Notice2023-14401
Integrated System Power Rates-Rate Order No. SWPA-80
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
July 7, 2023
Effective
July 15, 2023
Issuing agencies
Energy DepartmentSouthwestern Power Administration
Abstract
The Administrator, Southwestern Power Administration (Southwestern), has approved and placed into effect on an interim basis Rate Order No. SWPA-80 (Rate Order), which provides the following Integrated System Wholesale Rates for Hydro Peaking Power (P-13B) Rate Schedule: Rate Schedule P-13B, Wholesale Rates for Hydro Peaking Power (Rate Schedule P-13B).
Full Text
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[Federal Register Volume 88, Number 129 (Friday, July 7, 2023)]
[Notices]
[Pages 43337-43347]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-14401]
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DEPARTMENT OF ENERGY
Southwestern Power Administration
Integrated System Power Rates--Rate Order No. SWPA-80
AGENCY: Southwestern Power Administration, DOE.
ACTION: Notice of rate order.
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SUMMARY: The Administrator, Southwestern Power Administration
(Southwestern), has approved and placed into effect on an interim basis
Rate Order No. SWPA-80 (Rate Order), which provides the following
Integrated System Wholesale Rates for Hydro Peaking Power (P-13B) Rate
Schedule: Rate Schedule P-13B, Wholesale Rates for Hydro Peaking Power
(Rate Schedule P-13B).
DATES: Approval of Rate Schedule P-13B on an interim basis is effective
July 15, 2023.
FOR FURTHER INFORMATION CONTACT: Ms. Fritha Ohlson, Senior Vice
President, Chief Operating Officer, Office of Corporate Operations,
(918) 595-6684 or <a href="/cdn-cgi/l/email-protection#4f293d263b272e612027233c20210f3c383f2e61282039"><span class="__cf_email__" data-cfemail="c6a0b4afb2aea7e8a9aeaab5a9a886b5b1b6a7e8a1a9b0">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION: Rate Order No. SWPA-80 is approved and
placed into effect on an interim basis for the period July 15, 2023,
through September 30, 2023, for the following rate schedule:
Rate Schedule P-13B, Wholesale Rates for Hydro Peaking Power, which
supersedes the existing Rate Schedule P-13A, Wholesale Rates for Hydro
Peaking Power.
Southwestern's Administrator determined that a change to the
Peaking Energy Schedule Submission Time was needed to provide
Southwestern with more flexibility and greater certainty when making
replacement power purchases, and better align Southwestern with
regional organized energy market considerations. Rate Schedule P-13B
replaces the existing Rate Schedule P-13A and will expire on September
30, 2023. Rate Schedule P-13B updates the Peaking Energy Schedule
Submission time from 2:30 p.m. Central Prevailing Time (CPT) to 8:30
a.m. CPT and allows the Southwestern's Administrator to change the
Peaking Energy Schedule Submission Time no more than once per year to a
time no earlier than 8:00 a.m. CPT and no later than 9:00 a.m. CPT.
Additionally, in response to comments received, Rate Schedule P-13B
includes a new Section 4.2.3 that, for a transition period of
approximately two months, provides for customers to reduce their
Peaking Energy schedules submitted for the next day after the 8:30 a.m.
Peaking Energy Schedule Submission Time, provided that such
adjustments: (1) do not increase the amount of Peaking Energy scheduled
for any one hour; (2) are limited to a 25 percent reduction in Peaking
Energy scheduled for any one hour; and (3) are coordinated with
Southwestern's Scheduling and Operations staff no later than 2:00 p.m.
on the day prior to schedule implementation. Additional responses to
comments received on the proposed Rate Schedule P-13B published in the
Federal Register on April 5, 2023 (Proposed Rate Schedule P-13B), are
contained in the Rate Order.
United States of America
Department of Energy
Administrator, Southwestern Power Administration
In the matter of: Southwestern Power Administration, Integrated System
Hydro Peaking Power Rate Schedule, Rate Order No. SWPA-80
Order Confirming, Approving and Placing Revised Power Rate Schedule in
Effect on an Interim Basis (June 30, 2023)
Pursuant to Sections 301(b) and 302(a) of the Department of Energy
[[Page 43338]]
Organization Act, Public Law 42 U.S.C. 7151(b) and 7152(a), 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, relating to the Southwestern Power Administration (Southwestern),
were transferred to, and vested in the Secretary of Energy. By
Delegation Order No. S1-DEL-RATES-2016, effective November 19, 2016,
the Secretary of Energy delegated: (1) the authority to develop power
and transmission rates to Southwestern's Administrator; (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, or to
remand or disapprove such rates, to the Federal Energy Regulatory
Commission (FERC). By Delegation Order No. S1-DEL-S3-2023, effective
April 10, 2023, the Secretary of Energy also delegated the authority to
confirm, approve, and place such rates into effect on an interim basis
to the Under Secretary for Infrastructure. By Redelegation Order No.
S3-DEL-SWPA1-2023, effective April 10, 2023, the Under Secretary for
Infrastructure redelegated the authority to confirm, approve, and place
such rates into effect on an interim basis to the Southwestern
Administrator.
Pursuant to that delegated authority, the Southwestern
Administrator has issued this interim rate order.
Background
Originally established by Order 1865, Secretary of the Interior,
dated August 31, 1943 and effective September 1, 1943 (8 FR 12142
(Sept. 3, 1943)), Southwestern is authorized by Congress to market the
hydroelectric power and energy from Federal dams controlled by the U.S.
Army Corps of Engineers (Corps), pursuant to Section 302(a)(1) of the
Department of Energy Organization Act (42 U.S.C. 7152(a)(1)), Section 5
of the Flood Control Act of 1944 (16 U.S.C. 825s), and Public Law 95-
456 (16 U.S.C. 825s-3). Guidelines for preparation of power repayment
studies are included in Department of Energy (DOE) Order No. RA 6120.2
(Sept. 20, 1979), entitled Power Marketing Administration Financial
Reporting. Procedures for public participation in power and
transmission rate adjustments of the Power Marketing Administrations
are found at title 10, part 903, subpart A of the Code of Federal
Regulations (10 CFR part 903). Procedures for the confirmation and
approval of rates for the Federal Power Marketing Administrations are
found at title 18, part 300, subpart L of the Code of Federal
Regulations (18 CFR part 300).
Southwestern markets power from 24 multi-purpose reservoir projects
with hydroelectric power facilities constructed and operated by the
Corps. These projects are located in Arkansas, Missouri, Oklahoma, and
Texas. Southwestern's marketing area includes these states plus Kansas
and Louisiana. The costs associated with 22 of these 24 hydropower
projects are repaid with revenues received under the Integrated System
rates. These rates also cover the costs of Southwestern's transmission
facilities that consist of 1,381 miles of high-voltage transmission
lines, 27 substations, and 46 microwave and VHF radio sites.
Additionally, Southwestern markets power from two hydropower projects
in southeastern Texas, Sam Rayburn Dam and Robert D. Willis. These
projects are isolated hydraulically, electrically, and financially from
the Integrated System, and are repaid via separate rate schedules and
therefore are not addressed in this Order.
On September 30, 2013, in Rate Order No. SWPA-66, the Deputy
Secretary of Energy placed into effect Southwestern's Integrated System
rate schedules (P-13, NFTS-13, and EE-13) on an interim basis for the
period October 1, 2013 to September 30, 2017. The Federal Energy
Regulatory Commission (FERC) confirmed and approved Southwestern's
interim Integrated System rates on a final basis on January 9, 2014 for
a period ending September 30, 2017.
Southwestern re-designated Integrated System rate schedule ``NFTS-
13'' as ``NFTS-13A'' with no revenue adjustment. In Rate Order No.
SWPA-71, the Deputy Secretary of Energy placed into effect
Southwestern's rate schedule NFTS-13A on an interim basis beginning
January 1, 2017. FERC confirmed and approved NFTS-13A on a final basis
on March 9, 2017.
On September 13, 2017, in Rate Order No. SWPA-72, the Deputy
Secretary of Energy extended all of Southwestern's Integrated System
rate schedules (P-13, NTFS-13A, and EE-13) for two years, for the
period of October 1, 2017 through September 30, 2019.
