Notice of Amended Rate Schedule

DEPARTMENT OF ENERGY

Western Area Power Administration

Notice of Amended Rate Schedule

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of Amended Rate Schedule CV-F7.

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SUMMARY: Notice is given of the confirmation and approval by the Deputy

Secretary of the Department of Energy of Amended Rate Schedule CV-F7

from the Central Valley Project (CVP) of the Western Area Power

Administration (Western) into effect on an interim basis. The interim

Amended Rate Schedule CV-F7, will remain in effect on an interim basis

until the Federal Energy Regulatory Commission (FERC) confirms,

approves, and places it into effect on a final basis or until it is

replaced by another rate schedule.

Rate Schedule CV-F7, Schedule for Rates for Commercial Firm-Power

Service under Rate Order No. WAPA-59, was approved by FERC on September

22, 1993, under FERC Docket No. EF93-5011-000. The rates were placed in

effect for the period beginning May 1, 1993, through April 30, 1998.

The methodology for the revenue adjustment clause (RAC) was

included in Rate Schedule CV-F7 and included provisions for a $20

million maximum allocation of the RAC credit or surcharge. The Amended

Rate Schedule CV-F7 modifies the maximum allocation of the RAC credit

of $20 million by the amount of the Pacific Gas and Electric Company

(PG&E) refund credit applied to the Western power bills for the fiscal

year. The $20 million maximum allocation for the RAC surcharge remains

unchanged, as do all other provisions of CVP Rate Schedule CV-F7.

DATES: Amended Rate Schedule CV-F7 will be placed into effect on an

interim basis prior to October 1, 1995, and will be in effect until

FERC confirms, approves, and places the rate schedule in effect on a

final basis through April 30, 1998, the remaining time period of the

current Rate Schedule CV-F7, or until the rate schedule is superseded.

FOR FURTHER INFORMATION CONTACT:

Mr. James C. Feider, Area Manager, Sacramento Area Manager, Western

Area Power Administration, 114 Parkshore Drive, Folsom, CA 95630, (916)

649-4418

Mr. Robert Fullerton, Acting Director, Division of Power Marketing,

Western Area Power Administration, P.O. Box 3402, Golden, CO 80401-

0098, (303) 275-1610

Mr. Joel Bladow, Assistant Administrator for Washington Liaison, Power

Marketing Liaison Office, Room 8G-027, Forrestal Building, 1000

Independence Avenue SW., Washington, DC 20585-0001, (202) 586-5581

SUPPLEMENTARY INFORMATION: The RAC compares projected net revenue with

actual net revenue for each fiscal year. If the net difference is

positive, a RAC credit is applied to the customers' power bills during

the next January 1 to September 30 period. If the net difference is

negative, a RAC surcharge is applied to customers' power bills in an

amount equal to any deficit in repayment of annual expenses plus a

minimum investment payment equal to the lesser of 1 percent of unpaid

investment or projected investment payment. The maximum allocation of a

RAC credit or surcharge on customers' power bills is $20 million

annually.

In February 1992, Western and the PG&E entered into a settlement

agreement (Settlement) which provided for annual reconciliation of

estimated energy and capacity rates based on actual PG&E thermal costs.

To date, the Settlement has resulted in refunds to Western which are

applied as credits against amounts owed by Western to PG&E. The

application of the credits reduces Western's purchase power expense

which may increase Western's net revenue. Since the current RAC

methodology provides for a $20 million cap, Western's customers may not

realize the full benefit of the Settlement amounts.

Discussions on the proposed amendment to the RAC methodology were

initiated at a customer meeting held on February 14, 1995. Western

received favorable comments following the meeting, and pursued

development of the proposed amendment. Representatives from the CVP

customer base reviewed and supported the amendment. On April 10, 1995,

Western sent a letter to all CVP customers requesting written comments

on the proposed amendment and establishing a comment period through May

15, 1995. Western received three written comments during the comment

period. All comments supported the interim amendment, with one comment

requesting that future savings resulting from changes in Western's

purchase

[[Page 42561]]

power contracts also be included in the RAC methodology. Western is

planning a rate adjustment to accommodate any change in purchase power

contracts.

The intent of amending the RAC would allow the net revenue,

resulting from the PG&E/Western rate reconciliation, to be passed on to

Western's customers as a RAC credit if there is no impact on CVP

projected repayment. The extent of the amendment would change the

maximum allocation of the RAC credit of $20 million by the amount of

the PG&E refund credit applied to the Western power bills for the

fiscal year. The current $20 million maximum allocation for the RAC

surcharge will not be changed.

The RAC amendment does not change the rates, power repayment study,

or any other documentation filed with the original Rate Order No. WAPA-

59.

