Robert Douglas Willis Hydro Power Rate; Notice of Order Approving a Power Rate Increase on an Interim Basis

DEPARTMENT OF ENERGY

Southwestern Power Administration

Robert Douglas Willis Hydro Power Rate; Notice of Order Approving

a Power Rate Increase on an Interim Basis

AGENCY: Department of Energy, Southwestern Power Administration.

ACTION: Notice of approving a power rate increase--Robert D. Willis

Hydro Project.

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SUMMARY: The Deputy Secretary acting under Amendment No. 3 to

Delegation Order No. 0204-108, dated November 10, 1993, 58 FR 59717,

has approved Rate Order No. SWPA-30 which increases the power rate for

the Robert Douglas Willis Hydro Project. This is an interim approval of

the rate effective October 1, 1994, through September 30, 1998.

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.

SUPPLEMENTARY INFORMATION: The existing rate for the Robert Douglas

Willis Hydro Project is $284,580 per year. The rate was approved on a

final basis by the Federal Energy Regulatory Commission on August 11,

1993, for a period ending September 30, 1997.

On June 15, 1994, the Southwestern Power Administration

(Southwestern) published notice in the Federal Register, 59 FR 30793 of

its proposed rate increase for the Robert Douglas Willis Hydro Project

and to provide a 60-day comment period. One comment indicating no

objection to the proposed rate increase was received from the sole

customer, Sam Rayburn Municipal Power Agency.

Following review of Southwestern's proposal within the Department

of Energy, I approved, Rate Order No. SWPA-30, which increases the

existing Robert Douglas Willis Rate to $294,312 per year for the period

October 1, 1994, through September 30, 1998.

Issued at Washington, DC, the 14th day of September 1994.

William H. White,

Deputy Secretary.

In the matter of: Southwestern Power Administration--Robert D.

Willis, Rate Order No. SWPA-30.

Order Confirming, Approving and Placing Decreased Power Rate in Effect

on an Interim Basis

September 14, 1994.

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, for the Southwestern Power

Administration (Southwestern) were transferred to and vested in the

Secretary of Energy. By Delegation Order No. 0204-108, effective

December 14, 1983, 48 FR 55664, the Secretary of Energy delegated to

the Deputy Secretary of Energy on a non-exclusive basis the authority

to confirm, approve and place into effect on an interim basis power and

transmission rates, and delegated to the Federal Energy Regulatory

Commission (FERC) on an exclusive basis the authority to confirm,

approve and place in effect on a final basis, or to disapprove power

and transmission rates. Amendment No. 1 to Delegation Order No. 0204-

108, effective May 30, 1986, 51 FR 19744, revised the delegation of

authority to confirm, approve and place into effect on an interim basis

power and transmission rates to the Under Secretary of Energy rather

than the Deputy Secretary of Energy. This delegation was reassigned to

the Deputy Secretary of Energy by Department of Energy (DOE) Notice

1110.29, dated October 27, 1988, and clarified by Secretary of Energy

Notice SEN-10-89, dated August 3, 1989, and subsequent revisions. By

Amendment No. 2 to Delegation Order No. 0204-108, effective August 23,

1991, 56 FR 41835, the Secretary of the Department of Energy revised

Delegation Order No. 0204-108 to delegate to the Assistant Secretary,

Conservation and Renewable Energy, the authority which was previously

delegated to the Deputy Secretary in that Delegation Order. By

Amendment No. 3 to Delegation Order No. 0204-108, effective November

10, 1993, 58 FR 59717, the Secretary of Energy revised the delegation

of authority to confirm, approve and place into effect on an interim

basis power and transmission rates by delegating that authority to the

Deputy Secretary of Energy. This rate order is issued by the Deputy

Secretary pursuant to said Amendment to Delegation Order No. 0204-108.

Background

Dam B (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

streamflow 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 Town Bluff Dam

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 (SRMA)

proposed to sponsor and finance the development of hydropower at Town

Bluff Dam 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. Since the hydroelectric

facilities at the Town Bluff Dam have been completed, the facilities

have been renamed the Robert Douglas Willis Hydroelectric Project

(Robert D. Willis).

