Proposed Rate Adjustment for Eklutna Project

DEPARTMENT OF ENERGY

Alaska Power Administration

Proposed Rate Adjustment for Eklutna Project

AGENCY: Alaska Power Administration, Department of Energy.

ACTION: Notice of proposed rate adjustment for Eklutna Project, notice

of public forum and opportunity for review and comment.

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SUMMARY: Alaska Power Administration (APA) is proposing to adjust the

rates for the Eklutna Project. Rates of 17 mills per kilowatthour for

firm energy, 10 mills per kilowatthour for non-firm energy and .3 mills

per kilowatthour for wheeling expire September 30, 1994. APA proposes

to raise the rate for firm energy to 18.9 mills per kilowatthour

beginning October 1, 1994 for a period of up to five years. Rates for

non-firm energy and wheeling would remain the same. APA will finalize

the proposal giving full consideration to comments received. The final

proposal may differ from the present. The proposed rates will be

submitted to the Deputy Secretary of Energy for interim approval and to

the Federal Energy Regulatory Commission for review and final approval.

DATES: Written comments will be considered for 90 days from the date of

this publication.

ADDRESSES: Written comments should be submitted to Mr. Lloyd A. Linke,

Alaska Power Administration, 2770 Sherwood Lane, Suite 2B, Juneau,

Alaska 99801.

FOR FURTHER INFORMATION CONTACT: Mr. Lloyd A. Linke, Director, Power

Division, Alaska Power Administration, 2770 Sherwood Lane, Suite 2B,

Juneau, AK 99802, (907) 586-7405.

SUPPLEMENTARY INFORMATION: The proposed rates apply for power sold from

the Eklutna Hydroelectric Project to three electric utilities serving

the Anchorage and Matanuska Valley areas of Alaska.

Details of the proposed rates, including supporting studies, are

available for inspection at Alaska Power Administration, 2770 Sherwood

Lane, Suite 2B, Juneau, Alaska; and the Eklutna Project Office, Mile

4.0, Old Glenn Highway, Palmer, Alaska.

A public information and comment forum is scheduled to be held June

14, 1994, at 7 p.m., in the public conference room of the Loussac

Library, 3600 Denali, Anchorage, Alaska. APA is requesting that the

parties interested in attending the public information and comment

forum notify APA of this intent in writing by June 7, 1994. If APA has

not received any written notices of intent to attend the forum the APA

Administrator will cancel the forum, as allowed in 10 CFR 903.15(c) and

10 CFR 903.16(c).

Authorities for the proposed rate action are the Eklutna Project

Act of July 31, 1950 (64 Stat. 382, as amended) and the Department of

Energy Organization Act (Pub. L. 95-91). Alaska Power Administration is

developing these rates in accordance with DOE financial reporting

policies, procedures and methodology (DOE Policy RA 6120.2 [September

20, 1979]), and the procedures for public participation in rate

adjustments found in 10 CFR Part 903 (1987) as amended.

The present rates went into effect in October 1990. APA has repaid

over 75% of the project investment. Since the last rate action

Operation and Maintenance (O&M) costs have increased. The major

contributors to this increase are the addition of the Government's

unfunded liability for the Civil Service Retirement System in the

repayment studies, and an increase in the number of staff dealing with

environmental compliance issues. The proposed rate results in an 11%

rate increase. This is below the rate of inflation from 1990 to 1994.

APA has notified its customers that a rate was being developed. One of

the customers has asked that APA look at the increased O&M costs and to

verify the need for the increases. APA is in the process of doing this

and will include the results of this evaluation in the final rate

proposal.

Given the age of the Eklutna Project, APA expects sizeable

replacement costs over the next several years. These costs have been

included in the repayment study supporting the proposed rates.

The Administration continues to advocate divestiture of APA, and a

legislative proposal to authorize the divestiture is under

Congressional consideration. This proposed rate action continues

present rate policies under existing law.

Environmental Impact

The proposed rate action will have no significant environmental

impact within the meaning of the National Environmental Policy Act of

1969. The proposed action meets the requirements of a categorical

exclusion as defined in 40 CFR 1508.4 and is listed as a categorical

exclusion for DOE in 10 CFR 1021, Appendix B4.3. An Environmental

Assessment and an Environmental Impact Statement is not required.

Issued at Juneau, Alaska, April 21, 1994.

Michael A. Deihl,

Administrator.

[FR Doc. 94-10576 Filed 5-2-94; 8:45 am]

BILLING CODE 6450-01-P