82 FR 837 - Integrated System Rate Schedule

DEPARTMENT OF ENERGY
Southwestern Power Administration

Federal Register Volume 82, Issue 2 (January 4, 2017)

The Deputy Secretary has approved and placed into effect on an interim basis Rate Order No. SWPA-71, which provides the following Integrated System Non-Federal Transmission Service (NFTS) Rate Schedule: Rate Schedule NFTS-13A, Wholesale Rates for Non-Federal Transmission Service.

[Federal Register Volume 82, Number 2 (Wednesday, January 4, 2017)]
[Notices]
[Pages 837-839]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-31885]


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DEPARTMENT OF ENERGY

Southwestern Power Administration


Integrated System Rate Schedule

AGENCY: Southwestern Power Administration, DOE.

ACTION: Notice of Rate Order.

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SUMMARY: The Deputy Secretary has approved and placed into effect on an 
interim basis Rate Order No. SWPA-71, which provides the following 
Integrated System Non-Federal Transmission Service (NFTS) Rate 
Schedule: Rate Schedule NFTS-13A, Wholesale Rates for Non-Federal 
Transmission Service.

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

SUPPLEMENTARY INFORMATION: Pursuant to Delegation Order Nos. 00-
037.00A, effective October 25, 2013, and 00-001.00F, effective November 
17, 2014, Rate Order No. SWPA-71, is approved and placed into effect on 
an interim basis for the period January 1, 2017, through September 30, 
2017, pursuant to the following rate schedule: Rate Schedule NFTS-13A, 
Wholesale Rates for Non-Federal Transmission Service, which supersedes 
the existing Rate Schedule NFTS-13, Wholesale Rates for Non-Federal 
Transmission Service.
    Southwestern Power Administration's (Southwestern) Administrator 
has determined that an additional section within Southwestern's 
Integrated System NFTS Rate Schedule is necessary to better align 
Southwestern's rate schedule with standard practices utilized by the 
Southwest Power Pool, Inc. (SPP) Regional Transmission Organization. 
The new section 2.3.6 establishes a procedure for determining an Annual 
Revenue Requirement (ARR) for customers that choose to contract for 
Network Integration Transmission Service (NITS) on Southwestern's 
transmission system pursuant to the SPP Open Access Transmission Tariff 
(OATT).
    The NFTS-13 Rate Schedule included a stated rate for NITS that is 
calculated by dividing Southwestern's monthly revenue requirement, 
derived from Southwestern's NFTS ARR identified within the Southwestern 
2013 Integrated System Power Repayment Studies (PRS), by the net 
transmission capacity available for NITS. Modifying Southwestern's rate 
schedule to include an ARR for SPP NITS, rather than applying a stated 
rate better aligns with standard practices utilized by SPP. Therefore, 
in place of applying the NITS stated rate for SPP NITS on 
Southwestern's transmission system, the proposed Section 2.3.6 includes 
a procedure for determining and updating an SPP NITS ARR, as a portion 
of Southwestern's NFTS ARR, based on the amount of revenue assumed to 
be recovered on an annual basis from NITS customers in each approved 
PRS. If additional customers choose to contract for SPP NITS on 
Southwestern's transmission system, the new Section 2.3.6 methodology 
updates the SPP NITS ARR. The title of the NFTS-13 Rate Schedule was 
changed to NFTS-13A to reflect the addition of Section 2.3.6.
    The Southwestern 2013 PRS indicated that rates (total Southwestern 
NFTS ARR) prescribed by NFTS-13, Wholesale Rates for Non-Federal 
Transmission Service, as approved in Docket No. EF14-1-000, for the 
period October 1, 2013, through September 30, 2017, are sufficient to 
meet repayment criteria and will have no impact on the amortization or 
status of repayment forecasted in the Southwestern 2013 PRS and will 
not require rate changes. Revenues based on current rates remain 
sufficient to meet repayment criteria.
    The Southwestern Administrator has followed Title 10, Part 903, 
Subpart A of the Code of Federal Regulations, ``Procedures for Public 
Participation in Power and Transmission Rate Adjustments and 
Extensions,'' in connection with the rate schedule revisions. The 
public was advised by notice published in the Federal Register (81 FR 
75814), November 1, 2016, of the proposed rate schedule change and of 
the opportunity to provide written comments for a period of 30 days 
ending December 1, 2016. One customer provided comments during the 
period of public participation related to the proposed rate schedule 
change, which consisted of some clarifying questions that Southwestern 
answered and one comment on phrasing that Southwestern acknowledged.
    Information regarding this rate proposal, including studies and 
other supporting material, and comments received is available for 
public review in the offices of Southwestern Power Administration, 
Williams Tower I, One West Third Street, Tulsa, Oklahoma 74103. 
Following review of Southwestern's proposal within the Department of 
Energy, I approve Rate Order No. SWPA-71.


