Loveland Area ProjectsNotice of Order Confirming and Approving an Extension of the Firm Electric Service Rate for Rate Order No. WAPA- 82

DEPARTMENT OF ENERGY

Western Area Power Administration

Loveland Area Projects--Notice of Order Confirming and Approving

an Extension of the Firm Electric Service Rate for Rate Order No. WAPA-

82

AGENCY: Western Area Power Administration, DOE.

ACTION: Notice of rate order.

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SUMMARY: This action is to extend the existing Loveland Area Projects

(LAP) firm electric service rate, Rate Order No. WAPA-51, through

January 31, 2001. The existing firm electric service rate will expire

January 31, 1999. This notice of an extension of a rate is issued

pursuant to 10 CFR 903.23. Rate Order No. WAPA-51 is extended under

Rate Order No. WAPA-82.

FOR FURTHER INFORMATION CONTACT: Mr. Daniel Payton, Rates Manager,

Rocky Mountain Customer Service Region, Western Area Power

Administration, P.O. Box 3700, Loveland, CO 80539-3003, telephone (970)

490-7442, or e-mail ([email protected]).

SUPPLEMENTARY INFORMATION: By Amendment No. 3 to Delegation Order No.

0204-108, published November 10, 1993 (58 FR 59716), the Secretary of

Energy 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 of Energy; 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).

Pursuant to Delegation Order No. 0204-108 and existing Department

of Energy procedures for public participation in power rate adjustments

at 10 CFR part 903, Western's LAP firm electric service rate was

submitted to FERC for confirmation and approval on January 10, 1994. On

July 14, 1994, in Docket No. EF94-5181-000 at 68 FERC para. 62,040,

FERC issued an order confirming, approving, and placing into effect on

a final basis the firm electric service rate for the LAP. The LAP

consists of the Pick-Sloan Missouri Basin Program, Western Division and

the Fryingpan-Arkansas Project. The rate, Rate Order No. WAPA-51, was

approved for the 5-year period beginning February 1, 1994, and ending

January 31, 1999.

Western proposed to extend the existing rate of $2.85/kilowattmonth

for capacity and the rate of 10.85 mills/kilowatthour for energy. The

existing rates are sufficient to recover project expenses (including

interest) and capital requirements through January 31, 2001. Increased

revenue from good hydrologic conditions and lower operation and

maintenance expenses over the cost-evaluation period have made this

possible. For the Pick-Sloan Missouri Basin Program, the ratesetting

study projected the deficit to peak at $178 million in fiscal year (FY)

1994 and to be repaid in FY 2002. The deficit actually peaked at $171

million in FY 1993 and was totally repaid in FY 1997. The Fryingpan-

Arkansas Project recorded its first principal payment of $2.8 million

on the investment in FY 1996. In FY 1997, the principal payment for

this project was $2.9 million. No principal payments were projected

during this time period in Docket No. EF94-5181-000. The total revenue

requirement of $44.3 million is sufficient to cover the expenses and

capital requirements through January 31, 2001. Western, therefore, has

decided to extend the existing rate pursuant to 10 CFR 903.23.

In accordance with 10 CFR 903.23(a)(2), Western did not have a

consultation and comment period. The notice of an extension of the firm

electric service rate was published in the Federal Register on August

18, 1998. Western is submitting the notice of rate order 30 days after

that publication.

Following review of Western's proposal within the Department of

Energy, I approved Rate Order No. WAPA-82, which extends the existing

Loveland Area Projects firm electric service Rate Schedule L-F4 on an

interim basis through January 31, 2001.

[[Page 58034]]

Dated: October 16, 1998.

Elizabeth A. Moler,

Deputy Secretary.

This rate was established pursuant to section 302(a) of the

Department of Energy Organization Act (42 U.S.C. 7152(a)), through

which the power marketing functions of the Department of the Interior

and the Bureau of 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)), 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 of Energy; 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). This rate

extension is issued pursuant to the Delegation Order and the Department

of Energy rate extension procedures at 10 CFR part 903.

BACKGROUND

In the order issued July 14, 1994, in Docket No. EF94-5181-000 at

68 FERC para. 62,040, FERC confirmed, approved, and placed into effect

on a final basis the firm electric service rate for the Loveland Area

Projects (LAP), Rate Order No. WAPA-51. The rate was approved for the

period from February 1, 1994, through January 31, 1999.

Discussion

The LAP consists of the Pick-Sloan Missouri Basin Program, Western

Division and the Fryingpan-Arkansas Project. The LAP existing rate is

$2.85/kilowattmonth for capacity and 10.85 mills/kilowatthour for

energy. The existing rate is sufficient to recover project expenses

(including interest) and capital requirements through January 31, 2001.

Increased revenue from good hydrologic conditions and lower operation

and maintenance expenses over the cost-evaluation period have made this

possible. For the Pick-Sloan Missouri Basin Program, the ratesetting

study projected the deficit to peak at $178 million in fiscal year (FY)

1994 and to be repaid in FY 2002. The deficit actually peaked at $171

million in FY 1993 and was totally repaid in FY 1997. The Fryingpan-

Arkansas Project recorded its first principal payment of $2.8 million

on the investment in FY 1996. In FY 1997, the principal payment for

this project was $2.9 million. No principal payments were projected

during this time period in Docket No. EF94-5181-000. The total revenue

requirement of $44.3 million is sufficient to cover the expenses and

capital requirements through January 31, 2001.

In accordance with 10 CFR 903.23(a)(2), Western did not have a

consultation and comment period. The notice of an extension of the firm

electric service rate was published in the Federal Register on August

18, 1998. Western is submitting the notice of rate order 30 days after

that publication.

Order

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

me by the Secretary, I hereby extend for the period effective February

1, 1999, through January 31, 2001, the existing Rate Schedule L-F4 for

the firm electric service rate for the Loveland Area Projects.

Dated: October 16, 1998.

Elizabeth A. Moler,

Deputy Secretary.

[FR Doc. 98-28911 Filed 10-28-98; 8:45 am]

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