Integrated System Rate Schedules

Published date30 September 2019
Citation84 FR 51537
Record Number2019-21040
SectionNotices
CourtSouthwestern Power Administration
Federal Register, Volume 84 Issue 189 (Monday, September 30, 2019)
[Federal Register Volume 84, Number 189 (Monday, September 30, 2019)]
                [Notices]
                [Pages 51537-51551]
                From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
                [FR Doc No: 2019-21040]
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                DEPARTMENT OF ENERGY
                Southwestern Power Administration
                Integrated System Rate Schedules
                AGENCY: Southwestern Power Administration, DOE.
                ACTION: Notice of extension of Integrated System rate schedules.
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                SUMMARY: The Assistant Secretary for Electricity has approved and
                placed into effect on an interim basis Rate Order No. SWPA-74, which
                extends the following existing Integrated System rate schedules for the
                Southwestern Power Administration: Rate Schedule P-13A, Wholesale Rates
                for Hydro Peaking Power; Rate Schedule NFTS-13A, Wholesale Rates for
                Non-Federal Transmission/Interconnection Facilities Service; Rate
                Schedule EE-13, Wholesale Rates for Excess Energy. This is an interim
                rate action effective
                [[Page 51538]]
                October 1, 2019, extending for a period of two years through September
                30, 2021.
                DATES: The effective period for the rate schedules specified in Rate
                Order No. SWPA-74 is October 1, 2019 through September 30, 2021.
                FOR FURTHER INFORMATION CONTACT: Ms. Fritha Ohlson, Director, Division
                of Resources and Rates, Office of Corporate Operations, Southwestern
                Power Administration, U.S. Department of Energy, One West Third Street,
                Tulsa, Oklahoma 74103, (918) 595-6684, [email protected], or
                facsimile transmission (918) 595-6684.
                SUPPLEMENTARY INFORMATION: Pursuant to Delegation Order Nos. 00-
                037.00B, effective November 19, 2016, and 00-002.00Q, effective
                November 1, 2018, and Redelegation Order No. 00-002.10D, effective June
                4, 2019, and pursuant to the implementation authorities in 10 CFR
                903.22(h), 10 CFR 903.23(a)(3), and 10 CFR 903.23(b), as amended (84 FR
                5347 (Feb. 21, 2019)), Rate Order No. SWPA-74 is approved and placed
                into effect on an interim basis for the period October 1, 2019, through
                September 30, 2021, for the following Southwestern Power Administration
                (Southwestern) Integrated System rate schedules:
                Rate Schedule P-13A, Wholesale Rates for Hydro Peaking Power
                Rate Schedule NFTS-13A, Wholesale Rates for Non-Federal Transmission/
                Interconnection Facilities Service
                Rate Schedule EE-13, Wholesale Rates for Excess Energy
                 The Integrated System rate schedules (P-13, NFTS-13 and EE-13) were
                placed into effect on an interim basis by the Deputy Secretary of
                Energy and were confirmed and approved on a final basis by the Federal
                Energy Regulatory Commission (FERC) on January 9, 2014, in Docket No.
                EF14-1-000 (146 FERC ] 62,016) for the period October 1, 2013 through
                September 30, 2017. Since initial FERC approval, a new section within
                rate schedule NFTS-13 was added to change from a stated rate to a
                revenue requirement-based methodology to better align with practices
                utilized by the Southwest Power Pool, Inc., Regional Transmission
                Organization. The change had no impact on the Integrated System revenue
                requirements and the revised rate schedule was re-designated NFTS-13A
                to reflect the change. The NFTS-13A rate schedule was placed into
                effect on an interim basis by the Deputy Secretary of Energy and was
                confirmed and approved on a final basis by FERC on March 9, 2017, in
                Docket No. EF14-1-001 (158 FERC ] 62,182) for the period January 1,
                2017 through September 30, 2017. A two-year extension of all Integrated
                System rate schedules was approved on an interim basis by the Deputy
                Secretary in Docket No. EF14-1-002 for the period October 1, 2017
                through September 30, 2019. Since the Integrated System rate schedules
                were placed into effect and subsequently extended, there has been one
                additional change with no impact on revenue requirements. Southwestern
                added section 4.2 and a corresponding new 1.9 definition section within
                the Hydro Peaking Power rate schedule P-13 to provide a single
                instrument and procedure for establishing and making limited
                adjustments to the time Southwestern requires its customers to submit
                Peaking Energy schedules. The revised rate schedule was re-designated
                P-13A to reflect the change. The P-13A rate schedule change was placed
                into effect on an interim basis by the Assistant Secretary, effective
                July 1, 2019, through September 30, 2019, and was confirmed and
                approved on a final basis by FERC in Docket No. EF14-1-003 (Aug. 29,
                2019).
                 Southwestern's Administrator completed an annual review of the
                continuing adequacy of the existing rate schedules for the Integrated
                System. This review, as presented in the 2019 Integrated System Power
                Repayment Studies (PRSs), indicated the need for a 0.8 percent revenue
                increase to continue to satisfy cost recovery criteria. It is
                Southwestern's established practice for the Administrator to defer, on
                a case-by-case basis, revenue adjustments for the Integrated System if
                such adjustments are within plus or minus two percent of the revenue
                estimated from the current Integrated System rate schedules. The
                Administrator has determined it to be prudent to defer the increase and
                allow the current rate schedules, which are set to expire September 30,
                2019, to remain in effect.
                 The deferral of a revenue adjustment provides for rate stability
                and savings on the administrative cost of implementation, and
                recognizes that the revenue sufficiency will be re-examined in the
                following year's PRSs. Therefore, the Administrator proposes the two-
                year extension of the Integrated System rate schedules for the period
                October 1, 2019 through September 30, 2021.
                 The Administrator has followed part 903, subpart A of Title 10 of
                the Code of Federal Regulations, ``Procedures for Public Participation
                in Power and Transmission Rate Adjustments and Extensions'' for the
                proposed extension to the rate schedules. The public was informed by
                notice published in the Federal Register (84 FR 29200 (June 21, 2019))
                of the proposed extension of the rate schedules and of the opportunity
                to provide written comments for a period of 30 days ending July 22,
                2019. No comments were received.
                 Information regarding the extension of these rate schedules,
                including the rate schedules and other supporting material, is
                available for public review in the offices of Southwestern Power
                Administration, Williams Tower I, One West Third Street, Tulsa,
                Oklahoma 74103. I have reviewed the Southwestern proposal and I approve
                Rate Order No. SWPA-74.
                 Dated: September 22, 2019.
                Bruce J. Walker,
                Assistant Secretary for Electricity.
                UNITED STATES OF AMERICA DEPARTMENT OF ENERGY ASSISTANT SECRETARY
                In the matter of:
                 Southwestern Power Administration) Rate Order
                 Integrated System Rate Schedules) No. SWPA-74
                ORDER APPROVING EXTENSION OF RATE SCHEDULES ON AN INTERIM BASIS
                (September 22, 2019)
                 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. 00-037.00B, the
                Secretary of Energy delegated to the Administrator of Southwestern
                (Administrator) the authority to develop power and transmission rates,
                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. By
                Delegation Order No. 00-002.00Q, the Secretary of Energy delegated to
                the Under Secretary (of Energy) the authority to confirm, approve, and
                place into effect on an interim basis rates developed by the
                Administrator under delegation. By Redelegation Order No. 00-002.10D,
                the Under Secretary (of Energy) redelegated to the Assistant Secretary
                for Electricity (Assistant Secretary) the authority to confirm,
                approve, and place into effect such rates on an interim basis. Pursuant
                to that delegated authority, the Assistant
                [[Page 51539]]
                Secretary has issued this interim rate order.
                BACKGROUND
                 The following rate schedules for the Integrated System were
                confirmed and approved on a final basis by FERC on January 9, 2014, in
                Docket No. EF14-1-000 (146 FERC ] 62,016), for the period October 1,
                2013 through September 30, 2017:
                Rate Schedule P-13, Wholesale Rates for Hydro Peaking Power
                Rate Schedule NFTS-13, Wholesale Rates for Non-Federal Transmission/
                Interconnection Facilities Service
                Rate Schedule EE-13, Wholesale Rates for Excess Energy
                 Since initial FERC approval, a new section within rate schedule
                NFTS-13 was added to change from a stated rate to a revenue
                requirement-based methodology to better align with practices utilized
                by the Southwest Power Pool, Inc. Regional Transmission Organization.
                The revised rate schedule was designated NFTS-13A to reflect the
                change. The following rate schedule was approved on a final basis by
                FERC on March 9, 2017, in Docket No. EF14-1-001 (158 FERC ] 62,182),
                effective for the period January 1, 2017 through September 30, 2017.
                Rate Schedule NFTS-13A, Wholesale Rates for Non-Federal Transmission/
                Interconnection Facilities Service
                 A two-year extension of all Integrated System rate schedules was
                approved on an interim basis by the Deputy Secretary in Docket No.
                EF14-1-002 for the period October 1, 2017 through September 30, 2019.
                Subsequently, Southwestern added section 4.2 (together with a new 1.9
                definition section) within the Hydro Peaking Power rate schedule P-13
                to provide a single instrument and procedure for establishing and
                making limited adjustments to the time Southwestern requires its
                customers to submit Peaking Energy schedules. The revised rate schedule
                was re-designated P-13A to reflect the change. The following rate
                schedule was placed into effect on an interim basis by the Assistant
                Secretary, effective July 1, 2019, and was confirmed and approved on a
                final basis by FERC under Docket No. EF14-1-003 (Aug. 29, 2019).
