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Integrated System Power Rates
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[Federal Register: October 12, 2006 (Volume 71, Number 197)]
[Notices]
[Page 60126-60139]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr12oc06-42]
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DEPARTMENT OF ENERGY
Southwestern Power Administration
Integrated System Power Rates
AGENCY: Southwestern Power Administration, DOE.
ACTION: Notice of Rate Order.
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SUMMARY: Pursuant to Delegation Order Nos. 00-037.00, effective
December 6, 2001, and 00-001-00B, effective July 28, 2005, the Deputy
Secretary has approved and placed into effect on an interim basis Rate
Order No. SWPA-56, which increases the power rates for the Integrated
System pursuant to the following Integrated System Rate Schedules:
Rate Schedule P-06, Wholesale Rates for Hydro Peaking Power.
Rate Schedule NFTS-06, Wholesale Rates for Non-Federal Transmission/
Interconnection Facilities Service.
Rate Schedule EE-06, Wholesale Rate for Excess Energy.
The rate schedules supersede the existing rate schedules shown below:
Rate Schedule P-05, Wholesale Rates for Hydro Peaking Power
(superseded by P-06).
Rate Schedule NFTS-05, Wholesale Rates for Non-Federal Transmission/
Interconnection Facilities Service (superseded by NFTS-06).
Rate Schedule EE-05, Wholesale Rate for Excess Energy (superseded by
EE-06).
[[Page 60127]]
The effective period for the rate schedules specified in Rate Order
No. SWPA-56 is October 1 2006, through September 30, 2010.
FOR FURTHER INFORMATION CONTACT: Forrest E. Reeves, Assistant
Administrator, Office of Corporate Operations, Southwestern Power
Administration, Department of Energy, Williams Center Tower I, One West
Third Street, Tulsa, Oklahoma 74103, (918) 595-6696,
gene.reeves@swpa.gov.
SUPPLEMENTARY INFORMATION: Southwestern Power Administration's
(Southwestern) Administrator has determined based on the 2006
Integrated System Current Power Repayment Study, that existing rates
will not satisfy cost recovery criteria specified in Department of
Energy Order No. RA 6120.2 and Section 5 of the Flood Control Act of
1944. The finalized 2006 Integrated System Power Repayment Studies
(PRSs) indicate that an increase in annual revenue of $37,703,812, or
27.7 percent, beginning October 1, 2006, will satisfy cost recovery
criteria for the Integrated System projects. The proposed Integrated
System rate schedules would increase annual revenues from $136,267,400
to $173,971,212, primarily to recover increased investments and
replacements in the hydroelectric generating facilities. Additionally,
the PRS indicates the need for an annual increase of $8,562,500 in
revenues received through the Purchased Power Adder to recover
increased average year purchased energy costs. This proposal also
includes an increase in size and frequency to the Administrator's
Discretionary Purchased Power Adder Adjustment (Adjustment) to a level
sufficient to recover purchased power costs for the recent drought
conditions experienced in the Southwestern region. The Adjustment
allows the Administrator to adjust the purchased power adder up to
twice annually, limited to $0.0067 per kilowatthour as necessary, at
his/her discretion, under a formula-type rate, with notification to the
FERC.
The Administrator has followed Title 10, Part 903 Subpart A, of the
Code of Federal Regulations, ``Procedures for Public Participation in
Power and Transmission Rate Adjustments and Extensions'' in connection
with the proposed rate schedule. On June 16, 2006, Southwestern
published notice in the Federal Register, (71 FR 34925), of a 60-day
comment period, together with a combined Public Information and Comment
Forum, to provide an opportunity for customers and other interested
members of the public to review and comment on the proposed rate
increase for the Integrated System. The forum was canceled since no one
expressed an intention to participate. Written comments were accepted
through August 15, 2006. Comments from two entities were received and
are addressed in this rate proposal.
Information regarding this rate proposal, including studies and
other supporting material, is available for public review and comment
in the offices of Southwestern Power Administration, Williams Center
Tower I, One West Third Street, Suite 1400, Tulsa, Oklahoma 74103.
Following review of Southwestern's proposal within the Department
of Energy, I approved, Rate Order No. SWPA-56, on an interim basis,
which increases the existing Integrated System annual revenue
requirement to $173,971,212 per year for the period October 1, 2006
through September 30, 2010.
Dated: September 28, 2006.
Clay Sell,
Deputy Secretary.
Deputy Secretary of Energy
In the matter of: Southwestern Power Administration; Integrated
System Rates; Rate Order No. SWPA-56.
Order Confirming, Approving and Placing Increased Power Rate Schedules
in Effect on an Interim Basis
Pursuant to Sections 302(a) and 301(b) of the Department of Energy
Organization Act, Public Law 95-91, the functions of the Secretary of
the Interior and the Federal Power Commission under Section 5 of the
Flood Control Act of 1944, 16 U.S.C. 825s, relating to the Southwestern
Power Administration (Southwestern) were transferred to and vested in
the Secretary of Energy. By Delegation Order No. 0204-108, effective
December 14, 1983, the Secretary of Energy delegated to the
Administrator of Southwestern the authority to develop power and
transmission rates, delegated to the Deputy Secretary of the Department
of Energy the authority to confirm, approve, and place in effect such
rates on an interim basis and delegated to the Federal Energy
Regulatory Commission (FERC) the authority to confirm and approve on a
final basis or to disapprove rates developed by the Administrator under
the delegation. Delegation Order No. 0204-108, as amended, was
rescinded and subsequently replaced by Delegation Orders 00-037.00
(December 6, 2001) and 00-001-00B (July 28, 2005). The Deputy Secretary
issued this rate order pursuant to said delegations.
Background
The Deputy Secretary approved and placed into effect on an interim
basis the following Integrated System (System) rate schedules for the
period February 1, 2006, through September 30, 2009, and submitted the
rate schedules to the FERC for final confirmation and approval:
Rate Schedule P-05, Wholesale Rates for Hydro Peaking Power.
Rate Schedule NFTS-05, Wholesale Rates for Non-Federal Transmission/
Interconnection Facilities Service.
Rate Schedule EE-05, Wholesale Rate for Excess Energy.
Southwestern Power Administration's (Southwestern), Current Power.
Repayment Study (PRS) indicates that the existing rates will not
satisfy present financial criteria regarding repayment of investment
within a 50-year period due to increased investments and replacements
in the U.S. Army Corps of Engineers (Corps) hydroelectric generating
facilities. The revised PRS indicates that an increase in annual
revenues of $37,703,812 is necessary beginning October 1, 2006, to
accomplish repayment in the required number of years. Accordingly,
Southwestern has prepared proposed rate schedules based on the
additional revenue requirement and the 2006 Rate Design Study.
An informal meeting was held in April 2006 with customer
representatives to review the repayment and rate design processes and
present the basis for the 27.7 percent annual revenue increase. In May
2006, Southwestern prepared a proposed 2006 PRS for the Integrated
System based on comments received from our customers during this
informal meeting.