Southwestern re-designated Integrated System rate schedule ``P-13''
as ``P-13A'' with no revenue adjustment. In Rate Order No. SWPA-73, the
Assistant Secretary for Electricity placed into effect Southwestern's
rate schedule P-13A on an interim basis beginning July 15, 2019. FERC
confirmed and approved P-13A on a final basis on August 29, 2019.
On September 22, 2019, in Rate Order No. SWPA-74, the Assistant
Secretary for Electricity extended all of Southwestern's Integrated
System rate schedules (P-13A, NFTS-13A, EE-13) for two years, for the
period of October 1, 2019 through September 30, 2021.
On August 30, 2021, in Rate Order No. SWPA-77, the Administrator,
Southwestern, extended all of Southwestern's Integrated System rate
schedules (P-13A, NFTS-13A, EE-13) for two years, for the period of
October 1, 2021 through September 30, 2023.
Southwestern must at times make replacement capacity and energy
purchases to fulfill its contractual obligations associated with the
delivery of Hydro Peaking Power as required through the majority of
Power Sales Contracts that utilize Southwestern's Integrated System
rate schedules. Historically, a significant portion of needed
replacement power purchases were made through pre-arranged Purchase
Power Agreements (PPAs), many of which were capacity and energy ``call
options'' that allowed Southwestern to schedule the energy as needed
after the historic Peaking Energy Schedule Submission Time of 2:00 p.m.
Central Prevailing Time (CPT). In 2019, Southwestern implemented a rate
schedule change to move the Peaking Energy Schedule Submission Time to
2:30 p.m. CPT. To facilitate the 30-minute shift in the Peaking Energy
Schedule Submission Time, Southwestern negotiated with its bilateral
trading partners at the time to shift the call option strike time later
by 30 minutes as well. Over the last several years, even prior to 2019,
the role of FERC-approved reliability transmission organizations (RTOs)
in Southwestern's marketing region has increased to the point where the
majority of Southwestern's traditional bi-lateral trading partners are
members of or participants in RTO energy markets. The regional
organized day-ahead energy markets close by 9:30 a.m. CPT, which means
that Southwestern's call option trading partners lose the opportunity
to bid their resources into the day-ahead markets if they allow
Southwestern to wait until the afternoon to determine whether to call
on the capacity and energy. Additionally, the planning reserve margins
for the RTOs surrounding Southwestern have either been increased or are
in the process of being increased which has led to entities keeping
their resources within their own portfolios to ensure their own
resource adequacy. These two complications have led to increased
pricing and decreased flexibility in the bilateral PPA offers available
to
[[Page 43339]]
Southwestern as well as a decrease in the availability of offers for
firm, deliverable capacity and energy in recent months. As a strategy
for addressing this issue, Southwestern has recently become a Market
Participant of the Midcontinent Independent System Operator (MISO),
which enables Southwestern to purchase physical and financial energy
from the MISO Day-Ahead and Real-Time energy markets. Southwestern is
also exploring becoming a Market Participant in the Southwest Power
Pool (SPP). Both the MISO and SPP day-ahead energy markets close
bidding at 9:30 a.m. CPT every day. In order to best utilize regional
organized day-ahead energy markets as a cost-competitive and risk-
management option for replacement energy purchases, Southwestern must
have increased certainty about its Peaking Energy obligations before
9:30 a.m. the day before the Peaking Energy will be delivered. Further,
Southwestern expects that earlier day-ahead certainty of Peaking Energy
schedules will provide Southwestern with additional options when
seeking new PPAs, as Southwestern could accept a strike time prior to
the closing times of regional organized day-ahead energy markets and
mitigate the lost opportunity concerns of trading partners. Ultimately,
Southwestern's effective participation in regional organized day-ahead
energy markets as well as the ability to attract more cost-competitive
PPAs will best ensure Southwestern can procure sufficient energy to
meet its contractual obligations at the lowest costs while limiting the
purchase of unneeded energy. Reduced risk and greater surety in the
delivery of Federal Power and Energy, as well as any cost savings
realized by Southwestern, will be to the benefit of all Integrated
System customers for which Southwestern has the contractual obligation
to provide replacement power.
Therefore, Southwestern's Administrator determined that Section
4.2, Peaking Energy Schedule Submission Time, should be modified to
establish the Peaking Energy Schedule Submission Time as on or before
8:30 a.m. Central Prevailing Time (CPT) of the day preceding the day
for delivery of Peaking Energy. Additionally, Section 4.2.2, Procedure
for Adjusting the Peaking Energy Schedule Submission Time, which allows
the Southwestern Administrator to adjust the Peaking Energy Schedule
Submission Time no more than once annually should be updated to allow
for a submission time no earlier than 8:00 a.m. CPT and no later than
9:00 a.m. CPT. These updates are expected to provide Southwestern with
more flexibility and greater certainty when making replacement power
purchases, and better align Southwestern with regional organized energy
market considerations. After considering comments received,
Southwestern's Administrator determined that a new Section 4.2.3 should
be added to provide for an approximate two-month transition period
during which customers will be allowed to reduce their Peaking Energy
schedules submitted for the next day after the 8:30 a.m. Peaking Energy
Schedule Submission Time, provided that such adjustments: (1) do not
increase the amount of Peaking Energy scheduled for any one hour; (2)
are limited to a 25 percent reduction in Peaking Energy scheduled for
any one hour; and (3) are coordinated with Southwestern's Scheduling
and Operations staff no later than 2:00 p.m. on the day prior to
schedule implementation. The changes to Rate Schedule P-13A, which will
be delineated as Rate Schedule P-13B, is a change to a rate schedule in
accordance with 18 CFR part 300.
Public Notice and Comment
Notice of a proposed rate schedule change was published in the
Federal Register April 5, 2023 (88 FR 20163). The notice advised
parties of the Proposed Rate Schedule P-13B and an associated public
consultation and comment period to provide for an open and transparent
process. Comments were accepted through May 5, 2023. Southwestern
received five responses containing comments on the Proposed Rate
Schedule P-13B. In finalizing the Rate Schedule P-13B, Southwestern
reviewed and considered all comments received during the public
consultation and comment period. The following is a summary of comments
received and Southwestern's response to those comments.
Comment 1: Three commenters acknowledged the regional capacity
challenges that Southwestern and other entities are facing: Arkansas
Electric Cooperative Corporation (AECC) ``understands the capacity
situation that exists''; City Water and Light Plant of the City of
Jonesboro, Arkansas (Jonesboro) ``empathizes with the lack of capacity
that [Southwestern] and other utilities in our region are facing''; and
the Southwestern Power Resources Association (SPRA), which represents
the interests of consumer-owned electric systems that are customers of
Southwestern, ``recognize[s] the difficult position that [Southwestern]
and all utilities in our region are facing with the lack of capacity.''
Response 1: As stated above, regional capacity challenges are a
driving factor for Southwestern's decision. Rate Schedule P-13B allows
Southwestern to better align itself with the closing times of regional
organized day-ahead energy markets, and therefore be better positioned
to utilize those markets and/or enter into PPAs that provide
consideration of those markets to ensure Southwestern is able to meet
its mission of marketing Federal hydropower at the lowest possible
costs.
Comment 2: Four commenters noted that their Federal hydropower
allocation is a valuable portion of their energy portfolios: AECC
``appreciate[s] the great value that [Southwestern] has provided in the
past few years''; Associated Electric Cooperative, Inc. (AECI) ``views
its longstanding partnership with [Southwestern] as integral to AECI's
mission to provide the lowest cost and reliable wholesale power to its
membership''; Jonesboro's ``Federal Hydropower Allocation is a critical
resource in [its] wholesale power portfolio''; and SPRA stated that
``Federal hydropower is a valued piece of the portfolio for the members
of SPRA.''
Response 2: Southwestern works hard to maintain and improve the
value of Federal hydropower in its region while providing wholesale
power to its preference customers at the lowest possible costs.
Comment 3: Three commenters expressed appreciation for their
partnerships with Southwestern: AECC ``appreciates [Southwestern]
working with customers''; Jonesboro and Southwestern ``have a long
history or partnering to support the overall benefit of all
[Southwestern's] customers'' and ``are very thankful for this
partnership''; and SPRA has ``long enjoyed working with [Southwestern]
to address concerns that could threaten the value or reliability of
federal hydropower.''