                Rate Schedule P-13A, Wholesale Rates for Hydro Peaking Power
                DISCUSSION
                 The existing Integrated System rate schedules are based on the 2013
                Power Repayment Studies (PRSs). PRSs have been completed on the
                Integrated System each year since approval of the existing rate
                schedules. The estimated revised annual revenue identified by the
                subsequent PRSs since the 2013 PRSs has indicated the need for minimal
                rate increases. Since the revenue changes reflected by the subsequent
                PRSs were all within the plus or minus two percent rate adjustment
                threshold practice established by the Administrator on June 23, 1987,
                these rate adjustments were deferred in the best interest of the
                government.
                 However, the existing rate schedules are set to expire on September
                30, 2019. Consequently, Southwestern proposed to extend the existing
                rate schedules for a two-year period ending September 30, 2021, on an
                interim basis under the implementation authorities noted in 10 CFR
                903.22(h) and 10 CFR 903.23(a)(3).
                 Southwestern followed Part 903 of Title 10 of the Code of Federal
                Regulations, ``Procedures for Public Participation in Power and
                Transmission Rate Adjustments and Extensions'' for the proposed
                extension of the rate schedules. An opportunity for customers and other
                interested members of the public to review and comment on the proposed
                extension of the rate schedules was announced by notice published in
                the Federal Register on June 21, 2019 (84 FR 29200), with written
                comments due by July 22, 2019.
                COMMENTS AND RESPONSES
                 Southwestern received no comments regarding the extension of the
                rate schedules.
                AVAILABILITY OF INFORMATION
                 Information regarding the extension of the rate schedules is
                available for public review in the offices of Southwestern Power
                Administration, Williams Tower I, One West Third Street, Tulsa,
                Oklahoma 74103.
                ADMINISTRATION'S CERTIFICATION
                 The 2013 Integrated System PRSs indicated that the current rate
                schedules 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. The 2019 Integrated System
                PRSs indicated the need for an annual revenue increase of 0.8 percent.
                However, the 2019 rate adjustment falls within Southwestern's
                established plus or minus two percent Integrated System rate adjustment
                threshold practice and was deferred.
                 Southwestern's 2020 PRSs will determine the appropriate level of
                revenues needed for the next rate period. In accordance with Delegation
                Order No. 00-037.00B effective November 19, 2016, and Section 5 of the
                Flood Control Act of 1944, the Administrator has determined that the
                existing rate schedules are the lowest possible rates consistent with
                sound business principles, and their extension is consistent with
                applicable law.
                ENVIRONMENT
                 The Southwestern NEPA Compliance Officer determined that this class
                of actions is categorically excluded from the requirements of preparing
                either an Environmental Impact Statement or an Environmental
                Assessment. No additional evaluation of the environmental impact of the
                extension of the existing rate schedules was conducted, since no change
                in anticipated revenues has been made to the currently-approved
                Integrated System rate schedules.
                ADMINISTRATIVE PROCEDURES
                 Under the Administrative Procedure Act (5 U.S.C. 553(d)),
                publication or service of a substantive rule must be made not less than
                30 days before its effective date, except (1) a substantive rule that
                grants or recognizes an exemption or relieves a restriction; (2)
                interpretative rules and statements of policy; or (3) as otherwise
                provided by the agency for good cause found and published with the
                rule. The Assistant Secretary finds good cause to waive the 30-day
                delay in the effective date of this action as unnecessary for the
                following reasons: (1) This is an extension of rates previously
                approved by FERC, pursuant to 10 CFR 903.23(a); (2) there are no
                substantive changes, as the existing rate schedules and anticipated
                revenues remain the same; and (3) the Administrator provided notice and
                opportunity for public comment more than 30 days prior to the effective
                date of the rate extension and received no comments.
                ORDER
                 In view of the foregoing, and pursuant to the authority redelegated
                to me by the Under Secretary (of Energy), I hereby extend on an interim
                basis, for the period of two years, effective October 1, 2019 through
                September 30, 2021, the current Integrated System rate schedules:
                Rate Schedule P-13A, Wholesale Rates for Hydro Peaking Power
                Rate Schedule NFTS-13A, Wholesale Rates for Non-Federal Transmission/
                Interconnection Facilities Service
                Rate Schedule EE-13, Wholesale Rates for Excess Energy
                [[Page 51540]]
                Dated: September 22, 2019
                Bruce J. Walker, Assistant Secretary for Electricity.
                UNITED STATES DEPARTMENT OF ENERGY SOUTHWESTERN POWER ADMINISTRATION
                RATE SCHEDULE P-13A\1\**
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                 \1\ Supersedes Rate Schedule P-13.
                 ** Extended through September 30, 2021, by approval of Rate
                Order No. SWPA-74 by the Assistant Secretary for Electricity.
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                WHOLESALE RATES FOR HYDRO PEAKING POWER
                 Effective: During the period October 1, 2013, through September 30,
                2021**, in accordance with Federal Energy Regulatory Commission (FERC)
                order issued in Docket No. EF14-1-000 (January 9, 2014), extension
                approved by the Deputy Secretary in Docket No. EF14-1-002 (September
                13, 2017), modification approved by FERC in Docket No. EF14-1-003
                (August 29, 2019), and extension approved by the Assistant Secretary in
                Rate Order No. 74.
                 Available: In the marketing area of Southwestern Power
                Administration (Southwestern), described generally as the States of
                Arkansas, Kansas, Louisiana, Missouri, Oklahoma, and Texas.
                 Applicable: To wholesale Customers which have contractual rights
                from Southwestern to purchase Hydro Peaking Power and associated energy
                (Peaking Energy and Supplemental Peaking Energy).
                 Character and Conditions of Service: Three-phase, alternating
                current, delivered at approximately 60 Hertz, at the nominal
                voltage(s), at the point(s) of delivery, and in such quantities as are
                specified by contract.
                1. Definitions of Terms
                1.1. Ancillary Services
                 The services necessary to support the transmission of capacity and
                energy from resources to loads while maintaining reliable operation of
                the System of Southwestern in accordance with good utility practice,
                which include the following:
                1.1.1. Scheduling, System Control, and Dispatch Service
                is provided by Southwestern as Balancing Authority Area operator and is
                in regard to interchange and load-match scheduling and related system
                control and dispatch functions.
                1.1.2. Reactive Supply and Voltage Control from Generation Sources
                Service
                is provided at transmission facilities in the System of Southwestern to
                produce or absorb reactive power and to maintain transmission voltages
                within specific limits.
                1.1.3. Regulation and Frequency Response Service
                is the continuous balancing of generation and interchange resources
                accomplished by raising or lowering the output of on-line generation as
                necessary to follow the moment-by-moment changes in load and to
                maintain frequency within a Balancing Authority Area.
                1.1.4. Spinning Operating Reserve Service
                maintains generating units on-line, but loaded at less than maximum
                output, which may be used to service load immediately when disturbance
                conditions are experienced due to a sudden loss of generation or load.
                1.1.5. Supplemental Operating Reserve Service
                provides an additional amount of operating reserve sufficient to reduce
                Area Control Error to zero within 10 minutes following loss of
                generating capacity which would result from the most severe single
                contingency.
                1.1.6. Energy Imbalance Service
                corrects for differences over a period of time between schedules and
                actual hourly deliveries of energy to a load. Energy delivered or
                received within the authorized bandwidth for this service is accounted
                for as an inadvertent flow and is returned to the providing party by
                the receiving party in accordance with standard utility practice or a
                contractual arrangement between the parties.
                1.2. Customer
                 The entity which is utilizing and/or purchasing Federal Power and
                Federal Energy and services from Southwestern pursuant to this Rate
                Schedule.
                1.3. Demand Period
                 The period of time used to determine maximum integrated rates of
                delivery for the purpose of power accounting which is the 60-minute
                period that begins with the change of hour.
                1.4. Federal Power and Energy
                 The power and energy provided from the System of Southwestern.
                1.5. Hydro Peaking Power
                 The Federal Power that Southwestern sells and makes available to
                the Customers through their respective Power Sales Contracts in
                accordance with this Rate Schedule.
                1.6. Peaking Billing Demand
                 The quantity equal to the Peaking Contract Demand for any month
                unless otherwise provided by the Customer's Power Sales Contract.
                1.7. Peaking Contract Demand
                 The maximum rate in kilowatts at which Southwestern is obligated to
                deliver Federal Energy associated with Hydro Peaking Power as set forth
                in the Customer's Power Sales Contract.
                1.8. Peaking Energy
                 The Federal Energy associated with Hydro Peaking Power that
                Southwestern sells and makes available to the Customer in accordance
                with the terms and conditions of the Customer's Power Sales Contract.
                1.9. Peaking Energy Schedule Submission Time
                 The time by which Southwestern requires the Customer to submit
                Peaking Energy schedules to Southwestern as provided for in this Rate
                Schedule and in accordance with the terms and conditions of the
                Customer's Power Sales Contract.
                1.10. Power Sales Contract
                 The Customer's contract with Southwestern for the sale of Federal
                Power and Federal Energy.
                1.11. Supplemental Peaking Energy
                 The Federal Energy associated with Hydro Peaking Power that
                Southwestern sells and makes available to the Customer if determined by
                Southwestern to be available and that is in addition to the quantity of
                Peaking Energy purchased by the Customer in accordance with the terms
                and conditions of the Customer's Power Sales Contract.
