Southwestern Power Admin. plans rate hike to pay for hydro fixes

The Southwestern Power Administration, part of the U.S. Department of Energy, plans an outreach program to explain to power customers its plans to increase rates to pay for maintenance of its hydroelectric dams.

Southwestern said in a notice to be published in the July 1 Federal Register that it has prepared current and revised 2013 Power Repayment Studies which show the need for an increase in annual revenues to meet cost recovery criteria. The increased revenues are needed primarily to cover the increased costs associated with increased operations and maintenance and increases to investments and replacements in the hydroelectric facilities.

The Administrator of Southwestern has developed proposed Integrated System rates, which are supported by the rate design study, to recover the required revenues. The Revised 2013 Study indicates that the proposed rates would increase annual system revenues by about 4.7% from $184,059,100 to $192,765,802 effective in the October 2013-September 2017 period.

Southwestern markets power from 24 multi-purpose reservoir projects with hydroelectric facilities constructed and operated by the U.S. Army Corps of Engineers. 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 the hydropower facilities of 22 of the 24 projects are repaid via revenues received under the Integrated System rates, as are those of Southwestern’s transmission facilities, which consist of 1,380 miles of high-voltage transmission lines, 25 substations, and 46 microwave and VHF radio sites. Costs associated with the Sam Rayburn and Robert D. Willis Dams, two Corps projects that are isolated hydraulically, electrically, and financially from the Integrated System, are repaid under separate rate schedules and are not addressed in the July 1 notice.

Southwestern will take comment on the rate proposals for 60 days from the July 1 publication date, and will also hold a public information forum, if requested, on July 11 in Tulsa, Okla.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.