[[Page 838]]


    Dated: December 23, 2016.
Elizabeth Sherwood-Randall,
Deputy Secretary.

United States of America

Department of Energy

Deputy Secretary

    In the matter of: Southwestern Power Administration Integrated 
System Non-Federal Transmission Service Rate Schedule

Rate Order No. SWPA-71

ORDER CONFIRMING, APPROVING AND PLACING REVISED POWER RATE SCHEDULES IN 
EFFECT ON AN INTERIM BASIS

    Pursuant to Sections 302(a) and 301(b) of the Department of Energy 
Organization Act, Public Law 95[dash]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 has issued this interim 
rate order.

BACKGROUND

    In July 2013, Southwestern completed its review of the adequacy of 
the current rate schedules for the Integrated System and finalized its 
2013 Power Repayment Studies (2013 PRS). The studies indicated that the 
proposed rates would meet cost recovery criteria for the Integrated 
System, including the identified Non-Federal Transmission Service 
(NFTS) Annual Revenue Requirement (ARR). The Federal Energy Regulatory 
Commission (FERC) confirmation and approval of the following Integrated 
System rate schedules was provided in a FERC order issued in Docket No. 
EF14-1-000 on January 9, 2014,\1\ for the period October 1, 2013, 
through September 30, 2017:
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    \1\ 146 FERC ]62,016
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Rate Schedule P-13, Wholesale Rates for Hydro Peaking Power
Rate Schedule NFTS-13, Wholesale Rates for Point-to-Point and Network 
Transmission Service
Rate Schedule EE-13, Wholesale Rate for Excess Energy
Based on operations under the approved rate schedules, the 
Administrator determined that an additional section outlining a new 
methodology within Southwestern's Integrated System Non-Federal 
Transmission Service (NFTS-13) Rate Schedule is necessary to better 
align Southwestern's rate schedule with standard practices utilized by 
the Southwest Power Pool, Inc. (SPP) Regional Transmission 
Organization. A new section 2.3.6 is proposed that establishes a 
procedure for determining an ARR for customers that choose to contract 
for Network Integration Transmission Service (NITS) on Southwestern's 
transmission system pursuant to the SPP Open Access Transmission Tariff 
(OATT).
    The new Section 2.3.6 does not change Southwestern's NFTS ARR, as 
determined in its 2013 PRS, but rather replaces the current stated-rate 
for SPP NITS with a revenue-requirement based methodology that includes 
determining the SPP NITS ARR portion of Southwestern's NFTS ARR. 
Furthermore, the new Section 2.3.6 affects only those customers that 
choose to contract for SPP NITS on Southwestern's transmission system 
under the SPP OATT.
    The designation of the aforementioned rate schedule has been 
revised from NFTS-13 to NFTS-13A to reflect that an addition has been 
made.
    Southwestern followed Title 10, Part 903 Subpart A, of the Code of 
Federal Regulations, ``Procedures for Public Participation in Power and 
Transmission Rate Adjustments and Extensions'' (Part 903) in connection 
with the proposed Rate Schedule NFTS[dash]13A. An opportunity for 
customers and other interested members of the public to review and 
comment on the proposed rate schedule was announced by notice published 
in the Federal Register November 1, 2016, (81 FR 75814), with written 
comments due by December 1, 2016. One customer provided comments during 
the period of public participation related to the proposed rate 
schedule change, which consisted of some clarifying questions that 
Southwestern answered and one comment on phrasing that Southwestern 
acknowledged.