Confirmation, approval, and placement of Amended Rate Schedule CV-

F7 into effect on an interim basis, is issued, and the Amended Rate

Schedule CV-F7 will be submitted promptly to FERC for confirmation and

approval on a final basis.

Issued in Washington, DC, August 8, 1995.

Bill White,

Deputy Secretary.

Order Confirming, Approving, and Placing the Central Valley Project

Amended Rate Schedule CV-F7 Into Effect on an Interim Basis

In the matter of: Western Area Power Administration Amended Rate

Schedule CV-F7, Central Valley Project.

August 8, 1995.

The original Rate Schedule CV-F7, for commercial firm power rates,

was established pursuant to section 302(a) of the Department of Energy

(DOE) Organization Act, 42 U.S.C. 7101 et seq., through which the power

marketing functions of the Secretary of the Interior and the Bureau of

Reclamation (Reclamation) under the Reclamation Act of 1902, 43 U.S.C.

371 et seq., as amended and supplemented by subsequent enactments,

particularly section 9(c) of the Reclamation Project Act of 1939, 43

U.S.C. 485h(c), and other acts specifically applicable to the project

system involved were transferred to and vested in the Secretary of

Energy (Secretary).

By Amendment No. 3 to Delegation Order No. 0204-108, published

November 10, 1993 (58 FR 59716), the Secretary delegated (1) the

authority to develop long-term power and transmission rates on a

nonexclusive basis to the Administrator of the Western Area Power

Administration (Western); (2) the authority to confirm, approve, and

place such rates into effect on an interim basis to the Deputy

Secretary; and (3) the authority to confirm, approve, and place into

effect on a final basis, to remand, or to disapprove such rates to the

Federal Energy Regulatory Commission (FERC). Existing DOE procedures

for public participation in power rate adjustments are located at 10

CFR Part 903.

Acronyms and Definitions

As used in this rate order, the following acronyms and definitions

apply:

CVP: Central Valley Project.

DOE: U. S. Department of Energy.

FERC: Federal Energy Regulatory Commission.

FY: Fiscal year.

Net Revenue: Revenue remaining after paying all annual expenses.

PG&E: Pacific Gas and Electric Company.

RAC: Revenue Adjustment Clause.

Rate Schedule CV-F7: The current rate schedule for commercial firm

power service, approved by FERC on September 22, 1993, under FERC

Docket No. EF93-5011-000.

Secretary: Secretary of Energy.

Western: Western Area Power Administration.

Effective Date

The Amended Rate Schedule CV-F7 will become effective on an interim

basis prior to October 1, 1995, and will be in effect pending FERC's

approval on a final basis for a 2\1/2\-year period, the remaining

effective period for Rate Schedule CV-F7, or until superseded.

Public Notice and Comment

The Procedures for Public Participation in Power and Transmission

Rate Adjustments and Extensions, 10 CFR Part 903, have been followed by

Western in the development of this amended rate schedule. The following

summarizes the steps Western took to ensure involvement of interested

parties in the rate process:

1. On February 14, 1995, Western proposed the amendment to the RAC

methodology at a customer meeting.

2. On April 10, 1995, Western sent a letter to all CVP customers

requesting written comments on the proposed amendment and established a

comment period through May 15, 1995.

Discussion

The RAC, included under Rate Schedule CV-F7, compares projected net

revenue with actual net revenue for a FY. If the net difference is

positive, a RAC credit is applied to the customers' power bills during

the next January 1 to September 30 period. If the difference is

negative, a RAC surcharge is applied to the customers' power bills in

an amount equal to any deficit in repayment of annual expenses plus a

minimum investment payment equal to the lesser of 1 percent of the

unpaid investment or projected investment payment. Under Rate Schedule

CV-F7, the maximum allocation for RAC credits or surcharges is $20

million.

Basis for Amendment to Current Rate Schedule CV-F7 in February

1992, Western and the PG&E entered into a settlement agreement

(Settlement) which provided for annual reconciliation of estimated

energy and capacity rates based on actual PG&E thermal costs. To date,

the Settlement has resulted in refunds to Western which are applied as

credits against amounts owed by Western to PG&E. The application of the

credits reduces Western's purchase power expense which may increase

Western's net revenue. Since the current RAC methodology provides for a

$20 million cap, Western's customers may not realize the full benefit

of the Settlement amounts.

The intent of amending the RAC would allow the net revenue,

resulting from the PG&E/Western rate reconciliation, to be passed on to

Western's customers as a RAC credit if there is no impact on CVP

projected repayment. The extent of the amendment would change the

maximum allocation of the RAC credit of $20 million by the amount of

the PG&E refund credit applied to the Western power bills for the

fiscal year. The current $20 million maximum allocation for the RAC

surcharge will not be changed.