Title 10, Part 903, Subpart A of the Code of Federal Regulations,
``Procedures for Public Participation in Power and Transmission Rate
Adjustment,'' has been followed in connection with the proposed rate
adjustments. More specifically, opportunities for public review and
comment on proposed System power rates during a 60-day period were
announced by notice published in the Federal Register, June 16, 2006,
(71 FR 34925). The consultation and comment period was shortened by the
Administrator in accordance with Sec. 903.14(a) of 10 CFR part 903,
because of the need to assure new rates are in place by October 1,
2006, to respond to financial difficulties resulting from the FY 2006
drought conditions. A Public Information and Comment Forum scheduled
for July 12, 2006, in Tulsa, Oklahoma, was canceled since no one
[[Page 60128]]
expressed an intention to attend. Written comments were due by August
15, 2006. Southwestern mailed copies of the proposed May 2006 Power
Repayment and Rate Design Studies to customers and interested parties
that requested the data, for review and comment during the formal
period of public participation.
Following conclusion of the comment period on August 15, 2006,
comments presented during the formal public participation process were
reviewed. Once the comments were evaluated, the 2006 Power Repayment
and Rate Design Studies were completed. No changes were made to the
2006 PRS based on comments received. The studies were finalized in
August 2006. The Administrator made the decision to submit the rate
proposal for interim approval and implementation. The comments
resulting from the public participation process and responses, as
developed by Southwestern's staff, are contained in this Rate Order.
Discussion
General
The existing rate schedules developed in the 2005 Integrated System
PRS were the basis for revenue determination in the August 2006
Integrated System Current PRS. The Current PRS indicates that existing
rates are insufficient to produce the annual revenues necessary to
accomplish repayment of the capital investment as required by Section 5
of the Flood Control Act of 1944 and Department of Energy (DOE) Order
No. RA 6120.2.
A Revised PRS was prepared that increases ultimate annual revenues
by $37,703,812 or 27.7 percent, in three steps over a three-year
period, which satisfies the cost recovery criteria outlined in DOE
Order No. RA 6120.2 and Section 5 of the Flood Control Act of 1944. The
first step (October 1, 2006) is an increase in the purchased power
adder ($8,562,500 or 6.3 percent) and the discretionary purchased power
adder adjustment ($10,085,580 or 7.4 percent) components which will be
set to recover future average purchased power expenses and purchased
power costs resulting from the recent drought situation in the
Southwestern region. The second step (October 1, 2007) will incorporate
1/2 of the full revenue requirement ($9,527,866 or 7 percent) caused by
the increased investment and replacement costs. The final step (October
1, 2008 through September 30, 2010) will incorporate the remaining 1/2
($9,527,866 or 7 percent) to reach the full revenue requirement level.
Due to only slight increases in annual operating and maintenance
expenses during the cost evaluation period, these revenue increases
combined over the three year phase-in will ensure that cost recovery
will be accomplished as required.
In Southwestern's 2006 Rate Design proposal, rates were designed to
recover the additional revenue requirements in three steps over a
three-year period. In FY 2007, the Purchased Power Adder will increase
to $0.0067 per kWh to cover the increased expense of future purchased
power costs. Also in FY 2007, the Discretionary Purchased Power Adder
Adjustment will increase in size and frequency (twice annually limited
to $0.0067 per kwh) to a level sufficient to recover the purchased
power costs for the recent drought conditions experienced in the
Southwestern region. A preliminary amount currently estimated to be
$0.0045 per kWh, based on actual data through August 2006, will be
collected through this adjustment. The final discretionary PPA
adjustment will be determined prior to implementation of this rate
proposal using actual data through September 2006 and will become
effective October 1, 2006. The demand charge for Federal power will
increase in FY 2008 by $0.15 per kW per month, and again in FY 2009 by
$0.33 per kW per month to the final rate of $3.51 per kW per month. The
energy charge for peaking energy has remained unchanged. The energy
charge for supplemental peaking energy and excess energy will increase
in FY 2008 by $0.0027 per kWh to $0.0082 per kWh and be equal to the
peaking energy rate. The transformation charge remains the same at
$0.30 per kW and is applied to the transmission capacity usage at 69 kV
and below. In addition, transmission charges for firm service
deliveries of non-Federal power will increase beginning in FY 2009.
Consistent with FERC's Order No. 888, Southwestern will continue
charging separately for five ancillary services under Rate Schedule P-
06 and Rate Schedule NTFS-06, and offering network transmission service
under Rate Schedule NFTS-06. Southwestern's rate design has separated
the five ancillary services for all transmission service. Two ancillary
services, Scheduling, System Control and Dispatch Service together with
Reactive and Voltage Support Service, are required for every
transmission transaction. These charges are also a part of the capacity
rate for Federal power. This is consistent with Southwestern's long-
standing practice of charging for the sale and delivery of Federal
power in its Federal demand charge. The three remaining ancillary
services will be made available to any transmission user within
Southwestern's control area, including Federal power customers. The
rate schedules for Peaking Power and Non-Federal Transmission Service
reflect these charges. Network transmission service is provided to
those who request the service, within Southwestern's control area, but
only for non-Federal deliveries. The rate for and application of this
service are identified in the Non-Federal Transmission/Interconnection
Facilities Service Rate Schedule, NFTS-06.
With respect to the Purchased Power Adder (Adder), Southwestern is
proposing, as in all previous proposals beginning with the 1983
implementation of the purchased power rate component, that the Adder is
set equal to the current average long-term purchased power revenue
requirement. As shown in the Rate Design Study, the amount is
determined by dividing the estimated total average direct purchased
power costs by Southwestern's total annual contractual 1200-hour
peaking energy commitments to the customers (exclusive of contract
support arrangements). In this rate proposal, the resulting Adder is
$0.0067 per kWh of peaking energy. The total revenue created through
application of this Adder would enable Southwestern to cover its
average annual purchased power costs.
Comments and Responses
The Southwestern Power Administration (Southwestern) responded to
questions during the public participation period which are included in
the supplemental background information. In addition, Southwestern
received comments from two entities during the public participation
process. Southwestern's responses are summarized into two general areas
of concern, and are as follows:
Future Investments
Comments: The commenter questions why Southwestern bases rates on
anticipated future capital expenditures which is not in keeping with
the standard industry practice of including capital investments in
rates only after the items are placed into service and are ``used and
useful'' and when Congressional funding is not a guarantee.
Response: Southwestern follows DOE Order No. RA 6120.2 dated
September 20, 1979, as amended October 1, 1983, for interpretation of
the statutory requirements for preparing annual
[[Page 60129]]
power repayment studies. As stated in Order No. RA 6120.2 (paragraph
10), replacements of investment will be ``included in repayment studies
by adding the estimated capital cost of (the) replacement to the unpaid
Federal investment in the year each replacement is estimated to go into
service.'' Southwestern is required to forecast for replacements and
must forecast replacements for the entire period of the PRS. The Corps
provides the best data they have available, together with the service
lives of the equipment. Southwestern and the Corps review these
estimates annually and update the replacement data with the goal to
better reflect what will be on the annual financial statements.