DISCUSSION

    The NFTS-13 Rate Schedule includes a stated rate for NITS that is 
calculated by dividing Southwestern's monthly revenue requirement, 
derived from Southwestern's NFTS ARR identified within the 2013 PRS, by 
the net transmission capacity available for NITS. Modifying 
Southwestern's rate schedule to include an ARR for SPP NITS, rather 
than applying a stated rate, better aligns with standard practices 
utilized by SPP. Therefore, in place of applying the NITS stated rate 
for SPP NITS on Southwestern's transmission system, the new Section 
2.3.6 in NFTS-13A includes a procedure for determining and updating an 
SPP NITS ARR, as a portion of Southwestern's NFTS ARR, based on the 
amount of revenue assumed to be recovered on an annual basis from NITS 
customers in each approved PRS. If additional customers choose to 
contract for SPP NITS on Southwestern's transmission system, the 
proposed Section 2.3.6 methodology updates the SPP NITS ARR.

COMMENTS AND RESPONSES

    Southwestern received comments from one customer during the period 
of public participation related to the proposed rate schedule change, 
which consisted of some clarifying questions that Southwestern answered 
and one comment on phrasing that Southwestern acknowledged. 
Southwestern made no change to the proposed rate schedule as a result 
of the questions and comment received. The questions and comment, with 
Southwestern's responses in underlined text, are detailed below.

Questions:

    1. Will NITS for delivery to loads within Southwestern's system 
only be available under the terms of the SPP OATT? Yes, for new 
transmission service. Additionally, as current Southwestern 
transmission service agreements expire (for grandfathered service or 
service under Southwestern's OATT), they will not be renewed; so if 
continued service is desired, it would be under a new SPP OATT 
agreement.
    If not, under what conditions may a customer elect to take 
Southwestern NITS? Per Southwestern's agreement with SPP, which is 
filed as Attachment AD of the SPP OATT, new Southwestern OATT NITS 
agreements will not be entered into.
    2. Approximately how many MWs of Southwestern NITS Capacity are 
currently reserved? 66 MW is currently reserved as NITS under both the 
Southwestern and SPP OATTs.
    3. Will current Southwestern NITS customers be allowed to renew 
their Southwestern NITS Agreement(s), or will they transition to SPP 
NITS? As current Southwestern transmission service agreements expire 
(for

[[Page 839]]

grandfathered service or service under Southwestern's OATT), they will 
not be renewed; so if continued service is desired, it would be under a 
new SPP OATT agreement, per SPP OATT Attachment AD.
    4. Do you expect Section 2.3.5. to apply to both SPP NITS and 
Southwestern NITS? I believe the peak billing demand methodology is 
different. Section 2.3.5 applies to Southwestern NITS only. The new 
Section 2.3.6 applies to SPP NITS only.
    5. My understanding is that SPP bills NITS load on a 12CP basis, 
whereas, Southwestern bills NITS load on a 1CP basis (per 2.3.5). Is it 
correct that NITS Transmission Customers on Southwestern's system will 
pay less for SPP NITS service than for equivalent Southwestern NITS 
service? Southwestern NITS customers are billed on a 1 CP basis and SPP 
NITS customers are billed on 12 CP basis, both in accordance with their 
respective OATT's.
    As to whether or not SPP NITS will cost less than Southwestern 
NITS, several factors will have to be assessed to make that 
determination, including the entities' proportion of load at the time 
of the monthly CP and the amount of transmission service reserved that 
was transitioned to SPP NITS (per the proposed Section 2.3.6). 
Additionally, entities choosing to utilize SPP NITS will be subject to 
various SPP charges (i.e. Schedule 11) that may add cost to the SPP 
NITS. The analysis of these costs can only be determined by the 
particular customer and their unique set of circumstances. Therefore, a 
statement that conveys certainty of a lower cost for SPP NITS cannot be 
made.