Response 3: Southwestern also appreciates and works hard to foster
the collaborative relationship it has with its customers.
Comment 4: ARKMO, a group consisting of five municipally-owned
utilities, located in Northeast Arkansas and Southeast Missouri, all of
which are Southwestern customers, stated that ``as small municipal
utilities the ARKMO group members are impacted significantly through
their [Southwestern] rates. Because of this, the ARKMO group is in
support of moving the peaking schedule submission time to 8:30 a.m.''
[[Page 43340]]
Response 4: Southwestern appreciates ARKMO's acknowledgement of the
beneficial aspects of this rate schedule change on its Integrated
System customers for which Southwestern has the contractual obligation
to provide replacement power. As noted, the purpose of this change is
to facilitate Southwestern's effective participation in regional
organized day-ahead energy markets and increase Southwestern's ability
to attract more cost-competitive PPAs.
Comment 5: ARKMO stated that the proposed change will allow
Southwestern ``to better manage their resources. The ARKMO group is in
support of [Southwestern] making strategic decisions to help maintain
lower rates for their customers.''
Response 5: As noted above, this change allows Southwestern to
better align itself with the closing times of regional organized day-
ahead energy markets. Southwestern's effective participation in
regional organized day-ahead energy markets as well as the ability to
attract more cost-competitive PPAs will best ensure Southwestern can
procure sufficient energy to meet its contractual obligations at the
lowest costs while limiting the purchase of unneeded energy. Reduced
risk and greater surety in the delivery of Federal Power and Energy, as
well as any cost savings realized by Southwestern, will be to the
benefit of all Integrated System customers for which Southwestern has
the contractual obligation to provide replacement power, and will
ensure Southwestern meets its mission of marketing Federal hydropower
at the lowest possible costs.
Comment 6: Three commenters indicated a desire for Southwestern to
revisit the need for the Peaking Energy Schedule Submission Time change
in the future to look for a more mutually agreeable solution to
Southwestern's capacity and energy concerns: AECC hopes the conditions
which have caused the capacity situation that exists ``change soon to
allow for a return to the scheduling timeline that exists today'';
Jonesboro ``respectfully encourage[s] [Southwestern] to continue its
partnership with the customers and evaluate solutions that (1) provide
for the lowest cost power purchase adder and (2) provide for the
overall maximum benefit for [Southwestern] customers''; and SPRA is ''
looking forward to a robust conversation during SPRA's upcoming
September meeting to analyze the data that was gathered during this
time, and continuing to work with [Southwestern] to produce solutions
which ensure the most value for all federal hydropower customers.''
Response 6: Southwestern will evaluate the impact of the Peaking
Energy Schedule Submission Time after implementation and will continue
to informally and periodically discuss the change as well as other
possible solutions with its customers. The ability to optimize energy
purchases via regional organized day-ahead energy markets will help
alleviate its capacity and energy shortage issues. Southwestern will
continue to monitor its progress and engage its customers to ensure the
most effective use of the Federal hydropower system consistent with
sound business principles.
Comment 7: Two commenters, Jonesboro and SPRA, stated that
Southwestern should use a ``temporary solution that allows for the
total reduction of a peaking schedule made to [Southwestern] by 8:30
a.m. by no more than 25 percent of the total of each individual hour
submitted. Any proposed reductions must be coordinated with
[Southwestern] Operations and Merchant Staff and completed by no later
than 2:00 p.m. the day prior to energy flow.''
Response 7: As a result of informal discussion with customers and
in response to comments received, to mitigate some of the immediate
impact of this change Southwestern has included a new Section 4.2.3 in
Rate Schedule P-13B that, for a transition period of approximately two
months, allows customers to reduce their Peaking Energy schedules
submitted for the next day after the 8:30 a.m. Peaking Energy Schedule
Submission Time, provided that such adjustments: (1) do not increase
the amount of Peaking Energy scheduled for any one hour; (2) are
limited to a 25 percent reduction in Peaking Energy scheduled for any
one hour; and (3) are coordinated with Southwestern's Scheduling and
Operations staff no later than 2:00 p.m. on the day prior to schedule
implementation.
Comment 8: Two commenters noted that the Proposed Rate Schedule P-
13B will limit customers' ability to optimize their Federal hydropower
resource in day-ahead markets: AECC ``estimates a loss in energy value
of 15-20 percent'' and ``a trim on the capacity of 82%'' which ``would
have been a loss in value for 2022 of 23%'', and AECI stated that
``limiting [Southwestern] customers' flexibility to choose when to call
on peaking power in this way will drive unnecessary cost increases to
AECI's end-use members.''
Response 8: Southwestern has determined that purchased power from
regional organized energy markets is one of the more cost-effective and
viable replacement power options available. Having more certainty about
Southwestern's obligations to customers prior to the closing times of
regional organized day-ahead energy markets will ensure that when a
resource shortage occurs, Southwestern can procure sufficient energy to
meet its obligations at the lowest costs while limiting the purchase of
unneeded energy. Any cost savings realized by Southwestern will be to
the benefit of all Integrated System customers for which Southwestern
has the contractual obligation to provide replacement power.
Comment 9: AECC stated it ``would appreciate [Southwestern's]
further consideration of allowing for increased flexibility, such as
allowing a customer to agree to trim capacity, keeping energy the same,
in return for allowing for the customer to have the ability to offer
the energy into the market.''
Response 9: Although this proposal would lower Southwestern's
capacity obligation, there would still be concerns regarding
Southwestern's next-day energy obligation and Southwestern's limited
ability to optimize regional organized day-ahead energy market
purchases. Southwestern has determined that a Peaking Energy Schedule
Submission Time that is prior to the closing times of regional
organized day-ahead energy markets is in the best interest of
Southwestern customers overall. Southwestern intends to move forward
with Rate Schedule P-13B, which allows the Administrator to change the
Peaking Energy Schedule Submission Time no more than once per year to a
time no earlier than 8:00 a.m. CPT and no later than 9:00 a.m. CPT.
Additionally, Rate Schedule P-13B includes a new Section 4.2.3 that,
for a transition period of approximately two months, allows customers
limited ability to reduce their Peaking Energy schedules submitted for
the next day after the 8:30 a.m. Peaking Energy Schedule Submission
Time.
Comment 10: AECC provided a ``proposed revision to [Southwestern]
Rate Schedule P-13A'' which updates Section 4.2.2 to state the
``Peaking Energy Schedule Submission Time of 2:00 p.m. CPT, as noted in
Section 4.2 of this Rate Schedule, may be adjusted by the
Administrator, Southwestern, to a time no earlier than 8:30 a.m. CPT
and no later than 2:00 p.m. CPT.''
Response 10: Southwestern has determined that a Peaking Energy
Schedule Submission Time that is prior to the closing times of regional
organized day-ahead energy markets is in the best interest of
Southwestern and its Integrated System customers for
[[Page 43341]]
which Southwestern has the contractual obligation to provide
replacement power. Southwestern intends to move forward with Rate
Schedule P-13B, which allows the Administrator to change the Peaking
Energy Schedule Submission Time no more than once per year to a time no
earlier than 8:00 a.m. CPT and no later than 9:00 a.m. CPT.
Additionally, in response to comments received, Southwestern included a
new Section 4.2.3 in Rate Schedule P-13B that, for a transition period
of approximately two months, allows customers limited ability reduce
their Peaking Energy schedules submitted for the next day after the
8:30 a.m. Peaking Energy Schedule Submission Time.
Comment 11: AECI stated that the ``unilateral change to
[Southwestern's] Peaking Power Rate Schedule does not constitute a
minor rate adjustment as it fails to adequately consider the
significant negative economic impact that removal of the 2:30 p.m.
peaking energy submission time will have on integrated system
customers.''
Response 11: ``Minor rate adjustment'' is a defined term under 10
CFR part 903.2. Under 10 CFR part 903.2, determinations as to whether a
rate adjustment qualifies as ``minor'' are based upon the revenue
change to Southwestern's Integrated System as a whole and not the
subjective impacts on an individual customer or set of customers. This
comment afforded Southwestern an opportunity to reexamine its initial
classification of the proposed change as a ``minor rate adjustment.''