The laws, regulations, methods, and standards for establishing rate
schedules for Power Marketing Administrations (PMAs) are different from
the standards that apply to Investor-Owned Utilities. The ``used and
useful'' concept is apparently utilized for testing rates of investor-
owned utility companies, but is not accepted in rate making for Federal
PMAs. The rationale for this difference is that the Federal projects
must be fully operational to allow Southwestern to market power and
energy for the entire repayment period to meet the requirements of the
law to amortize the investment over a reasonable period of years.
Replacements must be included to assure the projects are fully
operational for the entire repayment period since most of the projects
will be well over 50 years old at the end of the repayment period and
would no longer be able to produce power. Our Power Repayment Study
system is based on the concept that the older projects will produce
power and revenues well beyond their original service lives to help
repay the newer projects, thus keeping rates lower overall. RA 6120.2
required estimated costs of capital to be included in the repayment
study, not that investment be ``used and useful'' before it can be
included. The replacement of hydroelectric power assets is required to
assure repayment of the Federal investment, as is the funding of those
replacements. Funding sources may include both direct Congressional
appropriations and/or other alternative financing methods such as
customer funding. In any event, adequate funding is assumed to enable
replacements and, hence, to assure repayment.
Unfunded Civil Service Retirement System Benefits
Comment: One commenter reiterated its opposition to including the
``unfunded CSRS'' costs in the PRS.
Response: Statement of Federal Financial Accounting Standards
(SFFAS) No. 5, requires all Federal agencies, including Power Marketing
Administrations (PMAs), to record the full cost of pension and
postretirement benefits in financial statements beginning in fiscal
year 1997. SFFAS No. 5 prescribes that the aggregate entry age normal
(AEAN) actuarial cost method be used to calculate pension expenses and
accrued actuarial liabilities for pension benefits. Under the AEAN
method, which is based on dynamic economic assumptions, including
future salary increases, the actuarial present value of projected
benefits is allocated on a level basis over the earnings or the service
of the group between entry age and assumed exit ages and should be
applied to pensions on the basis of a level percentage of earnings. The
portion of this actuarial present value allocated to a valuation year
is called the ``normal cost''. The Office of Personnel Management (OPM)
applies the AEAN method to estimate the amount by which employer and
employee contributions toward future Civil Service Retirement System
(CSRS) pension benefits fall short of the normal cost of those benefits.
Southwestern has included an estimate of the unfunded portion of
the CSRS costs in its Power Repayment Studies every year since 1998.
All previous rate filings back to 1998 have been submitted through the
DOE and ultimately approved by FERC. The FERC confirmed the
Southwestern rate filings on a final basis and did not accept arguments
to exclude the CSRS costs.
Authority to collect revenues for the unfunded CSRS costs comes
primarily from Section 5 of the Flood Control Act of 1944 which, in
part, states ``* * * Rate schedules shall be drawn having regard to the
recovery'' * * * ``of the cost of producing and transmitting such
electric energy, * * *'' Unfunded CSRS has been determined to be a cost
of producing and transmitting electricity. The Federal government funds
the unfunded portion of the CSRS program just as it funds the funded
portion of the CSRS program. All of the CSRS costs are properly
included within Southwestern's cost estimates.
Availability of Information
Information regarding this rate proposal, including studies,
comments and other supporting material, is available for public review
and comment in the offices of Southwestern Power Administration, One
West Third Street, Tulsa, OK 74101.
Administrator's Certification
The August 2006 Revised Power Repayment Study indicates that the
increased power rates 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. 00-037.00, December 6, 2001, and Section 5 of
the Flood Control Act of 1944, the Administrator has determined that
the proposed System rates are consistent with applicable law and the
lowest possible rates consistent with sound business principles.
Environment
The environmental impact of the proposed System rates was evaluated
in consideration of DOE's guidelines for implementing the procedural
provisions of the National Environmental Policy Act and was determined
to fall within the class of actions that are categorically excluded
from the requirements of preparing either an Environmental Impact
Statement or an Environmental Assessment.
Order
In view of the foregoing and pursuant to the authority delegated to
me the Deputy Secretary of Energy, I hereby confirm, approve and place
in effect on an interim basis, effective October 1, 2006, the following
Southwestern Integrated System Rate Schedules which shall remain in
effect on an interim basis through September 30, 2010, or until the
FERC confirms and approves the rates on a final basis.
Dated: September 28, 2006.
Clay Sell,
Deputy Secretary.
Department of Energy, Southwestern Power Administration
Rate Schedule P-06 \1\ Wholesale Rates for Hydro Peaking Power
Effective: During the period October 1, 2006, through September 30,
2010, in accordance with Rate Order No. SWPA-56 issued by the Deputy
Secretary of Energy.
---------------------------------------------------------------------------
\1\ Supersedes Rate Schedule P-05
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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
[[Page 60130]]
(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 points of delivery, and in such quantities as are
specified by contract.
Definitions of Terms: ``Customer'' is the entity which is utilizing
and/or purchasing hydroelectric power and associated energy and
services from Southwestern pursuant to this rate schedule.
The ``Demand Period'' used to determine maximum integrated rates of
delivery for the purpose of power accounting is the 60-minute period
which begins with the change of hour. The term ``peak demand'' means
the highest rate of delivery, in kilowatts, for any Demand Period
during a particular month, at any particular point of delivery.
For the purposes of this Rate Schedule, the term ``point of
delivery'' is used to mean either a single physical point at which
electric power and energy are delivered from the System of Southwestern
(defined below), or a specified set of delivery points which together
form a single, electrically integrated load. ``Peak demand'' for such
set of delivery points is computed as the coincidental highest rate of
delivery among the specified points rather than as the sum of peak
demands for each individual physical point of delivery.
The term ``Peaking Contract Demand'' means the maximum rate in
kilowatts at which Southwestern is, by contract, obligated to deliver
Peaking Energy during any Demand Period. Unless otherwise provided by
contract, the ``Peaking Billing Demand'' for any month shall be equal
to the ``Peaking Contract Demand.''
The term ``Uncontrollable Force,'' as used herein, shall mean 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, war, riot, civil
disturbance, labor disturbance, sabotage, 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.
The term ``System of Southwestern'' means the high-voltage
transmission lines and related facilities Southwestern owns and
operates, and/or has contractual rights to such transmission facilities
owned by others.
``Ancillary Services'' are those 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. Definitions of the Ancillary
Services are as follows:
``Scheduling, System Control, and Dispatch Service'' is provided by
Southwestern as Control Area operator and is in regard to interchange
and load-match scheduling and related system control and dispatch functions.
``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.
``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 Control Area.
``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.
``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.
``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
(defined below) 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.
Energy Associated With Hydro Peaking Power
Peaking Energy: 1,200 kilowatthours of Peaking Energy per kilowatt
of Peaking Contract Demand will be furnished during each contract year.
Supplemental Peaking Energy: Supplemental Peaking Energy (in
addition to Peaking Energy) will be furnished if and when determined by
Southwestern to be available, and at rates of delivery which do not
exceed the Customer's Peaking Contract Demand.