                1.12. System of Southwestern
                 The transmission and related facilities owned by Southwestern, and/
                or the generation, transmission, and related facilities owned by
                others, the capacity of which, by contract, is available to and
                utilized by Southwestern to satisfy its contractual obligations to the
                Customer.
                1.13. Uncontrollable Force
                 Any force which is not within the control of the party affected,
                including, but not limited to failure of water supply, failure of
                facilities, flood,
                [[Page 51541]]
                earthquake, storm, lightning, fire, epidemic, riot, civil disturbance,
                labor disturbance, sabotage, war, act of war, terrorist acts, or
                restraint by court of general jurisdiction, which by exercise of due
                diligence and foresight such party could not reasonably have been
                expected to avoid.
                2. Wholesale Rates, Terms, and Conditions for Hydro Peaking Power,
                Peaking Energy, Supplemental Peaking Energy, and Associated Services
                 Unless otherwise specified, this Section 2 is applicable to all
                sales under the Customer's Power Sales Contract.
                2.1. Hydro Peaking Power Rates, Terms, and Conditions
                2.1.1. Monthly Capacity Charge for Hydro Peaking Power
                 $4.50 per kilowatt of Peaking Billing Demand.
                2.1.2. Services Associated with Capacity Charge for Hydro Peaking Power
                 The capacity charge for Hydro Peaking Power includes such
                transmission services as are necessary to integrate Southwestern's
                resources in order to reliably deliver Hydro Peaking Power and
                associated energy to the Customer. This capacity charge also includes
                two Ancillary Services charges: Scheduling, System Control, and
                Dispatch Service; and Reactive Supply and Voltage Control from
                Generation Sources Service.
                2.1.3. Secondary Transmission Service under Capacity Associated with
                Hydro Peaking Power
                 Customers may utilize the transmission capacity associated with
                Peaking Contract Demand for the transmission of non-Federal energy, on
                a non-firm, as-available basis, at no additional charge for such
                transmission service or associated Ancillary Services, under the
                following terms and conditions:
                 2.1.3.1. The sum of the capacity, for any hour, which is used for
                Peaking Energy, Supplemental Peaking Energy, and Secondary Transmission
                Service, may not exceed the Peaking Contract Demand;
                 2.1.3.2. The non-Federal energy transmitted under such secondary
                service is delivered to the Customer's point of delivery for Hydro
                Peaking Power;
                 2.1.3.3. The Customer commits to provide Real Power Losses
                associated with such deliveries of non-Federal energy; and
                 2.1.3.4. Sufficient transfer capability exists between the point of
                receipt into the System of Southwestern of such non-Federal energy and
                the Customer's point of delivery for Hydro Peaking Power for the time
                period that such secondary transmission service is requested.
                2.1.4. Adjustment for Reduction in Service
                 If, during any month, the Peaking Contract Demand associated with a
                Power Sales Contract in which Southwestern has the obligation to
                provide 1,200 kilowatthours of Peaking Energy per kilowatt of Peaking
                Contract Demand is reduced by Southwestern for a period or periods of
                not less than two consecutive hours by reason of an outage caused by
                either an Uncontrollable Force or by the installation, maintenance,
                replacement or malfunction of generation, transmission and/or related
                facilities on the System of Southwestern, or insufficient pool levels,
                the Customer's capacity charges for such month will be reduced for each
                such reduction in service by an amount computed under the formula:
                R = (C x K x H) / S
                with the factors defined as follows:
                R = The dollar amount of reduction in the monthly total capacity
                charges for a particular reduction of not less than two consecutive
                hours during any month, except that the total amount of any such
                reduction shall not exceed the product of the Customer's capacity
                charges associated with Hydro Peaking Power times the Peaking
                Billing Demand.
                C = The Customer's capacity charges associated with Hydro Peaking
                Power for the Peaking Billing Demand for such month.
                K = The reduction in kilowatts in Peaking Billing Demand for a
                particular event.
                H = The number of hours duration of such particular reduction.
                S = The number of hours that Peaking Energy is scheduled during such
                month, but not less than 60 hours times the Peaking Contract Demand.
                 Such reduction in charges shall fulfill Southwestern's obligation
                to deliver Hydro Peaking Power and Peaking Energy.
                2.2. Peaking Energy and Supplemental Peaking Energy Rates, Terms, and
                Conditions
                2.2.1. Peaking Energy Charge
                 $0.0094 per kilowatthour of Peaking Energy delivered plus the
                Purchased Power Adder as defined in Section 2.2.3 of this Rate
                Schedule.
                2.2.2. Supplemental Energy Charge
                 $0.0094 per kilowatthour of Supplemental Peaking Energy delivered.
                2.2.3. Purchased Power Adder
                 A purchased power adder of $0.0059 per kilowatthour of Peaking
                Energy delivered, as adjusted by the Administrator, Southwestern, in
                accordance with the procedure within this Rate Schedule.
                 2.2.3.1. Applicability of Purchased Power Adder: The Purchased
                Power Adder shall apply to sales of Peaking Energy. The Purchased Power
                Adder shall not apply to sales of Supplemental Peaking Energy or sales
                to any Customer which, by contract, has assumed the obligation to
                supply energy to fulfill the minimum of 1,200 kilowatthours of Peaking
                Energy per kilowatt of Peaking Contract Demand during a contract year
                (hereinafter ``Contract Support Arrangements'').
                 2.2.3.2. Procedure for Determining Net Purchased Power Adder
                Adjustment: Not more than twice annually, the Purchased Power Adder of
                $0.0059 (5.9 mills) per kilowatthour of Peaking Energy, as noted in
                this Rate Schedule, may be adjusted by the Administrator, Southwestern,
                by an amount up to a total of $0.0059 (5.9 mills) per
                kilowatthour per year, as calculated by the following formula:
                ADJ = (PURCH - EST + DIF) / SALES
                with the factors defined as follows:
                ADJ = The dollar per kilowatthour amount of the total adjustment,
                plus or minus, to be applied to the net Purchased Power Adder,
                rounded to the nearest $0.0001 per kilowatthour, provided that the
                total ADJ to be applied in any year shall not vary from the then-
                effective ADJ by more than $0.0059 per kilowatthour;
                PURCH = The actual total dollar cost of Southwestern's System Direct
                Purchases as accounted for in the financial records of the
                Southwestern Federal Power System for the period;
                EST = The estimated total dollar cost ($13,273,800 per year) of
                Southwestern's System Direct Purchases used as the basis for the
                Purchased Power Adder of $0.0059 per kilowatthour of Peaking Energy;
                DIF = The accumulated remainder of the difference in the actual and
                estimated total dollar cost of Southwestern's System Direct
                Purchases since the effective date of the currently approved
                Purchased Power Adder set forth in this Rate Schedule, which
                remainder is not projected for recovery through the ADJ in any
                previous periods;
                SALES = The annual Total Peaking Energy sales projected to be
                delivered (2,241,300,000 KWh per year) from the System of
                Southwestern, which total was used as the basis for the $0.0059 per
                kilowatthour Purchased Power Adder.
                [[Page 51542]]
                2.3. Transformation Service Rates, Terms, and Conditions
                2.3.1. Monthly Capacity Charge for Transformation Service
                 $0.46 per kilowatt will be assessed for capacity used to deliver
                energy at any point of delivery at which Southwestern provides
                transformation service for deliveries at voltages of 69 kilovolts or
                less from higher voltage facilities.
                2.3.2. Applicability of Capacity Charge for Transformation Service
                 Unless otherwise specified by contract, for any particular month, a
                charge for transformation service will be assessed on the greater of
                (1) that month's highest metered demand, or (2) the highest metered
                demand recorded during the previous 11 months, at any point of
                delivery. For the purpose of this Rate Schedule, the highest metered
                demand will be based on all deliveries, of both Federal and non-Federal
                energy, from the System of Southwestern, at such point during such
                month.
                2.4. Ancillary Services Rates, Terms, and Conditions
                2.4.1. Capacity Charges for Ancillary Services
                 2.4.1.1. Regulation and Frequency Response Service: Monthly rate of
                $0.07 per kilowatt of Peaking Billing Demand plus the Regulation
                Purchased Adder as defined in Section 2.4.5 of this Rate Schedule.
                 2.4.1.2. Spinning Operating Reserve Service: Monthly rate of
                $0.0146 per kilowatt of Peaking Billing Demand.
                 Daily rate of $0.00066 per kilowatt for non-Federal generation
                inside Southwestern's Balancing Authority Area.
                 2.4.1.3. Supplemental Operating Reserve Service: Monthly rate of
                $0.0146 per kilowatt of Peaking Billing Demand.
                 Daily rate of $0.00066 per kilowatt for non-Federal generation
                inside Southwestern's Balancing Authority Area.
                 2.4.1.4. Energy Imbalance Service: $0.0 per kilowatt for all
                reservation periods.
                2.4.2. Availability of Ancillary Services
                 Regulation and Frequency Response Service and Energy Imbalance
                Service are available only for deliveries of power and energy to load
                within Southwestern's Balancing Authority Area. Spinning Operating
                Reserve Service and Supplemental Operating Reserve Service are
                available only for deliveries of non-Federal power and energy generated
                by resources located within Southwestern's Balancing Authority Area and
                for deliveries of all Hydro Peaking Power and associated energy from
                and within Southwestern's Balancing Authority Area. Where available,
                such Ancillary Services must be taken from Southwestern; unless,
                arrangements are made in accordance with Section 2.4.4 of this Rate
                Schedule.