The Robert D. Willis rate is unique in that it excludes the costs

associated with the hydropower design and construction performed by the

Corps, because all funds for these costs were provided by SRMA. Under

the Southwestern/SRMA power sales Contract No. DE-PM75-85SW00117, SRMA

will continue to pay all annual operating and marketing costs, as well

as expected capital replacement costs, through the rate paid to

Southwestern, and will receive all power and energy produced at the

project for a period of 50 years.

Discussion

The 1994 Current Robert D. Willis PRS tests the adequacy of the

existing rate based on the latest cost evaluation period extending from

FY 1994 through FY 1998, to recover annual expenses for marketing,

operation and maintenance, and to amortize additions to plant and major

replacements of the generating facilities. Since the project's design

and construction were financed in their entirety by SRMA, no component

for amortization of the original investment of some $18 million is

included in the rate determination. The Current PRS for the Robert D.

Willis project, using the existing annual rate of $284,580, indicates

that the legal requirements to repay all costs will not be met without

an increase in revenue. This shortage is primarily a result of

operation and maintenance cost estimates increasing to match actual

costs.

The existing annual Robert D. Willis project power rate of $284,580

was confirmed and approved on a final basis by the FERC on August 11,

1993, for the period April 1, 1993, through September 30, 1997. The

1994 Robert D. Willis Current Power Repayment Study (PRS) indicates

that the present rate does not meet the cost recovery criteria for the

isolated project. The current rate will underpay requirements by

$3,211,586. The 1994 Robert D. Willis Revised PRS indicates that an

annual rate of $294,312 will satisfy repayment criteria in accordance

with Department of Energy Order No. RA 6120.2 and Section 5 of the

Flood Control Act of 1944. The proposed increase in revenue amounts to

$9,732 or 3.4 percent annually to begin October 1, 1994. The proposed

rate of $294,312 annually would satisfy the present repayment criteria.

Pursuant to title 10, part 903, subpart A of the Code of Federal

Regulations (10 CFR 903), ``Procedures for Public Participation in

Power and Transmission Rate Adjustments and Extensions'', 50 FR 37837,

the Administrator, Southwestern, published notice in the Federal

Register (59 FR 30793), on June 15, 1994, announcing a 60-day period

for public review and comment. Southwestern held several informal

meetings and a Public Information Forum (Forum) on July 7, 1994, where

Southwestern provided copies of supporting data for the 1994 Robert D.

Willis PRS to interested parties. A letter was received on behalf of

SRMA, indicating no opposition to the proposed rate increase.

Southwestern did not receive any request to convene a formal Public

Comment Forum and, as a result, did not convene such a meeting.

Information regarding this rate proposal, including studies, comments

and other supporting material, is available for public review and

comment in the offices of the Southwestern Power Administration, One

West Third Street, Tulsa, Oklahoma 74101.

Administrator's Certification

The 1994 Revised Robert D. Willis PRS indicates that the annual

power rate of $294,312 will repay all costs of the project including

amortization of additions to plant and major replacements of the

generating facilities consistent with provisions of DOE Order No. RA

6120.2. In accordance with Section 1 of Delegation Order No. 0204-108,

as amended November 10, 1993, 58 FR 59717, and Section 5 of the Flood

Control Act of 1944, the Administrator has determined that the proposed

Robert D. Willis power rate is consistent with applicable law and is

the lowest possible rate consistent with sound business principles.

Environment

The environmental impact of the rate increase proposal was

evaluated in consideration of DOE'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.

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 October 1, 1994, the proposed

annual rate of $294,312 for the sale of power and energy from the

Robert D. Willis project to the Sam Rayburn Municipal Power Agency,

under Contract No. DE-PM75-85SW00117, as amended. The rate shall remain

in effect on an interim basis through September 30, 1998, or until the

FERC confirms and approves the rate on a final basis.

Issued at Washington, DC, this 14th day of September 1994.

William H. White,

Deputy Secretary.

[FR Doc. 94-23642 Filed 9-22-94; 8:45 am]

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