa, Oklahoma 74103, (918) 595-6646, 
[email protected].

SUPPLEMENTARY INFORMATION: Rate Order No. SWPA-70, which has been 
approved and placed into effect on an interim basis, increases the 
power rate for Willis pursuant to the following Rate Schedule:

    Rate Schedule RDW-15, Wholesale Rates for Hydro Power and Energy 
Sold to Sam Rayburn Municipal Power Agency (Contract No. DE-PM75-
85SW00117)

    The rate schedule supersedes the existing rate schedule shown 
below:

    Rate Schedule RDW-14, Wholesale Rates for Hydro Power and Energy 
Sold to Sam Rayburn Municipal Power Agency (Contract No. DE-PM75-
85SW00117) (superseded by RDW-15)

    Southwestern Power Administration's (Southwestern) Administrator 
has determined, based on the 2015 Willis Current Power Repayment Study 
that the existing power rate will not satisfy cost recovery criteria 
specified in Department of Energy Order No. RA 6120.2 and Section 5 of 
the Flood Control Act of 1944. The finalized 2015 Willis Power 
Repayment Studies indicate that an increase in annual revenue of 
$101,340, or 8.6 percent, beginning January 1, 2016, will satisfy cost 
recovery criteria for Willis. The proposed Willis rate schedule would 
ultimately increase annual revenues from $1,181,496 to $1,282,836, to 
recover increased costs associated with operations and maintenance as 
well as increased costs for investments and replacements in the 
hydroelectric generating facility and the associated increased interest 
expense, with one half (4.3 percent) beginning January 1, 2016, and the 
remaining one half (4.3 percent) beginning on January 1, 2017.
    The Administrator has followed title 10, part 903 subpart A, of the 
Code of Federal Regulations (10 CFR part 903), ``Procedures for Public 
Participation in Power and Transmission Rate Adjustments and 
Extensions'' in connection with the proposed rate schedule. On October 
9, 2015, Southwestern published notice in the Federal Register, (80 FR 
61205), of the proposed power rate increase for Willis. Southwestern 
provided a 30-day comment period as an opportunity for customers and 
other interested members of the public to review and comment on the 
proposed power rate increase with written comments due by November 9, 
2015. Southwestern did not hold the combined Public Information and 
Comment Forum (Forum) because Southwestern did not receive any requests 
to hold the Forum. One comment was received from Gillis, Borchardt and 
Barthel LLP, on behalf of the Vinton Public Power Authority and the Sam 
Rayburn Generation and Transmission Cooperative which stated they had 
no objection to the proposed rate adjustment.
    Information regarding this rate proposal, including studies and 
other supporting material, is available for public review and comment 
in the offices of Southwestern Power Administration, Williams Center 
Tower I, One West Third Street, Tulsa, Oklahoma 74103. Following review 
of Southwestern's proposal within the Department of Energy, I approved 
Rate Order No. SWPA-70, on an interim basis, which ultimately increases 
the existing Willis power rate to $1,282,836 per year for the period 
January 1, 2016 through September 30, 2019.

    Dated: December 17, 2015.
Elizabeth Sherwood-Randall,
Deputy Secretary.

DEPARTMENT OF ENERGY

DEPUTY SECRETARY OF ENERGY

    In the matter of: Southwestern Power Administration, Robert D. 
Willis Hydropower Project Power Rate

[[Page 79884]]

Rate Order No. SWPA-70

ORDER CONFIRMING, APPROVING AND PLACING INCREASED POWER RATE SCHEDULE 
IN EFFECT ON AN INTERIM BASIS

    Pursuant to Sections 302(a) and 301(b) of the Department of Energy 
Organization Act, Public Law 95-91, the functions of the Secretary of 
the Interior and the Federal Power Commission under Section 5 of the 
Flood Control Act of 1944, 16 U.S.C. 825s, relating to the Southwestern 
Power Administration (Southwestern) were transferred to and vested in 
the Secretary of Energy. By Delegation Order No. 00-037.00A, the 
Secretary of Energy delegated to the Administrator of Southwestern the 
authority to develop power and transmission rates, delegated to the 
Deputy Secretary of the Department of Energy the authority to confirm, 
approve, and place in effect such rates on an interim basis and 
delegated to the Federal Energy Regulatory Commission (FERC) the 
authority to confirm and approve on a final basis or to disapprove 
rates developed by the Administrator under the delegation. Pursuant to 
that delegated authority, the Deputy Secretary issued this interim rate 
order.