                2.4.3. Applicability of Charges for Ancillary Services
                 For any month, the charges for Ancillary Services for deliveries of
                Hydro Peaking Power shall be based on the Peaking Billing Demand.
                 The daily charge for Spinning Operating Reserve Service and
                Supplemental Operating Reserve Service for non-Federal generation
                inside Southwestern's Balancing Authority Area shall be applied to the
                greater of Southwestern's previous day's estimate of the peak, or the
                actual peak, in kilowatts, of the internal non-Federal generation.
                2.4.4. Provision of Ancillary Services by Others
                 Customers for which Ancillary Services are made available as
                specified above, must inform Southwestern by written notice of the
                Ancillary Services which they do not intend to take and purchase from
                Southwestern, and of their election to provide all or part of such
                Ancillary Services from their own resources or from a third party.
                 Subject to Southwestern's approval of the ability of such resources
                or third parties to meet Southwestern's technical and operational
                requirements for provision of such Ancillary Services, the Customer may
                change the Ancillary Services which it takes from Southwestern and/or
                from other sources at the beginning of any month upon the greater of 60
                days notice or upon completion of any necessary equipment modifications
                necessary to accommodate such change; Provided, That, if the Customer
                chooses not to take Regulation and Frequency Response Service, which
                includes the associated Regulation Purchased Adder, the Customer must
                pursue these services from a different host Balancing Authority;
                thereby moving all metered loads and resources from Southwestern's
                Balancing Authority Area to the Balancing Authority Area of the new
                host Balancing Authority. Until such time as that meter reconfiguration
                is accomplished, the Customer will be charged for the Regulation and
                Frequency Response Service and applicable Adder then in effect. The
                Customer must notify Southwestern by July 1 of this choice, to be
                effective the subsequent calendar year.
                2.4.5. Regulation Purchased Adder
                 Southwestern has determined the amount of energy used from storage
                to provide Regulation and Frequency Response Service in order to meet
                Southwestern's Balancing Authority Area requirements. The replacement
                value of such energy used shall be recovered through the Regulation
                Purchased Adder. The Regulation Purchased Adder during the time period
                of January 1 through December 31 of the current calendar year is based
                on the average annual use of energy from storage \1\ for Regulation and
                Frequency Response Service and Southwestern's estimated purchased power
                price for the corresponding year from the most currently approved Power
                Repayment Studies.
                ---------------------------------------------------------------------------
                 \1\ The average annual use of energy from storage for Regulation
                and Frequency Response Service is based on Southwestern studies.
                ---------------------------------------------------------------------------
                 The Regulation Purchased Adder will be phased in over a period of
                four (4) years as follows:
                ------------------------------------------------------------------------
                 Regulation Purchased Adder for the
                 Year incremental replacement value of energy
                 used from storage
                ------------------------------------------------------------------------
                2014.......................... \1/4\ of the average annual use of
                 energy from storage x 2014 Purchased
                 Power price.
                2015.......................... \1/2\ of the average annual use of
                 energy from storage x 2015 Purchased
                 Power price.
                2016.......................... \3/4\ of the average annual use of
                 energy from storage x 2016 Purchased
                 Power price.
                2017 and thereafter........... The total average annual use of energy
                 from storage x the applicable Purchased
                 Power price.
                ------------------------------------------------------------------------
                 2.4.5.1. Applicability of Regulation Purchased Adder: The
                replacement value of the estimated annual use of energy from storage
                for Regulation and Frequency Response Service shall be recovered by
                Customers located within
                [[Page 51543]]
                Southwestern's Balancing Authority Area on a non-coincident peak ratio
                share basis, divided into twelve equal monthly payments, in accordance
                with the formula in Section 2.4.5.2.
                 If the Regulation Purchased Adder is determined and applied under
                Southwestern's Rate Schedule NFTS-13A, then it shall not be applied
                here.
                 2.4.5.2. Procedure for Determining Regulation Purchased Adder:
                Unless otherwise specified by contract, the Regulation Purchased Adder
                for an individual Customer shall be based on the following formula
                rate, calculated to include the replacement value of the estimated
                annual use of energy from storage by Southwestern for Regulation and
                Frequency Response Service.
                 RPA = The Regulation Purchased Adder for an individual Customer per
                month, which is as follows:
                [(L Customer / L Total) x RP
                Total ] / 12
                with the factors defined as follows:
                L Customer = The sum in MW of the following three
                factors:
                (1) The Customer's highest metered load plus generation used to
                serve the Customer's load that is accounted for through a reduction
                in the Customer's metered load (referred to as `generation behind
                the meter') during the previous calendar year, and
                (2) The Customer's highest rate of Scheduled Exports \2\ during the
                previous calendar year, and
                ---------------------------------------------------------------------------
                 \2\ Scheduled Exports and Scheduled Imports are transactions,
                such as sales and purchases respectively, which are in addition to a
                Customer's metered load that contribute to Southwestern's Balancing
                Authority Area need for regulation.
                ---------------------------------------------------------------------------
                (3) The Customer's highest rate of Scheduled Imports \2\ during the
                previous calendar year.
                L Total = The sum of all L Customer factors
                for all Customers that were inside Southwestern's Balancing
                Authority Area at the beginning of the previous calendar year in MW.
                RP Total = The ``net'' cost in dollars and cents based on
                Southwestern's estimated purchased power price for the corresponding
                year from the most currently approved Power Repayment Studies
                multiplied by the average annual use of energy from storage, as
                provided for in the table in Section 2.4.5, to support
                Southwestern's ability to regulate within its Balancing Authority
                Area. The ``net'' cost in dollars and cents shall be adjusted by
                subtracting the product of the quantity of such average annual use
                of energy from storage in MWh and Southwestern's highest rate in
                dollars per MWh for Supplemental Peaking Energy during the previous
                calendar year.
                 For Customers that have aggregated their load, resources, and
                scheduling into a single node by contract within Southwestern's
                Balancing Authority Area, the individual Customer's respective
                Regulation Purchased Adder shall be that Customer's ratio share of the
                Regulation Purchased Adder established for the node. Such ratio share
                shall be determined for the Customer on a non-coincident basis and
                shall be calculated for the Customer from their highest metered load
                plus generation behind the meter.
                2.4.6. Energy Imbalance Service Limitations
                 Energy Imbalance Service primarily applies to deliveries of power
                and energy which are required to satisfy a Customer's load. As Hydro
                Peaking Power and associated energy are limited by contract, the Energy
                Imbalance Service bandwidth specified for Non-Federal Transmission
                Service does not apply to deliveries of Hydro Peaking Power, and
                therefore Energy Imbalance Service is not charged on such deliveries.
                Customers who consume a capacity of Hydro Peaking Power greater than
                their Peaking Contract Demand may be subject to a Capacity Overrun
                Penalty.
                3. Hydro Peaking Power Penalties, Terms, and Conditions
                3.1. Capacity Overrun Penalty
                3.1.1. Penalty Charge for Capacity Overrun
                 For each hour during which Hydro Peaking Power was provided at a
                rate greater than that to which the Customer is entitled, the Customer
                will be charged a Capacity Overrun Penalty at the following rates:
                ------------------------------------------------------------------------
                 Rate per
                 Months associated with charge kilowatt
                ------------------------------------------------------------------------
                March, April, May, October, November, December............... $0.15
                January, February, June, July, August, September............. 0.30
                ------------------------------------------------------------------------
                3.1.2. Applicability of Capacity Overrun Penalty
                 Customers which have loads within Southwestern's Balancing
                Authority Area are obligated by contract to provide resources, over and
                above the Hydro Peaking Power and associated energy purchased from
                Southwestern, sufficient to meet their loads. A Capacity Overrun
                Penalty shall be applied only when the formulas provided in Customers'
                respective Power Sales Contracts indicate an overrun on Hydro Peaking
                Power, and investigation determines that all resources, both firm and
                non-firm, which were available at the time of the apparent overrun were
                insufficient to meet the Customer's load.
                3.2. Energy Overrun Penalty
                3.2.1. Penalty Charge for Energy Overrun
                 $0.1034 per kilowatthour for each kilowatthour of overrun.
                3.2.2. Applicability of Energy Overrun Penalty
                 By contract, the Customer is subject to limitations on the maximum
                amounts of Peaking Energy which may be scheduled under the Customer's
                Power Sales Contract. When the Customer schedules an amount in excess
                of such maximum amounts, such Customer is subject to the Energy Overrun
                Penalty.
                3.3. Power Factor Penalty
                3.3.1. Requirements Related to Power Factor
                 Any Customer served from facilities owned by or available by
                contract to Southwestern will be required to maintain a power factor of
                not less than 95 percent and will be subject to the following
                provisions.
                3.3.2. Determination of Power Factor
                 The power factor will be determined for all Demand Periods and
                shall be calculated under the formula:
                [GRAPHIC] [TIFF OMITTED] TN30SE19.001
                with the factors defined as follows:
                PF = The power factor for any Demand Period of the month.
                kWh = The total quantity of energy which is delivered during such
                Demand Period to the point of delivery or interconnection in
                accordance with Section 3.3.4.
                rkVAh = The total quantity of reactive kilovolt-ampere-hours (kVARs)
                delivered during such Demand Period to the point of delivery or
                interconnection in accordance with Section 3.3.4.