The terms ``rate,'' ``rate adjustment,'' and ``minor rate adjustment''
are all defined in 10 CFR 903.2. A pre-requisite to any change being
qualified as a ``minor rate adjustment'' is that it involves a ``rate''
and that it constitutes a ``rate adjustment.'' Upon further review,
Southwestern has determined that this action does not meet the
definition of a ``rate adjustment,'' and thus should not be classified
as a ``minor rate adjustment.'' Under 10 CFR 903.2 a ``rate
adjustment'' is defined as ``a change in an existing rate or rates, or
the establishment of a rate or rates for a new service.'' The
definition goes on to expressly state a rate adjustment ``. . . does
not include a change in rate schedule provisions or in contract terms .
. .'' Instead, the action should be classified simply as a change in
the terms or provisions of the ``Rate Schedule'' that does not change
the existing ``rates'' (the monetary charges or formula for computing
such charges) to Southwestern's customers as provided for in Rate
Schedule P-13A.
Comment 12: AECI stated Southwestern's ``assertion that switching
to an earlier peaking power submission deadline will increase its
ability to provide shortfall capacity pre-supposes that power will be
available during those needed hours. Thus, [Southwestern's] plan would
on-balance create at least as much uncertainty as it attempts to
resolve and would expose [Southwestern] customers to greater price risk
in the organized markets.''
Response 12: Southwestern has been and is exposed to price risk
through past and present PPAs that have a variable energy price based
on a gas index or energy market nodal pricing. Additionally, such PPAs
come with a capacity premium. The ability to optimize Southwestern's
participation in regional organized day-ahead energy markets through an
earlier Peaking Energy Schedule Submission Time while maintaining
optionality with PPAs, as needed, will allow Southwestern to better
manage risk than if Southwestern were to rely solely on the recent PPA
offers it has received.
Comment 13: AECI stated Southwestern ``provides no data showing
there are significant and recurring capacity shortfalls.''
Response 13: Southwestern has experienced recurring capacity
shortfalls the last several years due to both scheduled and unscheduled
maintenance outages. Long-term unit outages (defined as an outage
anticipated to last longer than three months) are reported weekly to
customers, including AECI, via a Monday Morning Report, and short-term
outages were reported on that same report until October 2021.
Additionally, Southwestern has provided outage information via regular
reports to its customer organization, the Southwestern Power Resources
Association (SPRA). Southwestern will make information supporting the
assertion that it has experienced significant and recurring capacity
shortfalls available on request.
Comment 14: AECI stated that ``no supporting data and hence no
substantial evidence underlies either assertion'' that `` `the number
of PPAs available to Southwestern has decreased and the pricing of
available PPAs has increased' ''.
Response 14: In August 2022, Southwestern issued a request for
proposals (RFP) for firm schedulable/dispatchable capacity and
associated energy. No proposals were received. Southwestern issued an
RFP for firm energy deliverable to Southwestern's transmission system
in January and February 2023. Three proposals were received but only
one of them met Southwestern's requested requirements but with energy
pricing significantly higher than historical rates. In April 2023,
Southwestern received additional proposals, none of which were for firm
deliverable capacity. All proposals contained elements that were
significantly higher in cost than historical responses. Even if more
PPAs were available to Southwestern, participation in regional
organized energy markets offers an additional tool for Southwestern to
manage risk.
Comment 15: AECI stated that Southwestern's ``scheduling rationale
appears to ironically rely on creating `better options when seeking new
PPAs' when the absence of previous PPAs is driving the change.''
Response 15: The current need for Rate Schedule P-13B is to allow
Southwestern to better optimize its participation in regional organized
day-ahead energy markets while competitively priced, firm, deliverable
capacity and energy options are limited. Southwestern plans to utilize
both regional organized energy markets as well as PPAs, when
competitive, to manage risk and meet its contractual obligations.
Comment 16: AECI stated that ``amending the day-ahead peaking
scheduling requirement on all days of the year for the entire capacity
of the integrated system, to guard against a relatively rare
convergence of high customer needs, insufficient hydropower resources,
and insufficient market liquidity is unnecessary and inconsistent with
[Southwestern's] mission under Section 5 of the Flood Control Act of
1944 to encourage the most widespread use at the lowest possible rates
of Federal hydropower consistent with sound business principles.''
Response 16: As Southwestern moves towards increased participation
in regional organized energy markets, it is anticipated that
Southwestern will benefit from the earlier Peaking Energy Schedule
Submission Time through having increased knowledge regarding Peaking
Energy obligations prior to market close on a regular basis. This will
help Southwestern prevent against either making purchases in excess of
its energy needs, thereby unnecessarily increasing costs, or making
purchases less than its energy needs, at which point the energy market
liquidity is significantly reduced when procuring the remainder of
needed energy. Furthermore, no matter the rarity of the situation at
hand, Southwestern contends the certainty of energy delivery in
accordance with our
[[Page 43342]]
contractual obligations is paramount to its mission in accordance with
Section 5 of the Flood Control Act of 1944.
Comment 17: AECI provided a ``proposed revision to [Southwestern]
Rate Schedule P-13A'' Section 4.2.2 which would: (1) require that
``Concurrent with the Peaking Energy Schedule Submission Time,
customers designated by Administrator, Southwestern, are required to
submit to Southwestern a preliminary Peaking Energy Schedule for the
second following day'' in addition to the day-ahead peaking energy
schedule by the then in-effect Peaking Energy Schedule Submission Time;
(2) allow for the ``Peaking Energy Schedule Submission Time of 2:00
p.m. CPT'' to be ``adjusted by the Administrator, Southwestern, to a
time no earlier than 8:30 a.m. CPT and no later than 2:00 p.m. CPT'';
(3) require that the Administrator ``make a determination daily on the
need to adjust the Peaking Energy Schedule Submission Time, limited to
the extent conditions required, based on preliminary Peaking Energy
Schedules, regional energy market conditions, and/or operational
considerations'' and (4) require that the Administrator ``notify
customers of the determination to adjust the Peaking Energy Schedule
Submission Time via electronic communication no later than 7:30 a.m. of
the day the Peaking Energy Schedule Submissions are due.''
Response 17: The suggested changes have been considered and
Southwestern has chosen not to implement any of the changes for the
following reasons: (1) the preliminary two-day-ahead schedule is
allowed to change without any restrictions prior to being submitted as
a final day-ahead schedule and therefore cannot be reliably used by
Southwestern in making operational decisions; (2) the analysis of a
preliminary schedule and daily determination of the Peaking Energy
Schedule Submission Time creates a significant additional workload and
administrative burden for Southwestern's staff with no corresponding
benefit for customers overall; (3) submission of a two-day-ahead
preliminary schedule is likely to create a burden for a majority of
Southwestern's customers, which currently submit Peaking Energy
schedules prior to 8:30 a.m. CPT rather than waiting until closer to
the 2:30 p.m. CPT Peaking Energy Schedule Submission Time as permitted
by the current Rate Schedule P-13A (although the comment allows for
Southwestern's Administrator to select specific customers which are
required to submit a two-day-ahead schedule, Southwestern applies rate
schedule provisions equally to all customers); (4) frequent changes to
the Peaking Energy Schedule Submission Time could easily cause
confusion among Southwestern's customers; (5) Southwestern desires to
develop rate schedules which are as consistent as possible for its
customers, and frequent changes to the Peaking Energy Schedule
Submission Time would increase volatility of daily operations; and (6)
as noted previously, Southwestern has determined that a Peaking Energy
Schedule Submission Time that is coordinated with the closing times of
regional organized day-ahead energy markets is in the best interest of
Southwestern and its Integrated System customers for which Southwestern
has the contractual obligation to provide replacement power.
Southwestern intends to move forward with Rate Schedule P-13B, which
allows the Administrator to change the Peaking Energy Schedule
Submission Time no more than once per year to a time no earlier than
8:00 a.m. CPT and no later than 9:00 a.m. CPT.
Availability of Information
Information regarding Rate Schedule P-13B, including public
comments received, is available for public review in the offices of
Southwestern Power Administration, One West Third Street, Suite 1500,
Tulsa, Oklahoma 74103. Southwestern in-effect rate schedules are
available on the Southwestern website at <a href="http://www.energy.gov/swpa">www.energy.gov/swpa</a>.
