Integrated System

DEPARTMENT OF ENERGY

Southwestern Power Administration

Integrated System

AGENCY: Southwestern Power Administration, DOE.

ACTION: Notice of proposed extension of integrated system power rates

and opportunities for public review and comment.

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SUMMARY: The Current Integrated System Rates were approved by the

Federal Energy Regulatory Commission (FERC) on September 18, 1991,

[EF91-4011-000, 56 FERC 61, 398]. These rates were effective October 1,

1990, and will expire September 30, 1994. The Administrator,

Southwestern, has prepared Current and Revised 1994 Power Repayment

Studies for the Integrated System which show the need for a minor rate

adjustment of $726,051 (0.8 percent increase) in annual revenues. In

accordance with Southwestern's rate adjustment threshold, dated June

23, 1987, the Administrator, Southwestern, may determine, on a case by

case basis, that for a revenue decrease or increase in the magnitude of

plus-or-minus two percent, deferral of a formal rate filing is in the

best interest of the Government. Also, the Deputy Secretary of Energy

has the authority to extend rates, previously confirmed and approved by

FERC, on an interim basis, pursuant to 10 CFR 903.22(h) and 903.23(a).

In accordance with DOE rate extension authority and Southwestern's rate

adjustment threshold, the Administrator is proposing that the rate

adjustment be deferred and that the current rates be extended for a

one-year period effective through September 30, 1995.

DATES: Written comments are due on or before June 29, 1994.

ADDRESSES: Written comments should be submitted to the Administrator,

Southwestern Power Administration, U.S. Department of Energy, P.O. Box

1619, Tulsa, Oklahoma 74101.

FOR FURTHER INFORMATION CONTACT: George C. Grisaffe, Assistant

Administrator, Office of Administration and Rates, Southwestern Power

Administration, Department of Energy, P.O. Box 1619, Tulsa, Oklahoma

74101, (918) 581-7419.

SUPPLEMENTARY INFORMATION: The U.S. Department of Energy was created by

an Act of the U.S. Congress, Department of Energy Organization Act,

Public Law 95-91, dated August 4, 1977, and Southwestern's power

marketing activities were transferred from the Department of the

Interior to the Department of Energy, effective October 1, 1977.

Southwestern markets power from 24 multiple-purpose reservoir

projects with power facilities constructed and operated by the U.S.

Army Corps of Engineers. These projects are located in the States of

Arkansas, Missouri, Oklahoma and Texas. Southwestern's marketing area

includes these states plus Kansas and Louisiana. Of the total, 22

projects comprise an Integrated System and are interconnected through

Southwestern's transmission system and exchange agreements with other

utilities. The other two projects (Sam Rayburn and Robert Douglas

Willis) are not interconnected with Southwestern's Integrated System.

Instead, their power is marketed under separate contracts through which

the two customers purchase the entire power output of the projects at

the dams.

Following Department of Energy Order Number RA 6120.2, the

Administrator, Southwestern, prepared a 1994 Current Power Repayment

Study (PRS) using existing system rate schedules. The Study shows the

actual status of repayment through FY 1993 at $288,259,891 on a total

investment of $971,634,103. The FY 1994 Revised PRS indicates the need

for an increase in annual revenues of $726,051, or 0.8 percent, over

and above the present annual revenues.

As a matter of practice, Southwestern would defer an indicated rate

adjustment that falls within Southwestern's plus-or-minus two percent

rate adjustment threshold. The threshold, which was established in

1987, was developed to add efficiency to the process of maintaining

adequate rates and is consistent with cost recovery criteria within DOE

Order Number RA 6120.2 regarding rate adjustment plans. The Integrated

System's FY 1993 (last year's) PRS concluded that the annual revenues

needed to be decreased by 1.1 percent. At that time, it was determined

prudent to defer the decrease in accordance with the established

threshold. As previously cited, the FY 1994 (this year's) PRS indicates

that revenues would need to be increased by 0.8 percent, or $726,051

per year. It once again seems prudent to defer a rate adjustment in

accordance with Southwestern's rate adjustment threshold and reevaluate

the ability of the existing rate to provide sufficient revenues to

satisfy costs projected in the FY 1995 (next year's) PRS.

On September 18, 1991, the current rate schedules for the

Integrated System were confirmed and approved by the FERC on a final

basis for a period that ends on September 30, 1994. In accordance with

10 CFR 903.22(h) and 903.23(a), the Deputy Secretary may extend

existing rates on an interim basis beyond the period specified by the

FERC. As a result of the benefits obtained by a rate adjustment

deferral and the Deputy Secretary's authority to extend a previously

approved rate, Southwestern's Administrator is proposing to extend the

current Integrated System rate schedules for the one-year period

beginning October 1, 1994, and extending through September 30, 1995.

Opportunity is presented for customers and interested parties to

receive copies of the study data for the Integrated System. If you

desire a copy of the Repayment Study Data Package for the Integrated

System, please submit your request to: Mr. George Grisaffe, Assistant

Administrator, Office of Administration and Rates, P.O. Box 1619,

Tulsa, OK 74101, (918) 581-7419.

Following review of the written comments, the Administrator will

submit the rate extension proposal for the Integrated System to the

Deputy Secretary of Energy for confirmation and approval.

Issued in Tulsa, Oklahoma, this 6th day of June, 1994.

J. M. Shafer,

Administrator.

[FR Doc. 94-14438 Filed 6-13-94; 8:45 am]

BILLING CODE 6450-01-P