Comments

During the 30-day comment period, Western received three written

comments regarding the proposed change in the RAC. All three commentors

agreed with the proposal, with one commentor additionally requesting

Western add any savings from changes in Western's purchase power

contracts. Western is planning a rate adjustment to accommodate any

change in purchase power contracts.

Written comments were received from the following sources:

Bay Area Rapid Transit (California)

Northern California Power Agency (California)

Sacramento Municipal Utility District (California)

[[Page 42562]]

Environmental Evaluation

In compliance with the National Environmental Policy Act of 1969

(42 U.S.C. 4321 et seq.); Council on Environmental Quality Regulations

(40 CFR parts 1500 through 1508); and DOE NEPA Regulations (10 CFR part

1021), Western has determined that this action is categorically

excluded from the preparation of an environmental assessment or an

environmental impact statement.

Executive Order 12866

DOE has determined that this is not a significant regulatory action

because it does not meet the criteria of Executive Order 12866, 58 FR

51735. Western has an exemption from centralized regulatory review

under Executive Order 12866; accordingly, no clearance of this notice

by the Office of Management and Budget is required.

Availability of Information

All studies, comments, letters, memoranda, or other documents made

or kept by Western for the purpose of developing Amended Rate Schedule

CV-F7, are and will be made available for inspection and copying at the

Sacramento Area Office, located at 1825 Bell Street, Suite 105,

Sacramento, California 95825; Western Area Power Administration,

Division of Power Marketing, PO Box 3402, Golden, Colorado 80401; and

Power Marketing Liaison Office, Office of the Assistant Administrator

for Washington Liaison, Room 8G-061, Forrestal Building, 1000

Independence Avenue SW., Washington, DC 20585.

Submission to Federal Energy Regulatory Commission

Amended Rate Schedule CV-F7 herein confirmed, approved, and placed

into effect on an interim basis, together with supporting documents,

will be submitted to FERC for confirmation and approval on a final

basis.

Order

In view of the foregoing and pursuant to the authority delegated to

me by the Secretary of Energy, I confirm and approve on an interim

basis, effective prior to October 1, 1995, Amended Rate Schedule CV-F7

for the Central Valley Project. The amended rate schedule shall remain

in effect on an interim basis, pending the Federal Energy Regulatory

Commission confirmation and approval on a final basis, through April

30, 1998, or until the rate schedule is superseded.

Issued in Washington, DC, August 8, 1995.

Bill White,

Deputy Secretary.

Amended Rate Schedule CV-F7

(Supersedes Schedule CV-F7)

Central Valley Project; Schedule of Rates for Commercial Firm-power

Service

Effective

October 1, 1995.

Available

Within the marketing area served by the Sacramento Area Office.

Applicable

To the commercial firm-power customers for general power service

supplied through one meter, at one point of delivery, unless otherwise

provided by contract.

Character

Alternating current, 60 hertz, three-phase, delivered and metered

at the voltages and points established by contract.

Monthly Rates

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Period Capacity Energy

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10/01/95-09/30/97................................ $6.57/kW/month............ Base: 17.73 mills/kWh.

Tier: 34.70 mills/kWh.

10/01/97-04/30/98................................ $7.16/kW/month............ Base: 19.33 mills/kWh.

Tier: 37.46 mills/kWh.

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Billing

Demand: The rates listed above for capacity shall be the charge per

kilowatt (kW) of billing demand. The billing demand is the highest 30-

minute integrated demand measured or scheduled during the month up to,

but not in excess of, the delivery obligation under the power sales

contract.

Energy: The rates listed above for energy shall be a charge per

kilowatthour (kWh) for all energy use up to, but not in excess of, the

maximum kWh obligation of the United States during the month as

established under the power sales contract.

The energy base rate shall be applied to all energy sales below a

70-percent monthly load factor. The energy tier rate shall be applied

to all energy sales at a 70-percent and higher monthly load factor. The

monthly load factor shall be calculated based on the lesser of the

customer's (1) maximum demand for the month or, if a scheduled

customer, the maximum scheduled demand for the month; or (2) the

contract rate of delivery. Only power offered under this Amended Rate

Schedule CV-F7 will be used in the calculation of the load factor.

Adjustments

Billing for Unauthorized Overruns

For each billing period in which there is a contract violation

involving an unauthorized overrun of the contractual obligation for

capacity and/or energy, such overrun shall be billed at 10 times the

applicable rates above. The energy base rate will be used as the

overrun rate for energy.

For Revenue Adjustment

The following methodology shall be used for the revenue adjustment

clause (RAC) calculation:

1. If the actual net revenue is greater than the projected net

revenue for the RAC calculation period, a revenue credit will be

allocated during the RAC adjustment period. The credit will equal the

difference between the actual net revenue and projected net revenue,

represented by the following formula:

ANR > PNR; C = ANR -PNR

Where:

ANR = Actual Net Revenue

PNR = Projected Net Revenue

C = Credit

2. If actual net revenue is less than the projected net revenue for

the RAC calculation period, a revenue surcharge will be allocated

during the RAC adjustment period.

