Integrated System Power Rates

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Published

November 12, 2024

Issuing agencies

Energy DepartmentSouthwestern Power Administration

Abstract

Southwestern Power Administration (Southwestern) proposes to revise the existing Integrated System rate schedules to meet the identified average annual revenue need of $237,821,129, an increase of $44,230,649 (22.8 percent), effective April 1, 2025, through September 30, 2027. Interested persons may review the proposed rate and supporting studies on Southwestern's website, request to participate in a public forum, and submit comments. Southwestern will evaluate all comments received in this process.

Full Text

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<title>Federal Register, Volume 89 Issue 218 (Tuesday, November 12, 2024)</title>
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[Federal Register Volume 89, Number 218 (Tuesday, November 12, 2024)]
[Notices]
[Pages 88997-88999]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-26144]

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DEPARTMENT OF ENERGY

Southwestern Power Administration

Integrated System Power Rates

AGENCY: Southwestern Power Administration, DOE.

ACTION: Notice of proposed rate.

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SUMMARY: Southwestern Power Administration (Southwestern) proposes to
revise the existing Integrated System rate schedules to meet the
identified average annual revenue need of $237,821,129, an increase of
$44,230,649 (22.8 percent), effective April 1, 2025, through September
30, 2027. Interested persons may review the proposed rate and
supporting studies on Southwestern's website, request to participate in
a public forum, and submit comments. Southwestern will evaluate all
comments received in this process.

DATES: A consultation and comment period will begin November 12, 2024
and end February 10, 2025. Written comments are due on or before
February 10, 2025. If requested, a public information and comment forum
(Forum) will be held on December 18, 2024, at 9:00 a.m. to no later
than 12:00 p.m. Central Standard Time (CST). The Forum will be
conducted via Microsoft Teams. Persons desiring to attend the Forum
should notify Southwestern by December 11, 2024, at 11:59 p.m. CST, so
that a list of Forum participants can be prepared. Requests to attend
the Forum should be sent via email to <a href="/cdn-cgi/l/email-protection#e4979394859685908197a497939485ca838b92"><span class="__cf_email__" data-cfemail="d8abafa8b9aab9acbdab98abafa8b9f6bfb7ae">[email&#160;protected]</span></a> should include
the individual's name, address, phone number, entity (if any) they
represent, and email address. Persons desiring to speak at the Forum
should specify this in their notification to Southwestern; others may
speak if time permits.
If Southwestern does not receive a request for a Forum, the Forum
will not be held. If a Forum is requested, the Microsoft Teams meeting
information will be posted to Southwestern's website.

ADDRESSES: Written comments should be submitted to: Fritha Ohlson,
Senior Vice President, Chief Operating Officer, Office of Corporate
Operations, Southwestern Power Administration, U.S. Department of
Energy, One West Third Street, Tulsa, Oklahoma 74103 or emailed to
<a href="/cdn-cgi/l/email-protection#46353136273427322335063531362768212930"><span class="__cf_email__" data-cfemail="bbc8cccbdac9dacfdec8fbc8cccbda95dcd4cd">[email&#160;protected]</span></a>.

FOR FURTHER INFORMATION CONTACT: Ashley Corker, Director, Division of
Resources and Rates, Southwestern Power Administration, U.S. Department
of Energy, One West Third Street, Tulsa, Oklahoma 74103, (918) 595-
6682, <a href="/cdn-cgi/l/email-protection#8cedffe4e0e9f5a2efe3fee7e9feccfffbfceda2ebe3fa"><span class="__cf_email__" data-cfemail="58392b30343d21763b372a333d2a182b2f2839763f372e">[email&#160;protected]</span></a>.