Administration's Certification
Rate Schedule P-13B will repay all costs of the Integrated System
including amortization of the power investment consistent with the
provisions of Department of Energy Order No. RA 6120.2. In accordance
with Delegation Order No. 00-037.00B, effective November 19, 2016, and
Section 5 of the Flood Control Act of 1944, the Administrator has
determined that Rate Schedule P-13B is consistent with applicable law
and the lowest possible rates consistent with sound business
principles.
Environment
Southwestern previously determined that the rate change actions,
placed into effect on October 1, 2013, fit within the following class
of categorically excluded actions as listed in Appendix B to Subpart D
of 10 CFR part 1021, DOE's Implementing Procedures and Guidelines of
the National Environmental Policy Act of 1969, as amended (42 U.S.C.
4321-4347): B4.4 (Electric power marketing rate changes). Categorically
excluded actions do not require preparation of either an environmental
impact statement or an environmental assessment. On June 13, 2023,
Southwestern determined that categorical exclusion B4.4 applies to the
current action as well.
Order
In view of the foregoing, and pursuant to delegated authority from
the Secretary of Energy, I hereby confirm, approve, and place into
effect on an interim basis, effective July 15, 2023, the Southwestern
Integrated System Rate Schedule P-13B which shall remain in effect on
an interim basis through September 30, 2023, or the FERC confirms and
approves the rates on a final basis.
Signing Authority
This document of the Department of Energy was signed on June 30,
2023, by Mike Wech, Administrator for Southwestern Power
Administration, pursuant to delegated authority from the Secretary of
Energy. That document, with the original signature and date, is
maintained by DOE. For administrative purposes only, and in compliance
with requirements of the Office of the Federal Register, the
undersigned DOE Federal Register Liaison Officer has been authorized to
sign and submit the document in electronic format for publication, as
an official document of DOE. This administrative process in no way
alters the legal effect of this document upon publication in the
Federal Register.
Signed in Washington, DC, on July 3, 2023.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
United States Department of Energy
Southwestern Power Administration
Rate Schedule P-13B \1\ **
---------------------------------------------------------------------------
\1\ Supersedes Rate Schedule P-13A.
** Extended through September 30, 2023 by approval of Rate Order
No. SWPA-77 by the Administrator, Southwestern Power Administration.
---------------------------------------------------------------------------
Wholesale Rates for Hydro Peaking Power
Effective
During the period October 1, 2013, through September 30, 2023,**
in accordance with Federal Energy Regulatory Commission (FERC) order
issued in Docket No. EF14-1-000 (Jan. 9, 2014), extension approved
by the Deputy Secretary in Docket No. EF14-1-002 (Sept. 13, 2017),
modification approved by FERC in Docket No. EF14-1-003 (Aug. 29,
2019), extension approved by Assistant Secretary for Electricity in
Rate Order No. 74 (Sept. 22, 2019), and extension approved by the
Administrator in Rate Order No. 77 (August 30, 2021).
[[Page 43343]]
Available
In the marketing area of Southwestern Power Administration
(Southwestern), described generally as the States of Arkansas,
Kansas, Louisiana, Missouri, Oklahoma, and Texas.
Applicable
To wholesale Customers which have contractual rights from
Southwestern to purchase Hydro Peaking Power and associated energy
(Peaking Energy and Supplemental Peaking Energy).
Character and Conditions of Service
Three-phase, alternating current, delivered at approximately 60
Hertz, at the nominal voltage(s), at the point(s) of delivery, and
in such quantities as are specified by contract.
1. Definitions of Terms
1.1. Ancillary Services
The services necessary to support the transmission of capacity
and energy from resources to loads while maintaining reliable
operation of the System of Southwestern in accordance with good
utility practice, which include the following:
1.1.1. Scheduling, System Control, and Dispatch Service
Is provided by Southwestern as Balancing Authority Area operator
and is in regard to interchange and load-match scheduling and
related system control and dispatch functions.
1.1.2. Reactive Supply and Voltage Control From Generation Sources
Service
Is provided at transmission facilities in the System of
Southwestern to produce or absorb reactive power and to maintain
transmission voltages within specific limits.
1.1.3. Regulation and Frequency Response Service
Is the continuous balancing of generation and interchange
resources accomplished by raising or lowering the output of on-line
generation as necessary to follow the moment-by-moment changes in
load and to maintain frequency within a Balancing Authority Area.
1.1.4. Spinning Operating Reserve Service
Maintains generating units on-line, but loaded at less than
maximum output, which may be used to service load immediately when
disturbance conditions are experienced due to a sudden loss of
generation or load.
1.1.5. Supplemental Operating Reserve Service
Provides an additional amount of operating reserve sufficient to
reduce Area Control Error to zero within 10 minutes following loss
of generating capacity which would result from the most severe
single contingency.
1.1.6. Energy Imbalance Service
Corrects for differences over a period of time between schedules
and actual hourly deliveries of energy to a load. Energy delivered
or received within the authorized bandwidth for this service is
accounted for as an inadvertent flow and is returned to the
providing party by the receiving party in accordance with standard
utility practice or a contractual arrangement between the parties.
1.2. Customer
The entity which is utilizing and/or purchasing Federal Power
and Federal Energy and services from Southwestern pursuant to this
Rate Schedule.
1.3. Demand Period
The period of time used to determine maximum integrated rates of
delivery for the purpose of power accounting which is the 60-minute
period that begins with the change of hour.
1.4. Federal Power and Energy
The power and energy provided from the System of Southwestern.
1.5. Hydro Peaking Power
The Federal Power that Southwestern sells and makes available to
the Customers through their respective Power Sales Contracts in
accordance with this Rate Schedule.
1.6. Peaking Billing Demand
The quantity equal to the Peaking Contract Demand for any month
unless otherwise provided by the Customer's Power Sales Contract.
1.7. Peaking Contract Demand
The maximum rate in kilowatts at which Southwestern is obligated
to deliver Federal Energy associated with Hydro Peaking Power as set
forth in the Customer's Power Sales Contract.
1.8. Peaking Energy
The Federal Energy associated with Hydro Peaking Power that
Southwestern sells and makes available to the Customer in accordance
with the terms and conditions of the Customer's Power Sales
Contract.
1.9. Peaking Energy Schedule Submission Time
The time by which Southwestern requires the Customer to submit
Peaking Energy schedules to Southwestern as provided for in this
Rate Schedule and in accordance with the terms and conditions of the
Customer's Power Sales Contract.
1.10. Power Sales Contract
The Customer's contract with Southwestern for the sale of
Federal Power and Federal Energy.
1.11. Supplemental Peaking Energy
The Federal Energy associated with Hydro Peaking Power that
Southwestern sells and makes available to the Customer if determined
by Southwestern to be available and that is in addition to the
quantity of Peaking Energy purchased by the Customer in accordance
with the terms and conditions of the Customer's Power Sales
Contract.
1.12. System of Southwestern
The transmission and related facilities owned by Southwestern,
and/or the generation, transmission, and related facilities owned by
others, the capacity of which, by contract, is available to and
utilized by Southwestern to satisfy its contractual obligations to
the Customer.
1.13. Uncontrollable Force
Any force which is not within the control of the party affected,
including, but not limited to failure of water supply, failure of
facilities, flood, earthquake, storm, lightning, fire, epidemic,
riot, civil disturbance, labor disturbance, sabotage, war, act of
war, terrorist acts, or restraint by court of general jurisdiction,
which by exercise of due diligence and foresight such party could
not reasonably have been expected to avoid.
2. Wholesale Rates, Terms, and Conditions for Hydro Peaking Power,
Peaking Energy, Supplemental Peaking Energy, and Associated
Services
Unless otherwise specified, this Section 2 is applicable to all
sales under the Customer's Power Sales Contract.
2.1. Hydro Peaking Power Rates, Terms, and Conditions
2.1.1. Monthly Capacity Charge for Hydro Peaking Power
$4.50 per kilowatt of Peaking Billing Demand.
