December 13, WSPP Inc., Docket No. ER11- Incorporation of Rate Schedules into WSPP Agreement

Transcription

1 December 13, 2010 The Honorable Kimberly D. Bose Secretary Federal Energy Regulatory Commission 888 First Street NE Washington, DC Re: WSPP Inc., Docket No. ER11- Incorporation of Rate Schedules into WSPP Agreement Honorable Secretary Bose: Pursuant to section 205 of the Federal Power Act ( FPA ), 16 U.S.C. 824d, and section of the Federal Energy Regulatory Commission s ( Commission or FERC ) regulations issued thereunder, 18 C.F.R , and at the request of NV Energy, Inc. ( NV Energy ), WSPP Inc. ( WSPP ) submits revised pages to the WSPP Agreement to incorporate cost-based rate schedules for Nevada Power Company ( Nevada Power ) and Sierra Pacific Power Company ( Sierra ). Nevada Power and Sierra are operating utilities wholly owned by NV Energy. Nevada Power and Sierra are both members of WSPP. NV Energy filed the Nevada Power and Sierra rate schedules with the Commission on July 30, 2010 in Docket No. ER The Commission conditionally accepted the rate schedules on October 1, 2010, and directed NV Energy to make a compliance filing. 1 NV Energy made the compliance filing for the Nevada Power rate schedule on October 19, 2010 in Docket No. ER ( Nevada Power Rate Filing ), which the Commission accepted on November 23, NV Energy made the compliance filing for the Sierra rate 1 2 See Nev. Power Co. & Sierra Pac. Power Co., 133 FERC 61,005 (2010). See Nev. Power Co., Letter Order, Docket No. ER (Nov. 23, 2010) ( Nevada Power Letter Order ).

2 The Honorable Kimberly D. Bose December 13, 2010 Page 2 schedule on October 19, 2010 in Docket No. ER ( Sierra Rate Filing ), which the Commission accepted on November 23, WSPP requests an effective date of October 1, 2010 for the WSPP Agreement revisions submitted in this filing. I. Background and Description of Filing On March 3, 2009, the Commission issued an order accepting the incorporation into the WSPP Agreement of a Schedule Q, into which cost-based rate schedules of those WSPP members lacking market-based rate authority (i.e., market-mitigated members) could, in turn, be incorporated. 4 Incorporation of a market-mitigated company s rate schedule into Schedule Q allows the applicable company to apply that rate to its cost-based transactions under the WSPP Agreement. 5 By this filing, WSPP incorporates into Schedule Q the Nevada Power and Sierra rate schedules accepted by the Commission in the Nevada Power and Sierra Letter Orders. These rate schedules are incorporated into the WSPP Agreement to state Nevada Power and Sierra s cost-based rates. Consistent with the March 3 Order, WSPP merely seeks to incorporate the Nevada Power and Sierra rate schedules which the Commission previously accepted. The Commission having accepted these rates, WSPP submits no rate justification. More specifically, this WSPP filing is ministerial, as contemplated when the Commission approved the Schedule Q rate-incorporation procedure in the March 3 Order (to facilitate affected WSPP members compliance with the Commission s order of September 29, 2008 in Docket Nos. ER and EL ). WSPP understands that detailed information with respect to these rates can be found in the Nevada Power Rate Filing and the Sierra Rate Filing. II. Effective Date and Request for Waiver Pursuant to section of the Commission s rules and regulations, 18 C.F.R , WSPP respectfully requests (a) a waiver of the Commission s 60- day notice requirement set forth at 18 C.F.R and (b) an effective date of October 1, See Sierra Pac. Power Co., Letter Order, Docket No. ER (Nov. 23, 2010) ( Sierra Letter Order ). See W. Sys. Power Pool, 126 FERC 61,193 (2009) ( March 3 Order ). See id. at PP 9-10.

3 The Honorable Kimberly D. Bose December 13, 2010 Page 3 Waiver is justified to enable WSPP to comply with the March 3 Order and consequently is reasonable. The March 3 Order requires that a market-mitigated company s rate schedule incorporated into Schedule Q have the effective date of the rate schedule. 6 III. Additional Information A. Information Required by Section of the Commission s Regulations, 18 C.F.R : 7 (1) Documents Enclosed: In addition to this transmittal letter, the following items are included: (a) a clean version of the revised WSPP Agreement pages; and (b) a redlined version of the revised pages. (2) Effective Date: As explained above, WSPP requests an effective date of October 1, 2010 for the WSPP Agreement changes submitted herein. WSPP requests a waiver of the Commission s 60-day notice requirement set forth at 18 C.F.R to allow this effective date. (3) Names and addresses of persons to whom this filing has been mailed: A copy of this filing will be ed to WSPP members who have supplied addresses for the member contact lists posted on the WSPP website. This ing will reach most or all active WSPP members. Additionally, a copy of this filing will be posted on the WSPP website. (4) Waiver of Additional Requirements: WSPP respectfully requests a waiver of all applicable requirements, if any, of the Commission s regulations with which this filing does not comply. 6 7 See March 3 Order at P 10. As previously discussed, WSPP seeks to incorporate into the WSPP Agreement the Nevada Power and Sierra rate schedules previously accepted by the Commission. Therefore, WSPP submits no cost of service information.