SUPPLEMENTARY INFORMATION: 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.
On September 30, 2013, the Deputy Secretary of Energy, via Rate
Order No. SWPA-66, placed Southwestern's Integrated System rate
schedules (P-13, NFTS-13, and EE-13) into effect until September 30,
2017. Subsequently, rate schedule NFTS-13 was renamed to NFTS-13A and
rate schedule P-13 was renamed to P-13A and then later to P-13B, in
each case with no revenue adjustment.\1\ Additionally, all three rate
schedules have been extended with no revenue adjustment.\2\ Most
recently, the Southwestern Administrator extended rate schedules P-13B,
NFTS-13A, and EE-13, via Rate Order No. SWPA-85, through September 30,
2025.
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\1\ Rate Order Nos. SWPA-71 (January 1, 2017), SWPA-73 (July 15,
2017), SWPA-80 (July 15, 2023)
\2\ Rate Order Nos. SWPA-72 (September 13, 2017), SWPA-74
(September 22, 2019), SWPA-77 (August 30, 2021), SWPA-81 (September
20, 2023).
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The guidelines for preparation of power repayment studies are
included in DOE Order No. RA 6120.2, ``Power Marketing Administration
Financial Reporting.'' In simple terms, the rate process works as
follows. First, Southwestern conducts a Power Repayment Study to
determine whether its current revenues are sufficient for Southwestern
to meet its repayment obligations. If a revenue shortfall (or surplus)
is indicated, Southwestern conducts a revised Power Repayment Study to
determine the level of revenue needed. If the revenue change needed to
meet Southwestern's repayment obligations is within a small margin of
Agency discretion, Southwestern will finalize the Power Repayment
Studies for that year and Southwestern's rates will not be adjusted.
This is what occurred annually for Southwestern's Integrated System
Rates from 2013 until 2023.
If, however, Southwestern's annual Power Repayment Studies indicate
a revenue shortfall (or surplus) outside of that small margin of Agency
discretion, Southwestern must then engage in a Rate Design Study to
inform the Administrator as to what the new proposed rates should be in
order to generate the needed revenue. This is what occurred in 2023.
Unlike previous years, Southwestern's 2023 Power Repayment Studies
indicated the need for a revenue increase that was substantial enough
to impact Southwestern's ability to meet its repayment obligations. The
2023 Power Repayment Studies indicated the need for an increase of
$44,230,649 in average annual revenue. Southwestern then engaged in a
Rate Design Study to develop rates necessary to generate this
additional revenue. The resulting rates are described in the chart.
Part of the total additional revenue identified by the Power
Repayment Studies is a need to increase revenues specifically for
purchased power and wheeling. The Purchased Power & Wheeling Adder
(PPWA) produces revenues which are segregated to cover the cost of
power purchased to meet contractual obligations. The PPWA is
established to reflect revenues required to meet Southwestern's
purchased power and wheeling needs on an average annual basis. The PPWA
rate will increase to reflect the increasing average cost of purchasing
power over the period as well as the cost of firm transmission to wheel
power and energy from two projects, Blakely Mountain and DeGray, from
MISO into Southwestern's system. Revenue from the sale of excess energy
from Blakely Mountain and DeGray will offset the increase in purchased
power and wheeling cost. The Administrator's authority to adjust the
PPWA at her or his discretion with the Purchased Power & Wheeling Adder
Adjustment (PPWAA) will remain in force.\3\ The PPWAA is limited to two
adjustments per year not to exceed a total of <plus-minus>8.7 mills per
kilowatt-hour per year. The PPWA will increase to $0.0087 per kilowatt-
hour and the PPWAA will

[[Page 88998]]

decrease to $0.00 per kilowatt-hour when the proposed rate schedules
take effect.
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\3\ See 138 FERC ] 62,199 (2012).
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Additionally, the Capacity Overrun and Energy Overrun penalties in
the proposed Hydro Peaking Power rate schedule have been updated to be
formula rates, which are the greater of the penalties as included in P-
13B, or the applicable day-ahead locational marginal price. This change
is to ensure that penalties are sufficient to cover the financial
impact of unauthorized capacity and energy overruns. The Excess Energy
rate schedule has also been converted to a formula rate based on the
applicable market rates at the time of sale, rather than a set rate as
in EE-13. Like EE-13, the proposed Excess Energy rate schedule does not
include a transmission component, as transmission service will be the
sole responsibility of the entity purchasing excess energy.
Below is a comparison of the existing and proposed Integrated
System rates:

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Existing Proposed Change
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P-13B P-23 Dollars Percent
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Hydro Peaking Power
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Energy:
Peaking Energy.................. $0.0094 /kWh........... $0.0128 /kWh........... $0.0034 36.2
Supplemental Peaking Energy..... $0.0094 /kWh........... $0.0128 /kWh........... 0.0034 36.2
Purchased Power & Wheeling...... $0.0059 /kWh........... $0.0087 /kWh........... 0.0028 47.5
Administrator's Discretionary +/-$0.0059 /kWh........ +/-$0.0087 /kWh........ 0.0028 47.5
Adder Adjustment--Annual Limit.
Capacity:
Grid or 138-161 kV.............. $4.50 /kW/Mo........... $5.30 /kW/Mo........... 0.80 17.8
Regulation & Frequency Response. $0.07 /kW/Mo........... $0.0208 /kW/Mo......... (0.0492) -70.3
Operational Reserves--Spinning.. $0.0146 /kW/Mo......... $0.0208 /kW/Mo......... 0.0062 42.5
Operational Reserves-- $0.0146 /kW/Mo......... $0.0208 /kW/Mo......... 0.0062 42.5
Supplemental.
Energy Imbalance................ $0.0 /kW/Mo............ $0.0 /kW/Mo............ 0.0 0.0
Regulation Purchased Adder (load prorated share of total prorated share of total N/A N/A
within SWPA BAA). energy cost. energy cost.
Transformation Service 69 kV & $0.46 /kW/Mo........... $0.86 /kW/Mo........... 0.4000 87.0
less (applied to usage, not
reservation).
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Non-Federal Transmission & Interconnection Facilities Service
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NFTS-13A............... NFS-23................. Dollars Percent
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Firm Point-to-Point Capacity........ $1.48 /kW/Mo........... $1.15 /kW/Mo........... ($0.33) -22.3
Non-Firm Point-to-Point Capacity (80 $1.184 /kW/Mo.......... $0.92 /kW/Mo........... (0.26) -22.3
percent of Firm Point-to-Point).
Network Integration................. $1.48 /kW/Mo........... $1.15 /kW/Mo........... (0.33) -22.3
Interconnection Facilities.......... $1.48 /kW/Mo........... $1.15 /kW/Mo........... (0.33) -22.3
Transformation Service 69 kV & less $0.46 /kW/Mo........... $0.86 /kW/Mo........... 0.40 87.0
(applied to usage, not reservation).
Scheduling, System Control, & $0.09 /kW/Mo........... $0.17 /kW/Mo........... 0.08 88.9
Dispatch.
Reactive Supply & Voltage Control... $0.04 /kW/Mo........... $0.10 /kW/Mo........... 0.06 150.0
Regulation & Frequency Response..... $0.07 /kW/Mo........... $0.0208 /kW/Mo......... (0.0492) -70.3
Operational Reserves--Spinning...... $0.0146 /kW/Mo......... $0.0208 /kW/Mo......... 0.0062 42.5
Operational Reserves--Supplemental.. $0.0146 /kW/Mo......... $0.0208 /kW/Mo......... 0.0062 42.5
Energy Imbalance.................... $0.0 /kW/Mo............ $0.0 /kW/Mo............ 0.0 0.0
Regulation Purchased Adder (load prorated share of total prorated share of total N/A N/A
within SWPA BAA). energy cost. energy cost.
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Excess Energy
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EE-13.................. EE-23.................. Dollars Percent
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Excess Energy....................... $0.0094 /kWh........... formula rate........... N/A N/A
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Public Participation

The procedures for public participation are found at title 10, part
903, subpart A of the Code of Federal Regulations (10 CFR part 903).
This proposed action is considered a ``Major Rate Adjustment,'' as
defined by 10 CFR 903.2(d). As such, in accordance with 10 CFR 903.14,
the public consultation and comment period is 90 days. In accordance
with 10 CFR 903.15(a) and 903.16(a), Southwestern will hold a Forum for
this proposed rate adjustment if requested. Southwestern will review
and consider all timely public comments at the conclusion of the
consultation and comment period and adjust the proposal as appropriate.
The Integrated System rate schedules will then be approved on an
interim basis.

Legal Authority

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 FERC. By Delegation Order No. S1-
DEL-S3-2024, effective August 30, 2024, the Secretary of Energy also
delegated the authority to confirm, approve, and place such rates into
effect on an interim basis to the

[[Page 88999]]

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 Administrator,
Southwestern.

Availability of Information

The 2023 Integrated System Power Repayment Studies and the
associated Rate Design Study as well as the proposed Integrated System
rate schedules are available on Southwestern's website at: <a href="https://www.energy.gov/swpa/rate-schedule-actions">https://www.energy.gov/swpa/rate-schedule-actions</a>. At the conclusion of the
consultation and comment period, Southwestern will post all comments
received at the same website location. If a Forum is held, the
transcript of the Forum and any other documents introduced during the
Forum will also be made available on Southwestern's website.

Environmental Impact

Southwestern is in the process of determining whether an
environmental assessment or an environmental impact statement should be
prepared or if this action can be categorically excluded from those
requirements.\4\
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\4\ In compliance with the National Environmental Policy Act
(NEPA) of 1969, as amended, 42 U.S.C. 4321 through 4347; the Council
on Environmental Quality Regulations for implementing NEPA (40 CFR
parts 1500 through 1508); and DOE NEPA Implementing Procedures and
Guidelines (10 CFR part 1021)
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Determination Under Executive Order 12866

Southwestern 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.

Signing Authority

This document of the Department of Energy was signed on November 6,
2024, 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 November 6, 2024.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
[FR Doc. 2024-26144 Filed 11-8-24; 8:45 am]
BILLING CODE 6450-01-P

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