Monthly Rates for Peaking Contract Demand
Capacity Charge for Hydro Peaking Power:
------------------------------------------------------------------------
10/1/2006-9/30/2007 10/1/2007-9/30/2008 10/1/2008-9/30/2010
------------------------------------------------------------------------
$3.03 per kilowatt of $3.18 per kilowatt $3.51 per kilowatt
Peaking Billing Demand. of Peaking Billing of Peaking Billing
Demand Demand.
------------------------------------------------------------------------
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 Customers. 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.
Secondary Transmission Service Under Capacity Associated With Hydro
Peaking Power
Customers may utilize the 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:
(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) The non-Federal energy transmitted under such secondary service
is delivered to the Customer's point of delivery for Hydro Peaking Power;
(3) The Customer pays for or commits to provide Real Power Losses
associated with such deliveries of non-Federal energy; and
(4) Southwestern determines that sufficient transfer capability
exists between the point of receipt into the
[[Page 60131]]
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.
Rates for Energy Associated With Hydro Peaking Power
(a) Peaking Energy Charge:
------------------------------------------------------------------------
10/1/2006-9/30/2007 10/1/2007-9/30/2008 10/1/2008-9/30/2010
------------------------------------------------------------------------
$0.0082 per kilowatthour of $0.0082 per $0.0082 per
Peaking Energy delivered; kilowatthour of kilowatthour of
plus (c). Peaking Energy Peaking Energy
delivered; plus (c). delivered; plus
(c).
------------------------------------------------------------------------
(b) Supplemental Energy Charge:
------------------------------------------------------------------------
10/1/2006-9/30/2007 10/1/2007-9/30/2008 10/1/2008-9/30/2010
------------------------------------------------------------------------
$0.0055 per kilowatthour of $0.0082 per $0.0082 per
Peaking Energy. kilowatthour of kilowatthour of
Peaking Energy. Peaking Energy.
------------------------------------------------------------------------
(c) A purchased power adder of $0.0067 per kilowatthour of Peaking
Energy delivered, as adjusted by the Administrator, Southwestern, in
accordance with the procedure within this rate schedule. This adder
does not apply to: 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
(Contract Support Arrangements).
Monthly Rates for Transformation Service
Capacity Charges for Transformation Service: A charge of $0.30 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.
Application of Capacity Charges for Transformation Service
For any particular month, charges for transformation service will
be assessed on the greater of (1) that month's actual peak demand, or
(2) the highest peak demand recorded during the previous 11 months, at
any point of delivery. For the purpose of this Rate Schedule, the peak
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.
Rates for Ancillary Services
Capacity Charges For Ancillary Services:
(a) Regulation and Frequency Response Service:
------------------------------------------------------------------------
10/1/2006-9/30/2008 10/1/2008-9/30/2010
------------------------------------------------------------------------
Monthly rate................ $0.08 per kilowatt $0.09 per kilowatt
of Peaking Billing of Peaking Billing
Demand. Demand.
------------------------------------------------------------------------
(b) Spinning Operating Reserve Service:
------------------------------------------------------------------------
10/1/2006-9/30/2008 10/1/2008-9/30/2010
------------------------------------------------------------------------
Monthly rate................ $0.0079 per kilowatt $0.0092 per kilowatt
of Peaking Billing of Peaking Billing
Demand. Demand.
Daily rate.................. $0.00036 per $0.00042 per
kilowatt for non- kilowatt for non-
Federal generation Federal generation
inside inside
Southwestern's Southwestern's
control area. control area.
------------------------------------------------------------------------
(c) Supplemental Operating Reserve Service:
------------------------------------------------------------------------
10/1/2006-9/30/2008 10/1/2008-9/30/2010
------------------------------------------------------------------------
Monthly rate................ $0.0079 per kilowatt $0.0092 per kilowatt
of Peaking Billing of Peaking Billing
Demand. Demand.
Daily rate.................. $0.00036 per $0.00042 per
kilowatt for non- kilowatt for non-
Federal generation Federal generation
inside inside
Southwestern's Southwestern's
control area. control area.
------------------------------------------------------------------------
(d) Energy Imbalance Service:
$0.0 per kilowatt for all reservation periods.
Availability of Ancillary Services
Ancillary Services (a) and (d) listed above are available only for
deliveries of power and energy to load centers within Southwestern's
Control Area. Ancillary Services (b) and (c) listed above are available
only for deliveries of non-Federal power and energy generated by
resources located within Southwestern's Control Area and for deliveries
of all Hydro Peaking Power and associated energy from and within
Southwestern's Control Area. Where available, such Ancillary Services
must be taken from Southwestern; unless, subject to Southwestern's
approval, they are provided by others.
[[Page 60132]]
Application of Ancillary Services Charges
For any month, the charges for Ancillary Services (a), (b), (c) and
(d) listed above for deliveries of Hydro Peaking Power shall be based
on the Peaking Billing Demand.
The daily charge for Ancillary Services (b) and (c) for non-Federal
generation inside Southwestern's Control 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.
Provision of Ancillary Services by Others
Customers for which Ancillary Services (a), (b), (c) and (d) 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 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.
Limitations on Energy Imbalance Service
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 in Southwestern's Open Access
Transmission Service tariff 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.
Application of Capacity Overrun Penalty
Customers which have loads within Southwestern's Control 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' 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.
Capacity Overrun Penalty
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
------------------------------------------------------------------------
Application of Energy Overrun Penalty: By contract, the Customer is
subject to limitations on the maximum amounts of Peaking Energy which
may be scheduled during any month or during any four consecutive
months. When the Customer schedules an amount in excess of such maximum
amounts for any month, or schedules more than 1,200 hours of Peaking
Energy per kilowatt of Peaking Contract Demand in any contract year,
such Customer is subject to the Energy Overrun Penalty.
Energy Overrun Penalty: For each kilowatthour of overrun: $0.0902
per kilowatthour.
Rates for Real Power Losses
The Customer shall purchase real power losses unless it elects to
self-provide such losses under the provision detailed below in Annual
Election to Self Provide Real Power Losses.
Real Power Losses are computed as four (4) percent of the total
amount of non-Federal energy transmitted under a particular Customer's
Peaking Contract Demand. The monthly charge for such Real Power Losses
will be computed on a per kilowatthour basis as follows:
MC = .04 x NFE x R
With the factors defined as follows:
MC = The monthly charge ($) by Southwestern for Real Power Losses of
non-Federal energy transmitted under the capacity associated with
Hydro Peaking Power;
NFE = The amount of non-Federal energy (kWh) transmitted under a
Customer's Peaking Contract Demand during a particular month; and
R = The rate for Real Power Losses ($ per kWh), is equal to the
average of Southwestern's actual costs for the purchase of energy to
replace Real Power Losses during the previous fiscal year (October
through September), as reflected in Southwestern's financial records.
The rate for Real Power Losses will be posted on Southwestern's OASIS
by November 1 of each year. This rate will be effective for one year
beginning January 1 of each calendar year.