4 The Honorable Kimberly D. Bose December 13, 2010 Page 4 B. Correspondence and Communications Correspondence and communications with respect to this filing should be sent to, and WSPP requests the Secretary to include on the official service list, the following: Arnold B. Podgorsky Patrick L. Morand Wright & Talisman, P.C G Street, N.W., Suite 600 Washington, D.C (202) phone (202) fax podgorsky@wrightlaw.com morand@wrightlaw.com IV. Conclusion For the reasons stated herein, WSPP requests that the Commission accept the proposed revisions to the WSPP Agreement to be effective October 1, Respectfully submitted, /s/ Patrick L. Morand Arnold B. Podgorsky Patrick L. Morand Attorneys for WSPP Inc. K:\WSPP\NV Energy rate incorp letter(final).doc

5 SCHEDULE Q FERC ACCEPTED SELLER-SPECIFIC COST-BASED RATE SCHEDULES Note: Each rate schedule included in this Schedule Q is applicable solely to the Member which submitted that rate schedule to FERC, and not to any other Member. INDEX Name of Member FERC Order Citation Arizona Public Service Company Letter Order, Docket No. ER (Aug. 11, 2009) Nevada Power Company Letter Order, Docket No. ER (Nov. 23, 2010) Public Service Company Letter Order, Docket No. ER (Oct. 26, 1995) of Colorado Sierra Pacific Power Company Letter Order, Docket No. ER (Nov. 23, 2010) Southwestern Public Service Letter Order, Docket No ER (Aug. 28, 2008) Company

6 WSPP AGREEMENT SCHEDULE Q FOR NEVADA POWER COMPANY Determination of Ceiling Rates Applicable to Cost-Based Sales Made by Nevada Power Company 1. The following rates shall be applicable to any cost-based sale of power and/or energy made by Nevada Power Company, d/b/a NV Energy ( Nevada Power ) (1) pursuant to the applicable terms and conditions of the WSPP Agreement, including under Service Schedule A (Economy Energy Service), Service Schedule B (Unit Commitment Service), and Service Schedule C (Firm Capacity/Energy Sale or Exchange Service), (2) at a delivery point located within the Nevada Power balancing authority area, and (3) for a term of less than one year. 2. The rates for any cost-based power and/or energy sale made by Nevada Power pursuant to the applicable terms and conditions of the WSPP Agreement from Nevada Power s generating resources shall not exceed the following: Maximum Demand Charge: The Maximum Demand Charge shall be capped using the following methodology: Units Most Likely To Participate Methodology Monthly Up to $8,390/MW Weekly Up to $1,940/MW Daily Up to $390/MW, provided, however, that the Daily rate of $390/MW shall not exceed the product of the number of kilowatts sold for a week multiplied by the maximum weekly demand charge of $1,940/MW. Hourly Up to $24.40/MW, provided, however, that the hourly rate of $24.40/MW shall not exceed the product of the number of kilowatts sold for a day multiplied by the maximum daily demand charge of $390/MW, and also not exceed the product of the number of kilowatts sold for a week multiplied by the maximum weekly demand charge of $1,940/MW. (iii) Energy Charge of 100% of SIC, plus up to 10% of SIC; and All charges incurred for transmission service, ancillary services, and transmission losses. 3. If Nevada Power enters into a purchased power transaction specifically for the purpose of reselling such power hereunder, the rates shall not exceed the sum of the following: Nevada Power s out-of-pocket costs of purchasing such capacity and/or energy, including all related charges incurred for transmission service, ancillary services, transmission losses and any applicable taxes or other similar governmental impositions; and $1.00 per megawatt-hour multiplied by the total megawatt-hours scheduled.

7 4. System Incremental Costs ( SIC ) means all reasonably forecasted costs of such power and/or energy and which otherwise would not have been incurred by Nevada Power including, but not limited to, costs associated with fuel, labor, variable operation and maintenance, start-up, shut-down, fuel handling, taxes or other similar governmental impositions, regulatory commission charges, emission allowances and other environmental compliance costs. 5. Purchasers in cost-based transactions shall also be responsible for any taxes, purchased power costs, and for any other costs incurred by Nevada Power Company in fulfilling its obligations for the provision of power and/or energy under the WSPP Agreement, which cost would otherwise not have been incurred, had such service not been provided.