                3.3.3. Penalty Charge for Power Factor
                 The Customer shall be assessed a penalty for all Demand Periods of
                a month where the power factor is less than 95 percent lagging. For any
                Demand Period during a particular month such penalty shall be in
                accordance with the following formula:
                C = D x (0.95 - LPF) x $0.10
                with the factors defined as follows:
                C = The charge in dollars to be assessed for any particular Demand
                Period of such month that the determination of power factor ``PF''
                is calculated to be less than 95 percent lagging.
                D = The Customer's demand in kilowatts at the point of delivery for
                such Demand Period in which a low power factor was calculated.
                LPF = The lagging power factor, if any, determined by the formula
                ``PF'' for such Demand Period.
                [[Page 51544]]
                 If C is negative, then C = zero (0).
                3.3.4. Applicability of Power Factor Penalty
                 The Power Factor Penalty is applicable to radial interconnections
                with the System of Southwestern. The total Power Factor Penalty for any
                month shall be the sum of all charges ``C'' for all Demand Periods of
                such month. No penalty is assessed for leading power factor.
                Southwestern, in its sole judgment and at its sole option, may
                determine whether power factor calculations should be applied to (i) a
                single physical point of delivery, (ii) a combination of physical
                points of delivery where a Customer has a single, electrically
                integrated load, (iii) or interconnections. The general criteria for
                such decision shall be that, given the configuration of the Customer's
                and Southwestern's systems, Southwestern will determine, in its sole
                judgment and at its sole option, whether the power factor calculation
                more accurately assesses the detrimental impact on Southwestern's
                system when the above formula is calculated for a single physical point
                of delivery, a combination of physical points of delivery, or for an
                interconnection as specified by an Interconnection Agreement.
                 Southwestern, at its sole option, may reduce or waive Power Factor
                Penalties when, in Southwestern's sole judgment, low power factor
                conditions were not detrimental to the System of Southwestern due to
                particular loading and voltage conditions at the time the power factor
                dropped below 95 percent lagging.
                 4. Hydro Peaking Power Miscellaneous Rates, Terms, and Conditions
                4.1. Real Power Losses
                 Customers are required to self-provide all Real Power Losses for
                non-Federal energy transmitted by Southwestern on behalf of such
                Customers under the provisions detailed below.
                 Real Power Losses are computed as four (4) percent of the total
                amount of non-Federal energy transmitted by Southwestern. The
                Customer's monthly Real Power Losses are computed each month on a
                megawatthour basis as follows:
                ML = 0.04 x NFE
                with the factors defined as follows:
                ML = The total monthly loss energy, rounded to the nearest
                megawatthour, to be scheduled by a Customer for receipt by
                Southwestern for Real Power Losses associated with non-Federal
                energy transmitted on behalf of such Customer; and
                NFE = The amount of non-Federal energy that was transmitted by
                Southwestern on behalf of a Customer during a particular month.
                 The Customer must schedule or cause to be scheduled to
                Southwestern, Real Power Losses for which it is responsible subject to
                the following conditions:
                 4.1.1. The Customer shall schedule and deliver Real Power Losses
                back to Southwestern during the second month after they were incurred
                by Southwestern in the transmission of the Customer's non-Federal power
                and energy over the System of Southwestern unless such Customer has
                accounted for Real Power Losses as part of a metering arrangement with
                Southwestern.
                 4.1.2. On or before the twentieth day of each month, Southwestern
                shall determine the amount of non-Federal loss energy it provided on
                behalf of the Customer during the previous month and provide a written
                schedule to the Customer setting forth hour-by-hour the quantities of
                non-Federal energy to be delivered to Southwestern as losses during the
                next month.
                 4.1.3. Real Power Losses not delivered to Southwestern by the
                Customer, according to the schedule provided, during the month in which
                such losses are due shall be billed by Southwestern to the Customer to
                adjust the end-of-month loss energy balance to zero (0) megawatthours
                and the Customer shall be obliged to purchase such energy at the
                following rates:
                ------------------------------------------------------------------------
                 Rate per
                 Months associated with charge kilowatthour
                ------------------------------------------------------------------------
                March, April, May, October, November, December............ $0.15
                January, February, June, July, August, September.......... 0.30
                ------------------------------------------------------------------------
                 4.1.4. Real Power Losses delivered to Southwestern by the Customer
                in excess of the losses due during the month shall be purchased by
                Southwestern from the Customer at a rate per megawatthour equal to
                Southwestern's rate per megawatthour for Supplemental Peaking Energy,
                as set forth in Southwestern's then-effective Rate Schedule for Hydro
                Peaking Power to adjust such hourly end-of-month loss energy balance to
                zero (0) megawatthours.
                4.2. Peaking Energy Schedule Submission Time
                 Southwestern's Peaking Energy Schedule Submission Time is on or
                before 2:30 p.m. Central Prevailing Time (CPT), as adjusted by the
                Administrator, Southwestern, in accordance with Section 4.2.2 in this
                Rate Schedule, of the day preceding the day for the delivery of Peaking
                Energy. The Peaking Energy Schedule Submission Time supersedes the
                Peaking Energy schedule submission time provided in the Customer's
                Power Sales Contract, pursuant to Section 4.2.1 of this Rate Schedule.
                4.2.1. Applicability of Peaking Energy Schedule Submission Time
                 The Peaking Energy Schedule Submission Time shall apply to the
                scheduling of Peaking Energy. The Peaking Energy Schedule Submission
                Time shall not apply to the scheduling of Supplemental Peaking Energy
                or to Contract Support Arrangements.
                4.2.2. Procedure for Adjusting the Peaking Energy Schedule Submission
                Time
                 Not more than once annually, the Peaking Energy Schedule Submission
                Time of 2:30 p.m. CPT, as noted in Section 4.2 of this Rate Schedule,
                may be adjusted by the Administrator, Southwestern, to a time no
                earlier than 2:00 p.m. CPT and no later than 3:00 p.m. CPT.
                 4.2.2.1. Determination of Need to Adjust the Peaking Energy
                Schedule Submission Time: The Administrator, Southwestern, will make a
                determination on the need to adjust the Peaking Energy Schedule
                Submission Time based on Southwestern's studies involving financial
                analysis, regional energy market conditions, and/or operational
                considerations.
                 4.2.2.2. Notification of Peaking Energy Schedule Submission Time
                Adjustment: The Administrator, Southwestern, will notify customers of
                the determination to adjust the Peaking Energy Schedule Submission Time
                in writing no later than 30 calendar days prior to the effective date
                of the Peaking Energy Schedule Submission Time adjustment.
                UNITED STATES DEPARTMENT OF ENERGY
                SOUTHWESTERN POWER ADMINISTRATION
                RATE SCHEDULE NFTS-13A \1\**
                 \1\ Supersedes Rate Schedule NFTS-13.
                 \**\ Extended through September 30, 2021, by approval of Rate
                Order No. SWPA-74 by the Assistant Secretary for Electricity.
                ---------------------------------------------------------------------------
                WHOLESALE RATES FOR NON-FEDERAL
                TRANSMISSION/INTERCONNECTION FACILITIES SERVICE
                 Effective: During the period January 1, 2017, through September 30,
                2021*, in accordance with Federal Energy Regulatory Commission (FERC)
                order issued in Docket No. EF14-1-000 (January 9, 2014), FERC order
                issued in Docket No. EF14-1-001 (March 9,
                [[Page 51545]]
                2017), extension approved by the Deputy Secretary in Docket No. EF14-1-
                002 (September 13, 2017), and extension approved by the Assistant
                Secretary in Rate Order No. 74.
                 Available: In the region of the 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
                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: Three-phase, alternating
                current, delivered at approximately 60 Hertz, at the nominal
                voltage(s), at the point(s) specified by Service Agreement or
                Transmission Service Transaction.
                1. Definitions of Terms
                1.1. Ancillary Services
                 The services necessary to support the transmission of capacity and
                energy from resources to loads while maintaining reliable operation of
                the System of Southwestern in accordance with good utility practice,
                which include the following:
                1.1.1. Scheduling, System Control, and Dispatch Service
                is provided by Southwestern as Balancing Authority Area operator and is
                in regard to interchange and load-match scheduling and related system
                control and dispatch functions.
                1.1.2. Reactive Supply and Voltage Control From Generation Sources
                Service
                is provided at transmission facilities in the System of Southwestern to
                produce or absorb reactive power and to maintain transmission voltages
                within specific limits.
                1.1.3. Regulation and Frequency Response Service
                is the continuous balancing of generation and interchange resources
                accomplished by raising or lowering the output of on-line generation as
                necessary to follow the moment-by-moment changes in load and to
                maintain frequency within a Balancing Authority Area.
                1.1.4. Spinning Operating Reserve Service
                maintains generating units on-line, but loaded at less than maximum
                output, which may be used to service load immediately when disturbance
                conditions are experienced due to a sudden loss of generation or load.
                1.1.5. Supplemental Operating Reserve Service
                provides an additional amount of operating reserve sufficient to reduce
                Area Control Error to zero within 10 minutes following loss of
                generating capacity which would result from the most severe single
                contingency.
                1.1.6. Energy Imbalance Service
                corrects for differences over a period of time between schedules and
                actual hourly deliveries of energy to a load. Energy delivered or
                received within the authorized bandwidth for this service is accounted
                for as an inadvertent flow and is returned to the providing party by
                the receiving party in accordance with standard utility practice or a
                contractual arrangement between the parties.