2.1.2. Services Associated With Capacity Charge for Hydro Peaking Power
The capacity charge for Hydro Peaking Power includes such
transmission services as are necessary to integrate Southwestern's
resources in order to reliably deliver Hydro Peaking Power and
associated energy to the Customer. This capacity charge also
includes two Ancillary Services charges: Scheduling, System Control,
and Dispatch Service; and Reactive Supply and Voltage Control from
Generation Sources Service.
2.1.3. Secondary Transmission Service Under Capacity Associated With
Hydro Peaking Power
Customers may utilize the transmission capacity associated with
Peaking Contract Demand for the transmission of non-Federal energy,
on a non-firm, as-available basis, at no additional charge for such
transmission service or associated Ancillary Services, under the
following terms and conditions:
2.1.3.1. The sum of the capacity, for any hour, which is used
for Peaking Energy, Supplemental Peaking Energy, and Secondary
Transmission Service, may not exceed the Peaking Contract Demand;
2.1.3.2. The non-Federal energy transmitted under such secondary
service is delivered to the Customer's point of delivery for Hydro
Peaking Power;
2.1.3.3. The Customer commits to provide Real Power Losses
associated with such deliveries of non-Federal energy; and
2.1.3.4. Sufficient transfer capability exists between the point
of receipt into the System of Southwestern of such non-Federal
energy and the Customer's point of delivery for Hydro Peaking Power
for the time period that such secondary transmission service is
requested.
2.1.4. Adjustment for Reduction in Service
If, during any month, the Peaking Contract Demand associated
with a Power Sales Contract in which Southwestern has the obligation
to provide 1,200 kilowatthours of Peaking Energy per kilowatt of
Peaking Contract Demand is reduced by
[[Page 43344]]
Southwestern for a period or periods of not less than two
consecutive hours by reason of an outage caused by either an
Uncontrollable Force or by the installation, maintenance,
replacement or malfunction of generation, transmission and/or
related facilities on the System of Southwestern, or insufficient
pool levels, the Customer's capacity charges for such month will be
reduced for each such reduction in service by an amount computed
under the formula:
R = (C x K x H) / S
with the factors defined as follows:
R = The dollar amount of reduction in the monthly total capacity
charges for a particular reduction of not less than two consecutive
hours during any month, except that the total amount of any such
reduction shall not exceed the product of the Customer's capacity
charges associated with Hydro Peaking Power times the Peaking
Billing Demand.
C = The Customer's capacity charges associated with Hydro Peaking
Power for the Peaking Billing Demand for such month.
K = The reduction in kilowatts in Peaking Billing Demand for a
particular event.
H = The number of hours duration of such particular reduction.
S = The number of hours that Peaking Energy is scheduled during such
month, but not less than 60 hours times the Peaking Contract Demand.
Such reduction in charges shall fulfill Southwestern's
obligation to deliver Hydro Peaking Power and Peaking Energy.
2.2. Peaking Energy and Supplemental Peaking Energy Rates, Terms, and
Conditions
2.2.1. Peaking Energy Charge
$0.0094 per kilowatthour of Peaking Energy delivered plus the
Purchased Power Adder as defined in Section 2.2.3 of this Rate
Schedule.
2.2.2. Supplemental Energy Charge
$0.0094 per kilowatthour of Supplemental Peaking Energy
delivered.
2.2.3. Purchased Power Adder
A purchased power adder of $0.0059 per kilowatthour of Peaking
Energy delivered, as adjusted by the Administrator, Southwestern, in
accordance with the procedure within this Rate Schedule.
2.2.3.1. Applicability of Purchased Power Adder
The Purchased Power Adder shall apply to sales of Peaking
Energy. The Purchased Power Adder shall not apply to sales of
Supplemental Peaking Energy or sales to any Customer which, by
contract, has assumed the obligation to supply energy to fulfill the
minimum of 1,200 kilowatthours of Peaking Energy per kilowatt of
Peaking Contract Demand during a contract year (hereinafter
``Contract Support Arrangements'').
2.2.3.2. Procedure for Determining Net Purchased Power Adder Adjustment
Not more than twice annually, the Purchased Power Adder of
$0.0059 (5.9 mills) per kilowatthour of Peaking Energy, as noted in
this Rate Schedule, may be adjusted by the Administrator,
Southwestern, by an amount up to a total of <plus-minus>$0.0059 (5.9
mills) per kilowatthour per year, as calculated by the following
formula:
ADJ = (PURCH-EST + DIF) / SALES
with the factors defined as follows:
ADJ = The dollar per kilowatthour amount of the total adjustment,
plus or minus, to be applied to the net Purchased Power Adder,
rounded to the nearest $0.0001 per kilowatthour, provided that the
total ADJ to be applied in any year shall not vary from the then-
effective ADJ by more than $0.0059 per kilowatthour;
PURCH = The actual total dollar cost of Southwestern's System Direct
Purchases as accounted for in the financial records of the
Southwestern Federal Power System for the period;
EST = The estimated total dollar cost ($13,273,800 per year) of
Southwestern's System Direct Purchases used as the basis for the
Purchased Power Adder of $0.0059 per kilowatthour of Peaking Energy;
DIF = The accumulated remainder of the difference in the actual and
estimated total dollar cost of Southwestern's System Direct
Purchases since the effective date of the currently approved
Purchased Power Adder set forth in this Rate Schedule, which
remainder is not projected for recovery through the ADJ in any
previous periods;
SALES = The annual Total Peaking Energy sales projected to be
delivered (2,241,300,000 KWh per year) from the System of
Southwestern, which total was used as the basis for the $0.0059 per
kilowatthour Purchased Power Adder.
2.3. Transformation Service Rates, Terms, and Conditions
2.3.1. Monthly Capacity Charge for Transformation Service
$0.46 per kilowatt will be assessed for capacity used to deliver
energy at any point of delivery at which Southwestern provides
transformation service for deliveries at voltages of 69 kilovolts or
less from higher voltage facilities.
2.3.2. Applicability of Capacity Charge for Transformation Service
Unless otherwise specified by contract, for any particular
month, a charge for transformation service will be assessed on the
greater of (1) that month's highest metered demand, or (2) the
highest metered demand recorded during the previous 11 months, at
any point of delivery. For the purpose of this Rate Schedule, the
highest metered demand will be based on all deliveries, of both
Federal and non-Federal energy, from the System of Southwestern, at
such point during such month.
2.4. Ancillary Services Rates, Terms, and Conditions
2.4.1. Capacity Charges for Ancillary Services
2.4.1.1. Regulation and Frequency Response Service
Monthly rate of $0.07 per kilowatt of Peaking Billing Demand
plus the Regulation Purchased Adder as defined in Section 2.4.5 of
this Rate Schedule.
2.4.1.2. Spinning Operating Reserve Service
Monthly rate of $0.0146 per kilowatt of Peaking Billing Demand.
Daily rate of $0.00066 per kilowatt for non-Federal generation
inside Southwestern's Balancing Authority Area.
2.4.1.3. Supplemental Operating Reserve Service
Monthly rate of $0.0146 per kilowatt of Peaking Billing Demand.
Daily rate of $0.00066 per kilowatt for non-Federal generation
inside Southwestern's Balancing Authority Area.
2.4.1.4. Energy Imbalance Service
$0.0 per kilowatt for all reservation periods.
2.4.2. Availability of Ancillary Services
Regulation and Frequency Response Service and Energy Imbalance
Service are available only for deliveries of power and energy to
load within Southwestern's Balancing Authority Area. Spinning
Operating Reserve Service and Supplemental Operating Reserve Service
are available only for deliveries of non-Federal power and energy
generated by resources located within Southwestern's Balancing
Authority Area and for deliveries of all Hydro Peaking Power and
associated energy from and within Southwestern's Balancing Authority
Area. Where available, such Ancillary Services must be taken from
Southwestern; unless, arrangements are made in accordance with
Section 2.4.4 of this Rate Schedule.
2.4.3. Applicability of Charges for Ancillary Services
For any month, the charges for Ancillary Services for deliveries
of Hydro Peaking Power shall be based on the Peaking Billing Demand.
The daily charge for Spinning Operating Reserve Service and
Supplemental Operating Reserve Service for non-Federal generation
inside Southwestern's Balancing Authority Area shall be applied to
the greater of Southwestern's previous day's estimate of the peak,
or the actual peak, in kilowatts, of the internal non-Federal
generation.