Comment:

    1. There are several general references in the proposed NFTS-13A to 
Network Integration Transmission Service. In a few instances, the 
document refers to SPP NITS or Southwestern NITS. I think it would be 
good to clarify in each instance if we are referring to SPP NITS, 
Southwestern NITS, or both. Comment acknowledged. We will review the 
language and ensure the final rate schedule has clarity between SPP 
NITS and Southwestern NITS.

AVAILABILITY OF INFORMATION

    Information regarding this rate schedule change is available for 
public review in the offices of Southwestern Power Administration, 
Williams Tower I, One West Third Street, Tulsa, Oklahoma 74103.

ADMINISTRATOR'S CERTIFICATION

    The revised rate schedule will repay all costs of the Integrated 
System including amortization of the power investment consistent with 
the provisions of Department of Energy Order No. RA 6120.2. In 
accordance with Delegation Order Nos. 00-037.00A, effective October 25, 
2013, and 00-001.00F, effective November 17, 2014, and Section 5 of the 
Flood Control Act of 1944, the Administrator has determined that the 
proposed Integrated System rate schedule is consistent with applicable 
law and the lowest possible rates consistent with sound business 
principles.

ENVIRONMENT

    The Southwestern NEPA Compliance Officer determined that the 
currently-approved Integrated System rates fall within the class of 
actions that are categorically excluded from the requirements of 
preparing either an Environmental Impact Statement or an Environmental 
Assessment. No additional evaluation of the environmental impact of the 
proposed rate schedule changes was conducted because no change in 
anticipated revenues was contemplated.

ADMINISTRATIVE PROCEDURES

    The Administrative Procedure Act (5 U.S.C. 553(d)) (APA) prescribes 
that the required publication or service of a substantive rule shall be 
made not less than 30 days before its effective date, except (1) a 
substantive rule that grants or recognizes an exemption or relieves a 
restriction; (2) interpretative rules and statements of policy; or (3) 
as otherwise provided by the agency for good cause found and published 
with the rule. For the reasons stated in the paragraph that follows, 
the Department of Energy (DOE) finds good cause to waive the 30-day 
delay in effective date because a 30-day delay would be unnecessary.
    In this action, Southwestern updates the method for charging non-
Federal transmission customers who choose to contract for SPP NITS on 
Southwestern's transmission system under the SPP OATT from a stated 
rate to a revenue-requirement based charge, to better align with 
standard practices utilized by SPP. Because the NFTS-13A rate schedule 
change will result in no change in anticipated revenues, it is 
considered a ``minor rate adjustment'' pursuant to 10 CFR part 903, 
subpart A, and Southwestern has treated it as such in the rate schedule 
actions to date. A ``minor rate adjustment'' is defined as a rate 
adjustment that (1) will produce less than 1 percent change in the 
annual revenues of the power system; or (2) is for a power system that 
has either annual sales normally less than 100 million kilowatt hours 
or an installed capacity of less than 20,000 kilowatts. When consistent 
with the APA, DOE regulations also provide that the effective date of 
rate schedules put into effect on an interim basis by the Deputy 
Secretary may be sooner than 30 days after the Deputy Secretary's 
decision when making a minor rate adjustment.
    Additionally, DOE emphasizes that there were no substantive issues 
or concerns raised during the public comment period for the NFTS-13A 
rate schedule action.

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, 2017, the Southwestern 
Integrated System Rate Schedule NFTS-13A which shall remain in effect 
on an interim basis through September 30, 2017, or until the FERC 
confirms and approves the rates on a final basis.
    Dated: December 23, 2016.
Elizabeth Sherwood-Randall,
Deputy Secretary.

[FR Doc. 2016-31885 Filed 1-3-17; 8:45 am]
BILLING CODE 6450-01-P