                1.2. Customer
                 The entity which is utilizing and/or purchasing services from
                Southwestern pursuant to this Rate Schedule.
                1.3. Demand Period
                 The period of time used to determine maximum integrated rates of
                delivery for the purpose of power accounting which is the 60-minute
                period that begins with the change of hour.
                1.4. Firm Point-to-Point Transmission Service
                 Transmission service reserved on a firm basis between specific
                points of receipt and delivery pursuant to either a Firm Transmission
                Service Agreement or to a Transmission Service Transaction.
                1.5. Interconnection Facilities Service
                 A service that provides for the use of the System of Southwestern
                to deliver energy and/or provide system support at an interconnection.
                1.6. Network Integration Transmission Service
                 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.
                1.7. Non-Firm Point-to-Point Transmission Service
                 Transmission service reserved on a non-firm basis between specific
                points of receipt and delivery pursuant to a Transmission Service
                Transaction.
                1.8. Point of Delivery
                 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.
                1.9. Secondary Transmission Service
                 Service that 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 Service
                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 Ancillary Services, are
                included in the applicable capacity charges for Firm Point-to-Point
                Transmission Service and Network Integration Transmission Service.
                1.10. Service Agreement
                 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 which include the following:
                1.10.1. Firm Transmission Service Agreement
                provides for reserved transmission capacity on a firm basis, for a
                particular point-to-point delivery path.
                1.10.2. Interconnection Agreement
                provides for the use of the System of Southwestern and recognizes the
                exchange of mutual benefits for such use or provides for application of
                a charge for Interconnection Facilities Service.
                [[Page 51546]]
                1.10.3. Network Transmission Service Agreement
                provides 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.
                1.10.4. Non-Firm Transmission Service Agreement
                provides for the Customer to request transmission service on a non-firm
                basis.
                1.11. Service Request
                 The request made under a Transmission Service Agreement through the
                Southwest Power Pool, Inc. (hereinafter ``SPP'') Open Access Same-Time
                Information System (hereinafter ``OASIS'') for reservation of
                transmission capacity over a particular point-to-point delivery path
                for a particular period. The Customer must submit hourly schedules for
                actual service in addition to the Service Request.
                1.12. System of Southwestern
                 The transmission and related facilities owned by Southwestern, and/
                or the generation, transmission, and related facilities owned by
                others, the capacity of which, by contract, is available to and
                utilized by Southwestern to satisfy its contractual obligations to the
                Customer.
                1.13. Transmission Service Transaction
                 A Service Request that has been approved by SPP.
                1.14. Uncontrollable Force
                 Any force which is not within the control of the party affected,
                including, but not limited to failure of water supply, failure of
                facilities, flood, earthquake, storm, lightning, fire, epidemic, riot,
                civil disturbance, labor disturbance, sabotage, war, act of war,
                terrorist acts, or restraint by court of general jurisdiction, which by
                exercise of due diligence and foresight such party could not reasonably
                have been expected to avoid.
                2. Wholesale Rates, Terms, and Conditions for Firm Point-to-Point
                Transmission Service, Non-Firm Point-to-Point Transmission Service,
                Network Integration Transmission Service, and Interconnection
                Facilities Service
                2.1. Firm Point-to-Point Transmission Service Rates, Terms, and
                Conditions
                2.1.1. Monthly Capacity Charge for Firm Point-to-Point Transmission
                Service
                 $1.48 per kilowatt of transmission capacity reserved in increments
                of one month of service or invoiced in accordance with a longer term
                agreement.
                2.1.2. Weekly Capacity Charge for Firm Point-to-Point Transmission
                Service
                 $0.370 per kilowatt of transmission capacity reserved in increments
                of one week of service.
                2.1.3. Daily Capacity Charge for Firm Point-to-Point Transmission
                Service
                 $0.0673 per kilowatt of transmission capacity reserved in
                increments of one day of service.
                2.1.4. Services Associated With Capacity Charge for Firm Point-to-Point
                Transmission Service
                 The capacity charge for Firm Point-to-Point Transmission Service
                includes Secondary Transmission Service, but does not include charges
                for Ancillary Services associated with actual schedules.
                2.1.5. Applicability of Capacity Charge for Firm Point-to-Point
                Transmission Service
                 Capacity charges for Firm Point-to-Point Transmission Service are
                applied to quantities reserved by contract under a Firm Transmission
                Service Agreement or in accordance with a Transmission Service
                Transaction.
                 A Customer, unless otherwise specified by contract, will be
                assessed capacity charges on the greatest of (1) the highest metered
                demand at any particular Point of Delivery during a particular month,
                rounded up to the nearest whole megawatt, or (2) the highest metered
                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 Customer
                shall be limited during any month to the most recent metered demand on
                which that Customer is billed or to the capacity reserved by contract,
                whichever is greater.
                2.2. Non-Firm Point-to-Point Transmission Service Rates, Terms, and
                Conditions
                2.2.1. Monthly Capacity Charge for Non-Firm Point-to-Point Transmission
                Service
                 80 percent of the monthly capacity charge for Firm Point-to-Point
                Transmission Service reserved in increments of one month.
                2.2.2. Weekly Capacity Charge for Non-Firm Point-to-Point Transmission
                Service
                 80 percent of the monthly capacity charge divided by 4 for Firm
                Point-to-Point Transmission Service reserved in increments of one week.
                2.2.3. Daily Capacity Charge for Non-Firm Point-to-Point Transmission
                Service
                 80 percent of the monthly capacity charge divided by 22 for Firm
                Point-to-Point Transmission Service reserved in increments of one day.
                2.2.4. Hourly Capacity Charge for Non-Firm Point-to-Point Transmission
                Service
                 80 percent of the monthly capacity charge divided by 352 for Firm
                Point-to-Point Transmission Service reserved in increments of one hour.
                2.2.5. Applicability of Charges for Non-Firm Point-to-Point
                Transmission Service
                 Capacity charges for Non-Firm Point-to-Point Transmission Service
                are applied to quantities reserved under a Transmission Service
                Transaction, and do not include charges for Ancillary Services.
                2.3. Network Integration Transmission Service Rates, Terms, and
                Conditions
                2.3.1. Annual Revenue Requirement for Network Integration Transmission
                Service
                 $15,533,800.
                2.3.2. Monthly Revenue Requirement for Network Integration Transmission
                Service
                 $1,294,483.
                2.3.3. Net Capacity Available for Network Integration Transmission
                Service
                 872,000 kilowatts.
                2.3.4. Monthly Capacity Charge for Network Integration Transmission
                Service
                 $1.48 per kilowatt of Network Load (charge derived from $1,294,483
                / 872,000 kilowatts).
                2.3.5. Applicability of Charges 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
                [[Page 51547]]
                determined on the greatest of (1) the highest metered demand at any
                particular point of delivery during a particular month, rounded up to
                the nearest whole megawatt, or (2) the highest metered demand recorded
                at such point of delivery during any of the previous 11 months, rounded
                up to the nearest whole megawatt.
                 For a Customer taking Network Integration Transmission Service who
                is also taking delivery of Federal Power and Energy, the highest
                metered 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 a Customer shall be limited
                during any month to the most recent highest metered demand on which
                such Customer is billed. Charges for Ancillary Services shall also be
                assessed.
                2.3.6. Procedure for Determining SPP Open Access Transmission Tariff
                Network Integration Transmission Service Annual Revenue Requirement
                 The SPP Open Access Transmission Tariff Network Integration
                Transmission Service Annual Revenue Requirement shall be based on the
                following formula which shall be calculated when a Customer transitions
                from a Service Agreement to an agreement for Network Integration
                Transmission Service under the SPP Open Access Transmission Tariff.
                 SPP NITS ARR = Southwestern's SPP Network Integration Transmission
                Service Annual Revenue Requirement, which is as follows:
                (SPP NITS Capacity/Southwestern NITS Capacity) x Southwestern NITS ARR
                with the factors defined as follows:
                SPP NITS Capacity = The capacity on the System of Southwestern
                utilized for SPP Network Integration Transmission Service which
                shall be based on the currently approved Power Repayment Studies.
                Southwestern NITS Capacity = Net Capacity Available for Network
                Integration Transmission Service on the System of Southwestern as
                specified in Section 2.3.3.
                Southwestern NITS ARR = Southwestern's Annual Revenue Requirement
                for Network Integration Transmission Service as specified in Section
                2.3.1.
                2.4. Interconnection Facilities Service Rates, Terms, and Conditions
                2.4.1. Monthly Capacity Charge for Interconnection Facilities Service
                 $1.48 per kilowatt.
                2.4.2. Applicability of Capacity 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 highest metered demand, or (2) the highest
                metered 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 schedule and deliver
                Real Power Losses pursuant to the provisions of this Rate Schedule
                based on metered flow through the interconnection where Interconnection
                Facilities Services is assessed.
                2.5. Transformation Service Rates, Terms, and Conditions
                2.5.1. Monthly Capacity Charge for Transformation Service
                 $0.46 per kilowatt will be assessed for capacity used to deliver
                energy at any point of delivery at which Southwestern provides
                transformation service for deliveries at voltages of 69 kilovolts or
                less from higher voltage facilities.