Annual Election to Self Provide Real Power Losses: The Customer may
elect, on an annual basis, to self-provide all loss energy for which it
is responsible subject to the following conditions:
(1) Such election for self-provision shall be for a full calendar
year (January through December) for that Customer and shall be
exercised by execution of a service agreement, or equivalent, before
December 1 of the prior calendar year;
(2) Unless otherwise specified in the service agreement, the
Customer shall schedule the delivery of real power losses into the
System of Southwestern at the rate of one megawatt of real power losses
for every 25 megawatts of non-Federal power and energy delivered to
Customers' loads served from the points of delivery set forth in the
Southwestern/Customer contract;
(3) For any new customer taking transmission service from
Southwestern, election to self-provide real power losses shall be made
at the time the contract is negotiated. Such service shall be
implemented as provided for in the contract and the election to self-
provide shall apply through the end of that calendar year for all
transmission services.
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.
[[Page 60133]]
Determination of Power Factor: The power factor will be determined
for all Demand Periods and shall be calculated under the formula:
[GRAPHIC]
[TIFF OMITTED]
TN12OC06.014
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.
rkVAh = The total quantity of reactive kilovolt-ampere-hours (kvars)
delivered during such Demand Period to the point of delivery or
interconnection.
Power Factor Penalty and Assessment: 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 (.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).
Application 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 a single physical point of delivery or to multiple
physical points of delivery where a Customer has a single, electrically
integrated load served through multiple points 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 or for a
combination of physical points 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.
Adjustment for Reduction in Service: If, during any month, the
quantity of Peaking Contract Demand of Southwestern's 1200 hour peaking
power sales customers that is scheduled by the customer for delivery is
reduced by 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 Peaking Power and Peaking Energy.
Procedure for Determining Southwestern's Net Purchased Power Adder
Adjustment
Not more than twice annually, the Purchased Power Adder of $.0067
(6.7 mills) per kilowatthour of Peaking Energy, as noted in this Rate
Schedule, may be adjusted by the Administrator, Southwestern, by an
amount up to a total of (±$.0067 (6.7 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 amount of the total adjustment, plus or minus, to
be applied to the Net Purchased Power Adder, rounded to the nearest
$.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
$.0067 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 ($15,064,500 per year) of
Southwestern's System Direct Purchases used as the basis for the
Purchased Power Adder of $.0067 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 $.0067 per
kilowatthour Purchased Power Adder.
Department of Energy, Southwestern Power Administration
Rate Schedule NFTS-06\1\ Wholesale Rates For Non-Federal Transmission/
Interconnection Facilities Service
---------------------------------------------------------------------------
\1\ Supersedes Rate Schedule NFTS-05.
---------------------------------------------------------------------------
Effective: During the period October 1, 2006, through September 30,
2010, in accordance with Rate Order No. SWPA-56 issued by the Deputy
Secretary of Energy.
Available: In the region where Southwestern Power Administration
(Southwestern) owns and operates high-voltage transmission lines and
related facilities, and/or has contractual rights to such transmission
facilities owned by others (System of Southwestern).
Applicable: To Customers which have executed Service Agreements
with Southwestern for the transmission of non-Federal power and energy
over the System of Southwestern or for its use for interconnections.
Southwestern will provide services over those portions of the System of
Southwestern in which the Administrator, Southwestern, in his or her
sole judgment, has determined that uncommitted transmission and
transformation capacities in the System of Southwestern are and will be
[[Page 60134]]
available in excess of the capacities required to market Federal power
and energy pursuant to Section 5 of the Flood Control Act of 1944 (58
Stat. 887,890; 16 U.S.C. 825s).
Character and Conditions of Service: Service will be provided as 3-
phase, alternating current, at approximately 60 Hertz, and at the
voltage level of the point(s) specified by Service Agreement or
Transmission Service Transaction.
Definitions of Terms: A Customer is the entity which is utilizing
and/or purchasing services from Southwestern pursuant to this rate
schedule.
A ``Service Agreement'' is a contract executed between a Customer
and Southwestern for the transmission of non-Federal power and energy
over the System of Southwestern or for interconnections. Service
Agreements include:
``Firm Transmission Service Agreements'' that provide for reserved
transmission capacity on a firm basis, for a particular point-to-point
delivery path.
``Non-Firm Transmission Service Agreements'' that provide for the
Customer to request transmission service on a non-firm basis.
``Network Transmission Service Agreements'' that provide for the
Customer to request firm transmission service for the delivery of
capacity and energy from the Customer's network resources to the
Customer's network load, for a period of one year or more.
``Interconnection Agreements'' that provide for the use of the
System of Southwestern and recognize the exchange of mutual benefits
for such use or provide for application of a charge for Interconnection
Facilities Service.
A ``Service Request'' is made under a Transmission Service
Agreement through Southwestern's Open Access Same-Time Information
System (OASIS) for reservation of transmission capacity over a
particular point-to-point delivery path for a particular period. When a
Service Request is approved by Southwestern, it becomes a
``Transmission Service Transaction.'' The Customer must submit hourly
schedules for actual service in addition to the Service Request.
``Firm Point-to-Point Transmission Service'' is transmission
service reserved on a firm basis between specific points of receipt and
delivery pursuant to either a Firm Transmission Agreement or to a
Transmission Service Transaction. ``Non-Firm Point-to-Point
Transmission Service'' is transmission service reserved on a non-firm
basis for specific points of receipt and delivery pursuant to a
Transmission Service Transaction. ``Network Integration Transmission
Service'' is transmission service provided under Part III of
Southwestern's Open Access Transmission Service Tariff which provides
the Customer with firm transmission service for the delivery of
capacity and energy from the Customer's resources to the Customer's load.
``Secondary Transmission Service'' is associated with Firm Point-
to-Point Transmission Service and Network Integration Transmission
Service. For Firm Point-to-Point Transmission Service, it consists of
transmission service provided on an as-available, non-firm basis,
scheduled within the limits of a particular capacity reservation for
transmission service, and scheduled from points of receipt, or to
points of delivery, other than those designated in a Long-Term Firm
Transmission Agreement or a Transmission Service Transaction for Firm
Point-to-Point Transmission Service. For Network Integration
Transmission Service, Secondary Transmission Service consists of
transmission service provided on an as-available, non-firm basis, from
resources other than the Network Resources designated in a Network
Transmission Service Agreement, to meet the Customer's Network Load.
The charges for Secondary Transmission Service, other than Real Power
Losses and Ancillary Services, are included in the applicable capacity
charges for Firm Point-to-Point Transmission Service and Network
Integration Transmission Service.
The ``Demand Period'' used to determine a maximum integrated rate
of delivery for the purposes of power accounting is the 60-minute
period which begins with the change of hour. The term ``Peak Demand''
means the highest rate of delivery, in kilowatts, for any Demand Period
during a particular month, at any particular point of delivery or
interconnection.
For the purposes of this rate schedule, the term ``Point of
Delivery'' is used to mean either a single physical point to which
electric power and energy are delivered from the System of
Southwestern, or a specified set of delivery points which together form
a single, electrically integrated load. Peak Demand for such set of
points is computed as the coincidental highest rate of delivery among
the specified points rather than as the sum of peak demands for each
individual physical point.