2.4.4. Provision of Ancillary Services by Others
Customers for which Ancillary Services are made available as
specified above, must inform Southwestern by written notice of the
Ancillary Services which they do not intend to take and purchase
from Southwestern, and of their election to provide all or part of
such Ancillary Services from their own resources or from a third
party.
Subject to Southwestern's approval of the ability of such
resources or third parties to meet Southwestern's technical and
operational requirements for provision of such Ancillary Services,
the Customer may change the Ancillary Services which it takes from
Southwestern and/or from other sources at the beginning of any month
upon the greater of 60 days notice or upon completion of any
necessary equipment modifications necessary to accommodate such
change; Provided, That, if the Customer chooses not
[[Page 43345]]
to take Regulation and Frequency Response Service, which includes
the associated Regulation Purchased Adder, the Customer must pursue
these services from a different host Balancing Authority; thereby
moving all metered loads and resources from Southwestern's Balancing
Authority Area to the Balancing Authority Area of the new host
Balancing Authority. Until such time as that meter reconfiguration
is accomplished, the Customer will be charged for the Regulation and
Frequency Response Service and applicable Adder then in effect. The
Customer must notify Southwestern by July 1 of this choice, to be
effective the subsequent calendar year.
2.4.5. Regulation Purchased Adder
Southwestern has determined the amount of energy used from
storage to provide Regulation and Frequency Response Service in
order to meet Southwestern's Balancing Authority Area requirements.
The replacement value of such energy used shall be recovered through
the Regulation Purchased Adder. The Regulation Purchased Adder
during the time period of January 1 through December 31 of the
current calendar year is based on the average annual use of energy
from storage \1\ for Regulation and Frequency Response Service and
Southwestern's estimated purchased power price for the corresponding
year from the most currently approved Power Repayment Studies.
---------------------------------------------------------------------------
\1\ The average annual use of energy from storage for Regulation
and Frequency Response Service is based on Southwestern studies.
---------------------------------------------------------------------------
The Regulation Purchased Adder will be phased in over a period
of four (4) years as follows:
------------------------------------------------------------------------
Regulation purchased adder for the
Year incremental replacement value of
energy used from storage
------------------------------------------------------------------------
2014.............................. \1/4\ of the average annual use of
energy from storage x 2014
Purchased Power price.
2015.............................. \1/2\ of the average annual use of
energy from storage x 2015
Purchased Power price.
2016.............................. \3/4\ of the average annual use of
energy from storage x 2016
Purchased Power price.
2017 and thereafter............... The total average annual use of
energy from storage x the
applicable Purchased Power price.
------------------------------------------------------------------------
2.4.5.1. Applicability of Regulation Purchased Adder
The replacement value of the estimated annual use of energy from
storage for Regulation and Frequency Response Service shall be
recovered by Customers located within Southwestern's Balancing
Authority Area on a non-coincident peak ratio share basis, divided
into twelve equal monthly payments, in accordance with the formula
in Section 2.4.5.2.
If the Regulation Purchased Adder is determined and applied
under Southwestern's Rate Schedule NFTS-13, then it shall not be
applied here.
2.4.5.2. Procedure for Determining Regulation Purchased Adder
Unless otherwise specified by contract, the Regulation Purchased
Adder for an individual Customer shall be based on the following
formula rate, calculated to include the replacement value of the
estimated annual use of energy from storage by Southwestern for
Regulation and Frequency Response Service.
RPA = The Regulation Purchased Adder for an individual Customer per
month, which is as follows:
[(L<INF>Customer</INF> / L<INF>Total</INF>) x RP<INF>Total</INF> ] /
12
with the factors defined as follows:
L<INF>Customer</INF> = The sum in MW of the following three factors:
(1) The Customer's highest metered load plus generation used to
serve the Customer's load that is accounted for through a reduction
in the Customer's metered load (referred to as `generation behind
the meter') during the previous calendar year, and
(2) The Customer's highest rate of Scheduled Exports \2\ during
the previous calendar year, and
---------------------------------------------------------------------------
\2\ Scheduled Exports and Scheduled Imports are transactions,
such as sales and purchases respectively, which are in addition to a
Customer's metered load that contribute to Southwestern's Balancing
Authority Area need for regulation.
---------------------------------------------------------------------------
(3) The Customer's highest rate of Scheduled Imports \2\ during
the previous calendar year.
L<INF>Total</INF> = The sum of all L<INF>Customer</INF> factors for
all Customers that were inside Southwestern's Balancing Authority
Area at the beginning of the previous calendar year in MW.
RP<INF>Total</INF> = The ``net'' cost in dollars and cents based on
Southwestern's estimated purchased power price for the corresponding
year from the most currently approved Power Repayment Studies
multiplied by the average annual use of energy from storage, as
provided for in the table in Section 2.4.5, to support
Southwestern's ability to regulate within its Balancing Authority
Area. The ``net'' cost in dollars and cents shall be adjusted by
subtracting the product of the quantity of such average annual use
of energy from storage in MWh and Southwestern's highest rate in
dollars per MWh for Supplemental Peaking Energy during the previous
calendar year.
For Customers that have aggregated their load, resources, and
scheduling into a single node by contract within Southwestern's
Balancing Authority Area, the individual Customer's respective
Regulation Purchased Adder shall be that Customer's ratio share of
the Regulation Purchased Adder established for the node. Such ratio
share shall be determined for the Customer on a non-coincident basis
and shall be calculated for the Customer from their highest metered
load plus generation behind the meter.
2.4.6. Energy Imbalance Service Limitations
Energy Imbalance Service primarily applies to deliveries of
power and energy which are required to satisfy a Customer's load. As
Hydro Peaking Power and associated energy are limited by contract,
the Energy Imbalance Service bandwidth specified for Non-Federal
Transmission Service does not apply to deliveries of Hydro Peaking
Power, and therefore Energy Imbalance Service is not charged on such
deliveries. Customers who consume a capacity of Hydro Peaking Power
greater than their Peaking Contract Demand may be subject to a
Capacity Overrun Penalty.
3. Hydro Peaking Power Penalties, Terms, and Conditions
3.1. Capacity Overrun Penalty
3.1.1. Penalty Charge for Capacity Overrun
For each hour during which Hydro Peaking Power was provided at a
rate greater than that to which the Customer is entitled, the
Customer will be charged a Capacity Overrun Penalty at the following
rates:
------------------------------------------------------------------------
Rate per
Months associated with charge kilowatt
------------------------------------------------------------------------
March, April, May, October, November, December.......... $0.15
January, February, June, July, August, September........ 0.30
------------------------------------------------------------------------
3.1.2. Applicability of Capacity Overrun Penalty
Customers which have loads within Southwestern's Balancing
Authority Area are obligated by contract to provide resources, over
and above the Hydro Peaking Power and associated energy purchased
from Southwestern, sufficient to meet their loads. A Capacity
Overrun Penalty shall be applied only when the formulas provided in
Customers' respective Power Sales Contracts indicate an overrun on
Hydro Peaking Power, and investigation determines that all
resources, both firm and non-firm, which were available at the time
of the apparent overrun were insufficient to meet the Customer's
load.
3.2. Energy Overrun Penalty
3.2.1. Penalty Charge for Energy Overrun
$0.1034 per kilowatthour for each kilowatthour of overrun.
3.2.2. Applicability of Energy Overrun Penalty
By contract, the Customer is subject to limitations on the
maximum amounts of Peaking Energy which may be scheduled under the
Customer's Power Sales Contract. When the Customer schedules an
amount in
[[Page 43346]]
excess of such maximum amounts, such Customer is subject to the
Energy Overrun Penalty.
3.3. Power Factor Penalty
3.3.1. Requirements Related to Power Factor
Any Customer served from facilities owned by or available by
contract to Southwestern will be required to maintain a power factor
of not less than 95 percent and will be subject to the following
provisions.