                2.5.2. Applicability of Capacity Charge for Transformation Service
                 Unless otherwise specified by contract, for any particular month, a
                charge for transformation service will be assessed on the greater of
                (1) that month's highest metered demand, or (2) the highest metered
                demand recorded during the previous 11 months, at any point of
                delivery. For the purpose of this Rate Schedule, the highest metered
                demand will be based on all deliveries, of both Federal and non-Federal
                energy, from the System of Southwestern, at such point during such
                month.
                2.6. Ancillary Services Rates, Terms, and Conditions
                2.6.1. Capacity Charges for Ancillary Services
                 2.6.1.1. Scheduling, System Control, and Dispatch Service: Monthly
                rate of $0.09 per kilowatt of transmission capacity reserved in
                increments of one month of service or invoiced in accordance with a
                Long-Term Firm Transmission Service Agreement or Network Transmission
                Service Agreement.
                 Weekly rate of $0.023 per kilowatt of transmission capacity
                reserved in increments of one week of service.
                 Daily rate of $0.0041 per kilowatt of transmission capacity
                reserved in increments of one day of service.
                 Hourly rate of $0.00026 per kilowatt of transmission energy
                delivered as non-firm transmission service.
                 2.6.1.2. Reactive Supply and Voltage Control from Generation
                Sources Service: Monthly rate of $0.04 per kilowatt of transmission
                capacity reserved in increments of one month of service or invoiced in
                accordance with a Long-Term Firm Transmission Service Agreement or
                Network Transmission Service Agreement.
                 Weekly rate of $0.010 per kilowatt of transmission capacity
                reserved in increments of one week of service.
                 Daily rate of $0.0018 per kilowatt of transmission capacity
                reserved in increments of one day of service.
                 Hourly rate of $0.00011 per kilowatt of transmission energy
                delivered as non-firm transmission service.
                 2.6.1.3. Regulation and Frequency Response Service: Monthly rate of
                $0.07 per kilowatt of transmission capacity reserved in increments of
                one month of service or invoiced in accordance with a Long-Term Firm
                Transmission Service Agreement or Network Transmission Service
                Agreement plus the Regulation Purchased Adder as defined in Section
                2.6.5 of this Rate Schedule.
                 Weekly rate of $0.018 per kilowatt of transmission capacity
                reserved in increments of one week of service plus the Regulation
                Purchased Adder as defined in Section 2.6.5 of this Rate Schedule.
                 Daily rate of $0.0032 per kilowatt of transmission capacity
                reserved in increments of one day of service plus the Regulation
                Purchased Adder as defined in Section 2.6.5 of this Rate Schedule.
                 Hourly rate of $0.00020 per kilowatt of transmission energy
                delivered as non-firm transmission service plus the Regulation
                Purchased Adder as defined in Section 2.6.5 of this Rate Schedule.
                 2.6.1.4. Spinning Operating Reserve Service: Monthly rate of
                $0.0146 per kilowatt of transmission capacity reserved in increments of
                one month of service or invoiced in accordance with a Long-Term Firm
                Transmission Service Agreement or Network Transmission Service
                Agreement.
                 Weekly rate of $0.00365 per kilowatt of transmission capacity
                reserved in increments of one week of service.
                [[Page 51548]]
                 Daily rate of $0.00066 per kilowatt of transmission capacity
                reserved in increments of one day of service.
                 Hourly rate of $0.00004 per kilowatt of transmission energy
                delivered as non-firm transmission service.
                 2.6.1.5. Supplemental Operating Reserve Service: Monthly rate of
                $0.0146 per kilowatt of transmission capacity reserved in increments of
                one month of service or invoiced in accordance with a Long-Term Firm
                Transmission Service Agreement or Network Transmission Service
                Agreement.
                 Weekly rate of $0.00365 per kilowatt of transmission capacity
                reserved in increments of one week of service.
                 Daily rate of $0.00066 per kilowatt of transmission capacity
                reserved in increments of one day of service.
                 Hourly rate of $0.00004 per kilowatt of transmission energy
                delivered as non-firm transmission service.
                 2.6.1.6. Energy Imbalance Service: $0.0 per kilowatt for all
                reservation periods.
                2.6.2. Availability of Ancillary Services
                 Scheduling, System Control, and Dispatch Service and Reactive
                Supply and Voltage Control from Generation Sources Service are
                available for all transmission services in and from the System of
                Southwestern and shall be provided by Southwestern. Regulation and
                Frequency Response Service and Energy Imbalance Service are available
                only for deliveries of power and energy to load within Southwestern's
                Balancing Authority Area, and shall be provided by Southwestern,
                unless, subject to Southwestern's approval, they are provided by
                others. Spinning Operating Reserve Service and Supplemental Operating
                Reserve Service are available only for deliveries of power and energy
                generated by resources located within Southwestern's Balancing
                Authority Area and shall be provided by Southwestern, unless, subject
                to Southwestern's approval, they are provided by others.
                2.6.3. Applicability of Charges for Ancillary Services
                 Charges for all Ancillary Services are applied to the transmission
                capacity 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 identified in Sections 2.6.1.3 through
                2.6.1.6 of this Rate Schedule are applicable to a Transmission Service
                Transaction of Secondary Transmission Service, but are not applicable
                to the transmission capacity reserved 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.
                2.6.4. Provision of Ancillary Services by Others
                 Customers for which Ancillary Services identified in Sections
                2.6.1.3 through 2.6.1.6 of this Rate Schedule 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. Such
                notice requirements also apply to requests for Southwestern to provide
                Ancillary Services when such services are available as specified above.
                 Subject to Southwestern's approval of the ability of such resources
                or third parties to meet Southwestern's technical and operational
                requirements for provision of such Ancillary Services, the Customer may
                change the Ancillary Services which it takes from Southwestern and/or
                from other sources at the beginning of any month upon the greater of 60
                days written notice or upon the completion of any necessary equipment
                modifications necessary to accommodate such change; Provided, That, if
                the Customer chooses not to take Regulation and Frequency Response
                Service, which includes the associated Regulation Purchased Adder, the
                Customer must pursue these services from a different host Balancing
                Authority; thereby moving all metered loads and resources from
                Southwestern's Balancing Authority Area to the Balancing Authority Area
                of the new host Balancing Authority. Until such time as that meter
                reconfiguration is accomplished, the Customer will be charged for the
                Regulation and Frequency Response Service and applicable Adder then in
                effect. The Customer must notify Southwestern by July 1 of this choice,
                to be effective the subsequent calendar year.
                2.6.5. Regulation Purchased Adder
                 Southwestern has determined the amount of energy used from storage
                to provide Regulation and Frequency Response Service in order to meet
                Southwestern's Balancing Authority Area requirements. The replacement
                value of such energy used shall be recovered through the Regulation
                Purchased Adder. The Regulation Purchased Adder during the time period
                of January 1 through December 31 of the current calendar year is based
                on the average annual use of energy from storage \1\ for Regulation and
                Frequency Response Service and Southwestern's estimated purchased power
                price for the corresponding year from the most currently approved Power
                Repayment Studies.
                ---------------------------------------------------------------------------
                 \1\ The average annual use of energy from storage for Regulation
                and Frequency Response Service is based on Southwestern studies.
                ---------------------------------------------------------------------------
                 The Regulation Purchased Adder will be phased in over a period of
                four (4) years as follows:
                ------------------------------------------------------------------------
                 Regulation Purchased Adder for the
                 Year incremental replacement value of energy
                 used from storage
                ------------------------------------------------------------------------
                2014.......................... \1/4\ of the average annual use of
                 energy from storage x 2014 Purchased
                 Power price.
                2015.......................... \1/2\ of the average annual use of
                 energy from storage x 2015 Purchased
                 Power price.
                2016.......................... \3/4\ of the average annual use of
                 energy from storage x 2016 Purchased
                 Power price.
                2017 and thereafter........... The total average annual use of energy
                 from storage x the applicable Purchased
                 Power price.
                ------------------------------------------------------------------------
                 2.6.5.1. Applicability of Regulation Purchased Adder: The
                replacement value of the estimated annual use of energy from storage
                for Regulation and Frequency Response Service shall be recovered by
                Customers located within Southwestern's Balancing Authority Area on a
                non-coincident peak ratio share basis, divided into twelve equal
                monthly payments, in accordance with the formula in Section 2.6.5.2.
                [[Page 51549]]
                 If the Regulation Purchased Adder is determined and applied under
                Southwestern's Rate Schedule P-13, then it shall not be applied here.
                 2.6.5.2. Procedure for Determining Regulation Purchased Adder:
                Unless otherwise specified by contract, the Regulation Purchased Adder
                for an individual Customer shall be based on the following formula
                rate, calculated to include the replacement value of the estimated
                annual use of energy from storage by Southwestern for Regulation and
                Frequency Response Service.
                 RPA = The Regulation Purchased Adder for an individual Customer per
                month, which is as follows:
                [(LCustomer / LTotal) x RPTotal] / 12
                with the factors defined as follows:
                LCustomer = The sum in MW of the following three factors:
                (1) The Customer's highest metered load plus generation used to
                serve the Customer's load that is accounted for through a reduction
                in the Customer's metered load (referred to as `generation behind
                the meter') during the previous calendar year, and
                (2) The Customer's highest rate of Scheduled Exports \2\ during the
                previous calendar year, and
                ---------------------------------------------------------------------------
                 \2\ Scheduled Exports and Scheduled Imports are transactions,
                such as sales and purchases respectively, which are in addition to a
                Customer's metered load that contribute to Southwestern's Balancing
                Authority Area need for regulation.