``Ancillary Services'' are those 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. Ancillary Services include:
``Scheduling, System Control, and Dispatch Service'' is provided by
Southwestern as Control Area operator and is in regard to interchange
and load-match scheduling and related system control and dispatch functions.
``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.
``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 Control Area.
``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.
``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.
``Energy Imbalance Service'' corrects for differences over a period
of time between schedules and actual hourly deliveries of energy to a load.
``Interconnection Facilities Service'' provides for the use of the
System of Southwestern to deliver energy and/or provide system support
at an interconnection.
Rates for Firm Point-to-Point Transmission Service
Capacity Charges for Firm Transmission Service:
[[Page 60135]]
------------------------------------------------------------------------
10/1/2006-9/30/2008 10/1/2008-9/30/2010
------------------------------------------------------------------------
Monthly..................... $0.90 per kilowatt $0.95 per kilowatt
of transmission of transmission
capacity reserved capacity reserved
in increments of in increments of
one month of one month of
service or invoiced service or invoiced
in accordance with in accordance with
a longer term a longer term
agreement. agreement.
Weekly...................... $0.225 per kilowatt $0.238 per kilowatt
of transmission of transmission
capacity reserved capacity reserved
in increments of in increments of
one week of service. one week of
service.
Daily....................... $0.0409 per kilowatt $0.0432 per kilowatt
of transmission of transmission
capacity reserved capacity reserved
in increments of in increments of
one day of service. one day of service.
------------------------------------------------------------------------
Service Associated with Capacity Charges for Firm Point-to-Point
Transmission Service
The capacity charge for firm transmission service includes Secondary
Transmission Service, but does not include charges for Ancillary Services
or for Real Power Losses associated with actual schedules.
Application of Capacity Charges for Firm Point-to-Point Transmission Service
Capacity charges for firm transmission service are applied to
quantities reserved by contract under a Firm Transmission Agreement or
in accordance with a Transmission Service Transaction.
Customers, unless otherwise specified by contract, will be charged
on the greatest of (1) the Peak Demand at any particular point of
delivery during a particular month, rounded up to the nearest whole
megawatt, or (2) the highest Peak Demand recorded at such point of
delivery during any of the previous 11 months, rounded up to the
nearest whole megawatt, or (3) the capacity reserved by contract; which
amount shall be considered such Customer's reserved capacity. Secondary
Transmission Service for such Customers shall be limited during any
month to the most recent Peak Demand on which a particular Customer is
billed or to the capacity reserved by contract, whichever is greater.
Rates for Non-Firm Point-to-Point Transmission Service
Capacity Charges for Non-Firm Transmission Service
Monthly: 80 percent of the firm monthly charge of transmission
capacity reserved in increments of one month of service.
Weekly: 80 percent of the firm monthly charge divided by 4 of
transmission capacity reserved in increments of one week of service.
Daily: 80 percent of the firm monthly charge divided by 22 of
transmission capacity reserved in increments of one day of service.
Hourly: 80 percent of the firm monthly charge divided by 352 of
transmission capacity reserved in increments of one hour of service.
Application of Charges for Non-Firm Point-to-Point Transmission Service
Capacity charges for Non-Firm Transmission Service are applied to
quantities reserved under a Transmission Service Transaction, and do
not include charges for Ancillary Services or Real Power Losses.
Rates for Network Integration Transmission Service
Annual Revenue Requirement for Network Integration Service:
------------------------------------------------------------------------
10/1/2006-9/30/2008 10/1/2008-9/30/2010
------------------------------------------------------------------------
$9,155,900 $9,431,500
------------------------------------------------------------------------
Monthly Revenue Requirement for Network Integration Service:
------------------------------------------------------------------------
10/1/2006-9/30/2008 10/1/2008-9/30/2010
------------------------------------------------------------------------
$762,992 $785,958
------------------------------------------------------------------------
Net Capacity Available for Network Integration Service:
------------------------------------------------------------------------
10/1/2006-9/30/2008 10/1/2008-9/30/2010
------------------------------------------------------------------------
845,000 kilowatts......................... 828,000 kilowatts.
------------------------------------------------------------------------
Capacity Charge for Network Integration Transmission Service:
------------------------------------------------------------------------
10/1/2006-9/30/2008 10/1/2008-9/30/2010
------------------------------------------------------------------------
$0.90 per kilowatt of Network Load $0.95 per kilowatt of
($762,992/845,000 kilowatts. Network Load ($785,958/
828,000 kilowatts.
------------------------------------------------------------------------
Application of Charge for Network Integration Transmission Service
Network Integration Transmission Service is available only for
deliveries of non-Federal power and energy, and is applied to the
Customer utilizing such service exclusive of any deliveries of Federal
power and energy. The capacity on which charges for any particular
Customer utilizing this service is determined on the greatest of (1)
the Peak Demand at any particular point of delivery during a particular
month, rounded up to the nearest whole megawatt, or (2) the highest
Peak Demand recorded at such point of delivery during any of the
previous 11 months, rounded up to the nearest whole megawatt.
For those Customers taking Network Integration Transmission Service
who are also taking delivery of Federal Power and Energy, the Peak
Demand shall be determined by subtracting the energy scheduled for
delivery of Federal Power and Energy for any hour from the metered
demand for such hour.
Secondary transmission Service for such Customers shall be limited
during any month to the most recent Peak Demand on which a particular
Customer is billed. Charges for Ancillary Services and for Real Power
Losses shall also be assessed.
Rates for Real Power Losses
The Customer shall purchase real power losses unless it elects to
self-provide such losses under the provisions detailed below in Annual
Election to Self-Provide Real Power Losses.
Real Power Losses are computed as four (4) percent of the total
amount of non-Federal energy transmitted on behalf of a Customer. The
monthly charge for such Real Power Losses will be computed on a per
kilowatthour basis as follows:
MC = .04 x NFE x R
with the factors defined as follows:
MC = The monthly charge ($) by Southwestern for Real Power Losses of
non-Federal energy transmitted on behalf of a Customer;
NFE = The amount of non-Federal energy (kWh) transmitted on behalf
of a Customer during a particular month; and
R = The rate for Real Power Losses ($ per kWh), is an average of
Southwestern's actual costs for the purchase of energy to replace
Real Power Losses during the previous fiscal year (October through
September), as reflected in Southwestern's financial records.
[[Page 60136]]
The rate for Real Power Losses will be posted on Southwestern's
OASIS by November 1 of each year. This rate will become effective for
one year beginning January 1 of each calendar year. Annual Election to
Self-Provide Real Power Losses: The Customer may elect, on an annual
basis, to self-provide all loss energy for which it is responsible,
subject to the following conditions:
(1) Such election for self-provision shall be for a full calendar
year (January through December) for that Customer and shall be
exercised by execution of a Service Agreement, or equivalent, before
December 1 of the prior calendar year.
(4) Unless otherwise specified in the Service Agreement, the
Customer shall schedule the delivery of real power losses in the System
of Southwestern at the rate of one megawatt of real power losses for
every 25 megawatts of non-Federal power and energy delivered to
Customers' loads served from the points of delivery set forth in the
Southwestern/Customer contract.