2.1 If the actual net revenue is negative, the surcharge will be

equal to the minimum investment payment plus the annual deficit,

represented by the following formula:

ANR 0; S = MIP - ANR (if ANR > MIP, S = 0)

Where:

ANR = Actual Net Revenue

PNR = Projected Net Revenue

MIP = Minimum Investment Payment

S = Surcharge

Provided, that if the actual net revenue is greater than the

minimum investment payment, the surcharge will be equal to zero.

3. The maximum RAC credit allocation will equal $20 million plus

the amount of the Pacific Gas and Electric Company refund credit

applied to Western power bills for the fiscal year. The maximum

allocation for a RAC surcharge shall not exceed $20 million.

4. The RAC credit or surcharge shall be allocated to each Central

Valley Project (CVP) commercial firm-power customer based on the

proportion of the customer's billed obligation to Western for CVP

commercial firm capacity and energy to the total billed obligation for

all CVP commercial firm-power customers for CVP commercial firm

capacity and energy for the RAC calculation period.

5. For purposes of the RAC calculation, the following terms are

defined:

5.1 Actual Net Revenue--The Recorded Net Revenue.

5.2 Annual Deficit--The amount the recorded annual expenses,

including interest, exceed recorded annual revenues.

5.3 Minimum Investment Payment--The lesser of 1 percent of the

recorded unpaid investment balance at the end of the prior FY that the

RAC is being calculated, or the projected net revenue.

5.4 Projected Net Revenue--The annual net revenue available for

investment repayment projected in the PRS for the rate case during the

FY that the RAC is being calculated (see Table 1).

5.5 RAC Adjustment Period--The period January 1 through September

30, following the RAC calculation period when credits or surcharges

will be applied to the power bills.

5.6 RAC Calculation Period--The last recorded FY (October 1

through September 30).

5.7 Recorded Net Revenue--The annual net revenue available for

repayment recorded in the PRS for the FY that the RAC is being

calculated.

6. Subject to modification by a superseding rate schedule, the

final RAC will be allocated to the customers during the period January

1, 1999, to September 30, 1999.

Table 1.-- Projected Net Revenue Available for Investment Repayment for

Revenue Adjustment Clause

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Projected net

Period revenue

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October 1, 1995-September 30, 1996...................... $14,430,107

October 1, 1996-September 30, 1997...................... 1,051,664

October 1, 1997-September 30, 1998...................... 9,595,452

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For Transformer Losses

If delivery is made at transmission voltage but metered on the low-

voltage side of the substation, the meter readings will be increased to

compensate for transformer losses as provided for in the contract.

For Power Factor

The customer will be required to maintain a power factor at all

points of measurement between 95-percent lagging and 95-percent

leading. The low power factor charge (LPFC) will be calculated by

multiplying the customer's maximum monthly demand by the kilovar

(kVar)/kW rate for the customer's mean power factor as provided in the

following Table 2:

Table 2.--kVar/kW Rate Table

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Power factor Rate

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0.94........................................................... 0.09

0.93........................................................... 0.17

0.92........................................................... 0.24

0.91........................................................... 0.32

0.90........................................................... 0.39

0.89........................................................... 0.46

0.88........................................................... 0.53

0.87........................................................... 0.60

0.86........................................................... 0.66

0.85........................................................... 0.73

0.84........................................................... 0.79

0.83........................................................... 0.86

0.82........................................................... 0.92

0.81........................................................... 0.99

0.80........................................................... 1.05

0.79........................................................... 1.12

0.78........................................................... 1.18

0.77........................................................... 1.25

0.76........................................................... 1.32

0.75 and below................................................. 1.38

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A LPFC will be assessed when a customer's power factor is less than

95 percent.

(a) A charge of $2.50 per kVar will be assessed for every kVar

required to raise a customer's power factor to 95 percent. The

calculated power factor used to determine if a charge will be assessed

is the arithmetic mean of a customer's measured monthly average power

factor and their measured onpeak power factor, rounded to the nearest

whole percent with 0.5 percent or greater rounded to the next higher

percent.

(b) The mean power factor will be calculated at each customer's

point of delivery. If a customer has multiple points of delivery, the

power factor will be determined from totalized information from the

points of delivery.

(c) No credit will be given for customers operating between 95

percent and 100 percent.

(d) Customers that have a monthly peak demand less than or equal to

50 kW will not be subject to the LPFC.

(e) The Contracting Officer may waive the LPFC for good cause in

whole or in part.

[FR Doc. 95-20284 Filed 8-15-95; 8:45 am]

BILLING CODE 6450-01-P