BACKGROUND

    The Robert Douglas Willis Hydropower Project (Willis) (aka: Dam B 
and later Town Bluff Dam), located on the Neches River in eastern Texas 
downstream from the Sam Rayburn Dam, was originally constructed in 1951 
by the U.S. Army Corps of Engineers (Corps) and provides stream flow 
regulation of releases from the Sam Rayburn Dam. The Lower Neches 
Valley Authority contributed funds toward construction of both projects 
and makes established annual payments for the right to withdraw up to 
2000 cubic feet of water per second from Willis for its own use. Power 
was legislatively authorized at the project, but installation of 
hydroelectric facilities was deferred until justified by economic 
conditions. A determination of feasibility was made in a 1982 Corps 
study. In 1983, the Sam Rayburn Municipal Power Agency (SRMPA) proposed 
to sponsor and finance the development of hydropower at Willis in 
return for the output of the project to be delivered to its member 
municipalities and participating member cooperatives of the Sam Rayburn 
Dam Electric Cooperative.
    The Willis power rate excludes the costs associated with the 
hydropower design and construction performed by the Corps, because all 
funds for these costs were provided by SRMPA. Under the Southwestern/
SRMPA power sales Contract No. DE-PM75-85SW00117, SRMPA will continue 
to pay all annual operating and maintenance costs, as well as expected 
capital replacement costs, through the power rate paid to Southwestern, 
and will receive all power and energy produced at the project for a 
period of 50 years.
    FERC confirmation and approval of the current Willis rate schedule 
was provided in FERC Docket No. EF15-5-000 issued on June 3, 2015, (151 
FERC ]62,156) effective for the period January 1, 2015, through 
September 30, 2018.

DISCUSSION

    Southwestern prepared a 2015 Current Power Repayment Study which 
indicated that the existing power rate would not satisfy present 
financial criteria regarding repayment of investment within a 50-year 
period due to increased costs associated with Corps operations and 
maintenance as well as increased costs for investments and replacements 
in the hydroelectric generating facilities and the associated increased 
interest expense. The 2015 Revised Power Repayment Study indicated the 
need for an 8.6 percent revenue increase. These preliminary results, 
which presented the basis for the proposed revenue increase, were 
provided to the customers for their review prior to the formal process.
    The 2015 Revised Power Repayment Study has been finalized and 
indicates that an increase in annual revenues of $101,340 (8.6 percent) 
is necessary beginning January 1, 2016, to accomplish repayment in the 
required number of years. Accordingly, Southwestern has prepared a 
proposed rate schedule based on the additional revenue requirement to 
ensure repayment.
    Southwestern conducted the rate adjustment proceeding in accordance 
with title 10, part 903, subpart A of the Code of Federal Regulations 
(10 CFR part 903), ``Procedures for Public Participation in Power and 
Transmission Rate Adjustments and Extensions.'' More specifically, 
opportunities for public review and comment during a 30-day period on 
the proposed Willis power rate were announced by a Federal Register 
notice published on October 9, 2015 (80 FR 61205), with written 
comments due November 9, 2015. The combined Public Information and 
Comment Forum scheduled for October 28, 2015, in Tulsa, Oklahoma was 
not held because Southwestern did not receive any requests to hold the 
forum. Southwestern provided the Federal Register notice, to the 
customers and interested parties for review and comment during the 
public comment period. In response to concerns expressed by 
Southwestern's customers during their review of the preliminary results 
of the 2015 Power Repayment Studies, Southwestern is increasing revenue 
in two steps over a twelve month period. Because Southwestern's current 
Willis power rate is sufficient to recover all average operation and 
maintenance expenses during the next two years, the ability to meet 
both annual and long-term repayment criteria is satisfied by increasing 
revenues in steps over the period.
    The first step of the rate increase, beginning January 1, 2016, 
would incorporate one half of the required revenue increase ($50,670 or 
4.3 percent). The second step of the rate increase, beginning January 
1, 2017, and ending on September 30, 2019, would incorporate the 
remaining one half of the revenue increase requirement ($50,670 or 4.3 
percent). Southwestern will continue to perform its Power Repayment 
Studies annually, and if the 2016 results should indicate the need for 
additional revenues, another rate filing will be conducted and updated 
revenue requirements implemented for Fiscal Year 2017 and thereafter.
    Following the conclusion of the comment period on November 9, 2015, 
Southwestern finalized the Power Repayment Studies and rate schedule 
for the proposed annual rate of $1,282,836 which is the lowest possible 
rate needed to satisfy repayment criteria. This rate represents an 
annual increase of 8.6 percent. The Administrator made the decision to 
submit the rate proposal for interim approval and implementation.

COMMENTS AND RESPONSES

    Southwestern received one comment during the public comment period. 
The comment on behalf of the Vinton Public Power Authority and the Sam 
Rayburn Generation and Transmission Cooperative expressed no objection 
to the proposed rate increase.

AVAILABILITY OF INFORMATION

    Information regarding this power rate increase, including studies, 
comments and other supporting material, is available for public review 
in the offices of Southwestern Power Administration, One West Third 
Street, Tulsa, OK 74103.