(5) For any new Customer taking transmission service from
Southwestern, election to self-provide real power losses shall be made
at the time the contract is negotiated. Such service shall be
implemented as provided for in the contract and the election to self-
provide shall apply through the end of that calendar year for all
transmission services.
Monthly Capacity Charges for Transformation Service
A charge of $0.30 per kilowatt will be assessed for capacity used
to deliver energy at any point of delivery at which Southwestern
provides transformation for deliveries at voltages of 69 kilovolts or
less from higher voltage facilities.
Application of Capacity Charges for Transformation Service
For any particular month, charges for transformation service will
be assessed on the greater of (1) that month's actual Peak Demand, or
(2) the highest Peak Demand recorded during the previous 11 months. For
the purpose of this rate schedule, the Peak 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.
Rates for Ancillary Services
Capacity Charges for Ancillary Services Associated with Transmission
Services
(a) Scheduling, System Control, and Dispatch Service:
------------------------------------------------------------------------
10/1/2006-9/30/2008 10/1/2008-9/30/2010
------------------------------------------------------------------------
Monthly..................... $0.06 per kilowatt $0.06 per kilowatt
of transmission of transmission
capacity reserved capacity reserved
in increments of in increments of
one month of one month of
service or invoiced service or invoiced
in accordance with in accordance with
a Long-Term Firm a Long-Term Firm
Transmission Transmission
Agreement or Agreement or
Network Network
Transmission Transmission
Service Agreement. Service Agreement.
Weekly...................... $0.015 per kilowatt $0.015 per kilowatt
of transmission of transmission
capacity reserved capacity reserved
in increments of in increments of
one week of service. one week of
service.
Daily....................... $0.0027 per kilowatt $0.0027 per kilowatt
of transmission of transmission
capacity reserved capacity reserved
in increments of in increments of
one day of service. one day of service.
Hourly...................... $0.00017 per $0.00017 per
kilowatt of energy kilowatt of energy
delivered as non- delivered as non-
firm transmission firm transmission
service. service.
------------------------------------------------------------------------
(b) Reactive Supply and Voltage Control from Generation Sources
Service:
------------------------------------------------------------------------
10/1/2006-9/30/2008 10/1/2008-9/30/2010
------------------------------------------------------------------------
Monthly..................... $0.03 per kilowatt $0.04 per kilowatt
of transmission of transmission
capacity reserved capacity reserved
in increments of in increments of
one month of one month of
service or invoiced service or invoiced
in accordance with in accordance with
a Long-Term Firm a Long-Term Firm
Transmission Transmission
Agreement or Agreement or
Network Network
Transmission Transmission
Service Agreement. Service Agreement.
Weekly...................... $0.008 per kilowatt $0.010 per kilowatt
of transmission of transmission
capacity reserved capacity reserved
in increments of in increments of
one week of service. one week of
service.
Daily....................... $0.0014 per kilowatt $0.0018 per kilowatt
of transmission of transmission
capacity reserved capacity reserved
in increments of in increments of
one day of service. one day of service.
Hourly...................... $0.00009 per $0.00011 per
kilowatt of energy kilowatt of energy
delivered as non- delivered as non-
firm transmission firm transmission
service. service.
------------------------------------------------------------------------
(c) Regulation and Frequency Response Service:
------------------------------------------------------------------------
10/1/2006-9/30/2008 10/1/2008-9/30/2010
------------------------------------------------------------------------
Monthly..................... $0.08 per kilowatt $0.09 per kilowatt
of transmission of transmission
capacity reserved capacity reserved
in increments of in increments of
one month of one month of
service or invoiced service or invoiced
in accordance with in accordance with
a Long-Term Firm a Long-Term Firm
Transmission Transmission
Agreement or Agreement or
Network Network
Transmission Transmission
Service Agreement. Service Agreement.
[[Page 60137]]
Weekly...................... $0.020 per kilowatt $0.023 per kilowatt
of transmission of transmission
capacity reserved capacity reserved
in increments of in increments of
one week of service. one week of
service.
Daily....................... $0.0036 per kilowatt $0.0041 per kilowatt
of transmission of transmission
capacity reserved capacity reserved
in increments of in increments of
one day of service. one day of service.
Hourly...................... $0.00023 per $0.00026 per
kilowatt of energy kilowatt of energy
delivered as non- delivered as non-
firm transmission firm transmission
service. service.
------------------------------------------------------------------------
(d) Spinning Operating Reserve Service:
------------------------------------------------------------------------
10/1/2006-9/30/2008 10/1/2008-9/30/2010
------------------------------------------------------------------------
Monthly..................... $0.0079 per kilowatt $0.0092 per kilowatt
of transmission of transmission
capacity reserved capacity reserved
in increments of in increments of
one month of one month of
service or invoiced service or invoiced
in accordance with in accordance with
a Long-Term Firm a Long-Term Firm
Transmission Transmission
Agreement or Agreement or
Network Network
Transmission Transmission
Service Agreement. Service Agreement.
Weekly...................... $0.00198 per $0.023 per kilowatt
kilowatt of of transmission
transmission capacity reserved
capacity reserved in increments of
in increments of one week of
one week of service. service.
Daily....................... $0.00036 per $0.00042 per
kilowatt of kilowatt of
transmission transmission
capacity reserved capacity reserved
in increments of in increments of
one day of service. one day of service.
Hourly...................... $0.00002 per $0.00003 per
kilowatt of energy kilowatt of energy
delivered as non- delivered as non-
firm transmission firm transmission
service. service.
------------------------------------------------------------------------
(e) Supplemental Operating Reserve Service:
------------------------------------------------------------------------
10/1/2006-9/30/2008 10/1/2008-9/30/2010
------------------------------------------------------------------------
Monthly..................... $0.0079 per kilowatt $0.0092 per kilowatt
of transmission of transmission
capacity reserved capacity reserved
in increments of in increments of
one month of one month of
service or invoiced service or invoiced
in accordance with in accordance with
a Long-Term Firm a Long-Term Firm
Transmission Transmission
Agreement or Agreement or
Network Network
Transmission Transmission
Service Agreement. Service Agreement.
Weekly...................... $0.00198 per $0.0023 per kilowatt
kilowatt of of transmission
transmission capacity reserved
capacity reserved in increments of
in increments of one week of
one week of service. service.
Daily....................... $0.00036 per $0.00042 per
kilowatt of kilowatt of
transmission transmission
capacity reserved capacity reserved
in increments of in increments of
one day of service. one day of service.
Hourly...................... $0.00002 per $0.00003 per
kilowatt of energy kilowatt of energy
delivered as non- delivered as non-
firm transmission firm transmission
service. service.