                ---------------------------------------------------------------------------
                (3) The Customer's highest rate of Scheduled Imports \2\ during the
                previous calendar year.
                LTotal = The sum of all LCustomer factors for
                all Customers that were inside Southwestern's Balancing Authority
                Area at the beginning of the previous calendar year in MW.
                RPTotal = The ``net'' cost in dollars and cents based on
                Southwestern's estimated purchased power price for the corresponding
                year from the most currently approved Power Repayment Studies
                multiplied by the average annual use of energy from storage, as
                provided for in the table in Section 2.6.5, to support
                Southwestern's ability to regulate within its Balancing Authority
                Area. The ``net'' cost in dollars and cents shall be adjusted by
                subtracting the product of the quantity of such average annual use
                of energy from storage in MWh and Southwestern's highest rate in
                dollars per MWh for Supplemental Peaking Energy during the previous
                calendar year.
                 For Customers that have aggregated their load, resources, and
                scheduling into a single node by contract within Southwestern's
                Balancing Authority Area, the individual Customer's respective
                Regulation Purchased Adder shall be that Customer's ratio share of the
                Regulation Purchased Adder established for the node. Such ratio share
                shall be determined for the Customer on a non-coincident basis and
                shall be calculated for the Customer from their highest metered load
                plus generation behind the meter.
                2.6.6. Energy Imbalance Service Limitations
                 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. Unless otherwise specified by contract, the two
                categories of days are weekdays and weekend days/North American
                Electric Reliability Corporation holidays, and 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. Unless otherwise specified by contract, in the event any
                hourly month-end balance exceeds 12 MWhs, the excess will be subject to
                Section 3.1 or Section 3.2 of this Rate Schedule, depending on the
                direction of the accumulation.
                3. Non-Federal Transmission/Interconnection Facilities Service
                Penalties, Terms, and Conditions
                3.1. Capacity Overrun Penalty
                3.1.1. Penalty Charge for Capacity Overrun
                 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
                ------------------------------------------------------------------------
                3.1.2. Applicability of Capacity Overrun Penalty
                 Customers who receive deliveries within Southwestern's Balancing
                Authority 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. In the event that a Customer
                underschedules its resources to serve 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 Capacity Overrun Penalty.
                3.2. Unauthorized Use of Energy Imbalance Service by Overscheduling of
                Resources
                 In the event that a Customer schedules greater resources than are
                needed to serve 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.
                3.3. Power Factor Penalty
                3.3.1. Requirements Related to Power Factor
                 Any Customer served from facilities owned by or available by
                contract to Southwestern will be required to maintain a power factor of
                not less than 95 percent and will be subject to the following
                provisions.
                3.3.2. Determination of Power Factor
                 The power factor will be determined for all Demand Periods and
                shall be calculated under the formula:
                [GRAPHIC] [TIFF OMITTED] TN30SE19.002
                with the factors defined as follows:
                PF = The power factor for any Demand Period of the month.
                kWh = The total quantity of energy which is delivered during such
                Demand Period to the point of delivery or interconnection in
                accordance with Section 3.3.4.
                rkVAh = The total quantity of reactive kilovolt-ampere-hours (kVARs)
                delivered during such Demand Period to the point of delivery or
                interconnection in accordance with Section 3.3.4.
                [[Page 51550]]
                3.3.3. Penalty Charge for Power Factor
                 The Customer shall be assessed a penalty for all Demand Periods of
                a month where the power factor is less than 95 percent lagging. For any
                Demand Period during a particular month such penalty shall be in
                accordance with the following formula:
                C = D x (0.95 - LPF) x $0.10
                with the factors defined as follows:
                C = The charge in dollars to be assessed for any particular Demand
                Period of such month that the determination of power factor ``PF''
                is calculated to be less than 95 percent lagging.
                D = The Customer's demand in kilowatts at the point of delivery for
                such Demand Period in which a low power factor was calculated.
                LPF = The lagging power factor, if any, determined by the formula
                ``PF'' for such Demand Period.
                 If C is negative, then C = zero (0).
                3.3.4. Applicability of Power Factor Penalty
                 The Power Factor Penalty is applicable to radial interconnections
                with the System of Southwestern. The total Power Factor Penalty for any
                month shall be the sum of all charges ``C'' for all Demand Periods of
                such month. No penalty is assessed for leading power factor.
                Southwestern, in its sole judgment and at its sole option, may
                determine whether power factor calculations should be applied to (i) a
                single physical point of delivery, (ii) a combination of physical
                points of delivery where a Customer has a single, electrically
                integrated load, (iii) or interconnections. The general criteria for
                such decision shall be that, given the configuration of the Customer's
                and Southwestern's systems, Southwestern will determine, in its sole
                judgment and at its sole option, whether the power factor calculation
                more accurately assesses the detrimental impact on Southwestern's
                system when the above formula is calculated for a single physical point
                of delivery, a combination of physical points of delivery, or for an
                interconnection as specified by an Interconnection Agreement.
                 Southwestern, at its sole option, may reduce or waive Power Factor
                Penalties when, in Southwestern's sole judgment, low power factor
                conditions were not detrimental to the System of Southwestern due to
                particular loading and voltage conditions at the time the power factor
                dropped below 95 percent lagging.
                4. Non-Federal Transmission/Interconnection Facilities Service
                Miscellaneous Rates, Terms, and Conditions
                4.1. Real Power Losses
                 Customers are required to self-provide all Real Power Losses for
                non-Federal energy transmitted by Southwestern on behalf of such
                Customers under the provisions detailed below.
                 Real Power Losses are computed as four (4) percent of the total
                amount of non-Federal energy transmitted by Southwestern. The
                Customer's monthly Real Power Losses are computed each month on a
                megawatthour basis as follows:
                ML = 0.04 x NFE
                with the factors defined as follows:
                ML = The total monthly loss energy, rounded to the nearest
                megawatthour, to be scheduled by a Customer for receipt by
                Southwestern for Real Power Losses associated with non-Federal
                energy transmitted on behalf of such Customer; and
                NFE = The amount of non-Federal energy that was transmitted by
                Southwestern on behalf of a Customer during a particular month.
                 The Customer must schedule or cause to be scheduled to
                Southwestern, Real Power Losses for which it is responsible subject to
                the following conditions:
                 4.1.1. The Customer shall schedule and deliver Real Power Losses
                back to Southwestern during the second month after they were incurred
                by Southwestern in the transmission of the Customer's non-Federal power
                and energy over the System of Southwestern unless such Customer has
                accounted for Real Power Losses as part of a metering arrangement with
                Southwestern.
                 4.1.2. On or before the twentieth day of each month, Southwestern
                shall determine the amount of non-Federal loss energy it provided on
                behalf of the Customer during the previous month and provide a written
                schedule to the Customer setting forth hour-by-hour the quantities of
                non-Federal energy to be delivered to Southwestern as losses during the
                next month.
                 4.1.3. Real Power Losses not delivered to Southwestern by the
                Customer, according to the schedule provided, during the month in which
                such losses are due shall be billed by Southwestern to the Customer to
                adjust the end-of-month loss energy balance to zero (0) megawatthours
                and the Customer shall be obliged to purchase such energy at the
                following rates:
                ------------------------------------------------------------------------
                 Rate per
                 Months associated with charge kilowatthour
                ------------------------------------------------------------------------
                March, April, May, October, November, December............ $0.15
                January, February, June, July, August, September.......... 0.30
                ------------------------------------------------------------------------
                 4.1.4. Real Power Losses delivered to Southwestern by the Customer
                in excess of the losses due during the month shall be purchased by
                Southwestern from the Customer at a rate per megawatthour equal to
                Southwestern's rate per megawatthour for Supplemental Peaking Energy,
                as set forth in Southwestern's then-effective Rate Schedule for Hydro
                Peaking Power to adjust such hourly end-of-month loss energy balance to
                zero (0) megawatthours.
                ---------------------------------------------------------------------------
                 \1\ Supersedes Rate Schedule EE-11.
                 ** Extended through September 30, 2021, by approval of Rate
                Order No. SWPA-74 by the Assistant Secretary for Electricity.
                ---------------------------------------------------------------------------
                UNITED STATES DEPARTMENT OF ENERGY
                SOUTHWESTERN POWER ADMINISTRATION
                RATE SCHEDULE EE-13 \1\**
                WHOLESALE RATES FOR EXCESS ENERGY
                 Effective: During the period October 1, 2013, through September 30,
                2021**, in accordance with Federal Energy Regulatory Commission (FERC)
                order issued in Docket No. EF14-1-000 (January 9, 2014), extension
                approved by the Deputy Secretary in Docket No. EF14-1-002 (September
                13, 2017), and extension approved by the Assistant Secretary in Rate
                Order No. 74.
                 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(s)
                and at the point(s) of delivery specified by contract.
                1. Wholesale Rates, Terms, and Conditions for Excess Energy
                 Excess Energy will be furnished at such times and in such amounts
                as Southwestern determines to be available.
                [[Page 51551]]
                1.2. Transmission and Related Ancillary Services
                 Transmission service for the delivery of Excess Energy shall be the
                sole responsibility of such customer purchasing Excess Energy.
                1.3. Excess Energy Charge
                 $0.0094 per kilowatthour of Excess Energy delivered.
                [FR Doc. 2019-21040 Filed 9-27-19; 8:45 am]
                BILLING CODE 6450-01-P
                

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