8 WSPP AGREEMENT SCHEDULE Q FOR SIERRA PACIFIC POWER COMPANY Determination of Ceiling Rates Applicable to Cost-Based Sales Made by Sierra Pacific Power Company 1. The following rates shall be applicable to any cost-based sale of power and/or energy made by Sierra Pacific Power Company, d/b/a NV Energy ( Sierra ) (1) pursuant to the applicable terms and conditions of the WSPP Agreement, including under Service Schedule A (Economy Energy Service), Service Schedule B (Unit Commitment Service), and Service Schedule C (Firm Capacity/Energy Sale or Exchange Service), (2) at a delivery point located within the Sierra balancing authority area, and (3) for a term of less than one year. 2. The rates for any cost-based power and/or energy sale made by Sierra pursuant to the applicable terms and conditions of the WSPP Agreement from Sierra s generating resources shall not exceed the following: Maximum Demand Charge: The Maximum Demand Charge shall be capped using the following methodology: Units Most Likely To Participate Methodology Monthly Up to $9,810/MW Weekly Up to $2,260/MW Daily Up to $450/MW, provided, however, that the Daily rate of $450/MW shall not exceed the product of the number of kilowatts sold for a week multiplied by the maximum weekly demand charge of $2,260/MW. Hourly Up to $28.10/MW, provided, however, that the hourly rate of $28.10/MW shall not exceed the product of the number of kilowatts sold for a day multiplied by the maximum daily demand charge of $450/MW, and also not exceed the product of the number of kilowatts sold for a week multiplied by the maximum weekly demand charge of $2,260/MW. (iii) Energy Charge of 100% of SIC, plus up to 10% of SIC; and All charges incurred for transmission service, ancillary services, and transmission losses. 3. If Sierra enters into purchased power transaction specifically for the purpose of reselling such power hereunder, the rates shall not exceed the sum of the following: Sierra s out-of-pocket costs of purchasing such capacity and/or energy, including all related charges incurred for transmission service, ancillary services, transmission losses and any applicable taxes or other similar governmental

9 impositions; and $1.00 per megawatt-hour multiplied by the total megawatt-hours scheduled. 4. System Incremental Costs ( SIC ) means all reasonably forecasted costs of such power and/or energy and which otherwise would not have been incurred by Sierra including, but not limited to, costs associated with fuel, labor, variable operation and maintenance, startup, shut-down, fuel handling, taxes or other similar governmental impositions, regulatory commission charges, emission allowances and other environmental compliance costs. 5. Purchasers in cost-based transactions shall also be responsible for any taxes, purchased power costs, and for any other costs incurred by Nevada Power Company in fulfilling its obligations for the provision of power and/or energy under the WSPP Agreement, which cost would otherwise not have been incurred, had such service not been provided.

10 SCHEDULE Q FERC ACCEPTED SELLER-SPECIFIC COST-BASED RATE SCHEDULES Note: Each rate schedule included in this Schedule Q is applicable solely to the Member which submitted that rate schedule to FERC, and not to any other Member. INDEX Name of Member FERC Order Citation Arizona Public Service Company Letter Order, Docket No. ER (Aug. 11, 2009) Nevada Power Company Letter Order, Docket No. ER (Nov. 23, 2010) Public Service Company Letter Order, Docket No. ER (Oct. 26, 1995) of Colorado Sierra Pacific Power Company Letter Order, Docket No. ER (Nov. 23, 2010) Southwestern Public Service Letter Order, Docket No ER (Aug. 28, 2008) Company