ADMINISTRATION'S CERTIFICATION

    The 2015 Willis Revised Power Repayment Study indicates that the 
increased power rate of $1,282,836 will repay all costs of the project 
including

[[Page 79885]]

amortization of the power investment consistent with the provisions of 
Department of Energy Order No. RA 6120.2. In accordance with Delegation 
Order No. 00-037.00A (October 25, 2013), and Section 5 of the Flood 
Control Act of 1944, the Administrator has determined that the proposed 
Willis power rate is consistent with applicable law and is the lowest 
possible rate to the customer consistent with sound business 
principles.

ENVIRONMENT

    The environmental impact of the power rate increase proposal was 
evaluated in consideration of the Department of Energy's guidelines for 
implementing the procedural provisions of the National Environmental 
Policy Act and was determined to fall within the class of actions that 
are categorically excluded from the requirements of preparing either an 
Environmental Impact Statement or an Environmental Assessment (10 CFR 
part 1021, App. B to subpart D, Sec.  B1.1 ``Changing rates & 
prices'').

ORDER

    In view of the foregoing and pursuant to the authority delegated to 
me by the Secretary of Energy, I hereby confirm, approve and place in 
effect on an interim basis, effective January 1, 2016, through 
September 30, 2019, the phased-in annual Willis power rate of 
$1,282,836 for the sale of power and energy from Willis to the Sam 
Rayburn Municipal Power Agency, under Contract No. DE-PM75-85SW00117, 
as amended. This rate shall remain in effect on an interim basis 
through September 30, 2019, or until the FERC confirms and approves the 
rate on a final basis.

Dated: December 17, 2015

Dr. Elizabeth Sherwood-Randall,
Deputy Secretary

UNITED STATES DEPARTMENT OF ENERGY

SOUTHWESTERN POWER ADMINISTRATION

RATE SCHEDULE RDW-15 \1\
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    \1\ Supersedes Rate Schedule RDW-14.
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WHOLESALE RATES FOR HYDRO POWER AND ENERGY SOLD TO SAM RAYBURN 
MUNICIPAL POWER AGENCY

(CONTRACT NO. DE-PM75-85SW00117)

Effective:

    During the period January 1, 2016, through September 30, 2019, 
in accordance with interim approval from Rate Order No. SWPA-70 
issued by the Deputy Secretary of Energy on December 17, 2015 and 
pursuant to final approval by the Federal Energy Regulatory 
Commission.

Applicable:

    To the power and energy purchased by Sam Rayburn Municipal Power 
Agency (SRMPA) from the Southwestern Power Administration 
(Southwestern) under the terms and conditions of the Power Sales 
Contract dated June 28, 1985, as amended, for the sale of all Hydro 
Power and Energy generated at the Robert Douglas Willis Hydropower 
Project (Robert D. Willis) (formerly designated as Town Bluff).

Character and Conditions of Service:

    Three-phase, alternating current, delivered at approximately 60 
Hertz, at the nominal voltage, at the point of delivery, and in such 
quantities as are specified by contract.

1. Wholesale Rates, Terms, and Conditions for Hydro Power and Energy

    1.1. These rates shall be applicable regardless of the quantity 
of Hydro Power and Energy available or delivered to SRMPA; provided, 
however, that if an Uncontrollable Force prevents utilization of 
both of the project's power generating units for an entire billing 
period, and if during such billing period water releases were being 
made which otherwise would have been used to generate Hydro Power 
and Energy, then Southwestern shall, upon request by SRMPA, suspend 
billing for subsequent billing periods, until such time as at least 
one of the project's generating units is again available.
    1.2. The term ``Uncontrollable Force,'' as used herein, shall 
mean any force which is not within the control of the party 
affected, including, but not limited to, failure of water supply, 
failure of facilities, flood, earthquake, storm, lightning, fire, 
epidemic, riot, civil disturbance, labor disturbance, sabotage, war, 
acts of war, terrorist acts, or restraint by court of general 
jurisdiction, which by exercise of due diligence and foresight such 
party could not reasonably have been expected to avoid.

1.3. Hydro Power Rates, Terms, and Conditions

1.3.1. Monthly Charge for the Period of January 1, 2016 through 
December 31, 2016

    $102,681 per month ($1,232,172 per year) for Robert D. Willis 
Hydro Power and Energy purchased by SRMPA from January 1, 2016, 
through December 31, 2016.

1.3.2. Monthly Charge for the Period of January 1, 2017 through 
September 30, 2019

    $106,903 per month ($1,282,836 per year) for Robert D. Willis 
Hydro Power and Energy purchased by SRMPA from January 1, 2017, 
through September 30, 2019.

[FR Doc. 2015-32365 Filed 12-22-15; 8:45 am]
BILLING CODE 6450-01-P