3.3.2. Determination of Power Factor
The power factor will be determined for all Demand Periods and
shall be calculated under the formula:
[GRAPHIC] [TIFF OMITTED] TN07JY23.004
with the factors defined as follows:
PF = The power factor for any Demand Period of the month.
kWh = The total quantity of energy which is delivered during such
Demand Period to the point of delivery or interconnection in
accordance with Section 3.3.4.
rkVAh = The total quantity of reactive kilovolt-ampere-hours (kVARs)
delivered during such Demand Period to the point of delivery or
interconnection in accordance with Section 3.3.4. {tc\l ``2.2
Reservation Priority For Existing Firm Service Customers''{time}
3.3.3. Penalty Charge for Power Factor
The Customer shall be assessed a penalty for all Demand Periods
of a month where the power factor is less than 95 percent lagging.
For any Demand Period during a particular month such penalty shall
be in accordance with the following formula:
C = D x (0.95-LPF) x $0.10
with the factors defined as follows:
C = The charge in dollars to be assessed for any particular Demand
Period of such month that the determination of power factor ``PF''
is calculated to be less than 95 percent lagging.
D = The Customer's demand in kilowatts at the point of delivery for
such Demand Period in which a low power factor was calculated.
LPF = The lagging power factor, if any, determined by the formula
``PF'' for such Demand Period.
If C is negative, then C = zero (0).
3.3.4. Applicability of Power Factor Penalty
The Power Factor Penalty is applicable to radial
interconnections with the System of Southwestern. The total Power
Factor Penalty for any month shall be the sum of all charges ``C''
for all Demand Periods of such month. No penalty is assessed for
leading power factor. Southwestern, in its sole judgment and at its
sole option, may determine whether power factor calculations should
be applied to (i) a single physical point of delivery, (ii) a
combination of physical points of delivery where a Customer has a
single, electrically integrated load, (iii) or interconnections. The
general criteria for such decision shall be that, given the
configuration of the Customer's and Southwestern's systems,
Southwestern will determine, in its sole judgment and at its sole
option, whether the power factor calculation more accurately
assesses the detrimental impact on Southwestern's system when the
above formula is calculated for a single physical point of delivery,
a combination of physical points of delivery, or for an
interconnection as specified by an Interconnection Agreement.
Southwestern, at its sole option, may reduce or waive Power
Factor Penalties when, in Southwestern's sole judgment, low power
factor conditions were not detrimental to the System of Southwestern
due to particular loading and voltage conditions at the time the
power factor dropped below 95 percent lagging.
4. Hydro Peaking Power Miscellaneous Rates, Terms, and Conditions
{tc\12 ``2 Initial Allocation and Renewal Procedures''{time}
4.1. Real Power Losses {tc\13 ``2.1 Initial Allocation and Renewal
Procedures''{time}
Customers are required to self-provide all Real Power Losses for
non-Federal energy transmitted by Southwestern on behalf of such
Customers under the provisions detailed below.
Real Power Losses are computed as four (4) percent of the total
amount of non-Federal energy transmitted by Southwestern. The
Customer's monthly Real Power Losses are computed each month on a
megawatthour basis as follows:
ML = 0.04 x NFE
with the factors defined as follows:
ML = The total monthly loss energy, rounded to the nearest
megawatthour, to be scheduled by a Customer for receipt by
Southwestern for Real Power Losses associated with non-Federal
energy transmitted on behalf of such Customer; and
NFE = The amount of non-Federal energy that was transmitted by
Southwestern on behalf of a Customer during a particular month.
The Customer must schedule or cause to be scheduled to
Southwestern, Real Power Losses for which it is responsible subject
to the following conditions:
4.1.1. The Customer shall schedule and deliver Real Power Losses
back to Southwestern during the second month after they were
incurred by Southwestern in the transmission of the Customer's non-
Federal power and energy over the System of Southwestern unless such
Customer has accounted for Real Power Losses as part of a metering
arrangement with Southwestern.
4.1.2. On or before the twentieth day of each month,
Southwestern shall determine the amount of non-Federal loss energy
it provided on behalf of the Customer during the previous month and
provide a written schedule to the Customer setting forth hour-by-
hour the quantities of non-Federal energy to be delivered to
Southwestern as losses during the next month.
4.1.3. Real Power Losses not delivered to Southwestern by the
Customer, according to the schedule provided, during the month in
which such losses are due shall be billed by Southwestern to the
Customer to adjust the end-of-month loss energy balance to zero (0)
megawatthours and the Customer shall be obliged to purchase such
energy at the following rates:
------------------------------------------------------------------------
Rate per
Months associated with charge kilowatthour
------------------------------------------------------------------------
March, April, May, October, November, December.......... $0.15
January, February, June, July, August, September........ 0.30
------------------------------------------------------------------------
4.1.4. Real Power Losses delivered to Southwestern by the
Customer in excess of the losses due during the month shall be
purchased by Southwestern from the Customer at a rate per
megawatthour equal to Southwestern's rate per megawatthour for
Supplemental Peaking Energy, as set forth in Southwestern's then-
effective Rate Schedule for Hydro Peaking Power to adjust such
hourly end-of-month loss energy balance to zero (0) megawatthours.
4.2. Peaking Energy Schedule Submission Time
Southwestern's Peaking Energy Schedule Submission Time is on or
before 8:30 a.m. Central Prevailing Time (CPT), as adjusted by the
Administrator, Southwestern, in accordance with Section 4.2.2 in
this Rate Schedule, of the day preceding the day for the delivery of
Peaking Energy. The Peaking Energy Schedule Submission Time
supersedes the Peaking Energy schedule submission time provided in
the Customer's Power Sales Contract, pursuant to Section 4.2.1 of
this Rate Schedule. Reductions to Peaking Energy schedules may be
made in accordance with Section 4.2.3 of this Rate Schedule.
4.2.1. Applicability of Peaking Energy Schedule Submission Time
The Peaking Energy Schedule Submission Time shall apply to the
scheduling of Peaking Energy. The Peaking Energy Schedule Submission
Time shall not apply to the scheduling of Supplemental Peaking
Energy or to Contract Support Arrangements.
4.2.2. Procedure for Adjusting the Peaking Energy Schedule Submission
Time
Not more than once annually, the Peaking Energy Schedule
Submission Time of 8:30 a.m. CPT, as noted in Section 4.2 of this
Rate Schedule, may be adjusted by the Administrator, Southwestern,
to a time no earlier than 8:00 a.m. CPT and no later than 9:00 a.m.
CPT.
4.2.2.1. Determination of Need To Adjust the Peaking Energy Schedule
Submission Time
The Administrator, Southwestern, will make a determination on
the need to adjust the Peaking Energy Schedule Submission Time based
on Southwestern's studies involving financial analysis, regional
energy market conditions, and/or operational considerations.
4.2.2.2. Notification of Peaking Energy Schedule Submission Time
Adjustment
The Administrator, Southwestern, will notify customers of the
determination to adjust the Peaking Energy Schedule Submission Time
in writing no later than 30 calendar days prior to the effective
date of
[[Page 43347]]
the Peaking Energy Schedule Submission Time adjustment.
4.2.3. Reductions to Peaking Energy Schedules After the Peaking Energy
Schedule Submission Time
Customers may reduce Peaking Energy Schedules submitted for July
15, 2023, through September 15, 2023, after the Peaking Energy
Schedule Submission Time in accordance with this Section 4.2.3. Such
changes must be coordinated with Southwestern Scheduling and
Operations staff no later than 2:00 p.m. CPT the day prior to
schedule implementation.
4.2.3.1. Customers must submit a Peaking Energy Schedule by the
Peaking Energy Schedule Submission Time.
4.2.3.2. For hours the Customer has scheduled a non-zero energy
amount, the Customer may reduce the amount of Peaking Energy
scheduled for that same hour by no more than 25 percent. Customers
may not increase the Peaking Energy scheduled for any hour.
4.2.3.3. For determining the 25 percent Peaking Energy hourly
reduction limit, fractional megawatt reductions will round to the
nearest whole megawatt. Values ending in 0.01 to 0.49 will round
down and values ending in 0.50 to 0.99 will round up.
4.2.3.4. Customers choosing to reduce the Peaking Energy
Schedule must adjust the applicable transaction tag to reflect the
desired reductions no later than 2:00 CPT the day prior to schedule
implementation.
[FR Doc. 2023-14401 Filed 7-6-23; 8:45 am]
BILLING CODE P
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</html>Indexed from Federal Register on July 7, 2023.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.