11 WSPP AGREEMENT SCHEDULE Q FOR NEVADA POWER COMPANY Determination of Ceiling Rates Applicable to Cost-Based Sales Made by Nevada Power Company 1. The following rates shall be applicable to any cost-based sale of power and/or energy made by Nevada Power Company, d/b/a NV Energy ( Nevada Power ) (1) pursuant to the applicable terms and conditions of the WSPP Agreement, including under Service Schedule A (Economy Energy Service), Service Schedule B (Unit Commitment Service), and Service Schedule C (Firm Capacity/Energy Sale or Exchange Service), (2) at a delivery point located within the Nevada Power balancing authority area, and (3) for a term of less than one year. 2. The rates for any cost-based power and/or energy sale made by Nevada Power pursuant to the applicable terms and conditions of the WSPP Agreement from Nevada Power s generating resources shall not exceed the following: Maximum Demand Charge: The Maximum Demand Charge shall be capped using the following methodology: Units Most Likely To Participate Methodology Monthly Up to $8,390/MW Weekly Up to $1,940/MW Daily Up to $390/MW, provided, however, that the Daily rate of $390/MW shall not exceed the product of the number of kilowatts sold for a week multiplied by the maximum weekly demand charge of $1,940/MW. Hourly Up to $24.40/MW, provided, however, that the hourly rate of $24.40/MW shall not exceed the product of the number of kilowatts sold for a day multiplied by the maximum daily demand charge of $390/MW, and also not exceed the product of the number of kilowatts sold for a week multiplied by the maximum weekly demand charge of $1,940/MW. (iii) Energy Charge of 100% of SIC, plus up to 10% of SIC; and All charges incurred for transmission service, ancillary services, and transmission losses. 3. If Nevada Power enters into a purchased power transaction specifically for the purpose of reselling such power hereunder, the rates shall not exceed the sum of the following: Nevada Power s out-of-pocket costs of purchasing such capacity and/or energy, including all related charges incurred for transmission service, ancillary services, transmission losses and any applicable taxes or other similar governmental impositions; and $1.00 per megawatt-hour multiplied by the total megawatt-hours scheduled.

12 4. System Incremental Costs ( SIC ) means all reasonably forecasted costs of such power and/or energy and which otherwise would not have been incurred by Nevada Power including, but not limited to, costs associated with fuel, labor, variable operation and maintenance, start-up, shut-down, fuel handling, taxes or other similar governmental impositions, regulatory commission charges, emission allowances and other environmental compliance costs. 5. Purchasers in cost-based transactions shall also be responsible for any taxes, purchased power costs, and for any other costs incurred by Nevada Power Company in fulfilling its obligations for the provision of power and/or energy under the WSPP Agreement, which cost would otherwise not have been incurred, had such service not been provided.

13 WSPP AGREEMENT SCHEDULE Q FOR SIERRA PACIFIC POWER COMPANY Determination of Ceiling Rates Applicable to Cost-Based Sales Made by Sierra Pacific Power Company 1. The following rates shall be applicable to any cost-based sale of power and/or energy made by Sierra Pacific Power Company, d/b/a NV Energy ( Sierra ) (1) pursuant to the applicable terms and conditions of the WSPP Agreement, including under Service Schedule A (Economy Energy Service), Service Schedule B (Unit Commitment Service), and Service Schedule C (Firm Capacity/Energy Sale or Exchange Service), (2) at a delivery point located within the Sierra balancing authority area, and (3) for a term of less than one year. 2. The rates for any cost-based power and/or energy sale made by Sierra pursuant to the applicable terms and conditions of the WSPP Agreement from Sierra s generating resources shall not exceed the following: Maximum Demand Charge: The Maximum Demand Charge shall be capped using the following methodology: Units Most Likely To Participate Methodology Monthly Up to $9,810/MW Weekly Up to $2,260/MW Daily Up to $450/MW, provided, however, that the Daily rate of $450/MW shall not exceed the product of the number of kilowatts sold for a week multiplied by the maximum weekly demand charge of $2,260/MW. Hourly Up to $28.10/MW, provided, however, that the hourly rate of $28.10/MW shall not exceed the product of the number of kilowatts sold for a day multiplied by the maximum daily demand charge of $450/MW, and also not exceed the product of the number of kilowatts sold for a week multiplied by the maximum weekly demand charge of $2,260/MW. (iii) Energy Charge of 100% of SIC, plus up to 10% of SIC; and All charges incurred for transmission service, ancillary services, and transmission losses. 3. If Sierra enters into purchased power transaction specifically for the purpose of reselling such power hereunder, the rates shall not exceed the sum of the following: Sierra s out-of-pocket costs of purchasing such capacity and/or energy, including all related charges incurred for transmission service, ancillary services, transmission losses and any applicable taxes or other similar governmental

14 impositions; and $1.00 per megawatt-hour multiplied by the total megawatt-hours scheduled. 4. System Incremental Costs ( SIC ) means all reasonably forecasted costs of such power and/or energy and which otherwise would not have been incurred by Sierra including, but not limited to, costs associated with fuel, labor, variable operation and maintenance, startup, shut-down, fuel handling, taxes or other similar governmental impositions, regulatory commission charges, emission allowances and other environmental compliance costs. 5. Purchasers in cost-based transactions shall also be responsible for any taxes, purchased power costs, and for any other costs incurred by Nevada Power Company in fulfilling its obligations for the provision of power and/or energy under the WSPP Agreement, which cost would otherwise not have been incurred, had such service not been provided.