------------------------------------------------------------------------
(f) Energy Imbalance Service: $0.0 per kilowatt for all periods of
reservation
Availability of Ancillary Services
Ancillary Services (a) and (b) are available for all transmission
services in and from the System of Southwestern and shall be provided
by Southwestern. Ancillary Services (c) and (f) listed above are
available only for deliveries of power and energy serving load within
Southwestern's Control Area and shall be provided by Southwestern,
unless, subject to Southwestern's approval, they are provided by
others. Ancillary Services (d) and (e) are available only for
deliveries of power and energy generated by resources located within
Southwestern's Control Area and shall be provided by Southwestern,
unless, subject to Southwestern's approval, they are provided by others.
Application of Ancillary Services Charges
Charges for all Ancillary Services are applied to the reserved or
network transmission service taken by the Customer in accordance with
the rates listed above when such services are provided by Southwestern.
The charges for Ancillary Services are considered to include
Ancillary Services for any Secondary Transmission Service, except in
cases where Ancillary Services (c) through (f) are applicable to a
Secondary Transmission Service transaction, but are not applicable to
the firm capacity reservation under which Secondary Transmission
Service is provided. When charges for Ancillary Services are applicable
to Secondary Transmission Service, the charge for the Ancillary Service
shall be the hourly rate applied to all energy transmitted utilizing
the Secondary Transmission Service.
[[Page 60138]]
Provision of Ancillary Services by Others
Customers for which Ancillary Services (c) through (f) 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 their election to provide all or part of such
Ancillary Services from their own resources or a third party.
Subject to Southwestern's approval of the ability of such resources
or third parties to meet Southwestern's technical 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
written notice or upon the completion of any necessary equipment
modifications necessary to accommodate such change. Such notice
requirements also apply to requests for Southwestern to provide
Ancillary Services when such services are available as specified above.
Limitations on Energy Imbalance Service
Energy Imbalance Service is authorized for use only within a
bandwidth of ±1.5 percent of the actual requirements of the
load at a particular point of delivery, for any hour, compared to the
resources scheduled to meet such load during such hour. Deviations
which are greater than ±1.5 percent, but which are less than
±2,000 kilowatts, are considered to be within the authorized
bandwidth. Deviations outside the authorized bandwidth are subject to a
Capacity Overrun Penalty.
Energy delivered or received within the authorized bandwidth for
this service is accounted for as an inadvertent flow and will be netted
against flows in the future. The inadvertent flow in any given hour
will only be offset with the flows in the corresponding hour of a day
in the same category. The two categories of days are weekdays and
weekend days/North American Electric Reliability Council holidays. This
process will result in a separate inadvertent accumulation for each
hour of the two categories of days. The hourly accumulations in the
current month will be added to the hourly inadvertent balances from the
previous month, resulting in a month-end balance for each hour.
The Customer is required to adjust the scheduling of resources in
such a way as to reduce the accumulation towards zero. It is recognized
that the inadvertent hourly flows can be both negative and positive,
and that offsetting flows should deter a significant accumulation of
inadvertent. In the event any hourly month-end balance exceeds 12 MWHs,
the excess will be subject to the Application of Capacity Overrun
Penalty or the Unauthorized Use of Energy Imbalance Service by
Overscheduling of Resources provisions, depending on the direction of
the accumulation.
Application of Capacity Overrun Penalty
Customers, who receive deliveries within Southwestern's Control
Area, are obligated to provide resources sufficient to meet their
loads. Such obligation is not related to the amount of transmission
capacity that such Customers may have reserved for transmission service
to a particular load. Customers whose resources are scheduled by
Southwestern are not subject to this provision. In the event that a
Customer under schedules its resources to meet its load, resulting in a
difference between resources and actual metered load (adjusted for
transformer losses as applicable) outside the authorized bandwidth for
Energy Imbalance Service for any hour, then such Customer is subject to
the following penalty:
Capacity Overrun Penalty
For each hour during which energy flows outside the authorized
bandwidth, the Customer will be obliged to purchase such energy 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
------------------------------------------------------------------------
Unauthorized Use of Energy Imbalance Service by Overscheduling of Resources
In the event that a Customer schedules greater resources than are
needed to meet its load, such that energy flows at rates beyond the
authorized bandwidth for the use of Energy Imbalance Service,
Southwestern retains such energy at no cost to Southwestern and with no
obligation to return such energy. Customers whose resources are
scheduled by Southwestern are not subject to this provision.
Application of Charge for Interconnection Facilities Service
Any Customer that requests an interconnection from Southwestern
which, in Southwestern's sole judgment and at its sole option, does not
provide commensurate benefits or compensation to Southwestern for the
use of its facilities shall be assessed a capacity charge for
Interconnection Facilities Service. For any month, charges for
Interconnection Facilities Service shall be assessed on the greater of
(1) that month's actual Peak Demand, or (2) the highest Peak Demand
recorded during the previous eleven months, as metered at the
interconnection. The use of Interconnection Facilities Service will be
subject to power factor provisions as specified in this rate schedule.
The interconnection customer shall also be assessed charges for Real
Power Losses on metered flow through the interconnection where
Interconnection Facilities Services is assessed.
Rate for Interconnection Facilities Service
The monthly capacity charge for Interconnection Facilities Service:
------------------------------------------------------------------------
10/1/2006-9/30/2008 10/1/2008-9/30/2010
------------------------------------------------------------------------
$0.90 per kilowatt........................ $0.95 per kilowatt.
------------------------------------------------------------------------
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.
Determination of Power Factor
The power factor will be determined for all Demand Periods and
shall be calculated under the formula:
[GRAPHIC]
[TIFF OMITTED]
TN12OC06.015
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.
rkVAh = The total quantity of reactive kilovolt-ampere-hours (kvars)
delivered during such Demand Period to the point of delivery or
interconnection.
Power Factor Penalty and Assessment
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:
[[Page 60139]]
C = D x (.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).
Application 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 a
single physical point of delivery or to multiple physical points of
delivery where a Customer has a single, electrically integrated load
served through multiple points 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 or for a combination of physical points 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.
Department of Energy, Southwestern Power Administration
Rate Schedule EE-06 \1\ Wholesale Rate for Excess Energy
Effective: During the period October 1, 2006, through September 30,
2010, in accordance with Rate Order No. SWPA-56 issued by the Deputy
Secretary of Energy.
---------------------------------------------------------------------------
\1\ Supersedes Rate Schedule EE-05.
---------------------------------------------------------------------------
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 electric utilities which, by contract, may purchase
Excess Energy from Southwestern.
Character and Conditions of Service: Three-phase, alternating
current, delivered at approximately 60 Hertz, at the nominal voltage
and points of delivery specified by contract.
Energy Associated with this Rate Schedule: Excess Energy will be
furnished at such times and in such amounts as Southwestern determines
to be available.
Transmission and Related Ancillary Services: Transmission service
for the delivery of Excess Energy shall be the sole responsibility of
such customer purchasing Excess Energy.
Rate for Excess Energy:
Energy Charge:
------------------------------------------------------------------------
10/1/2006-9/30/2007 10/1/2007-9/30/2010
------------------------------------------------------------------------
$0.0055 per kilowatthour.................. $0.0082 per kilowatthour.
------------------------------------------------------------------------
[FR Doc. E6-16912 Filed 10-11-06; 8:45 am]
BILLING CODE 6450-01-P